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SUBSEQUENT EVENTS | 3 Months Ended
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Mar. 31, 2022
Subsequent Events [Abstract] |
SUBSEQUENT EVENTS | NOTE 11 – SUBSEQUENT EVENTS On April 1, 2022, the Company, entered into a merger agreement by and among the Company, United Wound and Skin Solutions, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“UWSS”), Precision Healing, PH Merger Sub I, Inc., a Delaware corporation, PH Merger Sub II, LLC, a Delaware limited liability company, and Furneaux Capital Holdco, LLC (d/b/a BlueIO), solely in its capacity as the representative of the securityholders of Precision Healing. On April 4, 2022, the merger parties closed the transactions contemplated by the merger agreement and effected a business combination wherein Precision Healing became a wholly owned subsidiary of the Company. As further described in Note 8, the Company’s investment in Precision Healing had been accounted for as an equity method investment as of and for the three months ended March 31, 2022. Pursuant to the merger agreement, among other things, the Company agreed to (i) pay the holders of Precision Healing common stock and preferred stock an aggregate of approximately $4.6 million, which is payable in cash or equity, (ii) pay approximately $0.6 million of transaction expenses on behalf of the equity holders of Precision Healing, (iii) assume all outstanding options and warrants of Precision Healing and (iv) pay, subject to the achievement of certain performance thresholds, earnout consideration, each as described in further detail below. We have not yet completed our purchase accounting for this acquisition, including determining the preliminary fair value of the assets acquired, liabilities assumed and the fair value of contingent consideration. During the three months ended March 31, 2022, we incurred approximately $450,000 of transaction costs related to this acquisition, which are recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations. Closing Consideration to Precision Healing Equity Holders Pursuant to the terms of the merger agreement, holders of Precision Healing common stock and preferred stock, other than UWSS, were entitled to receive approximately $5.2 million as aggregate closing consideration, which consisted of $125,965 in cash consideration payable to stockholders who were not accredited investors, 165,738 shares of the Company’s common stock paid only to “accredited investors” as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended, and the payment in cash of approximately $0.6 million of transaction expenses of Precision Healing. Assumption of Precision Healing Options and Warrants On the closing date, the Precision Healing outstanding options previously granted under the Precision Healing 2020 Stock Option and Grant Plan (the “Precision Healing Plan”), converted pursuant to their terms into options to acquire an aggregate of 144,191 shares of Company common stock with a weighted exercise price of $10.71 per share. In addition, outstanding and unexercised Precision Healing warrants converted into rights to receive warrants to purchase (i) 4,421 shares of Company common stock with an initial exercise price of $7.32 per share and an expiration date of April 22, 2031 and (ii) 12,301 shares of the Company’s common stock with an initial exercise price of $12.05 per share and an expiration date of August 10, 2030. Assumption of the Precision Healing Plan Pursuant to the merger agreement, the Company assumed sponsorship of the Precision Healing Plan, effective as of the closing date, as well as the outstanding awards granted thereunder, the award agreements evidencing the grants of such awards and the remaining shares available under the Precision Healing Plan, in each case adjusted in the manner set forth in the merger agreement to such awards. Concurrent with the assumption of the Precision Healing Plan, the Company terminated the ability to offer future awards under the Precision Healing Plan. Earnout Consideration Pursuant to the merger agreement, upon the achievement of certain performance thresholds, the securityholders of Precision Healing, including the holders of options and warrants to purchase Precision Healing common stock and certain persons promised options to purchase Precision Healing common stock, are also entitled to receive payments of up to $10.0 million (the “Earnout Consideration”), which will be accounted for as contingent consideration pursuant to ASC 805. The Earnout Consideration is payable in cash or, at the Company’s election, is payable to accredited investors in shares of Company common stock at a price per share equal to the greater of (i) $27.13 and (ii) the average closing price of Company common stock for the 20 trading days prior to the date such Earnout Consideration is due and payable. Pursuant to the merger agreement, a minimum percentage of the Earnout Consideration may be required to be issued to accredited investors in shares of Company common stock for tax purposes. The amount and composition of the portion of Earnout Consideration payable is subject to adjustment and offsets as set forth in the merger agreement.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -URI https://asc.fasb.org/topic&trid=2122774 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 855 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6842918&loc=SL6314017-165662 + Details
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