Quarterly report pursuant to Section 13 or 15(d)

Subsequent Events

Subsequent Events
9 Months Ended
Sep. 30, 2023
Subsequent Events [Abstract]  
Subsequent Events

13. Subsequent Events


Asset Purchase Agreement


On October 4, 2023, the Company entered into an Asset Purchase Agreement (the “APA”) with Odyssey Health, Inc., f/k/a Odyssey Group International, Inc., a Nevada corporation (“Odyssey”). Pursuant to the APA, the Company has agreed to purchase and assume, and Odyssey has agreed to sell and assign, certain assets and certain liabilities related to a segment of Odyssey’s business focused on developing medical products that treat brain related illnesses and diseases (the “Purchased Assets”) in exchange for (i) $1,000,000 in cash and 8,000,000 shares of convertible Series F Preferred Stock (“Series F Preferred Stock”), on and subject to the terms and conditions set forth therein (such transaction, the “Odyssey Asset Purchase”). The Purchased Assets include drug candidates for treating mild traumatic brain injury (mTBI), also known as concussion, and for treating Niemann Pick Disease Type C (NPC), as well as Odyssey’s proprietary powder formulation and its nasal delivery device.


The cash is to be paid in two installments: $500,000 upon the execution of the APA and $500,000 upon the earlier of (a) the closing of the Purchase Agreement (the “Closing), (b) within three (3) business days after the date that Odyssey has obtained its stockholders’ approval approving the Odyssey Asset Purchase and (c) immediately upon the Company’s wrongful termination of the Purchase Agreement in breach of the Purchase Agreement. At the Closing, the Company will issue 8,000,000 shares of Series F Preferred Stock to Odyssey.


The closing of the Odyssey Asset Purchase is expected to close at the end of the fourth quarter of 2023, subject to the satisfaction of customary closing conditions, of which there can be no assurance. The closing conditions include: (1) Odyssey shall have obtained all required consents to the Odyssey Asset Purchase; (2) Odyssey shall have obtained its shareholders’ approval to the Odyssey Asset Purchase; (3) the Company’s shareholders shall have approved (a) the increase in the Company’s authorized Common Stock from 4,166,666 to 350,000,000 and (b) the conversion of the Series F Preferred Stock into Common Stock; (4) no material adverse change shall have occurred to the Purchased Assets; (5) the Company must have at least $5,000,000 in cash at Closing; and (6) the Company must have completed its due diligence of the Purchased Assets to its satisfaction.


The Purchase Agreement also includes customary representations, warranties, and covenants. The Purchase agreement also contains indemnification rights for each of the Company and Odyssey for breaches of representations, warranties, and covenants.


Although the Company believes that the Purchased Assets could provide positive synergies to strengthen the Company’s current intranasal drug delivery platform, the Company cannot be certain that the acquisition of this proprietary neurological drug therapy and technology will be successful. See, “Risk Factors.”


Addition to Board of Directors


On October 4, 2023 the Company’s Board of Directors approved an increase in the size of the board of directors from five (5) to seven (7) individuals. Following the increase in the size of the Company’s board of directors, the Board of Directors appointed Mr. Bruce Cassidy and Mr. John Gandolfo to the Company’s board.


Messrs. Cassidy and Gandolfo were chosen to serve as members of the Company’s board due their extensive leadership and business experience, as well as their service and experience on other boards of directors for companies in the life sciences and pharmaceutical industries as well as in the entertainment and media industries. In connection with the appointment of Messrs. Cassidy and Gandolfo to the Company’s board of directors and pursuant to the Company’s 2021 Plan as applied to new, non-employee directors, the Company also granted to each of Messrs. Cassidy and Gandolfo stock options to purchase 5,102 shares of the Company’s common stock at an exercise price per share equal to the fair market value per share on the date before they became directors, which shares will immediately vest and be exercisable for ten years, subject to early termination under the terms of the Plan.