Entry into a Material Definitive Agreement, Financial Statements and Exhibits
Item 1.01 Entry into a Material Definitive Agreement.
On November 11, 2013, Local Corporation (the "Registrant") entered into a Settlement and Patent License Agreement (the "Agreement") with GeoTag, Inc., pursuant to which the Registrant agreed to pay GeoTag, Inc. a license fee of $550,000 in return for a license to the Licensed Patents (as defined in the Agreement), including United States Patent No. 5,930,474, all patent applications related thereto, and all reissue patents, continuations and continuations-in-part through the expiration of the last surviving patent among the Licensed Patents. In connection with the Agreement, Geotag will dismiss its claims against the Registrant in Civil Action No. 2:10-CV-00265 pending in United States District Court for the Eastern District of Texas with respect to the Licensed Activities and Products (as defined in the Agreement), which includes all current operations of the Registrant. The Registrant has denied liability in the litigation and has entered into the Agreement to put an end to litigation costs associated with this suit. A copy of the Agreement is attached hereto as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.
Exhibit 10.1 Settlement and Patent License Agreement by and between Registrant and Geotag, Inc. dated November 11, 2013.
Ken Cragun - Chief Financial Officer "Q3 sales and marketing expense increased $221,000 from the prior quarter, related to higher personnel related cost and higher marketing spend on trade show participation. Q3 G&A expense increased $1 million as Q3 G&A expense included an accrual for $550,000 as an estimated cost related to the Geotag lawsuit and $450,000 in bad debt expense."
But the best es of all: Without this costs, the EBITDA in Q3/2013 would be 1.9 million, not only 1.3 million - and this costs doesn't exist in Q4/2013.