Item 2.05 Costs Associated with Exit or Disposal Activities.
Following Otonomy, Inc.'s (the "Company") previously announced plans to pause
its product development activities and take other steps to reduce costs in order
to preserve its cash resources, and in connection with the planned Dissolution
(as defined below), the Company has reduced its workforce, including the
termination of all employees, effective as of December 15, 2022 (the
"Reduction").
The Company estimates that it will incur aggregate charges of approximately
$5.0 million for severance and other employee termination-related costs in the
fourth quarter of 2022.
The costs that the Company expects to incur are subject to a number of
assumptions, and actual results may differ from the Company's original estimate.
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, these
actions. If the Company subsequently determines that it will incur additional
significant costs associated with these actions, it will amend this Current
Report on Form 8-K to disclose such information.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On December 15, 2022, in connection with the Reduction, David A. Weber, Ph.D.,
President and Chief Executive Officer, Paul E. Cayer, Chief Financial Officer
and Chief Business Officer, and Alan C. Foster, Ph.D., Chief Scientific Officer,
terminated employment with the Company. Dr. Weber, Mr. Cayer and Dr. Foster will
receive severance benefits pursuant to the terms of their executive employment
agreements with the Company, dated July 30, 2014, April 16, 2021 and April 16,
2021, respectively. Dr. Weber continues to serve as a director on the Company's
board of directors (the "Board"). Mr. Cayer continues to serve as Chief
Financial and Business Officer and Secretary, was appointed President effective
December 15, 2022, and will be paid an hourly rate based on his base salary in
effect immediately prior to his termination of employment.
Item 8.01. Other Events
On December 13, 2022, the Board approved the liquidation and dissolution of the
Company pursuant to a Plan of Liquidation and Dissolution (the "Plan"), subject
to stockholder approval (the "Dissolution"). The Company intends to seek
approval of the Dissolution at a special meeting of stockholders and will file
proxy materials with the Securities and Exchange Commission ("SEC") as soon as
practicable. A copy of the Plan is filed herewith as Exhibit 2.1 and
incorporated herein by reference.
A copy of the press release issued by the Company on December 19, 2022
announcing, among other things, the Board's approval of the Dissolution is filed
herewith as Exhibit 99.1 and incorporated herein by reference.
--------------------------------------------------------------------------------
Important Additional Information filed with the SEC
This Current Report on Form 8-K is for informational purposes only. It is not a
solicitation of a proxy. In connection with the Plan, the Company intends to
file with the SEC a preliminary proxy statement and other relevant materials.
THE COMPANY'S STOCKHOLDERS ARE URGED TO READ THE PRELIMINARY PROXY STATEMENT AND
THE OTHER RELEVANT MATERIALS THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
COMPANY AND THE PLAN OF DISSOLUTION. Stockholders may obtain a free copy of the
proxy statement and the other relevant materials (when they become available),
and any other documents filed by the Company with the SEC, at the SEC's web site
at http://www.sec.gov. In addition, the Company will make available or mail a
copy of the definitive proxy statement to stockholders on the record date when
it becomes available. A free copy of the proxy statement, when it becomes
available, and other documents filed with the SEC by the Company may also be
obtained by directing a written request to: Otonomy, Inc., Investor Relations,
4796 Executive Dr, San Diego, CA 92121 or at https://investors.otonomy.com/.
Stockholders are urged to read the proxy statement and the other relevant
materials when they become available before making any voting or investment
decision with respect to the Plan.
Participants in the Solicitation
The Company and its directors and executive officers may be deemed to be
participants in the solicitation of proxies from the Company's stockholders in
connection with the Plan. Information about the persons who may be considered to
be participants in the solicitation of the Company's stockholders in connection
with the Plan, and any interest they have in the Plan, will be set forth in the
definitive proxy statement when it is filed with the SEC. These documents (when
they become available) may be obtained free of charge at the SEC's website at
www.sec.gov. In addition, stockholders may obtain free copies of the documents
filed with the SEC by the Company by directing a written request to: Otonomy,
Inc., Investor Relations, 4796 Executive Dr, San Diego, CA 92121 or at
https://investors.otonomy.com/.
Cautionary Note Regarding Forward Looking Statements
This Current Report on Form 8-K contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. Any statements
contained in this Current Report on Form 8-K that are not statements of
historical fact may be deemed to be forward-looking statements. Words such as
"intends," "expects," "estimates," and similar expressions are intended to
identify forward-looking statements. These forward-looking statements are based
upon the Company's current expectations. Actual results or developments may
differ materially from those projected or implied in these forward-looking
statements. Factors that may cause such a difference include, among other
things, the risks and uncertainties related to completion of the Dissolution on
the anticipated terms or at all, unexpected personnel-related termination or
other costs, and market conditions. More information about the risks and
uncertainties faced by the Company is contained in the section titled "Risk
Factors" in the Company's Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on November 10, 2022. The forward-looking
statements are based on information available to the Company as of the date
hereof. The Company disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Item
No. Description
2.1 Plan of Liquidation and Dissolution of Otonomy, Inc.
99.1 Press Release issued by Otonomy, Inc. dated December 19, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL document
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses