XML 30 R19.htm IDEA: XBRL DOCUMENT v3.4.0.3
Subsequent Events
3 Months Ended
Mar. 31, 2016
Subsequent Events [Abstract]  
Subsequent Events

12. Subsequent Events

 

Workforce Reduction

 

On April 1, 2016, the Board approved a cost-savings plan and focused corporate strategy involving reductions in headcount as well as a deferral in a portion of annual base salaries for the Company’s leadership team to decrease operating costs.  These cost-saving measures are in response to recent events, including the limited net proceeds raised in the Company’s completed financing and an assessment of its capital requirements and assets. The Company is implementing cost-saving measures and a focused corporate strategy to achieve, with its current cash on-hand, data readout in the fourth quarter of 2016 for its lead Phase 2 clinical trial evaluating HS-410 for the treatment of non-muscle invasive bladder cancer (NMIBC). These cost-saving measures are intended to significantly reduce the Company’s cost structure and scale the organization appropriately for its current goals. The Company plans to direct its resources primarily to enable the completion of its Phase 2 clinical trial of HS-410 for the treatment of NMIBC and to advance the current eight patients enrolled in its Phase 1b trial evaluating HS-110 in combination with nivolumab, a Bristol-Myers Squibb PD-1 checkpoint inhibitor, for the treatment of non-small cell lung cancer (NSCLC).

 

The Company’s corporate cost-savings plan included a workforce reduction of approximately twenty-two percent (22%) of the Company’s headcount, or six positions.  The Company estimates that it will incur total expenses relating to termination benefits of approximately $295,000 in the second quarter of 2016.  In the first quarter of 2017, the Company estimates that it will incur expenses of approximately $299,000 for retention bonuses equal to three months of base salary payable to Dr. Price, Dr. Schreiber and Ms. Rosar, as well as retention bonuses to four other employees that will be paid if the employees remain employed with the Company through December 31, 2016. 

 

Departure of Certain Officers and Appointment of Certain Officers

 

On April 4, 2016, Louis C. Bock and Michael Kharitonov, Ph.D. each provided the Company with notice of their respective resignations from the Board, effective immediately. Mr. Bock served on the Audit Committee and Dr. Kharitonov served on the Compensation Committee and Nominating and Corporate Governance Committee. Mr. Bock and Dr. Kharitonov had served on the Board since 2013 and 2009, respectively. The resignations from the Board were not due to any disagreement related to the Company’s operations, policies or practices.

 

On April 5, 2016, in connection with the Company’s cost-savings plan, the Company entered into a Severance Agreement and General Release (the “Severance Agreements”) with each of Timothy Creech, the Company’s former Chief Financial Officer and Corporate Secretary, and Anil Goyal, the Company’s former Vice President of Business Development, who both departed from the Company effective as of April 4, 2016. The complete terms of the Severance Agreements are filed as Exhibits 10.5 and 10.6 to the Company’s Current Report on Form 8-K filed April 7, 2016.   

 

On April 5, 2016, the Company entered into a four-year employment agreement with Ann Rosar (the “Rosar Employment Agreement”), the Company’s Controller since January 2015, newly appointing her to serve as the Company’s Vice President of Finance, Controller and Corporate Secretary. The complete terms of the Rosar Employment Agreements are filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed April 7, 2016.   

 

On April 21, 2016, the Company’s Board of Directors (the “Board”) appointed John K. A. Prendergast, Ph.D. to fill a vacancy on the Board. Dr. Prendergast has been named to serve on the Audit, Compensation and Nominating and Governance Committees of the Board to replace Dr. Paul Belsky who resigned from the Board on April 21, 2016.  Dr. Belsky indicated that his resignation was for personal reasons and not due to any disagreement with the Board or the Company’s management.

 

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing

 

On May 2, 2016, the Company received written notice from the Listing Qualifications Department of The NASDAQ Stock Market LLC (“NASDAQ”) notifying the Company that for the preceding 30 consecutive business days (March 18, 2016 through April 29, 2016), the Company’s common stock did not maintain a minimum closing bid price of $1.00 (“Minimum Bid Price Requirement”) per share as required by NASDAQ Listing Rule 5550(a)(2). The notice has no immediate effect on the listing or trading of the Company’s common stock and the common stock will continue to trade on The NASDAQ Capital Market under the symbol “HTBX.”

 

In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the Company has a compliance period of 180 calendar days, or until October 31, 2016, to regain compliance with NASDAQ Listing Rule 5550(a)(2). Compliance can be achieved automatically and without further action if the closing bid price of the Company’s stock is at or above $1.00 for a minimum of ten consecutive business days at any time during the 180-day compliance period, in which case NASDAQ will notify the Company of its compliance and the matter will be closed.

 

If, however, the Company does not achieve compliance with the Minimum Bid Price Requirement by October 31, 2016, the Company may be eligible for additional time to comply. In order to be eligible for such additional time, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify NASDAQ in writing of its intention to cure the deficiency during the second compliance period.

 

The Company intends to actively monitor the bid price of its common stock and will consider available options to regain compliance with the NASDAQ listing requirements, including such actions as effecting a reverse stock split to maintain its NASDAQ listing.