Related Party Transactions
|6 Months Ended|
Jun. 30, 2017
|Related Party Transactions [Abstract]|
|Related Party Transactions||
9. Related Party Transactions
On May 10, 2017 the Company entered into a Note Purchase Agreement with Intrexon pursuant to which the Company issued a $2.4 million unsecured non-convertible promissory note to Intrexon and amended the first milestone in its Oral Mucositis ECC with Intrexon. The note matures in two (2) years and has a simple interest rate of 12% per annum. Proceeds from the note will be used to fund the Company’s AG013 research and clinical trials.
During the three and six months ended June 30, 2017, we paid $-0- and $524,620; and during the three and six months ended June 30, 2016 we paid $500,770 and $933,375 respectively, to Intrexon under the Oral Mucositis and Lantibiotic ECC agreements (See Note 8). Included in accounts payable and accrued expenses at June 30, 2017 and December 31, 2016 was $615,168 and $524,620, respectively, related to unpaid invoices received from Intrexon relating to work performed under the ECC Agreements and accrued interest relating to unpaid invoices and the unsecured non-convertible promissory note. As of June 30, 2017 and 2016 Intrexon beneficially owned approximately 31.4% and 31.5% of our outstanding common stock.
On June 27, 2016, the Company completed the sale of its consumer probiotics business to ProBiora Health, LLC, (“ProBiora Health”) an entity owned by Ms. Christine L. Koski, a director at the time of the transaction. The purchase price was $1,700,000 in cash of which $1,250,000 was paid at closing and $450,000 was payable on or before July 31, 2016. The note accrued interest at the rate of 1% per annum and was paid in full on July 29, 2016. In connection with the sale, ProBiora Health assumed certain liabilities. ProBiora Health is obligated to pay the Company contingent consideration annually over a 10 year period based on a percentage of sales of products using the Purchased Assets, in excess of $2,000,000 annually over the contingent contribution period, with a maximum obligation to the Company of $2,000,000. No payments were made by or due from ProBiora Health for post-closing sales in 2016.
The activities related to the consumer probiotic business are reflected as part of “Discontinued Operations” for the periods presented.
The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.
Reference 1: http://www.xbrl.org/2003/role/presentationRef