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Related Party Transactions
9 Months Ended
Sep. 30, 2016
Related Party Transactions [Abstract]  
Related Party Transactions

Note 7 — Related Party Transactions

 

Effective October 2015, the Company entered into a three-year management services agreement with HCP/Advisors LLC, an affiliate of a director of the Company, which replaced a prior contemplated management services agreement with HCFP LLC, another affiliate of the director and certain other officers and directors of the Company. Pursuant to the HCP/Advisors LLC agreement, such entity has agreed to provide the Company with certain management services, including without limitation identifying potential corporate opportunities, general business development, corporate development, corporate governance, marketing strategy, strategic development and planning, coordination with service providers, and other advisory services as may be mutually agreed upon. The Company has agreed to pay HCP/Advisors LLC an initial monthly fee of $35,000 commencing as of November 1, 2015 and thereafter a monthly fee of $25,000. Under this agreement, the Company incurred fees of $75,000 and $225,000 during the three and nine months ended September 30, 2016, respectively, which is included in “Formation and operating costs” in the accompanying condensed consolidated statements of operations.

 

Effective September 2016, the Company entered into a consulting agreement with HCFP /Strategy Advisors LLC, an affiliate of certain directors and officers of the Company (the “HCFP Strategic Advisory Agreement”). Under the HCFP Strategic Advisory Agreement, HCFP /Strategy Advisors has been engaged for an initial term of five months to provide various strategic advisory services, including: strategic business planning, to identify and assist with potential sources of financing arrangements, promotion of the Company to various potential investors, and to provide strategic advisory services as reasonably requested by the Company. The HCFP Strategic Advisory Agreement provides for total fee payments to HCFP /Strategy Advisors LLC of $110,000, with $30,000 paid upon execution of the agreement and $20,000 paid per month thereafter. The Company incurred expense of $30,000 in the three and nine months ended September 30, 2016 under the HCFP Strategic Advisory Agreement, which is included in “Formation and operating costs” in the accompanying condensed consolidated statements of operations.

 

Effective September 2016, the Company also entered into a consulting agreement with Swartwood Hesse, Inc., an affiliate of HCFP /Strategy Advisors (which, as noted above, is an affiliate of certain directors and officers of the Company) (the “Swartwood Hesse Financial Advisory Agreement”). Under the Swartwood Hesse Financial Advisory Agreement, Swartwood Hesse has been engaged for an initial term of five months to provide advisory services regarding potential financing arrangements, assisting the Company with its investors relations, and to provide other financial advisory services as reasonably requested by the Company. The Swartwood Hesse Financial Advisory Agreement provides for total fee payments to Swartwood Hesse of $15,000, which was paid upon execution of the agreement. The Company may incur additional fees for investment banking services under a separate written agreement to be executed between the Company and Swartwood Hesse, Inc. The Company incurred expense of $15,000 in the three and nine months ended September 30, 2016 under the Swartwood Hesse Financial Advisory Agreement, which is included in “Formation and operating costs” in the accompanying condensed consolidated statements of operations.

 

Effective October 1, 2016, the Company and Michael J. Glennon, Vice Chairman and a member of the Board of Directors, entered into a consulting agreement (the Glennon Consulting Agreement), under which Mr. Glennon provides the Company with services and advice relating to the successful development and commercialization of medical device products, including interfacing with outsourced contract manufacturers, assisting with development of the supply chain and establishing commercialization channels with independent distributors and strategic corporate partners, and providing such other services as requested by the Company’s Chairman and Chief Executive Officer. As compensation for his services, Mr. Glennon received an initial payment of $37,500 for past services upon execution of the consulting agreement, with the initial payment recognized as an accrued expense at September 30, 2016, and will receive a monthly retainer of $12,500 for each month thereafter. The Glennon Consulting Agreement may be terminated by either party upon 30 days’ prior written notice, except either party may terminate the Glennon Consulting Agreement immediately for cause (which includes an uncured material breach of the agreement). The Glennon Consulting Agreement also will terminate immediately if the parties agree to the employment of Mr. Glennon on a full-time basis. The Company incurred fees of $37,500 in the three and nine months ended September 30, 2016 under the Glennon Consulting Agreement, which is included in “Formation and operating costs” in the accompanying condensed consolidated statements of operations.