SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On November 5, 2023, the Company entered into a Non-exclusive Collaboration and License Agreement (the “Halozyme License Agreement”) with Halozyme, Inc. (“Halozyme”).

Under the terms of the Halozyme License Agreement, Halozyme granted the Company a non-exclusive license to Halozyme’s ENHANZE® drug delivery technology for the development of a subcutaneous formulation of ACU193 (such combination, the “Product”). Halozyme will also be the Company’s exclusive supplier of clinical and commercial supplies of the API for Halozyme’s PH20 product.

The Company will make a seven figure upfront payment for the license to Halozyme’s technology. Additionally, the Company will make milestone payments tied to achievement of certain development and commercialization milestone events with respect to the Product, as well as milestone payments based on achievement of certain net sales levels of the Product. The Company will also make single-digit royalty payments based on worldwide net sales of the Product.

On November 10, 2023 (the “Closing Date”), the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with the lenders referred to therein (the “Lenders”), K2 HealthVentures LLC (“K2HV”), as administrative agent for the Lenders, and Ankura Trust Company, LLC, as collateral agent for the Lenders. The Loan Agreement provides up to $50.0 million principal in term loans (the “Term Loan”) consisting of a first tranche of $30.0 million funded on the Closing Date and a subsequent second tranche of up to $20.0 million upon the Company’s request, subject to review by the Lenders of certain information from the Company and discretionary approval by the Lenders. The Term Loan matures on November 1, 2027, provided, that the maturity date may be extended to November 1, 2028 if the Company achieves certain other financing milestones.

The obligations of the Company under the Loan Agreement are secured by substantially all of the assets of the Company, excluding the Company’s intellectual property.

The Term Loan bears a variable interest rate equal to the greater of (i) 9.65% and (ii) the sum of (a) the Prime Rate as reported in the Wall Street Journal plus (b) 1.15%. The Company may prepay, at its option, all, or a portion of the Term Loan then outstanding plus the accrued and unpaid interest on the portion of principal so repaid, subject to a prepayment premium to which the Lenders are entitled and certain notice requirements.

The Lenders may elect at any time following the Closing Date and prior to the full repayment of the Term Loan to convert any portion of the principal amount of the term loans then outstanding, up to an aggregate of $2.5 million in principal amount, into shares of the Company’s common stock (the “Conversion Shares”), at a conversion price of $2.53 per share, subject to certain beneficial ownership limitations.

In addition, under the Loan Agreement, the Company issued to K2HV a warrant to purchase up to 730,769 shares of the Company’s common stock at an exercise price of $1.95 per share.