NOTE 8 - PREPAID EXPENSES AND OTHER CURRENT ASSETS

9 Months Ended

Sep. 30, 2016

Disclosure Text Block Supplement [Abstract]

NOTE 8 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

The Company’s prepaid expenses and other current assets consisted of the following at September 30, 2016 and December 31, 2015, respectively:

Category	September 30, 2016		December 31, 2015
	(Unaudited)
Prepaid Insurance	$	26,193	$	69,456
Subscriptions		220,120		54,756
Vendor Prepayments		185,996		34,389
Deferred Valuation Expense Related to Endorser Agreements		131,500		353,802
Molds		57,967		-
Deferred Charges		31,546		31,546
Total Prepaid Expenses and Other Current Assets	$	653,322	$	543,949

Prepaid insurance pertains to various business insurance policies, the fees of which have been financed by a third-party service provider and are being paid over an eleven-month period. This prepayment is amortized ratably over the twelve-month insurance coverage period.

Subscriptions principally pertain to prepaid software support and web-hosting services provided by third-party service providers. The balance can fluctuate period-over-period based upon the timing between payment and amortization activities. The prepayments are amortized into expense over the life of the specific service period.

Vendor prepayments principally consist of a personnel search firm, a consultant for advisory services and costs for molds for an updated component of the VidTac product. These prepayments will be charged to operating expenses in fiscal year 2016 as the services are performed and as production of VidTac commences.

Deferred valuation expense relates to an endorsement agreement the Company entered into in January 2016 with an endorser who agreed to assist the Company with its brand recognition and sales efforts for COPsync products in pre-designated geographical areas. The agreement requires six quarterly payments of $250,000 and the grant of 100,000 shares of the Company’s common stock which was granted at signing and an additional 100,000 shares to be granted six months after signing. The non-cash value of the endorsement agreement totaled $206,000 and was determined by using the stock price on the date of the agreement. The second tranche is valued at $93,000. These amounts are being amortized to non-cash consulting expense over the respective service periods.

Deferred charges pertain to off-the-shelf computer-aided dispatch systems (“CAD”) purchased from two outside software services companies and delivered to six contracted customers as part of their respective, executed service agreement (or contract). The contracts involved license fees for the CAD service over a four-year period commencing with the acceptance of the service, as well as one-time implementation fees specific to each agency. The contracts were executed in early in 2013 and the customers made prepayments totaling $285,555, which were reported in current deferred revenues. At September 30, 2016, there remains some services yet to be performed and delivered to the customers; therefore, revenue recognition is not appropriate at this time. The Company expects to complete and deliver those services in the next twelve months, at which time the deferred charges will be recognized as revenues.