Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies

Commitments and Contingencies

15. Commitments and Contingencies

From time to time, the Company may be exposed to claims and legal actions in the normal course of business. As of September 30, 2024, and continuing as of November 7, 2024, the Company is not aware of any pending or threatened material litigation claims against the Company.

On May 10, 2018, the Company entered into a Development, Commercialization and Exclusive Distribution Agreement. As part of the agreement, the Company is required to make the following future milestone payments:

● $3,500 in cash payments upon the achievement of future development milestones;

● $3,500 in equity, determined by dividing the amount due by the volume-weighted average price of the Company’s common stock on the NYSE American exchange over the 10 trading days prior to the achievement of each milestone event.

As of September 30, 2024, none of the future development milestones related to the above agreement have been met. The Company has assessed the probability of meeting the above milestones and has determined that an accrual is not necessary as of September 30, 2024 and December 31, 2023.

On January 17, 2023, the Company entered into a series of agreements with Qorvo Biotechnologies, LLC. Other than the obligation to purchase a minimum quantity of BAW sensors during the term of the BAW Sensor Supply Agreement, the obligations under these agreements were terminated upon the acquisition of Qorvo Biotechnologies, LLC on October 4, 2023.

On April 4, 2023, the Company entered into a Development and License Agreement with Brisby Inc.  Under the terms of this agreement, Brisby grants the Company a license to use, develop, manufacture, have manufactured, offer for sale, sell, and import certain Brisby products, such as the Smart Pet Pad and the Intelligent Pet Bed, along with any future developments of these products.

As part of this agreement, the Company is required to make the following milestone payments:

● $3,500 in cash payments, split between license fees and equity interest, upon the achievement of future development milestones, inclusive of development milestones and commercial sales;

● $750 in warrants upon the first commercial sale of the Smart Pet Pad, determined by dividing the amount due by the closing price of the Company's common stock on the date of such first commercial sale, as reported on the NYSE American exchange, with a term of 10 years;

● $750 in warrants upon the first commercial sale of the Intelligent Pet Bed, determined by dividing the amount due by the closing price of the Company's common stock on the date of such first commercial sale, as reported on the NYSE American exchange, with a term of 10 years;

● $5,000 in warrants upon reaching $15,000 in annual net sales of the licensed products, determined by dividing the amount due by the closing price of the Company's common stock on the date that net sales reach $15,000, as reported on the NYSE American exchange.

As of September 30, 2024, the Company has made $1,563 in cash payments for milestones achieved under this agreement and holds a 19.50% equity stake in Brisby Inc. The remaining cash payments, totaling $1,937, are due upon the achievement of future development milestones and the first commercial sales of the Smart Pet Pad and the Intelligent Pet Bed.

The Company’s investment in Brisby Inc. is accounted for under the equity method in accordance with ASC 323, Investments – Equity Method and Joint Ventures (“ASC 323”), and is included in “Other assets” on our consolidated balance sheets.