Business Context and Reporting Period
This Form 8-K was filed by Tharimmune, Inc. (THAR) on November 7, 2023, reporting events occurring on November 3, 2023. The filing details the entry into a material definitive agreement with Avior Inc. d/b/a Avior Bio, LLC.
Key Financial Metrics and Transaction Terms
The filing describes a patent license agreement rather than standard periodic financial results. Key financial terms of the agreement include:
- Upfront Payments: A mid-six-digit upfront license fee due within ten days of the effective date, plus an additional mid-six-digit fee payable in four equal quarterly installments.
- Development Milestones: Aggregate potential payments of $24,250,000 upon the occurrence of various development milestones.
- Sales Milestones: Fees ranging from low seven digits to low eight digits, with higher fees applicable to higher sales volumes.
- Royalties: Ongoing royalties based on net sales ranging from low single-digit to mid single-digit percentages, with lower percentages applied to higher sales volumes.
- Sublicensing: The Company must pay Avior a high single-digit percentage of any upfront payments received from granting sublicenses for AV104 (renamed TH104).
Material Changes and Strategic Developments
The primary material change is the acquisition of an exclusive, sublicensable, worldwide license to develop, make, use, sell, and commercialize two specific assets:
- AV104 (to be renamed TH104)
- AV103 (to be renamed TH103)
The agreement grants rights to the Licensed Patent Rights and Licensed Technology associated with these assets. Upon expiration of the agreement and fulfillment of payment obligations, the license becomes fully paid, irrevocable, and freely transferable.
Outlook, Risks, and Contingencies
Termination Rights: The Company may terminate the agreement at any time without cause upon 30 days' written notice, provided it pays the next unpaid Development Milestone Payment. Either party may terminate for material breach (if uncured within 30 days) or in the event of insolvency, bankruptcy, dissolution, or receivership.
Reversion of Rights: Upon termination, all rights to the Licensed Patent Rights and Licensed Products revert to Avior.
Confidentiality: Certain portions of the agreement were omitted from the public filing as confidential and non-material.
Investor Verification Checklist
- Verify the exact dollar amounts of the "mid six digit" upfront and quarterly fees by reviewing the full text of Exhibit 10.1.
- Confirm the specific definitions and timelines for the $24,250,000 in development milestones.
- Review the specific royalty tiers and sales thresholds for the low to mid single-digit royalty percentages.
- Assess the Company's current cash position to determine its ability to fund the immediate upfront payments and quarterly installments.
- Monitor the progress of TH104 and TH103 to evaluate the likelihood of triggering future milestone payments.