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Delaware
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8071
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26-1911522
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(State or other jurisdiction of
incorporation or organization) |
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(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number) |
|
|
Jonathan L. Kravetz
Megan N. Gates Daniel H. Follansbee Mintz, Levin, Cohn, Ferris, Glovsky, and Popeo, P.C. One Financial Center Boston, MA 02111 (617) 542-6000 |
| |
Edwin M. O’Connor
Seo Salimi Goodwin Procter LLP 620 Eighth Avenue New York, New York 10018 (212) 813-8800 |
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Large accelerated filer
☐
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Accelerated filer
☐
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Non-accelerated filer
☒
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Smaller reporting company
☒
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| | | |
Emerging growth company
☒
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Title of Securities being Registered
|
| | |
Amount to be
Registered(1) |
| | |
Proposed Maximum
Offering Price Per Share |
| | |
Proposed Maximum
Aggregate Offering Price(2) |
| | |
Amount of
Registration Fee(3) |
|
Class A Common Stock, $0.0001 par value per share
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Page
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| | | | F-1 | | |
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Three Months Ended March 31,
|
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Year Ended December 31,
|
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2021
|
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2020
|
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2020
|
| |
2019
|
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| | |
(in thousands, except share and per share amounts)
|
| |||||||||||||||||||||
| | |
(unaudited)
|
| | | | | | | | | | | | | |||||||||
Statements of Operations and Comprehensive Loss
Data: |
| | | | | | | | | | | | | | | | | | | | | | | | |
Revenue
|
| | | $ | 13 | | | | | $ | 8 | | | | | $ | 25 | | | | | $ | 36 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | | | | | | | |
Cost of revenue
|
| | | | 5 | | | | | | 3 | | | | | | 11 | | | | | | 18 | | |
Research and development
|
| | | | 2,396 | | | | | | 2,050 | | | | | | 7,782 | | | | | | 9,353 | | |
Selling and marketing
|
| | | | 1,350 | | | | | | 868 | | | | | | 3,645 | | | | | | 2,963 | | |
General and administrative
|
| | | | 2,287 | | | | | | 1,379 | | | | | | 6,558 | | | | | | 4,278 | | |
Total operating expenses
|
| | | | 6,038 | | | | | | 4,300 | | | | | | 17,996 | | | | | | 16,612 | | |
Loss from operations
|
| | | | (6,025) | | | | | | (4,292) | | | | | | (17,971) | | | | | | (16,576) | | |
Interest expense
|
| | | | (307) | | | | | | (437) | | | | | | (1,839) | | | | | | (1,972) | | |
Other income (expense), net
|
| | | | (27) | | | | | | 33 | | | | | | (38) | | | | | | 2,027 | | |
Net loss and comprehensive loss
|
| | | $ | (6,359) | | | | | $ | (4,696) | | | | | $ | (19,848) | | | | | $ | (16,521) | | |
Net loss per share attributable to common stockholders, basic and diluted(1)
|
| | | $ | (1.71) | | | | | $ | (1.48) | | | | | $ | (6.14) | | | | | $ | (5.24) | | |
Weighted-average common shares outstanding, basic and diluted(1)
|
| | | | 3,725,328 | | | | | | 3,171,251 | | | | | | 3,234,476 | | | | | | 3,153,654 | | |
Pro forma net loss per share, basic and diluted (unaudited)(1)
|
| | | $ | (0.17) | | | | | | | | | | | $ | (0.56) | | | | | | | | |
Pro forma weighted-average common shares outstanding, basic and diluted (unaudited)(1)
|
| | | | 37,645,659 | | | | | | | | | | | | 35,756,690 | | | | | | | | |
| | |
As of March 31, 2021
(unaudited) |
| |||||||||||||||
|
Actual
|
| |
Pro forma(1)
|
| |
Pro forma
as adjusted(2) |
| |||||||||||
| | |
(in thousands)
|
| |||||||||||||||
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 60,016 | | | | | $ | 98,816 | | | | | $ | | | |
Working capital(3)
|
| | | $ | 56,709 | | | | | $ | 95,509 | | | | | $ | | | |
Total assets
|
| | | $ | 62,744 | | | | | $ | 101,544 | | | | | $ | | | |
Convertible preferred stock
|
| | | $ | 188,343 | | | | | $ | — | | | | | $ | | | |
Accumulated deficit
|
| | | $ | (137,818) | | | | | $ | (137,818) | | | | | $ | | | |
Total stockholders’ (deficit) equity
|
| | | $ | (130,390) | | | | | $ | 97,247 | | | | | $ | | | |
| | |
As of March 31, 2021
(unaudited) |
| |||||||||||||||
(in thousands, except share and per share data)
|
| |
Actual
|
| |
Pro forma
|
| |
Pro forma as
adjusted(1) |
| |||||||||
Cash and cash equivalents
|
| | | $ | 60,016 | | | | | $ | 98,816 | | | | | $ | | | |
Loans payable
|
| | | | 1,050 | | | | | | 1,050 | | | | | | | | |
Preferred stock warrant liability
|
| | | | 494 | | | | | | — | | | | | | | | |
Capital lease obligation
|
| | | | 179 | | | | | | 179 | | | | | | | | |
Convertible Preferred Stock: | | | | | | | | | | | | | | | | | | | |
Junior convertible preferred stock, par value of $0.0001; 22,047,294 shares authorized, actual, 20,414,766 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted.
|
| | | | 77,844 | | | | | | — | | | | | | | | |
Senior convertible preferred stock, par value of $0.0001; 24,496,040 shares authorized, actual, 22,195,278 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted.
