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POSITRON
CORPORATION
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(Exact
Name of Registrant as Specified in Its Charter)
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Texas
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000-24092
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76-0083622
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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1777
Maryland Avenue, Niagara Falls, New York
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14305
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(317)
576-0183
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(Registrant's
Telephone Number, Including Area Code)
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Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions (see General Instruction A.2. below):
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☐
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Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Explanatory
Note
: Positron Corporation (the “Registrant”) is filing this Current Report on Form 8-K in order to disclose
and provide information regarding the Registrant since the Registrant’s last filing with the Securities and Exchange Commission
(the “Commission”) on May 10, 2016 and not previously disclosed.
Cautionary
Note Regarding Forward-Looking Statements
This
Current Report on Form 8-K may include “forward-looking” statements as defined in Section 27A of the Securities Act
of 1933 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”),
the Private Securities Litigation Reform Act of 1995 (the “PSLRA”) or in releases made by the Securities and Exchange
Commission (“SEC”), all as may be amended from time to time. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause the actual results, performance or achievements of Positron
Corporation, or general industry or broader economic performance in global markets in which Positron operates or competes, to
differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements.
Statements that are not historical fact are forward-looking statements. Forward-looking statements can be identified by, among
other things, the use of forward-looking language, such as the words “plan,” “believe,” “expect,”
“anticipate,” “intend,” “estimate,” “project,” “may,” “will,”
“would,” “could,” “should,” “seeks,” or “scheduled to,” or other similar
words, or the negative of these terms or other variations of these terms or comparable language, or by discussion of strategy
or intentions. These cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with
the intention of obtaining the benefits of the “safe harbor” provisions of such laws. Positron cautions investors
that any forward-looking statements made by Positron are not guarantees or indicative of future performance. Important assumptions
and other important factors that could cause actual results to differ materially from those forward-looking statements with respect
to Positron, include, but are not limited to, the risk that Positron may not successfully grow its business as expected and those
factors, risks and uncertainties that are described in periodic securities filings by Positron with the SEC. Although Positron
believes that its plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable,
actual results could differ materially from a projection or assumption in any forward-looking statements. Positron’s future
financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent
risks and uncertainties. The forward-looking statements contained in this press release are made only as of the date hereof, and
Positron does not have or undertake any obligation to update or revise any forward-looking statements whether as a result of new
information, subsequent events or otherwise, unless otherwise required by law.
BACKGROUND
As
previously disclosed on May 4, 2016, on August 28, 2015, three creditors of Positron Corporation (the “Registrant”)
filed an involuntary Chapter 11 petition against the Registrant in the U.S. Bankruptcy Court for the Northern District of Texas,
Lubbock Division (“Bankruptcy Court”) under Case No. 15-502015-rlj.
As
previously disclosed, the Registrant and the petitioning creditors filed a joint motion to approve a structured dismissal agreement
pursuant to bankruptcy rule 9019 on May 2, 2016. A hearing to consider approval of the structured dismissal agreement was to be
held on June 22, 2016.
The
structured dismissal agreement was not approved by the Bankruptcy Court, and on September 7, 2016 an Order for Relief was entered
by the Bankruptcy Court.
On
November 22, 2016, the Bankruptcy Court granted the Company’s motion to approve a settlement agreement whereby the Registrant
transferred all of the assets of Positron’s subsidiary Manhattan Isotope Technology, LLC to DX, LLC (“DX”) (
DX is one of the three petitioning creditors, DX, LLC. is owned by Cecil O’Brate a now former Positron shareholder) in exchange
for the forgiveness of a secured promissory note in the amount of $451,590 held by DX and the forgiveness of all claims by DX
and Jason and Suzanne Kitten. In addition to the above, Cecil O’Brate, Jason and Suzanne Kittens and the O’Brate Group
agreed to relinquish all of the shares held by them of the Registrant’s capital stock.
On
March 27, 2017, the Registrant filed a Plan of Reorganization (“Plan”) and Disclosure Statement (the “Disclosure
Statement”) with the Bankruptcy Court. The Plan was solicited by the Registrant and approved by the four classes entitled
to vote on the Plan: Class 1-Claim of Tradex Global Advisors LLC (“Tradex”); Class 3-Priority Wage Claims; Class 5-General
Unsecured Claims; and Class 6-General Unsecured Claims-Insider Notes of the Registrant.
On
April 26, 2017, following a confirmation hearing, the Bankruptcy Court entered an order (“Confirmation Order”) confirming
the Registrant’s amended Plan.
The
following is a summary of the material terms of the Plan (capitalized terms used but not defined in this Current Report on Form
8-K have the meaning set forth in the Plan):
The
Plan provided for the payment of administrative and certain priority claims in full, payment of $125,000 to Tradex from the sale
of the Registrant’s real property located in Westmont, IL (“Westmont Real Property”), payment in full of priority
wage claims in Class 3 over a period of thirty six (36) months, a distribution of a total of $50,000 to Class 5 General Unsecured
Claims over a period of thirty six (36) months (representing approximately a 5% distribution) and granting Class 6 General Unsecured
Claims-Insider Notes an option to convert their notes to equity in the Reorganized Company. All payments and distributions under
the Plan were funded by the sale of the Westmont Real Property and by the going forward business operations of the Registrant.
On
October 4, 2017, the Registrant was granted a Final Decree for Reorganization in Texas Court (the “Final Decree”).
The Final Decree set forth a schedule for repayment of obligations which is currently being met. All shareholder classes remained
intact, except Cecil O’Brate whose 3,276,298 shares were returned to the Registrant’s treasury in connection with
the DX settlement.
Item
1.01. Entry into a Material Definitive Agreement
On
April 26, 2017, the Bankruptcy Court entered into an order confirming the Company’s Amended Plan of Reorganization. The
terms of the Plan are more fully set forth in Item 1.03 below and are incorporated herein by reference.
Item 1.03.
Bankruptcy or Receivership.
As
previously disclosed on May 4, 2016, on August 28, 2015, three creditors of Positron Corporation (the “Registrant”)
filed an involuntary Chapter 11 petition against the Registrant in the U.S. Bankruptcy Court for the Northern District of Texas,
Lubbock Division (“Bankruptcy Court”) under Case No. 15-502015-rlj.
As
previously disclosed, the Registrant and the petitioning creditors filed a joint motion to approve a structured dismissal agreement
pursuant to bankruptcy rule 9019 on May 2, 2016. A hearing to consider approval of the structured dismissal agreement was to be
held on June 22, 2016.
The
structured dismissal agreement was not approved by the Bankruptcy Court, and on September 7, 2016 an Order for Relief was entered
by the Bankruptcy Court.
On
March 27, 2017, the Registrant filed a Plan of Reorganization (“Plan”) and Disclosure Statement (the “Disclosure
Statement”) with the Bankruptcy Court.
The
Plan was solicited by the Registrant and approved by the four classes entitled to vote on the Plan: Class 1-Claim of Tradex Global
Advisors LLC (“Tradex”); Class 3-Priority Wage Claims; Class 5-General Unsecured Claims; and Class 6-General Unsecured
Claims-Insider Notes of the Registrant.
On
April 26, 2017, following a confirmation hearing, the Bankruptcy Court entered an order (“Confirmation Order”) confirming
the Registrant’s amended Plan.
The
following is a summary of the material terms of the Plan (capitalized terms used but not defined in this Current Report on Form
8-K have the meaning set forth in the Plan):
The
Plan provided for the payment of administrative and certain priority claims in full, payment of $125,000 to Tradex from the sale
of the Registrant’s real property located in Westmont, IL (“Westmont Real Property”), payment in full of priority
wage claims in Class 3 over a period of thirty six (36) months, a distribution of a total of $50,000 to Class 5 General Unsecured
Claims over a period of thirty six (36) months (representing approximately a 5% distribution) and granting Class 6 General Unsecured
Claims-Insider Notes an option to convert their notes to equity in the Reorganized Company. All payments and distributions under
the Plan were funded by the sale of the Westmont Real Property and by the going forward business operations of the Registrant.
On
October 4, 2017, the Registrant was granted a Final Decree for Reorganization in Texas Court (the “Final Decree”).
The Final Decree set forth a schedule for repayment of obligations which is currently being met. All shareholders class remained
intact, except for the O’Brate Group and the Kittens whose 3,276,298 shares were returned to the Registrant’s treasury.
Item
2.02. Disposition of Assets
On
April 17, 2017, the Registrant sold its Westmont Real Property. The terms of the sale of the Westmont Real Property are more fully
set forth in Item 1.03 above and are incorporated herein by reference.
Item
5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
On
or about February 27, 2018, a majority of the Registrant’s shareholders voted to remove Corey N. Conn as the Registrant’s
sole member of the Board of Directors. Also on that date, Adel Abdullah was appointed to the Board of Directors.
On
or about March 16, 2018, Corey N. Conn was terminated as the Registrant’s Chief Financial Officer and/or from any other
office he may have had as of that date. Also on March 16, 2018, Adel Abdullah was appointed the Registrant’s President.
On
May 25, 2018, Aaron Hargrave was appointed Vice President of the Registrant.
Adel
Abdullah, 45, President and Director
Prior
to his appointment as Director on February 27, 2018 and since 2006, Mr. Abdullah served as the Registrant’s Director of
Service & Operations where he lead all technical and clinical efforts of the Registrant’s PET Systems, business operations
and services. Mr. Abdullah has degree in Aerospace and Mechanical Engineering from University of Arizona. The Registrant believes
as a result of Mr. Abdullah’s twenty three (23) years of experience in medical imaging and technology in multiple capacities
and years of services with the Company, he is very qualified for the appointed position.
Aaron
Hargrave, 32, Vice President
Prior
to his appointment as Vice President on May 25, 2018 and since 2010, Mr. Hargrave served as the Registrant’s Clinical Applications
Specialist, where he lead training, support, and clinical efforts of the Registrant’s PET Systems and Software. Mr. Hargrave
has degree in Nuclear Medicine Technology from University at Buffalo. The Registrant believes as a result of Mr. Hargrave’s
ten (10) years of experience in medical imaging and applications and years of service with the Company, he is qualified for the
appointed position.
Item
5.07. Submission of Matters to a Vote of Security holders.
The
disclosures set forth in Item 5.02 are hereby incorporated by reference to this Item 5.07.
Item 9.01 Financial
Statements and Exhibits
(d)
Exhibits
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SIGNATURES
PURSUANT
TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF
BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
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POSITRON
CORPORATION
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Date:
July 31, 2018
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By:
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/s/ Adel Abdullah
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Name:
Adel Abdullah
Title:
President, Director
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