Effective September 1, 2013, our company entered into an exclusive agency agreement with PayWith Worldwide Inc. (“PayWith”), pursuant to which our company will market a new product called mCards (mobile cards) (the “Platform”) in the following states: Arizona, Colorado, Nevada, Oregon, Utah and Washington (the “Territories”). Pursuant to the agency agreement, our company will generate revenue associated with every mCard transaction that takes place using the mCardNetwork. Under the agency agreement, our company had the following obligations to PayWith:
• Achieve the following targets within the Territories:
Number of Signed Target Date Merchant Agreements 6 months after effective date 500 12 months after effective date 2,000 18 months after effective date 10,000
As of the date of this Registration Statement, these targets have not been met. These targets were not met due to the slow rate of mobile payment adoption in the United States. Pursuant to the agreement, PayWith may revoke the exclusivity of the rights to the Platform held by us in the Territories as these obligations were not met.
Our company has paid $150,000 to PayWith for the exclusive licensing rights mentioned above.
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