Annual report pursuant to Section 13 and 15(d)

Patent and Technology License Agreement

v3.10.0.1
Patent and Technology License Agreement
12 Months Ended
Sep. 30, 2018
Patent and Technology License Agreement [Abstract]  
PATENT AND TECHNOLOGY LICENSE AGREEMENT

3. PATENT AND TECHNOLOGY LICENSE AGREEMENT

 

LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc., (“NAT”) to develop and commercialize Mino-Lok on an exclusive, worldwide sub licensable basis, as amended. LMB pays an annual maintenance fee in June until commercial sales of a product subject to the license commence. The Company recorded maintenance fee expense of $75,000, $50,000 and $45,000 in 2018, 2017 and 2016, respectively under the terms of this agreement.

 

LMB will also pay annual royalties on net sales of licensed products, with royalties ranging from the mid-single digits to the low double digits. In limited circumstances in which the licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low-single digits. After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties of $100,000 in the first commercial year which is prorated for a less than 12-month period, increasing $25,000 per year to a maximum of $150,000 annually. LMB must also pay NAT up to $1,390,000 upon achieving specified regulatory and sales milestones. Finally, LMB must pay NAT a specified percentage of payments received from any sub licensees.

 

Unless earlier terminated by NAT, based on the failure to achieve certain development and commercial milestones, the license agreement remains in effect until the date that all patents licensed under the agreement have expired and all patent applications within the licensed patent rights have been cancelled, withdrawn or expressly abandoned.