INVESTMENT IN SURFACE OPHTHALMICS, INC. - RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2022

Investment In Surface Ophthalmics Inc. - Related Party Transactions

INVESTMENT IN SURFACE OPHTHALMICS, INC. - RELATED PARTY TRANSACTIONS

NOTE 5. INVESTMENT IN SURFACE OPHTHALMICS, INC. - RELATED PARTY TRANSACTIONS

The Company entered into an asset purchase and license agreement with Surface in 2017 and amended it in April 2018 (the “Surface License Agreements”). Pursuant to the terms of the Surface License Agreements, the Company assigned and licensed to Surface certain intellectual property and related rights associated with Surface’s drug candidates (collectively, the “Surface Products”). Surface is required to make mid-single digit royalty payments to the Company on net sales of the Surface Products while any patent rights remain outstanding.

As of September 30, 2022, the Company owned 3,500,000 shares of Surface common stock. Company directors Richard L. Lindstrom, Perry J. Sternberg and Mark L. Baum, who is also the Company’s Chief Executive Officer, are directors of Surface. Dr. Lindstrom is a principal of Flying L Partners, an affiliate of an investor who purchased Surface Series A Preferred Stock.

The unaudited condensed results of operations information of Surface is summarized below:

	For the Nine Months Ended September 30,
	2022			2021
Revenues, net	$	-		$	-
Loss from operations		(5,338,000	)		(6,859,000	)
Net loss	$	(5,338,000	)	$	(6,859,000	)

The unaudited condensed balance sheet information of Surface is summarized below:

	At		At
	September 30, 2022		December 31, 2021
Current assets	$	16,625,000	$	21,731,000
Non-current assets		661,000		412,000
Total assets	$	17,286,000	$	22,143,000
Total liabilities	$	1,745,000	$	1,514,000
Total preferred stock and stockholders’ deficit		15,541,000		20,629,000
Total liabilities and stockholders’ equity	$	17,286,000	$	22,143,000