The Company has entered into employment agreements with some of its executive officers. Generally, the terms of these agreements provide that,
if the Company terminates the officer other than for cause, death, or disability, or if the officer terminates his or her employment with the Company for good cause, the officer shall be entitled to receive certain severance compensation and
benefits as described in each such agreement.
On May 15, 2018, Georgia Erbez resigned as Chief Business Officer and Chief Financial
Officer. Pursuant to the terms of a Separation Agreement entered into May 10, 2018, the Company agreed to pay severance totaling approximately $201,000, including base salary and benefit continuation coverage, for the six months following the
separation date. Accordingly, as of September 30, 2018, the Company has approximately $55,000 of remaining severance related to this arrangement accrued and unpaid. In addition, 25% of the unvested portion of Ms. Erbez equity awards
at the time of her resignation were accelerated. Her vested options remain exercisable for a period of eighteen months following her resignation.
On May 8, 2017, Konstantinos Alataris resigned as President and Chief Executive Officer. Pursuant to the terms of a Separation Agreement,
the Company agreed to pay severance totaling approximately $252,000, including base salary and benefit continuation coverage, for six months following the separation date. As of September 30, 2018, the Company had no severance due to
Dr. Alataris related to his separation agreement.
Equipment Purchase Commitment
In May 2018, the Company entered into a Purchase Order with Harro Hofliger Packaging Systems to purchase a commercial coating and primary
packaging machine for the production of its product candidate, M207, for an aggregate purchase price of $12.2 million. The terms of the purchase commitment are contingent upon performance of certain milestones. The Company anticipates that the
obligation will be paid over an eighteen-month period. As of September 30, 2018, the Company had made payments totaling $3.0 million which were recorded in
construction-in-progress and the total remaining obligation on the equipment purchase commitment was $9.2 million.
Manufacturing and Supply Agreement with Patheon.
In September 2018, the Company entered into a manufacturing and supply agreement with Patheon Manufacturing Services LLC (Patheon),
for Patheon to provide services related to the manufacture and commercialization of M207. During the term of the agreement, Patheon will provide manufacturing services to the Company for the manufacturing of M207, including, services related to
processing, packaging, labelling and storing of M207, in addition to other services such as stability testing, quality control and assurance and waste disposal.
The Company is required to pay for commercial supply by Patheon in annual base fees in equal monthly installments in the amounts specified in
the agreement. In addition, we are required to pay an additional product fee for units in excess of the number of units covered by the base fee at the price per unit provided for in the agreement. The agreement contains negotiated representations
and warranties, indemnification, limitations of liability, and other provisions. The initial term of the agreement continues until the seventh anniversary of the date on which we receive NDA approval of M207 in the United States.
The Company may terminate the agreement if M207 is not granted certain regulatory approvals or if such regulatory approval is withdrawn under
certain circumstances. The Company or Patheon may terminate the agreement for the others uncured material breach, uncured force majeure or bankruptcy or insolvency-related events.
September 30, 2018, the Company had $4.8 million of noncancelable purchase commitments due within the current fiscal year and $23.3 million due thereafter, primarily related with third party manufacturers.
On January 24, 2018, the Company amended its certificate of incorporation to increase the number of shares of common stock authorized for
issuance from 100,000,000 to 250,000,000. On January 25, 2018, the Company effected a 1-for-20 reverse stock split of its outstanding common stock.
Equity Line of Credit
On October 20, 2017, the Company entered into a purchase agreement and a registration rights agreement with an accredited investor,
Lincoln Park, providing for the purchase of up to $35.0 million worth of the Companys common stock over the term of the purchase agreement (the Equity Line of Credit).