|
| | | | 110,499 | | | | | | — | | | | | | | | |
Stockholders’ (deficit) equity: | | | | | | | | | | | | | | | | | | | |
Class A common stock, $0.0001 par value: 75,000,000 shares
authorized, actual, 4,120,842 shares issued and outstanding, actual; 80,000,000 shares authorized, pro forma; 53,682,978 shares issued and outstanding, pro forma; shares authorized, pro forma as adjusted; shares issued and outstanding, pro forma as adjusted. |
| | | | — | | | | | | 5 | | | | | | | | |
Class B common stock, $0.0001 par value: 3,000,000 shares authorized, actual, no shares issued and outstanding, actual; 3,000,000 shares authorized, pro forma; no shares issued and outstanding, pro forma; shares authorized, pro forma as adjusted; shares issued and outstanding, pro forma as adjusted
|
| | | | — | | | | | | — | | | | | | | | |
Additional paid-in capital
|
| | | | 7,428 | | | | | | 235,060 | | | | | | | | |
Accumulated deficit
|
| | | | (137,818) | | | | | | (137,818) | | | | | | | | |
Total stockholders’ (deficit) equity
|
| | | | (130,390) | | | | | | 97,247 | | | | | | | | |
Total capitalization
|
| | | $ | 57,953 | | | | | $ | 97,247 | | | | | | | | |
|
Assumed initial public offering price per share of our common stock
|
| | | $ | | | | | | | | | |
|
Historical net tangible book value (deficit) per share as of March 31, 2021, before giving effect to this offering
|
| | | | | | | | | $ | (31.98) | | |
|
Increase in historical net tangible book value per share attributable to the pro forma transactions described in the preceding paragraphs
|
| | | | | | | | | $ | 33.77 | | |
|
Pro forma net tangible book value per share as of March 31, 2021
|
| | | | | | | | | $ | 1.79 | | |
|
Increase in net tangible book value per share attributable to new investors participating in this offering
|
| | | | | | | | | | | | |
| Pro forma as adjusted net tangible book value per share after giving effect to this offering | | | | | | | | | | | | | |
|
Dilution per share to new investors participating in this offering
|
| | | $ | | | | | | | | | |
| | |
Shares
Purchased |
| |
Total Consideration
|
| |
Weighted
Average Price/ Share |
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Number
|
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Percent
|
| |
Amount
|
| |
Percent
|
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Existing stockholders
|
| | | | | | | % | | | | | $ | | | | | | % | | | | | $ | | | ||
Investors participating in this offering
|
| | | | | | | % | | | | | $ | | | | | | | % | | | | | $ | | | |
Total
|
| | | | | | | 100% | | | | | $ | | | | | | | 100% | | | | | $ | | | |
| | |
Three Months Ended March 31,
|
| |||||||||||||||
|
2021
|
| |
2020
|
| |
Change
|
| |||||||||||
|
(in thousands)
(unaudited) |
| |||||||||||||||||
Revenue
|
| | | $ | 13 | | | | | $ | 8 | | | | | $ | 5 | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Cost of revenue
|
| | | | 5 | | | | | | 3 | | | | | | 2 | | |
Research and development
|
| | | | 2,396 | | | | | | 2,050 | | | | | | 346 | | |
Selling and marketing
|
| | | | 1,350 | | | | | | 868 | | | | | | 482 | | |
General and administrative
|
| | | | 2,287 | | | | | | 1,379 | | | | | | 908 | | |
Total operating expenses
|
| | | | 6,038 | | | | | | 4,300 | | | | | | 1,738 | | |
Loss from operations
|
| | | | (6,025) | | | | | | (4,292) | | | | | | (1,733) | | |
Interest expense
|
| | | | (307) | | | | | | (437) | | | | | | 130 | | |
Other income (expense), net
|
| | | | (27) | | | | | | 33 | | | | | | (60) | | |
Net loss and comprehensive loss
|
| | | $ | (6,359) | | | | | $ | (4,696) | | | | | $ | (1,663) | | |
| | |
Three Months Ended March 31,
|
| |
Change
|
| ||||||||||||
|
2021
|
| |
2020
|
| ||||||||||||||
| | |
(in thousands)
(unaudited) |
| |||||||||||||||
Research and Development | | | | | | | | | | | | | | | | | | | |
Expenses: | | | | | | | | | | | | | | | | | | | |
Clinical studies
|
| | | $ | 693 | | | | | $ | 640 | | | | | $ | 53 | | |
Research and bioinformatics
|
| | | | 732 | | | | | | 655 | | | | | | 77 | | |
Laboratory operations
|
| | | | 971 | | | | | | 755 | | | | | | 216 | | |
Total research and development expenses
|
| | | $ | 2,396 | | | | | $ | 2,050 | | | | | $ | 346 | | |
| | |
Year Ended December 31,
|
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| | |
2020
|
| |
2019
|
| |
Change
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Revenue
|
| | | $ | 25 | | | | | $ | 36 | | | | | $ | (11) | | |
Operating expenses: | | | | | | | | | | | | | | | | | | | |
Cost of revenue
|
| | | | 11 | | | | | | 18 | | | | | | (7) | | |
Research and product development
|
| | | | 7,782 | | | | | | 9,353 | | | | | | (1,571) | | |
Selling and marketing
|
| | | | 3,645 | | | | | | 2,963 | | | | | | 682 | | |
