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SEC Filings

OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 02/16/2007
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  •      the successful commercialization of our products; and
  •      the extent to which we in-license, acquire or invest in other indications, products, technologies and businesses.
In December 2006, we entered into a credit and security agreement with Merrill Lynch Capital providing for potential borrowing until June 30, 2007 of up to $17.0 million. We have not yet drawn down any amounts under the credit and security agreement, although we have paid a non-refundable fee totaling $85,000. If we borrow amounts under the credit and security agreement, we will be required to make monthly payments of principal and interest and all amounts then outstanding will become due and payable upon the earlier to occur of June 30, 2010 or three years from the last funding of any amounts under the agreement. Interest accrues on amounts outstanding under the agreement at a base rate set forth in the agreement plus an applicable margin, which ranges from 3.75% to 4.25% based on the date of borrowing. The loan is collateralized by substantially all of our assets other than, subject to certain limited exceptions, intellectual property. Subject to certain limited exceptions, amounts prepaid under the credit and security agreement are subject to a prepayment fee equal to 3% of the amount prepaid. In addition, upon repayment of the amounts borrowed for any reason, we will be required to pay an exit fee equal to the greater of $500,000 or 5% of the total amounts borrowed under the credit facility. Under the terms of the agreement, we are subject to operational covenants, including limitations on our ability to incur liens or additional debt, pay dividends, redeem our stock, make specified investments and engage in merger, consolidation or asset sale transactions, among other restrictions.
We believe that our existing cash and cash equivalents, together with the borrowing capacity under our $17.0 million credit and security agreement with Merrill Lynch Capital, will be sufficient to meet our projected operating requirements through at least March 31, 2008.
Until we can generate significant cash from our operations, we expect to continue to fund our operations with existing cash resources generated from the proceeds of offerings of our equity securities, potential borrowings and potential corporate collaborations. In addition, we may finance future cash needs through the sale of additional equity securities, strategic collaboration agreements and other debt financing. In addition, we cannot be sure that our existing cash and investment resources will be adequate, that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or our stockholders. Having insufficient funds may require us to delay, scale back or eliminate some or all of our development programs, relinquish some or even all rights to product candidates or renegotiate less favorable terms than we would otherwise choose. Failure to obtain adequate financing also may adversely affect our ability to operate as a going concern. If we raise additional funds by issuing equity securities, substantial dilution to existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash payment obligations as well as covenants and specific financial requirements that may restrict our ability to operate our business.
Contractual Obligations and Commitments
The following table describes our long-term contractual obligations and commitments as of December 31, 2006:
    Payments Due by Period  
          Less than 1
    Total     Year     1-3 Years     4-5 Years     After 5 Years  
Long-term debt obligations(1)
  $      —     $      —     $      —     $      —     $      —  
Long-term liabilities(2)
    534,052            —       1,433       532,619            —  
Operating lease obligations
    1,037,900       202,200       425,300       410,400        
License obligations(3)
  $ 1,571,952     $ 202,200     $ 426,733     $ 943,019     $