Annual report pursuant to Section 13 and 15(d)

Subsequent Events

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Subsequent Events
12 Months Ended
Mar. 31, 2020
Subsequent Events [Abstract]  
Subsequent Events

We have evaluated subsequent events through the date of this Annual Report and have identified the following material events and transactions that occurred after March 31, 2020:

 

Sales of Common Stock under the LPC Agreement

 

Subsequent to the effectiveness of the LPC Registration Statement on April 14, 2020, and through June 26, 2020, we have sold an additional 6,201,995 registered shares of our common stock to Lincoln Park and have received aggregate cash proceeds of $2,840,200.

 

Grants of Stock Options from the 2019 Stock Incentive Plan

 

On April 23, 2020, when the quoted market price of our common stock was $0.398 per share, the Compensation Committee of the Board granted options from our 2019 Plan to our independent directors, officers and employees and to certain consultants to purchase an aggregate of 1,555,000 shares of our common stock at an exercise price of $0.398 per share. The options were vested 25% upon grant with the remaining shares vesting over two years. On April 24, 2020, when the quoted market price of our common stock was also $0.398 per share, we granted options from our 2019 Plan to purchase 25,000 shares of our common stock to another consultant. Those options were also vested 25% upon grant with the remaining shares vesting over two years. On May 8, 2020, when the quoted market price of our common stock was $0.42 per share, the Board granted options from our 2019 Plan to additional consultants to purchase an aggregate of 225,000 shares of our common stock at an exercise price of $0.42 per share. The options were vested 25% upon grant with the remaining shares vesting over one year. On June 19, 2020 and June 24, 2020, when the quoted market price of our common stock was $0.5124 per share and $0.535 per share, respectively, we also granted options from our 2019 Plan to additional consultants to purchase 60,000 shares at $0.5124 per share on June 19, 2020 and 80,000 shares at $0.55 per share on June 24, 2020. In each of the June 2020 grants, the options were vested 25% upon grant with the remaining shares vesting over one year.

 

Sale of Common Stock and Warrants in the Spring 2020 Private Placement

 

In April 2020, in a self-directed private placement, we sold to an accredited investor units to purchase an aggregate of 125,000 unregistered shares of our common stock and four-year warrants to purchase 125,000 shares of our common stock at an exercise price of $0.50 per share and we received cash proceeds of $50,000 (the Spring 2020 Private Placement).

 

PPP Loan Agreement

 

On April 22, 2020, we entered into a note payable agreement with Silicon Valley Bank as lender (the Lender) (the PPP Loan Agreement), pursuant to which we received net proceeds of approximately $224,000 from a potentially forgivable loan from the U. S. Small Business Administration (SBA) pursuant to the Paycheck Protection Program (PPP) enacted by Congress under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) administered by the SBA (the “PPP Loan”). The PPP Loan provides for working capital to the Company and matures on April 22, 2022. Under the CARES Act and the PPP Loan Agreement, all payments of both principal and interest are deferred until at least October 22, 2020. The PPP Loan will accrue interest at a rate of 1.00% per annum, and interest will continue to accrue throughout the period the PPP Loan is outstanding, or until it is forgiven. The CARES Act (including subsequent guidance issued by SBA and U.S. Department of the Treasury related thereto) provides that all or a portion of the PPP Loan may be forgiven upon our request to the Lender, subject to requirements in the PPP Loan Agreement and the CARES Act.

 

Registration Statement for shares underlying warrants issued in Private Placements

 

On May 1, 2020, we filed a registration statement on Form S-3 (Registration No. 333-237968) to register approximately 12.1 million shares of common stock underlying outstanding warrants that we had issued in earlier private placement offerings, including the Summer 2018 Private Placement, the Fall 2018 Private Placement, the Fall 2019 Private Placement, the Winter 2019 Warrant Offering, the January 2020 Warrants and the Spring 2020 Private Placement, as well as common stock underlying warrants that had been previously issued to various consultants as full or partial compensation for their services. We also registered approximately 0.8 million shares of unregistered outstanding common stock held by former holders of warrants who had exercised such warrants subsequent to the Winter 2019 Warrant Modification. Further, we registered the approximately 0.1 million shares of common stock issued in the Spring 2020 Private Placement. The SEC declared the registration statement effective on May 13, 2020. As a result of the effectiveness of this registration statement, the shares of common stock underlying essentially all of our outstanding warrants has been registered.

 

PH94B Sublicense Agreement

 

On June 24, 2020, we entered into a strategic licensing and collaboration agreement for the clinical development and commercialization of PH94B with EverInsight Therapeutics Inc., a biopharmaceutical company focused on developing and commercializing transformative pharmaceutical products for patients in Greater China and other parts of Asia (the EverInsight Agreement). Under the terms of the EverInsight Agreement, EverInsight will be responsible for clinical development, regulatory submissions and commercialization of PH94B for treatment of SAD, and potentially other anxiety-related indications, in markets in Greater China, South Korea and Southeast Asia. EverInsight will make a non-dilutive upfront payment of $5.0 million to us, and we are eligible to receive additional development and commercial milestone payments in the future, upon successful attainment of specific milestones. We expect to receive net cash proceeds of approximately $4.475 million, after sublicense and consulting payments which we are obligated to make pursuant to our PH94B license from Pherin and other consulting agreements. On June 24, 2020, we issued 233,645 unregistered shares of our common stock, valued at $125,000, as partial compensation to a consultant for services related to the EverInsight Agreement.