|3 Months Ended|
Sep. 30, 2023
|Subsequent Events [Abstract]|
Note 9. Subsequent Events
On October 5, 2023, the Company terminated without cause the employment of Simon Allen, the Company’s Chief Executive Officer. In connection with his termination, Mr. Allen agreed to severance payments equal to nine months of annual base compensation plus reimbursement for COBRA premiums paid by him for a maximum of 12 months. Mr. Allen resigned from the Company’s Board of Directors on October 5, 2023.
On October 6, 2023, the Board of Directors appointed Richard (Richie) Anthony Cunningham as the Company’s Chief Executive Officer and as a member of the Board of Directors. Pursuant to his Employment Agreement, on October 6, 2023, the Company granted Mr. Cunningham a stock option under the Company’s 2020 Stock Incentive Plan to purchase up toshares of the Company’s common stock at an exercise price equal to the closing price of the common stock on the grant date. This option vests in 16 equal quarterly installments commencing on January 1, 2024. In addition, the Company granted Mr. Cunningham a performance-based stock option to purchase up to shares of common stock at an exercise price per share equal to the closing price of the common stock on the date of grant. This option vests in installments upon achievement of certain business development, clinical and corporate milestones.
Loan and Security Agreement
On November 13, 2023, the Company entered into a Loan and Security Agreement (“LSA”) with 22NW, LP (“22NW”) and JFL Capital Management LLC (“JFL” and collectively with 22NW, the “Lenders”) which will allow the Company to draw up to $10 million (the “Facility Amount”) as needed to fund future operations until the third anniversary of the LSA (the “Maturity Date”). Pursuant to the LSA, if the Company elects to draw on the Facility Amount (an “Advance”), JFL has the right, but not the obligation to fund 50% of the Advance at the request of the Company. If JFL elects not to fund 50% of the Advance, then 22NW will fund 100% of the Advance. The outstanding balance will accrue interest at 0.25% per annum and no fee will be assessed on the unused balance. Upon the draw of at least $3 million in the aggregate, the LSA will be collateralized by substantially all of the Company’s assets. All principal drawn and interest accrued under the LSA will be due and payable on the Maturity Date.
The Company issued 50,000 Advance Shares will be issued in connection with the first Advance. The Advance Shares shall be issued to the Lenders on a pro rata basis according to the portion of each Advance such Lender funds.shares of common stock to 22NW upon the signing of the LSA. The Company will also issue shares of common stock per dollar loaned in each Advance (rounded up or down to the nearest whole share) up to a maximum aggregate of (the “Advance Shares”); provided that a minimum of
Joseph F. Lawler, M.D., Ph.D., our founder and a member of our Board of Directors, is the founder and Managing Member of JFL. Aron R. English, the President and Portfolio Manager of 22NW, and Nat Calloway, the lead for 22NW, are each members of our Board of Directors.
The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef