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SEC Filings

S-1/A
OREXIGEN THERAPEUTICS, INC. filed this Form S-1/A on 04/09/2007
Entire Document
 
Table of Contents

 
OREXIGEN THERAPEUTICS, INC.
(a development stage company)

NOTES TO FINANCIAL STATEMENTS — (Continued)

6.   Accrued Expenses

 
Accrued expenses consist of the following:
 
                 
    December 31,  
    2005     2006  
 
Accrued preclinical and clinical trial expenses
  $     $ 2,268,851  
Accrued compensation related expenses
    136,747       761,788  
Accrued legal expenses
          104,126  
Other accrued expenses
          68,960  
                 
    $ 136,747     $ 3,203,725  
                 
 
7.   Redeemable Convertible Preferred Stock and Stockholders’ Equity
 
Redeemable Convertible Preferred Stock
 
During January 2004, the Company entered into agreements with several investors who collectively purchased 7,863,776 shares of Series A redeemable convertible preferred stock (“Series A Preferred Stock”) at $1.18 per share for cash proceeds of $9,193,866, net of issuance costs of $85,387. In addition, notes payable and accrued interest totaling $1,720,747 were converted into 1,458,259 shares of Series A Preferred Stock.
 
During April and May 2005, the Company entered into agreements with several investors who collectively purchased 14,830,509 shares of Series B redeemable convertible preferred stock (“Series B Preferred Stock” and, together with the Series A Preferred Stock, the “Preferred Stock”) at $2.36 per share for cash proceeds totaling $34,914,721, net of issuance costs of $85,279.
 
The holders (collectively, the “Preferred Holders”) of Preferred Stock are entitled to receive non-cumulative dividends at a rate of 8% per annum. These dividends are payable when and if declared by the Board of Directors. At December 31, 2006, the Board of Directors had not declared any dividends. The preferred dividends are payable in preference and in priority to any dividends on the Company’s common stock.
 
Shares of Preferred Stock are convertible into shares of common stock, at the option of the holder, at a conversion ratio of one-to-two, subject to certain further antidilutive adjustments. Preferred Holders vote on an equivalent basis with common shareholders on an as-converted basis.
 
Each share of Preferred Stock is automatically converted into common stock upon (i) the affirmative election of the holders of two-thirds of the outstanding shares of Preferred Stock, or (ii) the closing of a firmly underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of common stock for the account of the Company in which the per share price is at least $12.16 (as may be adjusted), and the gross cash proceeds are at least $30 million.
 
The holders of the Series A Preferred Stock and Series B Preferred Stock are entitled to receive liquidation preferences at the rate of $1.18 and $2.36 per share, respectively. Liquidation payments to the holders of Preferred Stock have priority and are made in preference to any payments to the holders of common stock.
 
The holders of Series A Preferred Stock are entitled to elect three members of the Company’s Board of Directors, and the holders of Series B Preferred Stock are entitled to elect two members of the Company’s Board of Directors.


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