Pulmatrix, Inc. (Form: 10-Q, Received: 08/04/2017 09:26:53)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2017

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-36199

PULMATRIX, INC.

(Exact name of registrant as specified in its charter)


Delaware		46-1821392
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
99 Hayden Avenue, Suite 390 Lexington, MA		02421
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code (781) 357-2333

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 2, 2017, the registrant had 20,124,411 shares of common stock outstanding.

PULMATRIX, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2017

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
Item 1. Financial Statements			3
Condensed Consolidated Balance Sheets as of June 30, 2017 (unaudited) and December 31, 2016			3
Condensed Consolidated Statements of Operations for the Three Months and Six Months Ended June 30, 2017 (unaudited) and 2016			4
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 (unaudited) and 2016			5
Notes to Condensed Consolidated Financial Statements (unaudited)			6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			14
Item 3. Quantitative and Qualitative Disclosures About Market Risk			20
Item 4. Controls and Procedures			20
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			22
Item 1A. Risk Factors			22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			22
Item 3. Defaults Upon Senior Securities			22
Item 4. Mine Safety Disclosures			22
Item 5. Other Information			22
Item 6. Exhibits			22
SIGNATURES			23

PART I — FINANCIAL INFORMATION

Item 1.

Financial Statements.

PULMATRIX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)


	At June 30, 2017			At December 31, 2016
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	10,976		$	4,182
Prepaid expenses and other current assets		754			577

Total current assets		11,730			4,759
Property and equipment, net		672			786
Long-term restricted cash		204			204
Goodwill		10,914			10,914

Total assets	$	23,520		$	16,663

Liabilities and stockholders’ equity
Current liabilities:
Loan payable, net of debt discount and issuance costs	$	2,745		$	2,586
Accounts payable		564			747
Accrued expenses and other current liabilities		2,583			1,317

Total current liabilities		5,892			4,650
Loan payable, net of current portion, debt discount and issuance costs		1,804			3,217
Derivative liability		35			35

Total liabilities		7,731			7,902

Commitments (Note 14)
Stockholders’ Equity (Deficit):
Preferred stock, $0.0001 par value - 500,000 authorized and 0 issued and outstanding at June 30, 2017 and December 31, 2016		—			—
Common stock, $0.0001 par value - 100,000,000 shares authorized; 20,124,411 and 14,850,526 shares issued and outstanding including vested restricted stock units of 0 and 99,308, at June 30, 2017 and December 31, 2016, respectively.		2			1
Additional paid-in capital		180,813			164,706
Accumulated deficit		(165,026	)		(155,946	)

Total stockholders’ equity		15,789			8,761

Total liabilities and stockholders’ equity	$	23,520		$	16,663

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

PULMATRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except share and per share data)


	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2017			2016			2017			2016
Revenues	$	—		$	260		$	—		$	656
Operating expenses
Research and development		3,363			2,441			5,035			5,871
General and administrative		2,066			2,214			3,706			4,623
Write-off of intangibles, net of tax provision		—			4,575			—			4,575

Total operating expenses		5,429			9,230			8,741			15,069

Loss from operations		(5,429	)		(8,970	)		(8,741	)		(14,413	)
Interest expense		(172	)		(224	)		(359	)		(448	)
Other income, net		4			7			20			4

Net loss	$	(5,597	)	$	(9,187	)	$	(9,080	)	$	(14,857	)

Net Loss Attributable to Common Stockholders	$	(5,597	)	$	(9,187	)	$	(9,080	)	$	(14,857	)

Net loss per share attributable to common stockholders, basic and diluted	$	(0.29	)	$	(0.62	)	$	(0.50	)	$	(1.01	)

Weighted average shares used to compute basic and diluted net loss per share attributable to common stockholders		19,553,281			14,804,606			18,179,951			14,779,244

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

PULMATRIX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	For the Six Months Ended June 30,
	2017			2016
Cash flows from operating activities:
Net loss	$	(9,080	)	$	(14,857	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		127			117
Write-off of intangible assets, net of tax provision		—			4,575
Stock-based compensation		1,337			2,402
Non-cash rent expense		11			22
Non-cash interest expense		94			103
Non-cash debt issuance expense		7			8
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(177	)		550
Accounts payable		(183	)		(561	)
Accrued expenses		1,215			(347	)
Restricted cash		—			46

Net cash used in operating activities		(6,649	)		(7,942	)

Cash flows from investing activities:
Purchases of property and equipment		(13	)		(172	)

Net cash used in investing activities		(13	)		(172	)

Cash flows from financing activities:
Proceeds from issuance of common stock, net of issuance costs		14,467			—
Proceeds from exercise of stock options		304			—
Term loan principal payments		(1,315	)		—

Net cash provided by financing activities		13,456			—

Net increase in cash and cash equivalents		6,794			(8,114	)
Cash and cash equivalents — beginning of period		4,182			18,902

Cash and cash equivalents — end of period	$	10,976		$	10,788

Supplemental disclosures of non—cash financing and investing activities:
Fixed asset purchases in accounts payable at quarter-end	$	—		$	135

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

PULMATRIX, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2017

(unaudited)

(in thousands, except share and per share data)

1. Organization

Pulmatrix, Inc. and its subsidiaries (the “Company”) is a clinical stage biotechnology company focused on the discovery and development of a novel class of inhaled therapeutic products. The Company’s proprietary dry powder delivery platform, iSPERSE™ (inhaled Small Particles Easily Respirable and Emitted), is engineered to deliver small, dense particles with highly efficient dispersibility and delivery to the airways, which can be used with an array of dry powder inhaler technologies and can be formulated with a variety of drug substances. The Company is developing a pipeline of iSPERSE-based therapeutic candidates targeted at prevention and treatment of a range of respiratory diseases and infections with significant unmet medical needs.

Liquidity

At June 30, 2017, the Company had unrestricted cash and cash equivalents of $10,976, an accumulated deficit of $165,026 and working capital of $5,838. The Company will be required to raise additional capital within the next year to continue the development and commercialization of current product candidates and to continue to fund operations at the current cash expenditure levels.

The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. If unable to raise additional capital when required or on acceptable terms, the Company may have to (i) delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that the Company would otherwise seek to develop or commercialize on unfavorable terms.

On June 9, 2017, the Company entered into a License, Development and Commercialization Agreement (the “License Agreement”) with RespiVert Ltd. (“RespiVert”), a wholly owned subsidiary of Janssen Biotech, Inc., pursuant to which RespiVert granted the Company an exclusive, royalty-bearing license in its intellectual property portfolio of materials and technology related to narrow spectrum kinase inhibitor compounds (the “Licensed IP”), to develop and commercialize products worldwide that incorporate the Licensed IP. Under the terms of the License Agreement, the Company will pay RespiVert an up-front, non-refundable license fee of $1,000,000 in partial consideration for the rights granted by RespiVert to the Company, and will pay RespiVert designated amounts when any licensed product achieves certain developmental milestones (see Note 6).

During the six months ended June 30, 2017, the Company sold 5,130,273 shares of its common stock for aggregate net proceeds of $14,467. (See Note 9).

The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional equity or debt financing and, ultimately, to generate revenue. Those factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated financial statements as of June 30, 2017 do not include any adjustments that might become necessary should the Company be unable to continue as a going concern.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on a going concern basis in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X, Rule 10-01. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (including those which are normal and recurring) considered necessary for a fair presentation of the interim financial information have been included. When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures at the date of the financial statements. Actual results could differ from those estimates. Additionally, operating results for the three and six months ended June 30, 2017, are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2017. For further information, refer to the financial statements and footnotes included in the Company’s annual financial statements for the fiscal year ended December 31, 2016, which are included in the Company’s annual report on Form 10-K filed with the SEC on March 10, 2017.

3. Summary of Significant Accounting Policies

In the three and six month periods ended June 30, 2017, there were no changes to the Company’s significant accounting policies identified in the Company’s most recent annual financial statements for the fiscal year ended December 31, 2016, which are included in the Company’s current report on Form 10-K filed with the SEC on March 10, 2017, except as noted below.

Recent Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which requires an entity to recognize revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring goods or services to customers. ASU 2014-09 will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective in the annual period ending December 31, 2017, including interim periods within that annual period. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The adoption of this standard is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

There have been four new ASUs issued amending certain aspects of ASU 2014-09, ASU 2016-08, “ Principal versus Agent Considerations (Reporting Revenue Gross Versus Net), ” was issued in March, 2016 to clarify certain aspects of the principal versus agent guidance in ASU 2014-09. In addition, ASU 2016-10, “ Identifying Performance Obligations and Licensing,” issued in April 2016, amends other sections of ASU 2014-09 including clarifying guidance related to identifying performance obligations and licensing implementation. ASU 2016-12, “Revenue from Contracts with Customers — Narrow Scope Improvements and Practical Expedients” provides amendments and practical expedients to the guidance in ASU 2014-09 in the areas of assessing collectability, presentation of sales taxes received from customers, noncash consideration, contract modification and clarification of using the full retrospective approach to adopt ASU 2014-09. Finally, ASU 2016-20, “ Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers,” was issued in December 2016, and provides elections regarding the disclosures required for remaining performance obligations in certain cases and also makes other technical corrections and improvements to the standard. With its evaluation of the impact of ASU 2014-09, the Company will also consider the impact on its financial statements related to the updated guidance provided by these four new ASUs.

In January 2017, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (ASU) 2017-04: “Intangibles — Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment” (“ASU 2017-04”), which removes Step 2 from the goodwill impairment test. It is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment test performed with a measurement date after January 1, 2017. The Company has adopted this standard and its impact on its consolidated financial statements and related disclosures was immaterial.

In May 2017, the Financial Accounting Standard Board (the “FASB”) issued Accounting Standards Update (ASU) 2017-09: Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting which clarifies which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The standard is effective beginning after December 15, 2017; early adoption is permitted. The Company has adopted this standard and its impact on its consolidated financial statements and related disclosures was immaterial.

In July 2017, FASB issued ASU No. 2017-11, Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). ASU 2017-11 consists of two parts. The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update re-characterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is in the process of evaluating this ASU and adoption of this ASU is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

Use of Estimates

In preparing consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results may differ from these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payments, estimating fair value of equity instruments recorded as derivative liabilities, estimating the fair value of net assets acquired in business combinations, estimating the useful lives of depreciable and amortizable assets, valuation allowance against deferred tax assets, goodwill impairment, and estimating the fair value of long-lived assets to assess whether impairment charges may apply.

Revenue Recognition

The Company’s principal sources of revenue during the reporting periods were reimbursement of clinical study costs. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, and collectability of the resulting receivable is reasonably assured.

Goodwill

Goodwill represents the difference between the consideration transferred and the fair value of the net assets acquired and liabilities assumed under the acquisition method of accounting for push-down accounting. Goodwill is not amortized but is evaluated for impairment within the Company’s single reporting unit on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the Company’s reporting unit below its carrying amount. When performing the impairment assessment, the accounting standard for testing goodwill for impairment permits a company to first assess the qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the goodwill is impaired. If the Company believes, as a result of the qualitative assessment, that it is more likely than not that the fair value of goodwill is impaired, the Company must perform the first step of the goodwill impairment test. The Company completed a qualitative assessment and determined that there was no impairment of goodwill as of June 30, 2017.

4. Goodwill

The Company recognized $10,914 of goodwill and as of June 30, 2017, there was no impairment. Goodwill has been assigned to the Company’s single reporting unit.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses consisted of the following:


	At June 30, 2017		At December 31, 2016
Prepaid Insurance	$	355	$	197
Prepaid Clinical Trials		243		9
Prepaid Other		156		58
Stock Subscriptions		—		206
Deferred Clinical Costs		—		107

Total prepaid and other current assets	$	754	$	577

6. Significant Agreements

License, Development and Commercialization Agreement

On June 9, 2017, the Company entered into a License Agreement with RespiVert, a wholly owned subsidiary of Janssen Biotech, Inc., pursuant to which RespiVert granted the Company an exclusive, royalty-bearing license to its Licensed IP, to develop and commercialize products worldwide that incorporate the Licensed IP. The development, application, design and marketing of the Licensed IP and any licensed products will be managed exclusively by the Company.

Under the terms of the License Agreement, the Company will pay RespiVert an up-front, non-refundable license fee of $1,000,000 in partial consideration for the rights granted by RespiVert to the Company, and will pay RespiVert designated amounts when any licensed product achieves certain developmental milestones. Following the commencement of commercial sales of the licensed products, the Company will pay RespiVert designated amounts when certain milestone events occur. The development milestones and commercial milestones range from $1,000,000 to $80,000,000 depending upon the significance of the particular milestone. The Company is also required to pay RespiVert royalties on all sales of licensed products, with such royalties ranging from 6%—10% of sales.

The License Agreement terminates upon the expiration of the Company’s obligation to pay royalties for all licensed products, unless earlier terminated. In addition, the License Agreement may be terminated (i) by the Company for any reason upon 120 days’ advance notice to RespiVert; (ii) by RespiVert upon receipt of notice from the Company of either voluntary or involuntary insolvency proceedings of the Company; and (iii) by either party for a material breach which remains uncured following the applicable cure period.

The Company recorded $1,000,000 in research and development expense during the three and six month periods ended June 30, 2017. As of June 30, 2017, the Company had $1,000,000 in accrued clinical and consulting fees on its balance sheet for the upfront license fee, which was paid in July 2017. The next likely development milestone payment would be $1,000,000 and result from first dosing of a patient in a Phase IIb Clinical Trial for a licensed product.

7. Debt

Loan and Security Agreement and Warrant Agreement

On June 11, 2015, Pulmatrix Operating entered into a Loan and Security Agreement (“LSA”) with Hercules Technology Growth Capital, Inc. (“Hercules”), for a term loan in the original principal amount of $7,000 (“Term Loan”). The term loan is secured by substantially all of the Company’s assets, excluding intellectual property. As of June 30, 2017, the outstanding principal balance of the term loan was $4,639.

The term loan bears interest at a floating annual rate equal to the greater of (i) 9.50% and (ii) the sum of (a) the prime rate as reported by The Wall Street Journal minus 3.25% plus (b) 8.50%. The Company is required to make interest payments in cash on the first business day of each month, beginning on July 1, 2015. Beginning on August 1, 2016, the Company began to make monthly payments on the first business day of each month consisting of principal and interest based upon a 30-month amortization schedule, and any unpaid principal and interest is due on the maturity date of July 1, 2018. Upon repayment of the term loan, the Company is also required to pay an end of term charge to the Lenders equal to $245. As of June 30, 2017, the Company has accrued $195 of the total $245 end of term charge, of which $40 and $51 accrued during the six months ended June 30, 2017 and 2016, respectively.

The Company may elect to prepay all, but not less than all, of the outstanding principal balance of the term loan, subject to a prepayment fee of 1% – 3%, depending on the date of repayment. Contingent on the occurrence of several events, including that the Company’s closing stock price exceed $11.73 per share for the seven days preceding a payment date, the Company may elect to pay, in whole or in part, any regularly scheduled installment of principal up to an aggregate maximum amount of $1,000 by converting a portion of the principal into shares of the Company’s common stock at a price of $11.73 per share. Hercules may elect to receive payments in the Company common stock by requiring the Company to effect a conversion option whereby Hercules can elect to receive a principal installment payment in shares of the Company common stock based on a price of $11.73 per share, subject to an aggregate maximum principal amount of $1,000.

The Company determined that the Company’s provisions allowing conversion of all or a portion of the LSA contained a beneficial conversion feature (“BCF”). The BCF is contingent upon the occurrence of certain events and as such, the Company will not record the BCF until the contingency is resolved. Through June 30, 2017 the contingency was not resolved.

The credit facility includes affirmative and negative covenants. The affirmative covenants include, among others, covenants requiring the Company to maintain its legal existence and governmental approvals deliver certain financial reports and maintain insurance coverage. The negative covenants include, among others, restrictions on transferring collateral, incurring additional indebtedness, engaging in mergers or acquisitions, paying dividends or making other distributions, making investments, creating liens, selling assets, and undergoing a change in control, in each case subject to certain exceptions. In general, the Term Loan prohibits the Company from (i) repurchasing or redeeming any class of capital stock, including common stock or (ii) declaring or paying any cash dividend or making cash distribution on any class of capital stock, including common stock.

The LSA includes provisions requiring the embedded interest rate reset upon an event of default and the put option upon an event of default or qualified change of control each represent an embedded derivative instrument requiring bifurcation from the loan. The embedded derivatives were bundled and valued as one compound derivative in accordance with the applicable accounting guidance for derivatives and hedging. The fair value of the compound derivative at issuance of $11 was recorded as a derivative liability and as a discount to the debt. The derivative liability is remeasured at fair value at each reporting date, with changes in fair value being recorded as other income (expense) in the statements of operations (Note 12). At June 30, 2017 and December 31, 2016, the fair value of the derivative liability was valued at $35. The net debt discounts resulting from the embedded compound derivative and lender fees are being amortized as interest expense from the date of issuance through the maturity date using the effective interest method. The Company incurred interest expense of $172 and $359 during the three and six months ended June 30, 2017 and $34 and $34 during the three and six months ended June 30, 2016. Of the total interest expense, $126 and $265 was payable in cash during the three and six months ended June 30, 2017 and $27 and $27 was payable in cash during the three and six months ended June 30, 2016.

The carrying amounts of the Company’s Term Loan as of June 30, 2017 and January 1, 2017 were as follows:


	Hercules Term Loan			Debt Discount			Issuance Costs			Total
Balance — January 1, 2017	$	5,954		$	(136	)	$	(15	)	$	5,803
Accretion of debt discount					54						54
Accretion of issuance costs								7			7
Principal payments		(1,315	)								(1,315	)

Balance — June 30, 2017	$	4,639		$	(82	)	$	(8	)		4,549

Current portion of debt, net of debt discount and issuance costs											2,745

Long term portion of debt, net of current portion										$	1,804

Future principal payments in connection with the Term Loan are as follows:


Remainder of 2017	$	1,380
2018		3,259

	$	4,639

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:


	At June 30, 2017		At December 31, 2016
Accrued vacation	$	95	$	54
Accrued wages and incentive		517		796
Accrued clinical & consulting		1,505		202
Accrued legal & patent		151		51
Accrued end of term fee		195		155
Deferred Rent		57		46
Accrued other expenses		63		13

Total accrued expenses and other current liabilities	$	2,583	$	1,317

9. Common Stock

Registered Direct Offering

On January 27, 2017, Pulmatrix, Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain investors for the sale by the Company of 2,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share, at a purchase price of $2.50 per share in a registered direct offering. The closing of the sale of the Shares under the Purchase Agreement occurred on February 2, 2017.

On February 3, 2017, Pulmatrix, Inc. entered into a Securities Purchase Agreement (the “Second Purchase Agreement”) with certain investors for the sale by the Company of 950,000 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $3.50 per share in a registered direct offering. The closing of the sale of the Shares under the Second Purchase Agreement occurred on February 8, 2017.

Net of issuance costs totaling $26, aggregate net proceeds of the two noted registered direct offerings were $7,598. The Shares were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission on July 15, 2016, and subsequently declared effective on August 3, 2016 (File No. 333-212546), and a related prospectus.

