Quarterly report pursuant to Section 13 or 15(d)

Commitments

v3.7.0.1
Commitments
3 Months Ended
Apr. 30, 2017
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Disclosure [Text Block]
11. Commitments
 
i) In accordance with a negotiated agreement, the Company is required to pay royalty fees based on the greater of a pre-determined percentage of certain sales, not to exceed 10% of these net wholesale sales, as defined in such agreements, or a minimum annual amount. The Company may terminate the agreement in the event that the other party fails to perform any of the services required to be performed under the agreement or breaches any of its other covenants or agreements set forth in the agreement.
 
At April 30, 2017, the Company has not made all minimum royalty payments as they have become due and payable under the terms of the agreement, however as at April 30, 2017, the Company has not been provided a notice of default by the other party to the agreement. If the other party provides such notice of default at a later date, this could affect the Company’s ability to sell certain portions of its inventory on hand and on order at April 30, 2017 that are covered under the royalty agreement. The Company is negotiating to settle the matter on terms that are agreeable to both parties. No provision has been made in the accompanying financial statements for any loss that might be incurred if a negotiated settlement is not able to be achieved.
 
The Company is committed to future minimum royalty payments as follows:
 
Year ending January 31,
 
Amount
 
2018
 
$
262,500
 
2019
 
 
350,000
 
2020
 
 
262,500
 
 
 
$
875,000
 
 
ii)
Pursuant to a Strategic Consulting and Collaboration Agreement, the Company is committed to pay a monthly cash retainer ranging from $10,000 to $20,000 over the three-year term of the agreement. The Company has negotiated a hold on the monthly cash retainer, effective March 1, 2016 and continuing indefinitely.