1M USD upfront

2.5M USD followed

5M USD After phase 2, which is close...

In July 2019, Zenith Epigenetics Ltd. entered into a license agreement with Newsoara for its lead compound, ZEN-3694, in China, Hong Kong, Taiwan, and Macau (the “Territories”). Under the terms of the agreement, Newsoara will have the rights to develop, market, and distribute ZEN-3694 for all indications in the Territories. Pursuant to the License Agreement, Newsoara agreed to pay Zenith Epigenetics Ltd. upfront and near-term development milestone payments totaling $15.0 million. An initial non- refundable upfront payment of $1.0 million, less applicable tax withholdings, was received in July 2019. Accounts receivable includes a second non-refundable upfront payment that was to be paid within 90 days of execution of the License Agreement. Subsequent to July 31, 2019, the second upfront payment of $2.5 million, less applicable tax withholdings, was received. The $2.94 million of unearned licensing revenue at July 31, 2019 is comprised of the initial and second upfront amounts, less applicable tax withholdings.

The near-term development milestone payments includes $5.0 million for completion of Zenith’s current Phase 2 clinical study with ZEN-3694 in metastatic castration-resistant prostate cancer (subject to Newsoara’s satisfaction with the study’s results and election to continue development); and $6.5 million for completion of either a Phase 3 clinical trial or a clinical study which results in Zenith receiving accelerated approval by the US Food and Drug Administration (“FDA”) (subject to Newsoara’s satisfaction with the study’s results). In addition, Zenith is eligible to receive tiered royalty payments on sales of products once commercialization commences and Newsoara achieves sales. No amounts have been recognized for these milestone or royalty payments at July 31, 2019.