2.4.0.800000013 - Disclosure - COMMITMENTS AND CONTRACTUAL OBLIGATIONStruefalsefalse1false falsefalseFrom2013-01-01to2013-06-30http://www.sec.gov/CIK0000704366duration2013-01-01T00:00:002013-06-30T00:00:001true 1DEAC_CommitmentsAndContractualObligationsAbstractDEAC_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Commitments And Contractual Obligations2false 2us-gaap_CommitmentsDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00<table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif">a)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif">Strategic Business and Legal Services Agreement - NBN Enterprises, Inc.</td></tr> </table>   On April 25, 2011, the Company entered into an agreement with NBN Enterprises, Inc. (NBN), through to May 1, 2013, whereby NBN provides strategic business services to the Company and pays the cost of outside legal counsel who will advise the Company on securities, corporate and contract matters. The agreement provides for compensation to NBN in the form of issuance of restricted Company common stock equal to 5% of outstanding shares, with anti-dilution protection through the issuance of additional shares through the term and for the succeeding 12 months, and a non-accountable expense allowance of $3,500 per month.   On September 11, 2012, the Company executed an amendment to the NBN agreement which substantially changed the terms for compensation under the original agreement, and made certain other changes, as follows:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(a)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">The due and owing, but unissued Company 1,065,226 shares of common stock shall be issued to NBN with a private placement restriction.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(b)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">NBN agreed to execute a separate Lock-up Agreement restricting the sale of the above referenced shares of common stock until September 21, 2013.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(c)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">The Company and NBN agreed to modify the original agreement whereby the Company is no longer obligated to issue additional or catch-up shares to NBN in order to maintain total aggregate share issuances under original agreement to 5% of outstanding shares of common stock after September 21, 2012, provided that that the Company continues to pay the $3,500 per month payments through May 30, 2013.</td></tr> </table>   During the six months ended June 30, 2013 and 2012, the Company incurred legal expenses of $17,500 and $21,000, respectively, under this agreement. At June 30, 2013 and December 31, 2012, the Company has amounts due of $28,000 and $10,500, respectively, under the agreement.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">b)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Line of Credit - Cronin</td></tr> </table>   On July 9, 2011, the Company established a revolving line of credit (LOC Cronin), bearing interest at 15% per annum, and payable with accumulated interest, and due December 31, 2011 with Charles R. Cronin, Jr., a shareholder and director of the Company, (the Lender).  On September 11, 2011 and October 5, 2011, the Board of Directors of the Company approved and the Company executed approvals of credit limit amendments to increase the Companys outstanding line of credit to $300,000.  The Company is still seeking funding to fulfill its financial obligations under this agreement and is in default for non-payment.  Without funds to settle this obligation or obtaining consent from the related party to defer payment of the amount owing, the related party has the right to demand payment from the Company.   On June 30, 2013 and December 21, 2012 the Company owed the Lender $183,045 and $119,139, respectively. During the six months ended June 30, 2013 and 2012, the Company recorded interest expense of $20,803 and $21,787, respectively, related to the line of credit.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif">c)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif">Consulting Agreement Key Services, Inc.</td></tr> </table>   On July 9, 2011, the Company executed a consulting agreement with Key Services, Inc. (Key Services), whereby Key Services will locate and assist in the Companys development and construction of an energy campus project to be undertaken by the Company in the future.  The Consulting Agreement is non-exclusive and runs for a period of five years. As consideration, the Company has agreed to pay compensation to Key Services  in the form of cash in an amount equal to $20,000 per month or at the Companys option (if funds are not available), restricted shares of the Companys common stock, valued at the average closing price of Companys common stock over the preceding 20 trading days. In addition, Key Services is entitled to additional fees, including but not limited to, joint venture, partnership, consulting, developer, contractor and/or project management fees, to be negotiated separately, and agreed to in writing on a project-by-project basis.   