General and administrative
|
| | | | 6,558 | | | | | | 4,278 | | | | | | 2,280 | | |
Total operating expenses
|
| | | | 17,996 | | | | | | 16,612 | | | | | | 1,384 | | |
Loss from operations
|
| | | | (17,971) | | | | | | (16,576) | | | | | | (1,395) | | |
Interest expense
|
| | | | (1,839) | | | | | | (1,972) | | | | | | 133 | | |
Other income (expense), net
|
| | | | (38) | | | | | | 2,027 | | | | | | (2,065) | | |
Net loss and comprehensive, loss
|
| | | $ | (19,848) | | | | | $ | (16,521) | | | | | $ | (3,327) | | |
| | |
Year Ended December 31,
|
| |||||||||||||||
| | |
2020
|
| |
2019
|
| |
Change
|
| |||||||||
| | |
(in thousands)
|
| |||||||||||||||
Research and Development | | | | | | | | | | | | | | | | | | | |
Expenses
|
| | | | | | | | | | | | | | | | | | |
Clinical studies
|
| | | $ | 2,557 | | | | | $ | 4,537 | | | | | $ | (1,980) | | |
Research and bioinformatics
|
| | | | 2,473 | | | | | | 2,157 | | | | | | 316 | | |
Laboratory operations
|
| | | | 2,752 | | | | | | 2,659 | | | | | | 93 | | |
Total research and development expenses
|
| | | $ | 7,782 | | | | | $ | 9,353 | | | | | $ | (1,571) | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
| | |
(in thousands)
|
| |||||||||
Interest income
|
| | | $ | 42 | | | | | $ | 64 | | |
Fair value remeasurements
|
| | | | (80) | | | | | | (129) | | |
Grant income
|
| | | | — | | | | | | 17 | | |
Other gains (losses), net
|
| | | | — | | | | | | 2,075 | | |
Other income (expense), net
|
| | | $ | (38) | | | | | $ | 2,027 | | |
| | |
Three Months Ended March 31,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||
|
2021
|
| |
2020
|
| |
2020
|
| |
2019
|
| ||||||||||||||
|
(in thousands)
(unaudited) |
| |
(in thousands)
|
| ||||||||||||||||||||
Net cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating activities
|
| | | $ | (6,950) | | | | | $ | (4,615) | | | | | $ | (16,868) | | | | | $ | (19,324) | | |
Investing activities
|
| | | | (41) | | | | | | (8) | | | | | | (149) | | | | | | (6) | | |
Financing activities
|
| | | | 53,474 | | | | | | 10,667 | | | | | | 9,160 | | | | | | 33,049 | | |
Net increase (decrease) in cash and cash equivalents
|
| | | $ | 46,483 | | | | | $ | 6,044 | | | | | $ | (7,857) | | | | | $ | 13,719 | | |
| | |
Payments Due by Period
|
| |||||||||||||||||||||||||||
| | |
Total
|
| |
Less Than
1 Year |
| |
1-3 Years
|
| |
3-5 Years
|
| |
More than
5 Years |
| |||||||||||||||
| | |
(in thousands)
|
| |||||||||||||||||||||||||||
Bank Loan (including interest and fees)(1)
|
| | | $ | 3,159 | | | | | $ | 3,159 | | | | | | — | | | | | | — | | | | | | — | | |
Convertible Note (including interest)(2)
|
| | | | 5,490 | | | | | | 5,490 | | | | | | — | | | | | | — | | | | | | — | | |
PPP loan payable (including interest)(3)
|
| | | $ | 1,065 | | | | | | 709 | | | | | | 356 | | | | | | | | | | | | | | |
Operating leases(4)
|
| | | | 1,099 | | | | | | 545 | | | | | | 554 | | | | | | — | | | | | | — | | |
Capital leases(5)
|
| | | | 215 | | | | | | 80 | | | | | | 135 | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 11,028 | | | | | $ | 9,983 | | | | | $ | 1,045 | | | | | | — | | | | | | — | | |
Name
|
| |
Age
|
| |
Position
|
| |||
Executive Officers: | | | | | | | | | | |
Gregory C. Critchfield, M.D., M.S.
|
| | | | 69 | | | | Chairman, President and Chief Executive Officer | |
Jay Moyes
|
| | | | 67 | | | | Chief Financial Officer | |
John J. Boniface, Ph.D.
|
| | | | 59 | | | | Chief Scientific Officer | |
Douglas Fisher, M.D.
|
| | | | 45 | | | | Chief Business Officer | |
John Peltier, Ph.D.
|
| | | | 58 | | | | Senior Vice President of Lab Operations | |
Thomas Garite
|
| | | | 76 | | | | Vice President, Clinical Sciences | |
Nadia Altomare
|
| | | | 51 | | | | Chief Commercial Officer | |
Nichole L. Martin
|
| | | | 43 | | | |
Vice President of Quality/Regulatory and HIPAA Privacy Officer
|
|
Benjamin G. Jackson
|
| | | | 42 | | | | General Counsel | |
Non-Employee Directors: | | | | |||||||
Dennis Farrar
|
| | | | 83 | | | | Director | |
Joshua Phillips
|
| | | | 54 | | | | Director | |
Mansoor Raza Mirza, M.D.
|
| | | | 59 | | | | Director | |
Ryan Trimble
|
| | | | 69 | | | | Director | |
Kim Kamdar, Ph.D.
|
| | | | 53 | | | | Director | |
Michael F. Minahan
|
| | | | 61 | | | | Director | |
Elizabeth Canis
|
| | | | 50 | | | | Director | |
Marcus Wilson, Pharm.D.
|
| | | | 58 | | | | Director | |
Charles D. Kennedy, M.D.
|
| | | | 58 | | | | Director | |
Joseph Siletto
|
| | | | 52 | | | | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Option
Awards ($)(1) |
| |
Non-Equity
Incentive Plan Compensation ($) (2) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| ||||||||||||||||||
Gregory C. Critchfield, M.D., M.S.
