Commitments and Contingencies

12 Months Ended

Jul. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 6. Commitments and Contingencies

On October 27, 2015, the Company received a Demand for Arbitration from PC Drivers Headquarters, LP, the Company’s partner (“PC Drivers”). PC Drivers requested that an arbitration panel decide whether a release event had occurred under the Joint Development & License Agreement between the Company and PC Drivers (“JDLA”). PC Drivers alleged that the Company failed to pay certain vendors and breached the JDLA, allowing PC Drivers to obtain the source code held in escrow for the development of the JDLA. After a hearing was held on November 5, 2015, the arbitrator determined that a release event occurred, allowing PC Drivers access to the source code. Other aspects of the JDLA, including the payment to the Company of revenues earned under have yet to be determined and the Company intends to exhaust all legal remedies with respect to such claims. The Company is currently still in the process of evaluating the legal and business impact of this event.

Office Lease

The company leases approximately 7,313 square feet of office and warehouse space at a monthly rental of $4,473 under the terms of a 63 month lease that expires on May 31, 2016. Total future minimum lease payments under this agreement are $50,702 all due in FY2016. 

Total rent expense for the years ended July 31, 2015 and 2014 was $66,949, and $53,675, respectively.

Capital Leases

On October 31, 2014, the Company leased $93,294 of servers and network switches to increase production capacity for the OEM project with PC Driver Headquarters LP. The leases are payable in 60 monthly installments through fiscal year 2019. On March 31, 2015, the Company leased $4,356 of drivers to increase production capacity for the OEM project with PC Driver Headquarters LP. The lease is payable in 36 monthly installments through fiscal year 2018. The Company determined that the leases qualified as capital leases because the company will own the equipment at the end of the leasing term subject to a bargain purchase option.

 

The future minimum lease payments under capital lease as of July 31, 2015 are as follows:

Year Ending July 31:
2016		21,682
2017		21,682
2018		21,037
2019		20,133
2020		5,033
		89,566
Less: amount representing interest		(10,939)
		78,627
Less: current portion of capital lease obligation		(20,952)
Long-term capital lease obligation	$	57,675