On July 18, 2012, the Company executed an amendment to the Key Services, Inc. consulting agreement which settled the accounts payable balance and substantially changed the terms for compensation under the original consulting agreement, and made certain other changes, as follows:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(a)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">The Company agreed to settle in full the past due and outstanding obligation for prior consulting fees to Key Services which aggregated $121,862, at July 18, 2012, by the immediate private issuance of 609,315 shares of the Companys restricted Common Stock to Key Services. The shares of common stock were issued September 28, 2012.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(b)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Key Services agreed to execute a separate Lock-up Agreement restricting the related sale of the above referenced Shares for a period of twelve (12) months after the date of expiration of the customary SEC Rule 144 restriction period (normally 6 months).</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(c)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">The Company and Key Services agreed to terminate payment of a $20,000 monthly consulting fee during the remaining term of the consulting agreement, beginning July 1, 2012.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(d)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Reaffirmed the Parties agreement that the Company would pay Key Services additional fees to be separately negotiated, including site development, joint venture, partnership, consulting, developer, contractor and/or project management fees, on a project by project basis.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">(e)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Provided that the Company has the right to assign its obligations under the consulting agreement to one or more wholly owned subsidiaries or related party entities. The Amendment contains customary warranties and representations and indemnification and confidentiality provisions and provides that the Key Services is subject to noncompetition and noninterference covenants.</td></tr> </table>   For the three and six months ended June 30, 2013 and 2012, the Company recorded consulting services expense of $0 and $120,000, respectively, to Key Services.   At June 30, 2013 and December 31, 2012, the Company has no amounts owing to Key Services.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">d)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Consulting Agreement TMDS, LLC</td></tr> </table>   On July 9, 2011, as amended December 30, 2011, Company executed a consulting agreement with TMDS, LLC (TMDS), an entity controlled by a director and shareholder of the Company, whereby TMDS will locate and assist in the Companys development and construction of energy campus projects to be undertaken by the Company in the future.  The consulting agreement is non-exclusive and runs for a period of five years. As consideration, the Company has agreed to pay compensation to TMDS in the form of one or more Warrants for the purchase of 1,000,000 shares of restricted common stock of the Company (Shares) every 90 days, exercisable at $0.0001 per share, with an exercise term of five (5) years from the date of each issuance.  In addition, TMDS is entitled to additional fees, including but not limited to, joint venture, partnership, consulting, developer, contractor and/or project management fees, to be negotiated separately, and agreed to in writing on a project-by-project basis.   During the three months ended June 30, 2013 and 2012, the Company recorded the issuance of one Warrant for 1,000,000 shares of common stock, valued at $20,000 and $160,000, respectively, to TMDS under this agreement. During the six months ended June 30, 2013 and 2012, the Company recorded the issuance of one Warrant for 2,000,000 shares of common stock, valued at $70,000 and $230,000, respectively, to TMDS under this agreement.   As of June 30, 2013 and December 31, 2012, the Company is  obligated to issue seven Warrants totaling 11,000,000 shares of common stock and six Warrants totaling 10,000,000 shares of common stocks, respectively, to TDMS under this agreement. See Note 7, Capital Stock Common Stock Warrants, for discussion.    <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif">e)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif">Consulting Agreement Investor and Broker Dealer Relations and Financing Alternatives</td></tr> </table>   On March 14, 2012, the Company executed a consulting agreement with Undiscovered Equities, Inc. (UEI), pursuant to which UEI has agreed to provide various consulting services, including retention and supervision of various public relations services and investor relations services, strategic business planning, broker dealer relations, financing alternatives and sources, and due diligence meetings for the investor community.  