Note 13 - Subsequent Events

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Subsequent Events [Text Block]

NOTE

13

– SUBSEQUENT EVENTS

Registered Offering of Common Stock and Warrants

On

February 27, 2019,

Precision Therapeutics Inc., entered into a Placement Agency Agreement (the “Placement Agency Agreement”) pursuant to which Dawson James Securities, Inc. served as placement agent on a “best efforts” basis (the “Placement Agent”) for a registered direct offering in which the Company sold

1,385,000

shares of the Company’s common stock (“Common Stock”) and warrants to purchase up to

692,500

shares of Common Stock (the “Warrants”) (the “Offering”). The Common Stock and warrants were sold in units (the “Units”), with each Unit consisting of

one

share of Common Stock and a warrant to purchase

0.5

of a share of the Company’s Common Stock at an exercise price of

$1.00

per whole share. The warrants are exercisable at any time on or after the date of issuance and expire on the

fifth

anniversary of issuance.

The Units were sold at a price of

$0.90

per Unit, resulting in gross proceeds to the Company of approximately

$1.25

million, before deducting placement agent fees and estimated offering expenses. The net offering proceeds to the Company, after deducting the placement agent’s fees and other estimated offering expenses payable by the Company, are expected to be approximately

$1.08

million.

The closing of the Offering occurred on

March 1, 2019.

Pursuant to the Placement Agency Agreement, the Company agreed to pay the Placement Agent a cash fee equal to

8%

of the aggregate purchase price of the Units sold. The Company also agreed to reimburse the Placement Agent for its expenses in connection with this offering, up to

$30,000,

and agreed to reimburse the placement agent for its reasonable “blue sky” fees and expenses, of

$5,000.

The Placement Agency Agreement contains indemnification, representations, warranties, conditions precedent to closing and other provisions customary for transactions of this nature.

Also pursuant to the Placement Agency Agreement, the Company, in connection with the offering, entered into Unit Purchase Option agreements, dated as of

March 1, 2019 (

the “Unit Purchase Options”), pursuant to which the Company granted the Placement Agent or its assignees the right to purchase from the Company up to an aggregate of

69,250

Units (which represents

5%

of the Units sold to investors in the offering) at an exercise price equal to

125%

of the public offering price of the Units in the offering, or

$1.125

per Unit. The Unit Purchase Options shall expire on

February 27, 2024.

On

March 12, 2019,

Peak One,

one

of the noteholders from the bridge loan, converted

71,046

shares of stock reducing the principal of the loan by

$44,475.

The value was computed, pursuant to the agreement, by calculating the average VWAP for the prior

20

days and multiplying that average by

70%.

Dr. Carl Schwartz, the Company’s CEO made an additional loan to the Company and made a private investment in the Company’s common stock, which in total, generated an additional

$1,300,000,

see Note

10

– Related party Transactions.

The Company entered into a forbearance agreement with

L2

Capital, LLC and Peak One Opportunity Fund, LP. AS part of the agreement the Company added

15%

to the principal of the note and issued inducement shares of common stock. The Company accrued approximately

$503,000

in penalty expenses as a result as of

December 31, 2018.

This penalty expense is recorded in accrued expenses on the balance sheet.

On

March 26, 2019,

Precision Therapeutics Inc., entered into a Placement Agency Agreement (the “Placement Agency Agreement”) pursuant to which Dawson James Securities, Inc. served as placement agent on a “best efforts” basis (the “Placement Agent”) for a registered direct offering in which the Company sold

1,478,750

shares of the Company’s common stock (“Common Stock”) and warrants to purchase up to

739,375

shares of Common Stock (the “Warrants”) (the “Offering”). The Common Stock and warrants were sold in units (the “Units”), with each Unit consisting of

one

share of Common Stock and a warrant to purchase

0.5

of a share of the Company’s Common Stock at an exercise price of

$1.00

per whole share. The warrants are exercisable at any time on or after the date of issuance and expire on the

fifth

anniversary of issuance.

The Units were sold at a price of

$0.80

per Unit, resulting in gross proceeds to the Company of approximately

$1.18

million, before deducting placement agent fees and estimated offering expenses. The net offering proceeds to the Company, after deducting the placement agent’s fees and other estimated offering expenses payable by the Company, are expected to be approximately

$1.05

million.

The closing of the Offering occurred on

March 29, 2019.

Pursuant to the Placement Agency Agreement, the Company agreed to pay the Placement Agent a cash fee equal to

8%

of the aggregate purchase price of the Units sold. The Company also agreed to reimburse the Placement Agent for its expenses in connection with this offering, up to

$30,000,

and agreed to reimburse the placement agent for its reasonable “blue sky” fees and expenses, of

$5,000.

The Placement Agency Agreement contains indemnification, representations, warranties, conditions precedent to closing and other provisions customary for transactions of this nature.

Also pursuant to the Placement Agency Agreement, the Company, in connection with the offering, entered into Unit Purchase Option agreements, dated as of

March 29, 2019 (

the “Unit Purchase Options”), pursuant to which the Company granted the Placement Agent or its assignees the right to purchase from the Company up to an aggregate of

73,938

Units (which represents

5%

of the Units sold to investors in the offering) at an exercise price equal to

125%

of the public offering price of the Units in the offering, or

$1.00

per Unit. The Unit Purchase Options shall expire on

March 29, 2024.

The securities in the Offerings were offered and sold pursuant to the Company’s “shelf” registration statement (File

No.

333

-

213766

), which was declared effective by the United States Securities and Exchange Commission on

October 4, 2016.