At-the-Market Offering

On March 17, 2017, the Company entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC (“BTIG”) to act as the Company’s sales agent with respect to the issuance and sale of up to $11,000,000 of the Company’s shares of common stock, from time to time in an at-the-market public offering (the “Offering”). Sales of common stock under the Sales Agreement are made pursuant to an effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission on July 15, 2016, and subsequently declared effective on August 3, 2016 (File No. 333-212546), and a related prospectus. BTIG acts as the Company’s sales agent on a commercially reasonable efforts basis, consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of The NASDAQ Global Market. If expressly authorized by the Company, BTIG may also sell the Company’s common stock in privately negotiated transactions. There is no specific date on which the Offering will end, there are no minimum sale requirements and there are no arrangements to place any of the proceeds of this offering in an escrow, trust or similar account.

BTIG is entitled to compensation at a fixed commission rate of 3.0% of the gross proceeds from the sale of the Company’s common stock pursuant to the Sales Agreement.

During the six month period ended June 30, 2017 the Company sold 2,180,273 shares of its common stock under the Sales Agreement at an average selling price of approximately $3.3001 per share which resulted in gross proceeds of approximately $ 7,195 and net proceeds of approximately $6,869 after payment of 3% commission to BTIG and other issuance costs.

10. Warrants

There were 3,284,440 common stock warrants outstanding at June 30, 2017. The warrants had a weighted-average exercise price of $7.79 with no intrinsic value and a remaining contractual life of 2.9 years.

11. Stock-Based Compensation

The Company sponsors the Pulmatrix, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan (the “2013 Plan). As of June 30, 2017, the 2013 Plan provides for the grant of up to 4,193,075 shares of Company Common Stock, of which 824,585 shares remained available for future grant.

In addition, the Company has two legacy plans: The Pulmatrix Operating’s 2013 Employee, Director and Consultant Equity Incentive Plan (the “Original 2013 Plan”) and Pulmatrix Operating’s 2003 Employee, Director, and Consultant Stock Plan (the “2003 Plan”). As of June 30, 2017, a total of 500,474 shares of Company Common Stock may be delivered under options outstanding under the Original 2013 Plan and the 2003 Plan, however no additional awards may be granted under the Original 2013 Plan or the 2003 Plan.

Options

During the first six months of 2017, the Company granted options to purchase 675,555, 30,800 and 10,000 shares of Company Common Stock to employees, directors and consultants, respectively. At the date of grant the weighted average fair value of those options aggregated to $1,257, $57 and $19 respectively. The stock options granted to employees and directors vest over 48 months (the “Time Based Options”). Subject to the grantees’ continuous service with the Company, Time Based Options vest 25% on the first anniversary of the option grant date and the remainder in 36 equal monthly installments beginning in the month after the vesting start date. Stock options generally expire ten years after the date of grant. The stock options granted to consultants vest over 24 months (the “Consultant Time Based Options”). Subject to the grantees’ continuous service with the Company, Consultant Time Based Options vest 50% on the first anniversary of the option grant date and the remainder in 12 equal monthly installments beginning in the month after the vesting start date. Stock options generally expire ten years after the date of grant.

The following table summarizes stock option activity for the six months ended June 30, 2017:


	Number of Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term ( Years)		Aggregate Intrinsic Value
Outstanding — January 1, 2017		2,829,301		$	6.89			$	—
Granted		716,355		$	2.73
Exercised		(138,425	)	$	2.19
Forfeited or expired		(81,425	)	$	8.41

Outstanding — June 30, 2017		3,325,806		$	6.16		8.04	$	173

Exercisable — June 30, 2017		1,543,214		$	7.05		7.07	$	158

Vested and expected to vest — June 30, 2017		3,276,373		$	6.14		8.04	$	173

The estimated weighted average fair values of employee stock options granted during the three and six months ended June 30, 2017 and 2016, were determined on the date of grant using the Black-Scholes option-pricing model with the following assumptions:


	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Expected option life (years)		6.19			6.22			6.13			6.22
Risk-free interest rate		1.99	%		1.81	%		2.07	%		1.78	%
Expected volatility		75.5	%		71.0	%		77.2	%		70.5	%
Expected dividend yield		0	%		0	%		0	%		0	%

The risk-free interest rate was obtained from U.S. Treasury rates for the applicable periods. The Company’s expected volatility was based upon the historical volatility for industry peers and used an average of those volatilities. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity. The dividend yield considers that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. As of June 30, 2017 there was $5,489 of unrecognized stock-based compensation expense related to unvested stock options granted under the Company’s stock award plans. This expense is expected to be recognized over a weighted-average period of approximately 2.2 years.

The following table presents total stock-based compensation expense for the three and six months ended June 30, 2017 and 2016:


	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017		2016
Research and development	$	177	$	226	$	330	$	439
General and administrative		532		943		994		1,963

Total stock based compensation expense	$	709	$	1,169	$	1,324	$	2,402

Restricted Stock Units (RSU)

In August 2015, the Company granted 10,374 RSUs to employees that vested over a two year period. The Company recorded stock-based compensation expense of $6 and $13 for the RSUs during the three and six months ended June 30, 2017. At June 30, 2017, 0 RSUs were outstanding.

12. Fair Value Measurements

Information about the liabilities measured at fair value on a recurring basis as of June 30, 2017 and December 31, 2016, and the input categories associated with those liabilities, is as follows:


	June 30, 2017
	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
Liabilities:
Embedded compound derivative	$	—	$	—	$	35	$	35


	December 31, 2016
	Fair Value Measurements Using
	Level 1		Level 2		Level 3		Total
Liabilities:
Embedded compound derivative	$	—	$	—	$	35	$	35

Embedded Compound Derivatives — LSA with Hercules

As described in Note 7, the LSA contains an interest rate reset upon an event of default and a put option upon an event of default or qualified change of control. Each of these features represents an embedded derivative instrument requiring bifurcation from the Term Loan. The embedded derivatives were bundled and valued as one compound derivative in accordance with the applicable accounting guidance for derivatives and hedging. The proceeds from the issuance of the Term Loan were allocated first to the warrant and compound derivative at their respective fair values, with the residual going to the carrying amount of the loan resulting in a discount to the face value of the debt. The fair value of the compound derivative upon issuance of $11 was recognized as a derivative liability and will be adjusted to fair value at each reporting date. At December 31, 2016, the fair value of the derivative liability was remeasured and valued at $35. The fair value of the derivative instruments is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used an income approach to estimate the fair value of the derivative liability and estimated the probability of an event of default occurring at various dates and then estimates the present value of the amount the holders would receive upon an event of default.

The significant assumption used in the model is the probability of the following scenarios occurring:


	At Issuance Date	At June 30, 2017
Probability of an event of default	10%	50%
Prepayment penalties	1.0% - 3.0%	1.0% - 3.0%
End of term payment	$245,000	$245,000
Risk-free interest rate	1.01%	1.03%

A roll-forward of the preferred stock warrant liability and derivative liability categorized with Level 3 inputs is as follows:


	Derivative Instruments
Balance — January 1, 2017	$	35
Change in fair value		—

Balance — June 30, 2017	$	35

Gains and/or losses arising from changes in the estimated fair value of the warrants and embedded compound derivatives are recorded within other income, net, on the condensed consolidated statement of operations.

13. Net Loss Per Share

The Company computes basic and diluted net loss per share using a methodology that gives effect to the impact of outstanding participating securities (the “two-class method”). As the three and six months ended June 30, 2017 and 2016 resulted in net losses attributable to common shareholders, there is no income allocation required under the two-class method or dilution attributed to weighted average shares outstanding in the calculation of diluted net loss per share.

The following potentially dilutive securities outstanding prior to the use of the treasury stock method have been excluded from the computation of diluted weighted-average shares outstanding, as they would be anti-dilutive.


	As of June 30,
	2017		2016
Options to purchase common stock		3,325,806		3,017,543
Warrants to purchase common stock		3,284,440		3,284,440
Restricted Stock Units		—		5,187
Settlement of term loan		85,251		85,251

14. Commitments

Future minimum lease payments under the non-cancelable operating lease for office and lab space is as follows:


	Amount
2017	$	316
2018		654
2019		676
2020		698

Total	$	2,344

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information set forth below should be read in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q as well as the audited financial statements and the notes thereto contained in our current report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 10, 2017. Unless stated otherwise, references in this Quarterly Report on Form 10-Q to “us,” “we,” “our,” or our “Company” and similar terms refer to Pulmatrix, Inc., a Delaware corporation, and its subsidiaries.

Forward-Looking Statements

This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “anticipates,” “assumes,” “believes,” “can,” “could,” “estimates,” “expects,” “forecasts,” “guides,” “intends,” “is confident that”, “may,” “plans,” “seeks,” “projects,” “targets,” and “would,” and their opposites and similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control that could cause our actual results, performance and achievements to differ materially from those expressed or implied in these forward-looking statements. Factors which may affect our results include, but are not limited to:

•

our history of recurring losses and negative cash flows from operating activities, significant future commitments and the uncertainty regarding the adequacy of our liquidity to pursue our complete business objectives;

•

difficulties in obtaining financing on commercially reasonable terms;

•

our inability to carry out research, development and commercialization plans;

•

our inability to manufacture our product candidates on a commercial scale on our own, or in collaborations with third parties;

•

our inability to complete preclinical testing and clinical trials as anticipated;

•

our ability to adequately protect and enforce rights to intellectual property;

•

intense competition in our industry, with competitors having substantially greater financial, technological, research and development, regulatory and clinical, manufacturing, marketing and sales, distribution and personnel resources than we do;

•

entry of new competitors and products and potential technological obsolescence of our products;

•

adverse market and economic conditions;

•

loss of one or more key executives or scientists; and

•

difficulties in securing regulatory approval to market our product candidates.

For a more detailed discussion of these and other factors that may affect our business and that could cause the actual results to differ materially from those projected in these forward-looking statements, see the risk factors and uncertainties set forth in Part II, Item 1A of this Quarterly Report. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Overview

Recent Developments

Business

The Company is a clinical stage biotechnology company focused on the discovery and development of a novel class of inhaled therapeutic products. The Company’s proprietary dry powder delivery platform, iSPERSE™ (inhaled Small Particles Easily Respirable and Emitted), is engineered to deliver small, dense particles with highly efficient dispersibility and delivery to the airways, which can be used with an array of dry powder inhaler technologies and can be formulated with a variety of drug substances. The Company is developing a pipeline of iSPERSE-based therapeutic candidates targeted at prevention and treatment of a range of respiratory diseases and infections with significant unmet medical needs. Since our inception in 2003, we have devoted substantially all of our efforts to product research and development. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations to date through proceeds from issuances of common and convertible preferred stock, issuances of convertible debt, collaborations with third parties and non-dilutive grants received from government agencies.

We expect to continue to incur significant expenses and increasing operating losses for at least the next several years based on our drug development plans. We expect our expenses and capital requirements will increase substantially in connection with our ongoing activities, as we:

•

initiate and expand clinical trials for PUR1900 for patients with severe lung disease;

•

seek regulatory approval for our product candidates;

•

hire personnel to support our product development, commercialization and administrative efforts; and

•

advance the research and development related activities for inhaled therapeutic products in our pipeline.

We will not generate product sales unless and until we successfully complete clinical developments and obtain regulatory approvals for our product candidates. Additionally, we currently utilize third-party contract research organizations, or CROs, to carry out our clinical development activities, and we do not yet have a commercial organization. If we obtain regulatory approval for any of our product candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing and distribution. Accordingly, we anticipate that we will seek to fund our operations through public or private equity or debt financings or other sources, potentially including collaborative commercial arrangements. Likewise, we intend to seek to limit our commercialization costs by partnering with other companies with complementary capabilities or larger infrastructure including sales and marketing.

On June 9, 2017, the Company entered into a License, Development and Commercialization Agreement (the “License Agreement”) with RespiVert Ltd. (“RespiVert”), a wholly owned subsidiary of Janssen Biotech, Inc., pursuant to which RespiVert granted the Company an exclusive, royalty-bearing license in its intellectual property portfolio of materials and technology related to narrow spectrum kinase inhibitor compounds (the “Licensed IP”), to develop and commercialize products worldwide that incorporate the Licensed IP. The development, application, design and marketing of the Licensed IP and any licensed products will be managed exclusively by the Company.

Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, then we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.

Financial Overview

Revenues

To date, we have not generated any product sales. Our limited revenues have been derived from feasibility work as part of agreements with other pharmaceutical companies and grants from government agencies. On March 24, 2015, we entered into the long-acting muscarinic agent collaboration agreement with Mylan under which we are eligible to receive reimbursement of up to $1.5 million for third-party out of pocket expenses directly related to clinical trials. On September 14, 2015, the Company entered into an amendment to the collaboration agreement to provide reimbursements with a new cost cap of $1.878 million. As consideration for the funding received, we agreed to grant to Mylan an option for the exclusive right to develop, manufacture, commercialize and market any resulting products outside the United States for 180 days following the delivery of a clinical studies report, in exchange for a tiered share of gross profit of up to 20% of such pharmaceutical company’s sales on the resulting products. In December 2016, Mylan’s option expired. As of June 30, 2017, Pulmatrix owns the exclusive right to develop, manufacture, commercialize and market any resulting products of PUR0200.

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for the research and development of our preclinical and clinical candidates, and include:

•

employee-related expenses, including salaries, benefits and stock-based compensation expense;

•

expenses incurred under agreements with CROs, contract manufacturing organizations, or CMOs, and consultants that conduct our clinical trials and preclinical activities;

•

the cost of acquiring, developing and manufacturing clinical trial materials and lab supplies;

•

facility, depreciation and other expenses, which include direct and allocated expenses for rent, maintenance of our facility, insurance and other supplies; and

•

costs associated with preclinical activities and regulatory operations.

We expense research and development costs to operations as incurred. We recognize costs for certain development activities, such as clinical trials, based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations or information provided to us by our vendors.

Research and development activities are central to our business model. We utilize a combination of internal and external efforts to advance product development from early stage work to clinical trial manufacturing and clinical trial support. External efforts include work with consultants and substantial work at CROs and CMOs. We support an internal research and development team and facility for our pipeline programs including PUR1900, our lead CF anti-infective, PUR0200, our lead COPD bronchodilator, and PUR1500, our preclinical stage therapeutic for treatment of idiopathic pulmonary fibrosis (IPF). In order to move these programs forward along our development timelines, we maintain a significant staff of research and development employees (71% of staff). In addition, we maintain a 12,000 square foot research and development facility which includes capital equipment for the manufacture, characterization, and in vitro/in vivo evaluation of our iSPERSE™ powders for our pipeline programs. As we identify opportunities for iSPERSE™ in respiratory indications, we anticipate additional head count, capital, and development costs will be incurred to support these programs.

On June 9, 2017, the Company entered into a License Agreement with RespiVert, pursuant to which RespiVert granted the Company an exclusive, royalty-bearing license to its Licensed IP, to develop and commercialize products worldwide that incorporate the Licensed IP. As of June 30, 2017, the Company accrued a $1.0 million up-front, non-refundable license fee to RespiVert that was paid in July 2017.

Because of the numerous risks and uncertainties associated with product development, however, we cannot determine with certainty the duration and completion costs of these or other current or future preclinical studies and clinical trials. The duration, costs and timing of clinical trials and development of our product candidates will depend on a variety of factors, including the uncertainties of future clinical and preclinical studies, uncertainties in clinical trial enrollment rates and significant and changing government regulation. In addition, the probability of success for each product candidate will depend on numerous factors, including competition, manufacturing capability and commercial viability.

General and Administrative Expenses

General and administrative expenses consist principally of salaries and related costs such as stock-based compensation for personnel and consultants in executive, finance, business development, corporate communications and human resource functions, facility costs not otherwise included in research and development expenses, patent filing fees and professional legal fees. Other general and administrative expenses include travel expenses and professional fees for consulting, auditing and tax services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and potential commercialization of our product candidates. We also anticipate increased expenses related to audit, legal, regulatory, and tax-related services associated with maintaining compliance with exchange listing and Securities and Exchange Commission requirements, director and officer liability insurance, investor relations costs and other costs associated with being a public company. Additionally, if and when we believe a regulatory approval of a product candidate appears likely, we anticipate an increase in staffing and related expenses as a result of our preparation for commercial operations, especially as it relates to the sales and marketing of our product candidates.

Interest Expense

We have been incurring and expect to continue to incur interest expense associated with the $7 million term loan executed in June 2015.

Other Expenses, Net

Other income, net is comprised primarily of gains and/or losses resulting from fair value adjustments for compound derivative instruments embedded within certain of our convertible notes.

Critical Accounting Policies

This management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and expenses and the disclosure of contingent assets and liabilities in our financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to accrued expenses and stock-based compensation. We base our estimates on historical

experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in the notes to our condensed consolidated financial statements appearing elsewhere in this Form 10-Q and in our audited financial statements included in our current report on Form 10-K filed with the SEC on March 10, 2017, we believe the following accounting policies to be most critical to the judgments and estimates used in the preparation of our financial statements.

Use of Estimates

In preparing financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results may differ from these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions. These estimates and assumptions include valuing equity securities in share-based payments, estimating fair value of equity instruments recorded as derivative liabilities, estimating the fair value of net assets acquired in business combinations, estimating the useful lives of depreciable and amortizable assets, valuation allowance against deferred tax assets, goodwill impairment, and estimating the fair value of long-lived assets to assess whether impairment charges may apply.

Revenue Recognition

Our principal sources of revenue are income from reimbursement of clinical study costs. In all instances, revenue is recognized only when the price is fixed or determinable, persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, and collectability of the resulting receivable is reasonably assured.

Goodwill

Goodwill represents the difference between the consideration transferred and the fair value of the net assets acquired under the acquisition method of accounting for push-down accounting. Goodwill is not amortized but is evaluated for impairment on an annual basis, during the fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the related reporting unit below its carrying amount. When performing the impairment assessment, the accounting standard for testing goodwill for impairment permits a company to first assess the qualitative factors to determine whether the existence of events and circumstances indicates that it is more likely than not that the goodwill is impaired. If we believe, as a result of the qualitative assessment, that it is more likely than not that the fair value of goodwill is impaired, we must perform the goodwill impairment test. We have determined that goodwill was not impaired as of June 30, 2017.

Results of Operations

Three Months Ended June 30, 2017 Compared with Three Months Ended June 30, 2016

The following table sets forth our results of operations for each of the periods set forth below (in thousands):


	Three months ended June 30,						Change
	2017			2016			$
Revenue	$	—		$	260		$	(260	)
Operating expenses
Research and development		3,363			2,441			922
General and administrative		2,066			2,214			(148	)
Write-off of intangibles, net of tax provision		—			4,575			(4,575	)

Total operating expenses		5,429			9,230			(3,801	)

Loss from operations		(5,429	)		(8,970	)		3,541
Interest expense		(172	)		(224	)		52
Other income, net		4			7			(3	)

Net loss	$	(5,597	)	$	(9,187	)	$	3,590

Revenue — For the three months ended June 30, 2017, revenue was $0.0 compared to $0.3 million for the three months ended June 30, 2016. The decrease in revenue was the result of the decreased revenue associated with the conclusion of the clinical study funded under our collaboration agreement with Mylan.

Research and development expenses — For the three months ended June 30, 2017, research and development expense was $3.4 million compared to $2.4 million for the three months ended June 30, 2016, an increase of $1.0 million. The increase was primarily due to a $1.0 million up-front, non-refundable license fee to RespiVert.

General and administrative expenses — For the three months ended June 30, 2017, general and administrative expense was $2.1 million compared to $2.2 million for the three months ended June 30, 2016, a decrease of $0.1 million. The decrease was primarily due to a decrease of $0.4 million in stock-based compensation expense, partially offset by a $0.3 million increase in salaries, legal and professional consultant costs.

Write-off of intangibles, net of tax provision — For the three months ended June 30, 2017, the write-off of intangibles, net of tax provision, was $0 compared to $4.6 million for the three months ended June 30, 2016. In 2016, as a result of the lapse of our license agreement for RUT58 – 60, a proprietary formulation of HOC1, a full write-off was made of both the IPR&D acquired in our 2015 Merger with Ruthigen, Inc., $7.5 million, and the associated deferred tax liability, $2.9 million, as of June 30, 2016.

Interest expense — For the three months ended June 30, 2017 interest expense was $0.2 million compared to $0.2 million for the three months ended June 30, 2016. During both periods, interest expense incurred related to the term loan agreement that we entered into in June 2015.

Six Months Ended June 30, 2017 Compared with Six Months Ended June 30, 2016

The following table sets forth our results of operations for each of the periods set forth below (in thousands):


	Six months ended June 30,						Change
	2017			2016			$
Revenue	$	—		$	656		$	(656	)
Operating expenses
Research and development		5,035			5,871			(836	)
General and administrative		3,706			4,623			(917	)
Write-off of intangibles, net of tax provision		—			4,575			(4,575	)

Total operating expenses		8,741			15,069			(6,328	)

Loss from operations		(8,741	)		(14,413	)		5,672
Interest expense		(359	)		(448	)		89
Other income, net		20			4			16

Net loss	$	(9,080	)	$	(14,857	)	$	5,777

Revenue — For the six months ended June 30, 2017, revenue was $0.0 compared to $0.7 million for the six months ended June 30, 2016. The decrease in revenue was the result of the decreased revenue associated with the conclusion of the clinical study funded under our collaboration agreement with Mylan.

Research and development expenses — For the six months ended June 30, 2017, research and development expense was $5.0 million compared to $5.9 million for the six months ended June 30, 2016, a decrease of $0.9 million. The decrease was primarily due to $1.9 million of reduced spend on the PUR1900 and PUR0200 projects related to the projects’ phase of development offset by $1.0 million up-front, non-refundable license fee to RespiVert.

General and administrative expenses — For the six months ended June 30, 2017, general and administrative expense was $3.7 million compared to $4.6 million for the six months ended June 30, 2016, a decrease of $0.9 million. The decrease was primarily due to a decrease of $1.0 million in stock-based compensation expense related to awards granted in 2015 that became fully vested in 2016, partially offset by an increase of $0.1 million in salary related costs.

Write-off of intangibles, net of tax provision — For the six months ended June 30, 2017, the write-off of intangibles, net of tax provision, was $0 compared to $4.6 million for the six months ended June 30, 2016. In 2016, as a result of the lapse of our license agreement for RUT58 – 60, a proprietary formulation of HOC1, a full write-off was made of both the IPR&D acquired in our 2015 Merger with Ruthigen, Inc., $7.5 million, and the associated deferred tax liability, $2.9 million, as of June 30, 2016.

Interest expense — For the six months ended June 30, 2017 interest expense was $0.4 million compared to $0.4 million for the six months ended June 30, 2016. During both periods, interest expense incurred related to the term loan agreement that we entered into in June 2015.

Liquidity and Capital Resources

Through June 30, 2017, we have incurred an accumulated deficit of $165.0 million, primarily as a result of expenses incurred through a combination of research and development activities related to our various product candidates and general and administrative expenses supporting those activities and our 2015 Merger with Ruthigen, Inc.. We have financed our operations since inception primarily through the sale of preferred and common stock and the issuance of convertible promissory notes and term loans. On June 9, 2017, the Company entered into a License Agreement with RespiVert, pursuant to which RespiVert granted the Company an exclusive, royalty-bearing license to its Licensed IP, to develop and commercialize products worldwide that incorporate the Licensed IP. As of June 30, 2017, the Company accrued a $1.0 million up-front, non-refundable license fee to RespiVert that was paid in July 2017.

Our total cash and cash equivalents balance as of June 30, 2017 was $11.0 million. We anticipate that we will continue to incur losses, and that such losses will increase over the next several years due to development costs associated with our iSPERSE™ pipeline programs. We expect that our research and development and general and administrative expenses will continue to increase and, as a result, we will need additional capital to fund our operations, which we may raise through a combination of equity offerings, debt financings, other third-party funding and other collaborations and strategic alliances. The Company’s ability to continue as a going concern is dependent upon its ability to obtain additional equity or debt financing and, ultimately, to generate revenue. Those factors raise substantial doubt about the Company’s ability to continue as a going concern.

The following table sets forth the major sources and uses of cash for each of the periods set forth below (in thousands):


	Six months ended June 30,
	2017			2016
Net cash used in operating activities	$	(6,649	)	$	(7,942	)
Net cash (used in) provided by investing activities		(13	)		(172	)
Net cash provided by financing activities		13,456			—

Net increase (decrease) in cash and cash equivalents	$	6,794		$	(8,114	)

Cash Flows from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2017 was $6.6 million, which was primarily the result of a net loss of $9.1 million, partially offset by $1.6 million of net non-cash adjustments and $0.9 million in cash inflows associated with changes in operating assets and liabilities. Our non-cash adjustments were primarily comprised of $1.3 million of stock-based compensation expense, $0.1 million of depreciation and amortization, and $0.1 million of non-cash interest expense. The net cash inflows associated with changes in operating assets and liabilities was primarily due to an increase in accrued expenses of $1.2 million, partially offset by an increase in prepaid expenses and other current assets of $0.2 million and a decrease in accounts payable of $0.2 million.

Net cash used in operating activities for the six months ended June 30, 2016 was $7.9 million, which was primarily the result of a net loss of $14.9 million and $0.3 million in cash outflows associated with changes in operating assets and liabilities, partially offset by $7.2 million of net non-cash adjustments. Our non-cash adjustments were primarily comprised of $4.6 million of the write-off of IPR&D, net of tax provision, $2.4 million of stock-based compensation expense, $0.1 million of depreciation and amortization and $0.1 million of non-cash interest expense. The net cash outflows associated with changes in operating assets and liabilities was primarily due to a $0.9 million decrease accounts payable and accrued expenses, partially offsets by $0.6 million decrease in prepaid expenses, other current assets and restricted cash.

Cash Flows from Investing Activities

Net cash used in investing activities for the six months ended June 30, 2017 and June 30, 2016 were entirely due to purchases of property and equipment.

Cash Flows from Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2017 was $13.5 million, as compared to $0 for the six months ended June 30, 2016. Net cash provided by financing activities for the six months ended June 30, 2017 resulted from the issuance of common stock of $14.5 million and $0.3 million from the exercise of stock options, partially offset by $1.3 million of term loan principal payments.

Financings

On January 27, 2017 and February 3, 2017 respectively, the Company entered a Securities Purchase Agreements with certain investors for the sale of the Company’s common stock pursuant to its effective shelf registration statement on Form S-3, which was filed with the Securities and Exchange Commission on July 15, 2016, and subsequently declared effective on August 3, 2016 (File No. 333-212546), and related prospectuses. In February 2017, the Company closed the sales of 2,950,000 shares of its common stock pursuant to the Securities Purchase Agreements for aggregate net proceeds of approximately $7.6 million.

On March 17, 2017, the Company entered into an At-The-Market Sales Agreement with respect to the issuance and sale of up to $11 million of the Company’s common stock from time to time in an at-the-market public offering. During the six months ended June 30, 2017, the company sold 2,180,273 shares of its common stock pursuant to the At-The-Market Sales Agreement for aggregate net proceeds of approximately $6.9 million.

Based on our planned use for our existing cash resources, we believe that our available funds will be sufficient to enable us to support clinical development of our PUR1900 program through completion of a Phase IB trial in CF patients, research and development staff working on chemistry manufacturing and control activities in support of PUR0200, and pre-clinical evaluation of PUR1500 for IPF. The funding will not be sufficient to complete additional clinical work for any of the pipeline programs. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

•

the initiation, progress, timing, costs and results of clinical studies for existing and new pipeline programs based on iSPERSE™;

•

the outcome, timing and cost of regulatory approvals by the FDA and European regulatory authorities, including the potential for these agencies to require that we perform studies in addition to those that we currently have planned;

•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights;

•

our need to expand our research and development activities;

•

our need and ability to hire additional personnel;

•

our need to implement additional infrastructure and internal systems;

•

the cost of establishing and maintaining a commercial-scale manufacturing line; and

•

the cost of establishing sales, marketing and distribution capabilities for any products for which we may receive regulatory approval.

If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4.

Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures . Our principal executive officer and principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Form 10-Q, have concluded that, based on such evaluation, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

(b) Changes in Internal Controls. There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the quarter ended June 30, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1.

Legal Proceedings.

From time to time, we may be involved in litigation that arises through the normal course of business. As of the date of this filing, we are not aware of any material legal proceedings to which we or any of our subsidiaries is a party or to which any of our property is subject, nor are we aware of any such threatened or pending litigation or any such proceedings known to be contemplated by governmental authorities.

We are not aware of any material proceedings in which any of our directors, officers or affiliates or any registered or beneficial stockholder of more than 5% of our common stock, or any associate of any of the foregoing, is a party adverse to or has a material interest adverse to, us or any of our subsidiaries.

Item 1A.

Risk Factors.

There have been no material changes to the risk factors disclosed under “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K. For more information concerning our risk factors, please refer to “Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K.

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

(a) Unregistered Sales of Equity Securities

None.

(b) Issuer Purchases of Equity Securities

We did not repurchase any of our equity securities during the quarter ended June 30, 2017.

Item 3.

Defaults Upon Senior Securities.

None.

Item 4.

Mine Safety Disclosures.

Not applicable.

Item 5.

Other Information.

None.

Item 6.

Exhibits.

See Index to Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	PULMATRIX, INC.

Date: August 4, 2017	By:	/s/ Robert W. Clarke
		Robert W. Clarke
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: August 4, 2017	By:	/s/ William Duke, Jr.
		William Duke, Jr.
		Chief Financial Officer
		(Principal Financial Officer)

EXHIBIT INDEX


Exhibit No.		Description

10.1* ^#		License, Development, and Commercialization Agreement, dated June 9, 2017, by and between Pulmatrix, Inc. and RespiVert Ltd.

31.1*		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2*		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101*		The following materials from the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets as of March 31, 2017 (unaudited) and December 31, 2016, (ii) Condensed Consolidated Statements of Operations for the three months ended March 31, 2017 and 2016 (unaudited), (iii) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2017 and 2016 (unaudited), and (iv) Notes to Condensed Consolidated Financial Statements (unaudited).

*	Filed herewith.

#	Certain portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission under a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

Exhibit 10.1

THE COMPANY HAS REQUESTED AN ORDER FROM THE SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION”) PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, GRANTING CONFIDENTIAL TREATMENT TO SELECTED PORTIONS. ACCORDINGLY, THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED FROM THIS EXHIBIT, AND HAVE BEEN FILED SEPARATELY WITH THE COMMISSION. OMITTED PORTIONS ARE INDICATED IN THIS EXHIBIT WITH “*****”.

EXECUTION VERSION

LICENSE, DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

between

RESPIVERT LTD

and

PULMATRIX, INC.

TABLE OF CONTENTS


TABLE OF CONTENTS			2

BACKGROUND			3

ARTICLE 1 DEFINITIONS			3

ARTICLE 2 GRANT OF LICENSE RIGHTS			11

ARTICLE 3 DEVELOPMENT OF LICENSED PRODUCTS			12

ARTICLE 4 COMMERCIALIZATION OF LICENSED PRODUCTS			13

ARTICLE 5 FINANCIALS AND REPORTING			14

ARTICLE 6 CONFIDENTIALITY			18

ARTICLE 7 PATENTS AND INTELLECTUAL PROPERTY			20

ARTICLE 8 INDEMNIFICATION AND INSURANCE			23

ARTICLE 9 TERM AND TERMINATION			24

ARTICLE 10 REPRESENTATIONS AND WARRANTIES			27

ARTICLE 11 DISPUTE RESOLUTION			28

ARTICLE 12 MISCELLANEOUS PROVISIONS			30

APPENDIX 1: RESPIVERT PATENTS			35

APPENDIX 2: PRESS RELEASE			47

APPENDIX 3: RESPIVERT MATERIALS			49

LICENSE, DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

This license, development, and commercialization agreement is dated June 9, 2017 (“Effective Date”) and is between RESPIVERT LTD., a company incorporated in England and Wales with company number 06032131, having its registered office at 50-100 Holmers Farm Way, High Wycombe, Buckinghamshire HP12 4EG, United Kingdom (“RespiVert”), which is a subsidiary of Janssen Biotech, Inc., and PULMATRIX, INC., a Delaware company with its principal offices at 99 Hayden Avenue, Suite 390, Lexington, MA 02421 (“ Pulmatrix ”).

BACKGROUND

RespiVert owns and controls materials and technology related to narrow spectrum kinase inhibitor compounds.

Pulmatrix is interested in developing a pharmaceutical product using the narrow spectrum kinase inhibitor compounds.

RespiVert desires to transfer its materials and exclusively license its technology to Pulmatrix, and Pulmatrix desires to receive RespiVert’s materials and obtain the exclusive license from RespiVert.

In exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties therefore agree as follows:

Article 1

DEFINITIONS

1.1 “Active Development” means that Pulmatrix, Sublicensee, or delegated Affiliate shall use Commercially Reasonable Efforts (as defined below) in engaging in, or retaining a third- party to engage in, one or more of the following Development activities for the lead Licensed Product it has selected to Develop: formulation development, study/protocol design activity, awaiting protocol approval from the applicable institutional review board or FDA, patient recruitment, patient treatment, data analysis, report writing for any clinical trial, regulatory file(s) being drafted or pending, pricing or marketing approvals pending, manufacturing investment work, synthetic process development, drug synthesis, packaging development, manufacturing scale-up and validation, preclinical or in vitro characterization and pursuing a go/no go decision awaited from the appropriate decision-maker(s) within Pulmatrix to initiate any of the preceding activities.

1.2 “Active Pharmaceutical Ingredient (API)” means any substance or combination of substances used in a finished pharmaceutical product, intended to furnish pharmacological activity or to otherwise have direct effect in the diagnosis, cure, mitigation, treatment or prevention of disease, or to have direct effect in restoring, correcting or modifying physiological functions in human beings.

1.3 “Affiliate” means, with respect to any person, any other person that directly or indirectly controls, is controlled by or is under direct or indirect common control with, such person. For purposes of this Section 1.2, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether

through the ownership of voting securities, by contract or otherwise. Control of any person by another person shall be presumed if fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest of the first person are owned, controlled or held, directly or indirectly, by the other person, or by an Affiliate of the other person. A person, for the purpose of this definition, means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

1.4 “Agreement” means this agreement, including its schedules and Appendices, as the same may be amended from time to time.

1.5 “Business Days” means any day other than Saturday or Sunday on which commercial banks in New York, NY are open for business.

1.6 “Calendar Quarter” means each three month period commencing on January 1, April 1, July 1, and October 1 of each Calendar Year; provided, however that the last Calendar Quarter under this Agreement will extend from the first day of such Calendar Quarter until the effective date of the termination or expiration of this Agreement.

1.7 “Calendar Year” means a calendar year commencing on January 1 and ending on December 31 during the term of this Agreement; provided, however that the last Calendar Year under this Agreement shall extend from the first day of such Calendar Year until the effective date of the termination or expiration of this Agreement.

1.8 “Change of Control” means a transaction or series of related transactions that result in (a) the holders of outstanding voting securities of a Party immediately prior to such transaction ceasing to represent at least fifty percent (50%) of the combined outstanding voting power of the surviving entity immediately after such transaction; (b) any Third Party (other than a trustee or other fiduciary holding securities under an employee benefit plan) becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of a Party; or (c) a sale or other disposition to a Third Party of all or substantially all of a Party’s assets or business.

1.9 “Clinical Trial” means any research study of a therapeutic product with human subjects designed to provide specific data to determine either or both the safety and efficacy of such product.

1.10 “Combination Product” means any product containing (a) as a single formulation, two or more APIs as components including (i) an API of a Licensed Product, as to which API proprietary rights are exclusively granted to Licensee under this Agreement, and (ii) one or more other APIs, or (b) in a single package or container and intended for coordinated use, two or more products as components including (i) a Licensed Product containing a single API, and (ii) one or more other products for therapeutic administration or diagnostic use.

1.11 “Commercialize” or “Commercialization” means any action directed to marketing, promoting, distributing, importing or selling a pharmaceutical product, obtaining pricing or reimbursement approvals for that product and Clinical Trials of a Product conducted after Regulatory Approval for that Product, including label expansion, pricing/reimbursement, epidemiological, modeling and pharmacoeconomic, voluntary post-marketing surveillance and health economics studies.

1.12 “Commercially Reasonable Efforts” means the efforts required to carry out a task in a reasonably diligent and sustained manner without undue interruption, pause or delay; which level is at least commensurate with the level of efforts that a reasonably financed but otherwise similarly situated company would devote to a product that is of high priority to such company and wherein the product is of similar economic value to the applicable Licensed Product, taking into account the product’s safety and efficacy, the product’s proprietary position, pricing, reimbursement and other market-specific factors, and all other relevant commercial factors (including technical, scientific, clinical and food and drug law regulatory factors).

1.13 “Compound(s)” shall mean RespiVert’s experimental narrow spectrum kinase inhibitor compounds designated as RV568, RV1162 and RV7031 and their salts, isomers, enantiomers, different physical forms (including amorphous forms) and polymorphs.

1.14 “Control” or “Controlled” means possession of the ability to grant a license or sublicense of Patents, know-how or other intangible rights as provided for herein without violating the terms of any contract or other arrangements with any Third Party.

1.15 “Currency Hedge Rate” means the rate that is calculated as a weighted average hedge rate of the outstanding external foreign currency forward hedge contract(s) of Johnson & Johnson’s Global Treasury Services Center (“GTSC”) and its Affiliates with third party banks.

1.16 “Development” or “Develop” means preclinical and clinical drug development activities, including, among other things: test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, development-stage manufacturing, quality assurance/quality control development, statistical analysis and report writing, clinical studies and regulatory affairs, product approval and registration. When used as a verb, “Develop” means to engage in Development.

1.17 “Dollars” means the legal currency of the United States of America.

1.18 “EMA” means the European Medicines Agency or any successor agency that is responsible for reviewing applications seeking approval for the sale of pharmaceuticals in the European Union.

1.19 “Effective Date” means the date of this Agreement as set forth above.

1.20 “European Commission” means the European Commission or any successor agency that is responsible for granting marketing approvals authorizing the sale of pharmaceuticals in the EU.

1.21 “European Union” or “EU” means the countries of the European Union, as the European Union is constituted as of the Effective Date and as it may be modified from time to time.

1.22 “FDA” means the United States Food and Drug Administration or any successor agency.

1.23 “Field” means the diagnosis, treatment, palliation, amelioration or prevention of (i) respiratory disease, condition, or symptom, and (ii) cancer or any related symptom, in humans or animals. “Respiratory disease, condition or symptom” is intended to include any disease, condition, or symptom that is (a) related to the respiratory system; or (b) diagnosed, treated, palliated, ameliorated, or prevented by an active pharmaceutical ingredient delivered by the respiratory pathway, for example, including oral or nasal inhalation. Notwithstanding the foregoing, the Field does not include diagnosis, treatment, palliation, amelioration or prevention of any gastrointestinal and/or ophthalmology indications in humans, but the Field does include any cancer or related indication, including without limitation any tumor suppression-related indication, in oncology such as cancers of the gastrointestinal tract and eye.

1.24 “First Commercial Sale” means, with respect to any Licensed Product, the first arm’s length sale of such Product to a Third Party in a country of the Territory by a Party, its Affiliate(s), or Sublicensee(s) for use or consumption in such country following Regulatory Approval. “Treatment IND sales,” “named patient sales” and “compassionate use sales” are not a First Commercial Sale in that country provided that such price received, if any, approximates or is less than the cost of the Licensed Product sold.

1.25 “Improvements” means any modifications of a Compound (such as structural analogs), whether individually or in a Combination Product, excluding any other aspect of the Licensed Products including dosage, formulation, and other such modifications.

1.26 “IND” means an investigational new drug application filed with the FDA as more fully defined in 21 C.F.R. §312.3, as amended from time to time, or its equivalent in any country. For purposes of this part, “IND” is synonymous with “Notice of Claim Investigational Exemption for a New Drug” and “FDA” means the U.S. Food and Drug Administration.

1.27 “Indication” means a recognized disease or condition as identified in an NDA or any supplement thereof for a Licensed Product. For the avoidance of doubt, a supplemental NDA shall be treated as corresponding to a separate Indication relative to the original NDA.

1.28 “Information” means all information including, but not limited to, screens, assays, models, inventions, practices, methods, knowledge, know-how, skill, experience, test data including pharmacological, toxicological and clinical test data, analytical and quality control data, marketing, pricing, distribution, costs, sales, manufacturing secrets and procedures, secret processes, reports, plans, designs, prototypes, test results, working drawings, methods including testing methods, formulas, recipes, material and performance specifications and current accumulated experience acquired as a result of technical research or otherwise, and patent and legal data or descriptions (to the extent that disclosure thereof would not result in loss or waiver of privilege or similar protection) and methods as each of the foregoing relate to the Licensed Product and is Controlled by a Party or its Affiliates.

1.29 “Know-How” means all Information, including but not limited to, manufacturing trade secrets and procedures.

1.30 “Licensed Product” means any Product or Combination Product in any form or formulation that the sale, manufacture, importation, or use, but for the license granted herein, would directly infringe, or contribute to or induce the infringement of a Valid Claim of a RespiVert Patent.

1.31 “MAA” means a marketing authorization application, or similar application: (a) submitted to the EMA in the European Union; or (b) submitted to a Regulatory Authority in the United Kingdom in the event the United Kingdom ceases to be subject to the jurisdiction of the EMA, for instance as a consequence of its exit from the European Union.

1.32 “Manufacturing Cost” means a supplier’s reasonable and necessary internal and third party costs incurred in manufacturing or acquisition of product, determined in accordance with supplier’s standard cost accounting policies that are in accordance with U.S. generally accepted accounting principles and consistently applied across supplier’s manufacturing network to other products that supplier manufactures.

1.33 “MHLW” means Japan’s Ministry of Health, Labor and Welfare, or any successor government agency that is responsible for approving the sale of pharmaceuticals in Japan.

1.34 “NDA” means a new drug application filed pursuant to 21 U.S.C. § 505(b)(1), as amended from time to time, or equivalent submissions with similar requirements in other countries including all documents, data and other information concerning a Licensed Product which are necessary for or included in, FDA approval to market a Licensed Product and all supplements and amendments, including supplemental new drug applications, that may be filed with respect to the foregoing as more fully defined in 21 C.F.R. §314.50 et. seq., as amended from time to time, or equivalent submissions with similar requirements in other countries.

1.35 “Net Sales” means the gross amounts invoiced on sales of a Licensed Product by Licensee, or any of its Affiliates or sublicensees to a Third Party purchaser in an arms-length transaction, less the following customary and commercially reasonable deductions, determined in accordance with US generally accepted accounting principles and internal policies and actually taken, paid, accrued, allocated, or allowed based on good faith estimates, including the following deductions:

trade, cash and/or quantity discounts, allowances, and credits, excluding commissions for commercialization;

excise taxes, use taxes, tariffs, sales taxes and customs duties, and/or other government charges imposed on the sale of Licensed Product (including VAT, but only to the extent that such VAT taxes are not reimbursable or refundable), specifically excluding, for clarity, any income taxes assessed against the income arising from such sale;

compulsory or negotiated payments and cash rebates or other expenditures to governmental authorities (or designated beneficiaries thereof) in the context of any national or local health insurance programs or similar programs; including, but not limited to, pay-for-performance agreements, risk sharing agreements as well as government levied fees as a result of the Affordable Care Act to the extent that Pulmatrix reports this fee in their Net Sales in their audited financial statements.;

rebates, chargebacks, administrative fees, and discounts (or equivalent thereof) to managed health care organizations, group purchasing organizations, insurers, pharmacy benefit managers (or equivalent thereof), specialty pharmacy providers, governmental authorities, or their agencies or purchasers (including Medicaid), reimbursers, or trade customers, as well as amounts owed to patients through co-pay assistance cards or similar forms of rebate to the extent the latter are directly related to the prescribing of the Licensed Product;

outbound freight, shipment and insurance costs to the extent included in the price and separately itemized on the invoice price;

retroactive price reductions, credits or allowances actually granted upon claims, rejections or returns of Licensed Product, including for recalls or damaged or expired goods, billing errors and reserves for returns;

any invoiced amounts which are not collected by the selling party or its Affiliates, including bad debts; and

any deductions in the context of payments that are due or collected significantly after invoice issuance.

All aforementioned deductions shall only be allowable to the extent they are commercially reasonable by Licensee and shall be determined, on a country-by-country basis, as incurred in the ordinary course of business in type and amount verifiable based on the Licensee and Affiliates’ reporting system. All such discounts, allowances, credits, rebates, and other deductions shall be fairly and equitably allocated to Licensed Product and other products of the Licensee and its Affiliates and sublicensees such that Licensed Product does not bear a disproportionate portion of such deductions.

The following dispositions are excluded from the Net Sales definition:

Sales of Licensed Product by and between a Licensee and its Affiliates and Sublicenses are not sales to Third Parties and shall be excluded from Net Sales calculations for all purposes

Sales of Licensed Product for the use in conducting clinical trials or other scientific testing of Licensed Product in a country shall be excluded from Net Sales calculations for all purposes.

Compassionate and Named Patient Sales or sales on an Affordable Basis shall be excluded from Net Sales calculations for all purposes

Any disposition of the Licensed Product as free samples, donations, patient assistance, test marketing programs or other similar programs or studies, shall be excluded from Net Sales calculations for all purposes.

In the event Licensed Product(s) is a Combination Product, the Parties shall negotiate in good faith, at the latest 6 months before the expected launch of such Combination Product, an allocation of Net Sales of such Combination Product to the respective API components or product components thereof, as the case may be, based on the fair market value of such components for the purposes of determining a Licensed Product specific or licensed API specific allocated Net Sales. Payments related to such Combination Product under this Agreement, including royalty payments, will be calculated, due and payable based only on such allocated Net Sales.

Net Sales for the determination of royalties of Combination Products (provided both products are New Chemical Entities) will be calculated by multiplying Net Sales of such Combination Product by the fraction A/(A+B) where A is the Average Selling price of the Licensed Product component contained in the Combination Product, if sold separately or subject to reasonable estimation, and B is the sum of the Average Selling prices of any other product components included in the Combination Product, if sold separately or subject to

reasonable estimation. If one of the products is not an NCE product, then the parties will mutually discuss and agree upon an appropriate economic determination to calculate royalties on such Net Sales.

1.36 “OUS Approval” means receipt of regulatory approval for a Product for the relevant indication outside of the US.

1.37 “Party” means Pulmatrix or RespiVert, and “Parties” means Pulmatrix and RespiVert.

1.38 “Patents” shall mean all patents and patent applications, including any continuations, continuations-in-part, divisions, provisionals or any substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal or extension (including any supplemental patent certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing.

1.39 “Phase IIb Clinical Trial” means a clinical trial generally consistent with 21 CFR §312.21(b) that is required for receipt of Regulatory Approval of a Product and which is conducted to evaluate the effectiveness and the appropriate dose range of a Product for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks.

1.40 “Phase III Clinical Trial” means a clinical trial generally consistent with 21 CFR §312.21(c) that is required for receipt of Regulatory Approval of a Product and which is conducted after preliminary evidence suggesting effectiveness of the drug has been obtained, and are intended to gather additional information to evaluate the overall benefit-risk relationship of the drug and provide an adequate basis for physician labeling.

1.41 “Product” means any and all pharmaceutical compositions or preparations (in any and all dosage forms), in final form, containing the Compound as an active ingredient either alone or in combination with one or more other active ingredients (Combination Product).

1.42 “Pulmatrix Know-How” means Information that is (a) within the Control of Pulmatrix upon termination of this Agreement under Section 9.2, 9.3 or 9.4, (b) not generally known to the public and (c) necessary or useful for RespiVert, its Affiliates or licensees to Develop or Commercialize Licensed Products.

1.43 “Regulatory Approval” means approval and authorization, by governmental entities, required for marketing and commercial sale of a Product in a country or region, such as an NDA or BLA in the United States, an MAA or BLA in the European Union and a JNDA or BLA in Japan.

1.44 “Regulatory Approval Application” means an application for Regulatory Approval required before Commercial sale or use of a Licensed Product in a regulatory jurisdiction.

1.45 “Related Party” and “Related Parties” means each of Pulmatrix’s Affiliates and permitted Sublicensees.

1.46 “Regulatory Authority” means any applicable government regulatory authority involved in granting Regulatory Approval in the Territory, including the FDA, EMA/European Commission and MHLW.

1.47 “RespiVert Know-How” means Information that (a) RespiVert discloses to Pulmatrix under this Agreement or under a separate confidentiality Agreement between the Parties, (b) is within the Control of RespiVert during the Term of the Agreement and (c) and that is not generally known to the public at the time it is disclosed to Pulmatrix or its Affiliates including relevant test protocols for release assay testing of API and formulated API and regulatory materials.

1.48 “RespiVert Materials” means the on-hand Compounds, physical API, formulated API bulk material and on-hand intermediates required exclusively for manufacture of Compounds, in the quantities listed in Appendix 3.

1.49 “RespiVert Patent” means the Patents listed in Appendix 1, and all pending or granted members of the patent families of such listed Patents in any country in the Territory. Upon Respivert’s request, Appendix 1 will be updated by Pulmatrix to reflect changes due to prosecution, expiration, and/or abandonment, during the course of this Agreement.

1.50 “Securities Act” shall mean the Securities Act of 1933, as amended.

1.51 “Sublicensee” shall mean, with respect to a particular Licensed Product, a Third Party to whom Pulmatrix has granted a license or sublicense under any RespiVert Know-How or RespiVert Patents to make, use or sell such Licensed Product. As used in this Agreement, “Sublicensee” shall also include a Third Party to whom Pulmatrix has granted the right to distribute a Licensed Product.

1.52 “Tax” or “Taxes” means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including any interest thereon).

1.53 “Term” shall have the meaning ascribed thereto in Section 9.1.

1.54 “Territory” means the entire world.

1.55 “Third Party” means any entity other than RespiVert or Pulmatrix and their respective Related Parties.

1.56 “Third Party Know-How” means Information that (a) RespiVert Controls but which is owned by a Third Party and (b) and that is not generally known to the public at the time it is disclosed to Pulmatrix or its Affiliates. Agreements between RespiVert and Third Parties covering the use of Third Party Know-How consist solely of the Lonza License and the Morphosys License.

1.57 “US” means the United States of America, including without limitation its territories and possessions.

1.58 “Valid Claim” means: (a) any claim of an issued unexpired patent that (i) has not been finally cancelled, withdrawn, abandoned or rejected by any administrative agency or other body of competent jurisdiction; (ii) has not been permanently revoked, or held invalid by a decision of a court or other body of competent jurisdiction that is unappealable or unappealed within the

time allowed for appeal; (iii) has not been rendered unenforceable through terminal disclaimer or otherwise; and (iv) is not lost through an interference proceeding that is unappealable or unappealed within the time allowed for appeal, or (b) a claim of a pending patent application where such claim has been pending for a period of seven years or less. If a claim of a pending patent application that ceased to be a Valid Claim under this sub-section (b) of this section later issues or grants as a patent within the scope of sub-section (a), then such claim is considered to be a Valid Claim from the date of such issue or grant.

1.59 Additional Definitions . Each of the following definitions is set forth in the Section of this Agreement indicated below:


Definition		Section
ANDA		7.4(d)
Confidential Information		6.1
Disclosing Party		6.1
Receiving Party		6.1
Licensee		9.4(b)
Licensor		9.4(b)
Losses		8.1(b)

Article 2

GRANT OF LICENSE RIGHTS

2.1 License for Licensed Products .

(a) Subject to the terms and conditions of this Agreement, RespiVert hereby grants to Pulmatrix an exclusive license under the RespiVert Patents and RespiVert Know-How to Develop, make, have made, use, sell, have sold, import, offer to sell and Commercialize Licensed Products in the Field in the Territory, with the right to sublicense. Notwithstanding the foregoing grant, RespiVert reserves the right to use all RespiVert Patents and RespiVert Know-How to the extent necessary solely to fulfill its obligations under this Agreement.

(b) Pulmatrix may sublicense its rights to Licensed Product to Sublicensees without RespiVert’s prior written approval after Pulmatrix completes a Phase I Clinical Trial of the Licensed Product; provided, however, that any such sublicense occurs pursuant to a written Agreement that subjects such Sublicensee to all relevant obligations, restrictions, and limitations in this Agreement. Pulmatrix will, within ten (10) calendar days after execution of a sublicense, provide RespiVert with: (a) notice of each agreement with a sublicensee executed hereunder by Pulmatrix or any of its Affiliates, (b) the name and address of each such sublicensee, and (c) a description of the rights granted to and the territory covered by each such sublicense. In addition, and notwithstanding the foregoing, Pulmatrix may, without the need for approval by RespiVert, distribute Licensed Product through a Third Party,

granting any necessary licenses or sublicenses using Third Party distributors. Pulmatrix shall be jointly and severally responsible with its Sublicensees and any delegated Affiliate for failure by its Sublicensees and any delegated Affiliate to comply with, and Pulmatrix guarantees the compliance by each of its Sublicensees and delegated Affiliate with, all such applicable restrictions and limitations in accordance with the terms and conditions of this Agreement.

(c) Pulmatrix and RespiVert may extend their rights and perform any or all of their obligations under this Agreement, through their Affiliates.

(d) Pulmatrix shall not permit any Sublicensees to use RespiVert Patents or RespiVert Know-How without provisions safeguarding confidentiality which are at least equivalent to those provided in this Agreement and Pulmatrix guarantees the compliance by each of its Sublicensees with all such applicable provisions safeguarding confidentiality in accordance with the terms and conditions of this Agreement.

Article 3

DEVELOPMENT OF LICENSED PRODUCTS

3.1 Pulmatrix’s Right to Select Licensed Products . Pulmatrix shall be solely responsible for and shall have the sole right to Develop the Licensed Product including making all Regulatory Approval Applications and obtaining and holding all Regulatory Approvals throughout the Territory, and shall use Commercially Reasonable Efforts to do so.

3.2 Information Sharing .

(a) Pulmatrix shall provide a written update at least twice per Calendar Year regarding its Development activities, which shall include, among other things, information related to progress, status and future plans.

(b) Upon the reasonable request of RespiVert, Pulmatrix shall make itself and its personnel available to discuss the aforementioned updates with RespiVert at an in-person meeting or via telephone conference, provided that such requests occur no more than monthly unless the parties mutually agree otherwise.

3.3 RespiVert’s Responsibilities . Pulmatrix acknowledges that RespiVert has discontinued all work on Licensed Products. Therefore, RespiVert has no obligation to use any efforts to assist Pulmatrix in Pulmatrix’s Development activities relating to any Licensed Product other than RespiVert’s specific obligations hereunder and under the Supply Agreement referred to below. RespiVert shall provide limited consulting to Pulmatrix, as available, through 31 December 2018.

3.4 For the purpose of Development by Pulmatrix, RespiVert shall grant access to all RespiVert Know-How available.

(a) RespiVert shall, promptly after the Effective Date, provide access to Pulmatrix, at RespiVert’s cost: (i) the relevant IND/CTA file or equivalent, including requisite CMC module, and all regulatory correspondence pertaining to the Compounds; and (ii) assay protocols; and (iii) any other Confidential Information, particularly Know-How, that is related to the Licensed Products and is in the possession of, or under the control of, RespiVert.

Article 4

COMMERCIALIZATION OF LICENSED PRODUCTS

4.1 Manufacture of Licensed Product . Pulmatrix shall be responsible for manufacturing and supplying Licensed Products in the Territory by itself or through a Third Party manufacturer for Commercial sale of Licensed Product following receipt of Regulatory Approval on a country-by-country basis in the Territory. Supplies for human Clinical Trials and related program required for Regulatory Approvals in the Territory shall be manufactured, as needed, in accordance with current cGMP standards.

(a) Supply of Materials .

(1) The Parties shall negotiate an Agreement (the “Supply Agreement”) relating to the transfer, Manufacture and supply of Compound which will include the following terms and conditions:

(A)

the transfer of Compound to Pulmatrix indicated in Appendix 3 as “Manufacturing Complete” and in quantities provided in Appendix 3, at no cost to Pulmatrix;

(B)

the Manufacture and supply of Compound indicated in Appendix 3 as “Manufacturing to be Completed” and in the quantities provided in Appendix 3, at Manufacturing Cost plus [****];

(C)

the CMC and quality support and documentation necessary to label, package, release and ship the existing inventory cGMP finished drug Product and matching placebo vials to clinical trial sites and/or a corresponding storage and distribution subcontractor of Pulmatrix’s choice (subject to Section 3.4(a)); and

(D)

the agreement of RespiVert and any other necessary Affiliate to permit Pulmatrix to audit RespiVert or its applicable Affiliate (including Janssen) during business hours upon reasonable notice regarding compliance with GMP requirements during the manufacture, shipping, storage, or other handling of raw and finished materials related to manufacture of the Licensed Products or any component thereof.

4.2 Commercial Responsibilities . Pulmatrix agrees to use Commercially Reasonable Efforts to Commercialize Licensed Products and to cause the commercial launch of Licensed Products in the US and at least one EU country within six (6) months of Regulatory Approval in each of the US or EU, respectively.

4.3 Pulmatrix’s Marketing Obligations For Licensed Products . All business decisions, including, without limitation, the design, sale, price and promotion of Licensed Products under this Agreement and the decisions whether to market any particular Licensed Product shall be within the sole discretion of Pulmatrix.

4.4 Trademarks . Pulmatrix shall select its own trademarks under which it will market the Licensed Products, and no right or license is granted to RespiVert hereunder with respect to such trademarks.

Article 5

FINANCIALS AND REPORTING

5.1 License Fee . In partial consideration for the rights and licensed granted by RespiVert to Pulmatrix under this Agreement, Pulmatrix shall pay $1,000,000 (one million US dollars) within thirty (30) days after the Effective Date. Such amount shall be non-refundable and non-creditable against any further amounts owed by Pulmatrix to RespiVert.

5.2 Development Milestone Payments . The following milestones shall become due and payable by Pulmatrix to RespiVert when any Licensed Product hereunder first achieves each of the following Development milestones, each of (1) through (4) a “Milestone Event”:

(a)


(1) First dosing of a patient in a Phase IIb Clinical Trial for a Licensed Product			$1,000,000
(2) First dosing of a patient in a Phase III Clinical Trial for a Licensed Product			[****]
(3) First FDA Regulatory Approval of a Licensed Product in the US for any Indication			[****]
(4) First OUS Regulatory Approval of a Licensed Product for any Indication			[****]

(b) All Development Milestone Payments in respect to each Licensed Product are cumulative such that once a given milestone is achieved all of the preceding Development Milestone Payments will become due unless they have been paid, with the exception of Milestone Events (3) and (4) that must be achieved independently for the Milestone Payment to be due for each. For the avoidance of doubt, if FDA regulatory approval is achieved based on Phase II Clinical Trial results, milestones payments under Section 5.2(a)(3) will be payable upon such regulatory approval. Additionally, for the avoidance of doubt, if a Licensed Product is dropped and another pursued, no milestone will be due a second time.

5.3 Commercial Milestone Payments . In addition to any other payments stated in this Article 5, Pulmatrix shall make the following Commercial milestone payments to RespiVert, each (a) through (c) a “Milestone Event”:


(a) First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed [****]		[****]
(b) First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed [****]		[****]
(c) First Calendar Year in which annual worldwide Net Sales of all Licensed Products exceed [****]	$	80,000,000

5.4 Milestone Payments are payable only once upon the initial achievement of the associated Milestone Event. Pulmatrix shall promptly provide RespiVert with written notice upon the achievement of each of the Milestone Events and will pay each associated Milestone Payment within ten (10) days after achievement of the Milestone Event in the case of Milestone Events in Section 5.2 and within forty-five (45) Business Days of the end of the Calendar Quarter in the case of Milestone Events in Section 5.3. If more than one Milestone Event occurs in the same Calendar Year, then Pulmatrix will need to pay the milestone amount for each of the milestone events in such Calendar Year. For example, if in a Calendar Year the Net Sales have increased from $400,000,000 to $1,000,000,000 then Pulmatrix would make a milestone payment to RespiVert of [****]. If RespiVert believes any milestone payment is due in spite of not having received notice from Pulmatrix, it will so notify Pulmatrix and provide to Pulmatrix the data and information supporting its belief. Pulmatrix will have 30 days after receipt of the data and information from RespiVert to address RespiVert’s notification. If upon receipt of Pulmatrix’s answer to RespiVert’s notification, RespiVert still believes such milestone payment is due it may use the procedure set forth in section 11.1 to resolve the issue.

5.5 Royalty Rate for Licensed Products Developed and Commercialized by Pulmatrix . Pulmatrix will pay RespiVert royalties on aggregate Net Sales by Pulmatrix or its Related Parties (including Sublicensees) of all Products in each Calendar Year as set forth below.


(1) For aggregate Net Sales in a Calendar Year of all Licensed Products less than or equal to [****]	6	%
(2) For aggregate Net Sales in a Calendar Year of all Licensed Products greater than [**]and less than or equal to [**]	8	%
(3) For aggregate Net Sales in a Calendar Year of all Licensed Products greater than [****]	10	%

5.6 Third Party Licenses . In the event that Pulmatrix requires a license from a Third Party to Develop and/or Commercialize a Licensed Product, Pulmatrix shall be entitled to set off any royalties paid under such a Third Party license against royalties payable to RespiVert under this Agreement. However, royalties payable to RespiVert shall not be reduced more than fifty percent (50%).

5.7 Currency Restrictions . Except as herein provided in this Article 5, all royalties shall be paid in US dollars. If, at any time, legal restrictions prevent the prompt remittance of part of or all of the royalties with respect to any country where Licensed Products are sold, Pulmatrix shall have the right and option to make such payments by depositing the amount thereof in local currency to RespiVert’s accounts in a bank or depository in such country.

5.8 Royalty Period . The royalty payments set forth in Section 5.5 above shall be payable for each Licensed Product on a product-by-product and country-by-country basis from the date of First Commercial Sale of such Licensed Product in such country until the later of: (a) ten (10) years from the date of First Commercial Sale of a Licensed Product in such country; (b) until the last to expire of any Valid Patent Claim of the RespiVert Patent rights and, but for the licenses granted herein, would be infringed by such sale of such Licensed Product; or (c) expiration of Regulatory Exclusivity granted by a Regulatory Authority. Once Pulmatrix has paid RespiVert for the full term of the periods of time set forth in (a), (b), and (c) above for a Licensed Product on a country-by- country basis, it shall have a perpetual, irrevocable, paid up, no fee, exclusive royalty-free license pursuant to Sections 2.1 and 2.1 under RespiVert Know-How.

5.9 Additional Sublicensing Compensation . In the event that Pulmatrix grants an exclusive sublicense under Section 2.1(b) prior to the start of a Phase 3 trial then, in addition to the Milestone Payments and Royalties due under Sections 5.2, 5.3, and 5.5, Pulmatrix shall also pay RespiVert [****]of all compensation received from its sublicensee that are incremental to any Milestone payment that may still be due or has already been paid by Pulmatrix prior to the grant of such sublicense. In the event that Pulmatrix grants an exclusive sublicense under Section 2.1(b) for an oncology Indication at any time then, in addition to the Milestone payments and Royalties due under Sections 5.1, 5.2, 5.3 and 5.5, Pulmatrix shall also pay RespiVert [****] of all compensation received from its sublicensee that are incremental to any Milestone payment that may still be due or has already been paid by Pulmatrix prior to the grant of such sublicense.

5.10 Mode of Payment . Except as provided in Section 5.7, all payments to be made by Pulmatrix to RespiVert under this Agreement shall be made in US Dollars and shall be paid by bank wire transfer in immediately available funds to such bank account in the United States or elsewhere as may be designated in writing by RespiVert from time to time.

5.11 Quarterly Royalty Reports . Pulmatrix shall promptly provide RespiVert with written notice upon the achievement of each of the Milestone Events listed in Sections 5.2 and 5.3. During the term of this Agreement following the First Commercial Sale of a Product in any country, Pulmatrix shall furnish to RespiVert a quarterly written report, as of the end of each Calendar Quarter, showing (i) the Net Sales of each Product in each country in the world during the reporting period; (ii) the royalties payable under this Agreement on account of those Net Sales and the basis for calculating those royalties; and (iii) the exchange rates and other methodology used in converting into U.S. Dollars, from the currencies in which sales were made, any payments due which are based on Net Sales. Pulmatrix will provide such reports to RespiVert no later than the thirtieth (30th) day following the last day of each Calendar Quarter. Royalties shown by each royalty report to have accrued during the Calendar Quarter are due and payable to RespiVert on the thirtieth (30th) day following the end of such Calendar Quarter. Pulmatrix will keep complete and accurate records in sufficient detail to enable the royalties payable to be determined and the information provided to be verified by RespiVert’s accounting firm pursuant to Section 5.12.

5.12 Currency Conversion . With respect to Net Sales of Licensed Product in a currency other than U.S. Dollar, such amounts and the amounts payable shall be expressed in their U.S. Dollar equivalent calculated using the following methodology:

For the upcoming calendar year, RespiVert shall provide: 1) a Currency Hedge Rate(s) to be used for the local currency of each country of the Territory and 2) the details of such Currency Hedge Rate(s) in writing to Pulmatrix not later than ten business days after the Currency Hedge Rate(s) are available from the GTSC or its Affiliates, which is customarily at the end of October. Such Currency Hedge Rate(s) will remain constant throughout the upcoming calendar year. Pulmatrix shall use the Currency Hedge Rate(s) to convert Net Sales to U.S. Dollars for the purpose of calculating royalties and commercial milestones.

5.13 Net Sales and Royalty Forecasts . Beginning with the Calendar Quarter prior to which First Commercial Sale is expected to occur for each Licensed Product and for so long as Pulmatrix is required to make royalty payments to RespiVert in respect to such Licensed Product, Pulmatrix shall provide RespiVert with non-binding estimated twelve month rolling forecasts and royalty payments, updated on a Calendar Quarter basis, of aggregated Net Sales of each Licensed Product forecasted to be sold in the Territory. Such information shall be provided for informational purposes only. Such estimates shall be consistent, to the extent possible, with the information Pulmatrix uses for its own internal planning purposes and Pulmatrix shall respond to Respivert’s reasonable questions regarding such information.

5.14 Audit . Pulmatrix shall maintain complete and accurate Financial Records of the sales of Licensed Products and calculation of corresponding royalties in sufficient detail to permit RespiVert to confirm the accuracy of Pulmatrix’s Financial records related to the royalty calculations and calculation of Net Sales. Financial Records under this Agreement shall be open during reasonable business hours upon reasonable advance notice for a period of four (4) Calendar Years. for examination. Upon the written request of RespiVert but not more often than once each year, at RespiVert’s expense, Pulmatrix shall permit an independent public accounting firm of national prominence selected by RespiVert and acceptable to Pulmatrix to have access during normal business hours upon reasonable advance notice to those records of Pulmatrix as may be reasonably necessary for the sole purpose of verifying the accuracy of the Net Sales report, the royalty calculation and Sales Milestones conducted by Pulmatrix pursuant to this Agreement.

(a) Pulmatrix shall include in each sublicense or Commercialization Agreement entered into by it pursuant to this Agreement, a provision requiring, among others, the Sublicensee or Commercialization partner to keep and maintain adequate financial records pursuant to such sublicense or Commercialization Agreement and to grant access to such records by the aforementioned independent public accountant for the reasons specified in this Agreement.

(b) The report prepared by such independent public accounting firm, a copy of which shall be sent or otherwise provided to Pulmatrix by such independent public accountant at the same time as it is sent or otherwise provided to RespiVert, shall contain the conclusions of such independent public accountant regarding the audit and will specify whether the amounts paid to RespiVert pursuant thereto were correct or, if incorrect, the amount of any underpayment or overpayment, and the basis for such finding.

(c) If such independent public accounting firm’s report shows any underpayment, Pulmatrix shall remit or shall cause its Sublicensees or Commercialization partners to remit to RespiVert within 30 days after Pulmatrix’s receipt of such report, (i) the amount of such underpayment with interest due and (ii) if such underpayment exceeds five percent (5%) of the total amount owed for the Calendar Year then being audited, the reasonable and necessary fees and expenses of such independent

public accountant performing the audit, subject to reasonable substantiation thereof. If such independent public accounting firm’s report shows any overpayment, Pulmatrix shall receive a credit equal to such overpayment against the royalty otherwise payable to RespiVert.

5.15 Interest Due . In case of any delay in payment by Pulmatrix to RespiVert not resulting from Force Majeure (as described in Section 12.7), interest at the annual rate of: one- twelfth (1/12) of the Prime Rate (as reported by JP Morgan Chase & Co.) plus three percent (3%), assessed from the due date of the payment shall be due from Pulmatrix.

5.16 Tax Withholding .

(a) Pulmatrix will make all payments to RespiVert under this Agreement without deduction or withholding for Taxes except to the extent that any such deduction or withholding is required by law in effect at the time of payment.

(b) Any tax required to be withheld on amounts payable under this Agreement will be paid by Pulmatrix on behalf of RespiVert to the appropriate governmental authority, and Pulmatrix will furnish RespiVert with proof of payment of such tax.

(c) Pulmatrix and RespiVert will cooperate with respect to all documentation required by any taxing authority or reasonably requested by Pulmatrix to secure a reduction in the rate of applicable withholding Taxes.

(d) If Pulmatrix had a duty to withhold Taxes in connection with any payment it made to RespiVert under this Agreement but Pulmatrix failed to withhold, and such Taxes were assessed against and paid by Pulmatrix, then RespiVert will indemnify and hold harmless Pulmatrix from and against such Taxes (including interest). If Pulmatrix makes a claim under this Section (d), it will comply with the obligations imposed by Section 5.16(b) as if Pulmatrix had withheld Taxes from a payment to RespiVert.

(e) All amounts in this Agreement are stated to be exclusive of VAT and other sales, use or indirect Taxes, which may be due on any invoice. If any such Taxes are payable on the payments under this Agreement (including for the avoidance of doubt any payments in kind whether for the grant of the licences hereunder or otherwise) then Pulmatrix shall be responsible for the payment of such taxes to RespiVert following receipt of a valid tax invoice from RespiVert.

Article 6

CONFIDENTIALITY

6.1 Confidentiality Obligations . The Parties agree that, for the term of this Agreement and for five (5) years thereafter, either Party that receives Information (a “Receiving Party”) and other confidential and proprietary information and materials furnished to it by the other Party (a “Disclosing Party”) pursuant to this Agreement or any Information developed during the term of this Agreement (collectively “Confidential Information”), shall keep confidential and shall not publish or otherwise disclose and shall not use for any purpose (except as expressly permitted hereunder) such Confidential Information, except to the extent that it can be established by the Receiving Party that such Confidential Information: (a) was already known to the Receiving Party, other than under an obligation of confidentiality from the Disclosing Party; (b) was generally

available to the public or otherwise part of the public domain at the time of its disclosure to the Receiving Party; (c) became generally available to the public or otherwise part of the public domain after its disclosure which was other than through any act or omission of the Receiving Party in breach of this Agreement; (d) was subsequently lawfully disclosed to the Receiving Party by a Third Party; (e) can be shown by written records to have been independently developed by the Receiving Party without reference to the Confidential Information received from the Disclosing Party and without breach of any of the provisions of this Agreement; or (f) is information that the Disclosing Party has specifically agreed in writing that the Receiving Party may disclose.

6.2 Written Assurances and Permitted Uses of Confidential Information .

(a) Each Party shall inform its employees and consultants who perform work under this Agreement of the obligations of confidentiality specified in Section 6.1, and all such persons shall be bound by obligations of confidentiality substantially similar to those set forth herein.

(b) The Receiving Party may disclose Confidential Information to the extent the Receiving Party is compelled to disclose such information by a court or other tribunal of competent jurisdiction, provided, however, that in such case the Receiving Party shall give prompt notice to the Disclosing Party so that the Disclosing Party may seek a protective order or other remedy from said court or tribunal. In any event, the Receiving Party shall disclose only that portion of the Confidential Information that, in the opinion of its legal counsel, is legally required to be disclosed and will exercise reasonable efforts to ensure that any such information so disclosed will be accorded confidential treatment by said court or tribunal.

(c) To the extent it is reasonably necessary or appropriate to fulfill its obligations and exercise its rights under this Agreement, either Party may disclose Confidential Information to its Affiliates and sublicensees (including potential sublicensees) on a need-to-know basis on condition that such Affiliates and sublicensees agree to keep the Confidential Information confidential for the same time periods and to the same extent as such Party is required to keep the Confidential Information confidential under this Agreement, and to any regulatory authorities to the extent reasonably necessary to obtain Regulatory Approval.

(d) To the extent that disclosure of RespiVert Confidential Information is to consultants, contract research organizations, potential clinical trial sites, clinical trial sites, clinical investigators, subcontractors of any of the foregoing and any other necessary Third Parties who are or are anticipated to become directly involved in the design and conduct of a Clinical Trial, the data safety monitoring and advisory board relating to such Clinical Trial, and regulatory agencies such as the FDA, EMA or other health authorities working with the sponsor of such Clinical Trial, Pulmatrix shall use Commercially Reasonable Efforts to obtain a confidentiality period of five (5) years following the expiration or earlier termination of any consultancy Agreement, confidential disclosure Agreement, clinical trial Agreement or any other Agreement necessary for the design and conduct of a Clinical Trial and analysis and interpretation of data obtained in such Clinical Trial.

(e) The existence and the terms and conditions of this Agreement that the Parties have not specifically agreed to disclose pursuant to this Section 6.2 shall be treated by each Party as Confidential Information of the other Party.

6.3 Publication . Each Party shall submit any proposed scientific publication containing Confidential Information of the other Party relating to its Development and/or Commercialization

activities relating to Licensed Products at least thirty (30) days in advance of submission of an abstract of a proposed publication, if any, and again at least thirty (30) days in advance of submission of the scientific publication, to allow such other Party to review such planned public disclosure, extendable by another thirty (30) days upon request to permit a Party to prepare and file for additional patent protection before any such public disclosure. The reviewing Party will promptly review such publication and make any objections that it may have to the publication of the Confidential Information contained therein. Should the reviewing Party make an objection to the publication of the Confidential Information or require its modification, then the Parties will discuss the merits of publishing and any such modifications; provided, however, that in any case, no publication of Confidential Information of the other Party shall take place under this Section without the other Party’s prior written approval thereof or unless the obligations of confidentiality as to such Confidential Information shall be waived or disclosure of Confidential Information of the other Party is authorized under this Article 6.

6.4 Publication of Clinical Trial Results . In connection with the licenses hereunder, RespiVert agrees that it will, and it will cause any of its Affiliates to agree to, permit Pulmatrix and its Affiliates to register and publish Development data as required by law or industry best practices, and otherwise comply with all terms therein, notwithstanding the provisions of Sections 6.1 and 6.3.

6.5 Public Announcements . A press release, deemed agreed upon by the Parties, is attached to this Agreement as Appendix 2. Neither Party shall originate any publicity, news release or public announcements, written or oral, whether to the public or press, stockholders or otherwise, relating to this Agreement, including its existence, the subject matter to which it relates, performance under it or any of its terms, to any amendment hereto or performances hereunder without the prior written consent of the other Party, save only such announcements that are required by law to be made or that are otherwise agreed to by the Parties. Such announcements shall be brief and factual. If a Party decides to make an announcement required by law, it shall give the other Party at least five (5) business days advance notice, where possible, of the text of the announcement so that the other Party shall have an opportunity to comment upon the announcement. To the extent that the receiving Party reasonably requests the deletion of any information in the materials, the disclosing Party shall delete such information unless, in the opinion of the disclosing Party’s legal counsel, such Confidential Information is legally required to be fully disclosed.

Article 7

PATENTS AND INTELLECTUAL PROPERTY

7.1 Improvements . Improvements, and any Patents relating to any Improvements, by Pulmatrix or its sublicensees are prohibited under this Agreement without the prior written consent of RespiVert.

7.2 Ownership; Inventions . Pulmatrix shall own and retain all rights, title, and interest in and to inventions created by Pulmatrix after the Effective Date. RespiVert shall have no license, right, or interest whatsoever in or to any and all such Pulmatrix inventions, except as expressly set forth in this Agreement.

7.3 RespiVert Patent Prosecution and Maintenance . During the term of the Agreement, Pulmatrix shall, through counsel mutually agreed by the Parties and, at Pulmatrix’s expense, prepare, file, prosecute and maintain RespiVert Patents. Pulmatrix will, directly or via its counsel, consult with RespiVert and keep RespiVert informed of all material matters relating to the preparation, filing, prosecution and maintenance of RespiVert Patents including copying RespiVert on all correspondence sent to and received from every patent office in every jurisdiction that relates to RespiVert Patents. Notwithstanding the foregoing, Pulmatrix shall have the option to abandon the prosecution of individual RespiVert Patents upon not less than thirty (30) days’ notice to RespiVert, at which point RespiVert shall have the right to prepare, file, prosecute and maintain such abandoned RespiVert Patent as RespiVert’s expense, and Pulmatrix shall cooperate with RespiVert as reasonably necessary to facilitate a smooth transition of such activities.

7.4 Infringement .

(a) Notice . If the development, manufacture, use, sale, offer to sell, importation, or any other commercialization of any Licensed Product results in a claim or a threatened claim by a Third Party against a Party hereto for patent infringement or for inducing or contributing to patent infringement (“Infringement Claim”), the Party first having notice of an Infringement Claim shall promptly notify the other in writing. The notice shall set forth the facts of the Infringement Claim in reasonable detail.

(b) Defense . Pulmatrix will have the right, but not the obligation, to defend any suit resulting from an Infringement Claim at its expense. RespiVert will cooperate and assist Pulmatrix in any such litigation at Pulmatrix’s expense. RespiVert may participate in, but not control, the defense of any such matter with counsel of its choice at its own expense.

(c) Settlement . In the event that the development, manufacture, use, sale, offer for sale, importation, or any other commercialization of the Licensed Product in a country would infringe a Third Party Patent and a license to such Third Party Patent is available, and Pulmatrix in its sole discretion seeks such a license, the Parties agree:

(i)

Pulmatrix shall be responsible for all costs associated with acquiring such Third Party license; and

(ii)

Pulmatrix shall use Commercially Reasonable Efforts to obtain required licenses under the Third Party Patents. For the avoidance of doubt, Pulmatrix shall have sole discretion to determine whether any offered terms of such Third Party license are commercially reasonable and whether to enter into such a Third Party license.

(d) ANDA Notices . RespiVert shall inform Pulmatrix of any certification regarding any RespiVert Patent Rights it has received pursuant to either 21 U.S.C. §§355(j) or its successor provisions or any similar provisions in a country in the Territory other than the United States and shall provide Pulmatrix with a copy of the certification within ten days of receipt.

(i)

Pulmatrix shall have the first right, but not the obligation, to bring infringement proceedings in connection with the matters described in the preceding subsections of this Section. If Pulmatrix decides not to bring infringement proceedings against the entity making such a certification, Pulmatrix shall give notice to RespiVert of its decision not to bring suit within twenty-one (21) days after receipt of notice of such certification.

(ii)

RespiVert may then, but is not required to, bring suit against the party that filed the certification.

(iii)

Any suit shall either be in the name of Pulmatrix or in the name of RespiVert, or jointly in the name of Pulmatrix and RespiVert, as may be required to effectively institute and maintain such suit. Each Party hereby agrees to be named a party to and to join such suit, at the other Party’s expense, if needed to institute or maintain such suit.

(iv)

For purposes of this Section, the Parties agree to execute the legal papers necessary for the prosecution of any such suit as may be reasonably needed.

(e) Each Party shall promptly give the other Party notice of (i) any infringement of a RespiVert Patent or (ii) any misappropriation or misuse of RespiVert Know-How, that may come to a Party’s attention. With respect to infringement of the RespiVert Patents or misappropriation of the RespiVert Know-How that is not covered under subsection (d) of this Section 7.3, Pulmatrix shall have the first right but not the obligation, to initiate and prosecute any such legal action at its own expense and in the name of RespiVert and Pulmatrix (or just RespiVert or just Pulmatrix if the laws of the jurisdiction so dictate). Pulmatrix shall promptly inform RespiVert if it elects not to exercise that right with respect to RespiVert Patent Rights and RespiVert shall thereafter have the right at its sole cost to initiate and prosecute such action in the name of Pulmatrix and, if necessary, RespiVert. Each Party shall have the right to be represented by counsel of its own choice and at its own expense. Irrespective of which Party prosecutes the action, it shall keep the other Party reasonably informed of strategic decisions and shall consider comments furnished by the other Party in good faith.

7.5 Patent Term Extensions . RespiVert hereby authorizes Pulmatrix to (a) provide in any NDA a list of patents which includes RespiVert Patents that relate to such Product and such other information as Pulmatrix believes is appropriate; (b) commence suit for infringement of RespiVert Patents under § 271(e) (2) of Title 35 of the United States Code; and (c) exercise any rights that may be exercisable by RespiVert as patent owner under the Act, including without limitation, applying for an extension of the term of any patent included in RespiVert Patents. In the event that applicable law in any country provides for the extension of the term of any patent included among RespiVert Patents, such as under the Act, the Supplementary Certificate of Protection of the Member States of the European Union and other similar measures in any other country, RespiVert shall apply for and use its reasonable efforts to obtain such an extension or, should the law require Pulmatrix to so apply, RespiVert hereby gives permission to Pulmatrix to do so. Pulmatrix and RespiVert agree to cooperate with one another in obtaining such extension. RespiVert agrees to cooperate with Pulmatrix or its sublicensee, as applicable, in the exercise of the authorization granted herein and shall execute such documents and take such additional action as Pulmatrix may reasonably request in connection therewith, including, if necessary, permitting itself to be joined as a Party in any suit for infringement brought by Pulmatrix hereunder.

7.6 Validity of Licensed Patents . In the event that a declaratory judgment action alleging invalidity of any of the RespiVert Patents is brought against either Party, Pulmatrix shall have the right, but not the obligation, to assume the sole defense of the action at its own expense.

Pulmatrix shall keep RespiVert informed of the progress of any such declaratory judgment action that it defends and will consider comments furnished by RespiVert in good faith. If Pulmatrix elects not to assume such defense, RespiVert may assume sole defense at its own expense.

7.7 Recovery. In the event of any monetary recovery in any infringement litigation under this Article 7, regardless of which Party prosecutes the claim(s), all such monetary recovery will be paid first to compensate the Party or Parties prosecuting the claim(s) for its or their reasonable attorney’s fees and documented out-of-pocket costs, and then any remainder will be allocated as follows: (i) if the monetary recovery is based upon Pulmatrix’s lost profits, then the recovery shall be treated as Net Sales for purposes of any payments owed to RespiVert under Sections 5.3 and 5.5; or (ii) if the recovery is based upon the allocation of a reasonable royalty, or on any other basis, then the Party that initiated and litigated the action shall receive 75% of such recovery, and the remaining 25% shall be allocated to the other Party, and none of the recovered amounts will be counted as Net Sales.

Article 8

INDEMNIFICATION AND INSURANCE

8.1 Indemnification .

(a) RespiVert agrees to indemnify, defend and hold Pulmatrix and its Affiliates harmless against any action, claims, damages, injuries, losses, costs and expenses (including reasonable attorney’s fees and disbursements) arising from or alleged or claimed to arise from personal injury, death or property sustained by any person resulting from any intentionally wrongful act or omission or gross negligence or sole negligence arising after the Effective Date of RespiVert or its employees or agents for any material breach by RespiVert or its Affiliates of RespiVert’s obligations under this Agreement. For the avoidance of doubt, this obligation includes indemnification for any materials that cause injury to any person that are transferred to Pulmatrix by RespiVert or its Affiliates, regardless of the time of manufacture.

(b) Pulmatrix shall indemnify, defend and hold RespiVert, and their agents, employees and directors (“RespiVert Indemnitees”) harmless from and against any and all liability, damage, claim, loss, cost or expense, including reasonable attorneys’ fees, including any claim of patent infringement (“Losses”), resulting directly from the manufacture, use, handling, storage, sale or other disposition of Licensed Products by Pulmatrix or its Sublicensees, distributors and agents, except to the extent such Losses result from the gross negligence or willful misconduct of the RespiVert Indemnitees.

(c) Except as provided in Section 8.1(a), Pulmatrix agrees to indemnify, defend and hold RespiVert and its Affiliates harmless against any action, claims, damages, injuries, losses, costs and expenses, including reasonable attorney’s fees and disbursements, arising from or alleged or claimed to arise from personal injury, death or property sustained by any person, except to the extent resulting from any intentionally wrongful act or omission or gross negligence or sole negligence of RespiVert, its Affiliates, or their employees or agents, or any material breach by Pulmatrix of its obligations under this Agreement.

8.2 Indemnification Procedure . Upon the assertion of any such claim or suit, the indemnitee shall promptly notify the indemnitor thereof and shall permit the indemnitor to assume

direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration) and shall cooperate as requested (at the expense of indemnitor) in the defense of the claim. The Indemnitee shall not settle any such claim or suit without the prior written consent of the indemnitor, unless they shall have first waived their rights to indemnification hereunder.

8.3 Insurance . Beginning no later than the First Commercial Sale, Pulmatrix shall maintain commercial general liability insurance including coverage for product liability in amounts not less than [****]per occurrence an annual aggregate and naming RespiVert as additional insured. Such insurance shall include worldwide coverage. During any clinical trials Pulmatrix shall maintain clinical trial insurance fully compliant with regulations in those territories where clinical trials are conducted. All insurance companies must be rated A or better in the most recent A.M. Best’s Rating Guide. The minimum amounts of insurance shall not be construed to create a limit of Pulmatrix liability with respect to its indemnification under this Agreement, provided that Pulmatrix’s liability will be limited in all respects under this Agreement as set forth in Section 8.4. Pulmatrix shall provide RespiVert with written evidence of such insurance upon request and shall provide RespiVert with thirty (30) days prior written notice in the event of cancellation. Pulmatrix shall maintain such commercial general liability insurance including product liability insurance during the period of commercialization and for a period of not less than five years thereafter.

8.4 Limitations on Liability . IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, INCIDENTAL, SPECIAL, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY LOSS OF PROFITS, REVENUE AND EXPECTED SAVINGS, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES SUFFERED BY THE OTHER PARTY HOWEVER CAUSED. This Section will not apply to any breach of Article 6 nor to any indemnification owed Licensor RespiVert for personal injury under Section 8.1(c).

Article 9

TERM AND TERMINATION

9.1 Term . This Agreement shall commence on the Effective Date and shall remain in effect until the expiration of Pulmatrix’s obligation to pay royalties for all Licensed Products, unless earlier terminated as provided in this Article 9.

9.2 Termination of this Agreement by Pulmatrix for any Reason . Pulmatrix may terminate this Agreement for any reason upon one hundred twenty (120) days advance written notice to RespiVert. In such case, Pulmatrix shall pay to RespiVert within thirty (30) days of such termination: (i) any outstanding fees and expenses including non-cancellable amounts incurred and due to RespiVert for any services rendered up to the date of termination; (ii) all reasonable direct costs including any non-cancellable amounts incurred by RespiVert to complete activities associated with such termination; and any payments which have accrued and become payable under Section 5 and Pulmatrix shall also be subject to the provisions of Section 9.5 herein.

9.3 Termination for Breach . The failure by a Party to comply with any of the material obligations contained in this Agreement shall entitle the other Party to give notice to have the default cured or terminate this Agreement if such failure is not subject to cure. If such default is not cured within sixty (60) days after the receipt of such notice, or if by its nature such default

could not be cured within sixty (60) days, the notifying Party shall be entitled, without prejudice to any of its other rights conferred on it by this Agreement, and in addition to any other remedies that may be available to it, to terminate this Agreement. Pulmatrix’s failure to maintain a Licensed Product in Active Development or failure to engage in Active Development or use Commercially Reasonable Efforts to Develop or Commercialize the Licensed Product pursuant to this Agreement shall constitute a material breach of this Agreement, provided, however, that in the event of a good faith dispute with respect to the existence of a material breach or cure thereof, the sixty (60) day cure period shall be tolled until such time as the dispute is resolved pursuant to Article 11 herein and any cure required by such resolution has not been timely completed.

9.4 Termination / Attempted Termination for Bankruptcy or Insolvency .

(a) By Pulmatrix . If (i) Pulmatrix makes any general assignment for the benefit of its creditors; (ii) a petition is filed by or against Pulmatrix, or any proceeding is initiated against Pulmatrix as a debtor, under any bankruptcy or insolvency law; (iii) Pulmatrix petitions for or acquiesces to the appointment of any receiver, trustee, or any similar officer to take possession, custody, or control of all or any part of Pulmatrix’s assets or property; or (iv) Pulmatrix commences under the laws of any jurisdiction any proceeding involving its insolvency, bankruptcy, reorganization, adjustment of debt, dissolution, liquidation or any other similar proceeding for the release of financially distressed debtors, or becomes a party to any proceeding or action of the type described above, Pulmatrix shall provide immediate written notice thereof to RespiVert and RespiVert may terminate this Agreement in its entirety (including the licenses granted herein) on or after the receipt of such written notice and Pulmatrix shall also be subject to the provisions of Section 9.5 herein.

(b) All rights and licenses granted by RespiVert (“Licensor”) or any other applicable successor licensor under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, U.S. Code (the “ Bankruptcy Code ”), licenses of rights to “intellectual property” as defined in the Bankruptcy Code. The Parties agree that Pulmatrix (“Licensee”) and its Affiliates and any sublicensees, shall retain and may fully exercise and enforce all of its respective rights and elections under the Bankruptcy Code, including in the event any proceeding shall be instituted by or against Licensor seeking to adjudicate Licensor as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of Licensor or Licensor’s debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors, or seeking an entry of an order for relief or the appointment of a receiver, trustee or other similar official for Licensor or any substantial part of Licensor’s property, or Licensor shall take any action to authorize any of the foregoing actions (each a “Proceeding” for this Section 9.4(b)).

Licensor hereby agrees that in the event of any such Proceeding during the term of this Agreement, and anytime thereafter with respect to the irrevocable license to Licensor’s Know-How under Section 5.8, to create and provide current copies to Licensee or, if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such intellectual property. In any event, Licensee will have (x) the right to a complete duplicate of (or complete access to, as appropriate) all intellectual property (as defined in the Bankruptcy Code) and embodiments of intellectual property, which shall be promptly delivered to Licensee upon any rejection of this Agreement by or on behalf of Licensor, upon written request therefor by Licensee; and (y) the right to continue to commercialize the Licensed Products using Licensor’s Patent Rights and Know-How granted under this Agreement, and all versions and derivatives thereof to which Licensee would otherwise have been entitled under this Agreement, in accordance with the terms and conditions of this Agreement.

All rights, powers, and remedies of each licensee provided under this Section 9.4 are in addition to and not in substitution for any and all other rights, powers, and remedies now or hereafter existing at law or in equity in the event of any such commencement of a bankruptcy proceeding by or against the applicable licensor.

9.5 Effect of Termination . In the event of termination by Pulmatrix under Section 9.2 or by RespiVert under Section 9.3 or 9.4(a): (i) all rights licensed herein shall revert to RespiVert; (ii) Pulmatrix shall, at its own expense, promptly provide RespiVert with all inventory, data (including clinical data) and results pertaining to Licensed Products; (iii) Pulmatrix will, at its own expense, promptly assign or transfer to RespiVert all trademarks and trademark applications (notwithstanding Section 4.4 herein), filings with regulatory authorities concerning Licensed Products, including, without limitation, Regulatory Approval Applications upon receipt of payment from RespiVert equal to the costs incurred for such filings on country-by-country basis; (iv) at Respivert’s sole discretion, Pulmatrix shall provide RespiVert with its requirements (to the extent of quantities on hand) at Pulmatrix’s reasonable cost, or as to which Pulmatrix has the right to acquire upon reimbursement or pre-payment at RespiVert’s sole cost) of Licensed Product, for a period of time, not to exceed six (6) months, reasonably sufficient for RespiVert to find an acceptable (at RespiVert’s sole discretion) alternative source of both clinical and Commercial supply of Licensed Product; and (v) Pulmatrix shall grant RespiVert a worldwide license in the Field to (a) all data related to the Compounds that it possesses and that has been developed under this Agreement, and (b) any Pulmatrix Patents and Pulmatrix Know-How that, respectively, cover or are directed to the Licensed Products that are Developed under this Agreement, but expressly excluding Pulmatrix’s iSPERSETM technology and any such Pulmatrix Patents and Know-How that relate thereto, and expressly excluding any other Pulmatrix technology and intellectual property rights existing before the Effective Date. In the event of such termination under this Section 9.5, Pulmatrix also agrees to negotiate in good faith with RespiVert regarding a royalty-bearing worldwide license of rights in the Field to use Pulmatrix’s technology and intellectual property rights, including any of the expressly excluded rights set forth above in Section 9.5(v)(b), solely as directly related to the Licensed Products and as necessary for RespiVert to commercialize the Licensed Products.

9.6 No Waiver . The right of a Party to terminate this Agreement, as provided in this Article 9, shall not be affected in any way by its waiver or failure to take action with respect to any prior default.

9.7 Consequences of Termination . Except as otherwise provided herein (including without limitation the irrevocable license to Pulmatrix under Section 5.8), upon termination of this Agreement by Pulmatrix under Section 9.2, or by RespiVert under Section 9.3 or 9.4(a), all remaining records and materials in Pulmatrix’s possession or control containing RespiVert’s Confidential Information, shall promptly be returned to RespiVert. Upon such termination, one copy of such records may be retained by legal counsel for Pulmatrix.

9.8 Survival of Obligations . The termination or expiration of this Agreement shall not relieve the Parties of any obligations accruing prior to such termination, and any such termination shall be without prejudice to the rights of either Party against the other. The provisions of Sections 2.1 (except in the case of termination by RespiVert under Section 9.3 or 9.4), Section 5.8 (license to RespiVert Know-How), Article 6, Article 8, this Section 9.8, Article 11, and Article 12 shall survive any termination of this Agreement.

9.9 Termination Not Sole Remedy . Except as set forth in Section 9.3, termination is not the sole remedy under this Agreement and, whether or not termination is effected, all other remedies will remain available except as agreed to otherwise herein.

Article 10

REPRESENTATIONS AND WARRANTIES

10.1 Authority . Each Party represents and warrants that as of the Effective Date, it has the full right, power and authority to enter into this Agreement and that this Agreement has been duly executed by such Party and constitutes a legal, valid and binding obligation of such Party, enforceable in accordance with its terms.

10.2 No Conflicts . Each Party represents and warrants that the execution, delivery and performance of this Agreement by such Party does not conflict with any Agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it.

10.3 No Existing Third Party Rights . Each Party represents and warrants that it has not, and during the term of the Agreement will not, grant any right to any Third Party relating to its respective technology in the Field which would conflict with the rights granted to the other Party hereunder.

10.4 Control of Know-How . RespiVert and Pulmatrix each represent and warrant that it owns or Controls all of the rights, title and interest in and to the RespiVert Know-How and the Pulmatrix Know-How, respectively.

10.5 Intellectual Property Representations by RespiVert . RespiVert represents and warrants that:

(a) each of the Patents and the Know-How being licensed to Pulmatrix is exclusively owned by RespiVert, is in good standing, and is not subject to any litigation or administrative proceeding, including without limitation opposition, re-examination, reissue, or post-issuance PTO review proceeding including interference, IPR, PGR, or related proceedings;

(b) no notice has been received from a third party by RespiVert or its Affiliates regarding any of the Patents or Compounds being licensed to Pulmatrix under this Agreement; and

(c) to its knowledge, there are no third party patents in any country that would be infringed by making, having made, using, offering for sale, selling, or importing, the Compounds being licensed under this Agreement.

10.6 Disclaimer of Warranties . EXCEPT AS SET FORTH ABOVE, RESPIVERT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE LICENSED PRODUCTS LICENSED HEREUNDER, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

10.7 Continuing Representations . The representations and warranties of each Party contained in this Article 10 shall survive the execution and delivery of this Agreement and shall remain true and correct at all times during the Term with the same effect as if made on and as of such later date.

