Business Context and Reporting Period
Relmada Therapeutics, Inc. filed this Form 8-K on January 16, 2018, to report the entry into a Material Definitive Agreement. The company is a Nevada corporation focused on the development of d-Methadone for psychiatric and neurological uses.
Key Financial Metrics
This filing does not report revenue, profit, cash flow, margins, debt, or liquidity metrics. It details the financial terms of a new intellectual property agreement:
- Upfront Fee: $180,000 non-refundable license fee payable to the Licensor.
- Milestone Payments: $45,000 payable every three months until the first commercial sale, patent expiration, or agreement termination.
- Royalties: Tiered royalties on net sales ranging from 1.5% to 2%.
- Sublicensing: Tiered payments of 15% to 20% of consideration received from sublicenses.
Material Changes
The primary material change is the restructuring of intellectual property rights regarding d-Methadone. Relmada assigned its existing rights (patents and applications) for psychiatric use to Dr. Charles E. Inturrisi and Dr. Paolo Manfredi (the "Licensor"). In return, Relmada secured a perpetual, worldwide, exclusive license to commercialize these rights and future inventions related to neurological and other uses.
Outlook, Risks, and Contingencies
Collaboration Requirements: The agreement mandates good faith collaboration on future IP development, requiring the Licensor to be included as an inventor on new d-Methadone-related patents.
Termination Risks: The License Agreement may terminate under specific circumstances, including:
- Bankruptcy of either party.
- Failure to perform covenants, including payment obligations and key man provisions.
- Invalidation or unenforceability of patent rights.
Investor Verification Checklist
- Verify the exact scope of the "Existing Invention" assigned to the Licensor versus the rights retained by Relmada.
- Confirm the company's current cash position to ensure it can meet the $180,000 upfront fee and recurring $45,000 quarterly payments.
- Review the full text of the License Agreement (Exhibit 10.1) and Assignment Agreement (Exhibit 10.2) for specific definitions of "net sales" and "key man provisions."
- Assess the impact of the royalty and sublicensing tiers on future gross margins.