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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2020
Commitments and Contingencies |
Commitments and Contingencies | Note 7 – Commitments and Contingencies On January 28, 2019 (the “Effective Date”), the Company and Colin James Deller entered into an employment agreement (the “Agreement”) pursuant to which the Company employed Dr. Deller as its President until April 1, 2019, at which time Dr. Deller became the Company’s Chief Executive Officer. Pursuant to the Agreement, the Company pays Dr. Deller an annual salary of $350,000. As an inducement to accept employment with the Company, Dr. Deller was also granted an option to purchase 400,000 shares of the Company’s common stock at an exercise price of $1.16 per share and an option to purchase 200,000 shares of the Company’s common stock at an exercise price of $2.25 per share. Each option has a term of 10 years and will vest as follows: the right to purchase one-third of the shares of common stock subject to the option vested on the Effective Date; the right to purchase one-third of the shares will vest on the first anniversary of the grant date; and the right to purchase one-third of the shares will vest on the second anniversary of the grant date. The Company also agreed to pay certain expenses, not to exceed the sum of $100,000, related to Dr. Deller’s move from Tulsa, Oklahoma to Seattle, Washington, including reasonable expenses related to the sale of his home in Tulsa. As a temporary adjustment for the difference in the cost of living between Tulsa and Seattle (the “Relocation Adjustment”), for a period of four years (the “Payment Period”) from the Effective Date, the Company has also agreed to pay up to $6,000 a month to Dr. Deller for expenses related to temporary housing and travel to and from Tulsa to Seattle. If Dr. Deller purchases a home in the Seattle area, the Relocation Adjustment will continue to be paid through the expiration of the Payment Period, although the Relocation Adjustment may be adjusted or terminated upon mutual agreement of Dr. Deller and the Company. The Agreement may be terminated by the Company for cause, as defined in the Agreement, due to Dr. Deller’s death or disability, upon 30 days’ notice to Dr. Deller or as a result of a change in control, as defined in the Agreement. With the exception of a termination for cause, if Dr. Deller’s employment is terminated by the Company, aside from accrued but unpaid salary, bonus (if any) and business expenses, Dr. Deller will receive the balance of the unpaid Relocation Adjustment and six months of his annual salary. During the six months ended June 30, 2020 and 2019, the Company has paid Dr. Deller $18,000 and $16,000, respectively, in Relocation Adjustment payments to reimburse temporary housing costs. Litigation From time to time the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties and an adverse result in any such matter may harm the Company’s business. As of the date of this report, the Company is not a party to any material pending legal proceedings claims that the Company believes will have a material adverse effect on its business, financial condition or operating results. Notice of Intent to File Lien We received a document dated June 11, 2020 and titled “Notice of Intent to File a Lien” with attachments, and subsequently we received an invoice dated July 8, 2020 in the amount of $3 million from Prairie Star National (the “Notice”). The Notice states that the “account” has been assigned to Prairie Star National for collection by Graciela Zeman Rutkowski, who we believe is the spouse or former spouse of Richard Rutkowski, our former Chief Executive Officer. The Notice does not clearly describe the basis for any claim against the Company, although prior correspondence we received from Prairie Star National suggests that any such claim would relate to Mr. Rutkowski and possibly to compensation paid by us to Mr. Rutkowski and/or claims thereto by Ms. Rutkowski. To our knowledge, neither Ms. Rutkowski nor Prairie Star National has filed a pleading in any court of law. We do not believe that we have any liability to Ms. Rutkowski and, if she were to file a legal action to assert any such claim, we expect to vigorously defend it. Indemnification Agreements The Company maintains indemnification agreements with its directors and officers that may require the Company to indemnify these individuals against liabilities that arise by reason of their status or service as directors or officers, except as prohibited by law. COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic, which continues to spread throughout the United States and the rest of the world. The ultimate extent of the impact of COVID-19 on the financial performance of the Company will depend on future developments, including, among other things, the duration and spread of COVID-19, and the overall economy, all of which are highly uncertain and cannot be predicted. The outbreak of COVID-19 has already caused significant disruptions to the global financial markets which may impact the Company's ability to raise additional capital on acceptable terms or at all. If the financial markets and/or the overall economy are impacted for an extended period, the Company's operating results may be materially and adversely affected. To date the Company has altered its operations through working remotely and only maintaining essential personnel in its offices. This has not resulted in any major impact to the Company’s ability to conduct business.

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