O- . Exhibit III Information Obtained About the Operations of RI Licensing Arrangement with Mica Revenue in the amount of $300,000 has been recognized in the accounting recor- Royalty revenue in the amount of $135,000 has been recognized in the accounting records based on a gross margin of $900,000 reported by Mica for the six months from December 1, 2019, to May 31, 2020 Mica is a financially sound entity Research and Development RI acquired the following technology and research findings from Jess Stone: Project Fair Value Current Status Technology/Assigned Name FeldsparX $ 700,000 licensed to Mica for three years (see No 1) Quartz 1,500,000 used in the commercial production of goods (see Note 2) Basalt 900,000 used in the commercial production of goods (see Note 3) Grandiorite 400.000 testing use in a possible product $3,500,000 Note 1-FeldsparX Technology: Management of RI decided to license use of the FeldsparX technology rather than to produce goods using this technology itself. Management expects that this technology will have a useful life of three years. Note 2-Quartz Technology: Management of RI estimates that the Quartz technology will generate total revenue in the amount of $7.5 million over a four-year period commencing December 1, 2019, Note 3-Basalt Technology: Management estimates that the Basalt technology will generate total revenue in the amount of $2.7 million over a three-year period commencing March 1, 2020. Jess Stone has started work on a new project, Kryptonite, after becoming an employee of RI and this project is presently in the conceptual formulation state of a possible product that uses the technology. A research and development asset in the amount of $3.5 million is reported on Ri's Aa Sales Arrangement with Ferrous Inc. Ferrous Inc. has placed a large order for PC touch screen monitors produced by RI that uses the Quartz technology. The sales agreement requires RI to have the goods available for delivery to Ferrous by August 31, 2020 and to make deliveries to Ferrous as requested during September and October 2020. Ferrous will be holding a special sales event during these months. Ferrous has requested that the goods are not to be delivered until September and October as they do not have the warehouse space to store all of the items for the special sale. Revenue pertaining to this agreement is $2,500,000 and the related direct production costs are estimated to total $1,350,000. These goods will be covered by RI's inventory insurance. Ferrous made the nonrefundable fee payment of $1,250,000 required by this agreement on June 1, 2020. This amount has been recognized as sales revenue. The final $1,250,000 is to be paid by Ferrous on October 31, 2020. Ferrous is a financially sound entity. Sales Arrangement with Mega Mart Ltd. RI entered into an agreement with Mega Mart Ltd., a large global retailer, to distribute a lower-end touch screen for price-sensitive customers. This touch screen makes use of the Basalt technology. The sales agreement requires RI to deliver units of the touch screen to Mega Mart. Mega Mart will display the screens in a prime location and retain 20% of the per-unit sales price ($50 per unit), with the remaining 80% of the sales price to be sent to RI. Any unsold touch screens that are not sold by Mega Mart will be returned to RI. In addition, Mega Mart will provide RI an upfront payment of $250,000 in order to help offset working capital requirements. According to the sales agreement, RI shipped 30,000 units to Mega Mart Ltd. in April 2020. At the time of delivery, RI recorded revenue of $1.2 million, debited cash for $250,000, and set up an accounts receivable for the remaining $950,000, Required Prepare a report that addresses the requests of Carlos Guevara. O- . Exhibit III Information Obtained About the Operations of RI Licensing Arrangement with Mica Revenue in the amount of $300,000 has been recognized in the accounting recor- Royalty revenue in the amount of $135,000 has been recognized in the accounting records based on a gross margin of $900,000 reported by Mica for the six months from December 1, 2019, to May 31, 2020 Mica is a financially sound entity Research and Development RI acquired the following technology and research findings from Jess Stone: Project Fair Value Current Status Technology/Assigned Name FeldsparX $ 700,000 licensed to Mica for three years (see No 1) Quartz 1,500,000 used in the commercial production of goods (see Note 2) Basalt 900,000 used in the commercial production of goods (see Note 3) Grandiorite 400.000 testing use in a possible product $3,500,000 Note 1-FeldsparX Technology: Management of RI decided to license use of the FeldsparX technology rather than to produce goods using this technology itself. Management expects that this technology will have a useful life of three years. Note 2-Quartz Technology: Management of RI estimates that the Quartz technology will generate total revenue in the amount of $7.5 million over a four-year period commencing December 1, 2019, Note 3-Basalt Technology: Management estimates that the Basalt technology will generate total revenue in the amount of $2.7 million over a three-year period commencing March 1, 2020. Jess Stone has started work on a new project, Kryptonite, after becoming an employee of RI and this project is presently in the conceptual formulation state of a possible product that uses the technology. A research and development asset in the amount of $3.5 million is reported on Ri's Aa Sales Arrangement with Ferrous Inc. Ferrous Inc. has placed a large order for PC touch screen monitors produced by RI that uses the Quartz technology. The sales agreement requires RI to have the goods available for delivery to Ferrous by August 31, 2020 and to make deliveries to Ferrous as requested during September and October 2020. Ferrous will be holding a special sales event during these months. Ferrous has requested that the goods are not to be delivered until September and October as they do not have the warehouse space to store all of the items for the special sale. Revenue pertaining to this agreement is $2,500,000 and the related direct production costs are estimated to total $1,350,000. These goods will be covered by RI's inventory insurance. Ferrous made the nonrefundable fee payment of $1,250,000 required by this agreement on June 1, 2020. This amount has been recognized as sales revenue. The final $1,250,000 is to be paid by Ferrous on October 31, 2020. Ferrous is a financially sound entity. Sales Arrangement with Mega Mart Ltd. RI entered into an agreement with Mega Mart Ltd., a large global retailer, to distribute a lower-end touch screen for price-sensitive customers. This touch screen makes use of the Basalt technology. The sales agreement requires RI to deliver units of the touch screen to Mega Mart. Mega Mart will display the screens in a prime location and retain 20% of the per-unit sales price ($50 per unit), with the remaining 80% of the sales price to be sent to RI. Any unsold touch screens that are not sold by Mega Mart will be returned to RI. In addition, Mega Mart will provide RI an upfront payment of $250,000 in order to help offset working capital requirements. According to the sales agreement, RI shipped 30,000 units to Mega Mart Ltd. in April 2020. At the time of delivery, RI recorded revenue of $1.2 million, debited cash for $250,000, and set up an accounts receivable for the remaining $950,000, Required Prepare a report that addresses the requests of Carlos Guevara