As part of the Company’s business model, it will seek out cannabis related licensing opportunities.
On July 31, 2014, the Company entered into a Licensing Agreement (the “Agreement”) with Artemis Dispensing Technologies (“Artemis”) for the development and resell of an automated dispensing product. Artemis is a non-affiliated company incorporated under the laws of Canada and was incorporated in Toronto, Ontario in July, 1997. No officers or directors of Artemis now, or from the Company’s inception, have served as an officer, director or affiliate of the Company and no officers or directors of the Company have served as an officer or director of Artemis.
Under the collaboration and license agreement, Artemis was to be responsible for the development of a high end automated dispensing product. Upon launch and sales of the product, Artemis was to be responsible for the installation, training and customer support for the hardware and software. The Company was to be responsible for direct sales, addition of key distributors and sublicensing of specific territories within the U.S.
Under the terms of the Agreement, the Company was to pay Artemis a licensing fee of $500,000 payable as follows: (1) $100,000 upon execution of the Agreement (which was paid to Artemis in August 2014), (2) $100,000 in 60 days, (3) $100,000 upon Artemis’ delivery of a functioning prototype, and (4) $200,000 after delivery of the prototype. The Company failed to pay the $100,000 due within 60 days of the July 31, 2014 Agreement date. Artemis failed to deliver any prototype of the dispensing product to the Company.
On December 31, 2016 (expiration date of the initial term of the Agreement), the Company reduced the carrying value of the Artemis Licensing Agreement capitalized costs from $100,000 to $0 and recognized an expense provision for nonrecoverability of Artemis License Agreement costs of $100,000. The Agreement as of January 1, 2017 was no longer in effect.
The Company is actively seeking additional licensing and dispensary opportunities in new territories as legislation is passed including, brick-and-mortar dispensaries, licenses for dispensaries, automated dispensing machines. Please feel free to contact us through ourand tell us more.