NOTE 9 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

The Company may become involved in certain legal proceedings and claims which arise in the normal course of business. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the Company’s results of operations, prospects, cash flows, financial position and brand. To the best knowledge of the Company’s management, at June 30, 2016, there are no legal proceedings which the Company believes will have a material adverse effect on its business, results of operations, cash flows or financial condition.

Contingent Stock Consideration 

On May 30, 2014, the Company completed the acquisition of certain assets of SKS, including licenses, patents and contracts relating to micro-fabrication polymer-based sustained delivery platforms related to ocular therapeutics and dry age-related macular degeneration animal models, together with biomarkers to support such models.

The purchase price consisted of: (a) cash in the amount of $3,500,000; (b) 1,194,862 shares of the Company’s common stock (valued at $10,180,224 based on the closing sale price of the common stock of the Company on May 30, 2014) and (c) an additional 1,493,577 shares that will be issued contingent to achievement of certain milestones. This contingent consideration has been recorded as a liability of the Company and is reviewed by management for probability and likelihood of the milestones being achieved at each reporting period. The liability is adjusted according to management’s assessment.

On December 11, 2015, the Board approved the achievement of Milestone 1 and consequently, the Company issued 497,859 shares of its common stock to SKS as partial settlement of the contingent consideration. The value of the stock issued was $2,061,136, as determined by the $4.14 per share closing sale price of the Company’s common stock on the date of Board approval.