Commitments

3 Months Ended

Aug. 31, 2012

Commitments and Contingencies Disclosure [Abstract]

Note 8.

Commitments

Employment Agreements

On June 1, 2011 we entered into consulting agreements with each of Mr. Douglas Toth and Mr. Gordon Samson, our CEO and CFO, pursuant to which each has agreed to terms with the Company. Both Mr. Toth and Mr. Samson previously provided services to the Company with no agreement. These agreements provide for a base salary of no less than $240,000 and 180,000 per annum respectively.

Both agreements provide that Mr. Toth and Mr. Samson are eligible for an annual, performance-based bonus if and when the Company implements an applicable annual incentive plan. The Agreements specified that the Compensation Committee of the Board of Directors would establish such a plan.

As an inducement to enter into these Agreements, Mr. Toth and Mr. Samson will be awarded not less than 1,000,000 shares of our common stock under an S-8 plan to be filed. Additionally on the origination of a company stock option plan they are each to be awarded stock options, with a seven year term, in respect of 3,000,000 shares of the Company’s common stock. The exercise price for these stock options will be the market price at time of grant or such other amount as established by a plan. The options are scheduled to vest in two equal annual installments. If Mr. Toth or Mr. Samson were to terminate their agreements voluntarily without good reason as defined in the agreement, they would forfeit any unvested shares related to this option grant.

Additionally, the termination provisions of these agreements, define “Termination for Cause” and “Termination for Good Reason”. Included in the Termination for Good Reason clauses is a triggering event provision pursuant to a “change of control”. A triggering event is defined to include a termination of the agreement by the participant following a reduction in position, pay or other “constructive termination,” or a failure by a new control group to assume or continue any plan awards.

The termination benefit provided to Mr. Toth and Mr. Samson upon an involuntary termination by the Company without cause, or a termination by either Mr. Toth or Mr. Samson for good reason, is a cash severance payment in an amount equal to the sum of (a) the then current base salary and (b) the average of the annual bonuses payable (including in such average a zero for any year for which no such bonus is payable) to him with respect to each of the last three completed fiscal years of the Company for which the amount of such bonus has been determined at the date of such termination.

To qualify for the cash severance benefit, any applicable bonus amounts and opportunity to vest in unvested equity awards available under a stock option plan following an involuntary termination by the Company without cause, or a termination for good reason, Mr. Toth and/or Mr. Samson must execute a release in favor of the Company and agree to provide the Company with certain consulting services for a period of six months after termination. Additionally, during the period of these consulting services, Mr. Toth and/or Mr. Samson, must also agree not to provide any services to entities that compete with any of the Company’s business.

These agreements became effective June 1, 2011 and have stated terms through May 31, 2012.

On November 11, 2011, the Company and Douglas Toth amended and superceded the June 1, 2011 consulting agreement with an Employment Agreement in which Douglas Toth will serve as Chairman and Chief Executive Officer of the Company. The term of the Agreement ends May 31, 2012. Compensation under the plan will remain at $240,000 per annum with a right to earn incentive compensation. In addition Mr. Toth will receive a stock award of 2,000,000 shares of common stock on or after January 1, 2012. Further, Mr. Toth will be granted 5,000,000 options to purchase company stock. The options will vest as follows:50% shall vest on June 30, 2011, and the remaining 50% shall vest pro-rata monthly from June 2011 through May 2012.

On August 19, 2011, Gordon Samson resigned as Director and CFO of the Company.

Joint Venture Agreement

On February 9, 2012, the Company entered into Joint Venture Agreement with Sun Enterprises Group, Ltd., a Cayman company. The parties have agreed to establish a Hong Kong joint venture entity, wherein each participant will have an equal equity ownership and ownership rights. The joint venture entity may establish a wholly owned operating company domiciled in the Peoples Republic of China.

The purpose of the joint venture is to provide SaaS (Software as a service) products to Chinese businesses by delivering collaborative intranet abilities and connectivity to international businesses through the Bizzingo B2B social networking platform. This operation will be developed in the PRC through the PRC subsidiary.

The Company, in addition to other contributions, has agreed to issue a royalty free license to the joint venture for the technology surrounding its B2B social networking platform on an exclusive basis for the territory of PRC, Hong Kong, Macau Special Administrative Zone, and Taiwan. In addition, the joint venture entity may act as non-exclusive agent to market, sell and distribute the Bizzingo technology outside the described territory.

Sun Enterprises, among other contributions, has agreed to provide to the joint venture, a management team and the marketing expertise, as well as communications support, and media relationships along established sales channels.

Consulting Agreements

On December 01, 2010, we entered into a consulting agreement with Group mark Financial Services Ltd., providing for $10,000 per month for services rendered each month.

On September 21, 2011, the Company entered into a two year agreement with Creative Processing, Inc (“CP”) to provide advertising and marketing services. CP is to be compensated for its services with 2,400,000 shares of Company common stock, to be issued over a one year period. In addition the Company will issue CP 2,400,000 stock purchase warrants with an exercise price of $0.20 per share. The parties amended the agreement in March 2012 to include monthly compensation to CP of $5,000 per month, starting March 1, 2012 and ending February 1, 2013.

On September 23, 2011, the Company entered into a two year agreement with Wall & Madison, LLC (“Wall”) to provide business development and marketing services. The Company will compensate Wall $10,000 per month relating to this agreement.

On October 7, 2011, the Company entered into a two year agreement with David Shamouelian, a Director of the Company, to provide marketing services. Mr. Shamouelian is one of the most respected names in the fashion industry. He is to be compensated for his services with 3,200,000 shares of Company common stock, to be issued over a 18 month period.

On October 17, 2011, the Company entered into a services agreement with BPG Worldwide, an award-winning Internet software development firm. BPG will provide technology services to further develop and launch Bizzingo’s B2B search and social media platform. The Company will be billed monthly for these services on a time and material basis.

On December 1, 2011, the Company engaged Advance Ventures, LLC (“Advance”), based in Silicon Valley, to provide venture development services, including guidance on recruitment, business development and enhancing strategic relationships in Silicon Valley. The Company will compensate Advance $10,000 per month relating to this agreement. In addition, the parties amended the agreement in March 2012 and May 2012, wherein the Company agreed to issue 100,000 shares of common stock to Advance as per the March amendment and an additional 100,000 shares of common stock as per the May amendment.

On February 5, 2012 the Company entered into a two year agreement with SB Acquisition #1 (“SB”) to provide advertising and marketing services. SB is to be compensated for its services with 1,550,000 shares of Company common stock, to be issued over a one year period.

On March28, 2012 the Company entered into a two year agreement with Var Growth (“VG”) to provide business development and marketing services. VG is to be compensated for its services with 3,600,000 shares of Company common stock, to be issued immediately.

On May25, 2012 the Company entered into a one year agreement with Joby Capital, LLC (“Joby”) to provide business development and marketing services. Joby is to be compensated for its services with 1,000,000 shares of Company common stock.

On May31, 2012 the Company entered into a one year agreement with MidAtlantic Capital Associates SL (“MidAtlantic”) to provide general business consulting services and business development in Europe. MidAtlantic is to be compensated for its services with up to 3,000,000 stock purchase warrants with an exercise price of $0.17 per share. 500,000 warrants will be earned immediately and the remaining warrants shall be earned upon MidAtlantic attaining certain benchmarks as stipulated in the consulting agreement.

In addition, the Company will pay MidAtlantic a finder’s fee equal to eight percent on all cashed received by the Company from the sale of its equity securities to investors that were directly introduced to the Company by MidAtlantic, and five percent on cashed received by the Company from the sale of its debt securities to investors that were directly introduced to the Company by MidAtlantic, provided that each such investor will not be a “US Person” as that term is defined under Rule 902 of Regulation S promulgated under the Securities Act of 1933, as amended.

