the normal course of business, BioTime may provide indemnifications of varying scope under BioTime’s agreements with other
companies or consultants, typically BioTime’s clinical research organizations, investigators, clinical sites, suppliers
and others. Pursuant to these agreements, BioTime will generally agree to indemnify, hold harmless, and reimburse the indemnified
parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties in connection
with the use or testing of BioTime’s products and services. Indemnification provisions could also cover third party infringement
claims with respect to patent rights, copyrights, or other intellectual property pertaining to BioTime products and services.
Other indemnification obligations may arise from agreements disposing of assets. The term of these indemnification agreements
will generally continue in effect after the termination or expiration of the particular research, development, services, or license
agreement to which they relate. The potential future payments BioTime could be required to make under these indemnification agreements
will generally not be subject to any specified maximum amount. Historically, BioTime has not been subject to any claims or demands
for indemnification. BioTime also maintains various liability insurance policies that limit BioTime’s financial exposure.
As a result, BioTime believes the fair value of these indemnification agreements is minimal. Accordingly, BioTime has not recorded
any liabilities for these agreements as of March 31, 2018 and December 31, 2017.
obligations and license fees
and its subsidiaries or affiliates are parties to certain licensing agreements with research institutions, universities and other
parties for the rights to use those licenses and other intellectual property in conducting research and development activities.
These licensing agreements provide for the payment of royalties by BioTime or the applicable party to the agreement on future
product sales, if any. In addition, in order to maintain these licenses and other rights during the product development, BioTime
or the applicable party to the contract must comply with various conditions including the payment of patent related costs and
annual minimum maintenance fees. Annual minimum maintenance fees are approximately $135,000 to $150,000 per year. The research
and development risk for these products is significant. License fees and related expenses under these agreements were immaterial
for the periods presented in the consolidated financial statements provided herein.
the terms of a grant agreement between Cell Cure and Israel Innovation Authority (“IIA”)
(formerly the Office of the Chief Scientist of Israel) of the Ministry of Economy and Industry, for the development of OpRegen®,
Cell Cure will be required to pay royalties on future product sales, if any, up to the amounts received from the IIA, plus interest
indexed to LIBOR. Cell Cure’s research and product development activities under the grant are subject to substantial risks
and uncertainties, and performed on a best efforts basis. As a result, Cell Cure is not required to make any payments under the
grant agreement unless it successfully commercializes OpRegen®. Accordingly,
pursuant to ASC 730-20, the Cell Cure grant is considered a contract to perform research and development services for others and
grant revenue will be recognized as the related research and development expenses are incurred (see Note 2).
law pertaining to such government grants contain various conditions, including substantial penalties and restrictions on the transfer
of intellectual property, or the manufacture, or both, of products developed under the grant outside of Israel, as defined by
April 5, 2018, ReCyte was awarded a grant of up to approximately $386,000 from the National Institutes of Health (NIH). The NIH
grant provides funding for continued development of AgeX’s technologies for treating stroke. The grant funds will be made
available by NIH for payment to ReCyte as allowable expenses are incurred.
May 1, 2018, BioTime’s shareholders approved an amendment of its Articles of Incorporation increasing the number of authorized
common shares that BioTime may issue from 150,000,000 shares to 250,000,000 shares.