INVIVO THERAPEUTICS HOLDINGS CORP. (NASDAQ:NVIV) Files An 8-K Costs Associated with Exit or Disposal ActivitiesItem 2.05. Costs Associated with Exit or Disposal Activities.
On August28, 2017, a committee of the Board of Directors of InVivo Therapeutics Holdings Corp. (the “Company”) approved a strategic restructuring of the Company that will refocus the Company’s efforts on re-opening enrollment for and completing the Company’s INSPIRE clinical trial. The Company implemented a temporary halt for the INSPIRE clinical trial in July2017, and is working on assessing the recommendations of the United States Food& Drug Administration and formulating a response that will include a protocol amendment.
As part of the restructuring, the Company will eliminate 13 positions across the organization. The Company expects the restructuring to be substantially completed by the end of the third quarter of 2017 and to be fully completed by the end of the fourth quarter of 2017. The Company currently expects the restructuring will result in total restructuring charges of approximately $810,000 to $1.1 million during the year ending December31, 2017, consisting of severance and benefit costs associated with the targeted staff reductions, which will be included in its results of operations for the third quarter of 2017. The Company is continuing to review the potential impact of the restructuring and is unable to estimate any additional restructuring costs or charges at this time. If the Company subsequently determines that it will incur additional major costs and restructuring charges, it will amend this Current Report on Form8-K with respect to such determination. The reduction in force is expected to increase compensation expenses by approximately $190,000 in 2017 as a result of severance charges and to reduce compensation expenses, excluding bonuses, by approximately $1.9 million in 2018. The restructuring is expected to extend the Company’s cash runway into the beginning of the third quarter of 2018.
The full text of the press release announcing the restructuring is attached as Exhibit99.1 to this Current Report and is incorporated herein by reference.
Item 2.05. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b)In connection with the restructuring, on August28, 2017, the Company notified Thomas Ulich, M.D., the Company’s Chief Scientific Officer, that his employment will be terminated effective August30, 2017. Under Dr.Ulich’s employment agreement, the Company is obligated to pay severance (consisting of base salary in effect at the time of termination) to Dr.Ulich for a period of one year, plus continued health insurance benefits for a period of 6 months. The severance payments are contingent upon execution of a general release of claims against the Company and are in addition to any accrued obligations to Dr.Ulich unpaid by the Company prior to the date of termination.
The description of the terms of Dr.Ulich’s employment agreement is qualified in its entirety by reference to the employment agreement, which was filed as Exhibit10.3 to the Company’s Quarterly Report on Form10-Q filed with the SEC on November4, 2015.
Item 2.05. Financial Statements and Exhibits.
(d)Exhibits
99.1 Press Release