Subsequent Events |
12 Months Ended |
|---|---|
Dec. 30, 2023 | |
| Subsequent Events [Abstract] | |
| Subsequent Events |
Note 22: Subsequent events
The Company has evaluated subsequent events through the filing of this Form 10-K, and determined that there have been no events that have occurred that would require adjustments to disclosures in its consolidated financial statements other than as discussed below:
Warrant Purchase Agreement
On January 12, 2024, the Company entered into a Warrant Purchase Agreement with a certain institutional investor that had purchased a Common Stock Purchase Warrant on August 22, 2023, in connection with such Investor’s purchase of shares of the Company’s common stock. The Warrant is exercisable from time to time for an aggregate of 899,348 shares of the Company’s common stock with a per-share exercise price of $0.7561. Pursuant to the terms of the Warrant Purchase Agreement, the Company or assigns agreed to purchase the Warrant for an aggregate price of $250,000, of which $200,000 was paid at the closing of the transaction and the remaining $50,000 was paid on March 5, 2024. In connection with the January transaction, the Company assigned the Common Stock Purchase Warrant to an otherwise unaffiliated third party. See Note 16.
Soin Amendment
Effective January 24, 2024, the Company, Amol Soin (“Dr. Soin”), and Soin Therapeutics LLC, a wholly-owned subsidiary of ours that we had purchased from Dr. Soin entered into an amendment (the “Soin Amendment”) to the parties’ Agreement and Plan of Merger that was dated as of December 28, 2022 (the “Soin Agreement”). With reference to the Soin Agreement, the parties to the Soin Amendment agreed that the $3.0 million convertible tranche (the first of the three original conversion tranches under the Soin Agreement) would be payable to Dr. Soin in cash rather than through his conversion of shares of the Series S Convertible Preferred Stock (the “Soin Preferred”) that constituted the consideration under the Soin Agreement. We tendered the first $100,000 amended tranche cash payment to Dr. Soin in March 2024; the second amended tranche cash payment to Dr. Soin, also in the amount of $100,000, is due on July 1, 2024; and the third amended tranche cash payment to Dr. Soin, in the amount of $2.8 million, is due on December 31, 2024. During the pendency of the amended cash tranche period, Dr. Soin agreed that he would not convert any of his shares of Soin Preferred. After we have tendered the second and third amended tranche cash payments to Dr. Soin, his conversion rights for the second and third original conversion tranches will remain convertible under the original provisions of the Soin Agreement and the related Certificate of Designation for the Soin Preferred. If we do not tender the second and third amended tranche cash payments to Dr. Soin, we agreed that we will transfer to him the membership interests of Soin Therapeutics LLC, and he will transfer to us the shares of Soin Preferred for cancellation.
ICG Promissory Obligation
On February 7, 2024, the Company amended its outstanding related party promissory obligations in favor of ICG and in favor of Live Ventures to add convertibility provisions to each. The per-share conversion price for each obligation, as amended, was set at $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors provided its final approvals of the amendments on February 7, 2024.
Amended Promissory Note
On February 7, 2024, the Company entered into a promissory note with each of the holders of the amended promissory notes (see above). The initial principal amount of each note is $300,000, with an interest rate of 10% per annum. Pursuant to an amendment to each note, one hundred thousand dollars of principal, and accrued interest thereon, is due on September 7, 2024 for each note, and the balance of each note is due on December 31, 2024. At the Company’s option, the obligation under each note is convertible after the six-month anniversary thereof at a per-share conversion price of $0.61, subject to standard adjustments for (i) stock dividends and splits, (ii) subsequent rights offerings, and (iii) pro rata distributions. The Company’s board of directors approved the issuance of the notes on February 7, 2024.
Unit Purchase Agreements
On February 23, 2024, the Company entered into Unit Purchase Agreements with two otherwise unaffiliated third-party investors, pursuant to which each Investor agreed to purchase 408,163 units of securities from the Company, at a price per Unit of $0.735, for an aggregate purchase price of $300,000 per investor for an aggregate price of $600,000. Each Unit consists of one share of the Company’s common stock and one warrant to purchase an additional share of common stock. The per-Unit price is allocated as follows: $0.61 per share of common stock and $0.125 per Warrant. The Warrant has a three-year term and will be immediately exercisable. Each Warrant is exercisable at $0.61 per share. The Company intends to use the proceeds from the Unit Purchases for its working capital needs.
Isaac Consulting Agreement
On March 4, 2024, we entered into a two-year Consulting Agreement (the “Consulting Agreement”) with Jon Isaac, pursuant to which he will provide to us (the “Services”): (i) strategic financial advice, including growth strategies, capital
allocation, and financial restructuring; (ii) sales and business development advice, including for the acquisition of new clients and new products through networking, referrals, and marketing efforts for our prospective products; (iii) in-depth research and market intelligence on specific industries, sectors, and market trends; (iv) financial models and financial analysis to support strategic decision-making; (v) assistance, through site visits, in the preparation of new client offers and bids for proposed projects; (vi) weekly update calls with management to align on progress of objectives and goals; (vii) enhanced non-confidential materials; (viii) business risk management support; and (ix) other services to which we and he may be agree that will be memorialized in writing if, when, and as needed during the two-year term.
Mr. Isaac is the son of our Chief Executive Officer, but otherwise does not have a current relationship with us.
As compensation for the Services, we agreed to (i) assign to him two universal life insurance policies that relate to the life of one of the founders of our now-disposed legacy recycling business (the first policy has an accumulated value/surrender value of approximately $3,854 and the second has an accumulated value/surrender value of approximately $468); (ii) contingently tender to him funds in our Canadian counsel’s trust account in the event that the prospective Order of the Court of Appeal for Ontario Canada in the matter styled, Amtim Capital Inc. and Appliance Recycling Centers of America, Case No. COA-23-CV-0156, becomes the final Order of the Court, which amount we estimated not to exceed approximately US$220,000; (iii) issue to him 200,000 restricted shares of our common stock with the per-share value being the average of the Nasdaq historical NOCP closing price during the five trading days prior to our board approving the Consulting Agreement, which shares were awarded from our 2023 Equity Incentive Plan; and (iv) a two-year, straight 10% convertible promissory note in the initial principal amount of $500,000, with a per-share conversion price equivalent to the per-share value of the restricted common stock that he was granted ($1.16).
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