Quarterly report pursuant to Section 13 or 15(d)

13. Subsequent Events

13. Subsequent Events
9 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
Subsequent Events

The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined, except as disclosed herein, that there were no other such events requiring recognition or disclosure in the financial statements.


In November 2015, the Company entered into an Asset Purchase Agreement (the “APA”) with AS Kevelt, an Estonian company (“Kevelt”), and Pharmsynthez, parent of Kevelt (together referred to as the “Sellers”). Pursuant to the APA, Kevelt will transfer to the Company certain intellectual property rights with respect to the immunomodulatory product Virexxaheld by Kevelt and the Sellers will grant the Company the worldwide right to develop, market and license Virexxafor all uses except for certain excluded uses in Russia, the Commonwealth of Independent States and certain other countries. In consideration, the Company will issue Pharmsynthez 100.5 million shares of its common stock. The APA also provides for the Company’s issuance of 10% Senior Secured Convertible Promissory Notes of up to $3.5 million to Pharmsynthez (the “New Notes”) and warrants to purchase a number of shares of the Company’s stock equal to 50% of the number of shares issuable under the New Notes. In the event that a New Note remains outstanding at April 30, 2016, Pharmsynthez shall be granted an additional warrant to purchase an additional number of shares of the Company’s common stock equal to 50% of the number of shares issuable under the New Note. There is also a provision in the APA for the contingent sale of up to $6.5 million of the Company’s common stock in the event of a public offering of at least $15 million. Also as part of the APA, Dmitry Genkin and Kirill Surkhov, shareholders and founders of Pharmsynthez, will assign a U.S. provisional patent application to the Company in exchange for 11 million shares of the Company’s common stock.


In connection with the APA, certain terms in the Note and Warrants issued in July 2015 were modified to adjust the maturity and exercisable dates of the Note and Warrants, respectively.


The APA transaction is expected to be completed during the fourth quarter of 2015 and it is contingent upon the parties meeting their respective closing conditions as set forth in the APA.