Intellectual Property License Agreement and Sponsored Research Agreement	6 Months Ended
Jun. 30, 2024
Intellectual Property License Agreement and Sponsored Research Agreement
Intellectual Property License Agreement and Sponsored Research Agreement	Note 7 – Intellectual Property License Agreement and Sponsored Research Agreement Dartmouth College – Intellectual Property License Agreement On October 2, 2019, the Company entered into an intellectual property license agreement (the “Intellectual Property License Agreement”) pursuant to which Dartmouth granted the Company an exclusive world-wide license under the patent application entitled “Mechanically Interlocked Molecules-based Materials for 3D Printing” in the field of human and animal health and certain additional patent rights to use and commercialize licensed products and services. The license grant includes the right of the Company to sublicense to third parties subject to the terms of the Agreement. The Agreement provided for: (i) a $25,000 license issue fee; (ii) an annual license maintenance fee of $25,000, until the first commercial sale of a licensed product or service; (iii) an earned royalty of 2% of net sales of licensed products and services by the Company or a sublicensee; (iv) 15% of consideration received by the Company under a sublicense; and (v) beginning in the first calendar year after the first commercial sale, an annual minimum royalty payment of $500,000, $1,000,000 in the second calendar year, and $2,000,000 in the third calendar year and each year thereafter. The Company will also reimburse Dartmouth for all patent preparation, filing, maintenance and defense costs. Under the Agreement, the Company was required to diligently proceed with the development, manufacture and sale of licensed products and licensed services, including funding at least $1,000,000 of research in each calendar year beginning in 2019 and ending with the first commercial sale of a licensed product; filing an IND/BLA (or equivalent) with the FDA or a comparable European regulatory agency before the four-year anniversary and make the first commercial sale of a licensed product before the twelve-year anniversary of the effective date of the Agreement and achieve annual net sales of at least $50,000,000 by 2033. If the Company failed to perform any of these obligations, Dartmouth has the option to terminate the Agreement or change the exclusive license to a nonexclusive license. As the Company failed to fulfill its requirements under the Agreement Dartmouth declared the Company in default in August 2023 and terminated the license. The Company and Dartmouth also agreed in February 2024 to add Professor Chenfeng Ke and Qianming Lin, both formerly of Dartmouth as co-inventors of the patent entitled Techniques for Promoting Neuronal Recovery and to add Dartmouth as co-owner of the patent together with Qrons. As of June 30, 2024, and December 31, 2023, the Company is indebted to Dartmouth for $50,000 of unpaid annual license fees and $4,877 of unpaid reimbursable patent maintenance costs. The Company’s sponsored research agreement, pursuant to which the Company funded research conducted by Dartmouth of mutual interest to the parties terminated by its terms in July 2020.

Intellectual Property License Agreement and Sponsored Research Agreement

6 Months Ended

Jun. 30, 2024

Intellectual Property License Agreement and Sponsored Research Agreement

Intellectual Property License Agreement and Sponsored Research Agreement

Note 7 – Intellectual Property License Agreement and Sponsored Research Agreement

Dartmouth College – Intellectual Property License Agreement

On October 2, 2019, the Company entered into an intellectual property license agreement (the “Intellectual Property License Agreement”) pursuant to which Dartmouth granted the Company an exclusive world-wide license under the patent application entitled “Mechanically Interlocked Molecules-based Materials for 3D Printing” in the field of human and animal health and certain additional patent rights to use and commercialize licensed products and services. The license grant includes the right of the Company to sublicense to third parties subject to the terms of the Agreement.

The Agreement provided for: (i) a $25,000 license issue fee; (ii) an annual license maintenance fee of $25,000, until the first commercial sale of a licensed product or service; (iii) an earned royalty of 2% of net sales of licensed products and services by the Company or a sublicensee; (iv) 15% of consideration received by the Company under a sublicense; and (v) beginning in the first calendar year after the first commercial sale, an annual minimum royalty payment of $500,000, $1,000,000 in the second calendar year, and $2,000,000 in the third calendar year and each year thereafter. The Company will also reimburse Dartmouth for all patent preparation, filing, maintenance and defense costs.

Under the Agreement, the Company was required to diligently proceed with the development, manufacture and sale of licensed products and licensed services, including funding at least $1,000,000 of research in each calendar year beginning in 2019 and ending with the first commercial sale of a licensed product; filing an IND/BLA (or equivalent) with the FDA or a comparable European regulatory agency before the four-year anniversary and make the first commercial sale of a licensed product before the twelve-year anniversary of the effective date of the Agreement and achieve annual net sales of at least $50,000,000 by 2033. If the Company failed to perform any of these obligations, Dartmouth has the option to terminate the Agreement or change the exclusive license to a nonexclusive license.

As the Company failed to fulfill its requirements under the Agreement Dartmouth declared the Company in default in August 2023 and terminated the license.

The Company and Dartmouth also agreed in February 2024 to add Professor Chenfeng Ke and Qianming Lin, both formerly of Dartmouth as co-inventors of the patent entitled Techniques for Promoting Neuronal Recovery and to add Dartmouth as co-owner of the patent together with Qrons.

As of June 30, 2024, and December 31, 2023, the Company is indebted to Dartmouth for $50,000 of unpaid annual license fees and $4,877 of unpaid reimbursable patent maintenance costs.

The Company’s sponsored research agreement, pursuant to which the Company funded research conducted by Dartmouth of mutual interest to the parties terminated by its terms in July 2020.

Qrons Inc. 10-Q