Gawk
On June 14, 2014, the Company entered into a license agreement with Gawk to use the CipherLoc engine for $1,125,000 for a period of four (4) years. This customer licensed the CipherShop-CipherLoc encryption software technology and support services. The Company was not required to make significant modifications at the time the contract was executed. The Company has never sold or licensed the CipherShop-CipherLoc encryption software, nor any support services for such. Under the license agreement, the Company is to provide access to its software on an operational basis and provide training. The Company will also provide unspecified upgrades, if and when available, and 24/7 support over the license term. No Vendor-Specific Objective Evidence was known for any of the elements. After the agreement was executed, the licensee requested modifications to the software because they could not use the software with the requested modifications. The Company made the newly requested modifications to the software. Management delivered the finished product in late December 2015, thus delivery had not deemed to have occurred until such date. The contract termination date was not extended beyond the initial date of June 2018. Revenues are being recorded from the date of delivery over the remaining term of the agreement or 30 months. For these reasons, revenue is recognized proratably from December 2015 until June 2018. During the year ended September 30, 2016, the Company recognized revenues of $341,478 and had a deferred revenue balance of $783,522.
GoSecured
The Company signed a license agreement with GoSecured on September 15, 2016 to provide GoSecured with a non-exclusive, non-transferable license to use multiple versions of CipherLoc encryption software. GoSecured is to pay a $10,000 license and maintenance fee, as well a royalty (three to ten percent of gross sales) for each end user agreement, dependent upon the origination of the end user agreement. To date, no amounts have been received or recorded as revenues under this contract.
You can lead a horse to water. But you can't make him get down on one knee and do an Al Jolson impression!
