Quarterly report pursuant to Section 13 or 15(d)

Related Party Transactions

v3.20.2
Related Party Transactions
9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions

5. Related Party Transactions

 

The Company’s principal office facilities are being provided without charge by Dr. John S. Kovach, the President and Chief Executive Officer. Such costs were not material to the consolidated financial statements and accordingly, have not been reflected therein.

 

The Company’s Chairman and major stockholder, Dr. John Kovach, was paid a salary of $15,000 for the three months ended September 30, 2020 and 2019, and $45,000 for the nine months ended September 30, 2020 and 2019, respectively, which amounts are included in general and administrative costs in the Company’s consolidated statements of operations.

 

In September 2007, the Company entered into a consulting agreement with Gil Schwartzberg for Mr. Schwartzberg to provide financial advisory and consulting services to the Company with respect to financing matters, capital structure and strategic development, and to assist management in communications with investors and stockholders. In January 2014 and August 2018, the Company entered into respective amendments to this consulting agreement, which have extended the consulting agreement through January 28, 2024. Consideration under this consulting agreement, including amendments, has been paid exclusively in the form of stock options. Mr. Schwartzberg is currently a significant stockholder of the Company and continues to be a consultant to the Company.

 

Legal and consulting fees charged to operations for services rendered by the Eric Forman Law Office were $14,000 and $12,000 for the three months ended September 30, 2020 and 2019, respectively, and $38,000 and $36,000 for the nine months ended September 30, 2020 and 2019, respectively. Eric Forman is the son-in-law of Gil Schwartzberg, a significant stockholder of and consultant to the Company, and is the son of Dr. Stephen Forman, who was elected to the Company’s Board of Directors on May 13, 2016. Julie Forman, the wife of Eric Forman and the daughter of Gil Schwartzberg, is Vice President of Morgan Stanley Wealth Management, where the Company maintains a continuing banking relationship.

 

A summary of related party costs for the three months and nine months ended September 30, 2020 and 2019 is as follows:

 

    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
    2020     2019     2020     2019  
                         
Related party costs:                                
Cash-based   $ 70,452     $ 27,000     $ 124,452     $ 81,000  
Stock-based     394,031       5,030       394,031       314,631  
Total   $ 464,483     $ 32,030     $ 518,483     $ 395,631  

 

Stock-based compensation arrangements involving members of the Company’s Board of Directors. officers and affiliates are described at Note 6.

 

Additional information with respect to cash-based compensation arrangements are described at Note 7.