Item 1.01. Entry into a Material Definitive Agreement
On December 30, 2022, Assure Holdings Corp. (the “Company”) entered into an asset purchase agreement (the “Purchase Agreement”) with each of NervePro LLC, a Colorado limited liability company (“NervePro”), Neuroprotect Neuromonitoring, LLC, a Colorado limited liability company (“Neuroprotect”), Neurotech Neuromonitoring, LLC, a Colorado limited liability company (“Neurotech”), and Nervefocus, LLC, a Colorado limited liability company (“Nervefocus,” and together with NervePro, Neuroprotect, and Neurotech, the “Sellers,” and each, a “Seller”). Pursuant to the Purchase Agreement, the Company agreed to purchased all assets of the Sellers related to the Sellers’ operating businesses that provide intraoperative neuromonitoring and related services (the “Business”) and assume certain liabilities of the Seller. The acquired assets include, but are not limited to, tangible personal property, inventory, records, prepaid expenses, contracts, licenses, warranties, intellectual property, goodwill, telephone numbers and email addresses, software, advertising, and accounts receivable related to work performed or billed on or after December 31, 2022 through the Closing (as defined below), including, without limitation, all rights to bill and collect for cases performed by Sellers between December 1, 2022 and Closing that were not billed or collected prior to the Closing, or that were billed between December 1, 2022 and Closing but were not collected in whole or in part, and the right to rebill any cases performed by Sellers between December 1, 2022 and Closing (“Acquired AR”) (collectively, the “Assets”); but excluding certain assets including cash and cash equivalents, retained liabilities, corporate records and documents, employee benefit-related files and records, insurance policies, tax assets, rights to actions, suits or claims, and rights which accrue to Sellers under the Purchase Agreement.
The Assets were acquired at Closing for a purchase price of 1,500,000 shares of common stock of the Company (the “Shares”). The acquisition of the Assets closed on December 30, 2022 (the “Closing”). The common stock is subject to regulatory and securities law restrictions.
During the one hundred and twenty (120) day period following the Closing, Sellers have the sole right to continue to collect all outstanding accounts receivable of the Business as of the Closing other than the Acquired AR. On or before the end of the one hundred and twenty (120) days following the Closing, Sellers will have the option, at their sole discretion, to transfer any remaining outstanding accounts receivable of the Business as of the Closing other than the Acquired AR to the Company and, in such event, the Company will have the sole right to collect such outstanding accounts receivable (any such transferred accounts receivable, the “Bonus AR”); provided, however, that in its sole discretion, the Company may reject assignment of any accounts receivable that constitute the Bonus AR.
The Company shall pay to Sellers during the 24-month period from the transfer date of the Bonus AR (the “Receivable Bonus Period”) an amount equal to the product of: (i) 45% multiplied by (ii) the gross amount of the Bonus AR collected by the Company during such calendar month during the Receivable Bonus Period (the “Receivable Bonus”).
Any Receivable Bonus will be paid to each Seller in the following percentages (the “Pro Rata Share”): NervePro: 16%; Neuroprotect: 34%; Neurotech: 34%, and Nervefocus 16%. The parties agree that no costs or expenses of the Company arising from or related to the Bonus AR will be applied to offset or reduce the Receivable Bonus. For clarity, no Receivable Bonus will be owed or paid with respect to any Acquired AR.
The Company has sole and absolute discretion with regard to all matters relating to the Company’s operations, including the operation of the Business and whether or not to collect (and what if efforts, if any, are used to collect) Bonus AR. Purchaser has no obligation to operate the Business in order to achieve any Receivable Bonus payment or to maximize the amount of any Receivable Bonus payment.
The Purchase Agreement contains customary representations, warranties and covenants from each of the parties. Under the Purchase Agreement, the Sellers have agreed to indemnify us for (a) any misrepresentation, omission, or breach by Sellers of any representation or warranty contained in the Purchase Agreement; (b) any nonperformance, failure to comply, or breach of or default by Sellers of any covenant, promise, or agreement of Sellers contained in this Agreement; (c) any retained liabilities of the Sellers; and (d) any excluded assets of the Sellers. Under the Purchase Agreement, the Company has agreed to indemnify the Sellers for (a) any misrepresentation, omission, or breach by the Company of any representation or warranty contained in the Purchase Agreement; (b) any
