11.  Subsequent Events

On November 4, 2015, AC exercised its option right pursuant to the Development, License & Option Agreement (the “Agreement”), dated November 3, 2014 made by and between AC and Sensory Management Services LLC (“SMS”).  SMS developed and sold a pressure-specified sensory device (“PSSD”) for use in evaluating patients with peripheral nerve conditions.  AC entered into the Agreement to validate and develop an updated PSSD to be named the AcroVal™ Neurosensory & Motor Testing System (the “AcroVal™”) and SMS granted AC an option pursuant to the Agreement to purchase the assets and technology necessary to own and commercialize the PSSD.  AC’s validation of the PSSD, and development of the AcroVal™, were positive, leading to the exercise of the option and acquisition of the rights and assets related to the PSSD.

AC intends to launch the AcroVal™ in the first quarter of 2016 through its current sales channel. Evaluating patients with peripheral nerve conditions is essential to confirming diagnosis, mapping a course of action and monitoring post-intervention results. Although examiners of peripheral nerves have many assessment options, there is little consistency on measurement protocols. With the AcroVal™ Neurosensory & Motor Testing System,  AC anticipates that examiners will have digital, less subjective results for their patients with conditions such as peripheral neuropathy, nerve compression syndromes, and transected nerves. Ultimately, standardization of assessment techniques will facilitate comparison and interpretation of clinical results leading to better understanding and care for patients with peripheral nerve conditions.

Upon exercise of the option AC paid a fee of $15,000 and is obligated to pay prior development fees owed by SMS of up to $39,500.  Commencing November 4, 2015 and for a ten year period, AC will also pay to SMS a 15% royalty on sales of AcroVal™ and AC will provide SMS an AcroVal™ instrument, with upgrades, for 10 years, without cost.  The SMS Agreement also provides for certain payments in the event that certain milestones are obtained during the royalty term.  AC, as a result of such option exercise, now has ownership of all necessary technology, information and know-how necessary for its commercialization of the AcroVal™.