Does New Visual own 100% of soon to be Embarq™ chip? By 100% I mean that NV gets any and all revenues from Embarq™. When you get revenues, will any of it go through Adaptive Networks' books, like "Step Into Liquid" is going through the books first of Top Secret Production?
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New Visual owns Embarq™ and gets 100% of the revenues when it is sold. Once we receive revenues we will pay a small royalty on every chip that we sell to ANI, as partial compensation for using their intellectual property, under the terms of our license and development agreement.
Unlike the limited liability corporation that owns "Step Into Liquid", the revenues for Embarq™ will be recognized solely by New Visual. Investors will be able to identify clearly what those revenues are when they appear on the Income portion our Income Statement as "Revenues". Investors will also be able to identify clearly the amounts that are paid to Adaptive when they appear on the Expense portion of our Income Statement as "Royalties Paid".
This area of business and law, which governs how technology is licensed and sold, is complicated and unique. It does not always relate to other aspects of general business, so it is easily misunderstood. New Visual has for several years now retained consultants and lawyers who specialize in this area to make sure that our relationship with Adaptive Networks, Inc. (ANI) and other technology partners is properly and legally documented.
One of the concepts that is not usually found in other businesses is that the owners of an asset may not always be the receivers of revenues when the product that is based on the asset is sold. In this case, New Visual co-owns some of the intellectual property, and licenses some of the intellectual property. The two types of intellectual property together comprise the product known as the Embarq™ transport processor
