|3 Months Ended|
Sep. 30, 2021
|Business Combinations [Abstract]|
As described in note 1, on August 19, 2020, the Company completed its Merger with Adgero in accordance with the terms of the Merger Agreement. In connection with the Merger, substantially all of the fair value was concentrated in in-process research and development (“IPR&D”). As such, the Merger has been treated as an acquisition of Adgero assets and an assumption of Adgero liabilities.
Under the terms of the Merger Agreement, upon closing of the Merger, the Company issued 11,439 shares of Company common stock and 2,315 stock purchase warrants (“Adgero Warrants”) to the security holders of Adgero. The Adgero Warrants are exercisable at $3.18 per share (note 7). Also, in conjunction with the Merger, the Company issued 572 shares of common stock to the placement agent as a success fee. The aggregate fair value of consideration transferred to the Adgero shareholders was $16,725. As part of the Merger, the Company acquired in-process research and development of $16,094 and other net assets of $631. The fair value of the acquired in-process research and development assets has been expensed as a charge in the condensed consolidated interim statements of operations for the three months ended September 30, 2020, as there is no alternative use for these assets.
The Company incurred approximately $1,554 of legal, consulting and other professional fees related to the Merger of which approximately $500 was incurred during the three months ended September 30, 2020. The transaction costs have been classified as merger expenses in the condensed consolidated statement of operations.
In connection with the Merger, the Company recorded a milestone payment liability which relates to an asset purchase agreement with St. Cloud Investments, LLC (“St. Cloud”) that Adgero has regarding the acquisition of REM-001. The Agreement, as amended, is dated November 26, 2012 (the “St. Cloud Agreement”). Pursuant to the terms of the St. Cloud Agreement, the Company is obligated to make certain payments under the agreement. The future contingent amounts payable under that agreement are as follows:
With respect to the $300 and $700 potential milestone payments referenced above (each a “Milestone Payment”), if either such Milestone Payment becomes payable, and in the event the Company elects to pay either such Milestone Payment in shares of its common stock, the value of the common stock will equal the average of the closing price per share of the Company’s common stock over the twenty (20) trading days following the first public announcement of the applicable event described above.
As of September 30, 2021, the Company reviewed its estimates with respect to the planned timing of completion of the respective milestones and adjusted the liability accordingly.
The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef