Item 2.05 - Costs Associated with Exit or Disposal Activities
On December 14, 2020, the Board of Directors of Assertio Holdings, Inc. (the
"Company") approved a restructuring of the Company's workforce, which will
include the layoff of 107 full-time employees. In addition, this restructuring
will include the departure of four executives. The restructuring is intended to
reduce the Company's operating costs.
The Company expects to recognize approximately $8.0 to $10.0 million in
severance and restructuring charges in the fourth quarter of 2020 and throughout
2021, consisting primarily of severance and other termination benefits. The
layoffs and executive departures will result in annual expense savings of
approximately $45.0 million.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Resignation of Todd Smith
Effective as of December 14, 2020, Todd N. Smith, President and Chief Executive
Officer and a director of Assertio Holdings, Inc. (the "Company") voluntarily
resigned as President and Chief Executive Officer and as a director of the
Company. Mr. Smith's decision to resign as a director does not arise from any
disagreement with the Company on any matter relating to the Company's
operations, policies or practices.
Election and Appointment of Daniel A. Peisert
Effective upon Mr. Smith's resignation, the Board of Directors of the Company
elected Daniel A. Peisert to serve as the Company's President and Chief
Executive Officer and appointed him as a director. There are no arrangements or
understandings between Mr. Peisert and any other persons pursuant to which he
was selected as President and Chief Executive Officer or as a director. There
are also no family relationships between Mr. Peisert and any director or
executive officer of the Company and he has no direct or indirect material
interest in any transaction required to be disclosed pursuant to Item 404(a) of
Regulation S-K. Mr. Peisert is 46 years old.
Mr. Peisert has served as Assertio's Executive Vice President since May 2020 and
Chief Financial Officer since December 2018. Mr. Peisert previously served as
Assertio's Senior Vice President, Business Development from August 2018 to
November 2018 and Assertio's Vice President, Business Development from
September 2017 to August 2018. Prior to Assertio, from October 2016 to
September 2017, Mr. Peisert served as Vice President, US Legacy Pharmaceuticals
for Concordia International Corp., an international specialty pharmaceutical
company. Prior to this, from March 2014 to October 2016, he was Vice President,
Business Development for Concordia. From February 2012 to February 2014,
Mr. Peisert served as a Research Analyst for Cupps Capital and from 2012 to 2013
he served as a member of the Board of Directors and Secretary of SureGene LLC.
From 2008 to 2012, Mr. Peisert was Director of Finance and Business Development
for Marathon Pharmaceuticals, LLC a privately held specialty pharmaceutical
company. Prior to entering the pharmaceutical industry, he was a healthcare
equity analyst and portfolio manager for Magnetar Capital and UBS O'Connor and
began his career as an auditor for PricewaterhouseCoopers. Mr. Peisert holds a
B.S. in Business with an emphasis on Accounting from the University of
Minnesota. Through his executive leadership at the Company and other companies,
Mr. Peisert contributes extensive finance, business and management experience
operating pharmaceutical companies.
Mr. Smith's Separation Agreement
In connection with Mr. Smith's resignation as President and Chief Executive
Officer of the Company, the Company and Mr. Smith agreed on the terms of
Mr. Smith's separation. In consideration of his release of claims against the
Company, he will be entitled to (1) a lump sum payment equal to $948,600
(including his 2020 bonus and $3,000 in lieu of COBRA premiums) and salary
continuation of $18,750 per month for 24 months; and (2) vesting of his unvested
stock options. To assist with an orderly transition, Mr. Smith has also entered
into a consulting arrangement with the Company under which he will provide
consulting services to the Company for a period of three months following his
departure from the Company in exchange for the Company's payments to him of
$11,000 per month. Mr. Smith is also required to execute a release of claims in
order to receive, among other things, the cash payments described above.
Resignation of Mark Strobeck, Ph.D
Effective as of December 14, 2020, Mark Strobeck, Ph.D., Executive Vice
President and Chief Operating Officer of the Company voluntarily resigned as
Executive Vice President and Chief Operating Officer of the Company.
Dr. Strobeck's Separation Agreement
In connection with Dr. Strobeck's resignation as Executive Vice President and
Chief Operating Officer of the Company, the Company and Dr. Strobeck agreed on
the terms of his separation. In consideration of his release of claims against
the Company, he will be entitled to (1) a lump sum payment equal to $562,119
(including his 2020 bonus and $3,000 in lieu of COBRA premiums) and salary
continuation of $12,220 per month for 24 months; and (2) vesting of his unvested
stock options. To assist with an orderly transition, Dr. Strobeck has also
entered into a consulting arrangement with the Company under which he will
provide consulting services to the Company for a period of three months
following his departure from the Company in exchange for the Company's payments
to him of $6,667 per month. Dr. Strobeck is also required to execute a release
of claims in order to receive, among other things, the cash payments described
above.
