21. Subsequent Events

Cyprium

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On February 24, 2021, Cyprium announced the execution of an asset purchase agreement with Sentynl Therapeutics, Inc. (“Sentynl”),  a U.S.-based specialty pharmaceutical company owned by the Zydus Group.  The asset purchase agreement commits Sentynl to an upfront cash payment to Cyprium of $8.0 million for development, a $3.0 million cash milestone payment at NDA acceptance, the purchase price of $9.0 million, as well as potential sales milestones totaling $255.0 million. Royalties on CUTX-101 net sales range from the mid-single digits up to the mid-twenties are also payable. Cyprium will retain development responsibility of CUTX-101 through approval of the NDA by the FDA, and Sentynl will be responsible for commercialization of CUTX-101 as well as progressing newborn screening activities. Continued development of CUTX-101 will be overseen by a Joint Steering Committee consisting of representatives from Cyprium and Sentynl.  Cyprium will retain 100% ownership over any FDA priority review voucher that may be issued at NDA approval for CUTX-101.

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Avenue

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On February 12, 2021, Avenue resubmitted its NDA to the FDA for IV Tramadol. The NDA for IV Tramadol was resubmitted following the receipt of official minutes from a Type A meeting with the FDA, which was conducted following a CRL issued by the FDA in October 2020. The resubmission included revised language relating to the proposed product label and a report relating to terminal sterilization validation. On February 26, 2021, Avenue received an acknowledgement letter from the FDA that Avenue’s resubmission of its NDA is a complete, class 1 response to the CRL, and a Prescription Drug User Fee Act goal date has been set for April 12, 2021.

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Journey

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8% Cumulative Convertible Class A Preferred Offering

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In March 2021, our partner company Journey is conducting an offering to accredited investors of 8% Cumulative Convertible Class A Preferred Stock in an aggregate minimum amount of $12.5 million and an aggregate maximum amount of $30.0 million, which may be increased if Journey and the placement agent agree to do so.  Dividends on the Journey preferred stock will be paid quarterly in shares of the Company’s common based upon a 7.5% discount to the average trading price over the 10-day period preceding the dividend payment date. The approximate number of shares issuable as a dividend per quarter, based upon the Company’s common stock price as of March 26, 2021, would be 72,849 shares if the minimum amount is raised and 174,838 if the maximum amount is raised.

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In addition, if the Journey preferred stock has not been converted into Journey common stock upon a sale of Journey or a financing of Journey in an amount of at least $25.0 million within a year of the closing (extendable by another six months at Journey’s option), the Journey preferred stock will be exchanged for shares of the Company’s common stock, also based upon a 7.5% discount to the average Company common stock trading price over the 10-day period preceding such exchange.  The approximate number of the Company’s common shares issuable upon such exchange would be approximately 3.4 million shares if the minimum amount is sold and 8.1 million if the maximum amount is sold, in each case based upon the Company’s common stock price as of March 26, 2021. The Company will be obligated to file one or more registration statements covering the issuance of shares that result from such dividends/exchange.  As consideration for the foregoing Journey will issue to the Company additional shares of Journey common stock, debt securities, or a combination of the foregoing.  From the initial closing on March 31, 2021, the Company raised gross proceeds of $12.5 million.