Quarterly report pursuant to Section 13 or 15(d)

Commitments and Contingencies

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Commitments and Contingencies
9 Months Ended
Sep. 30, 2015
Commitments and Contingencies [Abstract]  
Commitments And Contingencies

10.  Commitments and Contingencies

 

Lease Abandonment

 

On June 8, 2015, the Company incurred a lease abandonment charge of $54,849 for three and nine months ended September 30, 2015, for the former corporate headquarters located at 58 W. Buffalo St. Suite #200 in Chandler, Arizona. Due to the growth of the Company, occupancy has been taken under a new leased space. The Company estimated the liability under operating lease agreements and accrued lease abandonment costs in accordance with Accounting Standards Codification (“ASC”) 420, Exit or Disposal Cost Obligation ("ASC 420"), as the Company has no future economic benefit from the abandoned space and the lease does not terminate until November 30, 2015. All leased space related to this lease was abandoned and ceased to be used by the Company on June 30, 2015.

 

Litigation

 

As of the date of this report, there are no pending legal proceedings to which we or our properties are subject.

 

Earn-Out Contingency

 

We have an earn-out commitment associated with the acquisition of SmartReceipt. The earn-out consists of 200% of the “eligible revenue” of the Company over the 12 month period following the close of the transaction (“earn-out period”).   The “eligible revenue” will consist of: 100% of Company revenue derived during the earn out period from the sale of SmartReceipt products and services to certain SmartReceipt clients as of the close (the “designated SmartReceipt clients”); plus 50% of Company revenue derived during the earn out period from the sale of Company products and services to the designated SmartReceipt clients, plus 50% of the Company revenue derived during the earn out period from the sale of SmartReceipt products and services to Company clients who are not designated SmartReceipt clients.  The earn-out payment is payable in common shares of the Company at the rate of $1.85 per share, which is based on the volume weighted average trading price of the Company’s common stock for the 90 trading days preceding the initial close of the transactions under the Asset Purchase Agreement.

 

As of September 30, 2015, the earn-out payable was satisfied for 903,928 shares of our Common Stock. As a result of this share payment, the company recorded a gain of $87,740 and $89,740 for the three and nine months ended September 30, 2015 in accordance with ASC 805-30-35-1 (subsequent measurement of consideration transferred in a business combination).