The agreement has a six month term, but may be terminated early after 60 days, and provides for the Company to pay consulting fees as follows: (i) the sum of $25,000 per month over the term of the agreement upon the Company procuring financing of $500,000 or more, and (ii) a signing bonus in the form of immediate issuance of 125,000 shares of the Companys restricted Common stock (the Stock Payments).   On May 3, 2012, the Company and UEI executed a letter of execution (the Letter of Extension) of the consulting agreement to extend the payment terms of Cash Payments and Stock Payments from the May 7, 2012 to June 15, 2012.   On August 15, 2012, the Company and UEI executed Amendment No. 1 to the consulting agreement, whereby the commencement date for the services to be provided by UEI, including the obligation of the Company to pay the monthly compensation to UEI upon the Company procuring financing of $500,000 or more, was amended to reflect a commencement date of September 1, 2012 instead of June 15, 2012.  The shares of common stock, valued at $17,500, were issued in November 2012.   On November 8, 2012, the Company and UEI executed Amendment No. 2 to the consulting agreement, whereby the commencement date for the services to be provided by UEI, including the obligation of the Company to pay the monthly compensation to UEI upon the Company procuring financing of $500,000 or more, was amended to reflect a commencement date of December 1, 2012 instead of September 1, 2012.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">f)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Stock Purchase Agreement C.C. Crawford Retreading Company, Inc. (CTR) and Assignment and Assumption Agreement and Right of First Refusal and Option Agreement IWSI PS Plan</td></tr> </table>   On March 20, 2012, the Company, through its wholly owned subsidiary, DEDC, entered into a stock purchase agreement (the Stock Purchase Agreement) with C.C. Crawford Tire Company, Inc. (CTR), pursuant to which DEDC agreed to acquire 100% of the issued and outstanding common shares of CTR, for an aggregate purchase price of $600,000 in cash, due and payable upon the date of closing, on or before April 20, 2012, subject to the completion of certain closing conditions precedent, to be performed by both the Seller and DEDC.   On June 1, 2012, the Company, through its wholly owned subsidiary, DEDC, entered into an assignment and assumption agreement (Assignment Agreement) with IWSI PS Plan (IWSI PS), an entity controlled by Charles R. Cronin, a shareholder and director of the Company, and the Seller pursuant to which DEDC assigned its rights to acquire CTR to IWSI PS Plan.    On October 2, 2012, the Company, through its wholly owned subsidiary, DEDC executed a right of first refusal and option agreement with IWSI PS for both an option to purchase and right of first refusal to purchase CTR.    The option to purchase granted to the Company extends for one year from the date of execution, and provides for certain terms and conditions as follows:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">1.</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">An option exercise price equal to $1,032,500, the original purchase price paid by IWSI (the Option Purchase Price) with the following adjustments;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">2.</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">A quarterly option payment of $15,000 (the Option Payment, payable every 90 days during the Term of this Agreement;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">3.</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">An amount equal to any increased accounts receivable over the Term and amount equal to five percent (5%) per month of the original purchase price paid by IWSI;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">4.</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">All amounts expensed by CTR to advance the business, including tire pyrolysis, the amounts paid the Officers as employment bonuses, the closing costs on the original acquisition, and an amount equal to any increase in IWSIs shareholder equity, less any amounts CTR received from the prior sale of any assets;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">5.</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Amount equal to any decrease in accounts payable, and a monthly fee of $10,000 per month, accrued monthly, for each month of use of the facility by DEAC and/or its affiliates.</td></tr> </table>   After 180 days from the date of execution of the Assignment Agreement, if IWSI PS receives a bona fide offer or enters into a purchase agreement with a Third Party Offeree to purchase CTR and DEDC fails to execute the Right of First Refusal, then the Right of First Refusal is terminated.  