COMMITMENTS AND CONTINGENCIES
|12 Months Ended|
Sep. 30, 2018
|COMMITMENTS AND CONTINGENCIES [Abstract]|
|COMMITMENTS AND CONTINGENCIES||
NOTE 16 – 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 approximately $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 product subscription revenue received by the Company for all non-US subscriptions. Accrued royalties under these agreements were not material as of September 30, 2018 or September 30, 2017 as the Company had no product sales. Total accrued expense under these agreements was $450,000 and $250,000 respectively, as of September 30, 2018 and 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 September 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 September 30, 2018 and, 2017 as the Company had no product revenues during the years ended September 30, 2018 and 2017. Total accrued expense related to these agreements was $775,000 as of September 30, 2018 and 2017, respectively. All agreements were expired as of September 30, 2017.
In addition to the royalties to be paid for products sales 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, however there have been no product sales through the year ended September 30, 2018.
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 years ended September 30, 2018 and 2017.
On August 28, 2018, the Company entered into a Stock Purchase Agreement with Shift Now (see note 6), which includes the issuance of 125,000 incentive shares of common stock based on gross revenue targets of $500,000 during the 12 months following the closing of the acquisition, plus an additional 125,000 shares of common stock base on gross revenue targets of $500,000 during the following 12 months.
The entire disclosure for commitments and contingencies.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef