Attached files
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EX-10.3 - EX-10.3 - Cascadian Therapeutics, Inc. | v58216exv10w3.htm |
EX-99.1 - EX-99.1 - Cascadian Therapeutics, Inc. | v58216exv99w1.htm |
EX-10.1 - EX-10.1 - Cascadian Therapeutics, Inc. | v58216exv10w1.htm |
EX-10.2 - EX-10.2 - Cascadian Therapeutics, Inc. | v58216exv10w2.htm |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 8, 2011
ONCOTHYREON INC.
(Exact name of registrant as specified in its charter)
Delaware | 001-33882 | 26-0868560 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
2601 Fourth Avenue, Suite 500
Seattle, Washington 98121
(Address of principal executive offices, including zip code)
Seattle, Washington 98121
(Address of principal executive offices, including zip code)
(206) 801-2100
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement. |
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
On February 8, 2011, Oncothyreon Inc. (the Company) entered into a Loan and Security
Agreement (the Loan Agreement) with General Electric Capital Corporation (GECC and together
with the other financial institutions that may become parties to the Loan Agreement, the
Lenders), pursuant to which the Lenders agreed to extend a term loan (the Initial Term Loan) to
the Company with an aggregate principal amount of $5.0 million and, subject to the terms and
conditions set forth in the Loan Agreement, a second term loan (the Second Term Loan) with an
aggregate principal amount of $7.5 million. Each term loan shall accrue interest at a fixed per
annum rate of 9.45% plus the greater of (A) a per annum rate of interest in effect on the day that
is three business days prior to the incurrence of the applicable term loan borrowings that is equal
to the rate published by the Board of Governors of the Federal Reserve System as the three year
treasuries constant maturities rate and (B) 0.54%. As security for its obligations under the Loan
Agreement, the Company granted the Lenders a lien on substantially all of its assets, excluding
intellectual property.
On February 8, 2011, GECC funded the
Initial Term Loan, which accrues interest at an annual
rate of 10.57% and has a term of 42 months. Interest only payments are due during the first nine
months of the Initial Term Loan and beginning on December, 1, 2011 the Company is required to make 32 equal monthly payments of principal and interest. A final payment of principal and interest of the Initial Term Loan is due on
August 1, 2014
(the Scheduled Maturity Date). The Company made a one-time, non-refundable
facility fee to GECC of $31,250 concurrently with the incurrence of the Initial Term Loan
At the Companys option and subject to satisfying certain conditions, the Company may borrow
the Second Term Loan on or before November 1, 2011. The conditions to borrow the Second Term Loan
include requirements that (i) the Company has 12 months of unrestricted cash and cash equivalents
(as calculated in the Loan Agreement) as of the time of incurrence, (ii) the START trial for the
Companys Stimuvax product is continuing or enrollment has been discontinued because such trial has
met a positive efficacy endpoint at an interim analysis as determined by an independent data safety
monitoring board overseeing such trial, and (iii) the study of at least one clinical indication in
the Companys PX-866 program is continuing. If borrowed, the Company is required to repay the
Second Term Loan in 32 equal consecutive payments commencing on December 1, 2011, plus one final payment that is due on the
Scheduled Maturity Date.
The Company may prepay each term loan in full, but not in part. If prepaid, a prepayment
premium will apply equal to: (i) 3.0% of the outstanding principal amount of such term loan, if
such prepayment is made on or before November 1, 2012, except if the Initial Term Loan is prepaid
on or before November 1, 2011, no prepayment premium will apply (ii) 2.0% of the outstanding
principal amount of such term loan, if such prepayment is made after November 1, 2012 but on or
before September 1, 2013, and (iii) 1.0% of the outstanding principal amount of such term loan, if
such prepayment is made after September 1, 2013 but before the Scheduled Maturity Date. Upon
satisfaction in full of each term loan (whether by prepayment or at the Scheduled Maturity Date),
the Company will owe a fee equal to 1.50% of the original principal amount of the applicable term
loan.
