First, it was Joe's brother getting company favors, and now his wife! This is sickening. $175k/year salary for no-show "consulting services".
In January 2013, we entered in to a consulting arrangement with Ambre Dahan, the spouse of Mr. Joe Dahan, for design director services that anticipates paying her $175,000 per annum on a bi-weekly basis. For the three months ended February 28, 2013, we paid Ms. Dahan $27,000 under this arrangement. This arrangement may be terminated at any time by the parties.
In April 2009, we entered into a commission-based sales agreement with Albert Dahan, brother of Joe Dahan, for the sale of our products into the off-price channels of distribution. Under the agreement, Mr. Albert Dahan is entitled to a commission for purchase orders entered into by us where he acts as a sales person. The agreement may be terminated at any time for any reason or no reason with or without notice. For the three months ended February 28, 2013 and February 29, 2012, payments of $120,000 and $40,000, respectively, were made to Mr. Albert Dahan under this arrangement.
In October 2011, we entered into an agreement with Ever Blue LLC, or Ever Blue, an entity for which Albert Dahan is the sole member, for the sale of children’s products. Ever Blue has an exclusive right to produce, distribute and sell children’s products bearing the Joe’s® brand on a worldwide basis, subject to certain limitations on the channels of distribution. In exchange for the license, Ever Blue pays to us a royalty on net sales with certain guaranteed minimum sales for each term. In connection with this agreement, we provided initial funding to Ever Blue for inventory purchases, which such amount has been repaid in full. For the three months ended February 28, 2013, we recognized $180,000 in royalty income under the license agreement. For the three months February 29, 2012, we did not recognize any royalty income under the license agreement.