President and Chief Executive Officer |
| | | | 2020 | | | | | | 400,000 | | | | | | 410,727 | | | | | | 113,831 | | | | | | — | | | | | | 924,558 | | |
Nadia Altomare
Chief Commercial Officer |
| | | | 2020 | | | | | | 340,616 | | | | | | 78,901 | | | | | | 70,000 | | | | | | — | | | | | | 489,517 | | |
John J. Boniface, Ph.D.
Chief Scientific Officer |
| | | | 2020 | | | | | | 316,685 | | | | | | 136,729 | | | | | | 70,000 | | | | | | — | | | | | | 523,414 | | |
Garrett K. Lam, M.D.
Former Chief Medical Officer |
| | | | 2020 | | | | | | 364,000 | | | | | | 49,060 | | | | | | 70,000 | | | | | | 182,000(3) | | | | | | 665,060 | | |
| | |
Option Awards(1)(2)
|
| |||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Options (#) Exercisable |
| |
Number of
Securities Underlying Unexercised Options (#) Unexercisable |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| ||||||||||||
Gregory C. Critchfield, M.D., M.S.
|
| | | | 20 | | | | | | — | | | | | $ | 100.00 | | | | | | 3/7/2021 | | |
| | | | | 40 | | | | | | — | | | | | $ | 100.00 | | | | | | 4/29/2021 | | |
| | | | | 421,052 | | | | | | 26,040 | | | | | $ | 0.95 | | | | | | 5/28/2027 | | |
| | | | | 177,876 | | | | | | — | | | | | $ | 0.95 | | | | | | 5/28/2027 | | |
| | | | | — | | | | | | 363,887 | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
| | | | | 200,250 | | | | | | 397,063 | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
Nadia Altomare
|
| | | | 315,789 | | | | | | 46,875 | | | | | $ | 0.95 | | | | | | 5/18/2027 | | |
| | | | | 87,336 | | | | | | — | | | | | $ | 0.95 | | | | | | 5/18/2027 | | |
| | | | | — | | | | | | 146,548 | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
| | | | | 38,542 | | | | | | | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
John J. Boniface, Ph.D.
|
| | | | 52,000 | | | | | | — | | | | | $ | 0.35 | | | | | | 12/14/2021 | | |
| | | | | 158,000 | | | | | | — | | | | | $ | 0.35 | | | | | | 3/12/2022 | | |
| | | | | 12,150 | | | | | | — | | | | | $ | 0.35 | | | | | | 9/10/2022 | | |
| | | | | 152,564 | | | | | | — | | | | | $ | 0.44 | | | | | | 12/28/2024 | | |
| | | | | 225,030 | | | | | | 9,784 | | | | | $ | 0.95 | | | | | | 5/18/2027 | | |
| | | | | 43,917 | | | | | | 1,909 | | | | | $ | 0.95 | | | | | | 6/26/2027 | | |
| | | | | 39,232 | | | | | | 253,571 | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
| | | | | 27,497 | | | | | | — | | | | | $ | 0.85 | | | | | | 2/27/2030 | | |
Garrett K. Lam, M.D.
|
| | | | — | | | | | | — | | | | | | — | | | | | | N/A | | |
Position
|
| |
Retainer
|
|
Board Member | | | $ | |
Board Chairperson | | | | |
Audit Committee Chair | | | | |
Compensation Committee Chair | | | | |
Nominating and Corporate Governance Committee Chair | | | | |
Audit Committee Member | | | | |
Compensation Committee Member | | | | |
Nominating and Corporate Governance Committee Member
|
| | | |
Name
|
| |
Shares
|
| |
Warrants at
$4.34 |
| |
Warrants at
$5.21 |
| |
Aggregate
Purchase Price |
| ||||||||||||
ATH Holding Company, LLC(1)
|
| | | | 2,073,733 | | | | | | 288,019 | | | | | | 288,019 | | | | | $ | 9,000,000.00 | | |
Blue Ox Healthcare Partners SP, LLC(2)
|
| | | | 5,385,946 | | | | | | 787,731 | | | | | | 787,731 | | | | | $ | 23,375,000.00 | | |
Chione Ltd.(3)
|
| | | | 867,634 | | | | | | 216,909 | | | | | | 216,909 | | | | | $ | 3,264,746.15 | | |
Entities affiliated with Domain Associates(4)
|
| | | | 524,981 | | | | | | 131,246 | | | | | | 131,246 | | | | | $ | 2,278,412.01 | | |
InterWest Partners X, L.P.(5)
|
| | | | 524,982 | | | | | | 131,246 | | | | | | 131,246 | | | | | $ | 2,278,418.57 | | |
Laboratory Corporation of America Holdings(6)
|
| | | | 343,248 | | | | | | 85,812 | | | | | | 85,812 | | | | | $ | 1,489,695.60 | | |
Catalyst Health Ventures, L.P.(7)
|
| | | | 140,899 | | | | | | 35,225 | | | | | | 35,225 | | | | | $ | 611,489.25 | | |
Gregory C. Critchfield, M.D., M.S.(8)
|
| | | | 59,731 | | | | | | 9,173 | | | | | | 9,173 | | | | | $ | 259,926.28 | | |
The Trimble Trust(9)
|
| | | | 73,545 | | | | | | 13,387 | | | | | | 13,387 | | | | | $ | 319,185.00 | | |
Name
|
| |
Shares
|
| |
Warrants at
$5.21 |
| |
Aggregate
Purchase Price |
| |||||||||
ATH Holding Company, LLC(1)
|
| | | | 2,504,174 | | | | | | 1,501,502 | | | | | $ | 15,000,000 | | |
Blue Ox Healthcare Partners SP, LLC(2)
|
| | | | 2,504,173 | | | | | | — | | | | | $ | 15,000,000 | | |
Entities affiliated with Baker Bros. Advisors LP(3)
|
| | | | 2,921,536 | | | | | | — | | | | | $ | 17,500,000 | | |
Vivo Capital Fund IX, L.P.(4)
|
| | | | 3,338,898 | | | | | | — | | | | | $ | 20,000,000 | | |
aMoon Growth Fund Limited Partnership(5)
|
| | | | 3,338,898 | | | | | | — | | | | | $ | 20,000,000 | | |
Catalyst Health Ventures, L.P.(6)
|
| | | | 333,890 | | | | | | — | | | | | $ | 2,000,000 | | |
| | |
Shares
Beneficially Owned |
| |
Percentage of Shares
Beneficially Owned |
| ||||||||||||
Name and Address of Beneficial Owner(1)
|
| |
Before
Offering |
| |
After
Offering |
| ||||||||||||
5% Stockholders: | | | | | | | | | | | | | | | | | | | |
Entities affiliated with Blue Ox Healthcare Partners, LLC(2)
|
| | | | 9,465,582 | | | | | | 17.1% | | | | | | % | | |
ATH Holding Company, LLC(3)
|
| | | | 6,655,446 | | | | | | 11.9% | | | | | | % | | |
Entities affiliated with Domain Associates, LLC(4)
|
| | | | 5,350,138 | | | | | | 9.9% | | | | | | % | | |
InterWest Partners X, LP(5)
|
| | | | 5,285,858 | | | | | | 9.8% | | | | | | % | | |
Chione, Ltd.(6)
|
| | | | 3,792,309 | | | | | | 7.0% | | | | | | % | | |
Laboratory Corporation of America Holdings(7)
|
| | | | 3,456,048 | | | | | | 6.4% | | | | | | % | | |
Vivo Capital Fund IX, L.P.(8)
|
| | | | 3,338,898 | | | | | | 6.2% | | | | | | % | | |
aMoon Growth Fund Limited Partnership(9)
|
| | | | 3,338,898 | | | | | | 6.2% | | | | | | % | | |
Entities affiliated with Baker Bros. Advisors LP(10)
|
| | | | 2,921,536 | | | | | | 5.4% | | | | | | % | | |
Named Executive Officers and Directors: | | | | | | | | | | | | | | | | | | | |
Dennis Farrar(11)
|
| | | | 731,433 | | | | | | 1.4% | | | | | | % | | |
Joshua Phillips(12)
|
| | | | 2,076,921 | | | | | | 3.9% | | | | | | % | | |
Mansoor Raza Mirza, M.D.(13)
|
| | | | 78,065 | | | | | | * | | | | | | % | | |
Ryan Trimble(14)
|
| | | | 235,827 | | | | | | * | | | | | | % | | |
Kim Kamdar, Ph.D.(15)
|
| | | | 5,363,920 | | | | | | 9.9% | | | | | | % | | |
Michael F. Minahan(16)
|
| | | | — | | | | | | * | | | | | | % | | |
Elizabeth Canis(17)
|
| | | | — | | | | | | * | | | | | | % | | |
Marcus Wilson, Pharm.D.(18)
|
| | | | — | | | | | | * | | | | | | % | | |
Joseph Siletto(19)
|
| | | | — | | | | | | * | | | | | | % | | |
Charles D. Kennedy, M.D.(20)
|
| | | | 9,465,582 | | | | | | 17.1% | | | | | | % | | |
Gregory C. Critchfield, M.D., M.S.(21)
|
| | | | 2,629,184 | | | | | | 4.8% | | | | | | % | | |
Nadia Altomare(22)
|
| | | | 522,545 | | | | | | 1.0% | | | | | | % | | |
John J. Boniface, Ph.D.(23)
|
| | | | 772,235 | | | | | | 1.4% | | | | | | % | | |
Garrett K. Lam, M.D.
|
| | | | 80,593 | | | | | | * | | | | | | % | | |
All current executive officers and directors as a group (21 persons)(24)
|
| | | | 23,358,616 | | | | | | 39.6% | | | | | | % | | |
Underwriter
|
| |
Number
of Shares |
|
Citigroup Global Markets Inc.
|
| | | |
Cowen and Company, LLC
|
| | | |
William Blair & Company, L.L.C.
|
| | | |
Total
|
| | | |
| | | | | | | | |
Total
|
| |||||||||
| | |
Per
share |
| |
No
exercise |
| |
Full
exercise |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discounts and commissions paid by us
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds to us, before expenses
|
| | | $ | | | | | $ | | | | | $ | | | |
| | | | | F-2 | | | |
| Financial Statements: | | | | | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-7 | | |
| Unaudited Interim Condensed Financial Statements: | | | | | | | |
| | | | | F-30 | | | |
| | | | | F-31 | | | |
| | | | | F-32 | | | |
| | | | | F-33 | | | |
| | | | | F-34 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 13,533 | | | | | $ | 21,390 | | |
Accounts receivable
|
| | | | 2 | | | | | | 1 | | |
Prepaid expenses and other current assets
|
| | | | 198 | | | | | | 161 | | |
Total current assets
|
| | | | 13,733 | | | | | | 21,552 | | |
Property and equipment, net
|
| | | | 965 | | | | | | 1,635 | | |
Other assets
|
| | | | 98 | | | | | | 72 | | |
Total assets
|
| | | $ | 14,796 | | | | | $ | 23,259 | | |
Liabilities, Convertible Preferred Stock, and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 441 | | | | | $ | 748 | | |
Accrued and other current liabilities
|
| | | | 1,577 | | | | | | 1,303 | | |
Accrued interest on convertible note
|
| | | | 996 | | | | | | — | | |
Deferred rent, current portion
|
| | | | 130 | | | | | | 114 | | |
Capital lease obligation, current portion
|
| | | | 69 | | | | | | 72 | | |
Convertible promissory note, current portion
|
| | | | 4,353 | | | | | | — | | |
Loans payable, current portion
|
| | | | 3,676 | | | | | | 3,667 | | |
Total current liabilities
|
| | | | 11,242 | | | | | | 5,904 | | |
Deferred rent
|
| | | | 139 | | | | | | 268 | | |
Loans payable, net of current portion
|
| | | | 348 | | | | | | 1,935 | | |
Convertible promissory note, net of current portion
|
| | | | — | | | | | | 3,507 | | |
Preferred stock warrant liability
|
| | | | 474 | | | | | | 230 | | |
Capital lease obligation, net of current portion
|
| | | | 127 | | | | | | 134 | | |
Other liabilities
|
| | | | — | | | | | | 555 | | |
Total liabilities
|
| | | | 12,330 | | | | | | 12,533 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Convertible preferred stock: | | | | | | | | | | | | | |
Junior convertible preferred stock, par value of $0.0001; 20,537,294 shares authorized, 20,414,766 shares issued and outstanding as of December 31, 2020 and 2019; aggregate liquidation preference of $78,916 as of December 31, 2020 and 2019;
|
| | | | 77,844 | | | | | | 77,844 | | |
Senior convertible preferred stock, par value of $0.0001; 12,320,844 shares
authorized, 11,928,167 and 9,451,206 shares issued and outstanding as of December 31, 2020 and 2019, respectively; aggregate liquidation preference of $102,535 and $81,035 as of December 31, 2020 and 2019, respectively; |
| | | | 50,192 | | | | | | 39,506 | | |
Stockholders’ deficit: | | | | | | | | | | | | | |
Common stock, $0.0001 par value; 55,000,000 shares authorized,3,535,688 and
3,170,805 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
| | | | — | | | | | | — | | |
Additional paid-in capital
|
| | | | 5,889 | | | | | | 4,987 | | |
Accumulated deficit
|
| | | | (131,459) | | | | | | (111,611) | | |
Total stockholders’ deficit
|
| | | | (125,570) | | | | | | (106,624) | | |
Total liabilities, convertible preferred stock, and stockholders’ deficit
|
| | | $ | 14,796 | | | | | $ | 23,259 | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Revenue
|
| | | $ | 25 | | | | | $ | 36 | | |
Operating expenses: | | | | | | | | | | | | | |
Cost of revenue
|
| | | | 11 | | | | | | 18 | | |
Research and development
|
| | | | 7,782 | | | | | | 9,353 | | |
Selling and marketing
|
| | | | 3,645 | | | | | | 2,963 | | |
General and administrative
|
| | | | 6,558 | | | | | | 4,278 | | |
Total operating expenses
|
| | | | 17,996 | | | | | | 16,612 | | |
Loss from operations
|
| | | | (17,971) | | | | | | (16,576) | | |
Interest expense
|
| | | | (1,839) | | | | | | (1,972) | | |
Other income (expense), net
|
| | | | (38) | | | | | | 2,027 | | |
Net loss and comprehensive loss
|
| | | $ | (19,848) | | | | | $ | (16,521) | | |
Net loss per share, basic and diluted
|
| | | $ | (6.14) | | | | | $ | (5.24) | | |
Weighted-average shares of common stock outstanding, basic and diluted
|
| | | | 3,234,476 | | | | | | 3,153,654 | | |
| | |
Senior Convertible
Preferred Stock |
| |
Junior Convertible
Preferred Stock |
| |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| ||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018
|
| | | | — | | | | | $ | — | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | 3,126,748 | | | | | | — | | | | | $ | 3,617 | | | | | $ | (95,090) | | | | | $ | (91,473) | | |
Issuance of Series D senior convertible preferred stock at $4.34 per share, net of issuance costs and commissions of $0.4 million
|
| | | | 9,451,206 | | | | | | 39,681 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Fair value of warrants to purchase common stock issued to investors
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 902 | | | | | | — | | | | | | 902 | | |
Fair value of warrants to purchase Series D Senior convertible preferred stock issued as commissions
|
| | |
|
—
|
| | | | | (175) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of common stock upon exercise of stock options, and vesting of early exercised options
|
| | |
|
—
|
| | | |
|
—
|
