VICAPSYS LIFE SCIENCES, INC. The accompanying unaudited condensed consolidated financial statements have been
prepared assuming the Company will continue as a going concern, which assumes
the realization of assets and satisfaction of liabilities and commitments in the
normal course of business. The Company experienced a net loss of
In
8
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Basis of Presentation and Principles of Consolidation
The accompanying condensed consolidated financial statements in this report have
been prepared by the Company without audit. In the opinion of management, all
adjustments necessary to present the financial position, results of operations
and cash flows for the stated periods have been made. Except as described below,
these adjustments consist only of normal and recurring adjustments. Certain
information and note disclosures normally included in the Company's consolidated
annual financial statements prepared in accordance with accounting principles
generally accepted in
These unaudited condensed consolidated financial statements should be read in
conjunction with a reading of the Company's consolidated audited financial
statements and notes thereto for the year ended
Use of Estimates
The preparation of financial statements in conformity with
Cash
The Company considers all highly liquid investments with an original term of
three months or less to be cash equivalents. The Company held no cash
equivalents as of
Intangible Assets
Costs of intangible assets are accounted for through the capitalization of those
costs incurred in connection with developing or obtaining such assets.
Capitalized costs are included in intangible assets in the unaudited condensed
consolidated balance sheets. The Company's intangible assets consist of costs
incurred in connection with securing an Exclusive Patent License Agreement with
The Company reviews these intangible assets for possible impairment when events or changes in circumstances indicate that the assets carrying amount may not be recoverable. In evaluating the future benefit of its intangible assets, management performs an analysis of the anticipated undiscounted future net cash flows of the intangible assets over the remaining estimated useful life. An impairment loss is recorded if the carrying value of the asset exceeds the expected future cash flows.
9 Long-Lived Assets
The Company reviews long-lived assets at least annually or when events or changes in circumstances reflect the fact that the recorded value may not be recoverable for impairment and recognizes impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying values.
The Company accounts for investments in which the Company owns more than 20% or
has the ability to exercise significant influence of the investee, using the
equity method in accordance with the Financial Accounting Standard Board's (the
"FASB") Accounting Standards Codification ("ASC") Topic 323,
The amount of the adjustment is included in the determination of net income by the investor, and such amount reflects adjustments similar to those made in preparing consolidated statements including adjustments to eliminate intercompany gains and losses, and to amortize, if appropriate, any difference between investor cost and underlying equity in net assets of the investee at the date of investment. The investment of an investor is also adjusted to reflect the investor's share of changes in the investee's capital. Dividends received from an investee reduce the carrying amount of the investment. A series of operating losses of an investee or other factors may indicate that a decrease in value of the investment has occurred which is other than temporary, and which should be recognized even though the decrease in value is in excess of what would otherwise be recognized by application of the equity method.
In accordance with ASC 323-10-35-20 through 35-22, the investor ordinarily shall discontinue applying the equity method if the investment (and net advances) is reduced to zero and shall not provide for additional losses unless the investor has guaranteed obligations of the investee or is otherwise committed to provide further financial support for the investee. An investor shall, however, provide for additional losses if the imminent return to profitable operations by an investee appears to be assured. For example, a material, nonrecurring loss of an isolated nature may reduce an investment below zero even though the underlying profitable operating pattern of an investee is unimpaired. If the investee subsequently reports net income, the investor shall resume applying the equity method only after its share of that net income equals the share of net losses not recognized during the period the equity method was suspended.
Equity and cost method investments are classified as investments. The Company periodically evaluates its equity and cost method investments for impairment due to declines considered to be other than temporary. If the Company determines that a decline in fair value is other than temporary, then a charge to earnings is recorded as an impairment loss in the accompanying consolidated statements of operations.
The Company's equity method investment consisted of equity owned in
10
Fair Value of Financial Instruments
ASC 825, "Disclosures about Fair Value of Financial Instruments," requires
disclosure of fair value information about financial instruments. ASC 820, "Fair
Value Measurements" defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles, and expands disclosures
about fair value measurements. Fair value estimates discussed herein are based
upon certain market assumptions and pertinent information available to
management as of
The carrying amounts of the Company's financial assets and liabilities, such as cash, prepaid expenses, accounts payable and accrued liabilities, payables with related parties, approximate their fair values because of the short maturity of these instruments.