The Loan Agreement contains customary representations and warranties and customary affirmative
and negative covenants, including, among others, covenants that limit or restrict the Companys
ability to incur indebtedness, grant liens, merge or consolidate, dispose of assets, make
investments, make acquisitions, enter into certain transactions with affiliates, pay dividends or
make distributions, or repurchase stock, in each case subject to customary exceptions for a credit
facility of this size and type, and a financial covenant that the Company has 12 months of
unrestricted cash and cash equivalents (as calculated in the Loan Agreement) as of each December 31
during the term of the Loan Agreement. In addition, the Loan Agreement contains customary events
of default that entitle the Lenders to cause any or all of the Companys indebtedness under the
Loan Agreement to become immediately due and payable. The events of default include non-payment,
inaccuracy of representations and warranties, covenant defaults, material adverse effect default
(as defined in the Loan Agreement), cross-default to material indebtedness, bankruptcy and
insolvency, material judgment defaults, change of control default and defaults related to certain
actions taken against the Company by the Food and Drug Administration or other equivalent
governmental authority.
The proceeds of the Initial Term Loan, after payment of lender fees and expenses, are
approximately $4.9 million. The net proceeds will be used for general corporate purposes,
including research and product development, such as funding
pre-clinical studies and clinical trials and otherwise moving product candidates towards
commercialization, or the possible acquisition or licensing of new product candidates or technology
which could result in other product candidates. Pending application of the net proceeds, the
Company intends to invest the net proceeds in short-term, investment-grade, interest-bearing
instruments.
Item 3.02 | Unregistered Sales of Equity Securities. |
Pursuant to the terms of the Loan Agreement, the Company is required to issue to the Lenders
warrants equal to 3.0% of the principal amount of term loan borrowings actually incurred. On
February 8, 2011, pursuant to the terms and conditions of the Loan Agreement, the Company issued
to an affiliate of GECC a warrant to purchase up to 48,701 shares of the Companys common stock at
an exercise price equal to $3.08 per share (the Initial Warrant). If the Company borrows the
Second Term Loan, the Company must issue an additional warrant to the Lenders (the Second Warrant
and together with the Initial Warrant, the Warrants) to purchase a number of shares of the
Companys common stock equal to (x) $225,000 divided by (y) the exercise price per share of the
Second Warrant. Subject to the adjustment described in the following sentence, the exercise price
of the Second Warrant shall equal the lesser of the 10-day trailing average of the Companys common
stock price, as determined as of the close of business on the business day immediately prior to the
funding date of the Second Term Loan, and the Companys common stock price, as determined as of the
close of business on the business day immediately prior to the funding date of the Second Term
Loan. If application of the formula for determining the number of shares underlying the Second
Warrant would cause the aggregate number of such shares to exceed 467,565, then the number of shares
purchasable will be fixed at 467,565 and the price per share will be reduced proportionately to maintain the net economic terms
dictated above. The Warrants are immediately exercisable and will expire seven years from their
respective dates of issue.
The offer and sale of the Warrants have not been registered under the Securities Act of 1933,
as amended (the Securities Act). The Warrants were offered and sold to accredited investors in
reliance upon exemptions from registration under Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.
The foregoing description of the Loan Facility is only a summary of its material terms and
does not purport to be complete. A copy of the Loan Agreement, the Promissory Note representing the
Initial Term Loan and the form of Warrant are attached hereto as Exhibit 10.1, Exhibit 10.2 and
Exhibit 10.3, respectively, and are incorporated herein by reference.
A copy of the press release announcing the Loan Facility is attached hereto as Exhibit 99.1
and is incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit Number | Description | |||
10.1 | Loan and Security Agreement between Oncothyreon Inc. and General Electric Capital
Corporation dated February 8, 2011. |
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10.2 | Promissory Note issued by Oncothyreon Inc. to General Electric Capital Corporation
dated February 8, 2011. |
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10.3 | Form of Warrant to Purchase Common Stock issued by Oncothyreon Inc. to the Lenders. |
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99.1 | Press Release issued by Oncothyreon Inc. dated February 9, 2011. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ONCOTHYREON INC. |
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By: | /s/ Julia M. Eastland | |||
Julia M. Eastland | ||||
Chief Financial Officer, Secretary and Vice President of Corporate Development | ||||
Date: February 9, 2011
EXHIBIT INDEX
Exhibit Number | Description | |||
10.1 | Loan and Security Agreement between Oncothyreon Inc. and General Electric Capital
Corporation dated February 8, 2011. |
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10.2 | Promissory Note issued by Oncothyreon Inc. to General Electric Capital Corporation
dated February 8, 2011. |
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10.3 | Form of Warrant to Purchase Common Stock issued by Oncothyreon Inc. to the Lenders. |
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99.1 | Press Release issued by Oncothyreon Inc. dated February 9, 2011. |