Delaware
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2834
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85-2696306
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(State or Other Jurisdiction of
Incorporation or Organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer
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☒
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Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
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Title of Each Class of
Securities to be Registered
|
|
Amount
to be
Registered(1)
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|
Proposed
Maximum
Offering Price
Per Share
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|
Proposed
Maximum
Aggregate
Offering Price
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|
Amount of
Registration Fee
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Common stock, par value $0.0001 per share
|
|
39,757,419(2)
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$13.27(3)
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$527,580,950
|
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$48,906.75(3)(4)
|
Total
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|
39,757,419
|
|
|
|
$527,580,950
|
|
$48,906.75
|
|
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(1)
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This registration statement (this “Registration Statement”) also covers an indeterminate number of additional shares of common stock, par value $0.0001 per share (the “Common Stock”) of Pardes Biosciences, Inc. (the “Registrant”) that may be offered or issued to prevent dilution resulting from share splits, share dividends or similar transactions in accordance with Rule 416 under the Securities Act of 1933, as amended (the “Securities Act”).
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(2)
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Consists of an aggregate of 39,757,419 shares of Common Stock registered for sale by the selling securityholders named in this Registration Statement.
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(3)
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Pursuant to Rule 457(c) under the Securities Act, and solely for the purpose of calculating the registration fee, the proposed maximum offering price per share is $13.27 which is the average of the high and low prices of shares of the Registrant’s common stock on The Nasdaq Global Market (“Nasdaq”) on January 20, 2022 (such date being within five business days of the date that this Registration Statement was filed with the U.S. Securities and Exchange Commission (the “SEC”)).
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(4)
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Calculated by multiplying the proposed maximum aggregate offering price of securities to be registered by 0.0000927.
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• |
Complete preclinical and clinical development and seek approval for our lead product candidate,
PBI-0451,
an investigational drug designed to be orally administered DAA for the treatment and prevention of
SARS-CoV-2
infections, the cause of
COVID-19,
including infections caused by newly emerging
SARS-CoV-2
variants.
PBI-0451
in August 2021. If
PBI-0451
demonstrates acceptable human pharmacokinetics and tolerability data in the Phase 1 clinical trial, we subsequently intend to discuss with the FDA and other regulatory authorities outside of the U.S., and seek advice, regarding proposed plans to initiate a Phase 2/3, potentially registrational, treatment trial that will enroll patients who are test positive for
SARS-CoV-2
PBI-0451
in additional populations, such as a post-exposure prophylaxis in first degree contacts of patients diagnosed with
SARS-CoV-2
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implement our clinical trials to align on the regulatory pathway for approval of
PBI-0451
and may seek Emergency Use Authorizations (EUA).
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• |
Expand our pipeline by developing additional highly selective, orally administered drug candidates
against additional targets in virology, immunology and oncology.
PBI-0451,
can be developed as a broadly active anti-coronaviral drug, we intend to continue to improve our capability to inhibit a range of coronaviruses, while we expand our wholly owned pipeline by continuing to innovate and discover additional differentiated oral small molecules against additional targets.
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• |
Maximize the value of our product candidates.
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• |
Pardes has incurred significant losses since its inception and expects to incur losses for the foreseeable future.
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Pardes has a limited operating history and no history of successfully developing or commercializing any approved therapeutic products, which may make it difficult to evaluate the success of our business to date and to assess the prospects for our future viability and ability to generate revenue and become profitable in the future`.
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• |
Pardes will require additional capital to finance our operations, which may not be available to us on acceptable terms, or at all. As a result, Pardes may not complete the development and commercialization of
PBI-0451
or any other product candidates.
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• |
Pardes is heavily dependent on the success of
PBI-0451,
our lead product candidate.
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• |
If Pardes is not successful in discovering, developing, receiving regulatory approval for and commercializing PBI-0451 or other product candidates, our ability to expand our business and achieve our strategic objectives would be impaired.
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• |
PBI-0451
and any other product candidates must undergo rigorous clinical trials and regulatory approvals, and success in nonclinical studies or earlier-stage clinical trials may not be indicative of results in future clinical trials.
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• |
Pardes is subject to many manufacturing risks, any of which could substantially increase our costs, delay clinical programs and limit supply of our products.
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• |
Pardes may encounter difficulties in managing our growth, which could adversely affect our operations.
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• |
Pardes must attract and retain highly skilled employees to succeed. If Pardes is not able to retain our current team or continue to attract and retain qualified scientific, technical and business personnel, our business will suffer.
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• |
Our employees, independent contractors, consultants, commercial partners and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
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• |
If Pardes fails to maintain an effective system of internal control over financial reporting, Pardes may not be able to accurately report our financial results or prevent fraud. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
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• |
Pardes’s disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
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Enrollment and retention of patients in clinical trials is an expensive and time-consuming process and could be made more difficult or rendered impossible by multiple factors outside our control, including significant competition for recruiting patients with
COVID-19
in clinical trials.
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• |
Pardes may not be able to secure a partner to help commercialize the product outside of North America.
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• |
PBI-0451,
Pardes’s lead candidate recently initiated its Phase 1 clinical study. Accordingly, there is significant uncertainty around the development of
PBI-0451
as a potential treatment for coronavirus generally, and
SARS-CoV-2
COVID-19
specifically.
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• |
PBI-0451
may face significant competition from vaccines, other anti-viral therapies and other treatments for
SARS-CoV-2
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• |
Pardes’ success depends upon our ability to obtain and maintain intellectual property protection for our products and technologies. Proprietary rights and technology are difficult and costly to protect, and Pardes may not be able to ensure their protection.
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• |
COVID-19
may materially and adversely affect our business and financial results.
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• |
COVID-19
may materially and adversely affect timing and/or conduct of Pardes clinical trials.
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Securities that may be offered and sold from time to time by the Selling Securityholders named herein
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Up to an aggregate of 39,757,419 shares of Common Stock held by the Selling Securityholders. | |
Common stock outstanding
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62,378,996 shares of Common Stock outstanding as of January 17, 2022. | |
Use of proceeds
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All of the shares of Common Stock offered by the Selling Securityholders pursuant to this prospectus will be sold by the Selling Securityholders for their respective accounts. We will not receive any of the proceeds from these sales. | |
Market for our common stock
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Our common stock is listed on Nasdaq under the symbol “PRDS”. | |
Risk factors
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Any investment in the Common Stock offered hereby is speculative and involves a high degree of risk. You should carefully consider the information set forth under “
Risk Factors
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• |
the ability of Pardes’s clinical trials to demonstrate acceptable safety and efficacy of Pardes’s product candidates, including
PBI-0451,
Pardes’s lead product candidate, and other positive results;
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• |
the timing, progress and results of clinical trials for
PBI-0451 and
completion of studies or trials and related preparatory work,
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the period during which the results of the trials will become available;
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• |
the initiation, timing, progress, results and costs of Pardes’s research and development programs and Pardes’s current and future preclinical and clinical studies;
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• |
Pardes’s ability to initiate, recruit and enroll patients in and conduct its clinical trials at the pace that Pardes’s projects;
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the timing, scope and likelihood of regulatory filings;
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• |
Pardes’s ability to obtain marketing approvals of its product candidates and to meet existing or future regulatory standards or comply with post-approval requirements;
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• |
Pardes’s expectations regarding the potential market size, government stockpiling and the size of the patient populations for its product candidates, if approved for commercial use;
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• |
Pardes’s intellectual property position and expectations regarding its ability to obtain and maintain intellectual property protection;
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• |
Pardes’s ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with its commercial objectives;
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the impact of government laws and regulations;
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Pardes’s competitive position and expectations regarding developments and projections relating to its competitors and any competing therapies that are or become available;
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• |
developments and expectations regarding developments and projections relating to Pardes’s competitors and industry; and
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• |
other risks and uncertainties indicated in this prospectus, including those under “
Risk Factors
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• |
successfully complete nonclinical studies and clinical trials for
PBI-0451
and any other product candidates;
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• |
seek and obtain marketing approvals for any product candidates that complete clinical development;
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• |
establish and maintain supply and manufacturing relationships with third parties, and ensure adequate and legally compliant manufacturing of bulk drug substances and drug products to maintain that supply;
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• |
launch and commercialize any product candidates for which Pardes obtains marketing approval, and, if launched independently, successfully establish a sales, marketing and distribution infrastructure;
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demonstrate the necessary safety data post-approval to ensure continued regulatory approval;
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obtain coverage and adequate product reimbursement from third-party payors, including government payors;
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achieve market acceptance for any approved products;
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address any competing technological and market developments;
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negotiate favorable terms in any collaboration, licensing or other arrangements into which Pardes may enter in the future and performing our obligations in such collaborations;
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establish, maintain, protect and enforce our intellectual property rights; and
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attract, hire and retain qualified personnel.
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the initiation, progress, timing, costs and results of nonclinical studies and anticipated clinical trials for
PBI-0451 or
any other product candidates Pardes may develop, including any
COVID-19-related delays
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• |
the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and applicable foreign regulatory authorities, including the potential for such authorities to require that Pardes performs more nonclinical studies or clinical trials than those that Pardes currently expects;
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the cost to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments Pardes may be required to make, or that Pardes may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights;
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the effect of competing technological and market developments;
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• |
market acceptance of any approved product candidates, including product pricing, as well as product coverage and the adequacy of reimbursement by third-party payors;
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the cost of acquiring, licensing or investing in additional businesses, products, product candidates and technologies;
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the cost and timing of selecting, auditing and potentially validating a manufacturing site for commercial-scale manufacturing;
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the stability, scale, yield and cost of manufacturing our product candidates for clinical trials, in preparation for regulatory approval and in preparation for commercialization;
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• |
the cost of establishing sales, marketing and distribution capabilities for any product candidates for which Pardes may receive regulatory approval and that Pardes determines to commercialize;
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• |
the ability to establish, nature, and timing of potential partnerships around current or future
PBI-0451 assets;
and
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our need to implement additional internal systems and infrastructure, including financial and reporting systems.
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• |
the research methodology used may not be successful in identifying potential product candidates;
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competitors may develop alternatives that render our product candidates obsolete or less attractive;
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a product candidate may, on further study, be shown to have harmful side effects, toxicities, be unable to achieve clinically relevant concentration after dosing or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria;
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a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all;
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an approved product may not be accepted as safe and effective by trial participants, the medical community or third-party payors; and
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intellectual property, patents or other proprietary rights of third parties may cover the product candidates that we develop or potentially block our entry into certain markets or make such entry economically impracticable.
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inability or failure by us or third parties to comply with regulatory requirements, including the requirements of good laboratory practice (“GLP”);
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inability to generate sufficient nonclinical or other in vivo or in vitro data to support the initiation of clinical studies;
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delays in reaching a consensus with regulatory agencies on study design and obtaining regulatory authorization to commence clinical trials;
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challenges in obtaining sufficient quantities of our drug candidates for use in nonclinical studies and clinical trials from third-party suppliers on a timely basis;
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delays due to the
COVID-19 pandemic,
including due to reduced workforce productivity as a result of our implementation of a work-from-home policy or illness among personnel, or due to delays at our third-party contract research organizations throughout the world for similar reasons or due to restrictions imposed by applicable governmental authorities; and
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delays due to other global-scale potentially catastrophic events, including other pandemics, terrorism, war, and climate changes.
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the manufacturing process is susceptible to product loss due to contamination by adventitious microorganisms, equipment failure, improper installation or operation of equipment, vendor or operator error and improper storage conditions. Even minor deviations from normal manufacturing processes could result in reduced production yields and quality as well as other supply disruptions. If microbial, viral or other contaminations are discovered in our products or in the manufacturing facilities in which our products are made, the manufacturing facilities may need to be closed for an extended period of time to investigate and eliminate the contamination;
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the manufacturing facilities in which our products are made could be adversely affected by equipment failures, labor and raw material shortages, financial difficulties of our contract manufacturers, natural disasters, power failures, local political unrest, politically driven embargoes or trade agreements affecting supply of raw materials, and numerous other factors; and
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any adverse developments affecting manufacturing operations for our products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls or other interruptions in the supply of our products. Pardes may also have to record inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more expensive manufacturing alternatives.
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the size and nature of the patient population;
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the number and location of clinical sites where patients are to be enrolled;
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the eligibility and exclusion criteria for the trial;
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the design of the clinical trial;
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inability to obtain and maintain patient consents;
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risk that enrolled participants will drop out before completion;
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competition with other companies for clinical sites or patients and clinicians’ and patients’ perceptions as to the potential advantages of the product being studied in relation to other available therapies, including any new products that may be approved for the indications Pardes is investigating; and
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other factors outside of our control, such as the ongoing and evolving nature of the
COVID-19
pandemic, the efficacy of vaccines and availability of other treatment options.
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delays or difficulties in enrolling participants in a clinical trial, including rapidly evolving treatment paradigms, and subjects that may not be able to comply with clinical trial protocols if quarantines impede subject movement or interrupt healthcare services;
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• |
difficulties in enrolling participants due to the number of competing therapies being tested for
COVID-19;
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delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators, and clinical site staff, or the overwork of existing investigators and staff;
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diversion or prioritization of healthcare resources away from the conduct of clinical trials and towards the
COVID-19 pandemic,
including the diversion of hospitals serving as clinical trial sites and hospital staff supporting the conduct of clinical trials;
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• |
interruptions or delays in preclinical or clinical studies due to restricted or limited operations at research and development laboratory facilities;
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interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal, state or provincial governments, employers and others;
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limitations in employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people;
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delays in receiving approval from local regulatory authorities to initiate our planned clinical trials;
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delays in clinical sites receiving the supplies and materials needed to conduct clinical trials;
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interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug product;
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changes in local regulations as part of a response to the
COVID-19 outbreak
that may require Pardes to change the ways in which our clinical trials are conducted, which may result in unexpected costs, or to discontinue the clinical trials altogether;
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delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and
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• |
the refusal of the FDA or other regulators to accept data from clinical trials in
SARS-CoV-2 affected
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disagreement with the design or implementation of our clinical trials;
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failure to demonstrate that a product candidate is safe and effective for its proposed indication;
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failure of clinical trials to meet the level of statistical significance required for approval;
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failure to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;
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disagreement with our interpretation of data from nonclinical studies or clinical trials;
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the insufficiency of data collected from clinical trials of our product candidates to obtain regulatory approval;
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failure to obtain approval of the manufacturing processes or facilities of third-party manufacturers with whom Pardes contract for clinical and commercial supplies; or
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changes in the approval policies or regulations that render our nonclinical and clinical data insufficient for approval.
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the FDA or applicable foreign regulatory authorities may not authorize Pardes’s or our investigators to commence our planned clinical trials or any other clinical trials Pardes may initiate, or may suspend our clinical trials, for example, through imposition of a clinical hold, and may request additional data to permit allowance of our investigational new drug, or IND;
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delays in filing or receiving allowance of additional IND applications that may be required;
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lack of adequate funding to continue our clinical trials and nonclinical studies;
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inability to generate sufficient preclinical, toxicology, or other in vivo or in vitro data to support the initiation or continuation of clinical trials;
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negative results from our ongoing nonclinical studies;
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delays in reaching or failing to reach agreement on acceptable terms with prospective CROs and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and study sites;
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delays in identifying, recruiting and training suitable clinical investigators;
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the inability of CROs to perform under these agreements, including due to impacts from the
COVID-19 pandemic
on their workforce;
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inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical trials, for example delays in the manufacturing of sufficient supply of finished drug product;
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difficulties obtaining ethics committee or Institutional Review Board, or IRB, approval to conduct a clinical study at a prospective site or sites;
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challenges in recruiting and enrolling subjects to participate in clinical trials, the proximity of subjects to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the availability of approved effective treatments for the relevant disease, and competition from other clinical study programs for similar indications;
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severe or unexpected drug-related side effects experienced by subjects in a clinical trial;
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Pardes may decide, or regulatory authorities may require us, to conduct additional nonclinical or clinical trials or abandon product development programs;
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delays in validating, or inability to validate, any endpoints utilized in a clinical trial;
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the FDA or applicable foreign regulatory authorities may disagree with our clinical study design and our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials; and
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difficulties retaining subjects who have enrolled in a clinical trial but may be prone to withdraw due to rigors of the clinical trials, lack of efficacy, side effects, personal issues, or loss of interest.
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failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols;
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inspection of the clinical study operations or study sites by the FDA or other regulatory authorities that reveals deficiencies or violations that require us to undertake corrective action, including in response to the imposition of a clinical hold;
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developments on trials conducted by competitors for related technology that raises FDA or foreign regulatory authority concerns about risk to patients of the technology broadly, or if the FDA or a foreign regulatory authority finds that the investigational protocol or plan is clearly deficient to meet our stated objectives;
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unforeseen safety issues or safety signals, including any that could be identified in our ongoing nonclinical studies or proposed clinical trials, adverse side effects or lack of effectiveness;
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changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;
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changes in government regulations or administrative actions;
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problems with clinical supply materials; and
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lack of adequate funding to continue clinical trials.
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regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct our clinical trials;
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foreign exchange fluctuations;
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manufacturing, customs, shipment and storage requirements;
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the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural custom;
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cultural differences in medical practice and clinical research;
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the risk that the patient populations in such trials are not considered representative as compared to the patient population in the target markets where approval is being sought; and
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political and economic risks relevant to such foreign countries.
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• |
the federal Anti-Kickback Statute prohibits persons from, among other things, knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, the referral of an individual for the furnishing or arranging for the furnishing, or the purchase, lease or order, or arranging for or recommending purchase, lease or order, of any good or service for which payment may be made under a federal healthcare program, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the federal Anti-Kickback Statute or specific intent to violate it to have committed a violation. Violations are subject to civil and criminal fines and penalties for each violation, plus up to three times the remuneration involved, imprisonment, and exclusion from government healthcare programs. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act or federal civil money penalties;
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federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which can be enforced through civil whistleblower or
qui tam
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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting
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to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, and their implementing regulations, imposes obligations on certain healthcare providers, health plans and healthcare clearinghouses, known as covered entities, as well as their business associates, which are individuals and entities that perform certain services involving the use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. HITECH also created new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions. In addition, there may be additional federal, state and
non-U.S.
laws which govern the privacy and security of health and other personal information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts;
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the U.S. federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to CMS, information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members. Effective January 1, 2022, these reporting obligations will extend to include transfers of value made to certain
non-physician providers
such as physician assistants and nurse practitioners; and
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additionally, Pardes is subject to state and foreign equivalents of each of the healthcare laws and regulations described above, among others, some of which may be broader in scope and may apply regardless of the payor. Many of the U.S. states have adopted laws similar to the federal Anti-Kickback Statute and False Claims Act, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving healthcare items or services reimbursed by
non-governmental payors,
including private insurers. In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Healthcare Professionals. Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state and require the registration of pharmaceutical sales representatives. State and foreign laws, including for example the European Union General Data Protection Regulation (the “EU GDPR”), which became effective May 2018 also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. There are ambiguities as to what is required to comply with these state requirements and if Pardes or our employees fail to comply with an applicable state law requirement the company could be subject to penalties. Finally, there are state and foreign laws governing the
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privacy and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
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• |
may require additional warnings on the label, including “boxed” warnings or issue safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings about such product;
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• |
mandate modifications to promotional materials or require us to provide corrective information to healthcare practitioners;
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• |
require that Pardes conduct post-marketing studies;
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• |
require us to enter into a consent decree, which can include imposition of various fines, reimbursements for inspection costs, required due dates for specific actions and penalties for noncompliance;
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• |
require Pardes to create a REMS which could include a medication guide outlining the risks of such side effects for distribution to patients;
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• |
seek an injunction or impose civil or criminal penalties or monetary fines;
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• |
suspend marketing of, withdraw regulatory approval of or recall such product;
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• |
suspend any ongoing clinical studies;
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• |
refuse to approve pending applications or supplements to applications filed by us;
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• |
suspend or impose restrictions on operations, including costly new manufacturing requirements; or
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• |
seize or detain products, refuse to permit the import or export of products or require us to initiate a product recall.
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• |
a covered benefit under its health plan;
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• |
safe, effective and medically necessary;
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• |
appropriate for the specific patient;
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• |
cost-effective; and
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• |
neither experimental nor investigational.
