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Subsequent Event
3 Months Ended
Mar. 31, 2022
Subsequent Events [Abstract]  
Subsequent Event

Note 11. Subsequent Event

 

In April 2022, we continued to reduce personnel related costs and plan to reduce headcount by approximately an incremental

36%. A majority of this reduction will take place in May 2022 and is expected to be completed by July 2022. We estimate that we will incur expenses of up to approximately $0.7 million, substantially all of which will be cash expenditures relating to severance through the third quarter of 2022. These estimates are subject to a number of assumptions, and actual results may differ.

 

On May 7, 2022, the Company adopted the 2022 Inducement Award Plan (the “Inducement Plan”), pursuant to which the

Company reserved 4,000,000 shares of its common stock for issuance under the Inducement Plan to be used exclusively for grants of awards to individuals who were not previously employees or directors of the Company. The Inducement Plan was approved by the independent members of the Board of Directors of the Company.

 

On May 9, 2022 the Company entered into an agreement and plan of merger and reorganization (the “Merger Agreement”)

with Novosteo Inc. (“Novosteo”), a privately-held biotech company focused on targeted therapeutics to treat skeletal diseases, bone cancer and injury and certain other parties thereto. The Merger Agreement provides, among other things, that upon consummation of the Merger the Company will appoint Dirk Thye, M.D., the current Chief Executive Officer of Novosteo, as the Chief Executive Officer of the Company, and Karen Smith, M.D., Ph.D., the current Chief Medical Officer of Novosteo, as the Chief Medical Officer of the Company. In addition, the Company has agreed to expand the Company’s Board of Directors to appoint Dr. Thye and Philip Low, Ph.D., a current director of Novosteo, as Class II and Class I directors of the Company’s Board of Directors, respectively.

 

In connection with the merger, the Company will issue approximately 6 million shares of common stock in exchange for

outstanding shares of Novosteo common stock and Novosteo equity awards, or approximately 19.99% of the Company’s securities on a fully diluted basis. Furthermore, the Merger Agreement provides that unaccredited Novosteo securityholders will receive cash in lieu of shares of common stock of the Company.

 

In connection with the consummation of the Merger, the Company plans to complete a corporate name change and operate

under a new name, Quince Therapeutics, Inc., and to trade under the ticker symbol "QNCX" in the coming months. The Merger Agreement has been approved by the Board of Directors of both companies and is expected to close within the next 30 days; however, the consummation of the Merger is subject to customary closing conditions.

 

Novosteo is considered a related party to the Company through a shared directorship on both boards of directors. David

Lamond, the Chairman of the Board of the Company is also a member of the board of directors of Novosteo. Mr. Lamond is also an equity owner of the Company and Novosteo. Additionally, EPIQ Capital Group, LLC and Chad Boeding as managing member of EPIC Capital Group, LLC are also deemed related parties due to common investments in both companies. EPIQ Capital Group, LLC is an equity owner of the Company and The Boeding Family Trust is an equity owner of Novosteo.