Resignation of Timothy Walbert
On December 14, 2020, Timothy Walbert voluntarily resigned from his position as
a director of the Company, effective immediately.
Special Note Regarding Forward Looking Statements
Statements included herein that are not historical facts are forward-looking
statements that reflect the Company's management's current expectations,
assumptions and estimates of future performance and economic conditions. These
forward-looking statements are made in reliance on the safe harbor provisions of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
relate to, among other things, future events or the future performance or
operations of the Company. All statements other than historical facts may be
forward-looking statements and can be identified by words such as "anticipate,"
"believe," "could," "design," "estimate," "expect," "forecast," "goal,"
"guidance," "imply," "intend," "may", "objective," "opportunity," "outlook,"
"plan," "position," "potential," "predict," "project," "prospective," "pursue,"
"seek," "should," "strategy," "target," "would," "will," "aim" or other similar
expressions that convey the uncertainty of future events or outcomes are used to
identify forward-looking statements. Such forward-looking statements are not
guarantees of future performance and are subject to risks, uncertainties and
other factors, some of which are beyond the control of the Company. Factors that
could cause the Company's actual results to differ materially from those implied
in the forward-looking statements include: (1) risks related to disruption of
management time from ongoing business operations due to the integration of the
merger with Zyla Life Sciences (the "Merger") and/or the restructuring;
(2) unexpected costs, charges or expenses resulting from the Merger and/or the
restructuring; (3) the ability of the Company to retain key personnel;
(4) potential adverse changes to business relationships resulting from the
Merger; (5) the combined company's ability to achieve the growth prospects and
synergies expected from the transaction, as well as delays, challenges and
expenses associated with integrating the combined company's existing businesses;
(6) negative effects of the Merger on the market price of the Company's common
stock, credit ratings and operating results; (7) legislative, regulatory and
economic developments, including changing business conditions in the industries
in which the Company operates; (8) the Company's ability to successfully pursue
and complete business development, strategic partnerships, and investment
opportunities to build and grow for the future; (9) the commercial success and
market acceptance of the Company's products; (10) coverage of the Company's
products by payors and pharmacy benefit managers; (11) the Company's ability to
execute on its sales and marketing strategy, including developing relationships
with customers, physicians, payors and other constituencies; (12) the entry of
any generic products for any of the Company's products; (13) the outcome of the
Company's opioid-related investigations, the Company's opioid-related litigation
brought by state and local governmental entities and private parties, and the
Company's insurance, antitrust, securities class action and other litigation,
and the costs and expenses associated therewith; (14) the outcome of the
Company's antitrust litigation relating to the drug Glumetza ®; (15) the
Company's estimates regarding expenses, future revenues, capital requirements
and needs for additional financing; (16) the Company's ability to generate
sufficient cash flow from its business to make payments on its indebtedness;
(17) the Company's ability to restructure or refinance its indebtedness and the
Company's compliance with the terms and conditions of the agreements governing
its indebtedness; (18) compliance or non-compliance with legal and regulatory
requirements related to the development or promotion of pharmaceutical products
in the U.S.; (19) the Company's ability to raise additional capital, if
necessary; (20) variations in revenues obtained from collaborative agreements;
(21) the Company's collaborative partners' compliance or non-compliance with
obligations under its collaboration agreements; (22) the ability of the
Company's common stock to regain compliance with Nasdaq's minimum closing bid
requirement of at least $1.00 per share; (23) obtaining and maintaining
intellectual property protection for the Company's products; (24) the Company's
ability to operate its business without infringing the intellectual property
rights of others; (25) the impact of disasters, acts of terrorism or global
pandemics, including COVID-19; (26) general market conditions; (27) the direct
and indirect impact of the resignations, appointment, and restructuring
described herein; and other risks listed in the Company's filings with the
United States Securities and Exchange Commission ("SEC"). These risks are more
fully described in the joint proxy statement/prospectus filed with the SEC in
connection with the Merger and the Company's Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q filed with the SEC and in other filings the
Company makes with the SEC from time to time. Investors and potential investors
are urged not to place undue reliance on forward-looking statements in this
communication, which speak only as of this date. While the Company may elect to
update these forward-looking statements at some point in the future, it
specifically disclaims any obligation to update or revise any
forward-looking-statements contained herein whether as a result of new
information or future events, except as may be required by applicable law.
Nothing contained herein constitutes or will be deemed to constitute a forecast,
projection or estimate of the future financial performance of the Company,
whether following the resignations, appointment, and restructuring described
herein or otherwise.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number Description
99.1 Press release dated December 15, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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