Agreements Related to Acquired Intellectual Property Rights
|6 Months Ended|
Jun. 30, 2019
|Intellectual Property Right [Abstract]|
|Agreements Related to Acquired Intellectual Property Rights||
Note 6 — Agreements Related to Acquired Intellectual Property Rights
Patent License Agreement - Case Western Reserve University
On May 12, 2018, Lucid Diagnostics Inc., a majority-owned subsidiary of the Company, entered into a patent license agreement with Case Western Reserve University (“CWRU”), for the exclusive worldwide license of the intellectual property rights for two distinct proprietary technologies, referred to as “EsoCheck™”, an esophageal cell sample collection device, and EsoGuard™, a panel of methylated DNA biomarkers - the “CWRU License Agreement”.
Under the CWRU License Agreement, Lucid Diagnostics Inc. recognized an accrued license fee of approximately $273,000, including an initial payment of $50,000, and subsequent quarterly payments of $50,000 until such fee is paid-in-full, provided, however, the commencement of the quarterly payments is subject to Lucid Diagnostics Inc. consummation of a bona fide financing with an unrelated third-party in excess of $500,000. In this regard, the remaining balance of the CWRU License Agreement is unpaid and has been recognized as an accrued expense liability as of June 30, 2019 and December 31, 2018. The CWRU License Agreement fee was recognized on the May 12, 2018 effective date as a current period research and development expense, with the remaining unpaid balance included in accrued expenses and other current liabilities.
The CWRU License Agreement also provides for potential payments upon the achievement of certain product development and regulatory clearance milestones. In this regard, upon FDA approval on June 21, 2019 of the EsoCheck™ device, the Company incurred a $75,000 research and development expense in connection with such milestone. If Lucid Diagnostics Inc. does not meet certain milestones listed in the CWRU License Agreement, then CWRU has the right, in its sole discretion, to require the Company to transfer to CWRU a percentage, varying up to 100%, of the shares of common stock of Lucid Diagnostics Inc. held by the Company. Lucid Diagnostics Inc. will also be required to pay a minimum annual royalty commencing the year after the first commercial sale of products resulting from the commercialization of the licensed intellectual property, with the minimum amount rising based on net sales of such product(s), if any. Such contingent milestone and /or royalty payments, if any, will be recognized in the period in which such payment obligations are incurred.
Reimbursement of patent fees under the CWRU License Agreement recognized as research and development expense was $47,186 and $78,148 in three and six months ended June 30, 2019, respectively. There were no such expenses in the corresponding periods of the prior year.
Patent License Agreement - Tufts University - Antimicrobial Resorbable Ear Tubes
In November 2016, the Company executed a Patent License Agreement (the “Tufts Patent License Agreement”) with Tufts University and its co-owners, the Massachusetts Eye and Ear Infirmary and Massachusetts General Hospital (the “Licensors”). Pursuant to the Tufts Patent License Agreement, the Licensors granted the Company the exclusive right and license to certain patents in connection with the development and commercialization of antimicrobial resorbable ear tubes based on a proprietary aqueous silk technology conceived and developed by the Licensors. Reimbursement of patent fees under the Tufts Patent License Agreement recognized as research and development expense was $29,390 and $33,258 in the three and six months ended June 30, 2019, respectively, and $25,876 and $61,713 in the three and six months ended June 30, 2018, respectively.
The Tufts Patent License Agreement also provides for potential payments from the Company to the Licensors upon the achievement of certain product development and regulatory clearance milestones as well as royalty payments on net sales upon the commercialization of products developed utilizing the licensed patents. The Company will recognize as a current period expense for contingent milestone payments or royalties in the period in which such payment obligations are incurred, if any.
The entire disclosure for goodwill.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef