Quarterly report pursuant to Section 13 or 15(d)

Concentration of Risk

Concentration of Risk
9 Months Ended
Sep. 30, 2019
Risks and Uncertainties [Abstract]  
Concentration of Risk

Note 8 - Concentration of Risk


Cash and cash equivalents.


We maintain deposits in banks in amounts that might exceed the federal deposit insurance available. Management believes the potential risk of loss on these cash and cash equivalents to be minimal. All cash balances as of September 30, 2019 and December 31, 2018, including foreign subsidiaries, without FDIC coverage were $6.5 million and $1.1 million, respectively.


On July 18, 2019, one of our former merchant processors released a reserve of $2.0 million and has agreed to refund an additional $1.5 million in November 2019, subject to certain conditions.




A significant portion of our revenue is derived from the Rich Dad brands. For the three months ended September 30, 2019 and 2018, Rich Dad brands provided 71.0% and 72.3% of our revenue, and 72.4% and 71.4% for the nine months ended September 30, 2019 and 2018, respectively. In addition, we have operations in North America, United Kingdom and Other foreign markets (see Note 9 — Segment Information). 


On September 16, 2019, we received notice from Rich Dad Operating Company, LLC ("RDOC"), indicating that RDOC does not intend to extend the term of the September 1, 2013, Rich Dad Operating License Agreement (as amended, the "License Agreement") by and between the Company and RDOC. The term of the License Agreement expired on September 30, 2019. Notwithstanding the expiration of the License Agreement, the Company may continue to use Licensed Intellectual Property, as defined in the License Agreement, including, but not limited to, the Rich Dad trademark and stylized logo, for the purpose of honoring and fulfilling orders by its customers in existence as of the date of the expiration of the Agreement.