Commitments and Contingencies
|9 Months Ended|
Sep. 30, 2018
|Commitments and Contingencies Disclosure [Abstract]|
|Commitments and Contingencies||
Note 10 – Commitments and Contingencies
Cocrystal Pharma has an exclusive license from Emory University for use of certain inventions and technology related to inhibitors of hepatitis C virus that were jointly developed by Emory and Cocrystal Pharma employees. The License Agreement is dated March 7, 2013 wherein Emory agrees to add to the Licensed Patents and Licensed Technology Emory’s rights to any patent, patent application, invention, or technology application that is based on technology disclosed within three (3) years of March 7, 2013. The agreement includes payments due to Emory ranging from $40 to $500 based on successful achievement of certain drug development milestones. Additionally, Cocrystal may have royalty payments at 3.5% of net sales due to Emory with a minimum in year one of $25 and increase to $400 in year five upon product commercialization. One of Cocrystal’s Directors, Dr. Raymond Schinazi, is also a faculty member at Emory University.
In the ordinary course of business, the Company enters into non-cancelable operating leases for its facilities, including related party leases. See Note 11 - Transactions with Related Parties. The future minimum lease payments under non-cancelable operating leases as of September 30, 2018 are as follows:
From time to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending, against it which, if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position.
In November 2017, Lee Pederson (Pederson), a former Biozone Pharmaceuticals, Inc. lawyer, filed a lawsuit in Minnesota against co-defendants the Company, Phillip Frost, OPKO Heath, Inc. and Brian Keller for various allegations. On July 11, 2018, the United States Magistrate Judge issued a Report and Recommendation to the United States (US) District Court Judge, that Pederson’s complaint against the Company and co-defendants, be dismissed without prejudice, for lack of personal jurisdiction. On July 16, 2018, Pederson filed an objection to the Report and Recommendation and the Company filed a response to Pederson’s Objection on July 30, 2018. On September 13, 2018, the US District Court Judge granted the Company and co-defendant’s motion to dismiss Pederson’s amended complaint. Subsequent to September 30, 2018, Pederson has filed a notice of appeal with the US Court of Appeals for the Eight Circuit on October 11, 2018. Management believes that this complaint is without merit and will be dismissed without monetary damages.
On September 20, 2018, Anthony Pepe, individually and on behalf of a class, filed with the U.S. District Court for the District of New Jersey a complaint against the Company, certain current and former executive officers and directors of the Company and the other defendants named therein for violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The class consists of the persons and entities who purchased the Company’s common stock during the period from September 23, 2013 through September 7, 2018. Pepe also alleges violation of other sections of the Exchange Act by the defendants named in the complaint other than the Company. Pepe seeks damages, pre-judgment and post-judgment interest, reasonable attorneys’ fees, expert fees and other costs. Management cannot assess the potential impact of this complaint as of the reporting date.
The entire disclosure for loss and gain contingencies. Describes any existing condition, situation, or set of circumstances involving uncertainty as of the balance sheet date (or prior to issuance of the financial statements) as to a probable or reasonably possible loss incurred by an entity that will ultimately be resolved when one or more future events occur or fail to occur, and typically discloses the amount of loss recorded or a range of possible loss, or an assertion that no reasonable estimate can be made.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef