8. Deferred Revenue and Advances |
3 Months Ended |
|---|---|
Mar. 31, 2016 | |
| Deferred Revenue Disclosure [Abstract] | |
| Deferred Revenue and Advances |
As of March 31, 2016 and December 31, 2015, the Company had advances of $2,544,667 and $599,167, respectively.
As a result of the Merger, the Company assumed from A Squared an April 2013 agreement for an advance of $450,000 for the music rights of certain A Squared properties. During the second quarter of 2014, the Company executed an agreement with the same counterparty for another music advance of $250,000 covering the properties held by the Company prior to the Merger. Pursuant to ASC 928-430-25-1, the Company began recognizing revenue under these agreements on May 1, 2014.
During the third quarter of 2014, the Company executed another music advance agreement for $250,000. Pursuant to ASC 928-430-25-1, the Company began recognizing revenue under these agreements on August 1, 2014.
On February 18, 2016, the Company entered into a distribution agreement with Sony Pictures Home Entertainment Inc. (Sony), pursuant to which the Company agreed to grant Sony certain rights for the marketing and distribution of the Companys animated feature-length motion pictures and animated television series in the United States and in Canada, and potentially additional countries. In consideration for such rights, and subject to certain conditions, Sony paid the Company an advance in the amount of $2.0 million, against future royalties in March 2016.
As of March 31, 2016 and December 31, 2015, the Company had deferred revenue of $349,184 and $359,370, respectively. Deferred revenue represents amounts collected from licensees and customers for which revenue recognition criteria have not been met.
|