|6 Months Ended|
Jun. 30, 2018
|Notes to Financial Statements|
|NOTE 9. ROYALTY LIABILITY||
The holders of the certain convertible notes referenced in Note 7 will receive, in the aggregate, pro rata based on investment, a total of five percent of the revenues of Caretta Therapeutics, LLC during the years ended December 31, 2017, 2018, 2019 and 2020.
On April 18, 2017, the Company revised the royalty agreement with the amendment and expansion of the subscription agreement from a maximum aggregate $2,500,000 to a maximum aggregate of $11,500,000. The term of the royalty for OTC Roll-On Venodol and OTC Oral Venodol begins on October 1, 2018 and ends on December 21, 2023. The royalty term of prescription strength Venodol shall be from October 1, 2018 and ending December 31, 2024. Notwithstanding the forgoing, the royalty shall terminate upon the achievement of the Maximum Royalty Amount as described in the table below:
For 2018, the royalty changed for new subscribers such that the “Royalty Term” shall mean the period beginning October 1, 2018 and ending on the date set forth on the following table for the subscriber’s Affiliated Investment Amount.
For the six months ended June 30, 2018, the Company recorded $623,405 of debt discount related to the relative fair value of the royalty liabilities associated with the new convertible notes, see Note 7. For the six months ended June 30, 2018, the Company recorded an unrealized loss related to the change in present value of the royalty liabilities in the amount of $66,027.