Revenue Recognition Revenue is recognized when a company satisfies a performance obligation by transferring a promised good or service to a customer. The Company generates all its revenue from contracts with customers. The Companys franchise agreements enter the parties into a ten year term and include performance obligations as follows: protected territory designation, access to proprietary manuals and handbooks, initial training and on-going assistance, consulting, promotion of goodwill, administration of marketing fund, marketing and promotion items, initial advertising program development assistance, company website access, Franchise Management Tool access, lessons and model plans, project kits, Duplo bricks, frames stop motion animation software, and use of the franchisors intellectual property (IP) (e.g., trade name  Bricks for Kidz). Additionally, the contract permits the franchisee to renew the contract for an additional ten-year term for a fee. The following is a description of principal activities from which the Company generates its revenue. Initial Franchise Fee - Since the Companys franchises are primarily a mobile concept and do not require finding locations or construction, the franchisees can begin operations as soon as they complete training. The franchise fees are fully collectible and nonrefundable as of the date of the signing of the franchise agreement. The initial franchise fee is recognized as deferred revenue on a straight line basis over the ten-year period as the performance obligations are met over the contract term. The Company adopted the new revenue standard (Topic 606) on October 1, 2018 for contracts with remaining performance obligations as of October 1, 2018. Comparative information from prior year periods has not been adjusted and continue to be reported under the accounting standards in effect for those periods under Topic 605. The adoption of the new guidance changed the timing of recognition of franchise sales and franchise renewal revenue and related commissions paid on franchise sales, as discussed further in Note 7. The activity in the Companys deferred revenue for initial franchise fee is included in Deferred revenue and Deferred revenue, net of current portion on the Condensed Consolidated Balance Sheets, and consists of the following: Balance at beginning of period New billings (a) Revenue recognized (b) Balance at end of period As of June 30, 2019 $ - $ 6,687,465 $ (1,844,413) $ 4,843,052 (a) New billings not related to ASC 606 implementation was $45,876 and $176,343 for the three and nine month periods ended June 30, 2019, respectively. (b) Revenue recognized not related to ASC 606 implementation for new billings was $815 and $10,468 for the three and nine month periods ended June 30, 2019, respectively. Commissions paid on initial franchise sales are recognized as an asset and amortized over the contract life of the franchise agreement. The activity in the Companys capitalized contract costs for commissions consist of the following: Balance at beginning of period Additions to Contract cost for new activity (a) Expense recognized (b) Balance at end of period As of June 30, 2019 $ - $ 2,087,806 $ (460,361) $ 1,627,445 (a) Additions to contract cost for new activity not related to ASC 606 implementation was $0 and $11,737 for the three and nine month periods ended June 30, 2019, respectively. (b) Expense recognized not related to ASC 606 implementation for new activity was $0 and $828 for the three and nine month periods ended June 30, 2019, respectively. Advertising Fund Revenue - Per the terms of the franchise agreements, the Company collects 2% of franchisees monthly gross revenues each month, due on the third day of the following month, for a marketing fund, managed by the Company, to allocate towards national branding of the Companys concepts to benefit the franchisees. This revenue is recognized on a monthly basis. Upon adoption of FASB 606 on October 1, 2018, the Company began presenting these revenues on a gross revenue basis on its statement of operations as per FASB ASC 606-10-55-39. The activity in the Companys accrued marketing fund for advertising fund revenue accounts consists of the following: Balance at beginning of period New billings (a) Expense recognized (b) Balance at end of period As of June 30, 2019 $ 97,334 $ 585,885 $ (617,915) $ 65,304 (a) New billings recognized related to the beginning balance was $68,871 and $73,573 for the three and nine month periods ended June 30, 2019 not related to ASC 606 implementation. (b) Expense recognized related to the beginning balance was $38,324 and $105,603 for the three and nine month periods ended June 30, 2019 not related to ASC 606 implementation. Royalties - Royalties are calculated per franchise, based on a flat fee structure and are recognized as earned on a monthly basis. Merchandise Revenue  Merchandise revenue is made up of Lego kits and fees for the use of Company email.