Subsequent Events |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | Subsequent Events Stella Diagnostics - Asset Purchase Agreement
On December 15, 2022, the Company entered into an Asset Purchase Agreement (the “Stella Purchase Agreement”), by and among the Company and Stella Diagnostics Inc. (“Stella”) and Stella DX, LLC (“Stella DX” and, together with Stella, the “Stella Sellers”), pursuant to which, on January 3, 2023, the Company purchased all of the assets, rights and interests of the Stella Sellers and their affiliates pertaining to the Stella Sellers’ BE-Smart Esophageal Pre-Cancer diagnostic screening test and certain clinical assets, including all intellectual property rights (the “Stella Purchased Assets”).
As consideration for the Stella Purchased Assets, the Company (i) paid to the Stella Sellers $3.5 million in cash, minus (a) the Secured Note Amount, if any, (b) the Liability Payoff Amount and (c) the Promissory Note Payoff Amounts (each as defined in the Stella Purchase Agreement), and (ii) issued to Stella DX 100,000 shares of common stock, par value $0.0005 per share, of the Company.
The Company is required to pay to the Stella Sellers for each of the calendar years (each, an “Annual Period”) during the year period commencing on the first day of the calendar year following the date of the Commercialization Event (as defined in the Stella Purchase Agreement), a non-refundable, non-creditable royalty of 5% of the Adjusted Gross Margin (as defined in the Stella Purchase Agreement) for such Annual Period.
Management is reviewing the final closing transactions to complete the accounting. These amounts will be reported in the Company's Form 10-Q for the three months ended March 31, 2023.
Debt and Equity Transactions
On January 26, 2023, the Company issued an unsecured promissory note and guaranty for an aggregate principal amount of $7.6 million (the “Note”) to JXVII Trust (“JXVII”). The Note is due and payable on January 27, 2026, the third anniversary of the date on which the Note was funded (the “Closing Date”), and accrues interest at a rate of 10% per year from the Closing Date, payable on a quarterly basis, until the Note is repaid in full. The Company has the right to prepay the Note at any time after the Closing Date and prior to the maturity date without premium or penalty upon providing seven days’ written notice to JXVII. Repayment of the Note has been guaranteed by the Company’s wholly-owned subsidiary, Pharmaloz Manufacturing, Inc.
In January 2023, the Company issued 603,881 shares of common stock through a cashless exercise of 1,348,250 options. In connection with the cashless exercise, the company repurchased 744,369 shares of common stock at a cost of $5,378 to satisfy tax withholding.
On March 13, 2023, the Company granted, in the aggregate, 205,000 stock options to seven employees under the 2022 Plan with an exercise price of $6.84, the closing price of the Company’s common stock on the date of grant. The options vest 25% on the date of grant with the remaining 75% vesting over a 3-year period in equal annual installments. The estimated fair value of these options at the date of grant was $0.9 million, which will be expensed over the vesting term.
On March 15, 2023, the Company announced that its board of directors had approved a new stock repurchase program. Under the stock repurchase program, the Company is authorized to repurchase up to $6.0 million of its outstanding shares of common stock from time to time, over a six-month period. The number of shares to be repurchased and the timing of the repurchases, if any, will depend on a number of factors, including, but not limited to, price, trading volume and general market conditions, along with the Company’s working capital requirements and general business conditions. The board of directors will re-evaluate the program from time to time and may authorize adjustments to its terms.
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