| | | | | — | | | | | | — | | | | | | 44,057 | | | | | | — | | | | | | 30 | | | | | | — | | | | | | 30 | | |
Stock-based compensation expense
|
| | |
|
—
|
| | | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 438 | | | | | | — | | | | | | 438 | | |
Net loss
|
| | |
|
—
|
| | | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (16,521) | | | | | | (16,521) | | |
Balance as of December 31, 2019
|
| | | | 9,451,206 | | | | | $ | 39,506 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | 3,170,805 | | | | | $ | — | | | | | $ | 4,987 | | | | | $ | (111,611) | | | | | $ | (106,624) | | |
Issuance of Series D senior convertible preferred stock at $4.34 per share, net of issuance costs of $0.1 million
|
| | | | 2,476,961 | | | | | | 10,686 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of common stock upon exercise of stock options
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 364,883 | | | | | | — | | | | | | 176 | | | | | | — | | | | | | 176 | | |
Stock-based compensation expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 726 | | | | | | — | | | | | | 726 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (19,848) | | | | | | (19,848) | | |
Balance as of December 31, 2020
|
| | | | 11,928,167 | | | | | $ | 50,192 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | 3,535,688 | | | | | $ | — | | | | | $ | 5,889 | | | | | $ | (131,459) | | | | | $ | (125,570) | | |
| | |
Year Ended
December 31, |
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (19,848) | | | | | $ | (16,521) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 895 | | | | | | 946 | | |
Stock-based compensation
|
| | | | 726 | | | | | | 438 | | |
Gain on disposal of fixed assets
|
| | | | — | | | | | | (103) | | |
Non-cash interest expense
|
| | | | 1,589 | | | | | | 1,509 | | |
Fair value adjustment to tranche forward liability
|
| | | | — | | | | | | (619) | | |
Other non-cash gain (loss)
|
| | | | 81 | | | | | | (1,328) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (2) | | | | | | 6 | | |
Prepaid expenses and other assets
|
| | | | (62) | | | | | | 23 | | |
Accounts payable
|
| | | | (307) | | | | | | (534) | | |
Deferred rent
|
| | | | (114) | | | | | | (98) | | |
Accrued and other current liabilities
|
| | | | 174 | | | | | | (3,043) | | |
Net cash used in operating activities
|
| | | | (16,868) | | | | | | (19,324) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (149) | | | | | | (109) | | |
Proceeds from disposal of property and equipment
|
| | | | — | | | | | | 103 | | |
Net cash used in investing activities
|
| | | | (149) | | | | | | (6) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Proceeds from issuance of Series D convertible preferred stock, net of
issuance costs |
| | | | 10,686 | | | | | | 29,147 | | |
Proceeds allocated to issuance of common stock warrants
|
| | | | — | | | | | | 902 | | |
Proceeds from exercise of stock options
|
| | | | 176 | | | | | | 28 | | |
Proceeds from convertible notes payable
|
| | | | — | | | | | | 6,600 | | |
Proceeds from loan payable
|
| | | | 1,050 | | | | | | — | | |
Payment of loan payable
|
| | | | (2,667) | | | | | | (3,333) | | |
Capital lease principal payments
|
| | | | (85) | | | | | | (282) | | |
Payment of deferred finance fees
|
| | | | — | | | | | | (13) | | |
Net cash provided by financing activities
|
| | | | 9,160 | | | | | | 33,049 | | |
Net (decrease) increase in cash and cash equivalents
|
| | | | (7,857) | | | | | | 13,719 | | |
Cash and cash equivalents at beginning of year
|
| | | | 21,390 | | | | | | 7,671 | | |
Cash and cash equivalents at end of year
|
| | | $ | 13,533 | | | | | $ | 21,390 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | | | | |
Cash paid for interest expense
|
| | | $ | 250 | | | | | $ | 463 | | |
Supplemental disclosure of non-cash investing and financing information | | | | | | | | | | | | | |
Purchases of property and equipment in accounts payable and accruals
|
| | | $ | 33 | | | | | $ | 30 | | |
Warrants to purchase convertible preferred stock issued as commissions
|
| | | $ | — | | | | | $ | 175 | | |
Conversion of convertible notes and accrued interest to Series D convertible preferred stock
|
| | | $ | — | | | | | $ | 10,033 | | |
| Computer equipment | | | 3 years | |
| Software | | | 3 years | |
| Machinery and equipment | | | 5 years | |
| Furniture and fixtures | | | 5 years | |
| Leasehold improvements | | | Shorter of useful life or remaining lease term | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Computer equipment
|
| | | $ | 767 | | | | | $ | 601 | | |
Software
|
| | | | 373 | | | | | | 373 | | |
Laboratory equipment
|
| | | | 4,194 | | | | | | 4,149 | | |
Furniture and fixtures
|
| | | | 292 | | | | | | 292 | | |
Leasehold improvements
|
| | | | 701 | | | | | | 689 | | |
Total property and equipment
|
| | | | 6,327 | | | | | | 6,104 | | |
Less accumulated depreciation and amortization
|
| | | | (5,362) | | | | | | (4,469) | | |
Property and equipment, net
|
| | | $ | 965 | | | | | $ | 1,635 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Accrued paid time off
|
| | | $ | 290 | | | | | $ | 158 | | |
Accrued compensation
|
| | | | 996 | | | | | | 782 | | |
Accrued clinical studies
|
| | | | — | | | | | | 183 | | |
Unrecognized grant income
|
| | | | — | | | | | | 43 | | |
Bank loan final payment fee
|
| | | | 100 | | | | | | — | | |
Other current liabilities
|
| | | | 191 | | | | | | 137 | | |
Total accrued and other current liabilities
|
