Subsequent Events

12 Months Ended

Dec. 31, 2015

Subsequent Events.

Subsequent Events

12. Subsequent Events

On January 19, 2016, we authorized the implementation of a 19 person reduction in staff to control operating expenses and reduce ongoing cash requirements.  After the reduction, TetraLogic will have 9 remaining employees.  We believe that the actions associated with the reductions will be completed in the first half of 2016.

As a result of the reductions, we expect to record a one-time restructuring charge of approximately $2.2 million in the first quarter of fiscal 2016, which may increase later in the year, depending on potential facility-related charges and other write-downs that have not yet been finalized. The restructuring charge is associated with the payment of one-time termination benefits that we expect to pay out in cash, of which $600,000 will be paid during the first quarter of fiscal 2016 and the remainder over a period of 18 months beginning April 2016. These termination benefits consist of a severance payment equal to 3 months’ salary or, in the case of certain senior executives, pursuant to the provisions of their employment agreements, and outplacement assistance. Payment of these termination benefits is contingent on the affected employee entering into a separation agreement with us containing a general release of claims against us.

Our estimated restructuring charge is based on a number of assumptions. Actual results may differ materially and additional charges not currently expected may be incurred in connection with or as a result of the reductions.

On January 28, 2016, we announced that we retained Houlihan Lokey Capital, Inc., as our financial advisor, to provide financial advisory, restructuring and investment banking services in connection with analyzing and considering a wide range of transactional and strategic alternatives. We can give no assurance that a transaction of any kind will occur.