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8. COMMITMENTS AND CONTINGENCIES
12 Months Ended
Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

Royalty Agreements

 

Effective November 28, 2007, WCI entered into separate exclusive license agreements with Applied Nutritionals, LLC (“Applied”) and its founder George Petito, pursuant to which WCI obtained the exclusive world-wide license to make products incorporating intellectual property covered by a patent related to CellerateRX products.

 

In consideration for the licenses, WCI agreed to pay to Applied the following royalties, beginning January 3, 2008: (a) an upfront royalty of $100,000; (b) a royalty of fifteen percent (15%) of gross sales occurring during the first year of the license; (c) an additional upfront royalty of $400,000, which was paid October, 2009; plus (d) a royalty of three percent (3%) of gross sales for all sales occurring after the payment of the $400,000 upfront royalty. In addition, WCI must maintain a minimum aggregate annual royalty payment of $375,000 for 2009 and thereafter if the royalty payments made do not meet or exceed that amount.  The total unpaid royalties as of December 31, 2015 and 2014 is $323,062 and $324,286, respectively.

 

On March 30, 2016 the Company made payment in the amount of $323,062 to Applied Nutritionals.

 

On September 29, 2009, the Company entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”), by and among the Company, RSI-ACQ, LLC, a wholly-owned subsidiary of the Company (RSI), Resorbable Orthopedic Products, LLC (“Resorbable”) and Resorbable’s members, pursuant to which, RSI acquired substantially all of Resorbable’s assets, in exchange for (i) 500,000 shares of the Company’s common stock, and (ii) a royalty equal to eight percent (8%) of the net revenues generated from products sold by the Company or any of its affiliates, which products are developed from or otherwise utilize any of the patented technology acquired from Resorbable. The royalty is paid to Dr. Barry Constantine whom is an employee and hold the position of Director of R&D.

 

Inventory Contract

 

In October of 2015, WCI entered into a contract with the manufacturer of the CellerateRX product to purchase $217,512 of product.  Payment in the amount of $108,014 was made in October of 2015 with the remaining balance of $109,498 paid in 2016 and before receipt of product.  This amount was recorded as an asset in the “Prepaid and Other Assets” account at December 31, 2015 based on the contractual obligation of the parties. The Company did not have any contractual obligations to purchase product as of December 31, 2014.

 

Office Leases

 

The Company’s corporate office is located at 16633 Dallas Parkway, Suite 250, Addison, TX 75001.  The lease was entered into in November of 2013.  The lease expires on April 30, 2017 and requires base rent payments of $5,737 per month for months 1-17, $5,866 for months 18-29, and $5,995 for months 30-41.

 

The Company also leased real property which it uses for its marketing staff in Denver, Colorado.  The lease was a 12 month lease expiring on November 30, 2014 and required base rent payment of $300 per month.  As of December 2014, the lease was month-to-month with a required base rent of $300 per month.  As of February 28, 2015 the lease was ended.

 

Payables to Related Parties

 

As of December 31, 2015 and 2014, the Company had outstanding payable to related parties totaling $21,099 and $0, respectively. The payables are unsecured, bear no interest and due on demand.