Aevi Loan |
12 Months Ended |
|---|---|
Dec. 31, 2019 | |
| Receivables [Abstract] | |
| Aevi Loan |
Aevi Loan
As discussed in detail in Note 17, on December 5, 2019, the Company entered into a Merger Agreement with Aevi that was subsequently consummated during the first quarter of 2020. In connection with the Merger Agreement, Cerecor agreed to fund certain expenses of Aevi related to the exercise of an exclusive license from MedImmune Limited to develop and commercialize a Phase 2‑ready fully human monoclonal antibody that targets interleukin 18, or IL‑18, AEVI‑007 (the "AZ Option"), as well as fund the operating expenses of Aevi from December 5, 2019 through the earlier of the termination of the Merger Agreement or the closing of the Merger. Cerecor received from Aevi two promissory notes in consideration for the loans for such expenses. In December 2019, Aevi requested and Cerecor funded a $4.1 million advance under the note specific to the AZ Option. Aevi did not request any advances under the note specific to general operating expenses.
Pursuant to the Aevi Loan, the maximum loan amount was $5.0 million, together with interest on the outstanding principal amount of all such advances at an annual rate of 5%. The use of proceeds was limited to fund obligations related to the AZ Option. All unpaid principal and unpaid accrued interest on the Aevi Loan was due and payable in full on December 5, 2020 (unless the Merger Agreement was terminated or upon consummation of the Merger). Upon termination of the Merger Agreement for any reason, Aevi would be required to repay the amount borrowed under the Aevi Loan in full. Upon consummation of the Merger, the Aevi Loan was to be forgiven.
As of December 31, 2019, it was unknown if the Merger would be consummated. Accordingly, as of December 31, 2019, the Company recognized the $4.1 million loaned to Aevi as an other receivable within its accompanying consolidated balance sheet.
As discussed in detail in Note 17, on February 3, 2020, the Merger was consummated in accordance with the terms of the Merger Agreement and the $4.1 million loan that Cerecor advanced to Aevi in December 2019 was forgiven. The Company is in the process of determining the financial effect of the Merger, including whether the Merger will be recorded as an asset purchase or a business combination and will perform preliminary purchase accounting during the first quarter of 2020, however the Company preliminarily plans to treat the Aevi Loan as purchase price consideration.
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