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SUBSEQUENT EVENTS
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Dec. 31, 2013
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NOTE 15 – SUBSEQUENT EVENTS
Commitments Between January 1, 2014 and March 27, 2014, the Company entered into contracts with various contract research organizations for which there are outstanding commitments aggregating approximately $5,600,000 for future work to be performed. On February 11, 2014, the Company entered into a lease amendment and expansion agreement, whereby the Company agreed to lease additional premises for office space, commencing May 1, 2014 and expiring on April 30, 2019. An increase to the original letter of credit will be required in the amount of $72,354. Future minimum lease payments under the agreement are as follows:
Related Party Transactions On March 18, 2014, Tonix Barbados entered into an agreement with Leder Laboratories, Inc. (“Leder”), to acquire intellectual property related to novel smallpox vaccines. As consideration, $125,000 in cash and 25,000 shares of the Company’s common stock were paid to Leder. On March 18, 2014, Tonix Barbados entered into an agreement with Starling Pharmaceuticals, Inc. (“Starling”), to acquire intellectual property related to radio and chemo protective agents. As consideration, $125,000 in cash and 25,000 shares of the Company’s common stock were paid to Starling. Leder and Starling are wholly-owned entities in which Dr. Seth Lederman, the Chief Executive Officer and Chairman of the Board of the Company, has a controlling interest. Equity transactions
From January 1 through March 27, 2014, the Company issued an aggregate of 1,127,866 shares of its common stock upon the exercise of warrants at $4.25 per share. Net proceeds received was approximately $4,800,000. On January 24, 2014, the Company entered into an underwriting agreement with Roth Capital Partners, LLC, as representative of several underwriters, relating to the issuance and sale of 2,898,550 shares of the Company’s common stock at a public offering price of $15.00 per share.
On January 29, 2014, the Company sold the shares for net proceeds of approximately $40.7 million, after deducting underwriting discounts and commissions and other offering expenses.
Options granted
On February 11, 2014, the Company granted options to purchase an aggregate of 173,500 shares of the Company’s common stock to officers and key employees at an exercise price equal to the volume weighted average price of the Company stock 30 calendar days prior to February 11, 2014 for a period of ten years, vesting 1/3 on the first anniversary and 1/36th each month thereafter for 24 months.
On February 11, 2014, the Company entered into an employment agreement (the “Agreement”) with Dr. Seth Lederman (“Lederman”) to continue to serve as our President, Chief Executive Officer and Chairman of the board of directors of the Company (the “Board”). Previously, the Company entered into a consulting agreement with Lederman & Co., LLC, pursuant to which Lederman received compensation for serving as the Company’s President and Chief Executive Officer. On February 11, 2014, the consulting agreement was terminated. The Agreement provides for various payment and benefits to Lederman in the event Lederman’s employment is terminated without cause (as defined) or Lederman resigns for Good Reason (as defined) as well as in the event employment is terminated as a result of death or permanent disability. Defined Contribution Plan
Effective March 3, 2014, the Company established a qualified defined contribution plan (the “401(k) Plan”) pursuant to Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), whereby all eligible employees may participate. Participants may elect to defer a percentage of their annual pretax compensation to the 401(k) plan, subject to defined limitations. The Company is required to make contributions to the 401(k) Plan equal to 100 percent of each participant’s pretax contributions of up to 19 percent of his or her eligible compensation, and the Company is also required to make a contribution equal to 6 percent of each participant’s salary, on an annual basis, subject to limitations under the Code.
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