Revenue Recognition
Revenue recognition is accounted for under ASC Topic 606, "Revenue from
Contracts with Customers" ("ASC 606") and all the related amendments. The core
principle of ASC 606 requires that an entity recognize revenue to depict the
transfer of promised goods or services to customers in an amount that reflects
the consideration to which the company expects to be entitled in exchange for
those goods or services. ASC 606 defines a five-step process to achieve this
core principle and, in doing so, it is possible more judgment and estimates may
be required within the revenue recognition process than required under
The Company's contracts with customers are generally on a contract and work
order basis and represent obligations that are satisfied at a point in time, as
defined in the new guidance, generally upon delivery or has services are
provided. Accordingly, revenue for each sale is recognized when the Company has
completed its performance obligations. Any costs incurred before this point in
time, are recorded as assets to be expensed during the period the related
revenue is recognized. The Company did not generate any revenue for the three
and nine months ended
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 - "Compensation -Stock Compensation," which requires recognition in the financial statements of the cost of employee, director and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under the FASB's Accounting Standards Update ASU 2016-09 Improvements to Employee Share-Based Payment.
Research and Development
Costs and expenses that can be clearly identified as research and development
are charged to expense as incurred. For the three and nine months ended
11 Income Taxes
The Company accounts for income taxes in accordance with ASC 740-10, Income Taxes. Deferred tax assets and liabilities are recognized to reflect the estimated future tax effects, calculated at the tax rate expected to be in effect at the time of realization. A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. Deferred tax assets and liabilities are adjusted for the effects of the changes in tax laws and rates of the date of enactment.
ASC 740-10 prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure, and transition issues. Interest and penalties are classified as a component of interest and other expenses. To date, the Company has not been assessed, nor paid, any interest or penalties.
Uncertain tax positions are measured and recorded by establishing a threshold for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. Only tax positions meeting the more-likely-than-not recognition threshold at the effective date may be recognized or continue to be recognized.
Earnings (Loss) Per Share
The Company reports earnings (loss) per share in accordance with ASC 260,
"Earnings per Share." Basic earnings (loss) per share is computed by dividing
net income (loss) by the weighted-average number of shares of common stock
outstanding during each period. Diluted earnings per share is computed by
dividing net loss by the weighted-average number of shares of common stock,
common stock equivalents and other potentially dilutive securities outstanding
during the period using the treasury stock method and as-if converted method. As
of
The following table represents the classes of dilutive securities as of
SCHEDULE OF ANTIDILUTIVE SECURITIES OF EARNINGS PER SHARE
September 30, 2022 September 30, 2021
Common stock to be issued 726,281 17,507,283
Stock options 2,670,000 -
Warrants to purchase common stock - 4,060,000
Anti-dilutive securities 3,396,281 23,467,283
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective
accounting pronouncements, if adopted, would have a material effect on the
accompanying unaudited condensed consolidated financial statements for the three
and nine months ended
12 NOTE 4 - INTANGIBLE ASSETS
The Company's intangible assets consist of costs incurred in connection with the License Agreement with MGH (See Note 5). The consideration paid for the rights included in the License Agreement was in the form of common stock shares which resulted in MGH receiving approximately 20% of the total outstanding shares of common stock of VI. The estimated fair value of the common stock as of the date of the agreement is being amortized over the term of the License Agreement which is based on the remaining patent life of the related patents being licensed which is approximately 16years.
The Company's intangible assets consisted of the following at
SCHEDULE OF INTANGIBLE ASSETS
September 30, 2022 December 31, 2021
Licensed patents $ 492,514 $ 492,514
Accumulated amortization (144,461 ) (120,994 )
Total $ 348,053 $ 371,520
The Company recognized
Future expected amortization of intangible assets is as follows:
SCHEDULE OF FUTURE AMORTIZATION OF INTANGIBLE ASSETS Fiscal year ending December 31, 2022 (months remaining)$ 7,822 2023 31,299 2024 31,299 2025 31,299 2026 31,299 Thereafter 215,035 Total$ 348,053
NOTE 5 - RELATED PARTY TRANSACTIONS
Consulting Agreements
On
13
On
MGH License Agreement
On
As amended by the Eighth Amendment to the License Agreement on
Pre-Sales Diligence Requirement:
(x) The Company shall provide a detailed business plan and development plan
by June 1st, 2022 . As of the date of this filing the Company has yet to
submit the business and development plan and is negotiating the
extension of this requirement with MGH.
(xi) The Company shall raise $2 million in financing by December 1st, 2022 .
(xii) The Company shall raise an additional $8 million in financing by
December 1st, 2023 .
(xiii) The Company shall initiate research regarding the role of CXCL12 in beta
cell function and differentiation by January 1st, 2023 .
(xiv) The Company shall initiate diabetic non-human primate studies using
cadaveric islets encapsulated in the CXCL12 technology by March 1st,
2023 .
(xv) The Company shall initiate research regarding other applications of the
CXCL12 platform by June 1st, 2023 .
(xvi) The Company shall initiate a Phase I clinical trial of a Product or
Process by March 1st, 2024 .
(xvii) The Company shall initiate a Phase II clinical trial of a Product or
Process within thirteen (13) years from Effective Date.
(xviii) The Company shall initiate Phase III clinical trial of a Product or
Process within sixteen (16) years from Effective Date.
14
Additionally, as amended by the Eighth Amendment to the License Agreement on
Post-Sales Diligence Requirements:
(i) The Company shall itself or through an Affiliate or Sublicensee make a
First Commercial Sale within the following countries and regions in the
License Territory within eighteen (18) years after the Effective Date of
this Agreement: US and Europe and China or Japan .
(ii) Following the First Commercial Sale in any country in the License
Territory, Company shall itself or through its Affiliates and/or
Sublicensees use commercially reasonable efforts to continue to make Sales
in such country without any elapsed time period of one (1) year or more in
which such Sales do not occur due to lack such efforts by Company.
In consideration of the update to the diligence milestones, the Company shall pay the following Annual Minimum Royalty payments:
(i) Prior to the First Commercial Sale, the Company shall pay to MGH a
non-refundable annual license fee of ten thousand dollars ($10,000 ) by June
30, 2022 , and on each subsequent anniversary of the Eighth Amendment
Effective Date thereafter. This agreed upon non-refundable license fee has
been included in accounts payable as of June 30, 2022 and expensed as
research and development expense upon execution of the Eight Amendment
during the six months ended June 30, 2022 . The non-refundable annual
license fee was paid on July 1, 2022 .
(ii) Following the First Commercial Sale, Company shall pay MGH a non-refundable
annual minimum royalty in the amount of one hundred thousand dollars United
States Dollars ($100,000 ) per year within sixty (60) days after each annual
anniversary of the Effective Date. The annual minimum royalty shall be
credited against royalties subsequently due on Net Sales made during the
same calendar year, if any, but shall not be credited against royalties due
on Net Sales made in any other year.
The License Agreement also requires VI to pay to MGH a 1% royalty rate on net sales related to the first license sub-field, which is the treatment of Type 1 Diabetes ("T1D"). Future sub-fields shall carry a reasonable royalty rate, consistent with industry standards, to be negotiated at the time the first such royalty payment shall become due with respect to the applicable Products and Processes (as defined in the License Agreement).
The License Agreement additionally requires VI to pay to MGH a
The License Agreement expires on the later of (i) the date on which all issued
patents and filed patent applications within the Patent Rights have expired
(
The License Agreement also grants MGH the right to terminate the License Agreement if VI fails to make any payment due under the License Agreement or defaults in the performance of any of its other obligations under the License Agreement, subject to certain notice and rights to cure set forth therein. MGH may also terminate the License Agreement immediately upon written notice to VI if VI: (i) shall make an assignment for the benefit of creditors; or (ii) or shall have a petition in bankruptcy filed for or against it that is not dismissed within 60 days of filing. As of the date of this filing, this License Agreement remains active and the Company has not received any termination notice from MGH.
15
VI may terminate the License Agreement prior to its expiration by giving 90 days' advance written notice to MGH, and upon such termination shall, subject to the terms of the License Agreement, immediately cease all use and sales of Products and Processes.
The Company incurred costs to MGH of
During the three and nine months ended
Accounts Payable, related parties and Accrued Salaries, related party
The Company incurred director fees of
The Company incurred consulting fees of
In
Sale of
In
NOTE 6- COMMITMENTS AND CONTINGENCIES
Legal Matters
The Company is not aware of any material, existing or pending legal proceedings against the Company, nor is it involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.
16 MGH License Agreement
As discussed in Note 5, the Company executed a License Agreement with MGH. Prior
to the first commercial sale, the License Agreement requires the Company to pay
MGH a non-refundable annual license fee of
The License Agreement also requires VI to pay to MGH a 1% royalty rate on net sales related to the first license sub-field, which is the treatment of T1D. Future sub-fields shall carry a reasonable royalty rate, consistent with industry standards, to be negotiated at the time the first such royalty payment shall become due with respect to the applicable Products and Processes (as defined in the License Agreement).
The License Agreement additionally requires VI to pay to MGH a
Consulting Agreements
On
On
17
NOTE 7 - STOCKHOLDERS' EQUITY (DEFICIT)
Preferred Stock
The Company has 20,000,000 authorized shares of preferred stock,
Series A Preferred Stock
On
In the event of liquidation, dissolution or winding up of the Company, either
voluntarily or involuntarily, the holders of Series A Preferred Stock shall be
entitled to receive, prior and in preference to any common stock holders,
distribution of any surplus funds equal to the greater of (i) the sum of
Each share of Series A Preferred Stock is convertible into shares of common stock at a conversion Rate of 2:1 (the "Series A Conversion Rate"). The Series A Conversion Rate shall be adjusted for stock splits, stock combinations, stock dividends or similar recapitalizations.
Pursuant to the Articles of Incorporation, the shares of Series A Preferred
Stock automatically converted into 6,000,000 shares of common stock to be issued
on
As of
Series B Preferred Stock
On
Each holder of shares of Series B Preferred Stock shall be entitled to the
number of votes equal to the number of votes held by the number of shares of
common stock into which such share of Series B Preferred Stock could be
converted, and except as otherwise required by applicable law, shall have the
voting rights and power equal to the voting rights and powers of the common
stock. The holders of the Series B Preferred Stock shall vote together with the
holders of the common stock of the Company as a single class and as single
voting group upon all matters required to be submitted to a class or series vote
pursuant to the protective provisions of the Series B Preferred Stock
Certificate of Designation or under applicable law. In the event of liquidation,
dissolution or winding up of the Corporation, either voluntarily or
involuntarily, the holders of Series A Preferred Stock shall be entitled to
receive, prior and in preference to any common stock holders, distribution of
any surplus funds equal to the greater of : the sum of
18
The holder of Series B Preferred Stock may elect at any time to convert such sharers into common stock of the Company. Each share of Series B Preferred Stock is convertible into shares of common stock at a conversion rate of 1:1 (the "Series B Conversion Rate"). The Series B Conversion Rate shall be adjusted for stock splits, stock combinations, stock dividends or similar recapitalizations.
Pursuant to the Articles of Incorporation, the shares of Series B Preferred
Stock automatically converted into 4,440,000 shares of common stock to be issued
on
As of
Common Stock
The Company has 300,000,000 authorized shares of common stock,
Common Stock Issuances
On
On
On
During the three and nine months ended
In
19 Common Stock to be issued
As of
The
Stock Option-Based Compensation Plan
On
? The Board or a committee established by the Board will administer the 2022
Plan.
? The total number of shares of common stock authorized for issuance under the
2022 Plan is 3,200,000 shares of Common Stock plus, to the extent the Company
issues new shares of Common Stock other than under the terms of the 2022 Plan
or other than certain Inducement Awards, 3.1% of the shares of Common Stock
issued by the Company in such issuance (or such lower amount as determined by
the Board). As of
approximately 10.1% of our common stock outstanding. ? Eligible recipients of awards include an employee, director or independent
contractor of the Company
the Administrator, subject to certain limitations relating to Section 409A of
the Internal Revenue Code of 1986, as amended (the "Code"). ? No non-employee director may be granted awards under the 2022 plan during any
calendar year if such awards and cash fees paid for serving as a non-employee
director would exceed
service, or$195,000 in any year thereafter. ? In no event shall the exercise price of an option issued pursuant to the 2022
Plan be less than one hundred percent (100%) of the Fair Market Value of a
share of Common Stock on the date of grant.
The purposes of the Plan are to (i) provide an additional incentive to selected employees, directors, and independent contractors of the Company or its Affiliates whose contributions are essential to the growth and success of the Company, (ii) strengthen the commitment of such individuals to the Company and its Affiliates, (iii) motivate those individuals to faithfully and diligently perform their responsibilities and (iv) attract and retain competent and dedicated individuals whose efforts will result in the long-term growth and profitability of the Company. To accomplish these purposes, the Plan provides that the Company may grant Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Other Stock-Based Awards or any combination of the foregoing.
Stock Option Activity
On
20
We utilized the Black-Scholes valuation method to recognize compensation expense over the vesting period. The expected life was determined using the simplified method.
The simplified method provided in
The option price was set at the estimated fair value of the common stock on the date of grant using an actual transactions approach. The actual transactions method considers actual sales of the Company's equity prior to the valuation date. The Company determined the price per share of the most recent private sale of equity to be a more reliable indicator of the Company's fair value rather than the quoted OTC prices, which reflected very low trading volume that subjected the quote price to unusual fluctuations in the stock prices.
The significant assumptions used to estimate the fair value of the equity awards granted were;
SCHEDULE OF STOCK OPTIONS VALUATION ASSUMPTIONS Grant date August 10, 2022 Price of common stock of the Company's last capital raise $ 0.25 Expected term (years) 5.25 Risk-free interest rate 2.93 % Volatility 95 % Dividend yield None
The following table summarizes activities related to stock options of the
Company for the nine months ended
SCHEDULE OF STOCK OPTIONS ACTIVITY
Weighted- Weighted- Aggregate
Average Average Intrinsic
Exercise Remaining Value
Number of Price per Life (Per
Options Share (Years) Option)
Outstanding at December 31, 2021 1,900,000 $ 0.66 5.83 $ -
Granted 770,000 $ 0.50 9.86 $ -
Outstanding at September 30, 2022 2,670,000 $ 0.62 6.46 $ -
Exercisable at September 30, 2022 1,900,000 $ 0.66 5.08 $ -
As of
The Company recorded stock compensation expense of
Warrants
On
21
Accounting Standards Codification ("ASC")
We utilized a Black-Scholes valuation method to determine any incremental value due to the modification. The inputs used to value the warrant as of the modification date are as follows: SCHEDULE OF STOCK WARRANT VALUATION ASSUMPTIONS
? The price of the common stock the Company last raised capital:$0.25 ? Exercise price of the warrant:$0.50 ? Life of the warrant: 0.15 years ? Risk free return rate: 1.99% ? Annualized volatility rate of four comparative companies: 94%
The Company recognized
The following table summarizes activities related to warrants of the Company for
the nine months ended
SCHEDULE OF WARRANTS ACTIVITY
Weighted-
Weighted- Average Aggregate
Average Remaining Intrinsic
Number of Exercise Price Life Value (Per
Warrants per Share (Years) Warrant)
Outstanding and exercisable at
December 31, 2021 4,060,000 $ 0.50 0.53 $ 1.50
Exercised 100,000 $ 0.50 - -
Expired 3,960,000 $ 0.51 - -
Outstanding and exercisable at
September 30, 2022 - $ - - $ -
The Company did not issue any warrants during the nine months ended
22
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto appearing in Part I, Item 1 of this Quarterly Report. Historical results and trends that might appear in this Quarterly Report should not be interpreted as being indicative of future operations.
Overview
The Company's strategy is to develop and commercialize, on a worldwide basis, various intellectual property rights (patents, patent applications, know how, etc.) relating to a series of encapsulated products that incorporate proprietary derivatives of the chemokine CXCL12 for creating a zone of immuno protection around cells, tissues, organs and devices for therapeutic purposes. The product name VICAPSYN™ is the Company's proprietary product line that is applied to transplantation therapies and related stem-cell applications in the transplantation field.
