Note 19 - Related Parties

12 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Related Party Transactions Disclosure [Text Block]

Note 19. Related Parties

Prior to the Merger, David A. Jenkins, the Company’s current Executive Chairman of the Board and Chief Executive Officer, and Old Catheter’s Chairman of the Board of Directors, and his affiliates held approximately $25.1 million of Old Catheter’s Convertible Promissory Notes, or the Notes, that were converted into 7,856.251 shares of Series X Convertible Preferred Stock in connection with the Merger (see Note 3, Business Combination, and Note 14, Preferred Stock). In consideration for forgiving the interest accrued but remaining unpaid under the Notes in an aggregate amount of approximately $13.9 million, Mr. Jenkins and his affiliates also received royalty rights equal to approximately 12% of the net sales, if any, of LockeT, commencing upon the first commercial sale and through December 31, 2035. The Company entered into an additional royalty agreement for the LockeT device with Auston Locke, who is the son of Robert Locke, VP of Product Development. Under this agreement, the Company will pay a 5% royalty rate on net sales up to $1 million in cumulative royalties. If a patent is obtained, the royalty rate will be 2% of net sales until the Company has paid a total of $10 million in cumulative royalties. Refer to Note 2, Summary of Significant Accounting Policies and Note 10, Royalties Payable for additional information over the royalties payable due to these related parties.

In addition to the shares described above that were issued in connection with the Notes, Mr. Jenkins and his affiliates received 1,325.838 shares of Series X Convertible Preferred Stock in the Merger, and Mr. Jenkins’ adult children received 1,284.344 shares of Series X Convertible Preferred Stock in the Merger, all in exchange for their equity interests in Old Catheter in accordance with the Merger exchange ratio.

In connection with the Merger (see Note 3, Business Combination), the Company assumed $1.4 million of accrued expenses and advances, of which $1.1 million was due to Mr. Jenkins and was paid on January 10, 2023.

Mr. Jenkins’ daughter, the Company’s non-executive Chief Operating Officer, received options to purchase 14,416 shares of the Company’s common stock upon the closing of the Merger in exchange for her options to purchase shares of Old Catheter common stock, converted based on the exchange ratio in the Merger. Of the total options to purchase 14,416 shares of the Company’s common stock, 14,081 options have an exercise price of $5.90 per share, and the remaining 335 options have an exercise price of $20.20 per share.

Following stockholder approval on March 21, 2023, the Company issued 99,182 shares of common stock to Mr. Jenkins and affiliates upon conversion of 991.828 shares of Series X Convertible Preferred Stock, and 23,532 shares of common stock to his adult children upon conversion of 235.320 shares of Series X Convertible Preferred Stock.

On May 1, 2024, Marie-Claude Jacques, the Company’s Chief Commercial Officer, received a non-plan option to purchase 25,000 shares of the Company’s common stock. The options have an exercise price of $5.321 per share, vest at 20% per year for 5 years and expire in May 2034.

During the year ended December 31, 2024, the Company entered into various short-term promissory notes with various related parties (the “Related Party Notes”). These Related Party Notes had a maturity date of August 30, 2024 and interest rates of 8% per annum. On August 23, 2024, the Notes were amended to extend the maturity date to January 31, 2026 and increase the interest rate to 12% per annum effective August 31, 2024. See Note 9, Notes Payable for further information.

The related parties and the amounts owed to each related party are summarized in the following table (in thousands):

Related Party	Issuance Date	Principal Amount		Interest Paid		Interest Accrued
David Jenkins	5/30/2024	$	500	$	10	$	20
FatBoy Capital	6/25/2024	$	150	$	2	$	6
FatBoy Capital	7/1/2024	$	250	$	4	$	10
FatBoy Capital	7/18/2024	$	100	$	1	$	4
Jenkins Family Charitable Institute	7/25/2024	$	500	$	4	$	21

On September 3, 2024, the Jenkins Family Charitable Institute also invested approximately $500,000 in the Company’s public offering and received 265,000 shares of common stock; 235,000 pre funded warrants with an exercise price of $0.0001 and no expiration date; 500,000 Series H Warrants with an exercise price of $1.00 per share that expire on March 3, 2025; 500,000 Series I Warrants with an exercise price of $1.00 per share that expire on March 3, 2026; and 500,000 Series J Warrants with an exercise price of $1.00 per share that expire on September 3, 2029. 

On October 28, 2024, the Jenkins Family Charitable Institute exercised all 235,000 pre funded warrants and received 235,000 shares of common stock of the Company.  On December 31, 2024, the Jenkins Family Charitable Institute distributed 450,000 Series J warrants to its trustee and two advisors, who are daughters of Mr. Jenkins.