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COMMITMENTS AND CONTINGENCIES
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12 Months Ended | ||||||
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Dec. 31, 2014
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| Commitments and Contingencies Disclosure [Abstract] | |||||||
| COMMITMENTS AND CONTINGENCIES |
Operating Leases
The Company leases its office space in Hollywood, California under an operating lease which provides for monthly rent of $14,805 through July 31, 2015. The Company had total rent expense for the years ended December 31, 2014 and 2013 of $135,718 and $39,513, respectively.
The Company has lease agreements to display its bBooth units in various shopping malls through the United States, which provide for monthly lease payments ranging from $3,500 to $12,000 extending through May 2015. The total commitments relating to these lease agreements for the year ended December 31, 2015 amount to $224,300.
Licensing Agreement
On September 30, 2014, the Company entered into an Asset License Agreement with Studio One Media, Inc. ("Studio One") which provides the Company with an exclusive license to use certain assets of Studio One, including its website, associated content and back-end infrastructure, and assignment of all collateral agreements including music publishing licenses. Consideration for the license of these assets includes 600,000 shares of the Company's common stock issued on November 11, 2014 following the closing of a reverse merger transaction, valued at $300,000, as well as $100,000, of which $40,000 was paid upon execution of the agreement, and $60,000 due by March 29, 2015, 180 days from the execution of the agreement.
The Company also received a license of all Studio One's intellectual property, including an exclusive license of all Studio One Mystudio related intellectual property, including patents issued and pending, as well as a non-exclusive license of AfterMaster technology for use by the Company in its booth equipment. The total consideration for the license is $1,150,000, of which $340,000 ($160,000 paid as of December 31, 2014) is payable upon execution of the agreement, $100,000 due 90 days from the execution of the agreement, $210,000 due 180 days from the execution of the agreement, $250,000 due 9 months from the execution of the agreement, and $250,000 payable on or before 18 months from the date of the agreement.
Employment Agreements
On November 21, 2014, we entered into an executive employment agreement effective November 1, 2014 with Rory Cutaia, our president, chief executive officer, secretary and treasurer. Pursuant to the terms of the employment agreement, we have agreed to pay Mr. Cutaia an annual salary of $325,000, which will be increased each year by 10%, subject to the annual review and approval of our board of directors. Notwithstanding the foregoing, a mandatory increase of not less than $100,000 per annum will be implemented on our company achieving EBITDA break-even. In addition to the base salary, Mr. Cutaia will be eligible to receive an annual bonus in an amount up to $325,000, based upon the attainment of performance targets to be established our the board of directors, in its discretion.
The initial term of the employment agreement is five years and, upon expiration of the initial five year term, it may be extended for additional one year periods on ninety days prior notice.
In the event that: (i) Mr. Cutaia's employment is terminated without cause, (ii) Mr. Cutaia is unable to perform his duties due to a physical or mental condition for a period of 120 consecutive days or an aggregate of 180 days in any 12 month period; or (iii) Mr. Cutaia voluntarily terminates the employment agreement upon the occurrence of a material reduction in his salary or bonus, a reduction in his job title or position, or the required relocation of Mr. Cutaia to an office outside of a 30 mile radius of Los Angeles, California, Mr. Cutaia will:
In addition, Mr. Cutaia wil have any and all of his unvested stock options immediately vest, with full registration rights; and any unearned and unpaid bonus compensation, expense reimbursement, and all accrued vacation, personal sick days, etc., be deemed earned, vested and paid immediately.
As a condition to receiving the foregoing, Mr. Cutaia will be required to execute a release of claims, and a non-competition and non-solicitation agreement having a term which is the same as the term of the monthly severance payments described above.
Aaron Meyerson is employed by bBooth for an annual salary of $225,000 pursuant to an employment agreement dated August 4, 2014. Mr. Meyerson is entitled to discretionary bonuses under the employment agreement based upon the achievement of performance targets and budget objectives. He received a guaranteed bonus of $25,000 upon completion of the Exchange Agreement and, subject to available free cash flow as determined in the discretion of our company's CEO, he is entitled to receive $50,000 on each of December 31, 2014 and each quarter thereafter until an aggregate of $277,460 has been paid. Mr. Meyerson's employment agreement may be terminated by either party upon 30 days written notice. If the employment agreement is terminated by our company without cause or by Mr. Meyerson for good reason, then we will pay three months' severance and reimbursement for COBRA health insurance costs for six months.
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