Business Context and Reporting Period
Cocrystal Pharma, Inc., a Delaware corporation, filed this Form 8-K on March 11, 2019. The company is engaged in the development of novel medicines for the treatment of human viral diseases.
Key Financial Metrics and Transaction Details
- Capital Raise: Entered into a Securities Purchase Agreement to sell approximately 1.6 million shares of common stock.
- Price per Share: $2.61.
- Gross Proceeds: Approximately $4.2 million.
- Placement Fee: 7% of gross proceeds plus reimbursement of out-of-pocket expenses.
- Use of Proceeds: General corporate purposes and continued development of novel medicines.
- Financial Statements: This filing does not provide revenue, profit, cash flow, margins, debt, or liquidity metrics.
Material Changes and Contingencies
The filing discloses a potential material non-cash impairment charge related to a voluntary termination of a license agreement with Emory University in December 2018.
- Impairment Charge: The company may incur $53,905,000 in non-cash impairment charges, representing a full write-off of remaining in-process research and development.
- Status: As of the filing date, the company was continuing discussions with its auditors regarding this matter.
Outlook, Risks, and Management Commentary
- Lock-Up Period: Directors, executive officers, and certain stockholders agreed to a 90-day lock-up period following the closing of the private placement.
- Registration Obligations: The company must file a resale registration statement by April 25, 2019. Failure to meet filing deadlines or keep the statement effective may result in liquidated damages payable to investors.
- Investor Base: The private placement was conducted with three current stockholders of the company.
Key Facts for Investor Verification
- Confirm the final closing date of the private placement (expected on or before March 13, 2019).
- Verify the outcome of discussions with auditors regarding the $53.9 million impairment charge.
- Monitor the timely filing and effectiveness of the resale registration statement by April 25, 2019.
- Review the full text of the Securities Purchase Agreement (Exhibit 10.1) for specific terms regarding liquidated damages and indemnification.