Advisory Board Agreement

In April and May 2012, the Company entered into Advisory Board agreements with Mark Waxman and Ranjith Kumaran (the “Advisors”), respectively. The term of the agreements is for a period of between one to three years unless either party provides a 30-day advance written notice of termination. As compensation for their services, each Advisor shall receive stock options to acquire 100,000shares of common stock of the Company. As of August 31, 2012 100,000 stock options to Ranjith Kumaran were granted.

Celebrity Endorsement Agreement

On March 14, 2012, the Company entered into Celebrity Endorsement Agreement with Joseph Theismann. Mr. Theismann is a Hall of Fame, National Football League quarterback.

The term of the agreement is for a period of one year, during which the Company is authorized to utilize Mr. Theismann’s name and likeness in the promotion of its B2B Network. In addition, Mr. Theismann has agreed to make himself available for a number of photo sessions and promotional appearances. Mr. Theismann will receive certain stock purchase warrants in the Company in exchange for the rights granted and services provided to the Company.

On March 15, 2012 the Company entered into a Finder’s Fee Agreement which provides for payment of a finder’s fee equal to 10% of the consideration paid under the above referenced Celebrity Endorsement Agreement.

Placement Agent and Advisory Services

On September 15, 2011 the Company entered into a one year agreement with Ocean Business Solutions Group, LLC (“Ocean”) and Ocean Cross Capital Markets, LLC (“OCCM”) to provide business consulting and capital placement services. The Company will pay Ocean a monthly management fee of $3,000 starting on October 1st 2011 for a period of twelve months. In addition the Company issued 275,000 stock purchase warrants to Ocean at the execution of the agreement. The Company will pay OCCM ten percent (10%) of any gross proceeds received by the Company in connection with the portion of any Financing placed by OCCM in which securities are issued by the Company.

On May 2, 2012, the Company terminated its agreement with OCCM.

On February 10, 2012 the Company entered into a one year agreement with Brean Murray, Carret & Co., a FINRA registered broker-dealer (“BMC”),as its exclusive corporate finance advisor and investment banker. Upon execution of the agreement, the Company is to issue BMC a non-refundable retainer consisting of 650,000 shares of Company Common Stock. to provide business consulting and capital placement services. The Company shall also pay BMC seven percent (7%) of any gross proceeds received by the Company in connection with a public or private offering of equity including convertible debt and convertible preferred equity. In the event of a private offering of debt BMC’s fee will be based on a percentage of the gross proceeds raised or commitments provided as follows: three percent (3%) with respect to senior debt and five percent (5%) with respect to nonconvertible subordinated debt. BMC will receive three percent (3%) of the consideration received or paid in a sale or merger transaction involving the Company. In addition BMC will receive a warrant allowing it to purchase, at its options, identical securities to those purchased by and/or issued or granted to investors in such transactions, in an amount equal to 7% of equity offerings and 5% of subordinated debt.

On February29, 2012 the Company entered into an agreement with Monarch Bay Associates, LLC., a FINRA registered broker-dealer (“MBA”),as its non-exclusive placement agent, on a non-exclusive basis, with respect to finding investors. The Company shall compensate MBA nine percent (9%) of gross proceeds received by the Company in connection with a public or private offering of equity including convertible debt and convertible preferred equity (the “Financing”). In addition MBA will receive a warrant allowing it to purchase nine percent (9%) of the total number of shares of common stock issued and issuable by the Company to investors under and in connection with the Financing. In addition the Company will issue 200,000 stock purchase warrants at the successful completion of a financing at $0.15 per share.

- Definition

The entire disclosure for significant arrangements with third parties, which includes operating lease arrangements and arrangements in which the entity has agreed to expend funds to procure goods or services, or has agreed to commit resources to supply goods or services, and operating lease arrangements. Descriptions may include identification of the specific goods and services, period of time covered, minimum quantities and amounts, and cancellation rights.

+ References+ Details

Bizzingo, Inc. 10-Q