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INVESTMENT IN PARAGON WASTE SOLUTIONS LLC
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6 Months Ended |
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Jun. 30, 2014
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| Business Combinations [Abstract] | |
| INVESTMENT IN PARAGON WASTE SOLUTIONS LLC |
NOTE 7– INVESTMENT IN PARAGON WASTE SOLUTIONS LLC
At June 30, 2014 and December 31, 2013 the Company owned 54% of the membership units of PWS, Black Stone Management Services, LLC (“Black Stone”), the original inventor of the technology, owned 26%, a shareholder of the Company 10% and two related parties, each owned 5%.
In August, 2011, we acquired certain waste destruction technology intellectual property (the “IP”) from Black Stone in exchange for 1,000,000 shares of our common stock valued at $100,000. In March 2012, the Company entered into an Irrevocable License & Royalty Agreement with PWS that granted to PWS an irrevocable world-wide license to the IP in exchange for a 5% royalty on all revenues from PWS and its affiliates. PWS generated licensing and placement revenues of $38,700 for the quarter ended June 30, 2014 and no revenues for the quarter ended June 30, 2013 or for the year ended December 31, 2013, therefore royalties due to SEER are $1,900 and $0, respectively.
Since its inception through June 30, 2014, we have provided approximately $2.9 million in funding to PWS for working capital, the further development and construction of various prototypes, and the construction of commercial waste destruction units for placement with licensees. None of the minority interest holders have made capital contributions or other funding to PWS. The intent of the operating agreement is that we will provide the funding as a loan to be repaid out of future earnings of PWS and prior to any capital distributions to members.
In September 2013, PWS entered into an Exclusive Use License and Joint Operations Agreement (“License Agreement”) with Sterall Inc. (“Sterall”). The License Agreement grants to Sterall the use of the PWS Technology and requires payments of licensing fees, unit placement fees and distribution of net operating profits as more fully described in Footnote 7 in our 2013 Annual Report on Form 10-K filed on March 27, 2014. For the six months ended June 30, 2014, Sterall ordered a total of six CoronaLux™ units of which one unit was delivered and five units are still under construction at June 30, 2014.
In addition, on March 4, 2014, PWS entered into a Licensing and Equipment Lease Agreement with eCycling International of South Carolina, LLC (“eCycling”). The License Agreement grants to eCycling the use of the PWS Technology for an initial term of five years and requires a payment of $176,875 as an initial licensing fee and distributions of 50% of net operating profits, as defined in the agreement, in lieu of continuing royalty payments for the use of the licensed technology.
Payments received for licensing and placement fees have been recorded as deferred revenue in the accompanying condensed consolidated balance sheets at June 30, 2014 and are recognized as revenue over the term of the contract. |