Enzolytics Inc (ENZC)

[Valuator2]

You could be right, but it depends on structure of the deal and what the pharmaceutical plant produces, neither of which has been revealed yet. BTW, neither has the legal structure of the "Licensing Entity"...corporation, partnership, etc....which has an impact on how and when ENZC reports the results of that operation on its own books. Per the Footnote:

The Licensing Entity is the owner of a pharmaceutical plant in Eastern Europe. Pursuant to the Agreement, Enzolytics will receive $1 Million USD and 50% ownership in the Licensing Entity valued at $8 Million.

Since the "Licensing Entity" (the parent) owns the pharmaceutical plant, and ENZC owns 50% of the parent entity, ENZC should share in 50% of the profit/loss of the pharmaceutical plant that flows up to the parent entity. IPF manufacturing costs would be included if that plant is used for its production, so associated IPF revenues would have to come into play at some point along the line of reporting unless IPF is excluded by some mechanism within the agreement.

My question is where and when will the 50% of the $8 million value of the Licensing Entity be recorded on ENZC's fins...as an asset and revenues. It appears to me to be a part of the sales price of the license, together with the $1 million, and should be recorded as an asset to be accounted for on the equity basis (as opposed to a subsidiary). Maybe there's a contingency or something left to be negotiated.