Commitments and Contingencies |
9 Months Ended | ||
|---|---|---|---|
Oct. 31, 2017 | |||
| Commitments and Contingencies Disclosure [Abstract] | |||
| Commitments and Contingencies |
Executive Severance Commitments
We have a severance compensation agreement with our Chief Executive Officer, Thomas Lanni. This agreement requires us to pay Mr. Lanni, in the event of a termination of employment following a change of control of the Company or certain other circumstances, the amount of his then current annual base salary and the amount of any bonus amount he would have achieved for the year in which the termination occurs plus the acceleration of unvested options. We have not recorded any liability in the accompanying condensed consolidated financial statements for this agreement.
Executive and Board of Directors Compensation
On November 2, 2013, the Company approved a deferred compensation plan for its Chief Executive Officer and Board of Directors. As of October 31, 2017, no compensation expense has been accrued under this deferred compensation plan as its goal has not yet been attained.
Effective April 1, 2017, $1,250 per month of the retainer paid to the non-employee directors other than the Chairman of the Board was indefinitely deferred and the annual cash retainer was reduced to zero to enable the Company to spend incremental resources on it IP enforcement activities. Upon the achievement of certain, specific, targeted balance sheet targets, the deferred amounts will be paid out.
Effective December 31, 2015, $2,500 per month of the retainer to be paid to the Chairman of the Board was indefinitely deferred to enable the Company to spend incremental resources on its intellectual property enforcement activities. Upon the achievement of certain, specific, targeted balance sheet targets, the deferred amounts will be paid out.
Legal Contingencies
On February 3, 2015, we filed a lawsuit against Apple, Inc. for patent infringement. The complaint alleges that Apple products sold in the United States utilizing the Apple Lightning® power supply adapter system, including most iPad®, iPhone®, and iPod® products, infringe the Company’s patented intellectual property. This lawsuit represents our most significant enforcement effort to date, and, together with the Targus and Best Buy lawsuits described elsewhere in this document, demonstrates our ongoing and accelerated efforts to methodically pursue those companies that we believe have infringed on the intellectual property estate that we have developed over the last 20 years. In September of 2015, Apple filed a petition with the PTAB requesting inter partes review of our 933 Patent. On February 22, 2017, the PTAB issued its finding, ruling in Apple’s favor. We believe the PTAB erred in its ruling, and we have appealed the ruling to the Court of Appeals for the Federal Circuit. We estimate that the appeals process will require approximately 12 months to run its course. While we believe that the proceeds from our Series A Financing (see Note 8) should provide us sufficient capital to pursue the appeal through a decision from the Court of Appeals for the Federal Circuit, it is possible that we may require incremental financing to pursue the appeal to conclusion, particularly if the appeals process runs longer than anticipated. If we require additional financing, there can be no assurance that we will be able to obtain requisite financing on acceptable terms, if at all.
In addition to the pending matters described above, we are, from time to time, involved in various legal proceedings incidental to the conduct of our business. We are unable to predict the ultimate outcome of these matters. |