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Subsequent Events
6 Months Ended
Jun. 30, 2019
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events
On July 16, 2019, the Company announced a strategic organizational restructuring to focus on the commercial development of its late-stage HPV assets and reallocate capital to develop fast-to-market product candidates. In order to reduce operating expenses and conserve cash resources, the Company also announced a reduction of approximately 28% of its workforce and the discontinuation of its immuno-oncology Phase 1/2 study of INO-5401 in advanced bladder cancer. On July 12, 2019, the Company’s Board of Directors approved these actions, which were effective immediately. As a result, the Company expects to incur a personnel-related restructuring charge of approximately $2.3 million in connection with one-time employee termination costs, including severance and other benefits, which is expected to be incurred primarily in the third quarter of 2019.
On August 1, 2019, the Company closed a private placement of 1.0% convertible bonds due 2024 with an aggregate principal amount of 18 billion Korean Won (KRW) (approximately USD $15.0 million based on the exchange rate on the date of issuance) issued to institutional investors led by Korea Investment Partners (KIP), a global venture capital and private equity firm based in Seoul, Korea. The Company also announced its intent to pursue a listing of its securities on the KOSDAQ Market of the Korea Exchange (KOSDAQ) in the form of Korean Depositary Receipts (KDRs) representing shares of common stock.
The bonds, which are unsecured obligations of the Company, were issued on August 1, 2019 and will accrue interest at a coupon rate of 1.00% per annum, payable quarterly. The bonds will mature on July 31, 2024, unless earlier converted or repurchased. The outstanding bonds will be repaid at maturity at a price equal to the principal of the outstanding bonds to be repaid plus a premium on such bonds to provide an internal rate of return with respect to such bonds of 6.00%. Commencing on August 1, 2020, the bonds will be convertible until the date that is one month prior to maturity date. Upon conversion, the Company will deliver KDRs, if the Company has any such securities listed on the KOSDAQ at that time, or otherwise shares of common stock, if KDRs are not listed on KOSDAQ at that time or the converting holder requests delivery of shares of common stock. The initial conversion rate will be 211.0595 shares per KRW1,000,000 principal amount of bonds (equivalent to an initial conversion price of approximately USD $4.00 per share based on the exchange rate as of July 30, 2019), subject to adjustment upon the occurrence of specified events. The conversion rate is subject to reset on January 2, 2020 and on each three month anniversary thereafter until the maturity date to the then current market price if the current market price is lower than the conversion price then in effect; provided that the conversion rate will not exceed 351.7658 shares per KRW1,000,000 (equivalent to a conversion price of approximately USD $2.40 per share based on the exchange rates as of July 30, 2019).
The bonds will be subject to repurchase by the Company at the option of the bondholders from and including July 31, 2022 up to the date that is one month prior to the maturity date at a repurchase price equal to the principal of the bonds to be repurchased plus a premium on the bonds in order to provide an internal rate of return with respect to the bonds of 6.00%. In addition, upon the occurrence of a fundamental change (as defined in the bonds), the Company will be required to offer to repurchase the bonds at a repurchase price equal to the principal amount thereof plus accrued and unpaid interest thereon to but excluding the applicable repurchase date.
From July 1 through July 16, 2019, the Company sold 382,800 shares of common stock under its Sales Agreement for net proceeds of $1.1 million. The sales were made at a weighted average price of $3.01 per share.