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Intangible Assets | 9 Months Ended
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Sep. 30, 2024
Intangible Assets [Abstract] |
Intangible assets |
| 8. | Intangible assets
On January 15, 2024, the Company entered into a license agreement with a biotechnology company to use their proprietary technology and process to assist in formulating stem cells (“License #1”). The term of the license is 10 years and has a purchase price of $1,000,000. The payment structure for License #1 is as follows:
| a) | $50,000 payable upon executing the license (paid);
| b) | $350,000 payable on March 15, 2025 (updated from July 15, 2024 in an amendment dated July 9, 2024); and
| c) | $600,000 payable on completion of technology transfer or two years from January 15, 2024, whichever comes first.
The cost of License #1 was measured at $861,452, which is the fair value of the consideration payable on initial recognition, determined by discounting the future payments using a market interest rate of 11.75%. On April 30, 2024, the Company entered into an exclusive license agreement with a pharmaceutical company granting the Company rights to develop, manufacture, and commercialize licensed products (“License #2”). The Company has classified License #2 as an IPR&D asset resulting in only the acquisition costs plus any transaction costs to be capitalized upon acquisition. The research and development project associated with License #2 is not yet complete and as a result the Company has not yet determined the useful life of the IPR&D asset. The Company paid consideration of $400,000 and 950,000 shares of common stock with a value of $492,850 to the pharmaceutical company. The shares issued to the pharmaceutical company are unregistered and subject to trading restrictions for six months from the issue date resulting in a fair value discount adjustment of $173,100 on the value of the common stock issued to the pharmaceutical company. The Company incurred transaction costs of $12,320 in legal fees and $1,117,771 in common stock paid to a consultant who assisted in acquiring License #2. The common stock to be issued to the consultant will be unregistered and subject to trading restrictions for a 1-year period from the issue date of the first tranche resulting in a fair value discount adjustment of $599,863 on the value of the common stock issued to the consultant. The fair value adjustments were calculated using the Black-Scholes Option Pricing Model. The Black-Scholes Option Pricing Model requires six basic data inputs: the exercise or strike price, expected time to expiration or exercise, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The following assumptions were used in the Black-Scholes option pricing model:
|  | Initial recognition |
Risk-free interest rate |  | 5.12-5.44% |
Expected life |  | 0.5-1 years |
Expected dividend rate |  | 0.00% |
Expected volatility |  | 100% |
The consultant is to receive 2,450,000 shares of common stock in the following tranches and all shares were earned (i.e. fully vested) upon the Company’s acquisition of License #2 as follows:
| ● | May 3, 2024: 612,500 shares (issued)
| ● | August 1, 2024: 612,500 shares (issued)
| ● | November 1, 2024: 612,500 shares (issued – Note 18)
| ● | February 2, 2025: 612,500 shares
The cost of License #2 IPR&D asset is $2,023,097, which is the fair value of the consideration paid on initial recognition.
|  | License #1 |  |  | License #2 (IPR&D asset) |  |  | Total |
Cost |  |  |  |  |  |  |  |  |
Balance, December 31, 2023 |  | $ | - |  |  |  | - |  |  |  | - |
Additions |  |  | 861,452 |  |  |  | 2,023,097 |  |  |  | 2,884,549 |
Balance, September 30, 2024 |  | $ | 861,452 |  |  |  | 2,023,097 |  |  |  | 2,884,549 |
Accumulated amortization |  |  |  |  |  |  |  |  |  |  |  |
Balance, December 31, 2023 |  | $ | - |  |  |  | - |  |  |  | - |
Additions |  |  | 61,019 |  |  |  | - |  |  |  | 61,019 |
Balance, September 30, 2024 |  | $ | 61,019 |  |  |  | - |  |  |  | 61,019 |
Net Book value – September 30, 2024 |  | $ | 800,433 |  |  |  | 2,023,097 |  |  |  | 2,823,530 |

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