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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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20-4864095
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(State or other jurisdiction
of incorporation or organization)
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(I.R.S. Employer
Identification No.)
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3201 Carnegie Avenue, Cleveland, Ohio
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44115-2634
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(Address of principal executive offices)
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(Zip Code)
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Common Stock, par value $0.001 per share
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ATHX
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The NASDAQ Stock Market LLC
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Large accelerated filer
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☐
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Accelerated filer
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x
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Non-accelerated filer
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☐
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Smaller reporting company
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x
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Emerging growth company
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☐
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PART I. FINANCIAL INFORMATION
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ITEM 1.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II. OTHER INFORMATION
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ITEM 1A.
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ITEM 2.
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ITEM 6.
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March 31,
2020 |
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December 31,
2019 |
||||
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(Unaudited)
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Assets
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Current assets:
|
|
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|
|
||||
Cash and cash equivalents
|
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$
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32,692
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$
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35,041
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Accounts receivable
|
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17
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|
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17
|
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Accounts receivable from Healios
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259
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|
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945
|
|
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Prepaid expenses and other
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1,503
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1,168
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Total current assets
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34,471
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37,171
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Equipment, net
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3,039
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|
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2,882
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Deposits and other
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1,558
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1,613
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Total assets
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$
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39,068
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$
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41,666
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Liabilities and stockholders’ equity
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|
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Current liabilities:
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Accounts payable
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$
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10,650
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$
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9,048
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Accounts payable to Healios
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1,068
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1,068
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Accrued compensation and related benefits
|
|
872
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|
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773
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||
Accrued clinical trial related costs
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1,106
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1,160
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Accrued expenses and other
|
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859
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|
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723
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Deferred revenue - Healios
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65
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65
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Total current liabilities
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14,620
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12,837
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Advance from Healios
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5,338
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5,338
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Other long-term liabilities
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102
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|
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220
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Stockholders’ equity:
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Preferred stock, at stated value; 10,000,000 shares authorized, and no shares issued and outstanding at March 31, 2020 and December 31, 2019
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—
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—
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Common stock, $0.001 par value; 300,000,000 shares authorized, and 170,770,089 and 159,791,585 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively
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171
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|
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160
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Additional paid-in capital
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459,145
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440,735
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Stock subscription receivable from Healios
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(7,040
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)
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—
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Accumulated deficit
|
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(433,268
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)
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(417,624
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)
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Total stockholders’ equity
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19,008
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23,271
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Total liabilities and stockholders’ equity
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$
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39,068
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$
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41,666
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Three months ended
March 31, |
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2020
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2019
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Revenues
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Contract revenue from Healios
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$
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—
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$
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1,441
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Grant revenue
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—
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4
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Total revenues
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—
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1,445
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Costs and expenses
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Research and development
