COMMITMENTS AND CONTINGENCIES
|9 Months Ended|
Jun. 30, 2018
|COMMITMENTS AND CONTINGENCIES [Abstract]|
|COMMITMENTS AND CONTINGENCIES||
NOTE 13 – COMMITMENTS AND CONTINGENCIES
The Company has endorsement agreements with spokespeople to serve as the Company’s brand ambassadors entered in January 2015, providing for cash compensation of $100,000 annually. The agreements have a ten-year term and provide for one-year extensions by agreement of both parties. The future compensation to brand ambassadors is $1,400,000, to be earned during the period from January 1, 2018 to December 31, 2024. In addition, the Company will pay royalties to each spokesperson of .5% per month for all gross subscription revenue received by the Company for US subscriptions and 0.25% per month for all gross subscription revenue received by the Company for all non-US subscriptions. Accrued royalties under these agreements were not material as of June 30, 2018 or September 30, 2017. Total accrued expense under these agreements was $400,000 and $250,000 respectively, as of June 30, 2018 and September 30, 2017, respectively.
The Company has endorsement agreements with athletes with dates all expiring in 2017, providing for cash compensation of amounts ranging from $50,000 annually to $150,000 annually. The future compensation to athletes is $0 as of June 30, 2018. In addition, the Company agreed to pay royalties of .5% of revenues from subscribers that identify the selected athlete as their favorite athlete. Accrued royalties under these agreements were not material as of December 31 or September 30, 2017. Total accrued expense related to these agreements was $775,000 as of June 30, 2018 and September 30, 2017, respectively. All agreements were expired as of September 30, 2017.
In addition to the royalties to be paid to brand ambassadors and athletes, the Company is to pay royalties the former CEO and to the Company's Founder as disclosed in Related Party footnote.
The Company is to pay commissions to Apple and Google in consideration for services as the Company's agent and commissionaire for sales of licensed applications to end-users in the amount of 30% of all purchase prices payable to each end-user. The Company’s application was inactive during the nine months ended June 30, 2018.
On September 30, 2016, the Company entered into a services agreement with a service provider for a development project payable in installments upon completion of certain milestones. The Company incurred $44,500 and $159,000 of expense for the nine months ended June 30, 2018 and 2017, respectively, related to the project which is included in research and development expense.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef