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Related Party Transactions

9 Months Ended

Mar. 31, 2022

Related Party Transactions

Related Party Transactions

Note 4 - Related Party Transactions

Related Parties

Related parties with whom the Company had transactions are:


Related Parties		Relationship
Dr. Anil R. Diwan		Chairman, President, CEO, significant stockholder and Director

TheraCour Pharma, Inc. (“TheraCour”)		An entity owned and controlled by Dr. Anil R. Diwan


		For the three months ended						For the nine months ended
		March 31,			March 31,			March 31,			March 31,
		2022			2021			2022			2021
Property and Equipment

During the reporting period, TheraCour acquired property and equipment on behalf of the Company from third party vendors and sold such property and equipment, at cost, to the Company		$	39,324		$	84,466		$	120,041		$	87,026


		As of
		March 31,			June 30,
		2022			2021
Account Payable – Related Party

Pursuant to an Exclusive License Agreement with TheraCour, the Company was granted exclusive licenses for technologies developed by TheraCour for the virus types: HIV, HCV, Herpes, Asian (bird) flu, Influenza and rabies. On November 1, 2019, the Company entered into the VZV Licensing Agreement with TheraCour. In consideration for obtaining these exclusive licenses, the Company agreed: (1) that TheraCour can charge its costs (direct and indirect) plus no more than 30% of certain direct costs as a development fee and such development fees shall be due and payable in periodic installments as billed, (2) the Company will pay $2,000 or actual costs each month, whichever is higher for other general and administrative expenses incurred by TheraCour on the Company’s behalf, (3) to make royalty payments of 15% (calculated as a percentage of net sales of the licensed drugs) to TheraCour and; (4) to pay an advance payment equal to twice the amount of the previous months invoice to be applied as a prepayment towards expenses. Accounts payable due TheraCour at March 31, 2022 and June 30, 2021 was $564,587 and $522,539, respectively, which include $200,000 of deferred accounts payable due to TheraCour which is scheduled to be paid in May, 2022 and which was further offset by a two month advance (see above) of $491,000.		$	73,587		$	31,539


		For the three months ended						For the nine months ended
		March 31,			March 31,			March 31,			March 31,
		2022			2021			2022			2021
Research and Development Costs Paid to Related Party

Development fees and other costs charged by and paid to TheraCour pursuant to the license agreements between TheraCour and the Company for the development of the Company’s drug pipeline. No royalties are due TheraCour from the Company at March 31, 2022 and June 30, 2021		$	587,239		$	706,537		$	1,754,143		$	1,961,603

License Milestone Fee – Related Party

On September 9, 2021, the Company entered into a COVID-19 License Agreement to use, promote, offer for sale, import, export, sell and distribute drugs that treat Covid-19 infections, using TheraCour’s proprietary as well as patented technology and intellectual property. Pursuant to such license agreement, the Board of Directors authorized the issuance of 100,000 fully vested shares of the Company’s Series A preferred stock as a license milestone payment and recorded an expense to Research and Development of $0 and $935,088 for the three and nine months ended March 31, 2022, respectively.

Mortgage Note Payable - Related Party

On December 16, 2019, the Company entered into an Open End Mortgage Note (the “Note”) with Dr. Anil Diwan, the Company’s founder, Chairman, President and CEO, to loan the Company up to $2,000,000 in two tranches of $1,000,000 (the “Loan”). The Note was paid off on December 31, 2020. The Note bore interest at the rate of 12% per annum and was secured by a mortgage granted against the Company’s headquarters. Dr. Anil Diwan received 10,000 shares of the Company’s Series A preferred stock as a loan origination fee which was amortized over the one year term of the loan using the effective interest method. The fair value of the 10,000 shares of the Company’s Series A preferred stock when issued on December 16, 2019 was $39,301. The Series A preferred stock fair value is based on the converted value of the Series A preferred stock to common at a ratio of 1:3.5. Amortization expense on the loan origination fee for the three and nine months ended March 31, 2021 was $0 and $18,013 respectively. The Company had drawn down $1.1 million of this loan. Interest was payable only on the amount drawn down. The lender had escrowed $132,000 of interest payable pursuant to the Loan. For the three and nine months ended March 31, 2021, the Company incurred interest expense of $0 and $62,773, respectively.