Note 14 - SUBSEQUENT EVENTS
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3 Months Ended |
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Mar. 31, 2013
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Notes to Financial Statements | |
Note 14 - SUBSEQUENT EVENTS |
Effective on April 5, 2013, the Board of Directors of the Company authorized the execution of a ten year sub-license agreement amongst the Company, Kryptonite Investments LLC ("Kryptonite Investments") and Trinity dated April 8, 2013 (the "License Agreement"), pursuant to which Kryptonite Investments shall acquire an exclusive license (the "License") solely for the State of Arizona for the purpose of receiving, implanting, using, selling and otherwise importing for commercializing the Naltrexone implant.
In accordance with the terms and provisions of the License Agreement: (i) the License shall be granted by the Company to Kryptonite Investments upon payment of $425,000 to the Company as evidenced by that certain convertible debenture agreement (the "Debenture"); and (ii) the Company shall grant to Kryptonite Investments the exclusive rights to the License to use, sell and offer for sale in the State of Arizona the Naltrexone implant and includes the Company's copyrighted, trademarked or patented materials inclusive of name, logo and other Company materials, such as advertising, marketing, publicity, public relations and publications.
In further accordance with the terms and provisions of the License Agreement, Kryptonite Investments shall pay the Company a license fee of $300,000 (the "License Fee"), which shall be payable as either: (i) an upfront License Fee less 10% discount for total of $270,000 if paid within 30 days of date that all principal and interest is repaid by the Company for the Debenture; or (ii) additional royalty fee of 10% in addition to the running royalty fee (defined below) to be allocated towards the License Fee of $300,000, which additional royalty is to begin within 30 days of principal and interest being paid in full for the Debenture by the Company and the additional royalty shall cease once the $300,000 is received by the Company from Kryptonite Investments for the license fee.
The License Agreement provides that there shall be a running royalty fee of 10% (the "Running Royalty Fee") on each Naltrexone implant with the applicable royalty rate (the "Royalty Fee"), which Running Royalty Fee shall be paid to the Company after the Company has paid the Debenture. In accordance with the terms and provisions of the License Agreement, Kryptonite Investments shall pay to the Company: (i) a Royalty Fee of 10% of the gross payment received, which shall be paid monthly beginning the first of the month following the first implant procedure conducted by Kryptonite Investments; and (ii) the Running Royalty Fee.
Lastly, in accordance with the License Agreement, the Company shall provide to Kryptonite Investments: (i) support and training for efficient operations; (ii) all documentation and procedural support for patient requirements, surgical procedures, billing, claims and other operational documentation; (iii) known compliance requirements of insurers and Medicare; (iv) insurance claim pre-authorization, billing procedures and support; (v) patient forms and testing requirements; (vi) implant procedures, training and support; (viii) requirements for hiring, training and supporting life coaching counselors; (ix) all medical procedure documentation from a licensed physician and list of medical supplies needed to perform the implant procedure; (x) access to medical training by doctors as to how to perform the insertion of the Naltrexone implant; and (xi) marketing and educational videos, advertising materials, participation in clinical studies and results and referrals of any inquiries within the State of Arizona.
Therefore, in accordance with the terms and provisions of the License Agreement and the Securities Purchase Agreement, the Company has issued an aggregate of 17 Units to the Principals for aggregate proceeds of $425,000. |