COVID-19
The coronavirus outbreak ("COVID-19") adversely affected the Company's financial
condition and results of operations. The impact of the COVID-19 outbreak on
businesses and the economy in
On
In addition, the Company is uncertain of the full effect the pandemic will have on it for the longer term since the scope and duration of the pandemic is unknown, and evolving factors such as the level and timing of the distribution of efficacious vaccines across the world and the extent of any resurgences of the virus or emergence of new variants of the virus, such as the Delta variant and the Omicron variant, will impact the stability of economic recovery and growth. The Company may experience long-term disruptions to its operations resulting from changes in government policy or guidance; quarantines of employees, customers and suppliers in areas affected by the pandemic; and closures of businesses or manufacturing facilities critical to its business.
Results of Operations - Three and Nine Months Ended
Revenues
The Company did not have any revenues for the three and nine months ended
23 Operating Expenses
We classify our operating expenses into four categories: personnel costs,
research and development expenses, professional fees, and general and
administrative expenses. The Company's total operating expenses for the three
and nine months ended
The
Funding Requirements
We anticipate that substantial additional equity or debt financings or funding
from collaborative agreements or from foundations, government grants or other
sources, will be needed to complete preclinical and animal testing necessary to
file an Investigational New Drug Application with the
Liquidity and Capital Resources
At
We do not believe that we have enough cash on hand to operate our business
during the next 12 months. We anticipate we will need to raise an additional
If we raise additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, or strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our future revenue streams, products or therapeutic candidates or to grant licenses on terms that may not be favorable to us.
24
To date, we have financed our operations through our sale of equity and debt securities. Failure to generate revenue or to raise funds could cause us to go out of business, which would result in the complete loss for investors in our Company.
To date, we have generated no revenues, and no substantial revenues are anticipated until we have implemented our full plan of operations. To implement our strategy to grow and expand per our business plan, we intend to generate working capital via a private placement of equity or debt securities, or to secure a loan. If we are unsuccessful in raising capital or securing a loan, we could be required to cease business operations and investors would lose all of their investment.
In
In
Additionally, we will have to meet all the financial disclosure and reporting requirements associated with being a publicly reporting company. Our management will have to spend additional time on policies and procedures to make sure our Company is compliant with various regulatory requirements.
This additional corporate governance time required of management could limit the amount of time management has to implement our business plan and may impede the speed of our operations.
Working Capital Deficit
September 30, 2022 December 31, 2021
Current Assets $ 35,747 $ 222,793
Current Liabilities 904,079 715,964
Working Capital Deficit $ (868,332 ) $ (493,171 )
Cash Flows
Cash activity for the nine months ended
Nine Months Ended September 30,
2022 2021
Net cash used in operating activities
- 100,000
Net cash provided by financing activities 50,000 385,000
Net increase (decrease) in cash $ (191,085 ) $ 164,280 As of
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements as defined in Regulation S-K Item 303(a)(4) during the periods presented, investments in special-purpose entities or undisclosed borrowings or debt. Additionally, we are not a party to any derivative contracts or synthetic leases.
25 Board of Directors
On
Also on
Contractual Obligations
MGH License Agreement
The Company has executed a License Agreement with MGH. Prior to the first
commercial sale, the License Agreement requires the Company to pay MGH a
non-refundable annual license fee of
The License Agreement also requires VI to pay to MGH a 1% royalty rate on net sales related to the first license sub-field, which is the treatment of T1D. Future sub-fields shall carry a reasonable royalty rate, consistent with industry standards, to be negotiated at the time the first such royalty payment shall become due with respect to the applicable Products and Processes (as defined in the License Agreement).
The License Agreement additionally requires VI to pay to MGH a
Critical Accounting Policies and Estimates
Our discussion and analysis of financial condition and results of operations is
based upon our consolidated financial statements, which have been prepared in
accordance with accounting principles generally accepted in
The methods, estimates and judgments we use in applying our most critical
accounting policies have a significant impact on the results that we report in
our consolidated financial statements.
We believe the following critical accounting policies, among others, require significant judgments and estimates used in the preparation of our interim condensed consolidated financial statements.
Our significant accounting policies are described in more detail in the notes to
our consolidated financial statements for the fiscal year ended
26
Recent Accounting Pronouncements
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying unaudited condensed consolidated financial statements.
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