Page 9 of 11 SEC Filing The Term Sheet provides for the reorganization of the Company (and the continuation of the Company’s corporate existence whose securities will be publicly traded), and payment, on or after the effective date of the confirmed plan, of all allowed administrative expenses, priority tax claims, unsecured priority claims and payment of general unsecured claims, each as more fully set forth in the Term Sheet. It further provides for the capitalization of a reorganized Company under two contemplated scenarios: (i) in the event the Company successfully raises $10,500,000 of committed capital (of which $3,000,000 can be in the form of backstop irrevocable capital call commitments) (“Successful Capital Raise”) by the effective date of the confirmed plan, then (a) the existing common equity shareholders will retain a to be determined percentage of the resulting common equity interests and (b) the Funds would be issued a non-convertible, no dividend preferred security in the amount of approximately $29.3 million which would have a liquidation preference equal to its face amount and receive an assignment of all of Company’s rights, title and interest in the existing Angel product line license agreement with Arthrex, Inc., all associated intellectual property owned by the Company and licensed thereunder and all royalty and payment rights which for purposes of the Chapter 11 Plan is valued at $15,000,000; or (ii) in the event the Company does not have a Successful Capital Raise, then (a) the Funds will receive 95% of the common equity of the Company and receive an assignment of all of Company’s rights, title and interest in the existing Angel product line license agreement with Arthrex, Inc., all associated intellectual property owned by the Company and licensed thereunder and all royalty and payment rights which for purposes of the Chapter 11 Plan is valued at $15,000,000 and (b) existing equity interests will retain 5% of the common equity of the Company. The Funds have agreed to support the confirmation of a plan of reorganization for the Company that is consistent with the Term Sheet and otherwise acceptable to the Funds and intend to continue to participate in discussions relating to a reorganization of the Company consistent with the Term Sheet. There can be no assurance however that a reorganization of the Company will occur or that any such reorganization will be effected upon the terms set forth in the Term Sheet. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Item 6 of the Schedule 13D is hereby amended by adding the following: On March 9, 2016, the Funds, Deerfield Mgmt, as administrative agent, and the Company entered into the Waiver and First Amendment to the DIP Financing Agreement. The description of the Waiver and First Amendment, including the Term Sheet attached thereto, set forth in Item 4 is incorporated herein by reference. Such description does not purport to be complete and is qualified in its entirety by reference to the full text of the Waiver and First Amendment (and the Term Sheet annexed as Exhibit B thereto), which is filed as Exhibit 99.8 hereto. Item 7. Material to be Filed as Exhibits Exhibit 99.8 Waiver and First Amendment (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on March 11, 2016). Follow Nuo Therapeutics Inc. (OTCMKTS:AURX)
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The Term Sheet provides for the reorganization of the Company (and the continuation of the Company’s corporate existence whose securities will be publicly traded), and payment, on or after the effective date of the confirmed plan, of all allowed administrative expenses, priority tax claims, unsecured priority claims and payment of general unsecured claims, each as more fully set forth in the Term Sheet. It further provides for the capitalization of a reorganized Company under two contemplated scenarios: (i) in the event the Company successfully raises $10,500,000 of committed capital (of which $3,000,000 can be in the form of backstop irrevocable capital call commitments) (“Successful Capital Raise”) by the effective date of the confirmed plan, then (a) the existing common equity shareholders will retain a to be determined percentage of the resulting common equity interests and (b) the Funds would be issued a non-convertible, no dividend preferred security in the amount of approximately $29.3 million which would have a liquidation preference equal to its face amount and receive an assignment of all of Company’s rights, title and interest in the existing Angel product line license agreement with Arthrex, Inc., all associated intellectual property owned by the Company and licensed thereunder and all royalty and payment rights which for purposes of the Chapter 11 Plan is valued at $15,000,000; or (ii) in the event the Company does not have a Successful Capital Raise, then (a) the Funds will receive 95% of the common equity of the Company and receive an assignment of all of Company’s rights, title and interest in the existing Angel product line license agreement with Arthrex, Inc., all associated intellectual property owned by the Company and licensed thereunder and all royalty and payment rights which for purposes of the Chapter 11 Plan is valued at $15,000,000 and (b) existing equity interests will retain 5% of the common equity of the Company.
The Funds have agreed to support the confirmation of a plan of reorganization for the Company that is consistent with the Term Sheet and otherwise acceptable to the Funds and intend to continue to participate in discussions relating to a reorganization of the Company consistent with the Term Sheet. There can be no assurance however that a reorganization of the Company will occur or that any such reorganization will be effected upon the terms set forth in the Term Sheet.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer.
Item 6 of the Schedule 13D is hereby amended by adding the following:
On March 9, 2016, the Funds, Deerfield Mgmt, as administrative agent, and the Company entered into the Waiver and First Amendment to the DIP Financing Agreement. The description of the Waiver and First Amendment, including the Term Sheet attached thereto, set forth in Item 4 is incorporated herein by reference. Such description does not purport to be complete and is qualified in its entirety by reference to the full text of the Waiver and First Amendment (and the Term Sheet annexed as Exhibit B thereto), which is filed as Exhibit 99.8 hereto.
Item 7. Material to be Filed as Exhibits
Exhibit 99.8 Waiver and First Amendment (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by the Company on March 11, 2016).
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