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Note 8 - Resalable Software License Rights
6 Months Ended
Jun. 30, 2018
Notes to Financial Statements  
Research, Development, and Computer Software Disclosure [Text Block]
8.
RESALABLE SOFTWARE LICENSE RIGHTS
 
On
November 11, 2015,
the Company entered into a license agreement for the rights to all software and documentation regarding the technology currently known as or offered under the FingerQ name. The license agreement grants the Company the exclusive right to reproduce, create derivative works and distribute copies of the FingerQ software and documentation, create new FingerQ related products, and grant sub-licenses of the licensed technology to end users. The license rights have been granted to the Company in perpetuity, with a stated number of end-user resale sub-licenses allowed under the contract for a total of
$12,000,000.
The cost of sub-license rights expected to be amortized in the following
12
months is
$2,820,000
and is classified as current, with remainder as non-current.
 
The Company has determined the software license rights to be a finite lived intangible asset, and estimated that the software license rights shall be economically used over a
10
year period, with a weighting towards the beginning years of that time-frame. The license rights were acquired during the
fourth
quarter of
2015,
but the usage of such rights in the Company’s products was
not
generally available until
January 2017.
Accordingly, amortization began in the
first
quarter of
2017.
 
The remaining license rights are to be amortized over the greater of the following:
1
) an estimate of the economic use of such license rights,
2
) straight line method over
ten
years or
3
) the actual usage of such rights. The Company believes categorizing the amortization expense under Cost of Sales more closely reflects the nature of the license right arrangement and the use of the technology. A total of
$660,000
and
$390,000
was expensed during the
three
month periods ended
June 30, 2018
and
2017,
respectively. A total of
$1,320,000
and
$778,092
was expensed during the
six
month periods ended
June 30, 2018
and
2017,
respectively.  The
2018
expense was recorded based on the economic use model.  Since the license purchase, a cumulative amount of
$2,878,596
has been expensed, with a carrying balance of
$9,121,404
as of
June 30, 2018.
 
On
December 31, 2015,
the Company purchased
third
-party software licenses in the amount of
$180,000
 in anticipation of a large pending deployment that has yet to materialize. The Company is amortizing the total cost over the same methodology described above with the greatest of the
three
approaches being the amortization for the periods. A total of
$20,642
and
$22,020
was expensed during the
three
month periods ended
June 30, 2018
and
2017,
respectively. A total of
$8,102
(net of credits of
$14,400
) and
$28,716
was expensed during the
six
month periods ended
June 30, 2018
and
2017,
respectively. Since the license purchase, the actual per unit cost (actual usage) of such license rights in the cumulative amount of
$55,698
net of credits has been expensed, with a carrying balance of
$124,302
as of
June 30, 2018. 
The Company has classified the balance as non-current until a larger deployment occurs. Software license rights is comprised of the following as of:
   
   
June 30,
   
December 31,
 
   
201
8
   
201
7
 
                 
                 
Current resalable software license rights
  $
2,820,000
    $
2,640,000
 
Non-current resalable software license rights
   
6,425,706
     
7,933,808
 
Total resalable software license rights
  $
9,245,706
    $
10,573,808