Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On July 3, 2020, our Chief Executive Officer Dr. Frank Haluska sent a letter to
our Chairman that the Board has considered and construes as notice of
constructive resignation. The letter outlined Dr. Haluska's belief that events
have occurred that are sufficient to trigger his ability to resign for "Good
Reason" under his employment agreement, and that he intends to resign as of
August 8, 2020 assuming the "Good Reason" events are not cured within thirty
(30) days. After discussion and advice from Company legal counsel, the Board
has informed Dr. Haluska that it completely disagrees with the letter's
assertions regarding "Good Reason". At the same time, the Board has concluded
that based on the content and nature of Dr. Haluska's letter, it is reasonable
to treat the letter as a constructive resignation. As a result, the Board has
resolved to relieve Dr. Haluska of his CEO duties effective immediately. In the
letter, Dr. Haluska also confirms his intent to resign as a director of the
Company. However, as of this date he has not submitted his formal
resignation. Until a new CEO is identified and appointed the Board will handle
all matters related to CEO duties.
On July 6, 2020, the Company received notice from Danforth Advisors of its
intention to terminate without cause its Consulting Agreement with the Company
dated September 26, 2016. Pursuant to this agreement, Danforth Advisors has
provided CFO services for the Company since May 5, 2020 and will no longer act
in that role. The Company has engaged Line Consulting A.S Ltd. ("Line
Consulting") to provide all necessary financial consulting services and has
appointed Mr. Andrew Fine as acting CFO. Line Consulting has provided financial
consulting services for the Company since May 1, 2020. Danforth will continue to
provide financial consulting services, including working with Line Consulting,
for up to 60 days from the date of its notice.
Item 8.01. Other Events.
The Company previously announced as its priority the development of our
pan-RAS-inhibitor program. In order to execute on this priority, the Company
requires additional equity capital and/or a co-development partner willing to
finance development activities.
Starting in 2019, management has been working to identify licensing and
co-development partners, including with the assistance of Life Sciences
Advisors, a prominent consultancy.
The Company has also attempted to identify additional equity financing necessary
to support the pan-RAS-inhibitor program.
Despite management's efforts to attract co-development partners and financing
sources, to date these efforts have not resulted in opportunities that are
sufficiently mature and upon which the Company can execute.
In order to conserve cash and preserve optionality while alternatives are being
identified and assessed, the Company will be undertaking reductions in headcount
and other cost saving measures. These include plans to temporarily pause its
internal and external research and development work on the Company's
pan-RAS-inhibitor program until there is greater clarity regarding Anchiano's
ability to fund such work.
The Company has also begun to explore strategic alternatives and has engaged
Oppenheimer & Co. to assist with this effort.
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