ITEM 2.05 Costs Associated with Exit or Disposal Activities.
On April 26, 2022, the Board of Directors of Cortexyme, Inc. (the "Company") has
approved additional headcount reductions as part of its previously announced
cost reduction program (the "Plan") to rationalize operations and to allow
continued support for the needs of its business following the clinical hold on
atuzaginstat's (COR388) Investigational New Drug application (IND 134303). The
Company is further reducing headcount by 36%, bringing the total reduction to
67% from the January 2022 headcount levels.
The majority of this current reduction in force is expected take place by the
end of May 2022, and the remainder is expected be completed by the end of July
2022.
In connection with this current reduction in force, the Company estimates that
it will incur expenses of approximately $0.7 million, substantially all of which
will be cash expenditures and other costs relating to the Plan. These estimates
are subject to a number of assumptions, and actual results may differ. The
Company may also incur additional costs not currently contemplated due to events
that may occur as a result of, or that are associated with, the Plan.
ITEM 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Departure of an Executive Officer
On April 26, 2022, the Board of Directors of the Company approved certain
executive management changes. Effective May 2, 2022 (the "Departure Date"),
Michael Detke, M.D., Ph.D., the Company's Chief Medical Officer, will step down
from his position as the Chief Medical Officer.
In connection with the departure of Dr. Detke from the Company, the Company
intends to enter into a separation agreement (the "Separation Agreement") with
Dr. Detke providing for (i) a release of claims against the Company; and
(ii) cash severance payments of $354,750, which equals to nine months of
Dr. Detke's 2022 base salary. In addition, in the event the Company consummates
a change in control of control within three months after the Departure Date,
subject to satisfaction of specified conditions, Dr. Detke would also be
entitled to additional cash severance, payment of target annual bonus, and
accelerated vesting with respect to his equity awards.
Forward-Looking Statements
Certain Statements in this Current Report on Form 8-K contain "forward-looking
statements" that are subject to substantial risks and uncertainties.
Forward-looking statements contained herein may be identified by the use of
words such as "anticipate," "expect," "believe," "plan," "intend," "will,"
"may," "should," "estimate," "project," "outlook," "runway," "forecast,"
"potential" or other similar words. Examples of forward-looking statements
include, among others, statements relating to the Company's cash position; its
expectations regarding the timing of the Plan and cost savings and expenses
associated therewith. Forward-looking statements are based on the Company's
current expectations and are subject to inherent uncertainties, risks, and
assumptions that are difficult to predict and could cause actual results to
differ materially from what the Company expects. Further, certain
forward-looking statements are based on assumptions as to future events that may
not prove to be accurate. Factors that could cause actual results to differ
include, but are not limited to, the risks and uncertainties described the
section titled "Risk Factors" in the Company's Annual Report on Form 10-K filed
with the Securities and Exchange Commission (the "SEC") on March 1, 2022, and
other reports as filed with the SEC. Forward-looking statements contained in
this Current Report on Form 8-K are made as of this date, and the Company
undertakes no duty to update such information except as required under
applicable law.
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