https://www.sec.gov/Archives/edgar/data/1059784/00
Post# of 36564
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Posted On: 07/16/2019 4:36:26 PM
https://www.sec.gov/Archives/edgar/data/10597...form8k.htm
New 8K out on the Pantheon Medisource deals already announced. Looks like a pretty good deal for Travis Bird...
Item 1.01 Entry into a Material Definitive Agreement.
On July 11, 2019, Generex Biotechnology Corporation (“ Generex ”) and its wholly owned subsidiary NuGenerex Distribution Solutions, LLC (“ NDS ”), entered into Asset Purchase Agreements (the “APAs”) for the purchase of substantially all of the operating assets of
Medisource Partners, LLC (“ Medisource ”) and Pantheon Medical - Foot & Ankle, LLC (“ Pantheon ”). Closing under each APA is scheduled for August 1, 2019.
Medisource contracts with vendors (including Pantheon ) for nationwide distribution of implants and devices for spine, hips, knees, foot, ankle, hand, and wrist surgeries. Additional product lines include biologics (blood, bone, tissue, and stem cells), durable medical equipment, and soft goods. The company also supplies kits to process bone marrow aspirates and platelet rich plasma biologics at the time of surgery.
Pantheon sells a physician friendly, “all-in-one,” integrated kit that includes plates, screws, and tools required for orthopedic surgeons and podiatrists conducting foot and ankle surgeries. Over the next three years, the company expects to develop and submit several new product lines to the FDA, which will include cannulated surgical screws and surgical staples, as well as a proprietary Hammertoe System.
Travis H. Bird is the CEO and principal owner of both Pantheon and Medisource.
Under the APAs:
• Generex will issue its common stock with a value of $1,400,000 in exchange for the Pantheon assets, and common stock with a value of $1,000,000 in exchange for the Medisource Assets.
• Generex and NDS will pay up to $700,000 in cash to Pantheon as an earn out payment. No payment will be made unless the business conducted by NDS using the former Pantheon assets has EBITDA in the twelve months following closing in excess of $500,000. If the Pantheon business’s EBITDA meets or exceeds $1,000,000, the entire $700,000 will be paid. If the Pantheon business’s EBITDA exceeds $500,000 but is less than $1,000,000, a pro rata portion of the $700,000 earn-out will be paid.
• Generex and NDS will pay up to $500,000 in cash to Medisource as an earn out payment. No payment will be made unless the business conducted by NDS using the former Medisource assets has EBITDA in the twelve months following closing in excess of $130,000. If the Medisource business’s EBITDA meets or exceeds $500,000, the entire $500,000 will be paid. If the Medisource business’s EBITDA exceeds $130,000 but is less than $500,000, a pro rata portion of the $500,000 earn-out will be paid.
• In the event the EBITDA targets are met for one or both Medisource and Pantheon, Travis Bird will receive sales commissions equal to 15% of net sales during the first year following closing, and 10% of net sales during the second year.
• Both Medisource and Pantheon agreed to waive the 1:1 stock dividend Generex announced it will issue if Generex is listed on NASDAQ.
• Each of Pantheon and Medisource will retain 50% of its cash on hand and 50% of its accounts receivable, with the remainder transferred to NDS at closing.
• Generex and NDS will not assume any Pantheon or Medisource liabilities except for post-closing obligations under assumed contracts.
• Pantheon and Medisource will not transfer their Medicare and Medicaid numbers.
2
At closing, Mr. Bird will enter into a 18 month consulting agreement with NDS. As compensation, Mr. Bird will receive Generex common stock with a value of $250,000, as well as monthly payments equaling $97,222.22. The monthly payments shall be paid from any available cash from the operations of Pantheon and Medisource. Any remaining balance of such monthly payments will consist of common stock. The agreement specifies the shares are to be freely tradeable. In addition, Mr. Travis will agree to fully assign and exchange any ownership rights in any new technology he develops with the Company, in exchange for a payment of Five Hundred Thousand Dollars ($500,000.00) in value of common stock for each completed item submitted to the FDA.
This Current Report contains summaries of the material terms of the APAs. The summaries of these documents are subject to, and are qualified in their entirety by, reference to the APAs, which are filed as an exhibit hereto and incorporated herein by reference.
