In a move that solidifies their partnership, Orthocell Ltd (ASX:OCC, OTC:ORHHF) and the University of Western Australia (UWA) have inked a royalty agreement under which UWA has agreed to exchange all royalty entitlements for equity in Orthocell.
Orthocell says the university’s decision to accept shares as payment reveals its commitment to Orthocell's medical products and its interest in the company’s global growth.
Shares in exchange for royalties
Orthocell will issue 1.71 million fully paid ordinary shares to UWA, each valued at $0.35 per share. As a result of this exchange, UWA will hold 2.36 million shares, representing 1.19% of Orthocell's undiluted shares.
Orthocell chair John Van Der Wielen said: “We are delighted to announce an agreement to exchange our financial obligations payable to UWA for equity in Orthocell.
“This agreement allows Orthocell to retain all revenue benefits of its intellectual property and makes Orthocell more attractive to potential partners and investors.
“It is deeply encouraging to see this respected university, with strong connections to the origins of Orthocell’s platform technologies, elect to take shares as payment – signalling its continued support and investment in Orthocell’s world-leading medical products and innovations and likelihood to realise significant global growth.”
Rights and interests vest in Orthocell
Orthocell's regenerative medicine products, including the CelGro™ medical device and OrthoATI™ cell therapy, were originally conceived by Professor Ming Hao Zheng, the Chief Scientific Officer of Orthocell and an academic at UWA.
In 2014, Orthocell acquired the intellectual property related to these products from UWA, involving an ongoing royalty on product sales.
Key terms of the royalty agreement stipulate that Orthocell and its related entities and personnel are not obligated to make royalty payments or provide other benefits to UWA concerning the CelGro™ medical device or OrthoATI™ cell culture intellectual property.
All rights, titles, and interests in these technologies remain exclusively vested in Orthocell.
Within 20 business days from the agreement's execution, Orthocell will issue 1,714,286 fully paid ordinary shares to UWA, free from any security interest.
Orthocell will also apply for official quotation of the UWA Shares. These UWA Shares will possess equal voting and dividend rights, as well as other entitlements, matching those of Orthocell's other ordinary shares.
This exchange positions Orthocell to focus on global distribution, setting the stage for continued innovation and growth in the regenerative medicine sector.