12. Joint Venture

On February 26, 2014, Ohr entered into a Joint Venture Agreement and related agreements with Cold Spring Harbor Laboratory (“CSHL”) pursuant to which a joint venture, DepYmed Inc. (“DepYmed”), was formed to further preclinical and clinical development of the Company’s intellectual property for rare diseases and oncology. DepYmed licenses research from CSHL and intellectual property from the Company.

Following the Ohr Acquisition, the Company owns common and preferred shares of DepYmed, which in aggregate represents approximately 16.75% ownership of DepYmed. In addition, as of September 30, 2019,  the Company held two of the six seats on DepYmed’s board of directors. The Company accounts for its investment in DepYmed using the equity method of accounting and records its proportionate share of DepYmed’s net income and losses in the accompanying consolidated statements of operations. In connection with Ohr Acquisition as described in Note 3, the Company determined the fair value of this investment to be $586,418. As of September 30, 2019 the carrying amount of the Company’s investment in DepYmed was $586,418. The Company will record its proportionate share of equity in earnings (losses) of DepYmed in the quarter following DepYmed’s reported results.