Health Discovery Corp (HDVY)

[JoeyMiggs]

Milestone Payments?

NeoGenomics holds the HDVY master licensing agreement for testing.

Wow.. I just realized some things after doing some research. Look at these earnings from NeoGenomics >> http://ir.neogenomics.com/releasedetail.cfm?ReleaseID=967020

NeoGenomics has acquired all these synergies from acquiring some company called Clarient, and NeoGenomics calls the integration complete. Their revenues and earnings are at record levels, and they've raised guidance for the year.

Per NeoGenomics Press release
First Quarter 2016 Highlights:
159% increase in consolidated revenue to a record $59.7 million
442% increase in consolidated Adjusted EBITDA(1) to record $8.2 million
175% increase in consolidated clinical genetic testing volume(2)


Here is the thing.. HDVY is eligible to receive royalty payments when their licensing agreement meets certain records in revenue. In the filings they've put out for the quarter, it highlights the milestone payments upon revenue recognition of their intellectual property, and after a certain amount, they're eligible to receive 6.5% of all net revenue on certain property, and 50% on others.

Per HDVY Quarterly

In addition, the NeoGenomics License provides for milestone payments in cash or stock, based on sublicensing revenue and revenue generated from products and services developed as a result of the NeoGenomics License. Milestone payments will be in increments of $500,000 for every $2,000,000 in GAAP revenue recognized by NeoGenomics up to a total of $5,000,000 in potential milestone payments. After $20,000,000 in cumulative GAAP revenue has been recognized by NeoGenomics, we will receive a royalty of (i) 6.5% (subject to adjustment under certain circumstances) on net revenue generated from all Licensed Uses except for the Cytogenetic Interpretation System and the Flow Cytometry Interpretation System and (ii) a royalty of 50% of net revenue (after the recoupment of certain development and commercialization costs) that NeoGenomics derives from any sublicensing arrangements it may put in place for the Cytogenetic Interpretation System and the Flow Cytometry Interpretation System.

In other words, it sounds like NeoGenomics may be poised to expand their base of revenues, take more market share, and HDVY will be a beneficiary of royalties from the master licensing agreeement..

They may be eligible for milestone payments currently! It may be more profitable to raise the stock price and buy them out.

That's my quick 5 minute interpretation. I'll continue digging.

PLUS.. NeoGenomics just had their booth at ASCO 2016 in Chicago, June 4th to June 6th...

I know I'm talking about NeoGenomics, but they've got the MLA, Master License Agreement for HDVY patents.