4. License Agreement with Carnegie Mellon University

On December 17, 2018, Private NeuBase entered into a License Agreement with Carnegie Mellon University (the “CMU License Agreement”). Under the CMU License Agreement, Carnegie Mellon University (“CMU”) granted Private NeuBase an exclusive, worldwide right to the PATrOL™ technology, with patents and patent applications describing composition of matter and uses of the platform.

As partial consideration for the license right, Private NeuBase issued and delivered to CMU 820,000 shares of Private NeuBase common stock (or 835,625 shares of common stock of the Company converted at the Exchange Ratio provided for in the Acquisition Agreement), which constituted 8.2% of the then fully-diluted capitalization of Private NeuBase. Further, as partial consideration for the license right, Private NeuBase issued a warrant to CMU, exercisable only upon the earlier of (i) the day that Private NeuBase receives cumulative capital funding or revenues equal to $2 million or (ii) 30 days prior to any change of control event that provides for the issuance of shares, for a number of shares of Private NeuBase common stock sufficient such that when added to the 820,000 shares of Private NeuBase common stock, CMU holds in the aggregate an amount equal to 8.2% of the fully-diluted capitalization of Private NeuBase; provided, however, that for purposes of calculating 8.2%, only the first $2 million of capital funding shall be considered in the determination of Private NeuBase’s fully-diluted capitalization. Under the CMU License Agreement, CMU has preemptive rights with respect to certain future sales of securities by Private NeuBase for capital-raising purposes, “piggyback” registration rights and co-sale rights with respect to certain resales of shares of Private NeuBase by Private NeuBase’s stockholders.

Pursuant to the CMU License Agreement, Private NeuBase must achieve certain milestones to demonstrate certain developments of the licensed product. Private NeuBase may obtain one six-month extension to meet each milestone with a nominal payment to CMU. Further, subject to certain conditions, Private NeuBase will pay to CMU royalties at a percentage of net sales in the low single digits and sublicensing fees.

The Company recognized research and development expense totaling approximately $1,046,965 during the year ended September 30, 2019 for the value of consideration paid in connection with the license agreement. The consideration paid for the license right is as follows: