2.4.0.8000090 - Disclosure - 5. Global Diagnostic Licensetruefalsefalse1false falsefalseD130101_130630http://www.sec.gov/CIK0001024048duration2013-01-01T00:00:002013-06-30T00:00:001true 1us-gaap_DisclosureTextBlockAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse0Notes2false 2fil_GlobalDiagnosticLicensefil_falsenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00<ol start="5" type="1" style='margin-top:0in'> <li style='margin-top:0in;margin-right:0in;margin-bottom:10.0pt;margin-left:0in;margin-bottom:0in;margin-bottom:.0001pt'>GLOBAL DIAGNOSTIC LICENSE</li> </ol>   License Agreement   On March 24, 2010, the Company entered into a license agreement with Panacea Pharmaceuticals Inc. (Pharmaceuticals) to acquire the global diagnostic license (GDL), with rights to sublicense worldwide, except for the United States of America.  GDL allows the Company to develop, market and use licensed products related to HAAH based laboratory tests.   In consideration for the GDL, the Company issued 35,500,000 common shares and will pay Pharmaceuticals a license fee of $2,500,000, due within 30 days of the Company raising a minimum $10,000,000 equity investment.  One-half of any equity investments raised shall be remitted to Pharmaceuticals, until the license fee is paid in full. The aggregate consideration paid and therefore fair value of the GDL equates $50,000,000.  Further, the Company will pay Pharmaceuticals 25% of all sublicensing revenue and will purchase all conforming reagent at a cost of $20 per test or 10% of the sale price of the individual test with a minimum $8.00 test price.   As at December 31, 2011, the Company engaged a third party professional valuation firm to review the license agreement and determine an appropriate representation of fair value of the intangible asset. The valuation report considered current conditions of the Company and industry as well as projections of future performance based on managements judgment of the likelihood of future outcomes. Results of the valuation report indicated that the intangible asset was not impaired as of December 31, 2011.  As at June 30, 2013, management is of the opinion that there has been no change to those circumstances.   The Company made license fee payments of $323,444 for the 3 months ending June 30, 2013 ($100,000 June 30, 2012), and $323,444 for the 6 months ending June 30, 2013 ($200,000 June 30, 2012), which has reduced the Companys license fee payable to $ 1,239,056. Sublicense Agreement On November 18, 2011, the Company entered into a sublicense agreement with Panacea Laboratories, Inc. (Laboratories) to sublicense the rights to develop, market and use licensed products related to HAAH based laboratory tests in Canada.   In consideration for the rights received under the sublicense agreement, Laboratories provided the Company with 40,000,000 shares of its common stock and will pay the Company a sublicense fee of $960,000, due within 3 years.  The fair value of the aggregate consideration paid and therefore the initial cost of the investment equated to $1,000,000, which was recognized as the initial asset balance of the investment.  Further, Laboratories must purchase all conforming reagents from the Company at a cost of $20 per test or 10% of the sale price of the individual test with a minimum $8.00 test price.   Sublicensing revenues of $1,000,000 had been recorded in deferred revenues for the year ended December 31, 2011, and will be taken into revenues once Laboratories commences operations. The amount of deferred revenues is unchanged since December 31, 2011. Upon the recognition of revenue, the Company will recognize its liability to reimburse Panacea Pharmaceuticals 25% of all sublicensing revenue as disclosed under the terms of the license agreement.     <table border="0" cellspacing="0" cellpadding="0" width="100%" style='width:100.0%'> <tr align="left"> <td width="5%" valign="top" style='width:5.0%;padding:0'></td> <td width="95%" valign="top" style='width:95.0%;padding:0'></td> </tr> </table> Based on the accounting guidance of FASB ASC 323, the Companys investment in Laboratories was subsequently decreased due to the Companys share of the losses in Laboratories operations. The Companys investment of 40,000,000 common shares represents a 50% ownership interest in Laboratories. Laboratories intends to raise capital in the current year through issuing additional shares and the Companys ownership interest in Laboratories is expected to decline.  The Company has significant influence over Laboratories but does not have the level of control that would require consolidation and has thus accounted for its investment in Laboratories using the equity method.      <table border="0" cellspacing="0" cellpadding="0" style='border-collapse:collapse'> <tr align="left"> <td width="638" colspan="3" valign="top" style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'> Investment in Laboratories </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'>   </td> <td width="21" valign="top" style='width:15.8pt;padding:0in 5.4pt 0in 5.4pt'>   </td> <td width="97" valign="top" style='width:72.75pt;padding:0in 5.4pt 0in 5.4pt'>   </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'> November 18, 2011 (initial value) </td> <td width="21" valign="top" style='width:15.8pt;padding:0in 5.4pt 0in 5.4pt'> $ </td> <td width="97" valign="top" style='width:72.75pt;padding:0in 5.4pt 0in 5.4pt'> 1,000,000 </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'> Share of losses up to December 31, 2012 </td> <td width="21" valign="top" style='width:15.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>   </td> <td width="97" valign="top" style='width:72.75pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> (87,424) </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'> December 31, 2012 </td> <td width="21" valign="top" style='width:15.8pt;border:none;padding:0in 5.4pt 0in 5.4pt'>   </td> <td width="97" valign="top" style='width:72.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'> 912,576 </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'> Share of gain for the six months ended June 30, 2013 </td> <td width="21" valign="top" style='width:15.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'>   </td> <td width="97" valign="top" style='width:72.75pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> 5,646 </td> </tr> <tr align="left"> <td width="520" valign="top" style='width:390.25pt;padding:0in 5.4pt 0in 5.4pt'> June 30, 2013 </td> <td width="21" valign="top" style='width:15.8pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> $ </td> <td width="97" valign="top" style='width:72.75pt;border:none;border-bottom:solid windowtext 1.0pt;padding:0in 5.4pt 0in 5.4pt'> 918,222 </td> </tr> </table>   The investment in Laboratories was $918,222 and $912,576 as of June 30, 2013 and December 31, 2012 respectively.  The increase in the investment during the six months ended June 30, 2013 represents a reversal of previously recognized operating expenses incurred at laboratories.falsefalsefalsenonnum:textBlockItemTypenaGlobal Diagnostic License.No definition available.false05. Global Diagnostic Licensefalse5. Global Diagnostic LicenseUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://www.panaceaglobalinc.com/20130630/role/idr_Disclosure5GlobalDiagnosticLicense12