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Related Party Transactions
 12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Related Party Transactions RELATED PARTY TRANSACTIONS
Due to Related Party
The Company and other related entities have had a commonality of ownership and/or management control, and as a result, the reported operating results and /or financial position of the Company could significantly differ from what would have been obtained if such entities were autonomous.
In 2016, the Company entered into a Master Services Agreement (“MSA”) with Autotelic Inc., a related party that is partly-owned by one of the Company’s former Board members, namely Vuong Trieu, Ph.D. Autotelic Inc. currently owns less than 5% of the Company. The MSA stated that Autotelic Inc. would provide business functions and services to the Company and allowed Autotelic Inc. to charge the Company for these expenses paid on its behalf. The Company terminated the MSA effective October 31, 2018. Dr. Trieu resigned as a director of our company effective October 1, 2018.
In accordance with the MSA, Autotelic Inc. billed the Company for personnel and service expenses incurred on behalf of the Company. For the year ended December 31, 2018, Autotelic Inc. billed a total of approximately $795,000, including personnel costs of $532,000. An unpaid balance of approximately $4,000 is included in due to related party in the accompanying balance sheets as of December 31, 2019 and 2018.
In April 2018, in connection with the closing of our private placement on that date, the Company entered into a Compromise and Settlement Agreement with Autotelic Inc. pursuant to which the Company agreed to issue to Autotelic Inc. an aggregate of 162.59 shares of Series E Preferred Stock to settle accounts payable of approximately $813,000 and Warrants to purchase up to 1,345,040 shares of common stock to satisfy accrued and unpaid fees in the aggregate amount of approximately $740,000, and other liabilities, owed to Autotelic Inc. as of March 31, 2018 pursuant to the MSA. The securities that were issued to Autotelic Inc., which were issued upon the closing described above, have the same terms and conditions as the securities that were issued to investors in the Preferred Series E offering. The warrants have a term of 5 years, an initial exercise price of $0.55, and have a fair value of approximately $1.5 million resulting in a loss on settlement of debt of approximately $750,000, which is included in the loss on settlement in the consolidated statements of operations. In July of 2018, the exercise price of the warrants was adjusted down to $0.50 upon issuance of the Series F Convertible Preferred Stock.
Omnibus Settlement Agreement with Vuong Trieu, Ph.D. and Affiliated Entities
On October 1, 2018, the Company entered into an Omnibus Settlement Agreement with Vuong Trieu, Ph.D., our former interim Chief Executive Officer, Executive Chairman and Chairman of the Board, Autotelic Inc., Autotelic LLC, Autotelic BIO, Oncotelic, Inc. and LipoMedics, Inc. At the same time, the Company also entered into an Agreement and Release with each of Dr. Trieu and Falguni Trieu and entered into an Agreement and Release with each of Autotelic Inc., Autotelic LLC, Autotelic BIO, Oncotelic, Inc. and LipoMedics, Inc. (collectively, the “Entity Releases”). The Company also delivered a release to Dr. Trieu, Ms.
Trieu, Autotelic Inc., Autotelic LLC, Autotelic BIO, Oncotelic, Inc. and LipoMedics, Inc. Pursuant to the Settlement Agreement, the Company agreed to make a payment to Dr. Trieu in the amount of $10,000 in consideration for Dr. Trieu entering into the individual releases between Dr. Trieu and our company. Dr. Trieu also agreed to sell, and the Company agreed to purchase, from Dr. Trieu for cancellation an aggregate of 500,000 shares of our common stock in consideration of an aggregate purchase price of $250,000. Additionally, each of Dr. Trieu, Autotelic Inc., Autotelic LLC, Oncotelic, Inc. and LipoMedics, Inc. agreed to certain restrictions on sale, transfer or assignment of our common stock.
Furthermore: (i) the Company and Autotelic Inc. agreed that the Master Services Agreement, dated as of November 15, 2016, by and between our company and Autotelic Inc., shall be terminated as of October 1, 2018; (ii) the Company and Autotelic BIO agreed that the Term Sheet, entered into as of January 11, 2018, by and between our company and Autotelic BIO, shall be terminated immediately; (iii) the Company and Oncotelic, Inc. confirmed that the License Agreement, dated July 17, 2017, by and between our company and Oncotelic Inc. was terminated effective May 15, 2018; and (iv) the Company and Lipomedics, Inc. agreed that the License Agreement, dated as of February 6, 2016, by and between our company and Lipomedics, Inc. would remain in effect.
Under the Settlement Agreement, the Company and Autotelic LLC agreed with respect to the License Agreement, dated as of November 15, 2016, by and between our company and Autotelic LLC, that such License Agreement shall continue, provided that Autotelic LLC shall be licensee and have a license to, without representation or warranty, nasal apomorphine and nasal scopolamine and related intellectual property in addition to nasal insulin, and Autotelic LLC shall not be a licensee or have a license to Familial Adenomatous Polyposis or CEQ508 and related intellectual property.
Pursuant to the releases, each of Dr. Trieu and Ms. Trieu, our former Director of Business Development and the spouse of Dr. Trieu, agreed to release us from all claims arising prior to the date of the release agreements. Pursuant to the entity releases, each of Autotelic Inc., Autotelic LLC, Autotelic BIO, Oncotelic, Inc. and LipoMedics, Inc. agreed to release us from all claims arising prior to the date of the applicable entity release. In addition, the Company agreed to release each of Dr. Trieu, Ms. Trieu, Autotelic Inc., Autotelic LLC, Autotelic BIO, Oncotelic, Inc. and LipoMedics, Inc. from all claims arising prior to the date of the company release.
Transactions with BioMauris, LLC/Erik Emerson
Eric Emerson was the former Chief Commercial Officer and former member of the Company's Board of Directors.
Until February of 2019, the Company had engaged the services of BioMauris, LLC, of which Erik Emerson is Executive Chairman.
During the year ended December 31, 2019 and 2018, the Company recorded approximately $32,000 and $572,000 respectively, for related party expenses incurred under the agreement. As of December 31, 2018, the Company recorded approximately, $24,000 as a related party liability on the accompanying balance sheet for amounts due BioMauris, LLC. In addition, during the year ended December 31, 2018, the Company paid approximately $63,000 to BioMauris, LLC related to Acutus Medical, which entity owns an equity interest in BioMauris, LLC. No related party liability was recorded as of December 31, 2019 for related party expenses with BioMauris, LLC.
In July 2019, Mr. Emerson, became the owner of an equity interest of approximately 22% in Pharma Hub Network, the Company's third-party network manager. During the third quarter of 2019, the Company terminated the relationship with Pharma Hub Network. For the year ended December 30, 2019, the Company recorded approximately $62,000 of related party expense for services provided by Pharma Hub Network.
Transactions Involving Robert Moscato
During the year ended December 31, 2018, the Company paid approximately $16,000 to an entity owned and operated by the wife of Robert Moscato, our former CEO, which entity rendered interior design services to our company.