Item 2.02 Results of Operations and Financial Condition.
On January 31, 2023, OptiNose, Inc. (the "Company") issued a press release
reiterating it's previous financial guidance:
•XHANCE net revenues for the full year of 2022 are expected to be between $74
and $78 million;
•average XHANCE net revenue per prescription for the full year of 2022 is
expected to be approximately $220; and
•total GAAP operating expenses (selling, general & administrative expenses and
research & development expenses) for the full year of 2022 are expected to be
between $127 - $131 million, of which the Company expects stock-based
compensation to be approximately $9 million.
This financial information is preliminary, subject to change, and has not been
reviewed by the Company's independent registered public accounting firm.
A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is
incorporated herein by reference.
The information in this Item 2.02 and the related Exhibit 99.1 attached hereto
shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of that section, nor shall it be deemed to be incorporated by
reference in any Company filing under the Securities Act or the Exchange Act,
except as expressly set forth by specific reference in such a filing.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On January 30, 2023, Peter K. Miller stepped down as Chief Executive Officer and
as a member of the Company's Board of Directors (the "Board") and the Board
appointed Dr. Ramy A. Mahmoud as Chief Executive Officer and as a member of the
Board, in each case, effective as January 30, 2023. Dr. Mahmoud was appointed as
a Class I director to the Board to fill the vacancy created by Mr. Miller
stepping down, to serve until the 2024 annual meeting of stockholders and until
his successor has been duly elected and qualified or until his earlier death,
removal, or resignation. A copy of the press release announcing this CEO
transition is filed as Exhibit 99.1 to this Form 8-K and is incorporated herein
by reference.
Dr. Mahmoud, age 58, has served as the Company's President and Chief Operating
Officer since 2010. Dr. Mahmoud has led both the commercial and R&D functions
during his tenure at Optinose. Prior to joining the Company, Dr. Mahmoud spent
14 years at Johnson & Johnson where he was Chief Medical Officer and a member of
the Global Management Board of the Ethicon group of companies. He also held
senior roles in the Pharmaceutical sector, serving on the management board of
several operating companies and leading a range of functions in both R&D and
commercial organizations. Dr. Mahmoud participated in the development, launch
and/or commercialization of dozens of pharmaceutical and medical device products
spanning multiple therapeutic categories. Dr. Mahmoud also served for 10 years
on active duty in the U.S. Army and an additional 10 years in the Army Reserves,
achieving the rank of Lieutenant Colonel and heading the Department of
Epidemiology at the Walter Reed Army Institute of Research. He has published
more than 80 peer-reviewed papers and textbook chapters, and has served as a
scientific reviewer for a number of journals and textbooks. Dr. Mahmoud earned a
Master of Healthcare Management and Policy degree from the Harvard School of
Public Health and an M.D. from the University of Miami.
There are no arrangements or understandings between Dr. Mahmoud and any other
person pursuant to which Dr. Mahmoud was appointed as Chief Executive Officer
and as a member of the Board. There are no relationships or transactions in
which Dr. Mahmoud has or will have an interest, or was or is a party, requiring
disclosure under Item 404(a) of Regulation S-K.
Effective as of January 30, 2023, Anthony Krick, the Company's VP and Chief
Accounting Officer, will assume the responsibilities of the principal financial
officer on an interim basis.
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Mahmoud Amended and Restated Employment Agreement
In connection with his appointment as the Company's Chief Executive Officer, the
Company and Dr. Mahmoud entered into an Amended and Restated Employment
Agreement, dated January 30, 2023 (the "Mahmoud Amended and Restated Employment
Agreement"). The Mahmoud Amended and Restated Employment Agreement amends and
restates Dr. Mahmoud's prior employment agreement to:
•reflect his new role as Chief Executive Officer and as a member of the Board;
•provide that the Board shall cause Dr. Mahmoud to be nominated to stand for
re-election to the Board at future meetings of the stockholders of the Company,
subject to certain specified exceptions;
•increase his base salary to $660,000 per year and increase his target
discretionary annual performance-based cash bonus to 65% of his base salary;
•provide for (i) a non-qualified stock option grant to purchase up to 549,202
shares of the Company's common stock at a per share purchase price equal to the
closing price of a share of the Company's common stock on the NASDAQ Global
Select Market on January 30, 2023 (the date of grant). The non-qualified stock
option will vest over four years, with 25% of the options vesting on the first
anniversary of the grant date and the remainder vesting in thirty-six (36) equal
monthly installments thereafter. The vesting of options is subject to Dr.
Mahmoud's continuous service with the Company through each such vesting date,
and (ii) a grant of 366,135 restricted stock units, 25% of which will vest on
the first anniversary of the grant date and the remainder vesting in twelve (12)
equal quarterly installments thereafter; provided that, in the event XHANCE® is
approved by the U.S. FDA for commercialization for the treatment of chronic
rhinosinusitis or a substantially similar indication in the U.S., then any
unvested restricted stock units shall become fully-vested on the four month
anniversary of such approval, subject to Dr. Mahmoud's continued service through
such date. The non-qualified stock option grant and the restricted stock unit
grant are being made to Dr. Mahmoud in lieu of annual equity grant in 2023 and
are being made pursuant to the OptiNose, Inc. 2010 Stock Incentive Plan, as
amended and restated (the "2010 Plan") and are subject to the terms and
conditions specified in the 2010 Plan, the Form of Non-Qualified Stock Option
Agreement and the Form of Restricted Stock Unit Agreement previously filed by
the Company with the SEC.
•increase the severance benefits that Dr. Mahmoud shall be entitled to receive
if his employment is terminated by the Company without Cause or by Dr. Mahmoud
for Good Reason within three (3) months prior to a Change of Control or eighteen
(18) months after a Change of Control (as such capitalized terms are as defined
in the Mahmoud Amended and Restated Employment Agreement), subject to his
execution and non-revocation of a release of claims and compliance with the
restrictive covenants and other terms set forth in the Amended and Restated
Employment Agreement to: (i) an amount equal to 200% of the sum of his annual
base salary and target bonus at the rate in effect on his date of termination,
(ii) payment of a pro-rata bonus for the year in which such employment
termination occurs; (iii) a lump sum payment to Dr. Mahmoud equivalent to the
value of 6 months of additional health insurance coverage for him and his
eligible dependents, such payment to be made following the expiration of the
18-month period during which the Company shall pay for Dr. Mahmoud's and his
eligible dependents to continue to be covered under the Company's health
insurance plan through COBRA; and (iv) all of Dr. Mahmoud's then-outstanding
equity awards granted to him by the Company will become immediately vested.
•modify the binding arbitration provisions contained in the agreement.
Except as noted above, all other provisions contained in Dr. Mahmoud's prior
employment agreement are restated, without substantial change, in the Mahmoud
Amended and his Amended Agreement.
The foregoing is a summary description of certain terms of the Mahmoud Amended
and Restated Employment Agreement, Non-Qualified Stock Option Agreement and
Restricted Stock Unit Agreement and, by its nature, is not complete. It is
qualified in its entirety by reference to the Mahmoud Amended and Restated
Employment Agreement, a copy of which is attached as Exhibit 10.1 to this
Current Report on Form 8-K, and is incorporated herein by reference.
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Miller Agreements
In connection with Mr. Miller stepping down as Chief Executive Officer and as a
member of the Board, the Company and Mr. Miller have mutually agreed that Mr.
Miller's employment will terminate as of January 31, 2023. Subject to Mr.
Miller's execution and non-revocation of a Separation Agreement and General
Release in the form attached as Exhibit 10.2 to this Current Report on Form 8-K,
he will be eligible to receive (i) a payment equal to twelve (12) months of his
base salary and target bonus, such payment to be made in twenty-four (24)
substantially equivalent semi-monthly installments and (ii) twelve (12) months
of continued coverage under the Company's group health insurance plan through
COBRA at active employee rates. In addition, the Company and Mr. Miller entered
into a Consulting Agreement, dated January 30, 2023 (the "Miller Consulting
Agreement") pursuant to which Mr. Miller will provide certain transition and
other services to the Company. The Miller Consulting Agreement has a term of 6
months and provides that (i) Mr. Miller will receive a monthly retainer of
$10,000, (ii) Mr. Miller's outstanding equity grants will continue to vest
during the term of the agreement and shall remain exercisable until December 31,
2023, and (iii) Mr. Miller may not solicit employees, customers or suppliers of
the Company during the term of the agreement and for a period of 1 year
following its termination.
The foregoing is a summary description of certain terms of the Miller Separation
Agreement and the Miller Consulting Agreement and, by its nature, is not
complete. It is qualified in its entirety by reference to the Miller Separation
Agreement and the Miller Consulting Agreement, copies of which are attached as
Exhibit 10.2 and Exhibit 10.3 to this Current Report on Form 8-K, respectively,
and each are incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Amended and Restated Employment Agreement, dated January 30, 2023,
between OptiNose US, Inc. and Ramy A. Mahmoud
10.2 Form of Separation Agreement and General Release
Consulting Agreement, dated January 3 0 , 2023, between Peter K.
10.3 Miller and OptiNose US, Inc.
99.1 Press Release issued by OptiNose, Inc., dated January 31, 2023
Cover Page Interactive Data File (embedded within the Inline XBRL
104 document)
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