| Accrued Liabilities |
As of September
30, 2016 and December 31, 2015, the Company has the following accrued liabilities:
| |
|
9/30/2016 |
|
|
12/31/2015 |
|
| Accrued Salaries and Wages (a) |
|
$ |
119,608 |
|
|
$ |
96,385 |
|
| Disputed Trade Payables (b) |
|
|
925,000 |
|
|
|
925,000 |
|
| Services Advance - Current Portion (c) |
|
|
1,489,583 |
|
|
|
– |
|
| Other Accrued Expenses |
|
|
224,854 |
|
|
|
509,477 |
|
| Total Accrued Liabilities |
|
$ |
2,759,045 |
|
|
$ |
1,530,862 |
|
| |
(a) |
Accrued Salaries and Wages represent accrued vacation
payable to employees. |
| |
(b) |
As part of the Merger, the Company assumed certain liabilities
from a previous member of A Squared which has claimed certain liabilities totaling $925,000. The Company disputes the basis
for this liability. As of September 30, 2016, the Company believes that the statute of limitations applicable to the assertion
of any legal claim relating to the collection of these liabilities has expired and therefore believes this liability is uncollectible.
The Company is working with the counterparty to extinguish this liability. |
| |
(c) |
During the first quarter of 2014, the Company entered into an
exclusive three-year agreement with Sony DADC, the optical disc manufacturing and fulfillment arm of Sony, to provide all
CD, DVD and BD replication, packaging and distribution to the Company’s direct customers. Under the terms of the long-term,
exclusive supply chain services agreement, the Company will order a minimum level of disc replication, packaging and distribution
services for its content across all physical media, including DVD, CD, and Blu-ray from Sony DADC. As consideration for these
minimum order levels, the Company received a total of $1,500,000, $750,000 during the first quarter of 2014 and $750,000 during
the first quarter of 2015. At the end of the term, the Company is obligated to repay a pro-rata portion of the advance if
it has not ordered a minimum number of DVD/CD units during the term. |
|