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• |
the USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process, the noncompliance with which can result in abandonment or lapse of a patent or patent application, and partial or complete loss of patent rights in the relevant jurisdiction;
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• |
patent applications may not result in any patents being issued that protect our product candidates;
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• |
patents may be challenged, invalidated, modified, revoked, circumvented, found to be unenforceable or otherwise may not provide any competitive advantage;
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• |
Pardes’s competitors, many of whom have substantially greater resources than Pardes and have made significant investments in competing technologies, may seek or may have already obtained patents that will limit, interfere with or eliminate Pardes’s ability to make, use and sell our potential product candidates;
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• |
there may be significant pressure on the U.S. government and international governmental bodies to limit the scope of patent protection both inside and outside the United States for disease treatments that prove successful, as a matter of public policy regarding worldwide health concerns; and
|
• |
countries other than the United States may have patent laws less favorable to patentees than those upheld by U.S. courts, allowing foreign competitors a better opportunity to create, develop and market competing product candidates.
|
• |
others may be able to make products that are similar to any product candidates Pardes may develop or utilize similar technology but that are not covered by the claims of the patents that Pardes licenses or may own in the future;
|
• |
Pardes, or our future collaborators, might not have been the first to make the inventions covered by Pardes’s pending patent applications that Pardes;
|
• |
Pardes, or our future collaborators, might not have been the first to file patent applications covering certain of our or their inventions;
|
• |
others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;
|
• |
it is possible that Pardes’s pending patent applications or those that we may own in the future will not lead to issued patents;
|
• |
issued patents that Pardes owns currently or in the future may be held invalid or unenforceable, including as a result of legal challenges by our competitors;
|
• |
our competitors might conduct research and development activities in countries where Pardes does not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;
|
• |
Pardes may not develop additional proprietary technologies that are patentable;
|
• |
the patents of others may harm our business; and
|
• |
Pardes may choose not to file a patent application in order to maintain certain trade secrets or
know-how,
and a third party may subsequently file a patent covering such intellectual property.
|
• |
the possible breach of the manufacturing agreement by the third party;
|
• |
the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us; and
|
• |
reliance on the third party for regulatory compliance, quality assurance and safety and pharmacovigilance reporting.
|
• |
the efficacy and safety profile of the product candidate as demonstrated in clinical trials;
|
• |
the timing of market introduction of the product candidate as well as competitive products;
|
• |
the clinical indications for which the product candidate is approved;
|
• |
acceptance of the product candidate as a safe and effective treatment by clinics and patients;
|
• |
the potential and perceived advantages of the product candidate over alternative treatments, including vaccines and other anti-viral therapeutics;
|
• |
the cost of treatment in relation to alternative treatments;
|
• |
the availability of coverage and adequate reimbursement and pricing by third-party payors;
|
• |
the relative convenience and ease of administration, for example, dosage form, pill burden, or number of days of therapy per course;
|
• |
the additional healthcare economic evidence generated, as supported by real-world data or other
non-interventional studies,
demonstrating cost-effectiveness or budget impact of therapy;
|
• |
the frequency and severity of adverse events;
|
• |
the effectiveness of sales and marketing efforts; and
|
• |
unfavorable publicity relating to our product candidates or similar therapeutics.
|
• |
decreased demand for any product candidates or products, if approved for commercial sale, that Pardes may develop;
|
• |
termination of clinical trial sites or entire trial programs;
|
• |
injury to our reputation and significant negative media attention;
|
• |
withdrawal of clinical trial participants;
|
• |
significant costs to defend the related litigation;
|
• |
substantial monetary awards to trial subjects, patients or other claimants;
|
• |
loss of revenue;
|
• |
diversion of management and scientific resources from our business operations;
|
• |
the inability to commercialize any products that Pardes may develop;
|
• |
product recalls, withdrawals or labeling, marketing or promotional restrictions; and
|
• |
a decline in our stock price.
|
• |
a limited availability of market quotations for our securities;
|
• |
reduced liquidity for our securities;
|
• |
a determination that our common stock is a “penny stock” which will require brokers trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
|
• |
a limited amount of news and analyst coverage; and
|
• |
a decreased ability to issue additional securities or obtain additional financing in the future.
|
• |
changes in the industries in which our and our customers operate;
|
• |
variations in its operating performance and the performance of its competitors in general;
|
• |
material and adverse impact of the
COVID-19
pandemic on the markets and the broader global economy;
|
• |
actual or anticipated fluctuations in our quarterly or annual operating results;
|
• |
publication of research reports by securities analysts about us or our competitors or our industry;
|
• |
the public’s reaction to our press releases, our other public announcements and its filings with the SEC;
|
• |
Our failure or the failure of its competitors to meet analysts’ projections or guidance that we or our competitors may give to the market;
|
• |
additions and departures of key personnel;
|
• |
changes in laws and regulations affecting our business;
|
• |
commencement of, or involvement in, litigation involving Pardes;
|
• |
changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;
|
• |
the volume of shares of our common stock available for public sale; and
|
• |
general economic and political conditions such as recessions, interest rates, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.
|
• |
a classified board with a three-year staggered term;
|
• |
the ability of Pardes’s board of directors to issue one or more series of “blank check” preferred stock;
|
• |
certain limitations on convening special stockholder meetings;
|
• |
advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at Pardes’s annual meetings; and
|
• |
amendment of certain provisions of the organizational documents only by the affirmative vote of at least
two-thirds
of Pardes’s then-outstanding shares of capital stock entitled to vote generally at an election of directors.
|
• |
any derivative action or proceeding brought on its behalf;
|
• |
any action asserting a breach of fiduciary duty owed by any of our directors, officers or other employees to Pardes or our stockholders;
|
• |
any action asserting a claim against Pardes arising under the DGCL, the Charter, or the Bylaws;
|
• |
any action to interpret, apply, enforce or determine the validity of the Charter or the
By-laws;
and
|
• |
any action asserting a claim against Pardes that is governed by the internal-affairs doctrine.
|
Statement of
Operations-For
the Nine Months Ended
September 30, 2021 |
FSDC II
(Historical) |
Pardes
(Historical) |
Pro
Forma |
|||||||||
Total operating expenses
|
$ | 3,564 | $ | 24,181 | $ | 27,745 | ||||||
Loss from operations
|
(3,564 | ) | (24,181 | ) | (27,745 | ) | ||||||
Net loss
|
(3,552 | ) | (24,171 | ) | (27,735 | ) | ||||||
Basic and diluted net loss per share—Class A
|
(0.16 | ) | (16.52 | ) | (0.49 | ) | ||||||
Basic and diluted net loss per share—Class B
|
(0.16 | ) | — | — |
Statement of Operations-Year Ended December 31, 2020
|
FSDC II
(Historical) |
Pardes
(Historical) |
Pro
Forma |
|||||||||
Total operating expenses
|
$ | 1 | $ | 5,313 | $ | 5,314 | ||||||
Loss from operations
|
(1 | ) | (5,313 | ) | (5,314 | ) | ||||||
Net loss
|
(1 | ) | (13,006 | ) | (13,007 | ) | ||||||
Basic and diluted net loss per share
|
— | — | (0.23 | ) |
Balance
Sheet-As
of September 30, 2021
|
FSDC II
(Historical) |
Pardes
(Historical) |
Pro
Forma |
|||||||||
Total current assets
|
$ | 571 | $ | 27,060 | $ | 285,432 | ||||||
Total assets
|
201,833 | 28,581 | 285,432 | |||||||||
Total current liabilities
|
2,498 | 5,971 | 5,669 | |||||||||
Total liabilities
|
9,542 | 5,971 | 5,669 | |||||||||
Total convertible preferred stock
|
— | 59,132 | — | |||||||||
Class A common stock subject to redemption
|
201,250 | — | — | |||||||||
Total stockholders’ equity (deficit)
|
(8,959 | ) | (36,522 | ) | 279,763 |
• |
Complete preclinical and clinical development and seek approval for our lead product candidate,
PBI-0451,
an investigational drug designed to be orally administered DAA for the treatment and prevention of
SARS-CoV-2
infections, the cause of
COVID-19,
including infections caused by newly emerging
SARS-CoV-2
variants.
PBI-0451 in
August 2021. If
PBI-0451 demonstrates
acceptable human pharmacokinetics and tolerability data in the Phase 1 clinical trial, we subsequently intend to discuss with the FDA and other foreign regulatory authorities, and seek advice, regarding potential plans to initiate a Phase 2/3, potentially registrational, treatment trial that will enroll patients who are test positive for
SARS-CoV-2 in
PBI-0451 as
a potential post-exposure prophylaxis in first degree contacts of patients diagnosed with
SARS-CoV-2 infection.
PBI-0451 and
may seek expedited development review programs such as Breakthrough Therapy designation and Emergency Use Authorizations (EUA).
|
• |
Expand our pipeline by developing additional highly selective, orally administered drug candidates
against additional targets.
PBI-0451,
can be developed as a broadly active coronaviral drug, we intend to continue to improve our capability to inhibit a range of coronaviruses, while we expand our wholly owned pipeline by continuing to innovate and discover additional differentiated oral small molecules against additional targets, which may include other targets in virology, as well as host targets related to the fields of immunology and oncology.
|
• |
Maximize the value of our product candidates.
|
• |
Topologically adaptable and tunable warheads, including those with novel structures and chemistry, where
|
• |
Structure can be designed to conform to a binding site and establish optimal stabilizing interactions;
|
• |
Tunable reactivity can be modulated to increase potency, specificity and residence time on the reactive nucleophile of a cysteine or serine protease;
|
• |
Reversibility of covalent behavior can be exploited to minimize
non-specific or
off-target
activities;
|
• |
Functionality can enhance potential for molecules to have favorable drug-like properties and oral bioavailability; and
|
• |
Reduced liabilities can be anticipated with respect to reductive or oxidative metabolism or degradation.
|
• |
Structure-based drug design, or SBDD, approaches, which enable us to rapidly explore chemical space and identify potential warheads that can be used to:
|
• |
“Weaponize” existing
non-covalent ligands
with one of our tunable, reversible covalent warheads;
|
• |
Convert an irreversible covalent inhibitor to a reversible covalent inhibitor by exchange of warheads to produce an agent with potential for improved properties, such as greater exposures and reduced
off-target effects;
and
|
• |
Design novel analogues to build on existing structural insights.
|
Coronavirus M
pro
|
PBI-0451
Activity vs Protease IC
50
(µM)*
|
|||
SARS-CoV-2
|
0.02 – 0.03 | |||
SARS-CoV
|
0.05 – 0.08 | |||
MERS-CoV
|
0.41 – 0.62 | |||
CoV-229E
|
0.12 – 0.17 | |||
CoV-OC43
|
0.15 – 0.20 | |||
CoV-HKU1
|
0.07 – 0.13 | |||
CoV-NL63
|
0.24 – 0.38 |
* |
IC
50
reported as
min-max across
separate studies. The lower the IC
50
number the more potent the compound is against the coronavirus tested.
|
Coronavirus & Assay
|
EC
50
(nM)*
|
CC
50
(µM)
|
||
SARS-CoV-2
(1)
|
32 (± 25) n=4 | >2 | ||
SARS-CoV-2
(2)
|
23 (± 16), n=6 | >10 | ||
CoV-229E
(3)
CPE assay
|
116 (± 7) n=3 | >90 |
* |
EC
50
reported as Avg ±SD, n= number of replicate studies
|
(1) |
SARS-CoV-2 WA-1 in
iPS-derived human
alveolar type II pneumocyte cultures
|
(2) |
SARS-CoV-2 (Nanoluciferase
|
(3) |
CoV-229E (cultured
in
MRC-5 cells)
coronavirus is one of the viruses responsible for the common cold
|
• |
PAXLOVID
TM
—combination of nirmatrelvir
(PF-07321332)
tablets and ritonavir tablets (Pfizer, Inc.), an oral protease inhibitor that in combination with ritonavir received an EUA from the FDA in December 2021 for the treatment of mild to moderate
COVID-19 in
patients with positive results of direct SARS-CoV-2 viral testing and who are at high risk for progression to severe COVID-19, including hospitalization or death. Pfizer has entered into a number of government contracts for advance purchases of PAXLOVID
™
upon receiving EUA from the FDA and has entered into a license agreement with Medicines Patent Pool Foundation to license Pfizer’s nirmatrelvir
(PF-07321332)
tablets to expand access in low and middle income countries.
|
• |
S-217622 (Shionogi &
Company Limited), an oral protease inhibitor, which in September 2021 commenced phase 2/3 studies and the company is planning for regulatory submission by the end of 2021.
|
• |
EDP-235 (Enanta
Pharmaceuticals, Inc.), an oral protease inhibitor, which currently has not initiated clinical studies.
|
• |
Oral protease inhibitor and intranasal
CDI-45205
(Cocrystal Pharma, Inc.), which currently has not initiated clinical studies.
|
• |
ALG-097431 (Aligos
Therapeutics, Inc. in collaboration with KU Leuven’s Rega Institute for Medical Research and its Centre for Drug Design and Discovery) a nonclinical small molecule 3CL protease inhibitor.
|
• |
Molnupiravir
(EIDD-2801/MK-4482)
(Ridgeback Biotherapeutics LP together with Merck & Co., Inc.), an oral ribonucleoside analog for the viral
RNA-dependent RNA
polymerase allowing its incorporation into viral RNA associated with the accumulation of mutations within the viral RNA genome, has received EUA from the FDA for the treatment of
mild-to-moderate
COVID-19
in certain adults with positive results of direct SARS-CoV-2 viral testing and who are at high risk for progression to severe COVID, including hospitalization or death and for whom alternative COVID-19 treatment options authorized by the FDA are not available. Merck has entered into a number of government contracts for advance purchases of Molnupiravir upon receiving EUA from the FDA or other applicable government approvals and Merck has entered into a license agreement with Medicines Patent Pool Foundation to license Molnupiravir to expand access in low and middle income countries.
|
• |
AT-527/AT-511 (Atea
AT-527 is
a repurposed drug that was originally developed for hepatitis C virus (HCV).
|
• |
Remdesivir
(GS-5734)
(Gilead Sciences, Inc.), a purine nucleotide prodrug that is a polymerase inhibitor that targets the
RNA-dependent RNA
polymerase (RdRp) enzyme, which received EUA authorization initially in May 2020.
|
• |
Favipiravir (Fujifilm Pharma Co., Ltd.), an oral nucleoside analog polymerase inhibitor that targets the RdRp enzyme.
|
• |
ADG20 (Adagio Therapeutics, Inc.), a monoclonal antibody targeting the spike protein of
SARS-CoV-2 and
|
• |
Ensovibep (MP0420/MP0423) (Novartis in collaboration with Molecular Partners AG), is an antiviral clinical candidate for the treatment and prevention of
COVID-19 based
on a new class of protein therapeutics known as DARPin
®
and is administered by subcutaneous single injection, commenced a Phase 2/3 study for treatment of
COVID-19 in
May 2021.
|
• |
Bamlanivimab
(LY-CoV555)
and Etesevimab
(LY-CoV016)
(Eli Lily and Company and Abcellera Biologics, Inc.), both neutralizing antibodies, were authorized to be administered together on February 9, 2021 or the treatment of mild to moderate
COVID-19
in adults and pediatric patients, including neonates, with positive results of direct
SARS-CoV-2
COVID-19,
including hospitalization or death.
|
• |
REGN-COV2 (Regeneron Pharmaceuticals, Inc.), a monoclonal antibody cocktail containing Casirivimab and imdevimab that is administered together by intravenous (IV) infusion, was granted
|
EUA on November 21, 2020 for the treatment of mild to moderate
COVID-19
in adult and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct
SARS-CoV-2
COVID-19,
including hospitalization or death.
|
• |
Sotrovimab (Vir Biotechnology/GlaxoSmithKline), a monoclonal antibody granted EUA on May 26, 2021 for treatment of
mild-to-moderate
(COVID-19)
in adults and pediatric patients (12 years of age and older weighing at least 40 kg) with positive results of direct
SARS-CoV-2
COVID-19,
including hospitalization or death.
|
• |
EVUSHELD
™
(tixagevimab
co-packaged
with cilgavimab, AstraZeneca) was granted EUA in December 2021 for the
pre-exposure
prophylaxis of
COVID-19
in adults and pediatrics (12 years of age and older weighing at least 40 kg), who are not currently infected with
SARS-CoV-2
SARS-CoV-2
COVID-19
vaccination or, for whom vaccination with any available
COVID-19
vaccine, according to the approved or authorized schedule, is not recommended due to a history of severe adverse reaction (e.g., severe allergic reaction) to a
COVID-19
vaccine(s) and/or
COVID-19
vaccine component(s).
|
• |
Ambarvimab
(BRII-196)/Romlusevimab
(BRII-198)
(Brii Biosciences), a combination of neutralizing monoclonal antibodies intended to treat
non-hospitalized
Covid-19
patients at high risk for progression to severe disease, has been approved in China in December 2021 and filed for EUA with the FDA in September 2021.
|
• |
completion of preclinical laboratory tests, animal studies and formulation studies in accordance with the FDA’s good laboratory practice, or GLP, requirements and other applicable regulations;
|
• |
submission to the FDA of an investigational new drug, or IND, application which must become effective before human clinical trials may begin and must be updated annually and when certain changes are made;
|
• |
approval by an independent institutional review board, or IRB, or ethics committee at each clinical site before each trial may be initiated;
|
• |
performance of adequate and well-controlled human clinical trials in accordance with good clinical practice, or GCP, requirements, to establish the safety and efficacy of the product candidate for its proposed intended use;
|
• |
submission to the FDA of a new drug application, or NDA, after completion of all pivotal trials;
|
• |
payment of user fees for FDA review of the NDA;
|
• |
satisfactory completion of an FDA advisory committee review, if applicable;
|
• |
satisfactory completion of one or more FDA
pre-approval inspections
of the manufacturing facility or facilities at which the drug will be produced to assess compliance with current good manufacturing practice, or cGMP, requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
|
• |
satisfactory completion of any FDA audits of the clinical trial sites that generated the data in support of the NDA to assess compliance with GCPs; and
|
• |
FDA review and approval of the NDA to permit commercial marketing of the product for particular indications for use in the United States.
|
• |
Phase 1:
|
• |
Phase 2:
|
• |
Phase 3:
|
• |
restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
|
• |
fines, warning letters, or untitled letters;
|
• |
holds on clinical trials;
|
• |
refusal of the FDA to approve pending applications or supplements to approved NDAs, or suspension or revocation of product approvals;
|
• |
product recall, seizure or detention, or refusal to permit the import or export of products;
|
• |
consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;
|
• |
mandated modification of promotional materials and labeling and the issuance of corrective information;
|
• |
the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or
|
• |
injunctions or the imposition of civil or criminal penalties.
|
• |
continues preclinical studies and initiates new clinical trials for
PBI-0451,
our lead product candidate being tested for the treatment of
COVID-19 disease;
|
• |
establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully;
|
• |
advances the development of our product candidate pipeline of other product candidates, including through business development efforts to invest in or
in-license other
technologies or product candidates;
|
• |
maintains, expands and protects our intellectual property portfolio;
|
• |
hires additional clinical, quality control, medical, scientific and other technical personnel to support Pardes’s clinical operations;
|
• |
seeks regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
undertakes any
pre-commercialization activities
to establish sales, marketing and distribution capabilities for any product candidates for which Pardes may receive regulatory approval;
|
• |
expands our infrastructure and facilities to accommodate our growing employee base; and
|
• |
adds operational, financial and management information systems and personnel, including personnel to support our research and development programs, any future commercialization efforts and our transition to operating as a public company following the Closing.
|
• |
expenses incurred to conduct the necessary preclinical studies and clinical trials required to obtain regulatory approval;
|
• |
expenses incurred under agreements with CROs that are primarily engaged in the oversight and conduct of our drug discovery efforts and preclinical studies, clinical trials and CMOs that are primarily engaged to provide preclinical and clinical drug substance and product for our research and development programs;
|
• |
other costs related to acquiring and manufacturing materials in connection with our drug discovery efforts and preclinical studies and clinical trial materials, including manufacturing validation batches, as well as investigative site and consultants that conduct our clinical trials, preclinical studies and other scientific development services;
|
• |
employee-related expenses, including salaries and benefits, travel and stock-based compensation expense for employees engaged in research and development functions; and
|
• |
costs related to compliance with regulatory requirements.
|
February 27,
2020 (inception)
through December 31, 2020 |
February 27,
2020 (inception) through September 30, 2020 |
Nine Months
Ended September 30, 2021 |
||||||||||
External costs
|
$ | 4,141 | $ | 1,949 | $ | 14,200 | ||||||
Internal costs:
|
||||||||||||
Salaries and benefits
|
395 | 200 | 2,377 | |||||||||
Stock-based compensation
|
— | — | 247 | |||||||||
Other unallocated costs
|
27 | 48 | 968 | |||||||||
|
|
|
|
|
|
|||||||
Total Internal costs:
|
422 | 248 | 3,592 | |||||||||
|
|
|
|
|
|
|||||||
Total research and development expenses
|
$ | 4,563 | $ | 2,197 | $ | 17,792 | ||||||
|
|
|
|
|
|
• |
the scope, progress, outcome and costs of our preclinical development activities, clinical trials and other research and development activities;
|
• |
establishing an appropriate safety and efficacy profile with clinically enabling studies;
|
• |
successful patient enrollment in and the initiation and completion of clinical trials;
|
• |
the timing, receipt and terms of any marketing approvals from applicable regulatory authorities including the FDA and
non-U.S.
regulators;
|
• |
the extent of any required post-marketing approval commitments to applicable regulatory authorities;
|
• |
establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers in order to ensure that we or our third-party manufacturers are able to make product successfully;
|
• |
development and timely delivery of clinical-grade and commercial-grade drug formulations that can be used in our clinical trials and for commercial launch;
|
• |
obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;
|
• |
significant and changing government regulation;
|
• |
launching commercial sales of our product candidates, if and when approved, whether alone or in collaboration with others; and
|
• |
maintaining a continued acceptable safety profile of our product candidates following approval, if any, of our product candidates.
|
February 27,
2020 (inception) through September 30, 2020 |
Nine Months
Ended September 30, 2021 |
Change
|
||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$ | 2,197 | $ | 17,792 | $ | 15,595 | ||||||
General and administrative
|
583 | 6,389 | 5,806 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses
|
2,780 | 24,181 | 21,401 | |||||||||
Loss from operations
|
(2,780 | ) | (24,181 | ) | (21,401 | ) | ||||||
Interest income
|
— | 10 | 10 | |||||||||
Change in fair value of SAFE liability
|
(885 | ) | — | 885 | ||||||||
|
|
|
|
|
|
|||||||
Net loss
|
$ | (3,665 | ) | $ | (24,171 | ) | $ | (20,506 | ) | |||
|
|
|
|
|
|
February 27,
2020 (inception) through December 31, 2020 |
||||
Operating expenses:
|
||||
Research and development
|
$ | 4,563 | ||
General and administrative
|
750 | |||
|
|
|||
Total operating expenses
|
5,313 | |||
|
|
|||
Loss from operations
|
(5,313 | ) | ||
Other expense:
|
||||
Change in fair value of SAFEs
|
(7,693 | ) | ||
|
|
|||
Total other expense
|
(7,693 | ) | ||
|
|
|||
Net loss
|
$ | (13,006 | ) | |
|
|
February 27,
2020 (inception) through December 31, 2020 |
February 27,
2020 (inception) through September 30, 2020 |
Nine Months
Ended September 30, 2021 |
||||||||||
Net cash used in operating activities
|
$ | (3,555 | ) | $ | (1,556 | ) | $ | (20,137 | ) | |||
Net cash provided by financing activities
|
6,965 | 5,005 | 43,111 | |||||||||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents
|
$ | 3,410 | $ | 3,449 | $ | 22,974 | ||||||
|
|
|
|
|
|
• |
advance preclinical development of our early-stage programs and initiate clinical trials of our product candidates;
|
• |
manufacture, or have manufactured on our behalf, its preclinical and clinical drug material and develop processes for late stage and commercial manufacturing;
|
• |
seek regulatory approvals for any product candidates that successfully complete clinical trials;
|
• |
establish a sales, marketing, medical affairs, managed care, and distribution infrastructure to commercialize any product candidates for which we may obtain marketing approval and intend to commercialize on our own;
|
• |
hire additional clinical, quality control and scientific personnel;
|
• |
expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company;
|
• |
obtain, maintain, expand and protect our intellectual property portfolio;
|
• |
manage the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and
|
• |
manage the costs of operating as a public company.
|
• |
the scope, progress, results and costs of researching and developing our product candidates, and conducting preclinical and clinical trials;
|
• |
the costs, timing and outcome of regulatory review of our product candidates;
|
• |
the costs, timing and ability to manufacture our product candidates to supply our clinical and preclinical development efforts and our clinical trials;
|
• |
the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;
|
• |
the costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;
|
• |
the ability to receive additional
non-dilutive funding,
including grants from organizations and foundations;
|
• |
the revenue, if any, received from commercial sale of our products, should any of our product candidates receive marketing approval;
|
• |
the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and defending intellectual property-related claims;
|
• |
our ability to establish and maintain collaborations on favorable terms, if at all; and
|
• |
the extent to which we acquire or
in-license other
product candidates and technologies.
|
• |
vendors, including research laboratories, in connection with preclinical development activities;
|
• |
CROs and investigative site in connection with preclinical studies and clinical trials; and
|
• |
CMOs in connection with drug substance and drug product formulation of preclinical studies and clinical trial materials.
|
• |
the prices at which Old Pardes sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;
|
• |
the progress of our research and development programs, including the status and results of preclinical studies for our product candidates;
|
• |
Old Pardes’s stage of development and commercialization and our business strategy; external market conditions affecting the biopharmaceutical industry and trends within the biopharmaceutical industry;
|
• |
Old Pardes’s financial position, including cash on hand, and our historical and forecasted performance and results of operations;
|
• |
the lack of an active public market for Old Pardes’s common stock and preferred stock;
|
• |
the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale of Old Pardes in light of prevailing market conditions; and
|
• |
the analysis of IPOs and the market performance of similar companies in the biopharmaceutical industry.
|
• |
Demand registration rights
any lock-up to
which an Investor may be subject, Pardes will be required, upon the written request of either (i) FSDC II Investors holding a majority of the Registrable Securities held by all FSDC II Investors or (ii) Major Pardes Investors holding at least 30% of the Registrable Securities held by all Major Pardes Investors, to file a registration statement under the Securities Act of 1933, as amended (the “
Securities Act
”) on
Form S-1 or
any similar long-form registration statement or, if then available, on
Form S-3, and
use reasonable best efforts to effect the registration of all or part of their registrable securities requested to be included in such registration by the Investors.
|
• |
Shelf registration rights
the Lock-up Period
(as defined in the Registration Agreement), if the Company shall receive a request from Investors holding registrable securities with an estimated market value of at least $5,000,000, to effect an underwritten shelf takedown, Pardes shall use its reasonable best efforts to as expeditiously as possible to effect the underwritten shelf takedown.
|
• |
Limits on demand registration rights and shelf registration rights.
any six-month period;
(b) any demand registration at any time there is an effective resale shelf registration statement on file with the SEC; (c) more than two underwritten demand registrations in respect of all registrable securities held by the FSDC II Investors, including those made under a shelf registration statement, or (d) more than two underwritten demand registrations in respect of all registrable securities held by the Major Pardes Investors, including those made under a shelf registration statement.
|
• |
Piggyback registration rights
customary cut-back rights.
|
• |
Expenses and indemnification
|
shares being registered. The Registration Rights Agreement contains customary cross-indemnification provisions, under which Pardes is obligated to indemnify holders of registrable securities in the event of material misstatements or omissions in the registration statement attributable to Pardes, and holders of registrable securities are obligated to indemnify Pardes for material misstatements or omissions attributable to them.
|
• |
Registrable securities
|
Name of Old Pardes Affiliate
|
Number of
Shares of Series
A-1
Preferred Stock Received |
Total SAFE
Balance Exchanged
for Series A-1
Preferred Stock |
Number of
Shares of Series
A-2
Preferred Stock Received |
Total SAFE
Balance Exchanged for Series
A-2
Preferred Stock |
Number of
Shares of Series
A-3
Preferred Stock Received |
Total SAFE
Balance Exchanged for Series
A-3
Preferred Stock |
||||||||||||||||||
Khosla Ventures Seed D, LP
|
2,415,458 | $ | 3,000,000 | — | — | — | — | |||||||||||||||||
Sara Lopatin
|
— | — | 40,256 | $ | 100,000 | 17,252 | $ | 50,000 |
• |
any person who is, or at any time during the applicable period was, one of Pardes’s executive officers or one of Pardes’s directors or director nominees;
|
• |
any person who is known by Pardes to be the beneficial owner of more than five percent (5%) of its voting stock;
|
• |
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling,
mother-in-law,
father-in-law,
daughter-in-law,
brother-in-law or
sister-in-law of
|
• |
any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest.
|
Name
|
Age
|
Position
|
||
Uri A. Lopatin, M.D.