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12,095
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11,415
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General and administrative
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3,474
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3,106
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Depreciation
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190
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184
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Total costs and expenses
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15,759
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14,705
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Loss from operations
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(15,759
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)
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(13,260
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)
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Other income, net
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115
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304
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Net loss and comprehensive loss
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$
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(15,644
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)
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$
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(12,956
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)
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Net loss per share, basic and diluted
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$
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(0.10
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)
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$
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(0.09
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)
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Weighted average shares outstanding, basic and diluted
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162,715
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145,964
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Preferred Stock
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Common Stock
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Stock Subscription Receivable
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Additional
Paid-in
Capital
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Accumulated
Deficit
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Total
Stockholders’
Equity
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||||||||||||||||||
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Number
of Shares
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Stated
Value
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Number
of Shares
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Par
Value
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|||||||||||||||||||||
Balance at December 31, 2019
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—
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$
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—
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159,791,585
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$
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160
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|
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$
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—
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$
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440,735
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$
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(417,624
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)
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$
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23,271
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Stock-based compensation
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—
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—
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—
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—
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—
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1,280
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—
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1,280
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||||||
Stock subscription receivable from Healios warrant exercise
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—
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—
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4,000,000
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4
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(7,040
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)
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7,036
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—
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—
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Issuance of common stock
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—
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—
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6,825,000
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7
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—
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10,243
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—
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10,250
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Issuance of common stock under equity compensation plan
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—
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—
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153,504
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—
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—
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(149
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)
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—
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|
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(149
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)
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||||||
Net comprehensive loss
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—
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|
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—
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|
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—
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|
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—
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|
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—
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|
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—
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|
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(15,644
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)
|
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(15,644
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)
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||||||
Balance at March 31, 2020
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—
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$
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—
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170,770,089
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$
|
171
|
|
|
$
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(7,040
|
)
|
|
$
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459,145
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|
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$
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(433,268
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)
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$
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19,008
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|
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Preferred Stock
|
|
Common Stock
|
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Additional
Paid-in
Capital
|
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Accumulated
Deficit
|
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Total
Stockholders’
Equity
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||||||||||||||||
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Number
of Shares
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Stated
Value
|
|
Number
of Shares
|
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Par
Value
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|||||||||||||||||
Balance at December 31, 2018
|
—
|
|
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$
|
—
|
|
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144,292,739
|
|
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$
|
144
|
|
|
$
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416,014
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|
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$
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(373,042
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)
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$
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43,116
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Stock-based compensation
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,090
|
|
|
—
|
|
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1,090
|
|
|||||
Issuance of common stock
|
—
|
|
|
—
|
|
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3,825,000
|
|
|
4
|
|
|
5,603
|
|
|
—
|
|
|
5,607
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|
|||||
Issuance of common stock under equity compensation plan
|
—
|
|
|
—
|
|
|
158,494
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|
|
—
|
|
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(69
|
)
|
|
—
|
|
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(69
|
)
|
|||||
Net comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
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|
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(12,956
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)
|
|
(12,956
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)
|
|||||
Balance at March 31, 2019
|
—
|
|
|
$
|
—
|
|
|
148,276,233
|
|
|
$
|
148
|
|
|
$
|
422,638
|
|
|
$
|
(385,998
|
)
|
|
$
|
36,788
|
|
|
|
Three months ended
March 31, |
||||||
|
|
2020
|
|
2019
|
||||
Operating activities
|
|
|
|
|
||||
Net loss
|
|
$
|
(15,644
|
)
|
|
$
|
(12,956
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
||||
Depreciation
|
|
190
|
|
|
184
|
|
||
Stock-based compensation
|
|
1,280
|
|
|
1,090
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
||||
Accounts receivable
|
|
—
|
|
|
251
|
|
||
Accounts receivable from Healios - billed and unbilled
|
|
686
|
|
|
2,261
|
|
||
Prepaid expenses, deposits and other
|
|
(279
|
)
|
|
1,101
|
|
||
Accounts payable and accrued expenses
|
|
1,664
|
|
|
1,210
|
|
||
Deferred revenue - Healios
|
|
—
|
|
|
499
|
|
||
Advances and deposits from Healios
|
|
—
|
|
|
845
|
|
||
Net cash used in operating activities
|
|
(12,103
|
)
|
|
(5,515
|
)
|
||
Investing activities
|
|
|
|
|
||||
Purchases of equipment
|
|
(347
|
)
|
|
(64
|
)
|
||
Net cash used in investing activities
|
|
(347
|
)
|
|
(64
|
)
|
||
Financing activities
|
|
|
|
|
||||
Proceeds from issuance of common stock
|
|
10,250
|
|
|
5,607
|
|
||
Shares retained for withholding tax payments on stock-based awards
|
|
(149
|
)
|
|
(69
|
)
|
||
Net cash provided by financing activities
|
|
10,101
|
|
|
5,538
|
|
||
Decrease in cash and cash equivalents
|
|
(2,349
|
)
|
|
(41
|
)
|
||
Cash and cash equivalents at beginning of the period
|
|
35,041
|
|
|
51,059
|
|
||
Cash and cash equivalents at end of the period
|
|
$
|
32,692
|
|
|
$
|
51,018
|
|
|
|
Three months ended
March 31, |
||||
|
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2020
|
|
2019
|
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Stock-based awards
|
|
16,662
|
|
|
12,431
|
|
Healios warrant – see Note 6
|
|
—
|
|
|
17,000
|
|
Total
|
|
16,662
|
|
|
29,431
|
|
|
|
Three months ended March 31, 2020
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Three months ended
March 31, 2019 |
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Point in
Time
|
|
Over Time
|
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Point in
Time
|
|
Over Time
|
||||||||
Contract Revenue from Healios
|
|
|
|
|
|
|
|
|
||||||||
Product supply revenue
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
966
|
|
|
$
|
—
|
|
Service revenue
|
|
—
|
|
|
—
|
|
|
—
|
|
|
475
|
|
||||
Total disaggregated revenues
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
966
|
|
|
$
|
475
|
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•
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our ability to raise capital to fund our operations;
|
•
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our ability to successfully finalize and implement an alliance with BARDA, and the terms of any such alliance, including the amount, if any, of funding that we might receive;
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•
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the success of our MACOVIA study and MATRICS-1 clinical trial;
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•
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the timing and nature of results from MultiStem clinical trials, including the MASTERS-2 Phase 3 clinical trial, the Phase 2 clinical trial conducted by The University of Texas Health Science Center at Houston at the Memorial Hermann-Texas Medical Center evaluating MultiStem cell therapy for the early treatment of traumatic injuries, and the Healios TREASURE and ONE-BRIDGE clinical trials in Japan;
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•
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the impact on our business, results of operations and financial condition from the ongoing and global COVID-19 pandemic, or any other pandemic, epidemic or outbreak of infectious disease in the United States;
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•
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the possibility of delays in, adverse results of, and excessive costs of the development process;
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•
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our ability to successfully initiate and complete clinical trials of our product candidates;
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•
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the possibility of delays, work stoppages or interruptions in manufacturing by third parties or us, such as due to material supply constraints, contaminations, or regulatory issues, which could negatively impact our trials and the trials of our collaborators;
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•
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uncertainty regarding market acceptance of our product candidates and our ability to generate revenues, including MultiStem cell therapy for the treatment of ischemic stroke, ARDS, acute myocardial infarction and trauma, and the prevention of graft-versus-host disease and other disease indications;
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•
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changes in external market factors;
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•
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changes in our industry’s overall performance;
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•
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changes in our business strategy;
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•
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our ability to protect and defend our intellectual property and related business operations, including the successful prosecution of our patent applications and enforcement of our patent rights, and operate our business in an environment of rapid technology and intellectual property development;
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•
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our possible inability to realize commercially valuable discoveries in our collaborations with pharmaceutical and other biotechnology companies;
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•
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our ability to meet milestones and earn royalties under our collaboration agreements, including the success of our collaboration with Healios;
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•
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our collaborators’ ability to continue to fulfill their obligations under the terms of our collaboration agreements and generate sales related to our technologies;
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•
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the success of our efforts to enter into new strategic partnerships and advance our programs, including, without limitation, in North America, Europe and Japan;
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•
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our possible inability to execute our strategy due to changes in our industry or the economy generally;
|
•
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changes in productivity and reliability of suppliers;
|
•
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the success of our competitors and the emergence of new competitors; and
|
•
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the risks mentioned elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2019 under Item 1A, “Risk Factors” and our other filings with the SEC.
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Exhibit No.
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|
Description
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10.1†
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10.2†
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10.3†
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31.1
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31.2
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32.1
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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†
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Indicates management contract or compensatory plan, contract or arrangement in which one or more directors or executive officers of the registrant may be participants.
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|
ATHERSYS, INC.
|
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Date: May 7, 2020
|
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/s/ Gil Van Bokkelen
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Gil Van Bokkelen
|
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|
|
Chairman and Chief Executive Officer
|
|
|
|
(principal executive officer authorized to sign on behalf of the registrant)
|
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|
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/s/ Ivor Macleod
|
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|
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Ivor Macleod
|
|
|
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Chief Financial Officer
|
|
|
|
(principal financial officer authorized to sign on behalf of the registrant)
|
|
•
|
Work with the CEO and other members of the leadership team to provide strategic input and leadership for the organization;
|
•
|
Provide financial expertise and leadership as part of the Executive Management team;
|
•
|
Lead the financial planning process;
|
•
|
Analyze financial strengths and weaknesses, assess financial risks, provide strategic input and propose corrective actions where appropriate;
|
•
|
Ensure timely preparation and submission of accurate financial reports;
|
•
|
Work with other members of the executive team to ensure effective Investor Relations strategy and capabilities, including interactions with investment banks, analysts, institutional fund managers, other current and/or potential shareholders, and the media where appropriate;
|
•
|
Engage in effective communications with current and potential corporate partners, and provide strategic input and evaluate new business opportunities where and when appropriate;
|
•
|
Help prepare the Company for the envisioned transition into commercialization;
|
•
|
Develop internal and external relationships and integrate fully into the Company, industry and its stakeholders; and
|
•
|
Expand and improve the reporting and analytical capabilities of our ERP system to support commercial operations.
|
•
|
An annual salary of $410,000 per year, payable monthly, during your employment with eligibility for merit increases from time to time at the discretion of the Board of Directors or its Compensation Committee;
|
•
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Beginning in 2020, participation during your employment in the Company’s annual cash incentive compensation program on terms substantially similar as those that apply to other executive officers of the Company, with a target opportunity of 40% of your annual salary (and no guaranteed minimum payment), subject to Company and/or individual performance as designed annually for such program by the Board of Directors or its Compensation Committee. Such 40% target opportunity will be weighted 80% toward corporate goal achievement and 20% toward individual goal achievement. Each annual cash incentive award will be subject to the specific approval of the Board of Directors or its Compensation Committee;
|
•
|
As an inducement to your acceptance of the position, based on our negotiations with you, we are pleased to agree on providing you with the following initial equity award, effective on your start date (“Grant Date”), which award is subject to the specific approval of the Board of Directors or its Compensation Committee and the terms of the governing Company equity plan:
|
o
|
A stock option award to purchase 600,000 shares of Company common stock at a per share exercise price equal to the closing price of a share of Athersys common stock on the Grant Date, with the award generally vesting over a four-year period and with a ten-year term. Vesting shall occur during that period with a one-year “cliff” for the first tranche (150,000 shares) and the remainder vesting quarterly in substantially equal installments over the remaining three years. The remaining terms of the award will be based substantially on a form Company stock option agreement approved for the purposes of your award, as shared with you;
|
•
|
Beginning in 2021, participation during your employment in the Company’s annual stock-based award program (e.g., stock options and RSUs) on terms substantially similar as those that apply to other executive officers of the Company. The terms of these awards will be determined annually at the discretion of the Board of Directors or its Compensation Committee. These awards will be subject to the specific approval of the Board of Directors or its Compensation Committee and the terms of the governing Company equity plan;
|
•
|
Coverage during your employment of reasonable commuting expense, including airfare, hotel/housing in Cleveland, and local transportation from your start date until July 31, 2020, up to an aggregate maximum value of $50,000 for such period;
|
•
|
$1 million of life insurance, in accordance with Company policy and practice, during your employment;
|
•
|
The Company will cover relocation-related costs for you and your family up to an aggregate of $50,000 if relocation has occurred by September 30, 2020; and
|
•
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As will be further described in an Employment Agreement to be entered into between you and the Company, the Company will provide you with six months of severance payments based on your then-effective base salary rate, and the opportunity to continue participation in the Company’s health plans during such period in the event of a termination of your employment by the Company without cause.
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If to Executive:
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At the most recent address
on file at the Company. |
1.
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Grant of Stock Option. Subject to and upon the terms, conditions, and restrictions set forth in this Agreement, the Company grants to the Optionee as of the Date of Grant an Option Right (the “Option”) to purchase Six Hundred Thousand (600,000) Common Shares (the “Option Shares”). The Option may be exercised from time to time in accordance with the terms of this Agreement.
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2.
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Type of Option. The Option is intended to be a nonqualified stock option and shall not be treated as an Incentive Stock Option.
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3.
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Option Price. The Option Shares may be purchased pursuant to this Option at a price of One Dollar and Thirty-Six Cents ($1.36) per Common Share, subject to adjustment as hereinafter provided (the “Option Price”).
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4.
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Term of Option/Agreement. The term of the Option shall commence on the Date of Grant and, unless earlier terminated in accordance with Section 7 hereof, shall terminate and expire automatically and without further notice ten (10) years from the Date of Grant.
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5.
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Right to Exercise.
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(a)
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Subject to Section 5(b) and (c), Section 7 and Section 11, the Option will vest and become exercisable as provided in the attached Exhibit A, for so long as the Optionee remains continuously employed with the Company or any Subsidiary. To the extent the Option is exercisable, it may be exercised in whole or in part. In no event shall the Optionee be entitled to acquire a fraction of one Option Share pursuant to this Option. The Optionee shall be entitled to the privileges of
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(b)
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Notwithstanding Section 5(a) above, the Option shall become immediately exercisable in full, if at any time prior to the termination of the Option, a Change in Control shall occur.
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(c)
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Notwithstanding Section 5(a) above, if the Optionee should die or become permanently disabled while in the employ of the Company or any Subsidiary, this Option shall immediately become exercisable in full and shall remain exercisable until terminated in accordance with Section 7 below. The Optionee shall be considered to have become permanently disabled if the Optionee’s employment terminates on account of the Optionee having become “permanently and totally disabled”, as defined in Section 22(e)(3) of the Code.
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6.
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Notice of Exercise; Payment. To the extent then exercisable, the Option may be exercised in whole or in part by written notice to the Company stating the number of Option Shares for which the Option is being exercised and the intended manner of payment. The date of such notice shall be the exercise date. The Option Price shall be payable (a) in cash or by check acceptable to the Company or by wire transfer of immediately available funds, (b) by actual or constructive transfer to the Company of nonforfeitable, unrestricted Common Shares that have been owned by the Optionee for more than six (6) months prior to the date of exercise, (c) for exercises of Options that occur more than one (1) year following the Date of Grant, by transfer to the Company of shares or vested Options under this Agreement for the purchase of Common Shares having a fair market value (net of the exercise price) at the time of exercise equal to the portion of the Option Price for which such transfer is made, or (d) by a combination of such methods of payment. The requirement of payment in cash shall be deemed satisfied if the Optionee shall have made arrangements satisfactory to the Company with a bank or a broker who is a member of the National Association of Securities Dealers, Inc. to sell on the exercise date a sufficient number of the shares being purchased so that the net proceeds of the sale transaction will at least equal the Option Price plus payment of any applicable withholding taxes and pursuant to which the bank or broker undertakes to deliver the full Option Price plus payment of any applicable withholding taxes to the Company on a date satisfactory to the Company, but not later than the date on which the sale transaction will settle in the ordinary course of business. As soon as practicable upon the Company’s receipt of the Optionee’s notice of exercise and payment, the Company shall direct the due issuance of the Option Shares so purchased.
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7.
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Termination. This Option shall terminate on the earliest of the following dates:
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(a)
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The date on which the Optionee ceases to be an employee of the Company or any Subsidiary, if the Optionee’s employment with the Company or a Subsidiary is terminated for Cause (“Cause” being defined as: (i) the commission of an act of fraud, embezzlement, theft or other criminal act constituting a felony; or (ii) the material breach of any provision contained in a written non-competition, confidentiality or non-disclosure agreement between the Company or any of its Subsidiaries and the Optionee);
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(b)
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Three (3) months after the Optionee ceases to be an employee of the Company or a Subsidiary, unless the Optionee ceases to be such employee by reason of death, permanent and total disability, Retirement or termination for Cause;
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(c)
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One (1) year after the death of the Optionee if the Optionee dies (i) while an employee of the Company or a Subsidiary (in which case the Option becomes
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(d)
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One (1) year after the permanent and total disability of the Optionee if the Optionee becomes permanently and totally disabled (as described in Section 5(c) above) while an employee of the Company or a Subsidiary (in which case the Option becomes immediately exercisable in full pursuant to Section 5(c) herein);
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(e)
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Five (5) years after the date that the Optionee shall Retire. For this purpose, “Retire” (or similar terms) shall mean that the Optionee terminates the Optionee’s employment by reason of the Optionee’s retirement entitling the Optionee to early, normal or late retirement benefits under the provisions of any retirement plan of the Company or its Subsidiaries in which the Optionee participates (or if no such plan exists, at or after age sixty-five (65)); and
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(f)
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Ten (10) years from the Date of Grant.
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8.
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Option Nontransferable. This Option is not transferable by the Optionee otherwise than by will or the laws of descent and distribution. In no event will any such award granted under this Agreement be transferred for value. This Option may be exercised, during the lifetime of the Optionee, only by the Optionee, or in the event of the Optionee’s legal incapacity, by the Optionee’s guardian or legal representative acting on behalf of the Optionee in a fiduciary capacity under state law or court supervision.
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9.
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Administration. This Section 9 shall apply to the Grant in lieu of Section 10 of the Plan. This Agreement will be administered by the Compensation Committee of the Board (or its successors) or a group of Board members consisting solely of all of the members of the Board who meet the requirements for independence under the Nasdaq Stock Market Listing Rules (the “Committee”). For purposes of this Agreement and the Grant, any references to “Committee” in the Plan shall be deemed references to the Committee as defined herein. The interpretation and construction by the Committee of any provision of this Agreement and any determination by the Committee pursuant to any provision of this Agreement or of any notification or document related hereto will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, subject to Section 17, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained or referenced in this Agreement, and no authorization in any section or other provision of this Agreement is intended or may be deemed to constitute a limitation on the authority of the Committee.
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10.
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Compliance with Law. This Option shall not be exercisable if such exercise would involve a violation of any applicable federal, state or other securities law.
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11.
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Adjustments. This Option and the Option Shares subject thereto, and the other terms and conditions of the grant evidenced by this Agreement, are subject to mandatory
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12.
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Taxes and Withholding. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by the Grantee or another person under this Agreement, the Grantee agrees that the Company will withhold any taxes required to be withheld by the Company under federal, state, local or foreign law from the Option Shares in an amount sufficient to satisfy the minimum statutory withholding amount permissible (unless the Committee takes action subsequent to the Date of Grant requiring such withholding amount to be paid by the Grantee in cash). The Option Shares so retained shall be credited against any such withholding requirement at the market value of such Common Shares on the date of such withholding. In no event will the market value of the Common Shares to be withheld pursuant to this Section 11 to satisfy applicable withholding taxes exceed the maximum amount of taxes or other amounts that could be required to be withheld.
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13.
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Continuous Employment. For purposes of this Agreement, the continuous employment of the Optionee with the Company or a Subsidiary shall not be deemed to have been interrupted, and the Optionee shall not be deemed to have ceased to be an employee of the Company or Subsidiary, by reason of the (a) transfer of the Optionee’s employment among the Company and its Subsidiaries or (b) an approved leave of absence.
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14.
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No Employment Contract. This Option is a voluntary, discretionary award being made on a one-time basis and it does not constitute a commitment to make any future awards. This Option and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing in this Agreement will give the Optionee any right to continue employment with the Company or any Subsidiary, as the case may be, or interfere in any way with the right of the Company or a Subsidiary to terminate the employment of the Optionee.
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15.
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Information. Information about the Optionee and the grant of the Option to the Optionee may be collected, recorded and held, used and disclosed for any purpose related to the administration of this Agreement. The Optionee understands that such processing of this information may need to be carried out by the Company and its Subsidiaries and by third party administrators whether such persons are located within the Optionee’s country or elsewhere, including the United States of America. The Optionee consents to the processing of information relating to the Optionee and the grant of the Option to the Optionee in any one or more of the ways referred to above.
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16.
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Relation to Plan. This Grant has not been awarded pursuant to the Plan, but this Grant and Agreement are subject to terms and conditions that are substantially the same as those set forth in the Plan that are applicable to Option Rights. Notwithstanding the foregoing, and for the avoidance of doubt, the Share limitations and share counting and recycling rules set forth in the Plan shall not apply with respect to the Grant. Notwithstanding anything in this Agreement to the contrary, Grantee acknowledges and agrees that this
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17.
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Amendments.
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(a)
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The Committee may at any time and from time to time amend this Agreement in whole or in part; provided, however, that if an amendment to this Agreement requires approval by the Stockholders in order to comply with applicable law or the rules of the Nasdaq Stock Market or, if the Common Shares are not traded on the Nasdaq Stock Market, the principal national securities exchange upon which the Common Shares are traded or quoted, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained; provided further, that no amendment shall materially adversely affect the rights of the Grantee under this Agreement without the Grantee’s consent.
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(b)
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For the avoidance of doubt, except in connection with a corporate transaction or event described in Section 12 of the Plan or in connection with a Change in Control, the terms of this Agreement may not be amended to reduce the Option Price of the Option Right, or cancel the Option if it is outstanding and “underwater” in exchange for cash, other awards or Option Rights with an Option Price that is less than the Option Price of the Optionee’s original Option Right, without Stockholder approval. This Section 17 is intended to prohibit the repricing of “underwater” Option Rights and will not be construed to prohibit the kinds of adjustments described in Section 12 of the Plan. Notwithstanding any provision of this Agreement to the contrary, this Section 17 may not be amended without approval by the Stockholders.
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18.
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Severability. If any provision of this Agreement or the application of any provision hereof to any person or circumstances is held invalid, unenforceable or otherwise illegal, the remainder of this Agreement and the application of such provision to any other person or circumstances shall not be affected, and the provisions so held to be invalid, unenforceable or otherwise illegal shall be reformed to the extent (and only to the extent) necessary to make it enforceable, valid and legal.
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19.
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Successors and Assigns. Without limiting Section 8 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Optionee, and the successors and assigns of the Company.
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20.
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Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement.
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21.
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Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.
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22.
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Notices. Any notice to the Company provided for herein shall be in writing to the Company, marked Attention: President, and any notice to the Optionee shall be addressed to said Optionee at the Optionee’s address on file with the Company at the time of such notice. Except as otherwise provided herein, any written notice shall be deemed to be duly given if and when delivered personally or deposited in the United States mail, first class registered mail, postage and fees prepaid, and addressed as aforesaid. Any party may change the address to which notices are to be given hereunder by written notice to the other party as herein specified (provided that for this purpose any mailed notice shall be deemed given on the third business day following deposit of the same in the United States mail).
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23.
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Compliance with or Exemption From Section 409A of the Code. To the extent applicable, it is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) do not apply to the Optionee. This Agreement shall be administered in a manner consistent with this intent and, for the avoidance of doubt, in accordance with the terms that apply under Section 17 of the Plan.
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1.
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I have reviewed this quarterly report on Form 10-Q of Athersys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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May 7, 2020
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/s/ Gil Van Bokkelen
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Gil Van Bokkelen
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Chief Executive Officer and
Chairman of the Board of Directors
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1.
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I have reviewed this quarterly report on Form 10-Q of Athersys, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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May 7, 2020
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/s/ Ivor Macleod
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Ivor Macleod
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Chief Financial Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.
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Date: May 7, 2020
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/s/ Gil Van Bokkelen
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Name: Gil Van Bokkelen
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Title: Chairman and Chief Executive Officer
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/s/ Ivor Macleod
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Name: Ivor Macleod
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Title: Chief Financial Officer
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