CISCO ROYALTY AUDIT AND CONCENTRATION |
12 Months Ended |
|---|---|
Dec. 31, 2015 | |
| Notes to Financial Statements | |
| NOTE L - CISCO ROYALTY AUDIT AND CONCENTRATION |
In late December 2013, the Company exercised its right to audit the royalties paid to it by Cisco for the years 2012 and 2013 (the "Audit Period") in accordance with its May 2011 license agreement with Cisco. As a result of the audit, Cisco agreed to pay the Company additional royalty payments pursuant to the May 2011 license agreement of $3,281,000 for the Audit Period and other periods covered by the license agreement. These additional aggregate royalty payments of $3,281,000 were all recorded as royalty revenue in the three month period ended June 30, 2014, at the time the Company completed the audit and the additional royalty payments were agreed to by the parties.
Cisco constituted approximately 51% and 87% of the Company's revenue (including the additional revenue from the Cisco audit referenced above), respectively, for years ended December 31, 2015 and December 31, 2014. At December 31, 2015 and December 31, 2014, the royalty receivable from Cisco constituted approximately 67% and 74% of the Company's royalty receivables, respectively. Microsoft Corporation accounted for 28% of the Company's revenue for the year ended December 31, 2015.
Notwithstanding a cap for the year ended December 31, 2015 of $8 million of royalty payments from Cisco to the Company in accordance with the Company's agreement with Cisco, the Company recorded revenue from Cisco of $8,403,484 for the year ended December 31, 2015 which included an adjustment of $403,484 agreed to in 2015 for prior periods. |