Annual report pursuant to Section 13 and 15(d)

Licenses, Net

v3.19.1
Licenses, Net
12 Months Ended
Dec. 31, 2018
Disclosure of licenses,Net [Abstract]  
Licenses, Net
Note 8 — Licenses, Net
 
 
 
December 31,

2018
 
 
December 31,

2017
 
 
 
 
 
 
 
 
Licenses
 
$
493,717
 
 
$
243,717
 
Less: Accumulated Amortization
 
 
(56,597
)
 
 
 
 
 
 
 
 
 
 
 
 
Licenses, Net
 
$
437,120
 
 
$
243,717
 
 
On 
October 4, 2018
, the Company invested in WakingApp Ltd., a private corporation in the augmented reality software tool market. The Company participated in a financing round with other investors that resulted in the Company acquiring less than a 
1
% ownership interest, in the form of preferred stock, in WakingApp Ltd., for a purchase price of $
250,000
. As part of this investment, the Company entered into a commercial agreement with WakingApp such that WakingApp agreed to: 
(i) provide full support of the Company’s AR products through the WakingApp AR tool software; (ii) provide three (3) working AR environments built with their tools to give away as demonstrations on the M300; and (iii) allow the Company to provide 60-day free licenses to their AR software tool to up to 100,000 of the Company’s developers and customers. The Company considers this investment as a prepaid licensing arrangement over a 36-month term; as such, this addition will be amortized over three years and included in Cost of Sales – Products in the Consolidated Statement of Operations
.
 
The Company acquired two licenses in 2017. The first related to the renegotiation of an existing license at a cost of $114,967, which will result in lower royalty rates being paid by the Company over the next 10 years. 
This license went into effect as of January 1, 2018. The second license was a result of the Company entering into a Technology Acquisition Agreement where it acquired all the seller's right, title and interest in certain Transferred Intellectual Property (IP). 
Pursuant to the agreement, the Company paid approximately $75,702 as reimbursement of related patent application costs incurred by the seller to date, which are included in Patents and Trademarks. The Company also issued 25,000 shares, valued at $128,750, upon the closing and will issue (i) a further 25,000 shares after the Company has successfully developed a working demonstrator system utilizing the IP; and (ii) 50,000 shares once the Company completes the successful commercialization of products containing the IP for sale in the marketplace. The Company estimates that, by end of 2019, it should be able 
to achieve the first development milestone of a functional demonstrator model and that it will need to spend a further $125,000 in additional R&D.
 
Total amortization expense related to licenses in the years ended December 31, 2018, 2017 and 2016 was $56,597, $0, and $0, respectively.