Note 9 - Related Party Transactions

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

NOTE 

9

– RELATED PARTY TRANSACTIONS

The Audit Committee has the responsibility to review and approve all transactions to which a related party and the Company

may

be a party prior to their implementation, to assess whether such transactions meet applicable legal requirements.

One of the Company’s directors, Richard L. Gabriel, is the Chief Operating Officer and serves as a director of GLG Pharma (“GLG”). Another Company director, Tim Krochuk, is on the supervisory board for GLG. The Company and GLG have a partnership agreement with Helomics for the purpose of bringing together their proprietary technologies to build out personalized medicine platform for the diagnosis and treatment of women’s cancer. There has been

no

revenue or expenses generated by this partnership to date.

In

April 2018,

one

of the Company’s directors, Richard L. Gabriel, executed a

six

-month consulting contract to help guide operations for the Company’s wholly-owned subsidiary TumorGenesis. Under the terms of the agreement Mr. Gabriel will receive

$12,000

in monthly cash payments. In addition, Mr. Gabriel will receive a grant of

240,000

performance-based restricted stock units (“RSU’s”) under the Company’s Amended and Restated

2012

Stock Incentive Plan, with the vesting and payment of the RSU’s based on performance milestones as set forth in the agreement. As of this filing date Mr. Gabriel has

not

reached any of the prescribed milestones for earning performance based restricted stock units. Mr. Gabriel executed another

six

-month consulting contract for these services in

October 2018.

The contract has the same terms as the

April 2018

contract except for the stock grants and performance milestones, which are covered under the original contract. On

May 1, 2019,

Mr. Gabriel executed a

one

-year contract with renewable

three

-month periods. Mr. Gabriel will receive

$13,500

in monthly cash payments otherwise the contract remains the same as the previously signed agreement.

On

November 30, 2018,

the Company’s CEO, Dr. Carl Schwartz, made an investment of

$370,000

in the Company and received a note and a common stock purchase warrant for

221,292

warrant shares at

$0.836

per share. As of

January 8, 2019,

Dr. Schwartz made an additional investment of

$950,000

and received an amended and restated note in the original principal amount of

$1,320,000

and an amended and restated warrant, which added a

second

tranche of

742,188

warrant shares at an exercise price of

$0.704.

Each tranche is exercisable beginning on the

sixth

month anniversary of the date of the related investment through the

fifth

-year anniversary of the date of the related investment. On

January 8, 2019,

Dr. Schwartz also purchased

78,125

shares of the Company’s common stock in a private investment for

$50,000,

representing a price of

$0.64

per share, pursuant to a subscription agreement. On

February 6, 2019,

Dr. Schwartz made an additional investment of

$300,000

in the Company and received an amended and restated note in the original principal amount of

$1,620,000

and an amended and restated warrant, which added a

third

tranche of

138,889

warrant shares at an exercise price of

$1.188

per share. Management concluded that the warrants qualified as equity classification. The proceeds from the loan from Dr. Schwartz were allocated between the note payable and warrants based on the relative fair value of the individual elements. On

February 1, 2019

and the

first

day of each calendar month thereafter while the note and the warrant remain outstanding, a number of additional shares will be added to the

second

tranche and the

third

tranche equal to (

1

)

one

-half percent (

1/2%

) of the outstanding principal balance of the Note on such date, divided by (

2

) the closing price of the Company’s common stock on that date. The Company has accounted for this liability to issue more warrants as a derivative liability as the exact number of warrants that will be issued was uncertain at the time of the agreement. The Company determined the fair value of this derivative liability by estimating the value and number of warrants that would be issued under various note payment scenarios. Based on this valuation, the Company recorded an initial derivative liability of

$69,722.

The Company issued

12,454

additional warrants to Dr. Schwartz under the agreement in

February

and

March 2019,

which reduced the value of the derivative liability by

$8,665.

As of

March 31, 2019,

the recorded derivative liability related to the agreement is

$61,057.