License and Supply Agreement, net	9 Months Ended
Sep. 30, 2024
License And Supply Agreement Net
License and Supply Agreement, net	Note 7 – License and Supply Agreement, net On April 23, 2012, the Company entered into a License and Supply Agreement (as thereafter amended, the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products, and for an exclusive supply arrangement for the filtration products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the filtration products worldwide, with certain limitations on territory, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the filtration products during the term of the License and Supply Agreement. The filtration products covered under the License and Supply Agreement includes both certain products based on Medica’s proprietary Versatile microfiber technology and certain filtration products based on Medica’s proprietary Medisulfone ultrafiltration technology. In December 2023, the Company signed a new agreement with Medica which extends the term until December 31, 2028, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement. In exchange for the license, the gross value of the intangible asset capitalized was $2.3 million. License and Supply Agreement, net, on the condensed consolidated balance sheet is $0.2 million and $0.3 million as of September 30, 2024 and December 31, 2023, respectively. Accumulated amortization is $2 million as of September 30, 2024 and December 31, 2023. The intangible asset is being amortized as an expense over the life of the License and Supply Agreement. Amortization expense of approximately $14,000 and $33,000 was recognized in each of the three months ended September 30, 2024 and 2023 on the condensed consolidated statement of operations. As of December 11, 2023, the Company has agreed with Medica to pay interest per month at the EURIBOR 360-day rate plus 500 basis points calculated on the principal amount of any outstanding invoices that are overdue by more than 15 days beyond the original payment terms. There was no interest recognized for the nine months ended September 30, 2024 or September 30, 2023. In addition, for the period beginning April 23, 2014 through December 31, 2023, the Company paid Medica a royalty rate of 3% of net sales of the filtration products sold, subject to reduction as a result of a supply interruption pursuant to the terms of the License and Supply Agreement. Approximately $102,000 for the three months ended September 30, 2023 was recognized as royalty expense and is included in cost of goods sold on the condensed consolidated statement of operations. Approximately $292,000 for the nine months ended September 30, 2023 was recognized as royalty expense and is included in cost of goods sold on the condensed consolidated statement of operations. Approximately $102,000 of this royalty expense was included in accounts payable as of September 30, 2023. Starting in 2024, the Company is no longer required to pay Medica royalties.

License and Supply Agreement, net

9 Months Ended

Sep. 30, 2024

Note 7 – License and Supply Agreement, net

On April 23, 2012, the Company entered into a License and Supply Agreement (as thereafter amended, the “License and Supply Agreement”) with Medica S.p.A. (“Medica”), an Italy-based medical product manufacturing company, for the marketing and sale of certain filtration products based upon Medica’s proprietary Medisulfone ultrafiltration technology in conjunction with the Company’s filtration products, and for an exclusive supply arrangement for the filtration products. Under the License and Supply Agreement, Medica granted to the Company an exclusive license, with right of sublicense, to market, promote, distribute, offer for sale and sell the filtration products worldwide, with certain limitations on territory, during the term of the License and Supply Agreement. In addition, the Company granted to Medica an exclusive license under the Company’s intellectual property to make the filtration products during the term of the License and Supply Agreement. The filtration products covered under the License and Supply Agreement includes both certain products based on Medica’s proprietary Versatile microfiber technology and certain filtration products based on Medica’s proprietary Medisulfone ultrafiltration technology. In December 2023, the Company signed a new agreement with Medica which extends the term until December 31, 2028, unless earlier terminated by either party in accordance with the terms of the License and Supply Agreement.

In exchange for the license, the gross value of the intangible asset capitalized was $2.3 million. License and Supply Agreement, net, on the condensed consolidated balance sheet is $0.2 million and $0.3 million as of September 30, 2024 and December 31, 2023, respectively. Accumulated amortization is $2 million as of September 30, 2024 and December 31, 2023. The intangible asset is being amortized as an expense over the life of the License and Supply Agreement. Amortization expense of approximately $14,000 and $33,000 was recognized in each of the three months ended September 30, 2024 and 2023 on the condensed consolidated statement of operations.

As of December 11, 2023, the Company has agreed with Medica to pay interest per month at the EURIBOR 360-day rate plus 500 basis points calculated on the principal amount of any outstanding invoices that are overdue by more than 15 days beyond the original payment terms. There was no interest recognized for the nine months ended September 30, 2024 or September 30, 2023.

In addition, for the period beginning April 23, 2014 through December 31, 2023, the Company paid Medica a royalty rate of 3% of net sales of the filtration products sold, subject to reduction as a result of a supply interruption pursuant to the terms of the License and Supply Agreement. Approximately $102,000 for the three months ended September 30, 2023 was recognized as royalty expense and is included in cost of goods sold on the condensed consolidated statement of operations. Approximately $292,000 for the nine months ended September 30, 2023 was recognized as royalty expense and is included in cost of goods sold on the condensed consolidated statement of operations. Approximately $102,000 of this royalty expense was included in accounts payable as of September 30, 2023. Starting in 2024, the Company is no longer required to pay Medica royalties.