Note 16 - Subsequent Events
|3 Months Ended|
Mar. 31, 2023
|Notes to Financial Statements|
|Subsequent Events [Text Block]||
The Company has evaluated events and transactions subsequent to March 31, 2023 and through the date these condensed consolidated financial statements were included in this Quarterly Report on Form 10-Q and filed with the SEC.
Asset Purchase Agreement
On April 10, 2023, the Company entered into an Asset Purchase Agreement with Meilleur Technologies, Inc. (“Meilleur”), pursuant to which Meilleur agreed to acquire certain assets and assume certain liabilities of the Company relating to its business of developing and commercializing PET biomarkers for Alzheimer’s Disease (the “Business”). As part of the purchase price, Meilleur paid a cash payment of $250,000 to the Company at closing and agreed to make a cash payment of $500,000 to the Company within 60 days after the closing date. In addition, Meilleur agreed to make certain future payments (as part of the purchase price) to the Company, including contingent payments and milestone payments based on potential licensing events, regulatory submissions, regulatory approvals, and net sales of any approved product derived from the purchased Business.
Bridge Note from John K. Scott, Jr.
On April 25, 2023, Mr. Scott agreed to make a second loan to the Company in the principal amount of up to $300,000 under the terms of a secured bridge note (“2023 Bridge Note”), of which $225,000 and $75,000 were funded on April 26, 2023. and May 9, 2023, respectively. The Company has agreed to pay a non-refundable fee of $15,000 to Mr. Scott at maturity on June 26, 2023. The Company’s obligations under the 2023 Bridge Note are secured by a first priority security interest in all of the Company’s assets and personal property pursuant to the Security Agreement dated April 10, 2022, as amended on April 25, 2023 in favor of Mr. Scott.
Stock Purchase Agreement
On April 26, 2023, the Company entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Keystone Capital Partners, LLC (“Keystone”) whereby the Company may offer and sell, from time to time at its sole discretion, and whereby Keystone committed to purchase, up to $2,750,000 of shares of the Company’s common stock (but subject to certain limitations and conditions). Under the Purchase Agreement, the Company agreed to issue to Keystone 400,000 shares of Common Stock as consideration for its commitment to purchase shares under the Purchase agreement, with 200,000 shares (based on the closing stock price of $0.25 as of April 25, 2023) being delivered on the date of the Purchase Agreement and the remaining 200,000 shares (based on the closing stock price of $0.25 as of April 25, 2023) to be delivered upon the Company raising a minimum of $2,750,000 under the Purchase Agreement or any other source. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Keystone, pursuant to which it agreed to provide Keystone with certain registration rights related to the shares issued under the Purchase Agreement.
On May 3, 2023, the Company sold 284,090 shares of common stock to Keystone under the Purchase Agreement at a purchase price of $0.18 per share, generating gross proceeds of $50,000.
Between May 4 and May 5, 2023, the Company sold a total of 626,911 shares of common stock to Keystone under the Purchase Agreement at a purchase price of $0.16 per share, generating total gross proceeds of $100,000.
As a result of these Dilutive Issuances (as defined in the Certificate of Designation for the Series I Preferred Stock and the related Warrants issued in the 2022 Rights Offering), the conversion price of the Series I Preferred Stock and the exercise price of the Warrants have been adjusted to $0.16 per share. Based on the adjusted conversion price, each share of the Series I Preferred Stock is convertible into 6,250 shares of common stock.
Letter of Intent for Asset Purchase Agreement
On April 26, 2023 the Company executed a Letter of Intent with Respect to Cardinal Milestone Payment (the “LOI”) with Keystone. Pursuant to the LOI, the parties intend that, subject to the satisfaction of various conditions, Keystone would acquire a $10 million milestone payment which would be paid to the Company by Cardinal Health 414, LLC (“Cardinal Health”) at such time as annual sales of Lymphoseek exceed $100 million in a fiscal year for a purchase price of $8 million. The right to receive the milestone payment will be backed by the Company’s issuance of 10,000 shares of Series I convertible preferred stock (“Series I Stock”) plus 5-year warrants with an exercise price of $0.50 per share. The Series I Stock will be forfeited upon payment of the milestone payment to Keystone. The conditions for closing include, among others, (i) the Company raising a minimum amount of new equity as agreed upon by the parties, and (ii) Mr. Scott converting all of his promissory notes into shares of Series I Stock and warrants.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef