Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

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Subsequent Events
6 Months Ended
Jan. 31, 2015
Subsequent Events.  
Subsequent Events

Note 11 — Subsequent Events

 

On March 3, 2015, the Company’s Board of Directors (“Board”) approved salary increases to the Company’s executive officers, consistent with the terms of their respective employment agreements, and to the Company’s non-executive staff, averaging 9% per employee. The Board also approved discretionary cash bonuses and stock option grants pursuant to the 2011 Plan to purchase the Company’s common stock with a grant price of $0.37 (the Company’s stock price on close of business on March 3rd, with 25% of the options vesting on grant date and the remainder of the options vesting monthly over three years) to the Company’s executive officers and non-executive staff, that totaled $324,900 and 1,250,000, respectively, and $265,000 and 1,420,000, respectively. The annual bonuses paid to executive officers were granted in the form of both cash and stock options as provided in and consistent with the terms of the Company’s employment agreement with each such executive officer. In addition, the Board approved stock option grants to purchase the Company’s common stock with a grant price of $0.37 (the Company’s stock price on close of business on March 3rd, with one quarter of the options vesting on grant date and the remainder of the options vesting quarterly) to the Board totaling 750,000.

 

On March 6, 2015, the Company entered into two Research and Development Services Agreements, one with Rev.1 Engineering Inc. (“Rev.1”) and the other with Merlin CSI, LLC (“Merlin”). Both companies are engaged to perform research, development, testing, and regulatory filing of two engineering projects for the Company. The Company will own any intellectual property that comes out of either agreement. The estimated total cost of the Rev.1 agreement is $3,383,000. The Company will pay an initial deposit to Rev.1 of $350,000 upon signing the agreement and Rev.1 will use this deposit to offset 10% of each monthly invoice under the agreement, reducing the outstanding deposit accordingly. If the Company exercises its right to terminate the Rev.1 agreement before the completion of the engineering projects, the Company will forfeit the outstanding deposit amount to Rev.1. The estimated total cost of the Merlin agreement is $1,525,000. The Company may be responsible for additional costs, including the costs of preapproved expenses incurred by Merlin.