| Accrued Liabilities, Current |
Note 7: Accrued
Liabilities – Current
As of March
31, 2018, and December 31, 2017, the Company has the following current accrued liabilities:
| |
|
March
31, 2018 |
|
|
December
31, 2017 |
|
| Accrued Salaries and Wages (a) |
|
$ |
174,227 |
|
|
$ |
168,549 |
|
| Disputed Trade Payables (b) |
|
|
925,000 |
|
|
|
925,000 |
|
| Other Accrued Expenses (c) |
|
|
2,405,987 |
|
|
|
1,717,970 |
|
| Total Accrued Liabilities - Current |
|
$ |
3,505,214 |
|
|
$ |
2,811,519 |
|
| |
(a) |
Accrued Salaries and Wages represent accrued vacation
payable to employees. |
| |
|
|
| |
(b) |
As part of the Merger in 2013, 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 March 31, 2018, 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. |
| |
|
|
| |
(c) |
Other Accrued Expenses include estimates of expenses incurred
but not yet recorded. |
|
As of December
31, 2017 and 2016, the Company had the following current accrued liabilities:
| |
|
December
31, 2017 |
|
|
December
31, 2016 |
|
| Accrued Salaries and Wages (a) |
|
$ |
168,549 |
|
|
$ |
132,827 |
|
| Disputed Trade Payables (b) |
|
|
925,000 |
|
|
|
925,000 |
|
| Services Advance - Current Portion (c) |
|
|
– |
|
|
|
1,489,583 |
|
| Other Accrued Expenses (d) |
|
|
1,717,970 |
|
|
|
249,482 |
|
| Total Accrued Liabilities - Current |
|
$ |
2,811,519 |
|
|
$ |
2,796,892 |
|
|
(a) |
Accrued
Salaries and Wages represent accrued vacation payable to employees. |
|
(b) |
As
part of the Merger in 2013, 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 December 31, 2017, 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. |
|
(c) |
During
the first quarter of 2014, the Company entered into an exclusive three-year agreement
with DADC to provide all CD, DVD and Blu-ray 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 disk replication,
packaging and distribution services for its content across all physical media, including
DVD, CD, and Blu-ray from 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. On January 10, 2017, the Company entered into an
amendment of our home entertainment Distribution Agreement with Sony pursuant to which,
among other things, Sony paid DADC $1,489,583, which was the total sum owed and payable
by us to DADC for the disk replication, packaging and distribution services. In
connection with such transaction, we issued Sony 301,231 shares of our common stock at
$4.945 per share, Sony’s exclusive territory for exercising its home entertainment
distribution rights under the Distribution Agreement was extended from the United States
and Canada to worldwide, and the amount of advances subject to recoupment by Sony out
of royalty payments that would otherwise be due to us under the Distribution Agreement
was increased by the amount of the payment to DADC. |
|
(d) |
Other
Accrued Expenses include estimates of expenses incurred but not yet recorded. The increase
in Other Accrued Expenses from the year ended December 31, 2016 to December 31, 2017
relates to estimates of final dubbing costs and participation expense related to our
Llama Llama property. |
|