Note 7 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note

7

- Commitments and Contingencies

Leases

On

April 16, 2018,

the Company executed a service agreement with CIC Innovation Communities, LLC, to establish and lease offices at the Cambridge Innovation Center in Cambridge, Massachusetts. The Company does

not

have a long-term agreement in place to occupy this location, but rather occupies on a month-to-month basis.

On

April 16, 2018,

the Company also executed a space utilization agreement with the Board of Regents of the University of Texas System to establish and lease offices at the Dell Medical School in Austin, Texas. The Company pays

$2,050

per month to occupy this location and the lease is effective until

April 30, 2020.

Commitments

MD Anderson

We have entered into a clinical study agreement with the University of Texas MD Anderson Cancer Center in Houston, Texas, to administer a Phase I/II clinical trial, combining

FUS1

-nanoparticles and Erlotinib in Stage IV lung cancer patients. The trial was expected to run through the end of

2018

with a projected total cost of approximately

$2

million. Payments are due and payable when invoiced throughout the clinical trial period. The agreement

may

be terminated at any time.

In

July 2018,

the Company entered into a

two

-year sponsored research agreement with MD Anderson Cancer Center to sponsor preclinical studies focused on the combination of

TUSC2

with an immunotherapy with a projected total cost of approximately

$2

million. Payments are due and payable when invoiced throughout the clinical trial period. The agreement

may

be terminated at any time.

In

2009,

we agreed to assume certain contractual and other obligations of IRI in consideration for the sublicense rights, expertise, and assistance associated with the assignment of certain technologies and intellectual property. We also agreed to pay royalties of

one

percent (

1%

) on sales of resulting Licensed Products, for a period of

21

years following the termination of the last of the MD Anderson License Agreement and Sublicense Agreement, to IRI and we assumed patent prosecution costs and an annual minimum royalty of

$20,000

payable to the National Institutes of Health.

National Institutes of Health

Our

$191,393

payment obligation to the National Institutes of Health (“NIH”) represented a current obligation, of which

$15,393

of

2016

patent prosecution costs were paid in the

fourth

quarter of

2016

and

$176,000

was included in Accounts Payable at

December 31, 2016 (

consisting of accrued annual royalties of

$140,000

and patent costs of

$36,000

). During the

first

quarter of

2017,

we modified the terms of our accrued royalty obligation to NIH. Under the modified agreement, NIH agreed to extinguish

$120,000

of the accrued royalties payable to them in consideration for payment by us of (i) accrued patent costs of

$36,000,

(ii) a royalty payment of

$20,000,

and (iii) a contingent payment of

$240,000,

increasing at

$20,000

per year starting in

2018,

to be paid upon our receipt of FDA approval. The payments for the patent costs of

$36,000

and royalties of

$20,000

were paid during the

second

quarter of

2017.

As a result of our modified agreement with the NIH, we have recognized the exchange of the

$120,000

fixed obligation for the

$240,000

contingent obligation as a

$120,000

reduction to intellectual property expense (classified within General and Administrative Expense) during the

first

quarter of

2017.

The

$240,000

contingent obligation which increases annually by

$20,000

and is

$280,000

as of

December 31, 2019 

will be recognized when we obtain regulatory approval (the event that triggers the payment obligation).

Contingencies

From time to time we

may

become subject to threatened and/or asserted claims arising in the ordinary course of our business. Management is

not

aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material impact on our Company’s financial condition, results of operations or liquidity.

During

October 2017,

we received an informal demand from a former financial advisor, claiming that it is entitled to a warrant to purchase shares of common stock equal to

three

(

3

) percent of our outstanding shares at

December 1, 2015.

We believe this asserted claim lacks merit, and we intend to defend the claim vigorously.