Business Context and Reporting Period
Cocrystal Pharma, Inc. filed a Current Report on Form 8-K on July 19, 2018. The filing reports the entry into a Material Definitive Agreement regarding an equity distribution program.
Key Financial Metrics
This filing does not contain revenue, profit, cash flow, margin, debt, or liquidity metrics. The document focuses exclusively on the terms of a new financing agreement.
- Maximum Offering Size: Up to $10,000,000 of common stock.
- Compensation to Sales Agents: Up to 2.0% of gross proceeds.
- Sales Method: Negotiated transactions or "at-the-market" offerings (Rule 415).
Material Changes
The material change reported is the execution of an Equity Distribution Agreement with Ladenburg Thalmann & Co. Inc., Barrington Research Associates, Inc., and A.G.P./Alliance Global Partners. This agreement authorizes the Company to sell shares over time through these Sales Agents.
Guidance, Outlook, and Risks
Management Commentary: The Company intends to use the agreement to issue and sell shares from time to time, subject to market conditions and the terms of the agreement. The Sales Agents are obligated to use commercially reasonable efforts to sell requested shares.
Conflicts of Interest: A conflict of interest exists under FINRA Rule 5121(f)(5)(B) because Dr. Phillip Frost beneficially owns more than 10% of the Company's common equity and more than 10% of the common equity of Ladenburg's parent company. Dr. Frost serves as a director of Cocrystal Pharma and chairman of the board of Ladenburg Thalmann Financial Services, Inc. Consequently, Barrington Research is acting as a "qualified independent underwriter."
Risks and Contingencies: The filing includes standard disclaimers that the report does not constitute an offer to sell securities and that representations in the agreement were made only for the benefit of the parties as of specific dates.
Investor Verification Checklist
- Verify the current market price of Cocrystal Pharma common stock to assess the potential dilution impact of a $10,000,000 offering.
- Review the effective Registration Statement on Form S-3 (File No. 333-220632) and the prospectus supplement dated July 19, 2018, for full terms.
- Confirm the extent of Dr. Phillip Frost's beneficial ownership in both the Company and Ladenburg Thalmann Financial Services, Inc.
- Monitor future filings to determine if and when shares are actually sold under this agreement.