Agreements With, and Other Related Party Transactions:

12 Months Ended

Feb. 29, 2024

Agreements With, and Other Related Party Transactions:

Agreements With, and Other Related Party Transactions:

2.           Agreements With, and Other Related Party Transactions:

The Company has agreements with its majority shareholder and President Dr. Burzynski as further described below:

Original License Agreement

Dr. Burzynski owned patents involving the formulation, preparation, manufacture, production, use, dosage and treatment with Antineoplastons. The United States Patent Office and Patent Offices of thirty-four other countries have issued the patents. Various Patents for cancer treatment and diagnosis in the United States and Canada were licensed to the Company pursuant to the Original License Agreement.

The Original License Agreement granted to the Company the exclusive right, in the United States, Canada, and Mexico, to use, manufacture, develop, sell, distribute, sub-license and otherwise exploit all of Dr. Burzynski’s rights, title, and interests, including patent rights, in Antineoplaston drugs in the treatment and diagnosis of cancer. Under the Original License Agreement, the Company owned exclusive rights to eight (8) issued United States Patents, four (4) issued Canadian Patents and one (1) issued Mexican Patent. Pursuant to the terms of the Original License Agreement, the Original License Agreement terminated on July 2, 2019 upon the expiration of the last patent licensed to the Company from Dr. Burzynski as of such date. As of July 2, 2019, all patents previously licensed by the Company under the Original License Agreement have expired.

New License Agreement

On May 22, 2023, the Company entered into the New License Agreement with Dr. Burzynski, pursuant to which Dr. Burzynski licensed to the Company the exclusive rights in the Territory (composed of the United States and Canada) to make, have made, use, sell, offer for sale, and distribute or otherwise exploit the licensed products and services relating to Antineoplastons, including but not limited to any patent rights which may be granted in these countries. The New License Agreement currently covers four United States patents owned by Dr. Burzynski (the “New US Patents”). The first of these New US Patents includes the patent which was originally issued to the Company on May 31, 2022 and re-assigned to Dr. Burzynski in early 2023, covering methods of treatment of leptomeningeal disease using Antineoplaston. This New US Patent is expected to expire on June 11, 2038. The second of these New US Patents includes the patent issued to Dr. Burzynski on March 21, 2023, also covering methods of treatment of leptomeningeal disease using Antineoplaston. This New US Patent is expected to expire on June 11, 2038. The third of these New US Patents includes the patent issued to Dr. Burzynski on April 21, 2020, covering methods for the treatment of recurrent glioblastoma (RGBM). This New US Patent is expected to expire on May 8, 2037. The fourth of these New US Patents includes the patent issued to Dr. Burzynski on February 1, 2022, covering methods for the treatment of glioblastoma multiforme. This New US Patent is expected to expire on May 8, 2037. Additionally, there are two pending Canadian patent applications (covering methods for the treatment of leptomeningeal disease and methods for the treatment of recurrent glioblastoma), and one pending United States patent applications (covering methods for the treatment of glioblastoma multiforme).The Company will not be able to exploit such rights under the New License Agreement until such time as Antineoplastons are approved, of which there can be no assurance, by the FDA for sale in the United States.

Research Funding Agreement

Effective March 1, 1997, Dr. Burzynski restructured his funding arrangement with the Company and entered into a Research Funding Agreement. On May 22, 2023, the parties amended and restated the Research Funding Agreement in connection with the execution of the New License Agreement and to limit the scope of the Research Funding Agreement to the United States and Canada. Under this agreement, the two parties agreed to the following:

1. The Company agrees to undertake all scientific research (including clinical trials) in connection with the development of new or improved Antineoplastons for the treatment of cancer in the United States

and Canada. The Company will hire such personnel as is required to fulfill its obligations under the agreement.

2. Dr. Burzynski agrees to fund in its entirety all basic research, which the Company undertakes in connection with the development of other Antineoplastons or refinements to existing Antineoplastons for the treatment of cancer.

3. As FDA approval of Antineoplastons will benefit both parties, Dr. Burzynski agrees to pay the expenses to conduct the clinical trials for the Company.

4. Dr. Burzynski agrees to provide the Company such laboratory and research space as the Company needs at the Trinity Drive facility in Stafford, Texas, and such office space as is necessary at Trinity Drive and at his medical facility.