10.8 Business Non-Compete . RespiVert represents, warrants, and covenants that, during the Term of this Agreement, it has not and will not, and it will ensure its Affiliates do not, engage in the development or commercialization of any of the Compounds that RespiVert owns or otherwise has rights to, including other compounds disclosed in the Patents listed on Appendix 1, in the Field, nor permit nor assist any RespiVert licensee or sublicensee or successor-in-interest or other third party to engage in such development or commercialization during the Term of this Agreement.

Article 11

DISPUTE RESOLUTION

11.1 Resolution of Disputes . The Parties shall negotiate in good faith and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof. If the Parties initially are unable to resolve a dispute despite using reasonable efforts to do so, either Party may, by written notice to the other, have the dispute referred to their respective senior management designated below or their respective successors, for attempted resolution by negotiation in good faith. The attempted resolution will take place no later than thirty (30) days following receipt of such notice. The designated management (each designated representative, an “Executive Officer”) are as follows:


For Pulmatrix:		Ted Rad
		99 Hayden Avenue, Suite 390
		Lexington, MA 02421
		Email: traad@pulmatrix.com

For RespiVert:		Mats Olsson
		Janssen Research & Development UK 50- 100 Holmers Farm Way
		High Wycombe Buckinghamshire HP12 4DP
		United Kingdom

		Email: molsson1@its.jnj.com

(a) If the Parties are unable to resolve the dispute, controversy or claim within thirty (30) days following the day on which one Party provides written notice of the dispute to the other in accordance with section 11.1, and a Party wishes to pursue the matter, each such dispute, controversy or claim that is not an Excluded Claim will be finally resolved by mediation followed by binding arbitration as set forth below. As used in this section, the term “ Excluded Claim ” means a dispute, controversy or claim that concerns the validity or infringement of a patent, trademark or copyright.

11.2 Mediation . The Parties shall first attempt in good faith to resolve any Dispute by confidential mediation in accordance with the then current Mediation Procedure of the International Institute for Conflict Prevention and Resolution (“CPR Mediation Procedure”) (www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure controls, except where that Procedure conflicts with these provisions, in which case these provisions control. The mediator will be chosen pursuant to the CPR Mediation Procedure. The mediation will be held in New York, New York.

(a) Either Party may initiate mediation by written notice to the other of the existence of a Dispute. The Parties will select the mediator within twenty (20) days of the notice and the mediation will begin promptly after the selection. The mediation will continue until the mediator or either Party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation conference attended on behalf of each Party by a senior business person with authority to resolve the Dispute, that the Dispute cannot be resolved by mediation. In no event, will mediation continue more than sixty (60) days from the initial notice by a Party to initiate meditation unless the Parties agree in writing to extend that period.

(b) Any period of limitations that would otherwise expire between the initiation of mediation and its conclusion is extended until twenty (20) days after the conclusion of the mediation.

11.3 Arbitration . If the Parties fail to resolve the Dispute in mediation, and a Party desires to pursue resolution of the Dispute, the Dispute will be submitted by either Party for resolution in arbitration pursuant to the then current CPR Rules for Non-Administered Arbitration of International Disputes (“CPR Rules”) (www.cpradr.org), except where they conflict with these provisions, in which case these provisions control. CPR is designated as the Neutral Organization for all purposes. The arbitration will be conducted in English and held in New York, New York. All aspects of the arbitration will be treated as confidential.

(a) The arbitrators will be chosen from the CPR Panels of Distinguished Neutrals, unless a candidate not on the CPR Panel is approved by both Parties. Each arbitrator must be a lawyer with at least fifteen (15) years’ experience with a law firm or corporate law department of over twenty- five (25) lawyers or who was a judge of a court of general jurisdiction. To the extent that the Dispute requires special expertise, the Parties will so inform CPR prior to the beginning of the selection process.

(b) The arbitration tribunal will consist of three arbitrators, chosen in accordance with Rules 5.3 and 6 of the CPR Rules. If, however, the aggregate award sought by the parties is less than $5 million and equitable relief is not sought, a single arbitrator will be chosen in accordance with Rules 5.3 and 6 of the CPR Rules.

(c) Candidates for the arbitrator position(s) may be interviewed by representatives of the Parties in advance of their selection, provided that all Parties are represented.

(d) The Parties will select the arbitrator(s) within forty-five (45) days of initiation of the arbitration. The hearing will be concluded within nine (9) months after selection of the arbitrator(s) and the award will be rendered within sixty (60) days of the conclusion of the hearing, or of any post-hearing briefing, which briefing will be completed by both sides within forty-five (45) days after the conclusion of the hearing. In the event the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule following the time limits set forth above as closely as practical.

(e) The arbitrator(s) will be guided, but not bound, by the IBA Rules on the Taking of Evidence in International Commercial Arbitration (www.ibanet.org).

(f) The hearing will be concluded in ten (10) hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent possible. A transcript of the testimony adduced at the hearing will be made available to either Party.

(g) The arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this Agreement, without application of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles such as “amiable compositeur” or “natural justice and equity.”

(h) The arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The arbitrator(s) may award the costs and expenses of the arbitration as provided in the CPR Rules, but each bears its own attorney fees

(i) The award may be entered and enforced in any court of competent jurisdiction. If a court is called upon to enforce an award in a court proceeding, the Parties consent to the court’s requiring the party resisting enforcement to pay the reasonable attorney’s fees and costs incurred in that proceeding by the Party seeking enforcement.

(j) Any Party may seek emergency, interim, or provisional relief prior to the appointment of the arbitrator(s) from any court of competent jurisdiction, without waiver of the Agreements to mediate and arbitrate. After appointment of the arbitrator(s), any request for emergency, interim, or provisional relief shall either be addressed to the arbitrator(s), which shall have the power to enter an interim award granting relief using the standards provided by applicable law, or to a court, but only with the permission of the arbitrator(s). Any interim award of the arbitrator(s) may be enforced in any court of competent jurisdiction.

(k) EACH PARTY WAIVES: (1) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, (2) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM TO PUNITIVE, EXEMPLARY, MULTIPLIED, INDIRECT, CONSEQUENTIAL OR LOST PROFITS/REVENUES DAMAGES, AND (3) ANY CLAIM FOR ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST.

Article 12

MISCELLANEOUS PROVISIONS

12.1 Entire Agreement . This Agreement and each of the Appendices hereto constitute and contain the entire understanding and Agreement of the Parties respecting the subject matter of this Agreement and cancels and supersedes any and all prior or contemporaneous negotiations, correspondence, understandings and Agreements between the Parties, whether oral or written, regarding such subject matter.

12.2 Further Actions . Each Party agrees to execute, acknowledge and deliver such further instruments and to do all such other acts as may be necessary or appropriate in order to carry out the purposes and intent of this Agreement.

12.3 Binding Effect . This Agreement and the rights granted herein shall be binding upon, and shall inure to the benefit of, RespiVert, Pulmatrix and their respective lawful successors and permitted assigns.

12.4 Assignment . Neither Party shall assign this Agreement without the prior written consent of the other Party (such consent not to be unreasonably withheld) except that a Party may assign this Agreement to an Affiliate or to a successor in connection with the merger, consolidation or sale of all or substantially all of its assets or that portion of its business pertaining to the subject matter of this Agreement. Any permitted assignee shall assume all obligations of its assignor under this Agreement.

12.5 No Implied Licenses . No rights to any other patents, know-how or technical information, or other intellectual property rights, other than as explicitly identified herein, are granted or deemed granted by this Agreement. No right, expressed or implied, is granted by this Agreement to a Party to use in any manner the name or any other trade name or trademark of the other Party or its Affiliates in connection with the performance of this Agreement.

12.6 No Waiver . No waiver, modification or amendment of any provision of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party. The failure of either Party to assert a right hereunder or to insist upon compliance with any term or condition of this Agreement shall not constitute a waiver of that right or excuse a similar subsequent failure to perform any such term or condition.

12.7 Force Majeure . The failure of a Party to perform any obligation under this Agreement by reason of force majeure such as acts of God, acts of governments, terrorism, riots, wars, strikes, accidents or deficiencies in materials or transportation or other causes of a similar magnitude beyond its control shall not be deemed to be a breach of this Agreement. The Party which is affected by any force majeure shall contact the other Party for discussion of possible emergency measures.

12.8 Independent Contractors . Both Parties are independent contractors and not agents or employees of the other Party under this Agreement. Nothing contained in this Agreement is intended nor is to be construed so as to constitute RespiVert or Pulmatrix as partners or joint venturers with respect to this Agreement. Neither Party shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of the other Party or to bind the other Party to any other contract, Agreement or undertaking with any Third Party except as may be explicitly provided for herein or authorized in writing.

12.9 Notices and Deliveries . Any notices, request, delivery, approval or consent required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been sufficiently given when it is received, whether delivered in person, transmitted by facsimile with contemporaneous confirmation, by email, or delivery by registered letter (or its equivalent) or delivery by certified overnight courier service, to the Party to which it is directed at its address shown below or such other address as such Party shall have last given by notice to the other Parties.

If to Pulmatrix:

Pulmatrix, Inc.

99 Hayden Avenue

Suite 390

Lexington, MA 02421

Attn: CEO

Email: rclarke@pulmatrix.com

with a copy to:

Mr. Kevin O’Driscoll

Pulmatrix, Inc.

99 Hayden Avenue, Suite 390

Lexington, MA 02421

Email: kodriscoll@pulmatrix.com

Rick Werner, Esq.

Haynes and Boone, LLP

30 Rockefeller Plaza

New York, NY 10112

Email: Rick.Werner@HaynesBoone.com

If to RespiVert:

Mats Olsson

Janssen Research & Development UK 50-

100 Holmers Farm Way

High Wycombe

Buckinghamshire

HP12 4DP

United Kingdom

Email: molsson1@its.jnj.com

with a copy to:

Chief Intellectual Property Counsel

Johnson & Johnson

One Johnson & Johnson Plaza

New Brunswick, NJ 08933

Email: jnjuspatent@corus.jnj.com

12.10 Headings . The captions to the sections and articles in this Agreement are not a part of this Agreement, and are included merely for convenience of reference only and shall not affect its meaning or interpretation.

12.11 Severability . In the event that any provision of this Agreement shall, for any reason, be held to be invalid or unenforceable in any respect, such invalidity or unenforceability shall not affect any other provision hereof, and this Agreement shall be construed as if such invalid or unenforceable provision had not been included herein.

12.12 Applicable Law . This Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without reference to its choice of laws or conflicts of laws provisions.

12.13 Advice of Counsel . Pulmatrix and RespiVert have each consulted with counsel of their choice regarding this Agreement, and each acknowledges and agrees that this Agreement shall not be deemed to have been drafted by one Party or another and will be construed accordingly.

12.14 Counterparts . This Agreement may be executed in two or more counterparts, or facsimile versions, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same Agreement.

12.15 Waiver . Except as specifically provided for herein, the waiver from time to time by either of the Parties of any of their rights or their failure to exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such Party’s rights or remedies provided in this Agreement.

12.16 Compliance with Laws . The Parties shall comply with all applicable laws, rules, regulations and orders of the United States and applicable European countries and European supra-governmental organizations, and all jurisdictions and any agency or court thereof in connection with this Agreement and the transactions contemplated thereby.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their respective duly authorized officers as of the Effective Date. The Agreement(s) may be executed in two (2) or more counterparts, each of which shall be an original, and all such counterparts together shall constitute the entire Agreement. Electronically signed and/or electronically transmitted signatures shall have the full force and effect of an original signature.


RESPIVERT LTD

By:

Name:

Title:

PULMATRIX, INC.

By:

Name:

Title:

APPENDIX 1: RESPIVERT PATENTS

RES-P1094

(RSP5008)

RV 1808 genus

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1094EP

Respivert
Limited

08 April

2011

11729448.8

European Patent Application

RES-P1094JP

Respivert
Limited

08 April

2011

2013-503179

07-Aug-15

5787977

Japan

RES-P1094US

Respivert
Limited

08 April

2011

13/639,959

05-May-15

9,024,041

United States

RES-P1096

(RSP5006)

RV 1837genus

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1096CHEP

Respivert
Limited

01 April

2011

11713510.3

17-Dec-14

2556065

Switzerland

RES-P1096DEEP

Respivert
Limited

01 April

2011

60 2011 012 290.8

17-Dec-14

2556065

Germany

RES-P1096ESEP

Respivert
Limited

01 April

2011

11713510.3

17-Dec-14

2556065

Spain

RES-P1096FREP

Respivert
Limited

01 April

2011

11713510.3

17-Dec-14

2556065

France

RES-P1096GBEP

Respivert
Limited

01 April

2011

11713510.3

17-Dec-14

2556065

United Kingdom

RES-P1096ITEP

Respivert
Limited

01 April

2011

11713510.3

17-Dec-14

2556065

Italy

RES-P1096JP

Respivert
Limited

01 April

2011

2013/501951

18-Mar-16

5902668

Japan

RES-P1096USC1

Respivert
Limited

01 April

2011

14/997,820

United States

RES-P1128

(RSP5011)

Use of CRT
compounds

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1128CHEP

Respivert
Limited

17 June

2011

11729151.8

02-Nov-16

2582700

Switzerland

RES-P1128DEEP

Respivert
Limited

17 June

2011

60 2011 031 908.6

02-Nov-16

2582700

Germany

RES-P1128FREP

Respivert
Limited

17 June

2011

11729151.8

02-Nov-16

2582700

France

RES-P1128GBEP

Respivert
Limited

17 June

2011

11729151.8

02-Nov-16

2582700

United Kingdom

RES-P1128IEEP

Respivert
Limited

17 June

2011

11729151.8

02-Nov-16

2582700

Ireland

RES-P1128

(RSP5011)

Use of CRT
compounds

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1128JP

Respivert
Limited

17 June

2011

2013-514789

22-Jul-16

5973426

Japan

RES-P1128US

Respivert
Limited

17 June

2011

13/805,471

13-Jan-15

8,933,228

United States

RES-P1128USD1

Respivert
Limited

17 June

2011

14/561,290

United States

RES-P1130

(RSP5012)

RSV (use)

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1130US

Respivert
Limited

17 June

2011

13/805,552

14-Jul-15

9,079,893

United States

RES-P1327

(RSP5015)

RV1162 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1327AR

Respivert
Limited

03 October

2012

P120103679

Argentina

RES-P1327ATEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Austria

RES-P1327AU

Respivert
Limited

03 October

2012

AU 2012320300

05-Jan-17

2012320300

Australia

RES-P1327BEEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Belgium

RES-P1327BR

Respivert
Limited

03 October

2012

BR1120140076944

Brazil

RES-P1327CA

Respivert
Limited

03 October

2012

2846222

Canada

RES-P1327CHEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Switzerland

RES-P1327CL

Respivert
Limited

03 October

2012

2014-813

Chile

RES-P1327CN

Respivert
Limited

03 October

2012

201280048821.1

06-Jul-16

ZL201280048821.1

China

RES-P1327CO

Respivert
Limited

03 October

2012

14-062.064

20-Nov-15

89865

Colombia

RES-P1327CR

Respivert
Limited

03 October

2012

2014-192

Costa Rica

RES-P1327DEEP

Respivert
Limited

03 October

2012

60 2012 017 389.0

20-Apr-16

2763984

Germany

RES-P1327DKEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Denmark

RES-P1327EA

Respivert
Limited

03 October

2012

201490730

30-Jun-16

23650

Eurasian Patent (AM, AZ, BY,

KG, KZ, MD, RY, TM & TJ)

RES-P1327EG

Respivert
Limited

03 October

2012

241/2014

Egypt

RES-P1327

(RSP5015)

RV1162 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1327ESEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Spain

RES-P1327FIEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Finland

RES-P1327FREP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

France

RES-P1327GBEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

United Kingdom

RES-P1327GC

Respivert
Limited

03 October

2012

GC 2012-22448

Gulf
Cooperation
Council

RES-P1327GREP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Greece

RES-P1327GT

Respivert
Limited

03 October

2012

A-2014-0054

Guatemala

RES-P1327HKEP

Respivert
Limited

03 October

2012

15100008.3

Hong Kong

RES-P1327HN

Respivert
Limited

03 October

2012

2014-000572

Honduras

RES-P1327ID

Respivert
Limited

03 October

2012

P-00 2014
01907

Indonesia

RES-P1327IEEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Ireland

RES-P1327IL

Respivert
Limited

03 October

2012

231025

Israel

RES-P1327IN

Respivert
Limited

03 October

2012

709/MUMNP/
2014

India

RES-P1327ITEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Italy

RES-P1327JO

Respivert
Limited

September 2012

2012/283

Jordan

RES-P1327JPD1

Respivert
Limited

31 March

2014

2015-89049

26-Jun-15

5765866

Japan

RES-P1327KR

Respivert
Limited

03 October

2012

10-2014-
7007831

Korea, Republic
of

RES-P1327LB

Respivert
Limited

03 October

2012

9800

Lebanon

RES-P1327LK

Respivert
Limited

03 October

2012

17594

26-Jan-15

17594

Sri Lanka

RES-P1327LUEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Luxembourg

RES-P1327MX

Respivert
Limited

03 October

2012

MX/a/
2014/004018

15-Sep-16

342168

Mexico

RES-P1327MY

Respivert
Limited

03 October

2012

PI 2014700788

Malaysia

RES-P1327NI

Respivert
Limited

03 October

2012

2014-000027

Nicaragua

RES-P1327NLEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Netherlands

RES-P1327NZ

Respivert
Limited

03 October

2012

621440

28-May-15

621440

New Zealand

RES-P1327PE

Respivert
Limited

03 October

2012

468.14

Peru

RES-P1327PH

Respivert
Limited

03 October

2012

1-2014-500547

Philippines

RES-P1327

(RSP5015)

RV1162 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1327PK

Respivert
Limited

03 October

2012

667/2012

Pakistan

RES-P1327PLEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Poland

RES-P1327PTEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Portugal

RES-P1327SEEP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Sweden

RES-P1327SG

Respivert
Limited

03 October

2012

11201400226U

12-Jul-16

11201400226U

Singapore

RES-P1327SV

Respivert
Limited

03 October

2012

E-4697-2014

El Salvador

RES-P1327TH

Respivert
Limited

03 October

2012

1401001804.0

Thailand

RES-P1327TREP

Respivert
Limited

03 October

2012

12772383.1

20-Apr-16

2763984

Turkey

RES-P1327TW

Respivert
Limited

03 October

2012

101136446

01-Dec-16

I560186

Taiwan

RES-P1327UA

Respivert
Limited

03 October

2012

a201401655

29-Sep-16

113289

Ukraine

RES-P1327US

Respivert
Limited

03 October

2012

14/349,345

18-Aug-15

9,108,950

United States

RES-P1327USC1

Respivert
Limited

03 October

2012

14/795,957

United States

RES-P1327UY

Respivert
Limited

03 October

2012

34.363

Uruguay

RES-P1327VN

Respivert
Limited

03 October

2012

1-2014-01074

Vietnam

RES-P1327ZA

Respivert
Limited

03 October

2012

2014/03204

27-Jan-16

2014/03204

South Africa

RES-P1331

(RSP5016)

