XML 43 R18.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Subsequent Events
3 Months Ended
Dec. 31, 2019
Subsequent Events [Abstract]  
Subsequent Events

NOTE 12 – Subsequent Events

 

WARF License amendment

 

The Company entered into an Amended and Restated Exclusive Start-up Company License Agreement (the "WARF License") with Wisconsin Alumni Research Foundation ("WARF") on January 21, 2020, which amended and restated in full the prior license agreement between WARF and NeuroOne, LLC, a predecessor of the Company, dated October 1, 2014, as amended on February 22, 2017, March 30, 2019 and September 18, 2019.

 

The WARF License grants to the Company an exclusive license to make, use and sell, in the United States only, products that employ certain licensed patents for a neural probe array or thin-film micro electrode array and method. The Company has agreed to pay WARF a royalty equal to a single-digit percentage of its product sales pursuant to the WARF License, with a minimum annual royalty payment of $50,000 for 2020, $100,000 for 2021 and $150,000 for 2022 and each calendar year thereafter that the WARF License is in effect. If the Company or any of its sublicensees contest the validity of any licensed patent, the royalty rate will be doubled during the pendency of such contest and, if the contested patent is found to be valid and would be infringed by the Company if not for the WARF License, the royalty rate will be tripled for the remaining term of the WARF License.

 

WARF may terminate the WARF License if the Company defaults on the payments of amounts due to WARF or fails to timely submit development reports, or breaches any other covenant in the WARF License and fails to remedy such default in ninety (90) days or in the event of certain bankruptcy events involving the Company. WARF may also terminate the WARF License on ninety (90) days' notice if the Company fails to have commercial sales of one or more FDA-approved products under the WARF License by June 30, 2020. The WARF License otherwise expires by its terms (i) on the date that no valid claims on the patents licensed thereunder remain or (ii) upon the cessation for more than four (4) calendar quarters of the payment, once begun, of earned royalties under certain sections of the WARF License. The Company expects the latest expiration of a licensed patent to occur in 2030.

 

In addition, WARF reserves the right to grant non-profit research institutions and government agencies non-exclusive licenses to practice and use the inventions of the licensed patents for non-commercial research purposes, and the Company grants WARF a non-exclusive, sub licensable, royalty-free right and license for non-commercial research purposes to use improvements to the licensed patents. In the event that the Company discontinues use or commercialization of the licensed patents or improvements thereon, the Company must grant WARF an option to obtain a non-exclusive, sub-licensable royalty-bearing license to use the improvements for commercial purposes.

 

Broker warrant issuance

 

In connection with the Paulson Private Placement, on January 21, 2020, the Company issued to affiliates of Paulson warrants to purchase 259,476 shares of common stock at an exercise price of $1.87 per share, which warrants were exercisable beginning on the date of issuance, January 21, 2020, and expire on January 21, 2030. Prior to expiration, subject to the terms and conditions set forth in the Broker Warrants, the holders of such Broker Warrants may exercise the Broker Warrants for shares of common stock by providing notice to the Company and paying the exercise price per share for each share so exercised.

 

Paulson Note Redemption

 

In January 2020, an investor elected to redeem outstanding principal and accrued and unpaid interest in the amount of $151,707 into 60,847 shares of common stock.

 

Restricted stock units

 

On February 10, 2020, grants of restricted stock units were made to NeuroOne's non-employee directors (91,387 restricted stock units in the aggregate), and such non-employee directors agreed to waive payment of the cash retainer for calendar year 2019 otherwise payable to such directors pursuant to NeuroOne's non-employee director compensation policy.