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11. Commitments | 15 Months Ended
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Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract] |
11. Commitments | Note 11 Commitments (A) Licensing and Royalty Agreement In 2011, the Company executed a trademark licensing agreement with General Electric (“GE”), which allows the right to market ceiling light and fan fixtures, with the Company’s Technology installed displaying the GE logo. In addition, The GE trademark license agreement imposes certain manufacturing and quality control conditions that the Company must maintain in order to continue to use the GE logo. The license is non-transferable and cannot be sub licensed. Various termination clauses are applicable, however, none were enforceable as of December 31, 2013 or 2012. The license agreement has minimum royalty obligations due from 2015 through 2017 as follows:
Year Ended December 31, |  |
| 2014 |  |  | $ | — |
| 2015 |  |  |  | 2,800,000 |
| 2016 |  |  |  | 3,300,000 |
| 2017 |  |  |  | 3,600,000 |
| Total |  |  | $ | 9,700,000 |
The minimum royalty obligations listed above could be higher in the event the Company exceeds the following net sales minimums:
| 2015 |  |  | $ | 56,000,000 |
| 2016 |  |  | $ | 66,000,000 |
| 2017 |  |  | $ | 72,000,000 |
The increase is computed by taking the Company’s net sales less the sales minimums and multiplying by 5%. The sales period used to determine the calculation is December 1 of the prior year through November 30 of the current year. During 2013, the Company recorded royalty expense of $400,000 as a component of general and administrative expenses. (B) Employment Agreement – Chief Executive Officer On November 15, 2013, the Company executed an employment agreement that commenced January 1, 2014 and expires on December 31, 2018. Under the terms of the agreement, the Company granted 1,250,000 shares of common stock, having a fair value of $312,500. 500,000 shares vested on November 15, 2013 (see Note 10 (A) (2); the remaining 750,000 shares vest evenly, (250,000 shares) each on December 31, 2014, 2015 and 2016. The Chief Executive Officer will also receive:
• |  | Annual salary of a minimum $150,000,
• |  | Additional cash compensation based on various thresholds and/or milestones tied to the Company meeting various revenue goals; none of which occurred as of the date of this report; and
• |  | 5 year stock options equal to 1 ½% of quarterly net income, a strike price will be determined on the grant date, which as of the date of this report has not yet occurred.
(C) Consulting Agreement On December 1, 2013, the Company executed a 3 year consulting agreement with a Non-Executive Chairman, having the following terms:
• |  | Annual salary of a minimum $150,000; and
• |  | Cash, stock or 5 year stock options (cashless exercise option by holder) equal to ½% of Company’s annual gross revenue (sales less returns and discounts), a strike price will be determined on the grant date, which as of the date of this report has not yet occurred.

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- Definition The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.25) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 25 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 19 -Article 7 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 17 -Article 9 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03.17) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03.(a)(19)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 + Details
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