Item 1.01 Entry into a Material Definitive Agreement.
On June 28, 2019, Acura Pharmaceuticals,
Inc. (“we” “Acura” or the “Company”) entered into a License, Development and Commercialization
Agreement (the "Agreement") with Abuse Deterrent Pharmaceuticals, LLC, a Kentucky limited liability company (“AD
Pharma”), a special purpose company organized by investors that will provide financing, as described below, for Acura’s
operations and completion of development of LTX-03 (hydrocodone bitartrate with acetaminophen) immediate-release tablets utilizing
Acura’s patented LIMITx™ technology which addresses the consequences of excess oral administration of opioid tablets,
the most prevalent route of opioid overdose and abuse.
The Agreement grants AD Pharma exclusive
commercialization rights in the United States to LTX-03. The Agreement provides for monthly license payments by AD Pharma to us
of $350,000 up to the earlier of 18 months or FDA’s acceptance of a New Drug Application (“NDA”) for LTX-03 and
reimbursement by AP Pharma of Acura’s LTX-03 outside development expenses. Upon commercialization, as defined, of LTX-03,
Acura will receive stepped-up royalties on sales and is eligible for additional payments based upon the achievement of certain
milestones.
AD Pharma may terminate the Agreement at
any time. Additionally, if the NDA for LTX-03 is not accepted by the FDA within 18 months, AD Pharma may terminate the Agreement
and take ownership of the intellectual property rights of the Company to LTX-03.
The inclusion of a description of the Agreement
under Item 1.01 of this Current Report on Form 8-K shall not be deemed an acknowledgement that the Agreement is a material agreement
not made, or deemed not to be made, in the ordinary course of our business.
Item 1.01 Loan Agreement with John Schutte
On June 28, 2019, we entered into a Promissory
Note with John Schutte that consolidated existing promissory notes into a single Note for $6.0 million. Terms of the consolidated
loan provide for a July 1, 2023 maturity date rather than the previous maturity date of January 2, 2020 for the loan from Mr. Schutte,
interest at fixed rate of 7.5% per annum, and deferral of all payments of principal and interest to maturity. We also granted to
Mr. Schutte conversion rights of the $6.0 million loan into Acura common stock at $0.16 per share, issued to him a warrant to purchase
10.0 million shares of the Company’s common stock at a price of $0.01 per share and granted a security interest in all Acura
assets.
With our consent, Mr. Schutte assigned
and transferred to AD Pharma all of his right, title and interest in this Note, Security Agreement and Warrant effective June 28,
2019.
The shares issuable to AD Pharma upon
conversion of the Note and exercise of the Warrant represent 69% of the shares of the Company calculated in accordance with Rule
13d-3 promulgated under the Securities Exchange Act.
Item 1.01 License, Commercialization and Option Agreement
with MainPointe Pharmaceuticals, LLC
On June 28, 2019, we granted authority
to MainPointe Pharmaceuticals, LLC (MainPointe) to assign to AD Pharma the option and the right to add, as an Option Product to
the Nexafed® Agreement, a Nexafed® 12-hour dosage (an extended-release pseudoephedrine hydrochloride product utilizing
the IMPEDE® Technology in 120mg dosage strength). In March 2017, we granted MainPointe an exclusive license to our IMPEDE ®
Technology to commercialize our Nexafed® and Nexafed® Sinus Pressure + Pain Products in the United States and Canada.
Mr. Schutte is our largest shareholder
and, as of March 15, 2018, to our knowledge beneficially owned approximately 47.5% of our common stock (after giving effect to
the exercise of warrants to purchase 1,782,531 shares of Common Stock that he holds). Mr. Schutte also controls MainPointe and,
we have been informed by Mr. Schutte, is a member of AD Pharma. The percentage of stock beneficially owned by Mr. Schutte does
not include shares beneficially owned by AD Pharma.