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Subsequent Events
6 Months Ended
Jun. 30, 2011
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS
9. SUBSEQUENT EVENTS
Preferred Stock Dividend
On July 8, 2011, the Board of Directors decided not to declare the quarterly cash dividend on the Preferred Stock with respect to the second quarter of 2011 that would have otherwise been payable on August 1, 2011.
The Board also did not declare the quarterly cash dividend with respect to each of the four quarters of fiscal year 2009 and the first, second and third quarters of 2010. To the extent that any dividends payable on the Preferred Stock are not paid, such unpaid dividends are added to the liquidity preference of the Preferred Stock. As the Company failed to pay in an aggregate amount equal to at least six quarterly dividends (whether or not consecutive) on the Preferred Stock, the size of the Company’s Board was increased by two members and the holders of the Preferred Stock, voting separately as a class, voted on May 24, 2011 and elected two directors to fill the vacancies created thereby, which directorships shall terminate when the Company pays all accrued but unpaid dividends.
License Agreement
On July 11, 2011, the Company entered into an amendment to its license agreement with Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), dated September 10, 2003, relating to certain rights which the Company has licensed from Daiichi Sankyo with regard to the Company’s sapacitabine drug. Effective July 11, 2011, the license agreement was amended to irrevocably waive a termination right Daiichi Sankyo possessed under a provision of the agreement that required the Company to obtain regulatory approval to sell sapacitabine in at least one country by September 2011, and releases the Company from all claims and liability of any kind arising under such provision. The amendment further provides that the royalty due from the Company to Daiichi Sankyo on future net sales of sapacitabine be increased by a percentage between 1.25% and 1.50% depending on the level of net sales of sapacitabine realized.
Financing
On July 7, 2011 the Company closed an underwritten offering for an aggregate of 7,617,646 units, at an offering price of $1.36 per unit, for gross proceeds of approximately $10.4 million. Each unit consists of (i) one share of common stock and (ii) a five-year warrant to purchase 0.5 of a share of common stock at an exercise price of $1.36 per share, exercisable beginning six months after the date of issuance. The shares of common stock and warrants were immediately separable and were issued separately such that no units were issued. The net proceeds, after underwriting discounts and commissions and other fees and expenses payable by the Company, were approximately $9.3 million.