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Subsequent Events
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events

11. SUBSEQUENT EVENTS

Completion of Allenex Acquisition

On April 14, 2016, the Company acquired 98.3% of the outstanding common stock of Allenex. Allenex is a transplant diagnostic company based in Stockholm, Sweden that develops, manufactures, and sells products that help match donor organs with potential recipients prior to transplantation. Allenex has 58 employees. Under the terms of the Conditional Share Purchase Agreements entered into on December 16, 2015, as amended and the tender offer prospectus dated March 7, 2016, and as a result of the tender offer, the purchase consideration is expected to total approximately $35.0 million, consisting of $27.8 million of cash, of which approximately $6.2 million is deferred purchase consideration payable to the Majority Shareholders no later than March 31, 2017, and the issuance of 1,375,029 shares of the Company’s common stock valued at $7.2 million. Additionally, $8.0 million of cash purchase consideration payable to the Majority Shareholders of Allenex is being held in escrow by the Company and relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a Subsequent Financing. The equity securities are expected to be sold no later than 30 days following the receipt of the Requisite Stockholder Approval, which is expected to occur on June 16, 2016, on terms, including price, substantially equivalent to the terms of a Private Placement described below. The Company intends to initiate compulsory acquisition proceedings under Swedish law to purchase the remaining shares of Allenex. In connection therewith, the Company subsequently intends to initiate a delisting of Allenex from Nasdaq Stockholm.

As of April 11, 2016, the Company reassessed the probability of the completion of a six-month bridge loan of $18.0 million with Oberland Capital SA Davos LLC and determined that it was not probable that the bridge loan would be consummated. The Company is currently disputing the fees associated with the bridge loan with Oberland Capital SA Davos LLC, but in the interim the Company has recorded a charge of $2.9 million in the three months ended March 31, 2016 to expense financing costs associated with this bridge loan. These costs have been included as a component of other (expense) income, net on the Company’s condensed statements of operations.

The cash portion of the acquisition purchase price was paid from the Company’s general working capital. The acquisition required and the Company obtained a consent from the Lender. The consent was contingent upon the Company closing a Private Placement for aggregate proceeds of at least $12.0 million and separately depositing into escrow cash of $8.0 million that relates to a commitment by the Majority Shareholders of Allenex to purchase the Company’s equity securities in a Subsequent Financing as described above, all of which occurred on April 14, 2016. The Lender also requires the Company to subsequently raise another $20.0 million through equity financing by March 31, 2017, prior to paying the $6.2 million of deferred purchase price consideration to the Majority Shareholders of Allenex. As of February 29, 2016, the Company was in violation of one of its financial covenants under the Loan Agreement. This violation was waived in principal by virtue of a contemporaneous verbal amendment to the Loan Agreement received from the Lender, which was subsequently memorialized in a written amendment to the Loan Agreement dated May 12, 2016. As of March 31, 2016, the Company was in compliance with its debt covenants. 

The acquisition of Allenex will be accounted for and reported as a business combination during the second quarter of 2016. The Company is in the process of determining the total purchase price and allocation thereof, however, it is impracticable to make any other disclosures related to this acquisition at this time.

Private Placement

On April 14, 2016, the Company completed a Private Placement transaction for the offering of 591,860 Units. Each Unit is comprised of: (i) one share of Common Stock, (ii) five shares of Series A Mandatorily Convertible Preferred Stock (“Series A Preferred”), and (iii) three warrants, each to purchase one share of Common Stock. The purchase price was $23.94 per Unit (the equivalent of $3.99 per share of Common Stock, assuming conversion of the Series A Preferred). The closing of the Private Placement was conditioned upon the closing of the Allenex acquisition, the consent of East West Bank to the Allenex acquisition, and certain other customary closing conditions, all of which occurred on April 14, 2016. The aggregate proceeds to the Company from the Private Placement were approximately $14.1 million, of which $1.4 million was paid for payment of placement agents, escrow agents and legal fees. 

On April 13, 2016, the Company filed a Certificate of Designation that established the rights and preferences of the Series A Preferred. Each share of Series A Preferred is mandatorily convertible into Common Stock upon the Company’s receipt of the Requisite Stockholder Approval. Subject to obtaining the Requisite Stockholder Approval, each share of Series A Preferred is initially convertible into one share of Common Stock, subject to certain adjustments. The Series A Preferred are not entitled to receive dividends and are not redeemable at the election of the Company. Series A Preferred could be required to be redeemed upon a deemed liquidation event, as defined, at $3.99 per share, or if the Company is unable to issue share certificates without sale restriction legend in certain circumstances, at amounts at which the holder purchases the Company’s shares required to satisfy its sale obligations. Except as required by the Delaware General Corporation Law, the Series A Preferred do not have voting rights and will not be included in determining the number of shares voting or entitled to vote on any matter of the Company. 

Each warrant is exercisable for a period of seven years to purchase one share of Common Stock at an initial exercise price of $4.98 per share, subject to certain adjustments. The Company also issued warrants to purchase an aggregate of 200,000 shares of Common Stock to certain of its placement agents (“Placement Agent Warrants”). Each Placement Agent Warrant is exercisable for a period of five years to purchase one share of Common Stock at an initial exercise price of $3.99 per share, subject to certain adjustments. Pursuant to the terms of the warrants, the holder of the warrant cannot exercise the warrant until the Company has obtained the Requisite Stockholder Approval. The warrants are expected to be recorded as a liability and be subject to ongoing remeasurement.

Concurrently, the Company also entered into Commitment Letters pursuant to which the Majority Shareholders of Allenex agreed to purchase the Company’s equity securities in a Subsequent Financing as described above. If the Subsequent Financing is not completed within 30 days of the Requisite Stockholder Approval, and provided that the Loan Agreement is still in place, the Lender has the right to require that the Company complete the Subsequent Financing and issue securities to the Majority Shareholders in exchange for the $8.0 million of cash held in escrow. If neither the Company nor the Lender exercise their rights by September 30, 2016, the $8.0 million held in escrow will be released to the Majority Shareholders without any further obligation on the part of the Majority Shareholders of Allenex. The Company expects to issue an additional 334,169 Units, which consist of (i) a total of 334,169 shares of Common Stock, (ii) a total of 1,670,845 shares of Series A Preferred that are all convertible to Common Stock, and (iii) 1,002,507 warrants in the Subsequent Financing. If the Subsequent Financing occurs following receipt of the Requisite Stockholder Approval on June 16, 2016, the Company will issue 2,005,014 shares of Common Stock and warrants to the Majority Shareholders of Allenex to purchase 1,002,507 shares of Common Stock instead of issuing the Units.

Following the closing of the Private Placement, the Company agreed to a number of requirements such as submitting the Private Placement to the Company’s stockholders for approval, which is expected to be approved after the receipt of the Requisite Stockholder Approval expected on June 16, 2016, granting certain registration rights, including the registration of shares sold in the Private Placement on a registration statement on Form S-3 within 45 days of closing. Additionally, if the Company fails to file an effective registration statement on Form S-3 within 45 days of closing the Private Placement, the Company shall be obligated to pay an aggregate penalty amount equal to approximately $0.3 million for each month that the Company has not filed the required registration statement, up to a maximum of $1.4 million.

The Company engaged M.M. Dillon & Co. Group (“M.M. Dillon”), an investment banking firm, to act as one of its financial advisors and placement agents in connection with a private equity placement of Common Stock and the execution of any such Private Placement that the Company may choose to pursue. A member of the Company’s board of directors is a managing director of M.M. Dillon, and as such, M.M. Dillon is considered a related party to the Company. As a result of the Private Placement and Subsequent Financing, the Company paid approximately $1.1 million in placement fees to its placement agents, of which $0.2 million pertained to fees paid to M.M. Dillon. Additionally, M.M. Dillon also received Placement Agent Warrants to purchase 100,000 shares of the Company’s Common Stock.

The Company expects to use the proceeds from the Private Placement and the Subsequent Financing for additional working capital, acquisitions and general corporate purposes.

The Company is soliciting the Requisite Stockholder Approval, which requires the support a majority of the Company’s stockholders, at its annual general meeting on June 16, 2016, and filed a definitive proxy statement on May 5, 2016. The Company and certain stockholders representing a majority of the Company’s outstanding Common Stock entered into voting agreements on April 14, 2016, pursuant to which each stockholder agreed to vote certain of its shares of Common Stock in favor of granting the Company the Requisite Stockholder Approval.