RV1162 genus

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1331CHEP

Respivert
Limited

03 October

2012

12772382.3

27-Apr-16

2763983

Switzerland

RES-P1331DEEP

Respivert
Limited

03 October

2012

60 2012 017
788.8

27-Apr-16

2763983

Germany

RES-P1331FREP

Respivert
Limited

03 October

2012

12772382.3

27-Apr-16

2763983

France

RES-P1331GBEP

Respivert
Limited

03 October

2012

12772382.3

27-Apr-16

2763983

United
Kingdom

RES-P1331IEEP

Respivert
Limited

03 October

2012

12772382.3

27-Apr-16

2763983

Ireland

RES-P1331JP

Respivert
Limited

03 October

2012

2014-532481

14-Oct-16

6023204

Japan

RES-P1331US

Respivert
Limited

03 October

2012

14/349,356

21-Oct-16

9,475,796

United States

RES-P1331USC1

Respivert
Limited

03 October

2012

15/259,505

United States

RES-P1617

(RSP5040)

RV7031 genus

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1617AR

Respivert
Limited

13 February

2015

P150100448

Argentina

RES-P1617AU

Respivert
Limited

13 February

2015

2015216705

Australia

RES-P1617CA

Respivert
Limited

13 February

2015

2938924

Canada

RES-P1617CN

Respivert
Limited

13 February

2015

201580019810.4

China

RES-P1617EP

Respivert
Limited

13 February

2015

15706511.1

European Patent
Application

RES-P1617IN

Respivert
Limited

13 February

2015

201617028821

India

RES-P1617JP

Respivert
Limited

13 February

2015

2016-551294

Japan

RES-P1617MX

Respivert
Limited

13 February

2015

MX/A/
2016/010571

Mexico

RES-P1617TW

Respivert
Limited

13 February

2015

104104906

Taiwan

RES-P1617US

Respivert
Limited

13 February

2015

15/118,708

United States

RES-P1819

(RSP5040WOPCT1)

RV7031 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1819AR

Respivert
Limited

13 February

2015

P150100447

Argentina

RES-P1819AU

Respivert
Limited

13 February

2015

2015216957

Australia

RES-P1819BR

Respivert
Limited

13 February

2015

BR112016015838-5

Brazil

RES-P1819CA

Respivert
Limited

13 February

2015

2939355

Canada

RES-P1819CN

Respivert
Limited

13 February

2015

201580008529.0

China

RES-P1819EA

Respivert
Limited

13 February

2015

201691625

Eurasian Patent

RES-P1819EP

Respivert
Limited

13 February

2015

15705797.7

European Patent
Application

RES-P1819GC

Respivert
Limited

15 February

2015

28928

Gulf Cooperation
Council

RES-P1819IN

Respivert
Limited

13 February

2015

201617023974

India

RES-P1819JO

Respivert
Limited

15 February

2015

32/2015

Jordan

RES-P1819JP

Respivert
Limited

13 February

2015

2016-550815

Japan

RES-P1819

(RSP5040WOPCT1)

RV7031 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P1819KR

Respivert
Limited

13 February

2015

10-2016-
7023275

Korea, Republic
of

RES-P1819LB

Respivert
Limited

13 February

2015

10566

Lebanon

RES-P1819MX

Respivert
Limited

13 February

2015

MX/A/
2016/10572

Mexico

RES-P1819PK

Respivert
Limited

13 February

2015

73/2015

Pakistan

RES-P1819SG

Respivert
Limited

13 February

2015

11201607058P

Singapore

RES-P1819TW

Respivert
Limited

13 February

2015

104104905

Taiwan

RES-P1819US

Respivert
Limited

13 February

2015

14/622,368

20-Sep-16

9,447,076

United States

RES-P1819USC1

Respivert
Limited

13 February

2015

15/253,141

United States

RES-P1819USC2

Respivert
Limited

13 February

2015

15/457,810

United States

RES-P1819UY

Respivert
Limited

13 February

2015

35998

Uruguay

RES-P1819VE

Respivert
Limited

13 February

2015

2015-000156

Venezuela

RES-P2078

(RSP5052)

RV1162 amorphous
spray dried

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P2078EPp

Respivert
Limited

November 2016

16199859.6

European Patent
Application

RES-P893

(RSP5004WOPCT)

RV568 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P893ALEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Albania

RES-P893ATEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Austria

RES-P893AU

Respivert
Limited

02 October

2009

2009299554.0

06-Mar-14

2009299554

Australia

RES-P893BAEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Bosnia &
Herzegovina

RES-P893BEEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Belgium

RES-P893BGEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Bulgaria

RES-P893BR

Respivert
Limited

02 October

2009

PI0920840-2

Brazil

RES-P893CA

Respivert
Limited

02 October

2009

2,738,827

28-Feb-17

2/738,827

Canada

RES-P893

(RSP5004WOPCT)

RV568 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P893CHEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Switzerland

RES-P893CN

Respivert
Limited

02 October

2009

200980139617.9

25-Jun-14

ZL200980139617.9

China

RES-P893CYEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Cyprus

RES-P893CZEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Czech Republic

RES-P893DEEP

Respivert
Limited

02 October

2009

602009016688.3

26-Jun-13

2350047

Germany

RES-P893DKEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Denmark

RES-P893EA

Respivert
Limited

02 October

2009

201170520.0

30-Apr-14

19590

Eurasian Patent
(AM, AZ, BY,

KG, KZ, MD,
RU, TM & TJ)

RES-P893EEEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Estonia

RES-P893ESEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Spain

RES-P893FIEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Finland

RES-P893FREP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

France

RES-P893GBEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

United
Kingdom

RES-P893GREP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Greece

RES-P893HKEP

Respivert
Limited

02 October

2009

11112365.9

25-Oct-13

1157781

Hong Kong

RES-P893HREP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Croatia

RES-P893HUEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Hungary

RES-P893IEEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Ireland

RES-P893IN

Respivert
Limited

02 October

2009

861/MUMNP/
2011

India

RES-P893ISEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Iceland

RES-P893ITEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Italy

RES-P893JP

Respivert
Limited

02 October

2009

2011-529636

04-Jul-14

5571088

Japan

RES-P893KR

Respivert
Limited

02 October

2009

10-2011-
7009956

21-Sep-16

10-1660266

Korea, Republic
of

RES-P893LTEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Lithuania

RES-P893LUEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Luxembourg

RES-P893LVEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Latvia

RES-P893MCEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Monaco

RES-P893

(RSP5004WOPCT)

RV568 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P893MEEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Montenegro

RES-P893MKEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Macedonia,
The Former
Yugoslav
Republic of

RES-P893MTEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Malta

RES-P893MX

Respivert
Limited

02 October

2009

MX/a/
2011/003552

22-Nov-13

315689

Mexico

RES-P893NLEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Netherlands

RES-P893NOEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Norway

RES-P893NZ

Respivert
Limited

02 October

2009

591426.0

22-Mar-13

591426

New Zealand

RES-P893PLEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Poland

RES-P893PTEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Portugal

RES-P893ROEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Romania

RES-P893RSEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Serbia

RES-P893SEEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Sweden

RES-P893SIEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Slovenia

RES-P893SKEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Slovakia

RES-P893SMEP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

San Marino

RES-P893TREP

Respivert
Limited

02 October

2009

09736271.9

26-Jun-13

2350047

Turkey

RES-P893US

Respivert
Limited

02 October

2009

13/121,445

23-Oct-12

8,293,771

United States

RES-P904

(RSP5004WOPCT1)

RV568 genus I

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P904CHEP

Respivert
Limited

02 October

2009

09785724.7

26-Feb-14

2350049

Switzerland

RES-P904DEEP

Respivert
Limited

02 October

2009

602009022057.8

26-Feb-14

2350049

Germany

RES-P904ESEP

Respivert
Limited

02 October

2009

09785724.7

26-Feb-14

2350049

Spain

RES-P904FREP

Respivert
Limited

02 October

2009

09785724.7

26-Feb-14

2350049

France

RES-P904GBEP

Respivert
Limited

02 October

2009

09785724.7

26-Feb-14

2350049

United
Kingdom

RES-P904ITEP

Respivert
Limited

02 October

2009

09785724.7

26-Feb-14

2350049

Italy

RES-P904

(RSP5004WOPCT1)

RV568 genus I

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P904US

Respivert
Limited

02 October

2009

13/121,999

23-Oct-12

8,293,748

United States

RES-P904USC1

Respivert
Limited

02 October

2009

13/616,696

31-Dec-13

8,618,140

United States

RES-P904USC2

Respivert
Limited

02 October

2009

14/139,982

10-Mar-15

8,975,285

United States

RES-P905

(RSP5004WOPCT2)

RV568 genus II

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P905CHEP

Respivert
Limited

11 December
2009

09768546.5

10-Aug-16

2370428

Switzerland

RES-P905DEEP

Respivert
Limited

11 December
2009

09768546.5

10-Aug-16

2370428

Germany

RES-P905FREP

Respivert
Limited

11 December
2009

09768546.5

10-Aug-16

2370428

France

RES-P905GBEP

Respivert
Limited

11 December
2009

09768546.5

10-Aug-16

2370428

United
Kingdom

RES-P905IEEP

Respivert
Limited

11 December
2009

09768546.5

10-Aug-16

2370428

Ireland

RES-P905JP

Respivert
Limited

11 December
2009

2011-540219

26-Dec-14

5670912

Japan

RES-P905US

Respivert
Limited

11 December
2009

13/133,998

30-Oct-12

8,299,073

United States

RES-P922

(RSP5003)

Flu mechanism of
action

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P922AU

Respivert
Limited

10 December
2010

2010329645

10-Sep-15

2010329645

Australia

RES-P922CN

Respivert
Limited

10 December
2010

201080063651.5

19-Nov-14

ZL201080063651.5

China

RES-P922EP

Respivert
Limited

10 December
2010

10788125.2

European Patent
Application

RES-P922IN

Respivert
Limited

10 December
2010

1683/MUMNP/
2012

India

RES-P922

(RSP5003)

Flu mechanism of
action

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P922JPD1

Respivert
Limited

10 December
2010

2016-017330

Japan

RES-P922USC1

Respivert
Limited

10 December
2010

14/883,464

United States

RES-P923

(RSP5010)

HRV use

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P923AU

Respivert
Limited

17 June

2011

2011266797

15-Oct-15

2011266797

Australia

RES-P923CN

Respivert
Limited

17 June

2011

201180029803.4

China

RES-P923EP

Respivert
Limited

17 June

2011

11729150.0

European Patent
Application

RES-P923IN

Respivert
Limited

17 June

2011

13/MUMNP/
2013

India

RES-P923JP

Respivert
Limited

17 June

2011

514787/13

Japan

RES-P923USC1

Respivert
Limited

17 June

2011

14/924,541

United States

RES-P928

(RSP5004WOPCT3)

RV1088 species

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P928CHEP

Respivert
Limited

01 April

2010

10711930.7

30-Mar-16

2414347

Switzerland

RES-P928DEEP

Respivert
Limited

01 April

2010

60 2010 031
673.4

30-Mar-16

2414347

Germany

RES-P928FREP

Respivert
Limited

01 April

2010

10711930.7

30-Mar-16

2414347

France

RES-P928GBEP

Respivert
Limited

01 April

2010

10711930.7

30-Mar-16

2414347

United
Kingdom

RES-P928IEEP

Respivert
Limited

01 April

2010

10711930.7

30-Mar-16

2414347

Ireland

RES-P928JP

Respivert
Limited

01 April

2010

2012-502808

29-May-15

5751640

Japan

RES-P928US

Respivert
Limited

01 April

2010

13/262,266

04-Feb-14

8,642,773

United States

RES-P928USD1

Respivert
Limited

01 April

2010

14/171,198

26-Jan-16

9,242,960

United States

RES-P930

(RSP5004WOPCT4)

RV1088 genus

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P930CHEP

Respivert
Limited

11 December
2009

09771766.4

20-Apr-16

2370429

Switzerland

RES-P930DEEP

Respivert
Limited

December 2009

60 2009 038
022.8

20-Apr-16

2370429

Germany

RES-P930FREP

Respivert
Limited

December 2009

09771766.4

20-Apr-16

2370429

France

RES-P930GBEP

Respivert
Limited

December 2009

09771766.4

20-Apr-16

2370429

United Kingdom

RES-P930IEEP

Respivert
Limited

December 2009

09771766.4

20-Apr-16

2370429

Ireland

RES-P930JPD1

Respivert
Limited

December 2009

2014-187591

01-Jul-16

5959587

Japan

RES-P930US

Respivert
Limited

December 2009

13/139,010

30-Oct-12

8,299,074

United States

RES-P962 (RSP5007)

Bayer Selection

Case Number

Applicant Name

Application Date

Application
Number

Registration Date

Registration
Number

Country

RES-P962CHEP

Respivert
Limited

08 April

2011

11714382.6

24-Feb-16

2556067

Switzerland

RES-P962DEEP

Respivert
Limited

08 April

2011

60 2011 023
391.2

24-Feb-16

2556067

Germany

RES-P962FREP

Respivert
Limited

08 April

2011

11714382.6

24-Feb-16

2556067

France

RES-P962GBEP

Respivert
Limited

08 April

2011

11714382.6

24-Feb-16

2556067

United
Kingdom

RES-P962IEEP

Respivert
Limited

08 April

2011

11714382.6

24-Feb-16

2556067

Ireland

RES-P962JP

Respivert
Limited

08 April

2011

503177/13

07-Aug-15

5787976

Japan

RES-P962US

Respivert
Limited

08 April

2011

13/639,887

16-Feb-16

9,260,410

United States

RES-P962USC1

Respivert
Limited

08 April

2011

14/988,824

United States

APPENDIX 2: PRESS RELEASE

LOGO

June XX, 2017

Pulmatrix Licenses Novel Drug Candidates from RespiVert Ltd., a wholly owned

subsidiary of Janssen Biotech, Inc.

The novel compounds target an enzyme involved in both inflammation and cancer, and may offer a new

approach for treating respiratory diseases

LEXINGTON, MA — Pulmatrix, Inc. (NASDAQ: PULM), a clinical stage biopharmaceutical company developing innovative inhaled therapies to address serious pulmonary diseases, today announced that it has entered into an exclusive, worldwide license agreement with RespiVert Ltd., a wholly owned subsidiary of Janssen Biotech, Inc. Through the agreement, Pulmatrix gains access to a portfolio of novel drug candidates in a class called kinase inhibitors that the company plans to develop.

Kinase inhibitors are chemical entities that block so-called kinase enzymes, which are involved in inflammation or cancer.

“We believe these innovative compounds licensed from RespiVert Ltd. will offer a new approach for treating lung inflammation in diseases like chronic obstructive pulmonary disease (COPD), asthma, and idiopathic pulmonary fibrosis (IPF),” said Pulmatrix CEO Robert Clarke, PhD. “They are also perfectly suited for formulation with our iSPERSE technology.”

Professor Peter J Barnes, Margaret Turner-Warwick Professor of Medicine and the Head of Respiratory Medicine at Imperial College, London, stated “Kinase inhibitors could be a very promising step forward for treating COPD and severe asthma. Coupled with the innovative iSPERSE technology to facilitate delivery to the site of disease within the lung, Pulmatrix is poised to improve the available therapeutic landscape for these patients in need.”

The key advance in the iSPERSE approach is a dry powder that “flies” easily into the lungs and can work with virtually any drug class ranging from small molecules to biologics . Drugs attached to the particles are thus delivered to the lungs with very high efficiency including small molecules like the Respivert kinase inhibitors.

Pulmatrix is already developing inhaled drugs for COPD and fungal infections. “These new compounds will significantly expand what we believe is already an impressive pipeline of drug candidates,” said Clarke. “Because these compounds have already been explored in a Phase I program, we envision that we will be able to quickly move to clinical proof-of-concept studies.”

Under the terms of the agreement, which covers both respiratory and oncology uses of the drug candidates, Pulmatrix will assume all development and commercialization activities worldwide.

About Pulmatrix

Pulmatrix is a clinical stage biopharmaceutical company developing innovative inhaled therapies to address serious pulmonary disease using its patented iSPERSE™ technology. The Company’s proprietary product pipeline is focused on advancing treatments for lung diseases, including opportunities in major pulmonary diseases through collaborations, like PUR0200, a branded generic in clinical development for chronic obstructive pulmonary disease (COPD) and PUR1900, an inhaled antifungal that could benefit severe asthmatics and patients with rare disease like cystic fibrosis. Pulmatrix’s product candidates are based on iSPERSE™, its proprietary dry powder delivery platform, which seeks to improve therapeutic delivery to the lungs by maximizing local concentrations and reducing systemic side effects to improve patient outcomes.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release that are forward-looking and not statements of historical fact are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that such statements involve risks and uncertainties that may materially affect the Company’s results of operations. Such forward-looking statements are based on the beliefs of management as well as assumptions made by and information currently available to management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including but not limited to the ability to establish that potential products are efficacious or safe in preclinical or clinical trials; the ability to establish or maintain collaborations on the development of therapeutic candidates; the ability to obtain appropriate or necessary governmental approvals to market potential products; the ability to obtain future funding for developmental products and working capital and to obtain such funding on commercially reasonable terms; the Company’s ability to manufacture product candidates on a commercial scale or in collaborations with third parties; changes in the size and nature of competitors; the ability to retain key executives and scientists; and the ability to secure and enforce legal rights related to the Company’s products, including patent protection. A discussion of these and other factors, including risks and uncertainties with respect to the Company, is set forth in the Company’s annual report on Form 10-K filed by the Company with the Securities and Exchange Commission on March 10, 2016. The Company disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact

Robert Clarke, CEO

(781) 357-2333

rclarke@pulmatrix.com

APPENDIX 3: RESPIVERT MATERIALS


Compound (Clinical Product)	Approximate Quantity	Comments	Anticipated Shipment Date	Facility

RV568 API (microfine) Batch 497395	467 g	Manufacturing Complete	Within 60 days from date of signature of Supply Agreement	Janssen FPO site @ Beerse, Belgium

RV1162 API (microfine) Batch 497842	478 g	Manufacturing Complete	Within 60 days from date of signature of Supply Agreement	Janssen FPO site @ Beerse, Belgium

RV1162 API (free base)	2 kg	Manufacturing To Be Completed	Anticipated Manufacturing 4Q2017	Janssen FPO site @ Beerse, Belgium

RV7031 API (free base)	Lab Quantities	Manufacturing Complete	Within 60 days from date of signature of Supply Agreement	Janssen FPO site @ Beerse, Belgium

Exhibit 31.1

CERTIFICATIONS UNDER SECTION 302

I, Robert W. Clarke, certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Pulmatrix, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017

/s/ Robert W. Clarke

Robert W. Clarke

President and Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS UNDER SECTION 302

I, William Duke, Jr., certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q of Pulmatrix, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 4, 2017

/s/ William Duke, Jr.

William Duke, Jr.

Chief Financial Officer

(Principal Financial Officer)

Exhibit 32.1

CERTIFICATIONS UNDER SECTION 906

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), each of the undersigned officers of Pulmatrix, Inc., a Delaware corporation (the “Company”), does hereby certify, to such officer’s knowledge and in the capacity of an officer, that:

The Quarterly Report for the quarter ended June 30, 2017 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.


Dated: August 4, 2017		/s/ Robert W. Clarke
		Robert W. Clarke
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated: August 4, 2017		/s/ William Duke, Jr.
		William Duke, Jr.
		Chief Financial Officer
		(Principal Financial Officer)

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