|
Changes in Contractual Commitments
|
6 Months Ended |
|---|---|
|
Jun. 30, 2012
|
|
| Commitments and Contingencies Disclosure [Text Block] |
9.
Changes
in Contractual Commitments
Software
License Agreement
Effective
June 22, 2012, the Company and its ClearPoint system
software development partner entered into an amendment (the
“Software Amendment”) to the master services
and licensing agreement (the “Master Software
Agreement”) between the parties.
The
Company entered into the Master Software Agreement in July
2007 for the software development partner to develop on the
Company’s behalf, based on the Company’s
detailed specifications, a customized software solution for
the Company’s ClearPoint system. The software
development partner was in the business of providing
software development and engineering services on a contract
basis to a number of companies. In developing the
Company’s ClearPoint system software, the software
development partner utilized certain of its own
pre-existing software code. Under the Master Software
Agreement, the Company received a non-exclusive, worldwide
license to that code as an integrated component of the
Company’s ClearPoint system software. In return, the
Company agreed to pay the software development partner a
license fee for each copy of the ClearPoint system software
that the Company distributes, subject to certain minimum
license purchase commitments by the Company.
Pursuant
to the Software Amendment, the Company agreed to issue the
software development partner 1,500,000 shares of the
Company’s common stock (1) in full payment and
satisfaction of license fees owed to the software
development partner in the amount of $612,500 for licenses
previously purchased by the Company, (2) in full payment
and satisfaction of all of the Company’s remaining
minimum license purchase commitments from the software
development partner in the amount of $962,500, and (3) in
exchange for additional licenses provided by the software
development partner to the Company valued at $87,500 based
on the original terms of the Master Software Agreement. The
Company applied guidance in ASC 505-50, Equity-Based
Payments to Non-Employees, using the contractual value of
the amounts owed and of the licenses acquired to measure
and record the transaction. The portion of the licenses
purchased by the Company that are not expected to be sold
or placed in service during the next twelve months, in the
amount of $1,137,500, have been recorded as a non-current
asset, software license inventory
Key
Personnel Incentive Program
The
Company adopted its Key Personnel Incentive Program to
provide a key consultant (who is a non-employee director of
the Company) and a key employee (collectively, the
“Participants”) with the opportunity to receive
incentive bonus payments based on the performance of future
services to the Company or upon a consummation of a
transaction involving the sale of the Company. In June
2012, the Participants voluntarily and irrevocably
relinquished their rights to receive, and the Participants
discharged the Company from its obligations to make, any
and all incentive bonus payments under the Key Personnel
Incentive Program based on the performance of
services.
Pursuant
to the Key Personnel Incentive Program, in the event of a
sale transaction, each of the Participants will be entitled
to receive an incentive bonus payment equal to
$1,000,000. In addition, one of the Participants
will also receive an incentive bonus payment equal to 1.4%
of net proceeds from the sale transaction in excess of
$50,000,000, but not to exceed $700,000.
Because
the Company was discharged from any obligations to make
incentive bonus payments related to performance of services
under the Key Personnel Incentive Program, in June 2012 the
Company reversed all amounts previously accrued for such
service-based payments under the program. This resulted in
a credit to reversal of R&D obligation of $882,537 for
the amounts that had been accrued as research and
development costs in 2010, 2011 and during the three months
ended March 31, 2012 ($120,895 had been accrued during the
three months ended March 31, 2012).
Employment
Agreements
In
June 2012 the Company entered into employment agreements
(each, an “Employment Agreement,” and
collectively, the “Employment Agreements”) with
four of its executive officers (each, an
“Executive,” and collectively, the
“Executives”). Among other
provisions customary for agreements of this nature, the
Employment Agreements provide for severance in the event of
a termination without cause or if the Executive terminates
his employment for good reason, as those terms are defined
in each Employment Agreement. Likewise, the Employment
Agreements provide for certain payments in connection with
a change of control transaction. The initial
base salaries set forth in the Employment Agreements are
the same as the base salaries for each of the Executives
immediately prior to the execution of the Employment
Agreements.
|