Annual report pursuant to Section 13 and 15(d)

Note 6 - DEFERRED REVENUE

v2.4.0.8
Note 6 - DEFERRED REVENUE
12 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
Note 6 - DEFERRED REVENUE

On January 27, 2012, the Company granted licensing rights for five years in the state of Florida for $300,000 payable as the licensee performs procedures. The licensing fees are amortized to income over the term on the license agreement. On November 8, 2013, the agreement was terminated. The remaining deferred revenue balance as of December 31, 2013 and 2012 was $-0- and $244,438, respectively.

 

Effective on April 5, 2013, the Company granted a sub-license agreement for ten years amongst the Company, Kryptonite Investments LLC (“Kryptonite Investments”) and Trinity dated April 8, 2013 for the state of Arizona.

 

In accordance with the terms and provisions of the license agreement: (i) the license shall be granted by the Company to Kryptonite Investments upon payment of $425,000 to the Company as evidenced by that certain convertible debenture agreement (the “Debenture”); and (ii) the Company shall grant to Kryptonite Investments the exclusive rights to the License to use, sell and offer for sale in the state of Arizona.

 

Kryptonite Investments shall pay the following amounts to the Company; a license fee of $300,000 (the “License Fee”), which shall be payable as either: (i) an upfront License Fee less 10% discount for total of $270,000 if paid within 30 days of date that all principal and interest is repaid by the Company for the Debenture; or (ii) payable as the licensee performs procedures to begin within 30 days of principal and interest being paid in full for the Debenture by the Company. The remaining unrecognized balance as of December 31, 2013 was $255,640.

 

On August 2, 2013, the Company granted licensing rights perpetually for the 48 most northern counties in the state of California for an aggregate of $633,000. The licensing fees are amortized to income over the estimated expected useful life of five years. The remaining deferred revenue balance as of December 31, 2013 was $586,319.

 

On December 13, 2013, the Company granted licensing rights for ten years in the state of Connecticut for $350,000 payable upfront. The licensing fees are amortized to income over the term on the license agreement. The remaining deferred revenue balance as of December 31, 2013 was $348,275.

 

In addition, the Company received $18,500 in advance licensing fees as of December 31, 2012, subsequently refunded during the year ended December 31, 2013.