By the way, the terms of the licensing agreement are laid out in the quarterly filing, item 11. The Licensing Agreement is between Verisante and BC Cancer Agency for the platform technology underlying Aura and Core. It is an exclusive world wide license for the life of the patents which gives Verisante the right to manufacture, distribute, sell and sublicense. In return the Company pays BCCA a licensing fee, royalties and 1,655,000 warrants were also issued to BCCA in 2010 in connection with the agreement.
I'll paste it below, but the formatting is all off. Just go to sedar.com and type in verisante. Then look up the Nov. quarterly report.
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11 Commitments and contingent liabilities
[...]
Effective July 14, 2010, the Company entered into a Licensing Agreement with the BC Cancer Agency (“BCCA”). On September 30, 2010, the Company entered into a First Amendment to the Licensing Agreement with the BCCA (the “Amendment”). Pursuant to the Amendment, the minimum annual royalty was amended to equal the greater of $80,000 or the Earned Royalties during the first three years of the agreement, and to equal the greater of $160,000 or the Earned Royalties after the first three years. In addition to the original milestone payments, the Company must also pay $120,000 upon first jurisdictional regulatory approval for sale in third clinical application.
On June 1, 2011, the Company entered into a licensing agreement to license the exclusive world-wide rights for a novel rapid multi-spectral imaging cancer detection technology in consideration for $10,875 and 100,000 stock purchase warrants with a fair value of $48,995. Each full warrant entitles the holder to acquire a common share at a price of $0.66 for a period of five years from the date of issuance. The Company will also pay the inventors on an annual basis the lessor of a system royalty or a running royalty as follows:
Term
System Royalty
Running Royalty
Year 1 - 5
2% of net sales of the licensed products
$200 per system
Year 6 - 8
1.5% of net sales of the licensed products
$150 per system
Each year thereafter
1% of net sales of the licensed products
$100 per system
In addition, the Company has the right to grant sublicenses of its right under this licensing agreement. The Company will pay the inventors fifty percent (50%) of all sublicense income received by the Company. Any payments by the Company that are not paid on or before the date such payments are due under this Agreement shall bear interest, to the extent permitted by law, at two percentage points above the Prime Rate of interest as reported by the Bank of Canada on the date payment is due.
In connection with the licensing agreement, on June 6, 2011, the Company entered into a consulting service agreement for consulting services in relation to the design and development of the multi-spectral imaging technology related products. The consulting agreement has a term of 12 months for a consulting fee of $3,000 per month plus applicable taxes.
On May 26, 2011, the Company entered into an Asset Purchase Agreement (the “Agreement”) with Perceptronix Medical Inc. (“PMI”), in which the Company purchased all rights to the ClearVu™ and ClearVu Elite™ endoscopy systems for early lung cancer detection developed by PMI in consideration for $200,000. If the Company is able to sell any of the ClearVu™ or ClearVu Elite™ systems within 24 months from the date of the Agreement, the Company must pay PMI $15,000 for each
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