Further, the Right of First Refusal and Option Agreement is terminated if DEDC, or its affiliates, does not raise a minimum of $2,000,000 through paid in capital of debentures by March 31, 2013.   DEDC or its affiliates failed to raise the minimum of $2,000,000 as of March 31, 2013, and accordingly, the Right of First Refusal and Option agreement terminated March 31, 2013.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif">g )</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif">License and Assignment Agreement R.F.B., LLC</td></tr> </table>   On May 23, 2012, Dynamic Energy IP, LLC, a Delaware corporation, a wholly owned subsidiary of Dynamic Energy Alliance Corporation, a Florida corporation (DEAC), entered into a definitive agreement (the Contract) with R.F.B., LLC (RFB), pursuant to which RFB licensed and assigned to Dynamic Energy LP, a Non-Provisional Patent Application (the Application), and the World Wide exclusive right, license and privilege of utilizing certain RFB technology and expertise. In consideration, the Company has an obligation to issue RFB 100,000 shares of the Companys restricted common when RFB completes certain provisions of the Contract.  On September 13, 2012, RFB completed its contract provisions and the shares of common stock, valued at $6,000, were issued in November 2012.   Further, the Contract provides for payment by the Company to RFB of specified license fees based on both gallons of high value organics produced utilizing the RFB technology, and a formula percentage of net profits realized from the recovery of all energy products from oil sands or tar sands over the term of the Contract by the Company (regardless of technology used) The Contract has a term of 25 years, or 20 years from the date of issuance of patents, whichever is shorter.  As of June 30, 2013 and December 31, 2012, there are no obligations due under the Contract.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">h )</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Industry Consulting and Nondisclosure Agreement and Amendments Practical Sustainability LLC</td></tr> </table>   On May 25, 2012, Dynamic Energy Development Company, LLC, (DEDC) a wholly owned subsidiary of Dynamic Energy Alliance Corporation, modified a prior agreement, Industry Consulting and Nondisclosure Agreement (ICNA), with Practical Sustainability, LLC (PS), an entity controlled by Dr. Earl Beaver, a director of the Company, dated November 19, 2010, whereby services and compensation were amended to reflect PSs role that was effective March 1, 2011.  Changes under the amended agreement include:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 8%; font: 10pt Times New Roman, Times, Serif; text-align: justify">-</td> <td style="width: 92%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Nature of Services:  Development of Life Cycle Analysis Models, Research of Government Information on Technology for Tire Pyrolysis Oil, Analysis of various tire pyrolysis operations, evaluation of the marketability of tire pyrolysis oil and carbon black produced by vendors of tire pyrolysis processes, participation in the development of the roll-out plan for tire pyrolysis plants, participation on the analysis of vended solutions of the manufacturing of tire pyrolysis plants.  Analysis of fuels produced by third party propriety processed that reportedly produce gasoline, diesel, jet fuel and other similar fuels for the use in combustion engines.  Provide and manage a central laboratory for DEDC or its parent.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 8%; font: 10pt Times New Roman, Times, Serif; text-align: justify">-</td> <td style="width: 92%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Compensation:  The Company or DEDC shall pay to PS a flat fee of $5,000 per month.  Compensation has been paid through January 2012.</td></tr> </table>   On January 17, 2013, the ICNA agreement was further amended to terminate the agreement effective February 1, 2012.  Under this amendment, DEDC and PS have agreed that all work under the ICNA agreement has been performed for those services through January 2012, and there are no obligations due PS as of June 30, 2013 and December 31, 2012.    <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%; font: 10pt Times New Roman, Times, Serif; text-align: justify">i)</td> <td style="width: 97%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Consulting Agreement Financing and Acquisitions Advisor</td></tr> </table>   On June 1, 2012, the Company executed a corporate advisory agreement (Agreement) with Heartland Capital Markets, LLC (Heartland), pursuant to which Heartland agreed to provide various advisory services, including equity and/or debt financings, strategic planning, merger and acquisition possibilities and business development activities that include various investor relations services, strategic business planning, broker dealer relations, financing alternatives and sources, and due diligence meetings for the investor community.  