Quarterly report pursuant to Section 13 or 15(d)

Related Parties and Certain Directors and Officers

v3.23.1
Related Parties and Certain Directors and Officers
6 Months Ended
Feb. 28, 2023
Related Party Transactions [Abstract]  
Related Parties and Certain Directors and Officers Related Parties and Certain Directors and Officers
Director Compensation
Amanda Murphy
On February 10, 2020, Amanda Murphy was appointed to our Board. Ms. Murphy was our Director of Operations at the time of her appointment. Ms. Murphy received salary compensation of $0.3 million for Fiscal 2022, respectively. On October 22, 2021, our Board approved the promotion of Ms. Murphy to the position of Chief Operating Officer, as well as an increase in her annual salary to $0.5 million, all of which were effective January 1, 2022. As of August 31, 2022, Ms. Murphy has deferred payment related to her salary increase of approximately $0.2 million. The deferred payment salary is recorded in the accrued liabilities on the condensed consolidated balance sheets.
Scott Absher
On October 22, 2021, our Board approved raising Mr. Absher’s annual salary to $1M, effective January 1, 2022, and also approved the payment of a $0.5 million bonus to Mr. Absher, 50% of which was payable upon Board approval, and the remainder of which was payable on January 1, 2022. As of August 31, 2022, Mr. Absher received payment of 50% of his bonus, or $0.3 million, in March 2022. Furthermore, as discussed in Note 5, Stockholders' Deficit on August 12, 2022, the Company entered into an agreement with Mr. Absher whereby he waived claims to certain unpaid compensation due to him through July 31, 2022, totaling $0.8 million, in exchange for an option to receive $4.1 million Company Preferred Shares. The agreement settled, the deferred payment of his incremental base salary, his outstanding personal time off or PTO as of July 31, 2022, and the remaining 50% of his approved bonus.
J. Stephen Holmes formerly served as a non-employee sales manager, advisor to and significant shareholder of the Company. The Company incurred $0.8 million in professional fees for services provided by Mr. Holmes during Fiscal 2021. On October 22, 2021, the Company severed all ties with Mr. Holmes, effective immediately, and cancelled Preferred Options that had previously been issued to him but had not been exercised. As a result of these actions, the Company no longer has any financial obligation to Mr. Holmes, and believes that he is no longer a significant shareholder of the Company, see Note 5, Stockholders’ Deficit and Note 8 Contingencies.
Related Persons to Scott Absher
Mark Absher, the brother of Scott Absher and was hired Company as Deputy General Counsel – Special Projects, for an annual salary of $0.2 million. Mr. Absher's compensation for the three and six month period ending February 28, 2023, was $60,000 and $0.12 million, respectively. His compensation for the three and six month period ending February 28, 2022, was $0 and $58,000, respectively.
David May, a member of our business development team, is the son-in-law of Mr. Absher. His compensation includes sales commissions of approximately $0.1 million for Fiscal 2022. Mr. May's compensation for the three month and six month period
ending February 28, 2023, was $37,000 and $75,000, respectively. His compensation for the three and six month period ending February 28, 2022, was $43,000 and was $86,000, respectively.
Phil Eastvold, the Executive Producer of ShiftPixy Productions, Inc., is the son-in-law of Mr. Absher. In addition to the relocation bonus noted above, Mr. Eastvold received compensation of approximately $0.2 million and $0.2 million for Fiscal 2022. Mr. Eastvold's compensation for the three and six month period ending February 28, 2023, was $56,000 and $0.1 million, respectively. His compensation for the three and six month period ending February 28, 2022, was $56,000 and $0.1 million, respectively.
Jason Absher, a member of the Company's business development team, is the nephew of Scott Absher and the son of Mark Absher. Mr. Absher annual salary is $0.1 million, Mr. Absher's compensation for the three month period and six month period ending February 28, 2023, was $30,000 and $60,000 respectively, His compensation for the three month period and six month period ending February 28, 2022, was $30,000 and $60,000 respectively.
Connie Absher, (the spouse of Scott Absher), Elizabeth Eastvold, (the daughter of Scott and Connie Absher and spouse of Mr. Eastvold), and Hannah Absher, (the daughter of Scott and Connie Absher), are also employed by the Company. These individuals, as a group, received aggregate compensation of $0.2 million for Fiscal 2022. In addition, as noted above, Hannah Absher received a relocation bonus of approximately $18,000 during Fiscal 2021, in connection with her relocation. Neither Connie Absher nor Elizabeth Eastvold received any such relocation bonus. These individuals, as a group, received compensation for the three and six month period ending February 28, 2023, of $60,000 and $0.1 million, respectively. Compensation as a group for these individuals for the three month period and six month period ending February 28, 2022 was $56,000 and $0.1 million, respectively.
The Company has accrued stock-based compensation related to shares of common stock to be issued for services provided by three directors. Stock-based compensation expense for the three months ended February 28, 2023 and February 28, 2022 was $56,250 and $56,250, respectively. Stock-based compensation expense for the six months ended February 28, 2023 and 2022 was $0.1 million was $0.1 million, respectively. The Company has agreements with three directors to receive shares of common stock was valued at $0.1 million per year. No shares of common stock have been issued as of August 31, 2022 and February 28, 2023, respectively. As of February 28, 2023, the shares of common stock to be issued to directors was 59.040.
As of February 28, 2023 and August 30, 2022, the Company has accrued $0.7 million and $0.6 million, respectively for stock-compensation related to shares to be issued for services to certain directors.