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SEC Filings

S-1/A
OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 04/09/2007
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DILUTION
 
If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock after this offering. As of December 31, 2006, our historical negative net tangible book value was $(15.8) million, or $(2.34) per share of common stock, based on 6,784,001 shares of our common stock outstanding at December 31, 2006, including the equivalent common shares related to our Series C convertible preferred stock. Our historical negative net tangible book value per share represents the amount of our total tangible assets reduced by the amount of our total liabilities and redeemable convertible preferred stock, divided by the total number of shares of our common stock outstanding as of December 31, 2006, including the equivalent common shares related to our Series C convertible preferred stock. After giving effect to the conversion upon consummation of this offering of all of our outstanding shares of Series A and Series B redeemable preferred stock into 12,076,269 shares of our common stock, our pro forma net tangible book value as of December 31, 2006 would have been $30.1 million, or $1.59 per share. After giving effect to our sale in this offering of 6,000,000 shares of our common stock at an assumed initial public offering price of $12.00 per share (the mid-point of the price range set forth on the cover page of this prospectus) and after deducting estimated underwriting discounts and commissions and estimated offering costs payable by us, our pro forma as adjusted net tangible book value as of December 31, 2006 would have been $95.2 million, or $3.83 per share of our common stock. This represents an immediate increase of net tangible book value of $2.24 per share to our existing stockholders and an immediate dilution of $8.17 per share to investors purchasing shares in this offering. The following table illustrates this per share dilution:
 
                 
Assumed initial public offering price per share
          $ 12.00  
Historical net tangible book value per share at December 31, 2006
  $ (2.34 )        
Pro forma increase per share attributable to conversion of all outstanding shares of redeemable preferred stock
    3.93          
                 
Pro forma net tangible book value per share at December 31, 2006 before giving effect to this offering
    1.59          
Increase per share attributable to investors purchasing shares in this offering
    2.24          
                 
Pro forma net tangible book value per share, as adjusted to give effect to this offering
            3.83  
                 
Dilution to investors in this offering
          $ 8.17  
                 
 
Each $1.00 increase or decrease in the assumed public offering price of $12.00 per share (the mid-point of the price range set forth on the cover page of this prospectus) would increase or decrease, our pro forma net tangible book value by approximately $5.6 million, the pro forma net tangible book value per share after this offering by approximately $0.22 per share and the dilution in pro forma net tangible book value per share to investors in this offering by approximately $0.22 per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering costs payable by us.
 
If the underwriters exercise their over-allotment option in full, the pro forma net tangible book value per share after giving effect to this offering would be $4.08 per share, and the dilution in pro forma net tangible book value per share to investors in this offering would be $7.92 per share.


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