Annual report pursuant to Section 13 and 15(d)

RELATED PARTY TRANSACTIONS

v3.22.4
RELATED PARTY TRANSACTIONS
12 Months Ended
Dec. 31, 2022
RELATED PARTY TRANSACTIONS  
RELATED PARTY TRANSACTIONS

15.RELATED PARTY TRANSACTIONS

Danforth Advisors, LLC

During the years ended December 31, 2022 and 2021, the Company made cash payments of $397,691 and $290,656, respectively, and incurred costs of $365,247 and $322,639, respectively, which are included in general and administrative expenses in the accompanying consolidated statements of operations and comprehensive loss for consulting services to a firm specializing in finance and strategic support for life science companies. The Chief Financial Officer of the Company is a managing director of the consulting firm.

UBC Collaborative Research Agreement

In April 2016, the Company entered into a three-year, collaborative research agreement (“CRA”) with the University of British Columbia (“UBC”) and the Vancouver Coastal Health Authority in the amount of C$787,500, with the Company’s Chief Scientific Officer, as principal investigator at the UBC. In March 2018, the CRA was amended and funding was increased to C$892,500 over three years. In July 2018, the total funding commitment to UBC increased to C$1,130,000 over the period of the agreement. In February 2019, the CRA was amended, and funding was increased to C$2,130,000 for an additional two-year period. In September 2019, the CRA was amended, and funding was increased to C$2,630,000 for an additional one- year period. In November 2021, the CRA was amended for an additional grant of C$800,000 effective January 1, 2022, for the 2022 calendar year for total funding of C$3,430,000. During the years ended December 31, 2022 and 2021, the Company made cash payments of $461,516 and $499,533, respectively, and incurred costs of $557,665 and $393,341, respectively, which are included in research and development expenses in the accompanying consolidated statements of operations and comprehensive loss.

Virtua, LLC

During the years ended December 31, 2022 and 2021, the Company made cash payments of $0 and $1,187,886, respectively, for management services to a company owned by the Company’s former Chief Executive Officer and Executive Chairman for services rendered, including the settlement of all deferred compensation outstanding as of December 31, 2021. During the years ended December 31, 2022 and 2021, the Company recorded expenses of $0 and $413,555, respectively, with 2021 expenses of $257,619 and $137,936 included in research and development expenses and general and administrative expenses, respectively, in the accompanying consolidated statements of operations and comprehensive loss.

Title 19 Promis

The Company entered into the following transactions with a related party during the years ended December 31 2022 and 2021:

In March 2021, the Company issued a convertible unsecured debenture to Title 19 Promis in the principal amount of $3,000,000, convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “Title 19 Debenture”). The Title 19 Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00. In June 2022, Title 19 Promis elected to convert the Title 19 Debenture and was issued 30,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 500,000 Common Shares.
In August 2021, Title 19 Promis acquired (a) 206,250 Common Shares and (b) a warrant to purchase 51,562 Common Shares for an aggregate purchase price of $1,980,000, each represented on a post-split basis.
In August 2021, Title 19 Acies, an affiliate of Title 19 Promis, acquired 48,333 Common Shares for an aggregate purchase price of $463,996, represented on a post-split basis.
In October 2022, in a private offering, Title 19 Promis acquired 106,391 Common Shares and a warrant to purchase 26,597 Common Shares for an aggregate purchase price of $574,511.

Crocker Mountain LLC

The Company entered into the following transactions with a related party during the years ended December 31 2022 and 2021:

In March 2021, the Company issued a convertible unsecured debenture to Crocker Mountain in the principal amount of $900,000, convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “Crocker Mountain Debenture”). The Crocker Mountain Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00. In June 2022, Crocker Mountain elected to convert the Crocker Mountain Debenture and was issued 9,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 150,000 Common Shares.
In March 2021, the Company issued a convertible unsecured debenture to the Jeremy M. Sclar 2012 Irrevocable Family Trust, an affiliate of Crocker Mountain (the “Trust”), in the principal amount of $900,000, convertible into Common Shares at the option of the holder at a conversion price of $6.00 (the “Trust Debenture”). The Trust Debenture was later amended to provide that it was convertible into Series 1 Preferred Shares at the option of the holder at a conversion price of $6.00. In June 2022, the Trust elected to convert the Trust Debenture and was issued 9,000,000 Series 1 Preferred Shares, which, as a result of the Reverse Stock Split, are now convertible into an aggregate of 150,000 Common Shares.
In August 2021, Crocker Mountain acquired (a) 340,833 Common Shares and (b) a warrant to purchase 85,208 Common Shares for an aggregate purchase price of $3,272,000, each represented on a post-split basis.
In October 2022, in a private offering, the Trust acquired 104,869 Common Shares and a warrant to purchase 26,217 Common Shares for an aggregate purchase price of $566,292.