5. In the event the research described in the agreement results in the approval of any additional patents for the treatment of cancer, Dr. Burzynski shall own all such patents, but shall license to the Company the patents based on the same terms, conditions and limitations as in the New License Agreement.

6. Dr. Burzynski shall have unlimited and free access to all equipment which the Company owns and controls, so long as such use is not in conflict with the Company’s use of such equipment, including without limitation to all equipment used in manufacturing of Antineoplastons used in the clinical trials.

7. The amounts, which Dr. Burzynski is obligated to pay under the agreement, shall be reduced dollar for dollar by the following:

a. Any income which the Company receives for services provided to other companies for research and/or development of other products, less such identifiable marginal or additional expenses necessary to produce such income (such as the purchase of chemicals, products or equipment) solely necessary to engage in such other research and development activity, and

b. The net proceeds of any stock offering or private placement, which the Company receives during the term of the engagement up to a maximum of $1,000,000 in a given Company fiscal year.

8. Effective March 1, 2023, the term of the Research Funding Agreement was extended to February 29, 2024, and is automatically renewable for an additional one-year term thereafter, unless one party notifies the other party at least thirty days prior to the expiration of the term of the agreement of its intention not to renew the agreement. In addition to the foregoing termination provisions, the agreement automatically terminates in the event that Dr. Burzynski owns less than fifty percent of the outstanding shares of the Company, or is removed as President and/or Chairman of the Board of the Company, unless Dr. Burzynski notifies the Company in writing of his intention to continue the agreement notwithstanding this automatic termination provision.

Royalty Agreement

Effective March 1, 1997, the Company entered into a royalty agreement with Dr. Burzynski whereby upon receiving FDA approval for interstate marketing and distribution, the Company agrees to pay Dr. Burzynski a royalty interest equivalent to 10% of the Company’s gross income, which royalty interest shall include gross receipts from all future sales, distributions and manufacture of Antineoplastons. On May 22, 2023, the parties amended and restated the royalty agreement in connection with the execution of the New License Agreement and to limit the scope of such agreement to the United States and Canada. Under the royalty agreement, Dr. Burzynski will have the right to either produce Antineoplaston products for use in his medical practice to treat up to 1,000 patients without paying any fees to the Company, or purchase from the Company Antineoplaston products for use in his medical practice to treat up to 1,000 patients at a price of the Company’s cost to produce the Antineoplaston products plus 10%. Dr. Burzynski will also have the right to either lease or purchase all the manufacturing equipment located at 12707 Trinity Drive, Stafford, Texas at a fair market price. The Company will also have the right to lease from Dr. Burzynski the entire premise located at 12707 Trinity Drive, Stafford, Texas at arms-length terms at rates competitive with those available in the market at that time, provided that Dr. Burzynski does not need the facility for his use.

The term of this agreement is indefinite and will continue until such time as the parties agree that it is in their mutual interest to terminate such agreement.

Other Related Party Transactions

Dr. Burzynski owns the production facility located at Trinity Drive. There is no formal lease agreement between Dr. Burzynski and the Company; however, the Research Funding Agreement described above provides that Dr. Burzynski will allow the Company the use of the building. In addition, the Royalty Agreement states that after FDA approval is granted (though approval is not assured) the Company may rent the facility at competitive rates if Dr. Burzynski does not need the facility for his use. The actual facility costs are included in the financial statements as set forth in Note 4. In addition, Dr. Burzynski’s medical clinic performs certain administrative functions such as accounting, and allows the Company the use of some office space. Since May of 2000, Dr. Burzynski’s and the chief financial officer’s entire salaries are paid through his medical practice and he is not compensated directly by the Company for his services.

The Company has received all significant funding from Dr. Burzynski through either cash contributed to the Company or the payment of the cost to conduct FDA approved clinical trials through his medical practice, as disclosed in Note 1. Following is a summary of the capital contributed and clinical trial costs paid by Dr. Burzynski for the years ended February 29, 2024 and February 28, 2023, respectively:

	2024		2023
Capital contributed	$	524,156	$	247,068
Clinical trial costs paid directly by Dr. Burzynski	$	799,879	$	654,291