In December 2016, the Company entered into a patent license agreement for $500,000, which expires upon
expiration of the patent. Under this agreement, if the Company develops and sells specific products based on the patent, the Company would pay a royalty up to a cumulative $500,000 from Origin 1, whereby no further payments will be due for any
production at Origin 1. If production of those products occurs at subsequent facilities, the Company will pay an upfront license fee royalty and a variable royalty based on production at that subsequent facility, capped at an aggregate $10,000,000
per facility. Certain products that the Company is currently developing and anticipates selling are expected to utilize these patents. No payments were made during the three months ended March 31, 2021 or 2020.
In November 2016, the Company entered into a patent license agreement for $35,000, which expires upon expiration of the patent. Under this agreement, if the
Company produces products based on the patent, the Company will pay an annual royalty upon commencement of operations on Origin 1 of $25,000 up to a cumulative $1,000,000. The pipeline of Company products and sales are not currently expected to be
subject to this patent. No payments were made during the three months ended March 31, 2021 or 2020.
In August 2015, the Company entered into a
patent license agreement, which expires upon expiration of the patent. Under this agreement, if the Company develops and sells specific products based on the patent, the Company would pay a royalty up to $2,000,000 per year and $10,000,000 in the
aggregate. Certain products that the Company is currently developing and anticipates selling are expected to utilize these patents. No payments were made during the three months ended March 31, 2021 or 2020.
In June 2011, the Company entered into a nonexclusive patents license agreement, which expires upon expiration of the last patent to expire. Under this
agreement, the Company pays a royalty of $5,000 annually and if the Company develops and sells specific products based on the patent, 0.4% of net sales. The pipeline of Company products and sales are not currently expected to be subject to this
patent.
For the three months ended March 31, 2021 and 2020, royalties expense was $40,353 and $41,347, respectively, under the license agreements.
Contingencies
At times there may be claims
and legal proceedings generally incidental to the normal course of business that are pending or threatened against the Company. Although the Company cannot predict the outcome of these matters when they arise, in the opinion of management, any
liability arising from them will not have a material adverse effect on the consolidated financial position, results of operations, or liquidity of the Company. At March 31, 2021 and December 31, 2020, there were no claims or legal
proceedings.
NOTE 16 BASIC AND DILUTED NET LOSS PER SHARE
Basic net loss per share includes no dilution and is computed by dividing income (loss) by the weighted average number of common shares outstanding for the
periods presented. The calculation of basic net loss per share for the three months ended March 31, 2021 and 2020, includes the weighted average of common shares outstanding. Diluted net loss per share reflect the potential dilution of
securities that could share in the earnings of an entity, such as convertible preferred stock, stock options, warrants or convertible securities.
Due to their anti-dilutive effect, the calculation of diluted net loss per share for the three months ended March 31, 2021 and 2020 excludes: 1) options to purchase 3,829,351 and 1,007,059
shares, respectively, of common stock, 2) warrants to purchase 2,257,053 shares of series A redeemable convertible preferred stock, 3) warrants to purchase 367,339 shares of series B redeemable convertible preferred stock, 4) redeemable convertible series
A preferred stock which is convertible into 13,189,261 shares of common stock, 4) redeemable convertible series B preferred stock which is convertible into
5,107,614 shares of common stock, and 5) redeemable convertible series C preferred stock which is convertible into 1,590,675 shares of common stock.
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