We plan to meet this obligation through exercising puts under the Swartz equity line of credit. If we cannot or choose not to access the Swartz equity line of credit, we will attempt to negotiate terms to extend the maturities or seek alternative financing. The acquisition of College Resource Management, Inc. has dramatically affected our revenues and expenses recognition methods. We recognize contract fee revenue from students on a straight-line basis over the term of the contract. Customers have the option to pay the full contract price when the contract is signed, in four equal installments payable the first four months of the contract, in twelve equal monthly installments or in weekly installments over one year.
Customers have the right to cancel the contract for a full refund within three days.
Amounts due under contracts are not recorded until cash is received. If a customer paying in four equal installments cancels their contract, all deferred revenue at that time is recognized as revenue. If a customer is paying in equal monthly or weekly installments, the revenue is recognized as the payments are received. Deferred revenue is recorded for cash received in advance for services we are obligated to perform. We expense direct workshop marketing costs, which are included in selling, general and administrative expenses in the statement of operations, prior to delivering action plans to customers.