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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Litigation The Company is involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, the Company records accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. There is no current or pending litigation of any significance with the exception of the matters that have arisen under, and are being handled in, the normal course of business. On May 13, 2022, the Company filed a demand for arbitration with the American Arbitration Association (AAA) against Michael Handelman, its former Chief Financial Officer, on claims of breach of fiduciary duty and failure to comply with federal securities reporting law. The claims are pending before an arbitrator in Los Angeles and the hearing is scheduled to begin on May 15, 2023. Mr. Handelman has not asserted counterclaims against the Company. On August 28, 2019, a complaint was filed in the Superior Court of California, County of Los Angeles, West Judicial District, Santa Monica Courthouse, Unlimited Civil Division by Jeffrey Lion and by Daniel Vallera, as individuals. The complaint was filed against GT Biopharma, Inc. and its subsidiary Oxis Biotech, Inc. The Plaintiffs allege breach of a license agreement between the Plaintiffs and the Company entered into on or about September 3, 2015. The Company filed an answer to the complaint denying many allegations and asserting affirmative defenses. The Company reached a settlement of the case and paid on March 4, 2022, $425,000 in full and final settlement of the claims. This amount was fully accrued at December 31, 2021 and was paid during fiscal year 2022. On March 3, 2021, a complaint was filed by Sheffield Properties in the superior Court of California, County of Ventura. The litigation arose from a commercial lease entered into by GT Biopharma, Inc. for office space in Westlake Village in California. In July, 2021 the Company entered into settlement agreement with Sheffield Properties and the payment in the settlement amount of $0.1 million was made on August 6, 2021. Significant Agreements Research and Development Agreements The Company is a party to a Scientific Research Agreement (“SRA”) with the Regents of the University of Minnesota, effective June 16, 2021. This SRA has three major goals: (1) support the Company’s TriKE® product development and GMP manufacturing efforts; (2) TriKE® pharmacokinetics optimization in humans; and, (3) investigation of the patient’s native NK cell population based on insights obtained from the analysis of the human data generated during our GTB-3550 clinical trial. The major deliverables proposed here are: (1) creation of IND enabling data for TriKE® constructs in support of our product development and GMP manufacturing efforts; (2) TriKE® platform drug delivery changes to allow transition to alternative drug delivery means and extended PK in humans; and, (3) gain an increased understanding of changes in the patient’s native NK cell population as a result of TriKE® therapy. Most studies will use TriKE® DNA/amino acid sequences created by us under current UMN/GTB licensing terms. The term of this agreement shall expire on June 30, 2023. The University of Minnesota shall use reasonable efforts to complete the project for a fixed sum of $2.1 million, of which $1.7 million has been incurred and recorded as of December 31, 2022. The Company has recorded an expense of $766,000 and $964,000 relating to the scientific research agreement for the years ended December 31, 2022 and 2021, respectively. Patent and License Agreements 2016 Exclusive Patent License Agreement The Company is party to an exclusive worldwide license agreement with the Regents of the University of Minnesota, (“UofMN”), to further develop and commercialize cancer therapies using TriKE® technology developed by researchers at the UofMN to target NK cells to cancer. Under the terms of the 2016 agreement, the Company receives exclusive rights to conduct research and to develop, make, use, sell, and import TriKE® technology worldwide for the treatment of any disease, state, or condition in humans. The Company is responsible for obtaining all permits, licenses, authorizations, registrations, and regulatory approvals required or granted by any governmental authority anywhere in the world that is responsible for the regulation of products such as the TriKE® technology, including without limitation the FDA and the European Agency for the Evaluation of Medicinal Products in the European Union. Under the agreement, the UofMN received an upfront payment of $0.2 million, and an annual License Maintenance fee of $0.1 million beginning in 2021. The agreement also includes 4% royalty fees, (not to exceed 6% under subsequence license agreements or amendments to this agreement or minimum annual royalty payments ranging from $0.25 million to $5.0 million. The agreement also includes certain performance milestone payments totaling $3.1 million, and one-time sales milestone payments of $1.0 million upon reaching $250 million in gross sales, and $5.0 million upon reaching $500 million dollars in cumulative gross sales of Licensed Products. The Company did not incur any research and development expense relating to the 2016 Exclusive Patent License Agreement for the year ended December 31, 2022. 2021 Patent License Agreement On March 26, 2021, the Company signed an agreement specific to the B7H3 targeted TriKE®. Under the agreement, the UofMN received an upfront license fee of $20,000, and will receive an annual License Maintenance fee of $5,000 beginning in 2022, 2.5% to 5% royalty fees, or minimum annual royalty payments of $0.25 million beginning in the year after the first commercial sales of Licensed Product, and $2.0 million beginning in the fifth year after the first commercial sale of such Licensed Product. The agreement also includes certain performance milestone payments totaling $3.1 million, and one-time sales milestone payments of $1.0 million upon reaching $250 million in gross sales, and $5.0 million upon reaching $500 million dollars in cumulative gross sales of Licensed Products. There is no double payment intended; if one of the milestone payments has been paid under the 2016 agreement no further payment is due for the corresponding milestone above. The Company did not incur any research and development expense relating to the 2021 Patent License Agreement for the years ended December 31, 2022 and 2021, respectively. Employee Compensation The following table summarizes the Company’s future financial commitment to certain employees pursuant to their respective employment agreements (in thousands): Schedule of Company’s Future Financial Commitment
Year ending |  | Amount |
2023 |  | $ | 432 |
2024 |  |  | 54 |
Total |  | $ | 486 |

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