Annual report pursuant to Section 13 and 15(d)

Subsequent Events

v3.8.0.1
Subsequent Events
12 Months Ended
Jul. 31, 2017
Subsequent Events [Abstract]  
Subsequent Events

Note 13—Subsequent Events

 

Common Stock and Warrants Offerings

 

On October 25, 2017, the Company closed a registered public offering and sale of 5,270,934 shares of its common stock at a purchase price of $1.34375 per share, pursuant to the terms of a securities purchase agreement (the October 22 “Purchase Agreement”) entered into between the Company and certain accredited investors (collectively, the “Purchasers”). The October 22 Purchase Agreement also contains customary representations and warranties of the Company and certain indemnification obligations and ongoing covenants of the Company, including a prohibition on sales by the Company of its common stock or securities convertible or exchangeable into common stock for a period of 90 days after the closing under the October 22 Purchase Agreement, subject to certain exceptions, and a prohibition on the Company from entering into agreements for or effecting certain variable rate transactions or securities issuances at future determined prices for a period of one year after the closing under the October 22 Purchase Agreement.

 

Pursuant to the October 22 Purchase Agreement, on October 25, 2017, the Company also issued to the Purchasers, in a concurrent private placement offering, warrants to purchase an aggregate of up to 3,953,200 shares of its common stock. Each Purchaser received a warrant to purchase up to 75% of the number of shares of common stock purchased by such Purchaser under the Purchase Agreement. The warrants issued to the Purchasers were immediately exercisable on their date of issuance and will remain exercisable October 22 until the 5.5 year anniversary of their date of issuance, subject to certain ownership limitations described in the warrants; are exercisable at an initial exercise price of $1.25 per share, subject to adjustment for stock splits, reverse splits and similar capital transactions as described in the warrants; and are exercisable on a “cashless” basis in certain circumstances as described in the warrants, including, among others, while there is no effective registration statement registering the shares of common stock issuable upon exercise thereof.

 

The aggregate gross proceeds to the Company from the offerings under the October 22 Purchase Agreement were $7.1 million, and the net proceeds to the Company from the offerings under the October 22 Purchase Agreement, after deducting placement agent fees and other estimated offering expenses paid or payable by Company and excluding the proceeds, if any, from any cash exercise of the warrants, are expected to be approximately $6.2 million. The Company intends to use the net proceeds for working capital and general corporate purposes, including primarily for its PISCES/KEYNOTE-695 clinical trial and for other clinical and research and development activities.

 

Additionally, on October 20, 2017, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright served as the exclusive placement agent for the offerings under the Purchase Agreements. As compensation for its placement agent services, the Company paid Wainwright an aggregate cash fee equal to 5.5% of the gross proceeds received by the Company from the sale of its common stock under the Purchase Agreement (or $389,555) plus a non-accountable expense allowance of $50,000, and the Company issued to Wainwright’s designees warrants to purchase up to 6% of the aggregate number of shares of common stock sold under the Purchase Agreement (or 316,256 shares). The warrants issued to Wainwright have substantially the same terms as the warrants issued to Purchasers, except that their exercise price is $1.68 per share and they will expire on October 21, 2022. The engagement letter with Wainwright also includes indemnification obligations of the Company and other provisions customary for transactions of this nature.

 

October 25 Purchase Agreement

 

On October 25, 2017, the Company entered into a securities purchase agreement (the “October 25 Purchase Agreement”) with one institutional accredited investor providing for the offering and sale by the Company, in a registered public offering, of 800,000 shares of its common stock and warrants to purchase up to 600,000 shares of its common stock, all at a purchase price of $1.34375 per share and associated warrants. The warrants to be issued under the October 25 Purchase Agreement have the same terms as the warrants issued under the October 22 Purchase Agreement, as described above, except that they are not exercisable until six months after issuance. The Company expects the closing under the October 25 Purchase Agreement to occur on or about October 27, 2017, subject to the satisfaction of certain customary closing conditions set forth in the October 25 Purchase Agreement. The October 25 Purchase Agreement also contains customary representations and warranties of the Company, termination rights of the parties and certain indemnification obligations and ongoing covenants of the Company, including the same prohibitions on the Company regarding certain future securities issuances and sales as are included in the October 22 Purchase Agreement, as described above.

 

The aggregate gross proceeds to the Company from the offering under the October 25 Purchase Agreement will be approximately $1.1 million, and the net proceeds to the Company from the offering under the October 25 Purchase Agreement, after deducting estimated placement agent fees and other estimated offering expenses paid or payable by Company and excluding the proceeds, if any, from any cash exercise of the warrants, are expected to be approximately $960,000. The Company intends to use the net proceeds for working capital and general corporate purposes, including primarily for its PISCES/KEYNOTE-695 clinical trial and for other clinical and research and development activities.

 

Wainwright Engagement

 

On October 20, 2017, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright served as the exclusive placement agent for the offerings under the October 22 Purchase Agreement and the October 25 Purchase Agreement (collectively, the “Purchase Agreements”). As compensation for its placement agent services, the Company agreed to pay Wainwright an aggregate cash fee equal to 5.5% of the gross proceeds received by the Company from the sale of its common stock under the Purchase Agreements plus offering expenses in an aggregate non-accountable sum of $65,000, and the Company agreed to issue to Wainwright’s designees warrants to purchase up to 6% of the aggregate number of shares of common stock sold under the Purchase Agreements. The warrants issued to Wainwright have substantially the same terms as the warrants issued under the Purchase Agreements, except that their exercise price is $1.68 per share and they will expire on October 21, 2022 (with respect to warrants to purchase 316,256 shares) and on October 25, 2017 (with respect to 48,000 shares). The engagement letter with Wainwright also includes indemnification obligations of the Company and other provisions customary for transactions of this nature.

 

Termination of ATM Program

 

Effective as of October 22, 2017, the Company terminated its equity distribution agreement with Oppenheimer relating to the ATM Program (see Note 6). As a result of such termination, no further offers or sales of the Company’s common stock will be made in the ATM Program. As of the date of such termination, the Company had sold an aggregate of 897,311 shares of its common stock in the ATM Program, for net proceeds to the Company, after deducting Oppenheimer’s commissions and other expenses paid or payable by the Company, of $1.1 million. Upon such termination, $0.2 million in costs related to the ATM Program, previously recorded as a prepaid asset as of July 31, 2017, will be expensed.