In April 2003, the Company entered into a three-year consulting agreement for advisory and other services related to the marketing, distribution and sale of its products.
The term of the agreement is from April 23, 2003 through April 22, 2006.
The agreement obligates the Company to pay the consultant an aggregate of $3,000,000 in cash as follows: $750,000 in 2003, $1,000,000 in both 2004 and 2005, and $250,000 in 2006.
Additionally, the agreement requires the Company to issue 66,667 shares of its common stock annually as directed by the consultant in 2003, 2004 and 2005.
At September 30, 2003, the Company has paid an aggregate of $675,000 pursuant to the contract but has not issued any shares of its common stock.
The Company has recorded its cash payment and stock issuance obligations under the agreement as a liability
($1,054,000 in accrued liabilities and $1,483,000 in other long-term liabilities at September 30, 2003) and a related asset ($1,054,000 in prepaid expenses and $1,669,000 in other non-current assets at September 30, 2003).
The cost of the services related to the contract is being recongized as an expense over the term of the agreement.
News 
Market Data 
Discover 
AI
