Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

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Related Party Transactions
9 Months Ended
Dec. 31, 2013
Notes to Financial Statements  
NOTE 10 - Related Party Transactions

Between September and December 2013, one of the Company’s executive officers provided short-term cash advances aggregating $64,000 to meet the Company’s short-term working capital requirements. In lieu of cash repayment of the advances by the Company, in December 2013, the officer elected to invest $50,000 in the 2013 Unit Private Placement.  The Company has partially repaid the remaining balance of the advances.

 

Cato Holding Company, doing business as Cato BioVentures ("CBV"), the parent of CRL, is one of the Company’s largest institutional stockholders at December 31, 2013.  As described in Note 7, Convertible Promissory Notes and Other Notes Payable, in October 2012, the 2011 CHC Note was cancelled and exchanged for the 2012 CHC Note and the CHC Warrant.  The 2012 CHC Note bears interest at the rate of 7.5% compounded monthly and is payable in monthly installments of $10,000 beginning November 1, 2012 until the balance is paid in full, with the final monthly payment to be made in the amount equal to the then current outstanding balance of principal and interest due under the 2012 Cato Note.  Total interest expense, including amortization of note discount, on notes payable to CHC was $7,900 and $24,000 in the three and nine month periods ended December 31, 2013, respectively, and $34,700 and $51,400 in the three and nine month periods ended December 31, 2012, respectively.

 

During fiscal year 2007, the Company entered into a contract research organization arrangement with CRL related to the development of its lead drug candidate, AV-101, and subsequent other projects under which the Company incurred expenses of $7,500 and $124,700 in the three month periods ended December 31, 2013 and 2012, respectively, and $45,000 and $639,300 in the nine month periods ended December 31, 2013 and 2012, respectively.

 

As described in Note 7, Convertible Promissory Notes and Other Notes Payable, in October 2012, the Company issued to CRL (i) the CRL Note as payment in full for all contract research and development services and regulatory advice (“CRO Services”) rendered by CRL to the Company and its affiliates through December 31, 2012 with respect to the preclinical and clinical development of AV-101, and (ii) the CRL Warrant. The principal amount of the CRL Note may, at the Company’s option, be automatically increased as a result of future CRO Services rendered by CRL to the Company and its affiliates from January 1, 2013 to June 30, 2013.  The CRL Note accrues interest at a rate of 7.5% compounded monthly, is due and payable on March 31, 2016 and is payable solely by CRL's surrender from time to time of all or a portion of the principal and interest balance due on the CRL Note in connection with its concurrent exercise of the CRL Warrant.  Total interest expense, including amortization of the note discount, on the CRL Note for the three and nine month periods ended December 31, 2013 was $32,000 and $103,500, respectively, and $26,300 for both the three and nine month periods ended December 31, 2012.