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Subsequent Events
9 Months Ended
Jun. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events

NOTE 12 – Subsequent Events

  

Conversion of 2020 Paulson Notes 

 

Between July 1, 2020 and July 22, 2020, certain Subscribers elected to convert $1,720,001 of the outstanding principal and interest of such Subscribers' 2020 Paulson Notes into 1,977,991 shares of Common Stock, and on July 23, 2020, the remaining $1,613,961 of the outstanding principal and interest of the 2020 Paulson Notes were automatically converted into 1,605,532 shares of Common Stock following the announcement of a Strategic Transaction (as discussed below under –Zimmer Development Agreement).

 

2020 Common Stock Offering

 

On July 28, 2020, the Company entered into Securities Purchase Agreements with an accredited investor in a private placement, pursuant to which the Company agreed to issue and sell 75,000 shares to such investor, at $1.80 per share.

  

Zimmer Development Agreement 

 

On July 20, 2020, the Company entered into an exclusive development and distribution agreement (the "Development Agreement") with Zimmer, Inc. ("Zimmer"), pursuant to which the Company granted Zimmer exclusive global rights to distribute NeuroOne's strip and grid cortical electrodes (the "Strip/Grid Products") and electrode cable assembly products (the "Electrode Cable Assembly Products"). Additionally, the Company granted Zimmer the exclusive right and license to distribute certain depth electrodes developed by the Company ("SEEG Products", and together with the Strip/Grid Products and Electrode Cable Assembly Products, the "Products"). The parties have agreed to collaborate with respect to development activities under the Development Agreement through a joint development committee composed of an equal number of representatives of Zimmer and the Company.

 

Under the terms of the Development Agreement, the Company will be responsible for all costs and expenses related to developing the Products, and the Company will be responsible for all costs and expenses related to the commercialization of the Products. In addition to the Development Agreement, Zimmer and the Company have entered into a Manufacturing and Supply Agreement (the "MS Agreement") and a supplier quality agreement (the "Quality Agreement") with respect to the manufacturing and supply of the Products.

 

Except as otherwise provided in the Development Agreement, the Company will be responsible for performing all development activities, including non-clinical and clinical studies directed at obtaining regulatory approval of each Product. Zimmer has agreed to use commercially reasonable efforts to promote, market and sell each Product following the "Product Availability Date" (as defined in the Development Agreement) for such Product.

 

Pursuant to the Development Agreement, Zimmer made an upfront payment of $2.0 million to the Company, the announcement of which triggered the automatic conversion of the Company's 2020 Paulson Notes pursuant to their terms. Additionally, in order to maintain the exclusivity of its distribution license for the SEEG Products, Zimmer must pay an additional fee to the Company within 60 days following the Product Availability Date for the SEEG Products.

 

The Development Agreement will expire on the tenth anniversary of the date of the first commercial sale of the last of the Products to achieve a first commercial sale, unless terminated earlier pursuant to its terms. Either party may terminate the Development Agreement (x) with written notice for the other party's material breach following a cure period or (y) if the other party becomes subject to certain insolvency proceedings. In addition, Zimmer may terminate the Development Agreement for any reason with 90 days' written notice, and the Company may terminate the Development Agreement if Zimmer acquires or directly or indirectly owns a controlling interest in certain competitors of the Company.

 

Issuance of Stock Options

 

On August 11, 2020, the Company granted 40,000 stock options to two consultants in exchange for consulting services.