(1)
|
50 | President, Chief Executive Officer and Director | ||
Heidi Henson | 56 | Chief Financial Officer | ||
Lee D. Arnold, Ph.D. | 61 | Chief Scientific Officer | ||
Brian P. Kearney, PharmD | 49 | Chief Development Officer | ||
Sean P. Brusky | 44 | Chief Commercial Officer | ||
Elizabeth H. Lacy | 56 | General Counsel and Corporate Secretary | ||
Philippe Tinmouth | 57 | Chief Business and Strategy Officer | ||
Mark Auerbach
(1)
|
83 | Director | ||
Deborah M. Autor
(1)
|
54 | Director | ||
Laura J. Hamill
(1)
|
57 | Director | ||
J. Jay Lobell
(1)
|
58 | Director | ||
Michael D. Varney, Ph.D.
(1)
|
61 | Director | ||
James B. Tananbaum, M.D.
(2)
|
58 | Director |
(1) |
Pardes Designee
|
(2) |
FSDC II Designee
|
• |
the Class I directors are J. Jay Lobell and Deborah M. Autor, their terms will expire at the annual meeting of stockholders to be held in 2022;
|
• |
the Class II directors are Michael D. Varney, Ph.D. and Laura J. Hamill, and their terms will expire at the annual meeting of stockholders to be held in 2023; and
|
• |
the Class III directors are Uri A. Lopatin, M.D., Mark Auerbach and James B. Tananbaum, M.D., and their terms will expire at the annual meeting of stockholders to be held in 2024.
|
• |
appointing, evaluating and compensating a qualified firm to serve as the independent registered public accounting firm to audit the Company’s financial statements;
|
• |
helping to ensure the independence and performance of the independent registered public accounting firm;
|
• |
discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;
|
• |
developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
|
• |
reviewing policies on risk assessment and risk management;
|
• |
reviewing related person transactions;
|
• |
obtaining and reviewing a report by the independent registered public accounting firm at least annually, that describes the Company’s internal quality-control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
|
• |
approving (or, as permitted, pre-approving) all audit and all permissible non-audit service to be performed by the independent registered public accounting firm.
|
• |
reviewing and approving, or recommending that our Board approve, the compensation of our executive officers;
|
• |
reviewing and recommending to our Board the compensation of our directors;
|
• |
reviewing and approving, or recommending that our Board approve, the terms of compensatory arrangements with our executive officers;
|
• |
administering our stock and equity incentive plans;
|
• |
selecting independent compensation consultants and assessing whether there are any conflicts of interest with any of the committee’s compensation advisors;
|
• |
reviewing and approving, or recommending that our Board approve, incentive compensation and equity plans, severance agreements,
change-of-control protections
and any other compensatory arrangements for our executive officers and other senior management, as appropriate;
|
• |
reviewing and establishing general policies relating to compensation and benefits of our employees; and
|
• |
reviewing our overall compensation philosophy.
|
• |
identifying, evaluating and selecting, or recommending that our Board approve, nominees for election to our board of directors;
|
• |
evaluating the performance of our Board and of individual directors;
|
• |
reviewing developments in corporate governance practices;
|
• |
evaluating the adequacy of our corporate governance practices and reporting;
|
• |
reviewing management succession plans; and
|
• |
developing and making recommendations to our Board regarding corporate governance guidelines and matters.
|
• |
reviewing Pardes’s overall scientific, research and development strategies;
|
• |
reviewing Pardes’s research and development programs; and
|
• |
reviewing and evaluating Pardes’s regulatory compliance and quality programs.
|
Name and principal
position |
Year
|
Salary
($) |
Bonus
($) |
Stock
Awards ($) |
Option
Awards ($) |
Non-Equity
Incentive Plan Compensation ($) |
All Other
Compensation ($) |
Total
($) |
||||||||||||||||||||||||
Uri A, Lopatin, M.D.
Chief Executive Officer
|
2021 | 442,500 | — | — | — | — | — | 442,500 | ||||||||||||||||||||||||
2020 | 208,333 |
(2)
|
— | 40.00 |
(1)
|
— | — | — | 208,373 | |||||||||||||||||||||||
Heidi Henson
Chief Financial Officer
(3)
|
2021 | 375,250 | — | — | 658,863 |
(4)
|
— | — | 1,034,113 | |||||||||||||||||||||||
2020 | — | — | — | — | — | 85,000 |
(5)
|
85,000 | ||||||||||||||||||||||||
Philippe Tinmouth
Chief Business and Strategy Officer
(6)
|
2021 | 37,670 | — | — | 2,394,650 |
(7)
|
— | 49,667 |
(8)
|
2,481,987 |
(1) |
The amount reported represent the aggregate grant date fair value of the restricted stock awards granted to our named executive officer during 2020, calculated in accordance with FASB ASC Topic 718. Such grant date fair value does not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the restricted stock awards reported in this column are set forth in Note 5 to Pardes’s financial statements included elsewhere in this prospectus. The amount reported reflects the accounting cost for the restricted stock award and does not correspond to the actual economic value that may be received by our named executive officer upon the vesting of the restricted stock award or any sale of the underlying shares of Pardes common stock.
|
(2) |
Dr. Lopatin’s employment start date was February 29, 2020, and his base salary was
pro-rated
accordingly.
|
(3) |
Ms. Henson’s employment start date was January 20, 2021, and her base salary was
pro-rated accordingly.
|
(4) |
The amount represents the aggregate grant date fair value of stock options awarded during 2021 calculated in accordance with the provisions of FASB ASC Topic 718. See Note 5 to Pardes’s financial statements appearing elsewhere in this prospectus regarding assumptions underlying the valuation of equity awards.
|
(5) |
Ms. Henson was hired as a consultant from April 2020 through December 2020. This amount represents consulting fees earned by Ms. Henson in 2020 but paid in 2021.
|
(6) |
Mr. Tinmouth’s employment start date was November 22, 2021, and his base salary was
pro-rated
accordingly.
|
(7) |
The amount represents the aggregate grant date fair value of stock options awarded during 2021, calculated in accordance with the provisions of FASB ASC Topic 718. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the stock options was assumed risk-free interest rate of 1.5%, assumed volatility of 79.3%, expected option life of 6.3 years and expected dividend yield of 0%.
|
(8) |
Mr. Tinmouth was hired as a consultant from June 2021 through November 2021. This amount represents consulting fees earned by Mr. Tinmouth in 2021.
|
Option Awards
(*)(5)
|
Stock Awards
(*)
|
|||||||||||||||||||||||||||||||
Name
|
Date of
Grant |
Vesting
Commencement Date |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
Option
Exercise Price ($) |
Option
Expiration Date |
Number of
Shares or Units of Stock That Have Not Vested (#) |
Market
Value of Shares or Units of Stock That Have Not Vested ($)
(3)
|
||||||||||||||||||||||||
Uri A. Lopatin, M.D.
Chief Executive Officer
|
2/29/2020 | 2/29/2020 | — | — | — | — | 3,050,218 |
(1)
(2)
|
49,932,069 | |||||||||||||||||||||||
Heid Henson
Chief Financial Officer
|
3/18/2021 | 1/20/2021 | 241,593 |
(6)
|
3.88 | 3/17/2031 | ||||||||||||||||||||||||||
7/1/2020 | 7/1/2020 | — | — | — | — | 181,840 |
(2)(4)
|
2,976,721 | ||||||||||||||||||||||||
10/1/2020 | 10/1/2020 | 24,930 |
(2)(4)
|
408,104 | ||||||||||||||||||||||||||||
Philippe Tinmouth
Chief Business
& Strategy Officer
|
11/23/2021 | 11/22/2021 | — | 422,340 |
(6)
|
8.19 | 11/22/2031 | |||||||||||||||||||||||||
7/27/2021 | 6/23/2021 | — | 28,156 |
(7)
|
4.94 | 7/26/2031 | — | — |
(*) |
Option Awards and Stock Awards are presented on a post-Closing basis. In connection with the Business Combination, and pursuant to the Merger Agreement, each outstanding option to purchase shares of Old Pardes common stock was converted into an option to purchase shares of our Common Stock equal to the number of shares subject to such option prior to the consummation of the Business Combination multiplied by 1.4078 (rounded down to the nearest share), with the per share exercise price equal to the exercise price divided by 1.4078 (rounded up to the nearest cent). The option shares and exercise price per share set forth in this table reflect the as converted shares and exercise price per share. Such converted options shall remain subject to the same terms and conditions as set forth under the applicable original option award prior to the conversion, but were assumed and reissued under the 2021 Stock Option and Incentive Plan described below under “Employee Benefits and Equity Compensation Plans—2021 Stock Option and Incentive Plan.” In connection with the Business Combination, and pursuant to the Merger Agreement, the outstanding restricted stock of Old Pardes common stock was converted into restricted shares of our Common Stock equal to the number of shares subject to the restricted stock award multiplied by 1.4078 with the repurchase price was converted to equal the original purchase price divided by 1.4078. Such restricted stock shall remain subject to the same terms and conditions set forth under the applicable restricted stock award agreement.
|
(1) |
This restricted stock award was granted pursuant to individual restricted stock purchase agreement between Pardes and the named executive officer in connection with the named executive officer’s commencement of employment with Pardes.
|
(2) |
The restricted stock award is subject to repurchase by Pardes upon certain circumstances, which repurchase restrictions lapse in accordance with the following schedule: 25% of the shares shall no longer be subject to repurchase by Pardes upon the first anniversary of the vesting commencement date and such restrictions shall continue to lapse in equal monthly installments thereafter for the next three years, in each case subject to the applicable named executive officer’s continued service relationship with Pardes through each applicable date. The restricted stock award is also subject to certain acceleration of vesting provisions as set forth in the Executive Severance Agreement.
|
(3) |
Based on the closing sales price of $16.37 per share for our common stock on the Nasdaq Stock Market as of December 31, 2021.
|
(4) |
This restricted stock award was granted pursuant to individual restricted stock purchase agreement between Pardes and the named executive officer in connection with the named executive officer’s services for Pardes as a consultant.
|
(5) |
The vesting of each stock option is subject to the named executive officer’s continuous service with us through the applicable vesting dates. Each of our named executive officers’ are entitled to accelerated vesting of all or a portion
|
of their outstanding unvested equity awards upon a qualifying termination. For additional discussion, please see “—Employment Arrangements” and “—Pardes Biosciences Inc. Executive Severance Plan.” |
(6) |
Option award vests over 4 years with 25% vesting on the first anniversary of the vesting commencement date and the remainder vesting in equal monthly installments thereafter. All of the option awards were granted with a per share exercise price equal to the fair market value of one share of Old Pardes common stock on the date of grant.
|
(7) |
Option award was granted to the named executive officer in connection with the named executive officer’s services for Pardes as a consultant. Option award vests over 2 years with 50% vesting on the first anniversary of the vesting commencement date and the remainder vesting in equal monthly installments thereafter.
|
Name
|
Fees earned
or paid in cash ($)
(1)
|
Option Awards
($) |
Restricted
Stock Awards ($) |
Total ($)
|
||||||||||||
Mark Auerbach
|
2,096 | 489,450 |
(2)
|
1 |
(3)(6)
|
491,547 | ||||||||||
Deborah M. Autor
|
1,060 | 725,850 |
(2)(3)(4)
|
— | 726,910 | |||||||||||
Laura J. Hamill
|
1,245 | 726,019 |
(2)(3)(5)
|
— | 727,264 | |||||||||||
J. Jay Lobell
|
1,295 | 489,450 |
(2)
|
— | 490,745 | |||||||||||
James B. Tananbaum
|
1,085 | 489,450 |
(2)
|
— | 490,535 | |||||||||||
Michael D. Varney
|
1,060 | 489,450 |
(2)
|
1 |
(3)(6)
|
490,511 |
(1) |
Represents the pro-rated fees for the non-employee directors who were appointed to serve as a director of Pardes on December 23, 2021 in connection with the Business Combination.
|
(2) |
On December 23, 2021, each non-employee director was granted an option award to purchase 75,000 shares of our Common Stock at an exercise price of $9.80 per share for board services. Subject to continuous service through the applicable vesting date, the option vests over 3 years in equal monthly installments with the first installment on the first month anniversary of the vesting commencement date. This option has a grant date fair value of $489,450, calculated in accordance with the provisions of FASB ASC Topic 718. The weighted-average assumptions used in the Black-Scholes option pricing model to determine the fair value of the stock options was assumed risk-free interest rate of 1.3%, assumed volatility of 78.3%, expected option life of 5.8 years and expected dividend yield of 0%. These amounts do not reflect the actual economic value that will be realized by our directors upon the vesting, exercise, or the sale of the share of common stock underlying such awards.
|
(3) |
Includes awards issued by Old Pardes in 2021 to such individuals prior to the consummation of the Business Combination. In connection with the Business Combination, and pursuant to the Merger Agreement, each outstanding option to purchase shares of Old Pardes common stock was converted into an option to purchase shares of our Common Stock equal to the number of shares subject to such option prior to the consummation of the Business Combination multiplied by 1.4078 (rounded down to the nearest share), with the per share exercise price equal to the exercise price divided by 1.4078 (rounded up to the nearest cent). Such converted options shall remain subject to the same terms and conditions as set forth under the applicable option award prior to the conversion, but was assumed and reissued under the 2021 Stock Option and Incentive Plan. In connection with the Business Combination, and pursuant to the Merger Agreement, outstanding restricted stock of Old Pardes common stock was converted in restricted shares of our Common Stock equal to the number of shares subject to the restricted stock award multiplied by 1.4078 with the converted repurchase price equal to the purchase price divided by 1.4078. Such restricted stock shall remain subject to the same terms and conditions set forth under the applicable restricted stock award agreement.
|
(4) |
As adjusted for the Business Combination as described in footnote (3), on August 1, 2021, Ms. Autor was granted an option to purchase 70,390 shares of our Common Stock at an exercise price of $6.95 for board services. Subject to continuous service through the applicable vesting date, the option vests over 4 years in equal monthly installments with the first installment vesting on the first month anniversary
|
of the vesting commencement date. This option has a grant date fair value of $236,400, calculated in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of the grant date fair value is included in Note 5 to Pardes’s financial statements included elsewhere in this prospectus. This amount does not reflect the actual economic value that will be realized by Ms. Autor upon the vesting, exercise, or the sale of the share of common stock underlying such award. |
(5) |
As adjusted for the Business Combination as described in footnote (3), on July 27, 2021, Ms. Hamill was granted an option to purchase 70,390 shares of our Common Stock at an exercise price of $6.95 for board services. Subject to continuous service through the applicable vesting date, the option vests over 4 years in equal monthly installments with the first installment vesting on the first month anniversary of the vesting commencement date. This option has a grant date fair value of $236,569, calculated in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of the grant date fair value is included in Note 5 to Pardes’s financial statements included elsewhere in this prospectus. This amount does not reflect the actual economic value that will be realized by Ms. Autor upon the vesting, exercise, or the sale of the share of common stock underlying such award.
|
(6) |
As adjusted for the Business Combination as described in footnote (3), Mr. Auerbach and Mr. Varney received 70,390 shares and 35,195 shares, respectively, of restricted stock awards during 2021 for board services. The amounts reported represent the aggregate grant date fair value of the restricted stock awards granted to such individuals during 2021, calculated in accordance with FASB ASC Topic 718. Such grant date fair values do not take into account any estimated forfeitures. The assumptions used in calculating the grant date fair value of the restricted stock awards reported in this column are set forth in Note 5 to Pardes’s financial statements included elsewhere in this prospectus. The amounts reported in this column reflect the accounting cost for these restricted stock awards and do not correspond to the actual economic value that may be received by our
non-employee
directors upon the vesting of the restricted stock awards or any sale of the underlying shares of Pardes common stock.
|
Annual Retainer for Board Membership
|
||||
Annual service on the board of directors
|
$ | 35,000 | ||
Additional retainer for annual service as
non-executive
chairperson
|
$ | 30,000 |
Additional Annual Retainer for Committee Membership
|
||||
Annual service as audit committee chairperson
|
$ | 15,000 | ||
Annual service as member of the audit committee (other than chair)
|
$ | 7,500 | ||
Annual service as compensation committee chairperson
|
$ | 10,000 | ||
Annual service as member of the compensation committee (other than chair)
|
$ | 5,000 | ||
Annual service as nominating and corporate governance committee chairperson
|
$ | 8,000 | ||
Annual service as member of the nominating and corporate governance committee (other than chair)
|
$ | 4,000 | ||
Annual service as science and technology committee chairperson
|
$ | 8,000 | ||
Annual service as member of the science and technology committee (other than chair)
|
$ | 4,000 |
• |
permit Pardes’s board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of control;
|
• |
provide that the authorized number of directors may be changed only by resolution of Pardes’s board of directors;
|
• |
provide that, subject to the rights of any series of preferred stock to elect directors, directors may be removed only with cause by the holders of at least 66
2/3
% of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors;
|
• |
provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;
|
• |
provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide advance notice in writing, and also specify requirements as to the form and content of a stockholder’s notice;
|
• |
provide that Special Meetings of Pardes’s stockholders may be called Pardes’s board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors;
|
• |
provide that Pardes’s board of directors will be divided into three classes of directors, with the classes to be as nearly equal as possible, and with the directors serving three-year terms, therefore making it more difficult for stockholders to change the composition of our board of directors; and
|
• |
not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose.
|
• |
each person who is known to be the beneficial owner of more than 5% of Pardes’s outstanding Common Stock immediately following the closing of the Business Combination;
|
• |
each of Pardes’s current executive officers and directors; and
|
• |
all executive officers and directors of Pardes as a group following the closing of the Business Combination.
|
Name and Address of Beneficial Owner
|
Number of
Shares
|
%
|
||||||
Directors and Officers:
|
||||||||
Uri A. Lopatin, M.D.
(1)
|
5,679,746 | 9.1 | ||||||
Heidi Henson
(2)
|
382,184 | * | ||||||
Lee D. Arnold, Ph.D.
(3)
|
2,815,585 | 4.5 | ||||||
Brian P. Kearney, PharmD
(4)
|
457,533 | * | ||||||
Sean P. Brusky
|
— | — | ||||||
Elizabeth H. Lacy
(5)
|
268,483 | * | ||||||
Philippe Tinmouth
|
— | — | ||||||
Mark Auerbach
(6)
|
74,556 | * | ||||||
Deborah M. Autor
(7)
|
14,431 | * | ||||||
Laura J. Hamill
(8)
|
14,431 | * | ||||||
J. Jay Lobell
(9)
|
3,595,431 | 5.8 | ||||||
Michael D. Varney, Ph.D.
(10)
|
74,556 | * | ||||||
James B. Tananbaum, M.D.
(11)
|
14,631,988 | 23.5 | ||||||
All Directors and Executive Officers as a group (13 individuals)
|
28,008,924 | 44.8 | ||||||
Five Percent Holders:
|
||||||||
Entities affiliated with FS Development Holdings II, LLC
(11)
|
14,627,822 | 23.4 | ||||||
Khosla Ventures
(12)
|
6,151,766 | 9.9 | ||||||
RA Capital Management. L.P.
(14)
|
4,691,115 | 7.5 | ||||||
GMF Pardes LLC
(9)
|
3,591,265 | 5.8 | ||||||
Certain funds and accounts advised or subadvised by T. Rowe Price Associates, Inc.
(13)
|
3,212,475 | 5.1 |
* |
Less than one percent.
|
(1) |
Uri A. Lopatin, M.D. and Lopatin Descendants’ Trust are the record holders, respectively, of 5,327,798 and 351,948 shares of Common Stock. Uri A. Lopatin, M.D. and Katherine Lopatin
are co-trustees of the
Lopatin Descendants’ Trust and have sole voting and investment discretion over the shares described above. At March 18, 2022, 2,815,585 shares remain subject to a right of repurchase.
|
(2) |
Consists of 316,753 restricted shares of Common Stock held by Ms. Henson, of which 186,974 shares remain subject to a right of repurchase at March 18, 2022 and 65,431 shares of Common Stock issuable to Ms. Henson pursuant to options exercisable within 60 days of January 17, 2022.
|
(3) |
Consists of 2,815,585 restricted shares of Common Stock held by Dr. Arnold, of which 1,525,109 shares remain subject to a right of repurchase at March 18, 2022.
|
(4) |
Consists of 457,533 restricted shares of Common Stock held by Dr. Kearney, of which 295,491 shares remain subject to a right of repurchase at March 18, 2022.
|
(5) |
Consists of 211,169 restricted shares of Common Stock held by Ms. Lacy, of which 136,380 shares remain subject to a right of repurchase at March 18, 2022 and 57,314 shares of Common Stock issuable to Ms. Lacy pursuant to options exercisable within 60 days of January 17, 2022.
|
(6) |
Consists of 70,390 restricted shares of Common Stock held by Mr. Auerbach, of which 49,860 shares remain subject to a right of repurchase at March 18, 2022 and 4,166 shares of Common Stock issuable to Mr. Auerbach pursuant to options exercisable within 60 days of January 17, 2022.
|
(7) |
Consists of 14,431 shares of Common Stock issuable to Ms. Autor pursuant to options exercisable within 60 days of January 17, 2022.
|
(8) |
Consists of 14,431 shares of Common Stock issuable to Ms. Hamill pursuant to options exercisable within 60 days of January 17, 2022.
|
(9) |
Consists of (i) 3,091,265 shares of Common Stock held by GMF Pardes LLC and (ii) 500,000 shares of Common Stock issued in the PIPE Investment. Mr. Lobell, in his capacity as managing member of GMF Pardes LLC, may be deemed to have sole voting and investment discretion over the shares described above. Mr. Lobell disclaims beneficial ownership of these shares except to the extent of any pecuniary interest therein. Also consists of 4,166 shares of Common Stock issuable to Mr. Lobell pursuant to options exercisable within 60 days of January 17, 2022.
|
(10) |
Consists of 70,390 restricted shares of Common Stock held by Dr. Varney, of which 46,927 shares remain subject to a right of repurchase at March 18, 2022 and 4,166 shares of Common Stock issuable to Mr. Varney pursuant to options exercisable within 60 days of January 17, 2022.
|
(11) |
FS Development Holdings II, LLC is the record holder of 5,543,750 shares of Common Stock. Foresite Capital Management V, LLC (“FCM V”), as the general partner of Foresite Capital Fund V, L.P. (“FCF V LP”), and Foresite Capital Opportunity Management V, LLC (“FCOM V”), as the general partner of Foresite Capital Opportunity Fund V, L.P. (“Opportunity V”), with FCF V LP and Opportunity V being the sole members of FS Development Holdings II, LLC, have voting and investment discretion with respect to the common stock held of record by FS Development Holdings II, LLC. Each of FCF V LP and Opportunity V was issued 500,000 shares of Common Stock in the PIPE Investment. FCF V LP and Opportunity V also received, respectively, 5,966,140 and 1,792,932 shares of Common Stock as Merger Consideration. In addition, each of FCF V LP and Opportunity V purchased 162,500 shares in a block trade. Dr. Tananbaum, in his capacity as managing member of each of FCM V and FCOM V, may be deemed to have sole voting and investment discretion over the shares described above. Each of FCM V, FCOM V, and Dr. Tananbaum disclaim beneficial ownership of these shares except to the extent of any pecuniary interest therein. With respect to Dr. Tananbaum only, also consists of 4,166 shares of Common Stock issuable to Dr. Tananbaum pursuant to options exercisable within 60 days of January 17, 2022.
|
(12) |
Consists of (i) 3,400,464 shares of Common Stock held by Khosla Ventures Seed D, LP (“Seed D”) and (ii) 2,751,302 shares of Common Stock held by Khosla Ventures VII, LP (“KV VII”). The general partner of Seed D is Khosla Ventures Seed Associates D, LLC (“KVSA D”). The general partner of KV VII is Khosla Ventures Associates VII, LLC (“KVA VII”). VK Services, LLC (“VK Services”), is the sole manager of KVSA D and KVA VII. Vinod Khosla is the managing member of VK Services. Each of Mr. Khosla, VK Services and KVSA D may be deemed to share voting and dispositive power over the shares held by Seed D. Mr. Khosla, VK Services and KVSA D disclaim beneficial ownership of the shares held by Seed D, except to the extent of their respective pecuniary interests therein. Each of Mr. Khosla, VK Services and KVA VII may be deemed to share voting and dispositive power over the shares held by KV VII. Mr. Khosla, VK Services and KVA VII disclaim beneficial ownership of such shares held by KV VII, except to the extent of their respective pecuniary interests therein. The address for Mr. Khosla, and each of the foregoing entities is 2128 Sand Hill Road, Menlo Park, California 94025.
|
(13) |
Based solely upon a Schedule 13G/A filed on January 10, 2022, by T. Rowe Price Associates, Inc. on behalf of T. Rowe Price Associates, Inc. and T. Rowe Price New Horizons Fund, Inc.
|
(14) |
Consists of (i) 2,691,115 shares of Common Stock held of record by RA Capital Healthcare Fund, L.P., and (ii) 2,000,000 shares of Common Stock purchased in the PIPE Investment by RA Capital Healthcare Fund, L.P. The address for the persons and entities set forth herein is 200 Berkeley Street, 18th Floor, Boston, MA 02116.
|
Securities Beneficially
Owned prior to the Offering |
Securities Being
Offered in the Offering |
Securities Beneficially
Owned After the Offered Securities are Sold |
||||||||||||||
Selling Securityholders
(1)
|
Shares of Common
Stock |
Shares of Common
Stock |
Shares of
Common Stock |
%
|
||||||||||||
Funds associated with Foresite Capital(*)
(2)
|
9,084,072 | 8,759,072 | 325,000 | 0.52 | % | |||||||||||
FS Development Holdings II, LLC (**)
(3)
|
5,543,750 | 5,543,750 | — | — | ||||||||||||
Daniel Dubin, MD (**)
(4)
|
30,000 | 30,000 | — | — | ||||||||||||
Owen Hughes (**)
(5)
|
30,000 | 30,000 | — | — | ||||||||||||
Deepa Pakianathan, Ph.D. (**)
(6)
|
30,000 | 30,000 | — | — | ||||||||||||
GMF Pardes LLC (*)
(7)
|
3,591,265 | 3,591,265 | — | — | ||||||||||||
RA Capital Healthcare Fund, L.P.
(8)
|
4,691,115 | 2,000,000 | 2,691,115 | 4.31 | % | |||||||||||
Certain funds and accounts advised or subadvised by T. Rowe Price Associates, Inc.
(9)
|
3,212,475 | 600,000 | 2,612,475 | 4.19 | % | |||||||||||
Gilead Sciences, Inc.
(10)
|
2,000,000 | 2,000,000 | — | — | ||||||||||||
Frazier Life Sciences IX, L.P.
(11)
|
2,457,507 | 1,000,000 | 1,457,507 | 2.34 | % | |||||||||||
Funds affiliated with Ecor1 Capital LLC
(12)
|
1,397,139 | 200,000 | 1,197,139 | 1.92 | % | |||||||||||
Funds affiliated with Monashee Investment Management LLC
(13)
|
300,000 | 200,000 | 100,000 | 0.16 | % | |||||||||||
Funds affiliated with Khosla Ventures (*)
(14)
|
6,151,766 | 6,151,766 | — | — | ||||||||||||
Uri A. Lopatin, M.D.(*)(+)
|
5,327,798 | 5,327,798 | — | — | ||||||||||||
Lopatin Descendants’ Trust(*)
|
351,948 | 351,948 | — | — | ||||||||||||
Lee Arnold(*)(+)
|
2,815,585 | 2,815,585 | — | — | ||||||||||||
Mark Auerbach(*)(+)
(15)
|
74,556 | 70,390 | 4,166 | (*** | ) | |||||||||||
Michael D. Varney, Ph.D.(*)(+)
(16)
|
74,556 | 70,390 | 4,166 | (*** | ) | |||||||||||
Brian Kearney(*)(+)
|
457,533 | 457,533 | — | — | ||||||||||||
Heidi Henson(*)(+)
(17)
|
382,184 | 316,753 | 65,431 | (*** | ) | |||||||||||
Elizabeth H. Lacy(*)(+)
(18)
|
268,483 | 211,169 | 57,314 | (*** | ) |
(*) |
These shares are subject to contractual lockup for 180 days following the Closing Date as described under “Certain Relationships and Related Person Transactions.”
|
(**) |
These shares are subject to various contractual lockup provisions of not less than 180 days following the Closing Date and up to one year following the Closing Date as described under “Certain Relationships and Related Person Transactions.”
|
(***) |
Less than one percent.
|
(+) |
These shares may only be sold to the extent the shares have vested and the repurchase option in favor of Pardes has lapsed.
|
(1) |
Unless otherwise noted, the business address of each of those listed in the table above is 2173 Salk Ave., Suite 250, PMB #052, Carlsbad, CA 92008.
|
(2) |
Consists of (i) 2,455,432 shares of Common Stock held of record by Foresite Capital Opportunity Fund V, L.P., of which 1,792,932 shares were received in connection with the Closing of the Business Combination, 500,000 shares were purchased in the PIPE Investment and 162,500 were purchased in the market prior to Closing, and (ii) 6,628,640 shares of Common Stock held of record by Foresite Capital Fund V, L.P., of which 5,966,140 were received in connection with the Closing of the Business Combination, 500,000 shares purchased in the PIPE Investment, and 162,500 shares were purchased in the market prior to Closing. The address of the funds associated with Foresite Capital is 900 Larkspur Landing Circle, Suite 150, Larkspur, California 94939.
|
(3) |
Consists of (i) 4,941,250 Founder Shares held of record by FS Development Holdings II, LLC and (ii) 602,500 Private Placement Shares held of record by FS Development Holdings II, LLC. The address of FS Development Holdings II, LLC, the Sponsor, is 900 Larkspur Landing Circle, Suite 150, Larkspur, California 94939.
|
(4) |
The address of Daniel Dubin, M.D. is 56 Radcliffe Road, Weston, MA 02493.
|
(5) |
The address of Owen Hughes is 31 Candy Hill Lane, Sudbury, MA 01776.
|
(6) |
The address of Deepa Pakianathan, Ph.D. is 145 Fallen Leaf Drive, Hillsborough, CA 94010.
|
(7) |
Consists of (i) 3,091,265 shares of Common Stock received in connection with the Closing of the Business Combination by GMF Pardes LLC and (ii) 500,000 shares purchased in the PIPE Investment by GMF Pardes LLC. The address of GMF Pardes, LLC is 650 Madison Ave., New York, NY 10022.
|
(8) |
Consists of (i) 2,691,115 shares of Common Stock held of record by RA Capital Healthcare Fund, L.P., and (ii) 2,000,000 shares of Common Stock purchased in the PIPE Investment by RA Capital Healthcare Fund, L.P. RA Capital Management, L.P. is the investment manager for RA Capital Healthcare Fund, L.P. (“RACHF”). The general partner of RA Capital Management, L.P. is RA Capital Management GP, LLC, of which Peter Kolchinsky and Rajeev Shah are the managing members. Each of Mr. Kolchinsky and Mr. Shah may be deemed to have voting and investment power over the shares held by RACHF. Mr. Kolchinsky and Mr. Shah disclaim beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address of RA Capital Healthcare Fund, L.P. is 200 Berkeley Street, 18th Floor, Boston, MA 02116.
|
(9) |
Consists of (i) 530,954 shares of Common Stock purchased in the PIPE Investment held by T. Rowe Price Health Sciences Fund, Inc., (ii) 45,107 shares of Common Stock purchased in the PIPE Investment held by TD Mutual Funds – TD Health Sciences Fund, (iii) 23,939 shares of Common Stock purchased in the PIPE Investment held by T. Rowe Price Health Sciences Portfolio, (iv) 1,237,291 beneficially owned by T. Rowe Price New Horizons Fund, Inc., and (v) 1,375,184 shares of Common Stock beneficially owned by T. Rose Price Associates, Inc. T. Rowe Price Associates, Inc. (“TRPA”) serves as investment adviser or subadviser with power to direct investments and/or sole power to vote the securities owned by the T. Rowe Accounts as well as securities owned by certain other individual and institutional investors. For purposes of reporting requirements of the Securities Exchange Act of 1934, TRPA may be deemed to be the beneficial owner of all of the shares of Common Stock purchased in the PIPE Investment; however, TRPA expressly disclaims that it is, in fact, the beneficial owner of such securities. T. Rowe Price Investment Services, Inc. (“TRPIS”), a registered broker-dealer (and FINRA member), is a subsidiary of TRPA. TRPIS was formed primarily for the limited purpose of acting as the principal underwriter and distributor of shares of the funds in the T. Rowe Price fund family and complements the other services provided to shareholders of the T. Rowe Price funds. TRPA is the wholly owned subsidiary of T. Rowe Price Group, Inc., which is a publicly traded financial services holding company. The address of each entity is T. Rowe Price Associates, Inc., 100 East Pratt Street, Baltimore, MD 21202.
|
(10) |
The address of Gilead Sciences, Inc. is 333 Lakeside Drive, Foster City, CA 94404.
|
(11) |
Consists of 1,000,00 shares of Common Stock purchased by Frazier Life Sciences IX, L.P. in the PIPE Investment and 1,457,507 shares beneficially owned by funds affiliated with Frazier Life Sciences. The address of Frazier Life Sciences IX, L.P. is 70 Willow Road #200, Menlo Park, CA 94025.
|
(12) |
Consists of (i) 1,197,139 shares of Common Stock beneficially owned by funds affiliated with EcoR1 Capital LLC, (ii) 173,840 shares of Common Stock purchased in the PIPE Investment by EcoR1 Capital Fund Qualified, L.P., and (iii) 26,160 shares of Common Stock purchased in the PIPE Investment by EcoR1 Capital Fund, L.P. The address of the funds associated with EcoR1 Capital LLC is 357 Tehama Street #3, San Francisco, CA 94103.
|
(13) |
Consists of (i) 48,458 shares of Common Stock purchased in the PIPE Investment by BEMAP Master Fund Ltd; (ii) 9,692 shares of Common Stock purchased in the PIPE Investment by Monashee Managed Account SP; (iii) 6,736 shares of Common Stock purchased in the PIPE Investment by Bespoke Alpha MAC MIM LP; (iv) 8,203 shares of Common Stock purchased in the PIPE Investment by SFL SPV I LLC; (v) 54,834 shares of Common Stock purchased in the PIPE Investment by DS Liquid Div RVA MON LLC; (vi) 42,485 shares of Common Stock purchased in the PIPE Investment by Monashee Solitario Fund LP; and (vii) 29,592 shares of Common Stock purchased in the PIPE Investment by Monashee Pure Alpha SPV I LP. The address of the funds associated with Monashee Investment Management, LLC is 75 Park Plaza, 2nd Floor, Boston, MA 02116.
|
(14) |
Consists of (i) 3,400,464 shares of Common Stock received in connection with the Closing of the Business Combination by Khosla Ventures Seed D, LP and (ii) 2,751,302 shares of Common Stock received in connection with the Closing of the Business Combination by Khosla Ventures VII, LP. The address of the funds associated with Khosla Ventures is 2128 Sand Hill Rd., Menlo Park, CA 94025.
|
(15) |
Consists of 70,390 restricted shares of Common Stock held by Mr. Auerbach, of which 49,860 shares remain subject to a right of repurchase at March 18, 2022 and 4,166 shares of Common Stock issuable to Mr. Auerbach pursuant to options exercisable within 60 days of January 17, 2022.
|
(16) |
Consists of 70,390 restricted shares of Common Stock held by Dr. Varney, of which 46,927 shares remain subject to a right of repurchase at March 18, 2022 and 4,166 shares of Common Stock issuable to Mr. Varney pursuant to options exercisable within 60 days of January 17, 2022.
|
(17) |
Consists of 316,753 restricted shares of Common Stock held by Ms. Henson, of which 186,974 shares remain subject to a right of repurchase at March 18, 2022 and 65,431 shares of Common Stock issuable to Ms. Henson pursuant to options exercisable within 60 days of January 17, 2022.
|
(18) |
Consists of 211,169 restricted shares of Common Stock held by Ms. Lacy, of which 136,380 shares remain subject to a right of repurchase at March 18, 2022 and 57,314 shares of Common Stock issuable to Ms. Lacy pursuant to options exercisable within 60 days of January 17, 2022.
|
• |
financial institutions or financial services entities;
|
• |
broker-dealers;
|
• |
governments or agencies or instrumentalities thereof;
|
• |
regulated investment companies;
|
• |
real estate investment trusts;
|
• |
expatriates or former long-term residents of the U.S.;
|
• |
persons that actually or constructively own five percent or more of our voting shares;
|
• |
insurance companies;
|
• |
dealers or traders subject to a
mark-to-market
|
• |
persons holding the securities as part of a “straddle,” hedge, integrated transaction or similar transaction;
|
• |
U.S. holders (as defined below) whose functional currency is not the U.S. dollar;
|
• |
partnerships or other pass-through entities for U.S. federal income tax purposes and any beneficial owners of such entities; and
|
• |
tax-exempt
entities.
|
• |
an individual who is a citizen or resident of the United States;
|
• |
a corporation (or other entity taxable as a corporation) organized in or under the laws of the United States, any state thereof or the District of Columbia; or
|
• |
an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or
|
• |
a trust, if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons (as defined in the Code) have authority to control all substantial decisions of the trust or (ii) it has a valid election in effect under Treasury Regulations to be treated as a U.S. person.
|
• |
a
non-resident
alien individual (other than certain former citizens and residents of the U.S. subject to U.S. tax as expatriates);
|
• |
a foreign corporation or
|
• |
an estate or trust that is not a U.S. holder;
|
• |
the gain is effectively connected with the conduct of a trade or business by the
Non-U.S.
holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the
Non-U.S.
holder); or
|
• |
we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the
Non-U.S.
holder held our common stock, and, in the case where shares of our common stock are regularly traded on an established securities market, the
Non-U.S.
holder has owned, directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period preceding the disposition or such
Non-U.S.
holder’s holding period for the shares of our common stock. There can be no assurance that our common stock will be treated as regularly traded on an established securities market for this purpose.
|
• |
purchases by a broker-dealer as principal and resale by such broker-dealer for its own account pursuant to this prospectus;
|
• |
ordinary brokerage transactions and transactions in which the broker solicits purchasers;
|
• |
block trades in which the broker-dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
• |
an
over-the-counter
|
• |
through trading plans entered into by a Selling Securityholder pursuant to Rule
10b5-1
under the Exchange Act that are in place at the time of an offering pursuant to this prospectus and any applicable prospectus supplement hereto that provide for periodic sales of their securities on the basis of parameters described in such trading plans;
|
• |
through one or more underwritten offerings on a firm commitment or best efforts basis;
|
• |
settlement of short sales entered into after the date of this prospectus;
|
• |
agreements with broker-dealers to sell a specified number of the securities at a stipulated price per share or warrant;
|
• |
in “at the market” offerings, as defined in Rule 415 under the Securities Act, at negotiated prices, at prices prevailing at the time of sale or at prices related to such prevailing market prices, including sales made directly on a national securities exchange or sales made through a market maker other than on an exchange or other similar offerings through sales agents;
|
• |
directly to purchasers, including through a specific bidding, auction or other process or in privately negotiated transactions;
|
• |
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
• |
through a combination of any of the above methods of sale; or
|
• |
any other method permitted pursuant to applicable law.
|
• |
the specific securities to be offered and sold;
|
• |
the names of the selling securityholders;
|
• |
the respective purchase prices and public offering prices, the proceeds to be received from the sale, if any, and other material terms of the offering;
|
• |
settlement of short sales entered into after the date of this prospectus;
|
• |
the names of any participating agents, broker-dealers or underwriters; and
|
• |
any applicable commissions, discounts, concessions and other items constituting compensation from the selling securityholders.
|
Page
|
||||
Condensed Financial Statements
|
||||
F-2
|
||||
F-3
|
||||
F-4
|
||||
F-5
|
||||
F-6
|
||||
Audited Financial Statements of FS Development Corp. II:
|
||||
F-23
|
||||
F-24
|
||||
F-25
|
||||
F-26
|
||||
F-27
|
||||
F-28
|
Financial Statements of Pardes Biosciences, Inc.:
|
||||
F-37
|
||||
F-38
|
||||
F-39
|
||||
F-40
|
||||
F-41
|
||||
F-42
|
September 30,
2021 |
December 31,
2020 |
|||||||
(Unaudited)
|
||||||||
Assets:
|
||||||||
Current assets:
|
||||||||
Cash
|
$ | 48,330 | $ | 8,800 | ||||
Prepaid expenses
|
522,202 | — | ||||||
|
|
|
|
|||||
Total current assets
|
570,532 | 8,800 | ||||||
Deferred offering cost
|
— | 82,900 | ||||||
Investments held in Trust Account
|
201,262,186 | — | ||||||
|
|
|
|
|||||
Total Assets
|
$
|
201,832,718
|
|
$
|
91,700
|
|
||
|
|
|
|
|||||
Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit):
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 183,911 | $ | 1,032 | ||||
Accrued expenses
|
2,164,500 | 16,700 | ||||||
Franchise tax payable
|
149,091 | — | ||||||
Note payable
|
— | 50,000 | ||||||
|
|
|
|
|||||
Total current liabilities
|
2,497,502 | 67,732 | ||||||
Deferred underwriting commissions
|
7,043,750 | — | ||||||
|
|
|
|
|||||
Total liabilities
|
9,541,252 | 67,732 | ||||||
Commitments and Contingencies
|
||||||||
Class A common stock subject to possible redemption, $0.0001 par value; 20,125,000 and
-0-
|
201,250,000 | — | ||||||
Stockholders’ Equity (Deficit):
|
||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding
|
— | — | ||||||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 602,500 and
-0-
|
60 | — | ||||||
Class B common stock, $0.0001 par value; 10,000,000 shares authorized; 5,031,250 shares issued and outstanding as of September 30, 2021 and December 31, 2020
|
503 | 503 | ||||||
Additional
paid-in
capital
|
— | 24,497 | ||||||
Accumulated deficit
|
(8,959,097 | ) | (1,032 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity (deficit)
|
(8,958,534 | ) | 23,968 | |||||
|
|
|
|
|||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)
|
$
|
201,832,718
|
|
$
|
91,700
|
|
||
|
|
|
|
For the
Three Months Ended September 30, 2021 |
For the
Nine Months Ended September 30, 2021 |
For the
Period From August 21, 2020 (inception) through September 30, 2020 |
||||||||||
General and administrative expenses
|
$ | 1,142,579 | $ | 3,334,485 | $ | 1,032 | ||||||
General and administrative expenses – related party
|
30,000 | 80,000 | — | |||||||||
Franchise tax expense
|
50,411 | 149,723 | — | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations
|
(1,222,990 | ) | (3,564,208 | ) | $ | (1,032 | ) | |||||
Income earned from investments held in Trust Account
|
5,073 | 12,186 | — | |||||||||
|
|
|
|
|
|
|||||||
Net loss
|
$ | (1,217,917 | ) | $ | (3,552,022 | ) | $ | (1,032 | ) | |||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding of Class A common stock, basic and diluted
|
20,727,500 | 17,083,104 | — | |||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net loss per share, Class A common stock
|
$ | (0.05 | ) | $ | (0.16 | ) | $ | — | ||||
|
|
|
|
|
|
|||||||
Weighted average shares outstanding of Class B common stock, basic and diluted
|
5,031,250 | 4,915,865 | 4,375,000 | |||||||||
|
|
|
|
|
|
|||||||
Basic and diluted net loss per share, Class B common stock
|
$ | (0.05 | ) | $ | (0.16 | ) | $ | (0.00 | ) | |||
|
|
|
|
|
|
For the Three and Nine months Ended September 30, 2021
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
Capital |
Accumulated
Deficit |
Total
Stockholders’ Equity (Deficit) |
|||||||||||||||||||||||||
Class A
|
Class B
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance – December 31, 2020
|
|
—
|
|
$
|
—
|
|
|
5,031,250
|
|
$
|
503
|
|
$
|
24,497
|
|
$
|
(1,032
|
)
|
$
|
23,968
|
|
|||||||
Sale of Private Placement Shares
|
602,500 | 60 | — | — | 6,024,940 | — | 6,025,000 | |||||||||||||||||||||
Accretion of Class A common stock subject to possible redemption amount
|
— | — | — | — | (6,049,437 | ) | (5,406,043 | ) | (11,455,480 | ) | ||||||||||||||||||
Net loss
|
— | — | — | — | — | (168,193 | ) | (168,193 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – March 31, 2021 (unaudited), as restated
|
|
602,500
|
|
|
60
|
|
|
5,031,250
|
|
|
503
|
|
|
—
|
|
|
(5,575,268
|
)
|
|
(5,574,705
|
)
|
|||||||
Net loss
|
— | — | — | — | — | (2,165,912 | ) | (2,165,912 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – June 30, 2021
(unaudited), as restated
|
|
602,500
|
|
|
60
|
|
|
5,031,250
|
|
|
503
|
|
|
—
|
|
|
(7,741,180
|
)
|
|
(7,740,617
|
)
|
|||||||
Net loss
|
— | — | — | — | — | (1,217,917 | ) | (1,217,917 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – September 30, 2021 (unaudited)
|
|
602,500
|
|
$
|
60
|
|
|
5,031,250
|
|
$
|
503
|
|
$
|
—
|
|
$
|
(8,959,097
|
)
|
$
|
(8,958,534
|
)
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
For the Period from August 21, 2020 (inception) through September 30, 2020
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-In
Capital |
Accumulated
Deficit |
Total
Stockholders’ Equity |
|||||||||||||||||||||||||
Class A
|
Class B
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance – August 21, 2020 (inception)
|
|
—
|
|
$
|
—
|
|
|
5,031,250
|
|
$
|
503
|
|
$
|
24,497
|
|
$
|
—
|
|
$
|
25,000
|
|
|||||||
Issuance of Class B common stock to Sponsor
|
— | — | — | — | — | — | — | |||||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,032 | ) | (1,032 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – September 30, 2020 (unaudited)
|
|
—
|
|
$
|
—
|
|
|
5,031,250
|
|
$
|
503
|
|
$
|
24,497
|
|
$
|
(1,032
|
)
|
$
|
23,968
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Nine Months Ended September 30, 2021 |
For the
Period From August 21, 2020 (inception) through September 30, 2020 |
|||||||
Cash Flows from Operating Activities:
|
||||||||
Net loss
|
$ | (3,552,022 | ) | $ | (1,032 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Income earned from investments held in Trust Account
|
(12,186 | ) | — | |||||
Changes in operating assets and liabilities:
|
||||||||
Prepaid expenses
|
(522,202 | ) | — | |||||
Franchise tax payable
|
149,091 | — | ||||||
Accounts payable
|
57,879 | 9,032 | ||||||
Accrued expenses
|
2,119,500 | |||||||
|
|
|
|
|||||
Net cash used in operating activities
|
(1,759,940 | ) | 8,000 | |||||
|
|
|
|
|||||
Cash Flows from Investing Activities
|
||||||||
Cash deposited in Trust Account
|
(201,250,000 | ) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities
|
(201,250,000 | ) | — | |||||
|
|
|
|
|||||
Cash Flows from Financing Activities:
|
||||||||
Proceeds from note payable to related party
|
150,000 | 50,000 | ||||||
Repayment of note payable to related party
|
(200,000 | ) | — | |||||
Proceeds received from initial public offering, gross
|
201,250,000 | — | ||||||
Proceeds received from private placement
|
6,025,000 | — | ||||||
Offering costs paid
|
(4,175,530 | ) | (41,200 | ) | ||||
|
|
|
|
|||||
Net cash provided by financing activities
|
203,049,470 | 8,800 | ||||||
|
|
|
|
|||||
Net change in cash
|
39,530 | 16,800 | ||||||
Cash – beginning of the period
|
8,800 | — | ||||||
|
|
|
|
|||||
Cash – end of the period
|
$
|
48,330
|
|
$
|
16,800
|
|
||
|
|
|
|
|||||
Supplemental disclosure of noncash activities:
|
||||||||
Offering costs included in accounts payable
|
$ | 125,000 | $ | — | ||||
Offering costs included in accrued expenses
|
$ | 28,300 | $ | 4,830 | ||||
Deferred underwriting commissions in connection with the initial public offering
|
$ | 7,043,750 | $ | — | ||||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B common stock
|
$ | — | $ | 25,000 |
As of February 19, 2021
|
As Previously
Reported |
Adjustment
|
As Restated
|
|||||||||
Total assets
|
$
|
203,119,261
|
|
$
|
203,119,261
|
|
||||||
Total liabilities
|
$
|
7,351,899
|
|
$
|
7,351,899
|
|
||||||
Class A common stock subject to possible redemption
|
190,767,360 | 10,482,640 | 201,250,000 | |||||||||
Preferred stock
|
— | — | — | |||||||||
Class A common stock
|
165 | (105 | ) | 60 | ||||||||
Class B common stock
|
503 | — | 503 | |||||||||
Additional
paid-in
capital
|
5,051,492 | (5,051,492 | ) | — | ||||||||
Accumulated deficit
|
(52,158 | ) | (5,430,983 | ) | (5,483,201 | ) | ||||||
Total stockholders’ equity (deficit)
|
$
|
5,000,002
|
|
$
|
(10,482,640
|
)
|
$
|
(5,482,638
|
)
|
|||
|
|
|
|
|
|
|||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)
|
$
|
203,119,261
|
|
$
|
—
|
|
$
|
203,119,261
|
|
|||
|
|
|
|
|
|
As of March 31, 2021
|
As Previously
Reported |
Adjustment
|
As Restated
|
|||||||||
Total assets
|
$
|
202,959,356
|
|
$
|
202,959,356
|
|
||||||
Total liabilities
|
$
|
7,284,061
|
|
$
|
7,284,061
|
|
||||||
Class A common stock subject to possible redemption
|
190,675,290 | 10,574,710 | 201,250,000 | |||||||||
Preferred stock
|
— | — | — | |||||||||
Class A common stock
|
166 | (106 | ) | 60 | ||||||||
Class B common stock
|
503 | — | 503 | |||||||||
Additional
paid-in
capital
|
5,168,561 | (5,168,561 | ) | — | ||||||||
Accumulated deficit
|
(169,225 | ) | (5,405,983 | ) | (5,575,268 | ) | ||||||
Total stockholders’ equity (deficit)
|
$
|
5,000,005
|
|
$
|
(10,574,710
|
)
|
$
|
(5,574,705
|
)
|
|||
|
|
|
|
|
|
|||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)
|
$
|
202,959,356
|
|
$
|
—
|
|
$
|
202,959,356
|
|
|||
|
|
|
|
|
|
Three Months Ended March 31, 2021
|
||||||||||||
As Previously
Reported |
Adjustment
|
As Restated
|
||||||||||
Supplemental Disclosure of Noncash Financing Activities:
|
||||||||||||
Initial value of Class A common stock subject to possible redemption
|
$ | 190,767,360 | $ | (190,767,360 | ) | $ | — | |||||
Change in value of Class A common stock subject to possible redemption
|
$ | (92,070 | ) | $ | 92,070 | $ | — |
As of June 30, 2021
|
As Previously
Reported |
Adjustment
|
As Restated
|
|||||||||
Total assets
|
$
|
202,246,887
|
|
$
|
202,246,887
|
|
||||||
Total liabilities
|
$
|
8,737,504
|
|
$
|
8,737,504
|
|
||||||
Class A common stock subject to possible redemption
|
188,509,380 | 12,740,620 | 201,250,000 | |||||||||
Preferred stock
|
— | — | — | |||||||||
Class A common stock
|
188 | (128 | ) | 60 | ||||||||
Class B common stock
|
503 | — | 503 | |||||||||
Additional
paid-in
capital
|
7,334,449 | (7,334,449 | ) | — | ||||||||
Accumulated deficit
|
(2,335,137 | ) | (5,405,983 | ) | (7,741,180 | ) | ||||||
Total stockholders’ equity (deficit)
|
$
|
5,000,003
|
|
$
|
(12,740,620
|
)
|
$
|
(7,740,617
|
)
|
|||
|
|
|
|
|
|
|||||||
Total Liabilities, Class A Common Stock Subject to Possible Redemption and Stockholders’ Equity (Deficit)
|
$
|
202,246,887
|
|
$
|
—
|
|
$
|
202,246,887
|
|
|||
|
|
|
|
|
|
Six Months Ended June 30, 2021
|
||||||||||||
As Previously
Reported |
Adjustment
|
As Restated
|
||||||||||
Supplemental Disclosure of Noncash Financing Activities:
|
||||||||||||
Initial value of Class A common stock subject to possible redemption
|
$ | 190,767,360 | $ | (190,767,360 | ) | $ | — | |||||
Change in value of Class A common stock subject to possible redemption
|
$ | (2,257,980 | ) | $ | 2,257,980 | $ | — |
Earnings Per Share
|
||||||||||||
As Previously
Reported |
Adjustment
|
As Restated
|
||||||||||
Three Months Ended March 31, 2021
|
||||||||||||
Net loss
|
$ | (168,193 | ) | $ | — | $ | (168,193 | ) | ||||
Weighted average shares outstanding – Class A common stock
|
20,727,500 | (11,054,667 | ) | 9,672,833 | ||||||||
Basic and diluted earnings per share – Class A common stock
|
$ | — | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Weighted average shares outstanding – Class B common stock
|
4,681,250 | 4,681,250 | ||||||||||
Basic and diluted earnings per share – Class B common stock
|
$ | (0.04 | ) | $ | 0.03 | $ | (0.01 | ) |
Earnings Per Share
|
||||||||||||
As Previously
Reported |
Adjustment
|
As Restated
|
||||||||||
Three Months Ended June 30, 2021
|
||||||||||||
Net loss
|
$ | (2,165,912 | ) | $ | — | $ | (2,165,912 | ) | ||||
Weighted average shares outstanding – Class A common stock
|
20,125,000 | 602,500 | 20,727,500 | |||||||||
Basic and diluted earnings per share – Class A common stock
|
$ | — | $ | (0.08 | ) | $ | (0.08 | ) | ||||
Weighted average shares outstanding – Class B common stock
|
5,633,750 | 5,031,250 | ||||||||||
Basic and diluted earnings per share – Class B common stock
|
$ | (0.38 | ) | $ | 0.30 | $ | (0.08 | ) | ||||
Earnings Per Share
|
||||||||||||
As Previously
Reported |
Adjustment
|
As Restated
|
||||||||||
Six Months Ended June 30, 2021
|
||||||||||||
Net loss
|
$ | (2,334,105 | ) | $ | — | $ | (2,334,105 | ) | ||||
Weighted average shares outstanding – Class A common stock
|
20,125,000 | (4,894,296 | ) | 15,230,704 | ||||||||
Basic and diluted earnings per share – Class A common stock
|
$ | — | $ | (0.12 | ) | $ | (0.12 | ) | ||||
Weighted average shares outstanding – Class B common stock
|
5,299,938 | 4,857,217 | ||||||||||
Basic and diluted earnings per share – Class B common stock
|
$ | (0.44 | ) | $ | 0.32 | $ | (0.12 | ) |
• |
Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;
|
• |
Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and
|
• |
Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
For the Three Months Ended
September 30, 2021 |
For the Nine Months Ended
September 30, 2021 |
|||||||||||||||
Class A
|
Class B
|
Class A
|
Class B
|
|||||||||||||
Basic and diluted net loss per ordinary share:
|
||||||||||||||||
Numerator:
|
||||||||||||||||
Allocation of net loss
|
$ | (980,031 | ) | $ | (237,886 | ) | $ | (2,758,291 | ) | $ | (793,731 | ) | ||||
Denominator:
|
||||||||||||||||
Basic and diluted weighted average ordinary shares outstanding
|
20,727,500 | 5,031,250 | 17,083,104 | 4,915,865 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted net loss per ordinary share
|
$ | (0.05 | ) | $ | (0.05 | ) | $ | (0.16 | ) | $ | (0.16 | ) | ||||
|
|
|
|
|
|
|
|
For the Period From
August 21, 2020 (inception) through September 30, 2020 |
||||||||
Class A
|
Class B
|
|||||||
Basic and diluted net loss per ordinary share:
|
||||||||
Numerator:
|
||||||||
Allocation of net loss
|
$ | — | $ | (1,032 | ) | |||
Denominator:
|
||||||||
Basic and diluted weighted average ordinary shares outstanding
|
— | 4,375,000 | ||||||
|
|
|
|
|||||
Basic and diluted net loss per ordinary share
|
$ | — | $ | (0.00 | ) | |||
|
|
|
|
Gross proceeds from Initial Public Offering
|
$ | 201,250,000 | ||
Less:
|
||||
Offering costs allocated to Class A common stock subject to possible redemption
|
(11,455,480 | ) | ||
Plus:
|
||||
Accretion of carrying value to redemption value
|
11,455,480 | |||
|
|
|||
Class A common stock subject to possible redemption
|
$ | 201,250,000 | ||
|
|
Description
|
Quoted
Prices in Active Markets (Level 1) |
Significant
Other Observable Inputs (Level 2) |
Significant
Other Unobservable Inputs (Level 3) |
|||||||||
Investments held in Trust Account – money market funds
|
$ | 201,262,131 | $ | — | $ | — |
Assets:
|
||||
Current assets:
|
||||
Cash
|
$ | 8,800 | ||
|
|
|||
Total current assets
|
8,800 | |||
Deferred offering costs associated with proposed public offering
|
82,900 | |||
|
|
|||
Total Assets
|
$
|
91,700
|
|
|
|
|
|||
Liabilities and Stockholder’s Equity:
|
||||
Current liabilities:
|
||||
Accounts payable
|
$ | 1,032 | ||
Accrued expenses
|
16,700 | |||
Note payable – related party
|
50,000 | |||
|
|
|||
Total current liabilities
|
67,732 | |||
|
|
|||
Commitments and Contingencies
|
||||
Stockholder’s Equity:
|
||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;
none issued and outstanding |
— | |||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized;
none issued and outstanding |
— | |||
Class B common stock, $0.0001 par value; 10,000,000 shares authorized;
2,875,000 shares issued and outstanding
(1)
|
288 | |||
Additional
paid-in
capital
|
24,712 | |||
Accumulated deficit
|
(1,032 | ) | ||
|
|
|||
Total stockholder’s equity
|
23,968 | |||
|
|
|||
Total Liabilities and Stockholder’s Equity
|
$
|
91,700
|
|
|
|
|
(1) |
This number includes up to 375,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
General and administrative expenses
|
$ | 1,032 | ||
|
|
|||
Net loss
|
$ | (1,032 | ) | |
|
|
|||
Weighted average shares outstanding, basic and diluted
(1)
|
2,500,000 | |||
|
|
|||
Basic and diluted net loss per share
|
$ | (0.00 | ) | |
|
|
(1) |
This number excludes an aggregate of up to 375,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
Common Stock
|
Additional
Paid-In
Capital |
Accumulated
Deficit |
Total
Stockholder’s Equity |
|||||||||||||||||||||||||
Class A
|
Class B
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||||||
Balance – August 21, 2020 (inception)
|
|
—
|
|
$ | — |
|
—
|
|
$ | — | $ | — | $ | — | $ | — | ||||||||||||
Issuance of Class B common stock to Sponsor
(1)
|
— | — | 2,875,000 | 288 | 24,712 | — | 25,000 | |||||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,032 | ) | (1,032 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance – December 31, 2020
|
|
—
|
|
$
|
—
|
|
|
2,875,000
|
|
$
|
288
|
|
$
|
24,712
|
|
$
|
(1,032
|
)
|
$
|
23,968
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
This number includes up to 375,000 shares of Class B common stock subject to forfeiture if the over-allotment option is not exercised in full or in part by the underwriters.
