Nephros Inc 8-K, filed Oct 20, 2020
Nephros Inc (NEPH)
About this 8-K
Nephros Inc filed this 8-K on October 20, 2020, reporting on events of October 15, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 15, 2020
NEPHROS, INC.
(Exact name of Registrant as Specified in its Charter)
| Delaware | 001-32288 | 13-3971809 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
380 Lackawanna Place, South Orange, New Jersey 07079 (Address of principal executive offices, including ZIP code) |
(201) 343-5202 (Registrant’s telephone number, including area code) |
n/a
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Common stock, $0.001 par value | NEPH | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01. Entry into a Material Definitive Agreement.
Second Amendment to Membership Interest Purchase Agreement
As previously disclosed, on December 31, 2018, Nephros, Inc., a Delaware corporation (the “Company”) entered into a Membership Interest Purchase Agreement (the “Agreement”) with Biocon 1, LLC, a Nevada limited liability company (“Biocon”), Aether Water Systems, LLC, a Nevada limited liability company (“Aether”), and Gregory Lucas, the sole member of each of Biocon and Aether (“Lucas”). Pursuant to the terms of the Agreement, the Company acquired 100% of the outstanding membership interests of each of Aether and Biocon in exchange for a cash payment of $750,000 to Lucas at closing, repayment of approximately $8,000 in debt of Biocon, and payment of contingent consideration to Lucas based on the net revenue of Biocon and Aether over each quarter of the 2019 and 2020 fiscal years, up to a maximum aggregate payment of $2,625,000.
On June 24, 2020, the Company and Lucas entered into a First Amendment to the Agreement (the “MIPA Amendment”), which modified the contingent consideration payments by disregarding the fiscal quarter ended June 30, 2020 and including the fiscal quarter ending March 31, 2021.
On October 15, 2020, the Company and Lucas entered into a Second Amendment to the Agreement (the “Second MIPA Amendment”), in which the Company agreed to pay Lucas a lump sum of $100,000 (the “Lump Sum”). In consideration for payment of the Lump Sum to Lucas, the Company’s obligation to make payments of contingent consideration to Lucas based on the net revenue of Biocon and Aether is terminated and deemed fully satisfied. The foregoing summary of the Second MIPA Amendment is qualified in its entirety by reference to the complete Second MIPA Amendment, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description | |
| 10.1 | Second Amendment to Membership Interest Purchase Agreement, between the Company and Gregory Lucas, dated October 15, 2020. |
| 2 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| Nephros, Inc. | ||
| Dated: October 20, 2020 | By: | /s/ Andrew Astor |
| Andrew Astor | ||
| Chief Executive Officer | ||
| 3 |
Exhibit 10.1
SECOND AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Amendment”) is entered into as of October 15, 2020, by and between Nephros, Inc. (the “Purchaser”) and Gregory Lucas (the “Member”). Capitalized terms used but not defined in this Amendment will have the meanings ascribed to them pursuant to the MIPA (defined below).
WHEREAS, the parties hereto, along with Biocon 1, LLC and Aether Water Systems, LLC, previously entered into that certain Membership Interest Purchase Agreement dated December 31, 2018, as amended by that First Amendment to Membership Interest Purchase Agreement dated June 24, 2020 (collectively, the “MIPA”); and
WHEREAS, the parties hereto desire to further amend the MIPA in order to settle any future obligations of the Purchaser to make Earnout Payments, as more fully described in this Amendment.
NOW, THEREFORE, the parties hereto, for good and valuable consideration and intending to be legally bound, hereby agree as follows:
1. Settlement of Earnout Obligations. On the date hereof, the Purchaser will pay to the Member an amount equal to $100,000 (the “Lump Sum”). The Lump Sum will be paid first from the Escrow Account and second, to the extent the amount remaining in the Escrow Account is not sufficient to cover the Lump Sum, by wire transfer of immediately available funds from the Purchaser to such bank account as is designated in writing by the Member. The Purchaser and the Member agree to jointly instruct the Escrow Agent to make the distribution set forth in the preceding sentence. Notwithstanding anything to the contrary in the MIPA, upon receipt by the Member of the Lump Sum, Purchaser’s obligation to make any Earnout Payments for the Remaining Quarterly Earnout Periods, which, for the avoidance of doubt, are the Purchaser’s fiscal quarters ended September 30, 2020 and ending December 31, 2020, and March 31, 2021, shall terminate and be deemed fully satisfied. Additionally, on the date hereof, Purchaser and the Member will cause to be delivered an amendment to the Employment Agreement, duly executed by each of Purchaser and the Member.
2. Reaffirmation. Other than as set forth in this Amendment, the MIPA remains in full force and effect. This Amendment will form a part of the MIPA for all purposes.
3. Counterparts. This Amendment may be executed in any number of counterparts, each of which when executed and delivered will be an original, but all such counterparts will constitute one and the same instrument. The exchange of executed copies of this Amendment by facsimile, email (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmissions will constitute effective execution and delivery of this Amendment.
[Signatures follow]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date set forth above.
| NEPHROS, INC. | ||
| By: | /s/ Andrew Astor | |
| Name: | Andrew Astor | |
| Title: | Chief Executive Officer | |
| /s/ Gregory Lucas | |
| Gregory Lucas |
Signature page to Second Amendment to Membership Interest Purchase Agreement