|12 Months Ended|
Dec. 31, 2018
|Subsequent Events [Abstract]|
16. Subsequent Event
Appointment of New Director
Effective January 1, 2019, the Company’s Board of Directors (the “Board”) elected Barbara Kosacz, J.D., a partner of Cooley, LLP (“Cooley”) and the international head of its life sciences practice, to the Board. Cooley serves as the Company’s outside legal counsel. During the years ended December 31, 2018 and 2017, the Company paid Cooley an aggregate of $0.7 million and $1.5 million, respectively; these amounts are substantially less than five percent of Cooley’s gross revenues for the related fiscal years.
On January 7, 2019, the Company and Rezolute further amended the license agreement and common stock purchase agreement. The license agreement was amended to eliminate the requirement that equity securities be issued to XOMA upon the closing of the Qualified Financing (as defined in the license agreement) and to replace it with a requirement that Rezolute: (1) make five cash payments to XOMA totaling $8.5 million following the closing of a Qualified Financing on or before specified staggered future dates (the “Future Cash Payments”); and (2) provide for early payment of the Future Cash Payments (only until the above referenced $8.5 million is reached) by making cash payments to XOMA equal to 15% of the net proceeds of each future financing following the closing of the Qualified Financing, with such payments to be credited against any remaining unpaid Future Cash Payments in reverse order of their future payment date. In accordance with the terms of the license agreement, XOMA will receive $5.5 million in cash upon the closing of the Qualified Financing which is additional to the amounts referenced directly above.
In addition, the license agreement amendment revised the amount Rezolute is required to expend on development of RZ358 and related licensed products and revised provisions with respect to Rezolute’s diligence efforts in conducting clinical studies. Lastly, the common stock purchase agreement was amended to remove certain provisions related to the issuance of equity to XOMA in accordance with the new provisions regarding the Future Cash Payments in the license agreement.
In January 2019, the Company entered into a non-cancellable sublease agreement for a portion of one of its three leased facilities. The term of the sublease agreement commenced on January 18, 2019. Under the term of the sublease agreement, the Company will receive $1.7 million over the term of the sublease, which ends at the same time as the original lease in April 2023.
Bioasis Royalty Purchase Agreement
On February 25, 2019, the Company entered into a Royalty Purchase Agreement with Bioasis Technologies Inc. and certain affiliates (collectively “Bioasis”). Under the agreement, the Company purchased potential future milestone, royalty and option fee payment rights from Bioasis for product candidates that are being developed pursuant to a License Agreement between Bioasis and Prothena Biosciences Limited. Under the terms of the agreement, the Company paid Bioasis an undisclosed upfront cash payment and will make potential future cash payments to Bioasis as the licensed product candidates reach certain development milestones. In addition, the Company was granted an option to purchase a 1% royalty right on the next two license agreements entered into between Bioasis and third-party licensees subject to certain payments and conditions as well as a right of first negotiation on subsequent Bioasis license agreements with third parties.
SVB Loan Agreement
On March 4, 2019, the Company and SVB amended the Loan Agreement entered into on May 7, 2018. The Loan Agreement was amended to extend the Draw Period from March 31, 2019 to March 31, 2020. In connection with the amendment, the Company issued a second warrant to SVB which is exercisable in whole or in part for up to an aggregate of 4,845 shares of common stock with an exercise price of $14.71 per share. The warrant may be exercised on a cashless basis and is exercisable within 10 years from the date of issuance or upon the consummation of certain acquisitions of the Company.
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://fasb.org/us-gaap/role/ref/legacyRef