|9 Months Ended|
Apr. 30, 2022
Note 13—Subsequent Events
On April 28, 2022, the Board of Directors (the “Board”) of OncoSec Medical Incorporated (the “Company”) approved the appointment of Robert H. Arch, Ph.D., as the Company’s President and Chief Executive Officer, effective May 2, 2022. In connection with Dr. Arch’s appointment as the Company’s President and Chief Executive Officer, the Company entered into an executive employment agreement, dated April 28, 2022, and effective as of May 2, 2022 (the “Employment Agreement”), with Dr. Arch that governs the terms of Dr. Arch’s employment with the Company. The Employment Agreement provides that Dr. Arch will be entitled to an initial annual base salary of $505,000 and will be eligible to receive an annual bonus of up to 40% of his annual base salary, with a pro-rated annual bonus for fiscal year 2022, based on the achievement of certain performance goals. The Employment Agreement also provides that Dr. Arch will be eligible to receive a signing bonus equal to $150,000, payable in three installments over Dr. Arch’s first year of employment, provided that Dr. Arch is employed on each applicable installment date. In connection with his appointment, the Company granted Dr. Arch non-qualified stock options to purchase shares of the Company’s common stock at an exercise price equal to the closing price of the Company’s common stock on the Nasdaq Capital Market on May 2, 2022, as an inducement material to Dr. Arch entering into employment with the Company in accordance with Nasdaq Listing Rule 5635(c)(4), which grant was made outside of the Company’s 2011 Stock Incentive Plan. The stock options will vest quarterly, commencing on the first completed calendar quarter after the date of grant, subject to Dr. Arch’s continuous service with the Company through each such vesting date.
On June 2, 2022, the Company received notice (the “Notice”) from the Nasdaq Stock Market LLC (“Nasdaq”) that the Company is not in compliance with Nasdaq Listing Rule 5550(a)(2), as the minimum bid price of the Company’s common stock had been below $1.00 per share for 30 consecutive business days as of the date of the Notice. The Notice has no immediate effect on the listing of the Company’s common stock, which will continue to trade at this time on the Nasdaq Capital Market under the symbol “ONCS.”
In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until November 29, 2022, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company’s common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180 calendar day period. In the event the Company does not regain compliance by November 29, 2022, the Company may be eligible for an additional 180 calendar day grace period if it meets the continued listing requirement for market value of publicly held shares ($1 million) and all other initial listing standards for the Nasdaq Capital Market, with the exception of the minimum bid price, and provides written notice to Nasdaq of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. If the Company does not regain compliance within the allotted compliance period(s), Nasdaq will provide notice that the Company’s common stock will be subject to delisting from the Nasdaq Capital Market. In that event, the Company may appeal such delisting determination to a hearings panel.
The Company is currently evaluating its alternatives to resolve the listing deficiency. To the extent that the Company is unable to resolve the listing deficiency, there is a risk that the Company’s common stock may be delisted from Nasdaq, which would adversely impact liquidity of its common stock and potentially result in even lower bid prices for its common stock.
On November 29, 2021, the Company notified Nasdaq that Robert E. Ward had resigned as a member of the Board of Directors and the Company’s Audit Committee, as disclosed on the Company’s Current Report filed on Form 8-K on November 30, 2021. After giving effect to Mr. Ward’s resignation, the Company’s Audit Committee no longer consisted of three independent members as required by Nasdaq Listing Rule 5605(c)(2)(A).
On December 8, 2021, the Company received a letter from Nasdaq noting that the Company no longer complied with the requirement of Listing Rule 5605. The letter also acknowledged that the Listing Rules provide a cure period in order for the Company to regain compliance until the earlier of the Company’s next annual meeting of stockholders or November 23, 2022.
On June 9, 2022, the Board of Directors appointed Mr. Joon Kim, an incumbent independent director, to the Audit Committee. On June 13, 2022, Nasdaq confirmed that the Company had regained compliance under Listing Rule 5605.