Quarterly report pursuant to Section 13 or 15(d)

Note 16 - Subsequent Events

Note 16 - Subsequent Events
6 Months Ended
Jun. 30, 2022
Notes to Financial Statements  
Subsequent Events [Text Block]


Subsequent Events


The Company has evaluated events and transactions subsequent to June 30, 2022 and through the date these condensed consolidated financial statements were included in this Quarterly Report on Form 10-Q and filed with the SEC.


Bridge Note


On July 1, 2022, Mr. Scott funded an additional $1.0 million under the Bridge Note, bringing the total outstanding principal balance to $2.5 million.


Rights Offering


On August 4, 2022, the Company commenced its previously announced Rights Offering. Under the terms of the Rights Offering, the Company distributed non-transferable subscription rights to each of its holders of Common Stock, and its holders of certain warrants, Series D Preferred Stock and Series F Preferred Stock, in each case held as of August 3, 2022. The subscription rights will expire on August 17, 2022, unless the Company extends the expiration date. Each subscription right entitles the holder to purchase one Unit at a subscription price of $1,000 per Unit, consisting of one share of Series I Preferred Stock (which is immediately convertible into 1,538 shares of Common Stock) and warrants to purchase an additional 1,538 shares of our Common Stock. The Rights Offering may result in aggregate gross proceeds of up to $35.0 million to the Company. Certain participants in the Rights Offering have the ability to pay the subscription price for their Units by cancelling or exchanging their shares of Series D Preferred Stock, Series F Preferred Stock and/or Series G Preferred Stock and the Company’s indebtedness evidenced by the Bridge Note, instead of paying by check or wire transfer of funds. The fair market value of the shares of each series of preferred stock and the Bridge Note to be cancelled or exchanged in the Rights Offering has been determined by the Company’s Board of Directors based on an independent appraisal obtained by the Company. The total amount of cash proceeds received by the Company in the Rights Offering will be reduced to the extent any such series of preferred stock and/or the Bridge Note are exchanged or cancelled in the Rights Offering. Net proceeds after deducting fees and expenses related to the Rights Offering will be used to fund our pivotal Phase 3 clinical trial for RA, obtaining regulatory approvals, working capital, and for general corporate purposes.


Research and Development Expense Reimbursement


The Company has previously entered into an agreement with a strategic partner for assistance with the development and supply of the active pharmaceutical ingredient (“API”) used to manufacture Lymphoseek (technetium Tc 99m tilmanocept) that is sold by the Company in countries other than the United States, Canada and Mexico. Under the agreement, among other things, the strategic partner agreed to reimburse the Company for up to a total of $1.85 million of the Company’s out-of-pocket costs associated with such development, in two installments, subject to specified commercial and regulatory milestones. On August 11, 2022, the Company received the first installment in the amount of $800,000, which is subject to clawback if the Company does not satisfy certain commercial and regulatory milestones on or before March 31, 2023. The strategic partner is obligated, subject to certain conditions, to pay the remaining reimbursement amount upon the later of July 1, 2023 or satisfaction of specified commercial and regulatory milestones.