Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

NOTE 4 - INTANGIBLE ASSETS AND GOODWILL

Mateon completed a Merger with Oncotelic, Inc. (Note 3), which gave rise to Goodwill of $4,751,055. The Goodwill will be tested on the annual impairment date chosen of December 31.

Arrangements with Adhera Therapeutics, Inc.

In July 2017, Oncotelic entered into a License Agreement (the “License Agreement”) with Adhera Therapeutics, Inc. (“Adhera”) pursuant to which, among other things, we were provided from Adhera a license to their SMARTICLES platform for the delivery of antisense DNA therapeutics, as well as a license to their conformationally restricted nucleotide (“CRN”) technology with respect to TGF-Beta. Under the terms of the License Agreement, Oncotelic agreed to purchase 49,019 shares of Adhera’s common stock for an aggregate purchase price of $0.25 million ($5.10 per share), with such purchase and sale to be made pursuant to a Stock Purchase Agreement to be entered into between us and Adhera within thirty (30) days following the date of the License Agreement. As of May 2018, we had not completed the purchase of the stock and were not able to reach a definitive agreement, and as part of the Omnibus Settlement Agreement, entered into on October 1, 2018, between Adhera, Vuong Trieu, Ph.D. and affiliated entities, the License Agreement was terminated effective May 15, 2018.

Assignment and Assumption Agreement with Autotelic, Inc.

In April 2018, we entered into an Assignment and Assumption Agreement (the “Assignment Agreement”) with Autotelic Inc., an affiliate company, and Autotelic LLC, an affiliate company, pursuant to which the Company acquired the rights to all intellectual property (“IP”) related to a patented product. As consideration for the Assignment Agreement, the Company issued 204,798 shares of our common stock for a value of $819,191. The Assignment Agreement also provides that the Company shall be responsible for all costs related to the IP, including development and maintenance, going forward. All previous pass through charges related to this asset from Autotelic Inc. to Autotelic, LLC and then to the Company will be null and void. As a result, Oncotelic wrote-off approximately $458,000 in previously billed charges related to the Oncotelic IP for the year ended December 31, 2018 which was recorded in general and administrative expenses. Dr. Trieu, a related party, is a control person in Autotelic LLC and Autotelic Inc.

Intangible Asset Summary

The following table summarizes the balances as of June 30, 2019 and December 31, 2018, of the intangible assets acquired, their useful life, and annual amortization:

	June 30, 2019			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			19.02
Intangible asset – Capitalization of license cost		190,989			19.02
		1,010,180
Less Accumulated Amortization		(59,926	)
Total	$	950,254

	December 31, 2018			Remaining Estimated Useful Life (Years)
Intangible asset – Intellectual Property	$	819,191			19.27
Intangible asset – Capitalization of license cost		190,989			19.27
		1,010,180
Less Accumulated Amortization		(34,189	)
Total	$	975,991

Amortization of identifiable intangible assets for the three and six months ended June 30, 2019 and 2018 was $12,896 and $25,737; and $8,561 and $8,561, respectively.

The future yearly amortization expense over the next five years and thereafter are as follows:

For the six-month period ended June 30,
2020	$	51,365
2021		51,365
2022		51,365
2023		51,365
2024		51,365
Thereafter		693,429
	$	950,254