Mast Therapeutics (MSTX) Says Workforce Reduction Completed

October 31, 2016 5:15 PM EDT
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Mast Therapeutics (NYSE: MSTX) disclosed the following on Monday:

Item 2.05 Costs Associated with Exit or Disposal Activities.

As part of its previously described strategic focus on AIR001 and plan to significantly reduce operating costs, on October 28, 2016, Mast Therapeutics, Inc. (the “Company”) committed to a reduction in workforce of four positions, commenced notification of the four affected employees and completed the workforce reduction. Since the beginning of October 2016, the Company’s workforce has been reduced by ten employees, or approximately 38%. Costs incurred as a result of the earlier workforce reduction were not material under U.S. generally accepted accounting principles, so were not separately reported.

Assuming each affected employee executes and does not revoke a separation agreement and general release of claims, the Company estimates that it will incur restructuring costs related to these workforce reductions totaling approximately $0.4 million, which represent one-time employee termination costs, including severance, benefits and related costs. The Company expects all of these costs to be paid in the fourth quarter of 2016.

The Company plans to implement additional cost control measures in the fourth quarter of 2016 to further reduce its expenditures.

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