The agreement has a three month term which is renewable for additional three month periods, and provides for the Company to pay an advisory fee of two hundred and fifty thousand (250,000) restricted shares of the Companys restricted common stock (Stock).  The advisory fee is considered fully earned pro rata over the course of the term of the agreement and due to Heartland at the execution of the agreement.   On August 17, 2012, the Company and Heartland amended the Agreement, whereby the commencement date for the services to be provided by Heartland was changed to September 1, 2012.  Further, the amendment changed the date that the advisory fee consisting of 250,000 restricted shares of the Companys restricted common stock (Stock) was considered fully earned to the date that Heartland was issued the Stock.  The Company issued the common stock, valued at $15,000, on August 8,done 2012.   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 4%; font: 10pt Times New Roman, Times, Serif; text-align: justify"> j)</td> <td style="width: 96%; font: 10pt Times New Roman, Times, Serif; text-align: justify">Non-Binding Letter of Intent Terpen Kraftig, LLC</td></tr> </table>   On October 10, 2012, the Company, through its wholly owned subsidiary, Dynamic Energy IP Corporation (DEIP), executed a non-binding letter of intent (LOI) with Terpen Kraftig LLC (TK), a company managed by two of the Companys Directors, Charles R. Cronin, Jr. and Dr. Earl Beaver, contemplating a definitive agreement within 45 days from said letter of intent under which TK would assign to DEIP the exclusive, worldwide license and right in and to Licensors catalyst(s), reactor and fractionator technology relating to the recovery of high valued organics from the processing of waste tires (the Licensed Technology).   The LOI sets forth terms for a future definitive agreement that anticipates that the term of the license and assignment to Licensor of the Licensed Technology shall be the greater of (a) twenty-five (25) years, or (b) twenty (20) years from the issuance of the Licensed IP patent(s), whichever is greater, and that compensation payable to TK from the Company and DEIP would consist of:   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 7%; font: 10pt Times New Roman, Times, Serif">1.</td> <td style="width: 93%; font: 10pt Times New Roman, Times, Serif; text-align: justify">A non-refundable deposit in the amount of $100,000 to secure the exclusivity of the term sheet, payable within 30 days and prior to preparation and execution of the Definitive Agreement, which shall, upon execution of the Definitive Agreement, be allocated towards to costs associated with the purchase of the equipment required to construct a prototype unit (the Prototype) of the Licensed Technology.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 7%; font: 10pt Times New Roman, Times, Serif; text-align: justify">2.</td> <td style="width: 93%; font: 10pt Times New Roman, Times, Serif; text-align: justify">A payment to Licensor in the amount of Four Hundred Thousand and No/100 Dollars (USD$400,000), on or before December 31, 2012, for the purchase of the equipment required to construct a pilot plant with input of a minimum of 50/gallons per day (the Pilot Plant). If Licensee fails to fund the Pilot Plant on or before December 31, 2012, the Licensor shall have the right cancel and rescind the licensing rights of the Licensed IP granted to Licensee under the Definitive Agreement.</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="width: 100%"> <tr style="vertical-align: top"> <td style="width: 7%; font: 10pt Times New Roman, Times, Serif; text-align: justify">3.</td> <td style="width: 93%; font: 10pt Times New Roman, Times, Serif; text-align: justify">A minimum royalty cash payment of Thirty-Five Thousand and No/100 Dollars (USD $35,000) per month, from the date of execution of the Definitive Agreement forward over the term of the license, until and except when the royalty stream exceeds $35,000 per month (the Minimum Licensing Fee).</td></tr> </table>   The letter of intent contains customary warranties and representations and confidentiality provisions, including specific terms which are considered trade secrets, and are therefore not being released.   The Company is still seeking funding and is in default on this agreement due to non-payment.  Without funds to secure the exclusivity of the term sheet or obtain consent from TK to defer payment of the amount required,   there is no formal agreement between TK and the Company at this time.  The Definite Agreement is still being negotiated.  falsefalsefalsenonnum:textBlockItemTypenaThe 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. 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