|
Cash Flows from Operating Activities:
|
||||
Net loss
|
$ | (1,032 | ) | |
Changes in operating assets and liabilities:
|
||||
Accounts payable
|
1,032 | |||
|
|
|||
Net cash used in operating activities
|
— | |||
|
|
|||
Cash Flows from Financing Activities:
|
||||
Proceeds from note payable to related party
|
50,000 | |||
Payment of deferred offering costs
|
(41,200 | ) | ||
|
|
|||
Net cash provided by financing activities
|
8,800 | |||
|
|
|||
Net change in cash
|
8,800 | |||
Cash – beginning of the period
|
— | |||
|
|
|||
Cash – end of the period
|
$
|
8,800
|
|
|
|
|
|||
Supplemental disclosure of noncash activities:
|
||||
Deferred offering costs included in accrued expenses
|
$ | 16,700 | ||
Deferred offering costs paid by Sponsor in exchange for issuance of Class B common stock
|
$ | 25,000 |
DECEMBER 31,
2020 |
SEPTEMBER 30,
2021 |
|||||||
(unaudited) | ||||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 3,410 | $ | 26,384 | ||||
Prepaid expenses and other current assets
|
194 | 676 | ||||||
|
|
|
|
|||||
Total current assets
|
3,604 | 27,060 | ||||||
Other assets
|
— | 1,521 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 3,604 | $ | 28,581 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Deficit
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 1,394 | $ | 2,747 | ||||
Accrued expenses
|
408 | 3,224 | ||||||
Simple agreements for future equity (SAFE)
|
14,808 | — | ||||||
|
|
|
|
|||||
Total current liabilities
|
16,610 | 5,971 | ||||||
|
|
|
|
|||||
Total liabilities
|
16,610 | 5,971 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 7)
|
||||||||
Convertible preferred stock, $0.00001 par value; no shares authorized at December 31, 2020 and 13,923,367 shares authorized at September 30, 2021 (unaudited); no shares issued and outstanding at December 31, 2020 and 13,923,356 shares issued and outstanding at September 30, 2021 (unaudited); liquidation preference of $0 and $51,615 at December 31, 2020 and September 30, 2021 (unaudited), respectively
|
— | 59,132 | ||||||
Stockholders’ deficit:
|
||||||||
Common stock, $0.00001 par value; 10,000,000 shares authorized at December 31, 2020 and 25,187,755 shares authorized at September 30, 2021 (unaudited); 6,859,000 shares issued and no shares outstanding at December 31, 2020 and 6,935,000 shares issued and 2,380,715 shares outstanding at September 30, 2021 (unaudited)
|
— | — | ||||||
Additional
paid-in
capital
|
— | 655 | ||||||
Accumulated deficit
|
(13,006 | ) | (37,177 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit
|
(13,006 | ) | (36,522 | ) | ||||
|
|
|
|
|||||
Total liabilities and stockholders’ deficit
|
$ | 3,604 | $ | 28,581 | ||||
|
|
|
|
FOR THE PERIOD
FEBRUARY 27, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020 |
FOR THE PERIOD
FEBRUARY 27, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020 |
NINE MONTHS
ENDED SEPTEMBER 30, 2021 |
||||||||||
(unaudited)
|
||||||||||||
Operating expenses:
|
||||||||||||
Research and development
|
$ | 4,563 | $ | 2,197 | $ | 17,792 | ||||||
General and administrative
|
750 | 583 | 6,389 | |||||||||
|
|
|
|
|
|
|||||||
Total operating expenses
|
5,313 | 2,780 | 24,181 | |||||||||
|
|
|
|
|
|
|||||||
Loss from operations
|
(5,313 | ) | (2,780 | ) | (24,181 | ) | ||||||
Other income (expense):
|
||||||||||||
Interest income
|
— | — | 10 | |||||||||
Change in fair value of SAFE liability
|
(7,693 | ) | (885 | ) | — | |||||||
|
|
|
|
|
|
|||||||
Total other expense
|
(7,693 | ) | (885 | ) | 10 | |||||||
|
|
|
|
|
|
|||||||
Net loss and comprehensive loss
|
$ | (13,006 | ) | $ | (3,665 | ) | $ | (24,171 | ) | |||
|
|
|
|
|
|
|||||||
Net loss per share, basic and diluted
|
|
|
|
|
|
|
$ | (16.52 | ) | |||
|
|
|||||||||||
Weighted-average common shares outstanding, basic and diluted
|
1,463,172 | |||||||||||
|
|
CONVERTIBLE
PREFERRED STOCK |
COMMON STOCK
|
ADDITIONAL
PAID-IN
CAPITAL |
ACCUMULATED
DEFICIT |
TOTAL
STOCKHOLDERS’ DEFICIT |
||||||||||||||||||||||||
SHARES
|
AMOUNT
|
SHARES
|
AMOUNT
|
|||||||||||||||||||||||||
Balance at February 27, 2020 (inception)
|
— | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Net loss
|
— | — | — | — | — | (13,006 | ) | (13,006 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at December 31, 2020
|
— | — | — | — | — | (13,006 | ) | (13,006 | ) | |||||||||||||||||||
Issuance of Series A convertible preferred stock for cash, net of issuance costs of $176 (unaudited)
|
9,771,414 | 44,324 | — | — | — | — | — | |||||||||||||||||||||
Conversion of SAFE agreements into shares of convertible preferred stock (unaudited)
|
4,151,942 | 14,808 | — | — | — | — | — | |||||||||||||||||||||
Vesting of restricted common stock (unaudited)
|
— | — | 2,379,715 | — | — | — | — | |||||||||||||||||||||
Exercise of common stock options (unaudited)
|
— | — | 1,000 | — | 5 | — | 5 | |||||||||||||||||||||
Stock-based compensation (unaudited)
|
— | — | — | — | 650 | — | 650 | |||||||||||||||||||||
Net loss (unaudited)
|
— | — | — | — | — | (24,171 | ) | (24,171 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2021
|
13,923,356 | $ | 59,132 | 2,380,715 | $ | — | $ | 655 | $ | (37,177 | ) | $ | (36,522 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at February 27, 2020 (inception)
|
— | $ | — | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||
Net loss (unaudited)
|
— | — | — | — | — | (3,665 | ) | (3,665 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance at September 30, 2020 (unaudited)
|
— | $ | — | — | $ | — | $ | — | $ | (3,665 | ) | $ | (3,665 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR THE PERIOD
FEBRUARY 27, 2020 (INCEPTION) THROUGH DECEMBER 31, 2020 |
FOR THE PERIOD
FEBRUARY 27, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020 |
NINE MONTHS
ENDED SEPTEMBER 30, 2021 |
||||||||||
(unaudited)
|
||||||||||||
Operating activities:
|
||||||||||||
Net loss
|
$ | (13,006 | ) | $ | (3,665 | ) | $ | (24,171 | ) | |||
Adjustments to reconcile net loss to cash used in operating activities:
|
||||||||||||
Stock-based compensation
|
— | — | 650 | |||||||||
Change in fair value of SAFE liability
|
7,693 | 885 | — | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
(44 | ) | (41 | ) | (482 | ) | ||||||
|
|
|
|
|
|
|||||||
Accounts payable
|
1,394 | 852 | 1,119 | |||||||||
Accrued expenses
|
408 | 413 | 2,747 | |||||||||
|
|
|
|
|
|
|||||||
Net cash used in operating activities
|
(3,555 | ) | (1,556 | ) | (20,137 | ) | ||||||
Financing activities:
|
||||||||||||
Proceeds from issuance of convertible preferred stock
|
— | — | 44,500 | |||||||||
Payment of issuance costs for convertible preferred stock
|
— | — | (176 | ) | ||||||||
Proceeds from issuance of SAFE agreements
|
6,965 | 5,005 | — | |||||||||
Proceeds from exercise of common stock options
|
— | — | 5 | |||||||||
Cash paid for deferred offering costs
|
— | — | (1,218 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities
|
6,965 | 5,005 | 43,111 | |||||||||
|
|
|
|
|
|
|||||||
Net increase in cash and cash equivalents
|
3,410 | 3,449 | 22,974 | |||||||||
Cash and cash equivalents at beginning of period
|
— | — | 3,410 | |||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period
|
$ | 3,410 | $ | 3,449 | $ | 26,384 | ||||||
|
|
|
|
|
|
|||||||
Supplemental schedule of
non-cash
financing activity:
|
||||||||||||
Other receivable in connection with the issuance of SAFE agreements
|
$ | 150 | $ | — | $ | — | ||||||
|
|
|
|
|
|
|||||||
Conversion of SAFE agreements into shares of convertible preferred stock
|
$ | — | $ | — | $ | 14,808 | ||||||
|
|
|
|
|
|
|||||||
Deferred offering costs included in accounts payable and accrued expenses
|
$ | — | $ | — | $ | 302 | ||||||
|
|
|
|
|
|
February 27,
2020 (inception) through December 31, 2020 |
February 27,
2020 (inception) through September 30, 2020 |
Nine
Months Ended September 30, 2021 |
||||||||||
(unaudited)
|
||||||||||||
Conversion of outstanding convertible preferred stock
|
— | — | 13,923,356 | |||||||||
Outstanding stock options
|
— | — | 1,604,933 | |||||||||
Restricted common stock subject to repurchase or forfeiture
|
6,859,000 | 6,261,500 | 4,554,285 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
6,859,000 | 6,261,500 | 20,082,574 | |||||||||
|
|
|
|
|
|
2020 SAFEs issued in the 2020 period
|
$ | 7,115 | ||
Change in fair value during the 2020 period
|
7,693 | |||
|
|
|||
Balance as of December 31, 2020
|
14,808 | |||
Conversion into shares of convertible preferred stock (unaudited)
|
(14,808 | ) | ||
|
|
|||
Balance as of September 30, 2021 (unaudited)
|
$ | — | ||
|
|
Shares
Authorized |
Shares
Issued and Outstanding |
Per Share
Original Issue Price |
Liquidation
Preference |
Carrying
Value |
||||||||||||||||
Series A
|
9,771,425 | 9,771,414 | $ | 4.5541 | $ | 44,500 | $ | 44,323 | ||||||||||||
Series
A-1
|
2,818,034 | 2,818,034 | $ | 1.2420 | 3,500 | 9,638 | ||||||||||||||
Series
A-2
|
605,850 | 605,850 | $ | 2.4841 | 1,505 | 2,302 | ||||||||||||||
Series
A-3
|
728,058 | 728,058 | $ | 2.8981 | 2,110 | 2,869 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total
|
13,923,367 | 13,923,356 | $ | 51,615 | $ | 59,132 | ||||||||||||||
|
|
|
|
|
|
|
|
Number of
Unvested Shares |
||||
Balance at February 27, 2020 (inception)
|
— | |||
Issued shares
|
6,983,000 | |||
Forfeited shares
|
(133,000 | ) | ||
|
|
|||
Balance at December 31, 2020
|
6,850,000 | |||
Issued shares (unaudited)
|
75,000 | |||
Vested shares (unaudited)
|
(2,376,715 | ) | ||
|
|
|||
Balance at September 30, 2021 (unaudited)
|
4,548,285 | |||
|
|
Number
|
Weighted-
Average Exercise Price |
Weighted-
Average Remaining Contractual Term (in Years) |
Weighted-
Average Grant Date (Fair Value) |
Aggregate
Intrinsic Value (in thousands) |
||||||||||||||||
Outstanding at December 31, 2020
|
— | — | ||||||||||||||||||
Granted (unaudited)
|
1,718,433 | $ | 5.63 | $ | 3.91 | |||||||||||||||
Exercised (unaudited)
|
(1,000 | ) | $ | 4.44 | ||||||||||||||||
Canceled (unaudited)
|
(112,500 | ) | $ | 5.42 | ||||||||||||||||
|
|
|||||||||||||||||||
Outstanding and expected to vest at September 30, 2021 (unaudited)
|
1,604,933 | $ | 5.64 | 9.6 | $ | 3.92 | $ | 5,824 | ||||||||||||
|
|
|||||||||||||||||||
Vested and exercisable at September 30, 2021 (unaudited)
|
9,248 | $ | 6.02 | 9.8 | $ | 4.05 | $ | 30 | ||||||||||||
|
|
Assumed risk-free interest rate
|
1.1 | % | ||
Assumed volatility
|
80.8 | % | ||
Expected option life (in years)
|
6.2 | |||
Expected dividend yield
|
— | % |
Research and development
|
$ | 246 | ||
General and administrative
|
404 | |||
|
|
|||
Total stock-based compensation
|
$ | 650 | ||
|
|
December 31,
2020 |
September 30,
2021 |
|||||||
(unaudited)
|
||||||||
Conversion of outstanding convertible preferred stock
|
— | 13,923,356 | ||||||
Outstanding stock options
|
— | 1,604,933 | ||||||
Shares available for issuance under the Plan
|
991,000 | 1,525,051 | ||||||
|
|
|
|
|||||
Total
|
991,000 | 17,053,340 | ||||||
|
|
|
|
Expected income tax benefit at statutory rates
|
$ | (2,731 | ) | |
Permanent items
|
35 | |||
Change in fair value of 2020 SAFEs
|
1,616 | |||
Research credits
|
(32 | ) | ||
Valuation allowance
|
1,112 | |||
|
|
|||
$ | — | |||
|
|
Deferred tax assets:
|
||||
Net operating loss carryforward
|
$ | 1,078 | ||
Research credit carryforwards
|
31 | |||
Other, net
|
3 | |||
|
|
|||
Total deferred tax assets
|
1,112 | |||
Less valuation allowance
|
(1,112 | ) | ||
|
|
|||
Net deferred tax assets
|
$ | — | ||
|
|
ITEM 13.
|
Other Expenses of Issuance and Distribution.
|
Amount
|
||||
SEC registration fee
|
$51,320.76 | |||
Accounting fees and expenses
|
5,000.00 | |||
Legal fees and expenses
|
5,000.0 | |||
Miscellaneous fees and expenses
|
0,000.00 | |||
|
|
|||
Total expenses
|
$251,320.76 | |||
|
|
ITEM 14.
|
Indemnification of Directors and Officers
|
ITEM 15.
|
Recent Sales of Unregistered Securities.
|
ITEM 16.
|
Exhibits and Financial Statement Schedules.
|
(a) |
Exhibits
|
* |
Filed herewith.
|
† |
Schedules and exhibits to this Exhibit omitted pursuant to Regulation
S-K
Item 601(b)(2). The Registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.
|
+ |
Management contract or compensation plan or arrangement.
|
(b) |
Financial Statement Schedules
|
A. |
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
|
(i) |
To include any prospectus required by section 10(a)(3) of the Securities Act;
|
(ii) |
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement.
|
(iii) |
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
|
B. |
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
|
C. |
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
|
D. |
That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
|
E. |
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
|
SIGNATURES
Pardes Biosciences, Inc.
|
||
By: |
/s/ Uri A. Lopatin, M.D.
|
|
Name: | Uri A. Lopatin, M.D. | |
Title: | Chief Executive Officer |
Name
|
Position
|
Date
|
||
/s/ Uri A. Lopatin, M.D.
|
President, Chief Executive Officer and Director | Dated: January 21, 2022 | ||
Uri A. Lopatin, M.D. | (Principal Executive Officer) | |||
/s/ Heidi Henson
|
Principal Financial and Principal | Dated: January 21, 2022 | ||
Heidi Henson | Accounting Officer | |||
/s/ Mark Auerbach
|
Director | Dated: January 21, 2022 | ||
Mark Auerbach | ||||
/s/ Deborah M. Autor
|
Director | Dated: January 21, 2022 | ||
Deborah M. Autor | ||||
/s/ Laura J. Hamill
|
Director | Dated: January 21, 2022 | ||
Laura J. Hamill | ||||
/s/ J. Jay Lobell
|
Director | Dated: January 21, 2022 | ||
J. Jay Lobell | ||||
/s/ James B. Tananbaum, M.D.
|
Director | Dated: January 21, 2022 | ||
James B. Tananbaum, M.D. | ||||
/s/ Michael D. Varney, Ph.D.
|
Director | Dated: January 21, 2022 | ||
Michael D. Varney, Ph.D. |
Exhibit 5.1
January 21, 2022
Pardes Biosciences, Inc.
2173 Salk Avenue
Suite 250
Carlsbad, CA 92008
Re: |
Securities Registered under Registration Statement on Form S-1 |
We have acted as counsel to you in connection with your filing of a Registration Statement on Form S-1 (as amended or supplemented, the Registration Statement) with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the Securities Act), relating to the registration by Pardes Biosciences, Inc., a Delaware corporation (the Company), of the offer and sale from time to time of 39,757,419 shares (the Selling Stockholder Shares) of the Companys common stock, par value $0.0001 per share, to be sold by the selling stockholders listed in the Registration Statement under Selling Stockholders.
We have reviewed such documents and made such examination of law as we have deemed appropriate to give the opinions set forth below. We have relied, without independent verification, on certificates of public officials and, as to matters of fact material to the opinions set forth below, on certificates of officers of the Company.
The opinion set forth below is limited to the Delaware General Corporation Law.
Based on the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that the Selling Stockholder Shares have been duly authorized and validly issued and are fully paid and nonassessable.
This opinion letter and the opinions it contains shall be interpreted in accordance with the Core Opinion Principles as published in 74 Business Lawyer 815 (Summer 2019).
We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the Registration Statement and to the references to our firm under the caption Legal Matters in the Registration Statement. In giving our consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations thereunder.
Very truly yours,
/s/ Goodwin Procter LLP
GOODWIN PROCTER LLP
Exhibit 10.10
January 20, 2021
Heidi Henson
[***]
[***]
Dear Heidi:
Pardes Biosciences, Inc, a Delaware corporation (the Company), is pleased to offer you employment pursuant to the terms of this Executive Offer Letter (the Agreement).
Duties and Extent of Service
As Chief Financial Officer of the Company, you will report directly to the President and Chief Executive Officer of the Company (the Supervising Officer) and you will have responsibility for performing those duties as are customary for, and are consistent with, your position with the Company, as well as those duties as the Supervising Officer or the Board of Directors of the Company (the Board) may designate. Your first date of employment shall be the date of this Agreement. Your primary working location shall initially be your home; provided that if the Company were to establish an office no more than a 50-mile radius from the address set forth above, the Company shall be entitled to designate such location as your primary working location. Subject to the terms of this Agreement, the Company reserves the right to reasonably require you to perform your duties at places other than your primary working location from time to time and to require business travel.
You agree to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted by the Company. Except for vacations and absences due to temporary illness, you will be expected to devote your full-time business efforts to the business and affairs of the Company. Notwithstanding the foregoing, you may participate in outside charitable, civic, educational, professional, community or industry activities to the extent such activities do not individually or in the aggregate materially interfere with the performance of your duties to the Company as provided in this Agreement or create an actual or potential conflict of interest with the Companys business; provided, further, that your service on any outside boards (whether for profit or non-profit) shall require the prior consent of the Supervising Officer. Any of your outside activities listed on Schedule 1 attached hereto shall also be deemed approved for purposes of this Agreement and shall not be a violation of your obligations in this paragraph.
Employment at Will
You and the Company understand and agree that you are an employee at-will, and that you may resign, or the Company may terminate your employment, at any time and for any or for no reason in accordance with the termination provisions set forth further below in this Agreement. Nothing in this Agreement shall be construed to alter the at-will nature of your employment, nor shall anything in this Agreement be construed as providing you with a definite term of employment.
Heidi Henson
January 20, 2021
Page 2
Compensation
Until the termination of your employment, in consideration for your services hereunder, we will compensate you as follows:
Base Salary. Your initial base salary shall be at the annualized rate of $395,000, payable in accordance with the Companys standard payroll schedule (the Base Salary). The Base Salary may be reviewed and modified from time to time at the sole discretion of the Board or any committee designated by the Board to govern compensation matters (the Compensation Committee) and is in addition to the other benefits set forth herein.
Annual Bonus. You will be eligible to receive an annual bonus with a target payout equal to forty percent (40%) of your Base Salary paid for the relevant fiscal year in accordance with the terms of any Company bonus plan adopted by the Board or the Compensation Committee. The determination of whether you will receive a bonus with respect to any given fiscal year of the Company, and the amount of any such bonus, shall be determined by the Board or its Compensation Committee, in its sole discretion, after considering your performance and the Companys performance for such fiscal year. If you are awarded a bonus with respect to a given fiscal year of the Company, the Company will make payment of such bonus no later than March 15 of the next fiscal year of the Company. Except as provided under the heading Severance below, a precondition to the annual bonus being considered earned is that you continuously remain an employee of the Company on the date on which any such annual bonus is paid.
Vacation; PTO. You will be entitled to paid vacation in accordance with the Companys then-current vacation policy.
Benefits. You will also be entitled to participate in such benefits (including group medical, vision and dental insurance), if any, as the Company shall make available to executive-level employees and in such employee benefit plans and fringe benefits as may be offered or made available by the Company to its employees. The Board reserves the right to change or terminate the Companys employee benefit plans and fringe benefits. Your participation in such employee benefit plans and fringe benefits, and the amount and nature of the benefits to which you shall be entitled thereunder or in connection therewith, shall be subject to the terms and conditions of such employee benefit plans and fringe benefits.
Expenses. Upon delivery of reasonable documentation, you will be entitled to reimbursement by the Company for reasonable travel, business development, and other business expenses incurred by you during the term of your employment in the performance of your duties hereunder in accordance with the then-current policies and practices of the Company.
Initial New Hire Equity Award and Future Equity Awards. Upon approval by the Companys Board of Directors or its Compensation Committee following the completion of a formal valuation of the Companys common stock (the 409A Valuation), the Company will grant you under the Companys 2020 Stock Plan an incentive stock option to purchase that number of shares of the Companys common stock (the Shares) that will increase your ownership interest in the Company to approximately 1.60% of the fully diluted post-closing capitalization of the Company following completion of the Series A Preferred Stock financing, which options shall have a ten year term and the right to early exercise pursuant to a notice of stock option grant and stock option agreement (the Stock Option Agreement). The exercise price under the Stock Option Agreement shall equal the fair market value of a share of common stock as determined by the 409A Valuation. Subject to the terms of the applicable equity award and the 2020 Stock Plan, the equity award shall contain the following vesting terms: 1⁄4 of the Shares shall vest on the one-year
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anniversary of the date you commence employment, and an additional 1/48th of the Shares shall vest on the corresponding day of each month thereafter (and if there is no corresponding day, the last day of the month) for 36 months, until all of the Shares are vested, in each case subject to your continued provision of services to the Company as either an employee or consultant through each applicable vesting date, except as otherwise provided in connection with severance as set forth below. In addition to the foregoing, you shall be eligible to receive grants of Company equity awards in the sole discretion of and subject to the approval of the Board or its Compensation Committee.
Signing Equity Award. Upon approval by the Companys Board of Directors or its Compensation Committee following the completion of the 409A Valuation, the Company shall grant you an incentive stock option to purchase 12,711 Shares pursuant to a Stock Option Agreement, with terms comparable to your new hire equity award set forth above. This equity award is being awarded in consideration of you converting to a full-time employee and terminating your Consulting Agreement dated April 16, 2020 with the Company, as amended (the Consulting Agreement), effective as of this date and waiving all payments due thereunder with respect to services performed during the month of January 2021 through the date of termination. Upon commencement of employment, you and the Company hereby agree that the Consulting Agreement has terminated.
Severance
Termination Without Cause or Resignation for Good Reason. In the event that the Company terminates your employment other than due to: (i) Cause (which term is defined below in this Agreement), or (ii) your death or disability, or in the event that you terminate your employment with the Company for Good Reason (which term is defined below in this Agreement), then, subject to the condition precedent of your execution and delivery of the Companys standard form general release to be delivered to you at the time of your termination, which release becomes irrevocable within sixty (60) days following your termination, you will be entitled to the following severance benefits (the Non-CIC Severance Benefits):
(i) |
your Base Salary for a period of nine (9) months following your termination of employment (such applicable period, the Severance Period), which amount shall be paid in equal installments on the Companys regular payroll schedule and will be subject to applicable tax withholdings over the period outlined above following the date of your termination of employment; provided, however, that no payments will be made prior to the sixtieth (60th) day following your termination of employment. On the sixtieth (60th) day following your termination of employment, the Company will pay you in a lump sum the Base Salary that you would have received on or prior to such date under the original schedule but for the delay while waiting for the sixtieth (60th) day in compliance with Section 409A (as defined below) and the effectiveness of the release, with the balance of the Base Salary being paid as originally scheduled. For such purposes, your final Base Salary will be calculated at the rate in effect as of the effective date of termination of your employment and prior to giving effect to any reduction in Base Salary that would give rise to your right to resign for Good Reason; |
(ii) |
if you are eligible for and timely elect to continue your health insurance coverage under the Companys group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 or the state equivalent (COBRA) following your termination date, the Company will pay the COBRA group health insurance premiums for you and your eligible dependents until the earliest of (A) the close of the Severance Period, (B) the expiration of your eligibility for the continuation coverage under COBRA, or (C) the date when you |
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become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by you under a Section 125 health care reimbursement plan under the Internal Revenue Code of 1986, as amended (the Code). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether you elect continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay you on the last day of each remaining month of the Severance Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the Health Care Benefit Payment). The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the Severance Period or (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; |
(iii) |
the vesting of all outstanding equity awards held by you shall be accelerated so that the amount of shares vested under such equity award shall equal that number of shares which would have been vested if you had continued to render services to the Company through the Severance Period; and |
(iv) |
outplacement assistance, in duration and amounts that are determined by the Company to be reasonable in its sole discretion. |
Termination Without Cause or Resignation for Good Reason During a Change in Control Period. In the event that the Company terminates your employment other than due to: (i) Cause, or (ii) your death or disability, or you terminate your employment with the Company for Good Reason, in each case at any time during the Change in Control Period (which term is defined below in this Agreement) then, subject to the condition precedent of your execution and delivery of the Companys standard form general release to be delivered to you at the time of your termination, which release becomes irrevocable within sixty (60) days following your termination, you will be entitled to the following severance benefits (the CIC Severance Benefits) in lieu of any Non-CIC Severance Benefits (and for the avoidance of doubt: (x) in no event will you be entitled to both the Non-CIC Severance Benefits and the CIC Severance Benefits, and (y) if the Company has commenced providing the Non-CIC Severance Benefits to you prior to the date that you become eligible to receive the CIC Severance Benefits, the Non-CIC Severance Benefits previously provided to you (or your beneficiaries or estate, as applicable) shall reduce the CIC Severance Benefits provided below):
(i) |
your Base Salary for a period of nine (9) months following your termination of employment (such period, the CIC Severance Period), which amount shall be paid in equal installments on the Companys regular payroll schedule and will be subject to applicable tax withholdings over the period outlined above following the date of your termination of employment; provided, however, that no payments will be made prior to the sixtieth (60th) day following your termination of employment. On the sixtieth (60th) day following your termination of employment, the Company will pay you in a lump sum the Base Salary that you would have received on or prior to such date under the original schedule but for the delay while waiting for the sixtieth (60th) day in compliance with Section 409A (as defined |
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below) and the effectiveness of the release, with the balance of the Base Salary being paid as originally scheduled. For such purposes, your final Base Salary will be calculated at the rate in effect as of the effective date of termination of your employment with the Company and prior to giving effect to any reduction in Base Salary that would give rise to your right to resign for Good Reason; |
(ii) |
a lump sum payment in an amount equal to your target annual bonus for the Companys then-current fiscal year, which payment shall be paid on the Companys first standard payroll date following the later of (A) the date that is sixty (60) days following your date of termination, but in no event more than seventy-five (75) days thereafter, or (B) the date of the Change in Control; |
(iii) |
if you are eligible for and timely elect to continue your health insurance coverage under the Companys group health plans under COBRA following your termination date, the Company will pay the COBRA group health insurance premiums for you and your eligible dependents until the earliest of (A) the close of the CIC Severance Period, (B) the expiration of your eligibility for the continuation coverage under COBRA, or (C) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by you under a Section 125 health care reimbursement plan under the Code. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether you elect continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay you on the last day of each remaining month of the CIC Severance Period, a fully taxable cash payment equal to the Health Care Benefit Payment. The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the CIC Severance Period or (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; |
(iv) |
If such termination is due to the Company terminating your employment for any reason (other than Cause or due to your death or disability) or your termination of your employment with the Company for Good Reason, then the vesting of all outstanding equity awards held by you shall be accelerated on the later of (A) the date of your termination or (B) the date of such Change in Control, so that all such equity awards shall be deemed to be fully vested. In addition, subject to the terms of the Companys equity plan, any such equity awards that are stock options may be exercised by you (or your legal guardian or legal representative) until the latest of (x) three (3) months after the date of your termination of employment (y) with respect to any portion of such equity awards that become exercisable on the date of a Change in Control pursuant to this clause (iv), three (3) months after the date of the Change in Control, or (z) such longer period as may be specified in the applicable equity award agreement; provided, however, that in no event shall any equity award that is a stock option remain exercisable beyond the original outside expiration date of such equity award; and |
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(v) |
outplacement assistance, in duration and amounts that are determined by the Company to be reasonable in its sole discretion. |
Certain Definitions.
For purposes of this Agreement, the following definitions shall be applicable:
Cause shall mean any one or more of the following: (i) your intentional commission of an act, or intentional failure to act, that materially injures the business of the Company; provided, however, that in no event shall any business judgment made in good faith by you and within your defined scope of authority constitute a basis for termination for Cause under this Agreement; (ii) your intentional refusal or intentional failure to act in accordance with any lawful and proper direction or order of the Board or the Supervising Officer; (iii) your material breach of your fiduciary, statutory, contractual, or common law duties to the Company (including any material breach of this Agreement, the Proprietary Rights Agreement (as defined below), or the Companys written policies); (iv) your indictment for or conviction of any felony or any crime involving dishonesty; or (v) your participation in any fraud or other act of willful misconduct against the Company; provided, however, that in the event that any of the foregoing events is reasonably capable of being cured, the Company shall provide written notice to you describing the nature of such event and you shall thereafter have twenty (20) days to cure such event.
Change in Control shall mean (1) a sale of all or substantially all of the Companys assets other than to an Excluded Entity, (2) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, limited liability company or other entity other than an Excluded Entity, or (3) the consummation of a transaction, or series of related transactions, in which any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of all of the Companys then outstanding voting securities. Notwithstanding the foregoing, a transaction shall not constitute a Change of Control if its purpose is to (A) change the jurisdiction of the Companys incorporation, (B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Companys securities immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Companys Board of Directors. An Excluded Entity means a corporation, limited liability company or other entity of which the holders of voting capital stock of the Company outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing at least a majority of the votes entitled to be cast by all of such corporations, limited liability companys or other entitys voting securities outstanding immediately after such transaction. As used in this Agreement, the consummation of (i) a transaction or series of related transactions in which any person or group (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Companys board of directors, (ii) any reorganization, merger or consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity or (iii) a sale, lease or other disposition of all or substantially all of the assets of the Company; provided, however, that following the Companys IPO, Change in Control shall have the meaning described in the Companys stock plan adopted by the Company in connection with the Companys IPO.
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Change in Control Period means the three (3) months prior to or within one (1) year after such Change in Control.
Good Reason means any one or more of the following: (i) a material diminution in the nature or scope of your duties; (ii) a material reduction in your Base Salary (other than as part of a reduction in the base salaries of all or substantially all other senior executives of the Company that is in the same proportion as the reduction in your Base Salary); and (iii) the permanent, non-voluntary relocation of your principal place of employment with the Company to a location that increases your one-way commuting distance by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to such relocation. In order for you to resign for Good Reason, each of the following requirements must be met: (A) you much provide written notice to the Board or the Supervising Officer within sixty (60) calendar days after the first occurrence of the event giving rise to Good Reason setting forth the basis for your resignation; (B) you must allow the Company at least twenty (20) days from receipt of such written notice from you sufficiently describing such alleged Good Reason to cure such event; (C) such event must not be cured by the Company within such twenty (20) day period; and (D) you must resign for Good Reason not later than sixty (60) days after the expiration of the foregoing cure period.
IPO means the Companys initial public offering of shares of its common stock pursuant to an effective Registration Statement on Form S-1.
Withholding Taxes
All payments and benefits described in this Agreement or that you may otherwise be entitled or eligible to receive as a result of your employment with the Company will be subject to applicable federal, state and local tax withholdings.
409A Compliance
It is intended that all of the severance benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code (the Section 409A), provided under Treasury Regulations 1.409A 1(b)(4), 1.409A 1(b)(5) and 1.409A 1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. In furtherance of the foregoing, the severance payments payable under the heading Severance shall be paid no later than the last date permitted in order to satisfy the exemption from Section 409A under Treasury Regulations 1.409A 1(b)(4). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A 2(b)(2)(iii)), your right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, to the extent any payments to you pursuant to this Agreement constitute nonqualified deferred compensation subject to Section 409A of the Code or are intended to be exempt from Section 409A of the Code pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), then, to the extent required by Section 409A of the Code or to satisfy such exception, no amount shall be payable pursuant to such sections unless your termination of employment constitutes a separation from service with the Company (as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto) (a Separation from Service). Notwithstanding any provision to the contrary in this Agreement, if you are deemed by the Company at the time of your Separation from Service under Section 409A to be a specified employee for purposes of Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or under
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any other agreement with the Company are deemed to be deferred compensation, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to you prior to the earliest of (i) the expiration of the six-month and one day period measured from the date of your Separation from Service with the Company, or (ii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to you, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. If the Company determines that any severance benefits provided under this Agreement constitute nonqualified deferred compensation under Section 409A, for purposes of determining the schedule for payment of the severance benefits, any such severance benefits shall not be paid, or in the case of installments shall not commence payment, until the sixtieth (60th) day following the Separation from Service or other applicable payment event. In addition to the above, to the extent required to comply with Section 409A and the applicable regulations and guidance issued thereunder, if the applicable deadline for you to execute (and not revoke) the applicable release spans two calendar years, payment of the applicable severance benefits shall not commence until the beginning of the second calendar year. To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts reimbursable to you under this Agreement shall be paid to you on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to you) during any one year may not effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. Notwithstanding the foregoing if a Change in Control would give rise to a payment or settlement event with respect to any payment or benefit that constitutes nonqualified deferred compensation, the transaction or event constituting the Change in Control must also constitute a change in control event (as defined in Treasury Regulation §1.409A-3(i)(5)) in order to give rise to the payment or settlement event for such payment or benefit, to the extent required by Section 409A.
Nondisclosure and Developments
As a condition of your employment, you shall sign the Companys standard employee Confidential Information and Invention Assignment Agreement (the Proprietary Rights Agreement).
No Conflicting Obligation
You hereby represent and warrant that as of the execution and delivery of this Agreement, the performance by you of any or all of the terms of this Agreement and the performance by you of your duties as an employee of the Company do not and will not breach or contravene (i) any agreement or contract (including, without limitation, any employment or consulting agreement, any agreement not to compete or any confidentiality or nondisclosure agreement) to which you are or may become a party on or at any time after your commencement of employment or (ii) any obligation you may otherwise have under applicable law to any former employer or to any person to whom you have provided, provide or will provide consulting services. You hereby further represent and warrant to the Company that, prior to the date of this Agreement, you have provided to the Company a copy of any and all potentially conflicting agreements for the Companys review.
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Defend Trade Secrets Act Notice of Immunity Rights
You acknowledge that the Company has provided you with the following notice of immunity rights in compliance with the requirements of the Defend Trade Secrets Act: (i) you shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; (ii) you shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (iii) if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the proprietary information to your attorney and use the proprietary information in the court proceeding, if you file any document containing the proprietary information under seal, and do not disclose the proprietary information, except pursuant to court order.
Termination
You acknowledge that the employment relationship between the Company and you is at-will, meaning that the employment relationship may be terminated by the Company or you for any reason or for no reason. Either party may terminate your employment with the Company at any time and for any or no reason upon thirty (30) days prior written notice; provided that the Company may terminate you for Cause and you may resign for Good Reason (subject to the process specified within the definition) at any time upon written notice.
Regardless of the reason your employment with the Company terminates, you will continue to comply with the Proprietary Rights Agreement contemplated hereby.
Work Eligibility
You agree that prior to the commencement of employment, you will provide the Company with sufficient documentation to demonstrate your eligibility to work in the United States and, at the request of the Company, shall provide any additional documentation requested by the Company to demonstrate your eligibility to work in the United States.
Governing Law
This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of California.
Dispute Resolution
To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with the Company, or the termination of your employment from the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in San Francisco, California by JAMS, Inc. (JAMS) or its successors, under JAMS then applicable rules and procedures for employment disputes (which can be found at http://www.jamsadr.com/rules-clauses/, and which will be provided to you on request); provided that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to
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award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrators essential findings and conclusions and a statement of the award. You and the Company shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law. BOTH YOU AND THE COMPANY ACKNOWLEDGE THAT BY AGREEING TO THIS ARBITRATION PROCEDURE, YOU AND THE COMPANY WAIVE THE RIGHT TO RESOLVE ANY SUCH DISPUTE THROUGH A TRIAL BY JURY OR JUDGE OR ADMINISTRATIVE PROCEEDING. The Company shall pay all filing fees in excess of those which would be required if the dispute were decided in a court of law, and shall pay the arbitrators fee. Nothing in this Agreement is intended to prevent either the Company or you from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. This section is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to your employment; provided, however, that you shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (i) claims for workers compensation, state disability insurance or unemployment insurance; (ii) claims for unpaid wages or waiting time penalties brought before the California Division of Labor Standards Enforcement (or any similar agency in any applicable jurisdiction other than California); provided, however, that any appeal from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (iii) claims for administrative relief from the United States Equal Employment Opportunity Commission and/or the California Department of Fair Employment and Housing (or any similar agency in any applicable jurisdiction other than California); provided, further, that you shall not be entitled to obtain any monetary relief through such agencies other than workers compensation benefits or unemployment insurance benefits.
Entire Agreement; Amendment
This Agreement (together with the Proprietary Rights Agreement contemplated hereby) sets forth the sole and entire agreement and understanding between the Company and you with respect to the specific matters contemplated and addressed hereby and thereby. No prior agreement, whether written or oral, shall be construed to change or affect the operation of this Agreement in accordance with its terms, and any provision of any such prior agreement, which conflicts with or contradicts any provision of this Agreement, is hereby revoked and superseded. Any prior agreement, if any, you may have with the Company regarding your employment, whether written or oral, is hereby, and without any further action on your part or the Companys, terminated, revoked and superseded by this Agreement. This Agreement may be amended or terminated only by a written instrument executed both by you and the Company.
Notices
Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to you at the address as listed on the Company payroll.
Severability
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the Parties.
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Waiver
Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
Counterparts
This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but both of which taken together will constitute one and the same Agreement.
Headings
The headings of the sections and paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
Indemnification and Directors and Officers Insurance
The Company will indemnify you to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission, and you shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers.
Successors and Assigns
This Agreement is intended to bind and inure to the benefit of and be enforceable by you and the Company, and your respective successors, assigns, heirs, executors and administrators, except that you may not assign any of your duties hereunder and you may not assign any of your rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.
[Signature Page Follows]
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Please acknowledge your acceptance of the terms of this Agreement by signing below and returning a copy to me.
Sincerely, | ||
PARDES BIOSCIENCES, INC. | ||
By: |
/s/ Uri A. Lopatin, M.D. |
|
Name: Uri A. Lopatin, M.D. | ||
Title: President and CEO |
Accepted and Agreed: | ||
I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this Agreement prior to signing hereunder. | ||
/s/ Heidi Henson |
||
Heidi Henson | ||
Date: | 1/20/2021 |
Exhibit 10.11
November 22, 2021
Philippe Tinmouth
[***]
[***]
Dear Phil:
Pardes Biosciences, Inc, a Delaware corporation (the Company), is pleased to offer you employment pursuant to the terms of this Executive Offer Letter (the Agreement).
Duties and Extent of Service
As Chief Business and Strategy Officer of the Company, you will report directly to the President and Chief Executive Officer of the Company (the Supervising Officer) and you will have responsibility for performing those duties as are customary for, and are consistent with, your position with the Company, as well as those duties as the Supervising Officer or the Board of Directors of the Company (the Board) may designate which are consistent with such position. Your first date of employment shall be November
22, 2021 (Hire Date), which initially shall be on a part-time basis (50% time) and converting to a full-time basis effective as of December 1, 2021. Your primary working location shall initially be your home;
provided that if the Company were to establish an office no more than a 50-mile radius from the address
set forth above, the Company shall be entitled to designate such location as your primary working location. Subject to the terms of this Agreement, the Company reserves the right to reasonably require you to perform your duties at places other than your primary working location from time to time and to require reasonable business travel.
You agree to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein that may be adopted by the Company (each to the extent provided to or made available to you in writing). Except for vacations and absences due to temporary illness, you will be expected to devote your full-time business efforts to the business and affairs of the Company. Notwithstanding the foregoing, you may participate in outside charitable, civic, educational, professional, community or industry activities to the extent such activities do not individually or in the aggregate materially interfere with the performance of your duties to the Company as provided in this Agreement or create an actual or potential conflict of interest with the Companys business; provided, further, that your service on any outside boards (whether for profit or non-profit) shall require the prior written consent of the Supervising Officer, which shall not be unreasonably withheld. The Company acknowledges and agrees that, without the necessity of further action, you shall be permitted to continue to serve as a Director at SCYNEXIS, Inc. and continue to perform consulting services for Lyndra Therapeutics through December 31, 2021.
Philippe Tinmouth
November 22, 2021
Page 2
Employment at Will
You and the Company understand and agree that you are an employee at-will, and that you may resign, or the Company may terminate your employment, at any time and for any or for no reason in accordance with the termination provisions set forth further below in this Agreement. Nothing in this Agreement shall be construed to alter the at-will nature of your employment, nor shall anything in this Agreement be construed as providing you with a definite term of employment.
Compensation
Until the termination of your employment, in consideration for your services hereunder, we will compensate you as follows:
Base Salary. Your initial base salary shall be at the annualized rate of $390,000, payable in accordance with the Companys standard payroll schedule (the Base Salary), which will be proportionately reduced while working on a part-time basis. The Base Salary may be reviewed and modified from time to time at the sole discretion of the Board or any committee designated by the Board to govern compensation matters (the Compensation Committee) and is in addition to the other benefits set forth herein.
Annual Bonus. Commencing with fiscal year 2022, you will be eligible to receive an annual bonus with a target payout equal to forty percent (40%) of your Base Salary paid for the relevant fiscal year in accordance with the terms of any Company bonus plan adopted by the Board or the Compensation Committee, which target payout percentage may be increased above forty percent (40%) to up to 200% of your Base Salary in the event of successful transaction(s) or partnership(s) during the performance year that, in the reasonable good faith discretion of the Board or its Compensation Committee, substantially increases shareholder value. The determination of whether you will receive a bonus with respect to any given fiscal year of the Company, and the amount of any such bonus, shall be determined by the Board or its Compensation Committee, in its sole discretion, after considering your performance and the Companys performance for such fiscal year. If you are awarded a bonus with respect to a given fiscal year of the Company, the Company will make payment of such bonus no later than March 15 of the next fiscal year of the Company. Except as provided under the heading Severance below, a precondition to the annual bonus being considered earned is that you continuously remain an employee of the Company on the date on which any such annual bonus is paid.
Vacation; PTO. You will be entitled to paid vacation in accordance with the Companys then-current vacation policy.
Benefits. You will also be entitled to participate in such benefits (including group medical, vision and dental insurance), if any, as the Company shall make available to executive-level employees and in such employee benefit plans and fringe benefits as may be offered or made available by the Company to its employees. The Board reserves the right to change or terminate the Companys employee benefit plans and fringe benefits. Your participation in such employee benefit plans and fringe benefits, and the amount and nature of the benefits to which you shall be entitled thereunder or in connection therewith, shall be subject to the terms and conditions of such employee benefit plans and fringe benefits.
Expenses. Upon delivery of reasonable documentation, you will be entitled to reimbursement by the Company for reasonable travel, business development, and other business expenses incurred by you during the term of your employment in the performance of your duties hereunder in accordance with the then-current policies and practices of the Company.
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Initial New Hire Equity Award and Future Equity Awards. Subject to approval by the Board or its Compensation Committee, the Company will grant you a stock option to purchase 300,000 shares of the Companys common stock (the Shares) under the Companys 2020 Stock Plan (the Options). The exercise price per share will be determined by the Board when the Options are granted and will equal the fair market value of a share of the Companys common stock on the date of grant; provided, however, that if the merger contemplated under that certain Agreement and Plan of Merger dated as of June 29, 2021, as amended, by and among the Company, FS Development Corp. II, Orchard Merger Sub, Inc., and Shareholder Representative Services LLC (the Merger Agreement) has not been consummated on or before January 28, 2022 (or such later date as the parties to the Merger Agreement may mutually agree (the Outside Date)) or the Merger Agreement is terminated prior to such date, the Company shall reprice the Options to reflect the then current fair market value of a share of the Companys common stock as approved by the Board of Directors of the Company if lower than the grant date fair market value (the Option Repricing). Please note that if any of your Options have been designated as an incentive stock option (ISO), your repriced Option will be an ISO to the maximum extent possible under current U.S. tax laws, including certain limitations on the number of ISO shares that can become exercisable in any one calendar year. Please be aware that for purposes of determining the number of repriced Options that can qualify as ISO shares, the $100,000 limit will be reduced by the aggregate exercise price of the repriced Options that would have become first exercisable in the year of the Option Repricing and with respect to Options that became exercisable and counted against the $100,000 limit in a prior year, if the Option Repricing had not occurred. In addition, if you exercise a repriced Option, you will have to hold the shares subject to the repriced Option for at least two years following the date of the Option Repricing in order for the repriced Option to continue to be eligible to be taxed as an ISO (in addition to meeting other applicable ISO requirements). If your Option is a non-statutory stock option (NSO), your repriced Option will remain an NSO. You should consult with your personal tax advisor about the potential tax treatment of your Option(s). The Option Repricing right provided in this paragraph shall terminate automatically upon the consummation of the merger contemplated under the Merger Agreement.
Subject to the terms of the applicable equity award and the 2020 Stock Plan, the Options shall have a ten year term and the equity award shall contain the following vesting terms: 1⁄4 of the Shares shall vest on the one-year anniversary of the date you commence employment, and an additional 1/48th of the Shares shall vest on the corresponding day of each month thereafter (and if there is no corresponding day, the last day of the month) for 36 months, until all of the Shares are vested, in each case subject to your continued provision of services to the Company as either an employee or consultant through each applicable vesting date. In addition to the foregoing, you shall be eligible to receive future equity awards under the Companys equity incentive plans then in effect in the sole discretion of and subject to the approval of the Board or its Compensation Committee. Your initial equity award and future equity awards (but only so long as the Company is a private company) shall reference and be subject to the accelerated vesting provisions set forth in the Severance paragraphs below.
Severance
Termination Without Cause or Resignation following the occurrence of Good Reason. In the event that the Company terminates your employment other than due to: (i) Cause (which term is defined below in this Agreement), or (ii) your death or disability, or in the event that you terminate your employment with the Company following the occurrence of Good Reason (which term is defined below in this Agreement), then, subject to the condition precedent of your execution and delivery of the Companys standard form general release substantially in the form attached hereto as Exhibit 1 to be delivered to you at the time of your termination, which release becomes irrevocable within sixty (60) days following your termination, you will be entitled to the following severance benefits (the Non-CIC Severance Benefits):
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(i) |
your Base Salary for a period of nine (9) months following your termination of employment (such applicable period, the Severance Period), which amount shall be paid in equal installments on the Companys regular payroll schedule and will be subject to applicable tax withholdings over the period outlined above following the date of your termination of employment; provided, however, that no payments will be made prior to the sixtieth (60th) day following your termination of employment. On the sixtieth (60th) day following your termination of employment, the Company will pay you in a lump sum the Base Salary that you would have received on or prior to such date under the original schedule but for the delay while waiting for the sixtieth (60th) day in compliance with Section 409A (as defined below) and the effectiveness of the release, with the balance of the Base Salary being paid as originally scheduled. For such purposes, your final Base Salary will be calculated at the rate in effect as of the effective date of termination of your employment and prior to giving effect to any reduction in Base Salary that would give rise to your right to resign for Good Reason; |
(ii) |
if you are eligible for and timely elect to continue your health insurance coverage under the Companys group health plans under the Consolidated Omnibus Budget Reconciliation Act of 1985 or the state equivalent (COBRA) following your termination date, the Company will pay the COBRA group health insurance premiums for you and your eligible dependents until the earliest of (A) the close of the Severance Period, (B) the expiration of your eligibility for the continuation coverage under COBRA, or (C) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by you under a Section 125 health care reimbursement plan under the Internal Revenue Code of 1986, as amended (the Code). Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether you elect continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay you on the last day of each remaining month of the Severance Period, a fully taxable cash payment equal to the COBRA premiums for that month, subject to applicable tax withholdings (such amount, the Health Care Benefit Payment). The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the Severance Period or (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; |
(iii) |
the vesting of all outstanding equity awards held by you shall be accelerated so that the amount of shares vested under such equity award shall equal that number of shares which would have been vested if you had continued to render services to the Company through the Severance Period; and |
(iv) |
outplacement assistance, in duration and amounts that are determined by the Company to be reasonable in its sole discretion. |
Termination Without Cause or Resignation following the occurrence of Good Reason During a Change in Control Period. In the event that the Company terminates your employment other than due to: (i) Cause, or (ii) your death or disability, or you terminate your employment with the Company for Good Reason, in each case at any time during the Change in Control Period (which term is defined below
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in this Agreement) then, subject to the condition precedent of your execution and delivery of the Companys standard form general release to be delivered to you at the time of your termination, which release becomes irrevocable within sixty (60) days following your termination, you will be entitled to the following severance benefits (the CIC Severance Benefits) in lieu of any Non-CIC Severance Benefits (and for the avoidance of doubt: (x) in no event will you be entitled to both the Non-CIC Severance Benefits and the CIC Severance Benefits, and (y) if the Company has commenced providing the Non-CIC Severance Benefits to you prior to the date that you become eligible to receive the CIC Severance Benefits, the Non- CIC Severance Benefits previously provided to you (or your beneficiaries or estate, as applicable) shall reduce the CIC Severance Benefits provided below):
(i) |
your Base Salary for a period of nine (9) months following your termination of employment (such period, the CIC Severance Period), which amount shall be paid in equal installments on the Companys regular payroll schedule and will be subject to applicable tax withholdings over the period outlined above following the date of your termination of employment; provided, however, that no payments will be made prior to the sixtieth (60th) day following your termination of employment. On the sixtieth (60th) day following your termination of employment, the Company will pay you in a lump sum the Base Salary that you would have received on or prior to such date under the original schedule but for the delay while waiting for the sixtieth (60th) day in compliance with Section 409A (as defined below) and the effectiveness of the release, with the balance of the Base Salary being paid as originally scheduled. For such purposes, your final Base Salary will be calculated at the rate in effect as of the effective date of termination of your employment with the Company and prior to giving effect to any reduction in Base Salary that would give rise to your right to resign for Good Reason; |
(ii) |
a lump sum payment in an amount equal to your target annual bonus for the Companys then-current fiscal year, which payment shall be paid on the Companys first standard payroll date following the later of (A) the date that is sixty (60) days following your date of termination, but in no event more than seventy-five (75) days thereafter, or (B) the date of the Change in Control; |
(iii) |
if you are eligible for and timely elect to continue your health insurance coverage under the Companys group health plans under COBRA following your termination date, the Company will pay the COBRA group health insurance premiums for you and your eligible dependents until the earliest of (A) the close of the CIC Severance Period, (B) the expiration of your eligibility for the continuation coverage under COBRA, or (C) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment. For purposes of this Section, references to COBRA premiums shall not include any amounts payable by you under a Section 125 health care reimbursement plan under the Code. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot pay the COBRA premiums without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then regardless of whether you elect continued health coverage under COBRA, and in lieu of providing the COBRA premiums, the Company will instead pay you on the last day of each remaining month of the CIC Severance Period, a fully taxable cash payment equal to the Health Care Benefit Payment. The Health Care Benefit Payment shall be paid in monthly installments on the same schedule that the COBRA premiums would otherwise have been paid and shall be equal to the amount that the Company would have otherwise paid for COBRA premiums, and shall be paid until the earlier of (i) expiration of the CIC Severance Period or (ii) the date when you become eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment; |
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(iv) |
If such termination is due to the Company terminating your employment for any reason (other than Cause or due to your death or disability) or your termination of your employment with the Company for Good Reason, then the vesting of all outstanding equity awards held by you shall be accelerated on the later of (A) the date of your termination or (B) the date of such Change in Control, so that all such equity awards shall be deemed to be fully vested. In addition, subject to the terms of the Companys equity plan, any such equity awards that are stock options may be exercised by you (or your legal guardian or legal representative) until the latest of (x) three (3) months after the date of your termination of employment (y) with respect to any portion of such equity awards that become exercisable on the date of a Change in Control pursuant to this clause (iv), three (3) months after the date of the Change in Control, or (z) such longer period as may be specified in the applicable equity award agreement; provided, however, that in no event shall any equity award that is a stock option remain exercisable beyond the original outside expiration date of such equity award; and |
(v) |
outplacement assistance, in duration and amounts that are determined by the Company to be reasonable in its sole discretion. |
Certain Definitions.
For purposes of this Agreement, the following definitions shall be applicable:
Cause shall mean any one or more of the following: (i) your intentional commission of an act, or intentional failure to act, that materially injures the business of the Company; provided, however, that in no event shall any business judgment made in good faith by you and within your defined scope of authority constitute a basis for termination for Cause under this Agreement; (ii) your intentional refusal or intentional failure to act in accordance with any lawful and proper direction or order of the Board or the Supervising Officer; (iii) your material breach of your fiduciary, statutory, contractual, or common law duties to the Company (including any material breach of this Agreement, the Proprietary Rights Agreement (as defined below), or the Companys written policies); (iv) your indictment for or conviction of any felony or any crime involving dishonesty; or (v) your participation in any fraud or other act of willful misconduct against the Company; provided, however, that in the event that any of the foregoing events is reasonably capable of being cured, the Company shall provide written notice to you describing the nature of such event and you shall thereafter have twenty (20) days to cure such event.
Change in Control shall mean (1) a sale of all or substantially all of the Companys assets other than to an Excluded Entity, (2) a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, limited liability company or other entity other than an Excluded Entity, or (3) the consummation of a transaction, or series of related transactions, in which any person (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of all of the Companys then outstanding voting securities. Notwithstanding the foregoing, a transaction shall not constitute a Change in Control if its purpose is to (A) change the jurisdiction of the Companys incorporation, (B) create a holding company that will be owned in substantially the same proportions by the persons who hold the Companys securities immediately before such transaction, or (C) obtain funding for the Company in a financing that is approved by the Companys Board of Directors. An Excluded Entity means a corporation, limited liability company or other entity of which the holders of voting capital
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stock of the Company outstanding immediately prior to such transaction are the direct or indirect holders of voting securities representing at least a majority of the votes entitled to be cast by all of such corporations, limited liability companys or other entitys voting securities outstanding immediately after such transaction. As used in this Agreement, the consummation of (i) a transaction or series of related transactions in which any person or group (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Companys board of directors, (ii) any reorganization, merger or consolidation of the Company, other than a transaction or series of related transactions in which the holders of the voting securities of the Company outstanding immediately prior to such transaction or series of related transactions retain, immediately after such transaction or series of related transactions, at least a majority of the total voting power represented by the outstanding voting securities of the Company or such other surviving or resulting entity or (iii) a sale, lease or other disposition of all or substantially all of the assets of the Company; provided, however, that following the Companys IPO, Change in Control shall have the meaning described in the Companys stock plan adopted by the Company in connection with the Companys IPO. For avoidance of doubt the business combination transaction contemplated under the Agreement and Plan of Merger dated as of June 29, 2021, as amended, by and among the Company, FS Development Corp. II, Orchard Merger Sub, Inc. and Shareholder Representative Services LLC shall not be deemed a Change in Control.
Change in Control Period means the three (3) months prior to or within one (1) year after such Change in Control.
Good Reason means the occurrence, without your written consent, of any one or more of the following: (i) a material diminution in the nature or scope of your duties; (ii) a material reduction in your Base Salary (other than as part of a reduction in the base salaries of all or substantially all other senior executives of the Company that is in the same proportion as the reduction in your Base Salary); and (iii) the permanent, non-voluntary relocation of your principal place of employment with the Company to a location that increases your one-way commuting distance by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to such relocation In order for you to effectuate your resignation following the occurrence of Good Reason, each of the following requirements must be met: (A) you much provide written notice to the Board or the Supervising Officer within sixty (60) calendar days after the first occurrence of the event giving rise to Good Reason setting forth the basis for your resignation; (B) you must allow the Company at least twenty (20) days from receipt of such written notice from you sufficiently describing such alleged Good Reason to cure such event; (C) such event must not be cured by the Company within such twenty (20) day period; and (D) you must resign for Good Reason not later than sixty (60) days after the expiration of the foregoing cure period.
IPO means the Companys initial public offering of shares of its common stock pursuant to an effective Registration Statement on Form S-1.
Withholding Taxes
All payments and benefits described in this Agreement or that you may otherwise be entitled or eligible to receive as a result of your employment with the Company will be subject to applicable federal, state and local tax withholdings.
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409A Compliance
It is intended that all of the severance benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Code (the Section 409A), provided under Treasury Regulations 1.409A 1(b)(4), 1.409A 1(b)(5) and 1.409A 1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. In furtherance of the foregoing, the severance payments payable under the heading Severance shall be paid no later than the last date permitted in order to satisfy the exemption from Section 409A under Treasury Regulations 1.409A 1(b)(4). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A 2(b)(2)(iii)), your right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this Agreement, to the extent any payments to you pursuant to this Agreement constitute nonqualified deferred compensation subject to Section 409A of the Code or are intended to be exempt from Section 409A of the Code pursuant to Treasury Regulation Section 1.409A-1(b)(9)(iii), then, to the extent required by Section 409A of the Code or to satisfy such exception, no amount shall be payable pursuant to such sections unless your termination of employment constitutes a separation from service with the Company (as such term is defined in Treasury Regulation Section 1.409A-1(h) and any successor provision thereto) (a Separation from Service). Notwithstanding any provision to the contrary in this Agreement, if you are deemed by the Company at the time of your
Separation from Service under Section 409A to be a specified employee for purposes of Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be deferred compensation, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to you prior to the earliest of (i) the expiration of the six-month and one day period measured from the date of your Separation from Service with the Company, or (ii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to you, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. If the Company determines that any severance benefits provided under this Agreement constitute nonqualified deferred compensation under Section 409A, for purposes of determining the schedule for payment of the severance benefits, any such severance benefits shall not be paid, or in the case of installments shall not commence payment, until the sixtieth (60th) day following the Separation from Service or other applicable payment event. In addition to the above, to the extent required to comply with Section 409A and the applicable regulations and guidance issued thereunder, if the applicable deadline for you to execute (and not revoke) the applicable release spans two calendar years, payment of the applicable severance benefits shall not commence until the beginning of the second calendar year. To the extent required to avoid accelerated taxation and/or tax penalties under Section 409A, amounts reimbursable to you under this Agreement shall be paid to you on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to you) during any one year may not effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment. Notwithstanding the foregoing if a Change in Control would give rise to a payment or settlement event with respect to any payment or benefit that constitutes nonqualified deferred compensation, the transaction or event constituting the Change in Control must also constitute a change in control event (as defined in Treasury Regulation §1.409A-3(i)(5)) in order to give rise to the payment or settlement event for such payment or benefit, to the extent required by Section 409A.
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Nondisclosure and Developments
As a condition of your employment, you shall sign the Companys standard employee Proprietary Information, Inventions and Assignment Agreement (the Proprietary Rights Agreement).
No Conflicting Obligation
You hereby represent and warrant that as of the execution and delivery of this Agreement, the performance by you of any or all of the terms of this Agreement and the performance by you of your duties as an employee of the Company do not and will not breach or contravene (i) any agreement or contract (including, without limitation, any employment or consulting agreement, any agreement not to compete or any confidentiality or nondisclosure agreement) to which you are or may become a party on or at any time after your commencement of employment or (ii) any obligation you may otherwise have under applicable law to any former employer or to any person to whom you have provided, provide or will provide consulting services. You hereby further represent and warrant to the Company that, prior to the date of this Agreement, you have provided to the Company a copy of any and all potentially conflicting agreements for the Companys review.
Defend Trade Secrets Act Notice of Immunity Rights
You acknowledge that the Company has provided you with the following notice of immunity rights in compliance with the requirements of the Defend Trade Secrets Act: (i) you shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law; (ii) you shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of proprietary information that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal; and (iii) if you file a lawsuit for retaliation by the Company for reporting a suspected violation of law, you may disclose the proprietary information to your attorney and use the proprietary information in the court proceeding, if you file any document containing the proprietary information under seal, and do not disclose the proprietary information, except pursuant to court order.
Termination
You acknowledge that the employment relationship between the Company and you is at-will, meaning that the employment relationship may be terminated by the Company or you for any reason or for no reason. Either party may terminate your employment with the Company at any time and for any or no reason upon thirty (30) days prior written notice; provided that the Company may terminate you for Cause and you may resign following the occurrence of Good Reason (subject to the process specified within the definition) at any time upon written notice.
Regardless of the reason your employment with the Company terminates, you will continue to comply with the Proprietary Rights Agreement contemplated hereby.
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November 22, 2021
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Work Eligibility
You agree that prior to the commencement of employment, you will provide the Company with sufficient documentation to demonstrate your eligibility to work in the United States and, at the request of the Company, shall provide any additional documentation requested by the Company to demonstrate your eligibility to work in the United States.
Governing Law
This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Massachusetts.
Dispute Resolution
To ensure the rapid and economical resolution of disputes that may arise in connection with your employment with the Company, you and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, your employment with the Company, or the termination of your employment from the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in Boston, MA by JAMS, Inc. (JAMS) or its successors, under JAMS then applicable rules and procedures for employment disputes (which can be found at http://www.jamsadr.com/rules-clauses/, and which will be provided to you on request); provided that the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrators essential findings and conclusions and a statement of the award. You and the Company shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law. BOTH YOU AND THE COMPANY ACKNOWLEDGE THAT BY AGREEING TO THIS ARBITRATION PROCEDURE, YOU AND THE COMPANY WAIVE THE RIGHT TO RESOLVE ANY SUCH DISPUTE THROUGH A TRIAL BY JURY OR JUDGE OR ADMINISTRATIVE PROCEEDING. The Company shall pay all filing fees in excess of those which would be required if the dispute were decided in a court of law, and shall pay the arbitrators fee. Nothing in this Agreement is intended to prevent either the Company or you from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. This section is intended to be the exclusive method for resolving any and all claims by the parties against each other for payment of damages under this Agreement or relating to your employment; provided, however, that you shall retain the right to file administrative charges with or seek relief through any government agency of competent jurisdiction, and to participate in any government investigation, including but not limited to (i) claims for workers compensation, state disability insurance or unemployment insurance; (ii) claims for unpaid wages or waiting time penalties brought before the California Division of Labor Standards Enforcement (or any similar agency in any applicable jurisdiction other than California); provided, however, that any appeal from an award or from denial of an award of wages and/or waiting time penalties shall be arbitrated pursuant to the terms of this Agreement; and (iii) claims for administrative relief from the United States Equal Employment Opportunity Commission and/or the California Department of Fair Employment and Housing (or any similar agency in any applicable jurisdiction other than California); provided, further, that you shall not be entitled to obtain any monetary relief through such agencies other than workers compensation benefits or unemployment insurance benefits.
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Entire Agreement; Amendment
This Agreement (together with the Proprietary Rights Agreement contemplated hereby) and the equity documents referenced herein, including your prior stock option grant) sets forth the sole and entire agreement and understanding between the Company and you with respect to the specific matters contemplated and addressed hereby and thereby. No prior agreement, whether written or oral, shall be construed to change or affect the operation of this Agreement in accordance with its terms, and any provision of any such prior agreement, which conflicts with or contradicts any provision of this Agreement, is hereby revoked and superseded. Any prior agreement, if any, you may have with the Company regarding your employment, whether written or oral, is hereby, and without any further action on your part or the Companys, terminated, revoked and superseded by this Agreement. This Agreement may be amended or terminated only by a written instrument executed both by you and the Company. Upon your commencement of employment, that certain Service Agreement dated as of June 23, 2021 by and between the Company and you shall terminate. As you will be continuing to provide services to the Company, all of your previously granted stock options shall remain outstanding and in effect without any modification, except that the previously granted stock options shall be subject to the accelerated vesting provisions set forth in the Severance paragraphs above.
Notices
Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to you at the address as listed on the Company payroll.
Severability
Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the Parties.
Waiver
Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
Counterparts
This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but both of which taken together will constitute one and the same Agreement.
Headings
The headings of the sections and paragraphs hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
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November 22, 2021
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Indemnification and Directors and Officers Insurance
The Company will indemnify you to the fullest extent permitted by the laws of the State of Delaware, as in effect at the time of the subject act or omission, and you shall be entitled to the protection of any insurance policies the Company may elect to maintain generally for the benefit of its directors and officers.
Successors and Assigns
This Agreement is intended to bind and inure to the benefit of and be enforceable by you and the Company, and your respective successors, assigns, heirs, executors and administrators, except that you may not assign any of your duties hereunder and you may not assign any of your rights hereunder without the written consent of the Company, which shall not be withheld unreasonably.
No Mitigation/No Offset
You are not required to seek other employment or to attempt in any way to reduce any amounts payable to you under this Agreement (and the equity agreements), and the Company shall not be entitled to offset any amounts otherwise received or for which you become eligible from any other source, except as contemplated with respect to COBRA.
[Signature Page Follows]
Philippe Tinmouth
November 22, 2021
Page 13
Please acknowledge your acceptance of the terms of this Agreement by signing below and returning a copy to me.
Sincerely, | ||||||||
PARDES BIOSCIENCES, INC. | ||||||||
By: |
/s/ Uri A. Lopatin, M.D. |
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Name: Uri A. Lopatin, M.D. | ||||||||
Title: President and CEO | ||||||||
Accepted and Agreed: | ||||||||
I hereby acknowledge that I have had a full and adequate opportunity to read, understand and discuss the terms and conditions contained in this Agreement prior to signing hereunder. | ||||||||
/s/ Philippe Tinmouth |
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Philippe Tinmouth | ||||||||
Date: November 22, 2021 |
Exhibit 1
Form of Release Agreement
[***]
Exhibit 10.13
PARDES BIOSCIENCES INC.
SENIOR EXECUTIVE CASH INCENTIVE BONUS PLAN
1. Purpose
This Senior Executive Cash Incentive Bonus Plan (the Incentive Plan) is intended to provide an incentive for superior work and to motivate eligible executives of Pardes Biosciences Inc. (the Company) and its subsidiaries toward even higher achievement and business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to attract and retain highly qualified executives. This Incentive Plan is for the benefit of Covered Executives (as defined below).
2. Covered Executives
From time to time, the Compensation Committee of the Board of Directors of the Company (the Compensation Committee) may select certain key executives (the Covered Executives) to be eligible to receive bonuses hereunder. Participation in this Incentive Plan does not change the at will nature of a Covered Executives employment with the Company.
3. Administration
The Compensation Committee shall have the sole discretion and authority to administer and interpret this Incentive Plan.
4. Bonus Determinations
(a) Corporate Performance Goals. A Covered Executive may receive a bonus payment under this Incentive Plan based upon the attainment of one or more performance objectives that are established by the Compensation Committee and relate to financial and operational metrics with respect to the Company or any of its subsidiaries that were approved by the Board of Directors of the Company (the Corporate Performance Goals), including the following: research, pre- clinical, non-clinical, developmental, publication, clinical or regulatory milestones; scientific or technological advances; R&D or manufacturing capabilities; cash flow (including, but not limited to, operating cash flow and free cash flow); revenue; corporate revenue; earnings before interest, taxes, depreciation and amortization; net income (loss) (either before or after interest, taxes, depreciation and/or amortization); changes in the market price of the Companys common stock; economic value-added; acquisitions or strategic transactions, including licenses, collaborations or joint ventures; financing or other capital raising transactions; operating income (loss); return on capital, assets, equity, or investment; stockholder returns; return on sales; total shareholder return; gross or net profit levels; productivity; expense; efficiency; margins; operating efficiency; satisfaction of, or other achievement metrics relating to, key third parties; working capital; earnings (loss) per share of the Companys common stock; bookings, new bookings or renewals; sales or market shares; number of prescriptions or prescribing physicians; coverage decisions; leadership development, employee retention, and recruiting and other human resources matters; operating income and/or net annual recurring revenue, any of which may be (A) measured in absolute terms or compared to any incremental increase, (B) measured in terms of growth, (C) compared to
another company or companies or to results of a peer group, (D) measured against the market as a whole and/or as compared to applicable market indices, and/or (E) measured on a pre-tax or post- tax basis (if applicable). Further, any Corporate Performance Goals may be used to measure the performance of the Company as a whole or a business unit or other segment of the Company, or one or more product lines or specific markets. The Corporate Performance Goals may differ from Covered Executive to Covered Executive.
(b) Calculation of Corporate Performance Goals. At the beginning of each applicable performance period, the Compensation Committee will determine whether any significant element(s) will be included in or excluded from the calculation of any Corporate Performance Goal with respect to any Covered Executive. In all other respects, Corporate Performance Goals will be calculated in accordance with the Companys financial statements, generally accepted accounting principles, or under a methodology established by the Compensation Committee at the beginning of the performance period and which is consistently applied with respect to a Corporate Performance Goal in the relevant performance period.
(c) Target; Minimum; Maximum. Each Corporate Performance Goal shall have a target (i.e., 100 percent attainment of the Corporate Performance Goal) and may also have a minimum hurdle and/or a maximum amount.
(d) Bonus Requirements; Individual Goals. Except as otherwise set forth in this Section 4(d): (i) any bonuses paid to Covered Executives under this Incentive Plan shall be based upon objectively determinable bonus formulas that tie such bonuses to one or more performance targets relating to the Corporate Performance Goals, (ii) bonus formulas for Covered Executives shall be adopted in each performance period by the Compensation Committee and communicated to each Covered Executive at the beginning of each performance period and (iii) no bonuses shall be paid to Covered Executives unless and until the Compensation Committee makes a determination with respect to the attainment of the performance targets relating to the Corporate Performance Goals. Notwithstanding the foregoing, the Compensation Committee may adjust bonuses payable under this Incentive Plan based on achievement of one or more individual performance objectives or pay bonuses (including, without limitation, additional discretionary bonuses) to Covered Executives under this Incentive Plan based on individual performance goals and/or upon such other terms and conditions as the Compensation Committee may in its discretion determine.
(e) Individual Target Bonuses. The Compensation Committee shall establish a target bonus opportunity for each Covered Executive for each performance period. For each Covered Executive, the Compensation Committee shall, in its discretion, have the authority to apportion the target award so that a portion of the target award shall be tied to attainment of Corporate Performance Goals and a portion of the target award shall be tied to attainment of individual performance objectives.
(f) Employment Requirement. Subject to any additional terms that may be contained in a written agreement between the Covered Executive and the Company, the payment of a bonus to a Covered Executive with respect to a performance period shall be conditioned upon the Covered Executives employment by the Company on the bonus payment date, unless otherwise determined by the Compensation Committee. If an executive becomes a Covered Executive and participant in this Incentive Plan during a performance period and was not employed for the entire performance period, the Compensation Committee may pro rate the bonus based on the number of days employed during such period.
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5. Timing of Payment
(a) With respect to Corporate Performance Goals established and measured on a basis more frequently than annually (e.g., quarterly or semi-annually), the Corporate Performance Goals will be measured at the end of each performance period after the Companys financial reports with respect to such period(s) have been published or such other appropriate time as the Compensation Committee determines. If the Corporate Performance Goals and/or individual goals for such period are met, payments will be made as soon as practicable following the end of such period, but not later than two and one-half months after the end of the fiscal year in which such performance period ends.
(b) With respect to Corporate Performance Goals established and measured on an annual or multi-year basis, Corporate Performance Goals will be measured as of the end of each such performance period (e.g., at the end of each fiscal year) after the Companys financial reports with respect to such period(s) have been published or such other appropriate time as the Compensation Committee determines. If the Corporate Performance Goals and/or individual goals for any such period are met, bonus payments will be made as soon as practicable, but not later than two and one-half months after the end of the fiscal year in which such performance period ends.
6. Amendment and Termination
The Company reserves the right to amend or terminate this Incentive Plan at any time in its sole discretion.
7. Effective Date
The Incentive Plan is effective as of the day of the closing of the transactions contemplated by that certain Agreement and Plan of Merger dated June 29, 2021, as amended, by and among the Company and certain other parties thereto, for performance periods beginning on or after January 1, 2022.
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Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
The Board of Directors
Pardes Biosciences, Inc.
We consent to the use of our report dated July 20, 2021, with respect to the balance sheet of Pardes Biosciences, Inc. (the Company) as of December 31, 2020, the related statements of operations and comprehensive loss, convertible preferred stock and stockholders deficit, and cash flows for the period from February 27, 2020 (inception) to December 31, 2020, and the related notes, included herein and to the reference to our firm under the heading Experts in the prospectus.
Our report dated July 20, 2021 contains an explanatory paragraph that states that the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of that uncertainty.
/s/ KPMG LLP
Irvine, California
January 21, 2022
Exhibit 23.3
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in the Prospectus constituting a part of this Registration Statement on Form S-1 of our report dated February 18, 2021 relating to the financial statements of FS Development Corp. II, which is contained in that Prospectus. We also consent to the reference to our firm under the caption Experts in the Prospectus.
/s/ WithumSmith+Brown, PC
New York, New York
January 21, 2022