CHICAGO, May 10, 2016 /PRNewswire/ -- Positron Corporation (OTC Markets: POSCE) (the "Company"), a nuclear medicine healthcare company, announced today that the Company entered into a settlement agreement for structured dismissal. If confirmed, the settlement will allow the Company to avoid entering a bankruptcy proceeding.
On May 2, 2016, the Company and its petitioning creditors filed a Joint Motion to Approve Agreed Structured Dismissal Pursuant to Bankruptcy Rule 9019. Any shareholders desiring to object to the terms of the Structured Dismissal Agreement have until May 26, 2016, to file a written objection with the Clerk of the United States Bankruptcy Court, 1205 Texas Avenue, Lubbock, Texas 79401. The petitioning creditors filed an involuntary chapter 11 bankruptcy petition against the Company in the U.S. Bankruptcy Court for the Northern District of Texas, Lubbock Division, in a case pending under Case No. 15-502015-rlj, and styled: In re: Positron Corporation.
A hearing to consider approval of the Structured Dismissal Agreement will be held in the Courtroom of the Honorable Robert L. Jones, U.S. Bankruptcy Judge, located on the 3rd floor of the George H. Mahon Federal Building and Court House, 1205 Texas Avenue, Lubbock, Texas, commencing at 1:30 p.m. on Wednesday, June 22, 2016.
A complete copy of the Notice of Deadline for Filing Objections to Joint Motion to Approve Agreed Structured Dismissal Pursuant to Bankruptcy Rule 9019 and Notice of Final Hearing is available on the Company's website at: http://www.positron.com/press/post/notice-of-deadline-for-filing-objections-to-joint-motion-to-approve-agreed positron.com). Following is a summary of certain provisions of the Structured Dismissal Agreement and is not intended to be a complete description of such:
1. Once the Order approving the Motion is final and non-appealable, the Company will purchase any and all capital stock of the Company owned by Cecil O'Brate (the "O'Brate Shares") for the total consideration of One Hundred Thousand Dollars ($100,000). The Company will issue a promissory note payable to Cecil O'Brate in the amount of $100,000, payable at 4.5% interest in 12 monthly installments of $8,537.85 each (the "O'Brate Note"). Such promissory note will be secured by a pledge of the O'Brate Shares.
2. Within 10 days of the Order becoming final and non-appealable, the Company will convey either: (i) all of the assets of the Manhattan Isotope Technologies, LLC ("MIT"); or (ii) the membership interests of MIT, to a company and/or entity designated by DX, LLC (the "MIT Transfer"). In exchange for the MIT Transfer, the promissory note in the original principal amount of $700,000 acquired by DX, LLC from Los Alamos National Bank (the "LANB Note"), along with all related guarantees, security interest, and rights in connection therewith, will be fully extinguished, deemed satisfied, paid in full, and discharged.
3. DX, LLC may employ Jason Kitten and Suzanne Kitten, or a consulting firm of its choice, to conduct due diligence concerning the operations of the MIT facility located in Lubbock, Texas. In exchange for the opportunity to conduct due diligence as described herein, DX, LLC or O'Brate shall advance to the Company sufficient funds necessary to pay all payroll expenses associated with the two current employees of MIT effective as of April 15, 2016, and shall also directly pay to Los Alamos National Laboratories sufficient funds to pay the licensing fees associated with the recycling permit granted by the Los Alamos National Laboratories. Such obligations of DX, LLC or O'Brate shall cease upon the entry of any order by the Bankruptcy Court denying approval of the Agreement, or upon a determination by the Bankruptcy Court that any party has materially breached any of the terms of this Agreement.
4. The Company shall attempt to sell the real property it owns located at 530 Oakmont Lane, Westmont, IL. Upon closing of the sale the net proceeds will be distributed in the order of priority established by the Bankruptcy Code to holders of administrative claims and the allowed claims of unsecured creditors, provided, however, that the total of such administrative expenses shall not exceed 50% of the sales price.
5. The Parties will sign mutual releases releasing the Parties and their representatives from any claims that the parties may have or could have against each other.
6. The Parties stipulate that the Petitioning Creditors have valid claims that are not subject to offset or any other dispute as to amount or liability. The claims shall be paid their pro-rata share of distributions paid to unsecured creditors. The Petitioning Creditors, including DX, LLC, the Kittens, Moress, LLC, and Posi-Med, LLC shall agree to support the Motion to Approve Structured Dismissal Agreement and shall not have the right to opt out of the distributions to unsecured creditors.
7. Any unsecured creditors who do not desire to release their claim in exchange for their pro-rata share of distributions paid to unsecured creditors may opt out and pursue such other remedies to collect their indebtedness as may be available to them.
8. Should the Bankruptcy Court determine the Company has failed to comply with the terms of the Structured Dismissal Agreement, it shall file a voluntary bankruptcy petition under chapter 11 of the Bankruptcy Code.
9. Upon the completion of all terms included in the Agreement, the Petitioning Creditors and the Company shall prepare and file a Joint Motion to Dismiss the Involuntary Petition.
Positron Corporation is a nuclear medicine healthcare company vertically integrating all the segments of nuclear cardiology; providing an end-to-end solution for cardiac PET. Through proprietary PET imaging systems, radiopharmaceuticals and radioisotopes solutions, Positron enables healthcare providers to more accurately diagnose disease and improve patient outcomes, while practicing cost effective medicine. Positron's unique products, market position and approach in securing the supply chain are substantial advantages, further accelerating the adoption of cardiac PET and growth of nuclear cardiology. Positron is redefining the industry. More information about Positron is available at www.positron.com.
Forward Looking Statements: Statements in this document contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are based on many assumptions and estimates and are not guarantees of future performance. These statements may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Positron Corporation to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Positron assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation those set forth as "Risk Factors" in our filings with the Securities and Exchange Commission.
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SOURCE Positron Corporation