New 8K out on the Pantheon Medisource deals already announced. Looks like a pretty good deal for Travis Bird...
Item 1.01 Entry into a Material Definitive Agreement.
On July 11, 2019, Generex Biotechnology Corporation (“ Generex ”) and its wholly owned subsidiary NuGenerex Distribution Solutions, LLC (“ NDS ”), entered into Asset Purchase Agreements (the “APAs”) for the purchase of substantially all of the operating assets of
Medisource Partners, LLC (“ Medisource ”) and Pantheon Medical - Foot & Ankle, LLC (“ Pantheon ”). Closing under each APA is scheduled for August 1, 2019.
Medisource contracts with vendors (including Pantheon ) for nationwide distribution of implants and devices for spine, hips, knees, foot, ankle, hand, and wrist surgeries. Additional product lines include biologics (blood, bone, tissue, and stem cells), durable medical equipment, and soft goods. The company also supplies kits to process bone marrow aspirates and platelet rich plasma biologics at the time of surgery.
Pantheon sells a physician friendly, “all-in-one,” integrated kit that includes plates, screws, and tools required for orthopedic surgeons and podiatrists conducting foot and ankle surgeries. Over the next three years, the company expects to develop and submit several new product lines to the FDA, which will include cannulated surgical screws and surgical staples, as well as a proprietary Hammertoe System.
Travis H. Bird is the CEO and principal owner of both Pantheon and Medisource.
Under the APAs:
• Generex will issue its common stock with a value of $1,400,000 in exchange for the Pantheon assets, and common stock with a value of $1,000,000 in exchange for the Medisource Assets.
• Generex and NDS will pay up to $700,000 in cash to Pantheon as an earn out payment. No payment will be made unless the business conducted by NDS using the former Pantheon assets has EBITDA in the twelve months following closing in excess of $500,000. If the Pantheon business’s EBITDA meets or exceeds $1,000,000, the entire $700,000 will be paid. If the Pantheon business’s EBITDA exceeds $500,000 but is less than $1,000,000, a pro rata portion of the $700,000 earn-out will be paid.
• Generex and NDS will pay up to $500,000 in cash to Medisource as an earn out payment. No payment will be made unless the business conducted by NDS using the former Medisource assets has EBITDA in the twelve months following closing in excess of $130,000. If the Medisource business’s EBITDA meets or exceeds $500,000, the entire $500,000 will be paid. If the Medisource business’s EBITDA exceeds $130,000 but is less than $500,000, a pro rata portion of the $500,000 earn-out will be paid.
• In the event the EBITDA targets are met for one or both Medisource and Pantheon, Travis Bird will receive sales commissions equal to 15% of net sales during the first year following closing, and 10% of net sales during the second year.
• Both Medisource and Pantheon agreed to waive the 1:1 stock dividend Generex announced it will issue if Generex is listed on NASDAQ.
• Each of Pantheon and Medisource will retain 50% of its cash on hand and 50% of its accounts receivable, with the remainder transferred to NDS at closing.
• Generex and NDS will not assume any Pantheon or Medisource liabilities except for post-closing obligations under assumed contracts.
• Pantheon and Medisource will not transfer their Medicare and Medicaid numbers.
2
At closing, Mr. Bird will enter into a 18 month consulting agreement with NDS. As compensation, Mr. Bird will receive Generex common stock with a value of $250,000, as well as monthly payments equaling $97,222.22. The monthly payments shall be paid from any available cash from the operations of Pantheon and Medisource. Any remaining balance of such monthly payments will consist of common stock. The agreement specifies the shares are to be freely tradeable. In addition, Mr. Travis will agree to fully assign and exchange any ownership rights in any new technology he develops with the Company, in exchange for a payment of Five Hundred Thousand Dollars ($500,000.00) in value of common stock for each completed item submitted to the FDA.
This Current Report contains summaries of the material terms of the APAs. The summaries of these documents are subject to, and are qualified in their entirety by, reference to the APAs, which are filed as an exhibit hereto and incorporated herein by reference.
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(0)Generex Biotechnology Corp. (GNBTQ) Stock Research Links
Disclaimer: Of course, all of this is my opinion and you should not make any investment decisions based on my opinion. I have not received any non-public information.