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Intangibles and License Fee Payable
9 Months Ended
Sep. 30, 2014
Notes  
Intangibles and License Fee Payable

6.                INTANGIBLES AND LICENSE FEE PAYABLE

 

License Agreement

 

On March 24, 2010, the Company entered into a license agreement with Panacea Pharmaceuticals Inc. (“Pharmaceuticals”), a related party, 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 to $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 of an $8 test price.

 

The GDL contains certain issued and pending patent rights. Upon commencement of licensed services to customers, amortization will be taken over the estimated useful life of the respective patent rights, which vary and are determined on a country-by-country basis.

 

As of September 30, 2014, the Company had not commenced any services relating to GDL and as a result, no amortization has been recorded.

 

As of September 30, 2014, management evaluated whether events and circumstances have occurred that indicate possible impairment and concluded that no impairment was noted.

 

License Fee Payable

 

The Company made license fee payments to Laboratories of $636,100 for the nine months ended September 30, 2014 to reduce the license fee payable from $574,211 as of December 31, 2013 to $0, and have recorded a receivable of $61,889 as of September 30, 2014 included in accounts receivable.