Use of Proceeds
We estimate that we will receive approximately $12.3 million in net proceeds
from this offering, or approximately $14.4 million if the underwriters'
over-allotment option is exercised in full, based upon an assumed initial public
offering price of $5.00 per share, after deducting underwriting discounts and
commissions and estimated offering expenses of approximately $1.6 million
payable by us, including the non-accountable expense allowance of 2.0% of the
gross proceeds of this offering.
A $1.00 increase (decrease) in the assumed initial public offering price of
$5.00 per share, would increase (decrease) the net proceeds to us from this
offering by approximately $2.7 million after deducting underwriting discounts
and commissions and estimated offering expenses payable by us, assuming the
number of shares offered by us, as set forth on the cover page of this
prospectus, remains the same. Regardless of whether there is a decrease of $1.00
in the assumed initial public offering price, we anticipate that the net
proceeds from this offering, our existing cash and cash equivalents and
continuing sales of Abbokinase will be sufficient to meet our anticipated cash
requirements until September 2008.
We plan to utilize the net proceeds from this offering, which we estimate at
$12.3 million, or $14.4 million if the underwriters' over-allotment option is
exercised in full, in the following manner:
• approximately $8 million to fund development activities in our SonoLysis
programs in ischemic stroke, including a Phase I/II clinical trial for
SonoLysis+tPA therapy, preclinical safety studies for our SonoLysis therapy,
and manufacturing, additional personnel and material costs related to these
• approximately $2 million to fund Abbokinase commercialization, including
sales and marketing costs, medical affairs activities, continuation of our
ongoing product stability studies and related regulatory matters, product
storage and labeling, continuation of our ongoing 200-patient immunogenicity
study, rebranding, additional personnel and exploring the regulatory and
commercial feasibility of manufacturing additional Abbokinase inventory;
• approximately $1 million to fund research and preclinical development
activities of our SonoLysis programs for additional indications, as well as
our NanO2 and other microbubble technologies; and
• working capital and other general corporate purposes.
The amounts we actually expend in these areas may vary significantly from our
expectations and will depend on a number of factors, including developments
relating to scientific, regulatory, competitive and partnering matters.
Accordingly, management will retain broad discretion in the allocation of the
net proceeds of this offering. A portion of the net proceeds may be used to
partially repay our $15.0 million secured non-recourse promissory note maturing
in December 2007, which would be reduced to approximately $11.9 million as of
June 30, 2007, including accrued interest at the rate of 6% per annum, after
applying the escrowed funds associated with our Abbokinase sales through
June 30, 2007, if we are unable to secure additional significant sales of
Abbokinase to our third party distributors or to refinance the promissory note
with Abbott Laboratories. We will use a portion of the net proceeds from this
offering to repay the promissory note only if, at the time of such repayment, we
anticipate sales of Abbokinase sufficient to replenish our cash resources so as
not to affect our planned expenditures under our then-current operating plan.
Additionally, a portion of the net proceeds may be used to acquire or invest in
complementary businesses, technologies, services or products. We have no current
plans, agreements or commitments with respect to any such material acquisition
or investment, and we are not currently engaged in any negotiations with respect
to any such transaction. Pending such uses, the net proceeds of this offering
will be invested in short-term, interest-bearing, investment-grade securities.