Guided Therapeutics Inc (GTHP)

[GetSeriousOK]

You've got that all wrong. GTHP doesn't have to give Shenghuo a dime of any SMI payment. Shenghuo and SMI are completely independent of each other. GTHP doesn't owe Shenghuo any royalties or percentages because Shenghuo didn't fulfill their part of the agreement.

On June 5, 2016, the Company entered into a license agreement with Shenghuo Medical, LLC pursuant to which the Company granted Shenghuo an exclusive license to manufacture, sell and distribute LuViva in Taiwan, Brunei Darussalam, Cambodia, Laos, Myanmar, Philippines, Singapore, Thailand, and Vietnam. Shenghuo was already the Company’s exclusive distributor in China, Macau and Hong Kong, and the license extended to manufacturing in those countries as well. Under the terms of the license agreement, once Shenghuo was capable of manufacturing LuViva in accordance with ISO 13485 for medical devices, Shenghuo would pay the Company a royalty equal to $2.00 or 20% of the distributor price (subject to a discount under certain circumstances), whichever is higher, per disposable distributed within Shenghuo’s exclusive territories. In connection with the license grant, Shenghuo was to underwrite the cost of securing approval of LuViva with Chinese Food and Drug Administration. At its option, Shenghuo also would provide up to $1.0 million in furtherance of the Company’s efforts to secure regulatory approval for LuViva from the U.S. Food and Drug Administration, in exchange for the right to receive payments equal to 2% of the Company’s future sales in the United States, up to an aggregate of $4.0 million. Pursuant to the license agreement, Shenghuo had the option to have a designee appointed to the Company’s board of directors (current director Richard Blumberg is the designee).

That's the $1 million you were talking about before that "Faupel didn't make SMI pay," isn't it? SMI had nothing to do with that $1 million. That was an optional payment that Shenghuo had the choice of making or not, and they did not, which means GTHP doesn't have to make the described future 2% payments to Shenghuo.