| | | $ | 1,577 | | | | | $ | 1,303 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Interest income
|
| | | $ | 42 | | | | | $ | 64 | | |
Fair value remeasurements
|
| | | | (80) | | | | | | (129) | | |
Grant income
|
| | | | — | | | | | | 17 | | |
Other gains (losses), net
|
| | | | — | | | | | | 2,075 | | |
Other income (expense), net
|
| | | $ | (38) | | | | | $ | 2,027 | | |
| | |
2021
|
| |
2022
|
| |
2023
|
| |
2023 and
Thereafter |
| |
Total
|
| |||||||||||||||
Loan payable
|
| | | $ | 3,100 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,100 | | |
February 2019 Convertible Note
|
| | | $ | 4,494 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 4,494 | | |
Paycheck Protection Loan payable
|
| | | $ | 702 | | | | | $ | 348 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,050 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Assets:
Cash equivalents |
| | | $ | 13,533 | | | | | | — | | | | | $ | — | | |
Liabilities:
Warrant liability |
| | | | — | | | | | | — | | | | | | 474 | | |
Total
|
| | | $ | 13,533 | | | | | | — | | | | | $ | 474 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Assets:
Cash equivalents |
| | | $ | 21,390 | | | | | | — | | | | | $ | — | | |
Liabilities:
Warrant liability |
| | | | — | | | | | | — | | | | | | 230 | | |
Total
|
| | | $ | 21,390 | | | | | | — | | | | | $ | 230 | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Senior convertible preferred stock
|
| | | | 11,928,167 | | | | | | 9,451,206 | | |
Junior convertible preferred stock
|
| | | | 20,889,401 | | | | | | 20,889,401 | | |
Shares issuable under convertible note
|
| | | | 1,383,989 | | | | | | 1,247,663 | | |
Warrants to purchase convertible preferred stock
|
| | | | 169,533 | | | | | | 167,460 | | |
Warrants to purchase common stock
|
| | | | 4,198,770 | | | | | | 4,198,770 | | |
Options to purchase common stock
|
| | | | 8,517,220 | | | | | | 5,677,248 | | |
Common stock available for future issuance under the 2011 Equity Incentive Plan
|
| | | | 807,702 | | | | | | 93,857 | | |
Total
|
| | | | 47,894,782 | | | | | | 41,725,605 | | |
Series
|
| |
Shares
Authorized |
| |
Shares Issued
and Outstanding |
| |
Original Issue
Price |
| |
Aggregate
Liquidation Preference |
| |
Proceeds,
net of issuance costs |
| |||||||||||||||
Series A-1 Junior Preferred Stock
|
| | | | 1,390 | | | | | | 1,390 | | | | | $ | 1,000.00 | | | | | $ | 1,390 | | | | | $ | 1,390 | | |
Series A-2 Junior Preferred Stock
|
| | | | 7,941,499 | | | | | | 7,908,277 | | | | | | 2.50 | | | | | | 19,771 | | | | | | 19,595 | | |
Series B-1 Junior Preferred Stock
|
| | | | 2,060,000 | | | | | | 2,000,000 | | | | | | 2.50 | | | | | | 5,000 | | | | | | 4,914 | | |
Series B-2 Junior Preferred Stock
|
| | | | 5,012,500 | | | | | | 5,000,000 | | | | | | 4.00 | | | | | | 20,000 | | | | | | 19,984 | | |
Series C-1 Junior Preferred Stock
|
| | | | 5,521,905 | | | | | | 5,505,099 | | | | | | 5.95 | | | | | | 32,755 | | | | | | 32,653 | | |
Series D Senior Preferred Stock
|
| | | | 12,320,844 | | | | | | 11,928,167 | | | | | | 4.34 | | | | | | 102,535 | | | | | | 50,415 | | |
Total Convertible Preferred Stock
|
| | | | 32,858,138 | | | | | | 32,342,933 | | | | | | | | | | | $ | 181,451 | | | | | $ | 128,951 | | |
Series
|
| |
Shares
Authorized |
| |
Shares Issued
and Outstanding |
| |
Original Issue
Price |
| |
Aggregate
Liquidation Preference |
| |
Proceeds,
net of issuance costs |
| |||||||||||||||
Series A-1 Junior Preferred Stock
|
| | | | 1,390 | | | | | | 1,390 | | | | | $ | 1,000.00 | | | | | $ | 1,390 | | | | | $ | 1,390 | | |
Series A-2 Junior Preferred Stock
|
| | | | 7,941,499 | | | | | | 7,908,277 | | | | | | 2.50 | | | | | | 19,771 | | | | | | 19,595 | | |
Series B-1 Junior Preferred Stock
|
| | | | 2,060,000 | | | | | | 2,000,000 | | | | | | 2.50 | | | | | | 5,000 | | | | | | 4,914 | | |
Series B-2 Junior Preferred Stock
|
| | | | 5,012,500 | | | | | | 5,000,000 | | | | | | 4.00 | | | | | | 20,000 | | | | | | 19,984 | | |
Series C-1 Junior Preferred Stock
|
| | | | 5,521,905 | | | | | | 5,505,099 | | | | | | 5.95 | | | | | | 32,755 | | | | | | 32,652 | | |
Series D Senior Preferred Stock
|
| | | | 12,320,844 | | | | | | 9,451,206 | | | | | | 4.34 | | | | | | 81,035 | | | | | | 39,729 | | |
Total Convertible Preferred Stock
|
| | | | 32,858,138 | | | | | | 29,865,972 | | | | | | | | | | | $ | 159,951 | | | | | $ | 118,264 | | |
| | |
Number of
Shares Subject to Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| |
Weighted-
Average Exercise Price Per Share |
| |
Weighted-
Average Remaining Contractual Life (In Years) |
| ||||||||||||
Outstanding – December 31, 2018
|
| | | | 5,673,947 | | | | | $ | 0.43 | | | | | $ | 0.73 | | | | | | 6.86 | | |
Granted
|
| | | | 234,000 | | | | | | 0.45 | | | | | | 0.87 | | | | | | | | |
Cancelled
|
| | | | (186,642) | | | | | | 0.44 | | | | | | 0.82 | | | | | | | | |
Exercised
|
| | | | (44,057) | | | | | | 0.42 | | | | | | 0.75 | | | | | | | | |
Outstanding – December 31, 2019
|
| | | | 5,677,248 | | | | | $ | 0.42 | | | | | $ | 0.73 | | | | | | 6.04 | | |
Granted
|
| | | | 4,036,933 | | | | | | 0.45 | | | | | | 0.85 | | | | | | | | |
Cancelled
|
| | | | (750,522) | | | | | | 0.43 | | | | | | 0.80 | | | | | | | | |
Expired
|
| | | | (81,556) | | | | | | 0.62 | | | | | | 1.16 | | | | | | | | |
Exercised
|
| | | | (364,833) | | | | | | 0.28 | | | | | | 0.48 | | | | | | | | |
Outstanding – December 31, 2020
|
| | | | 8,517,220 | | | | | | 0.44 | | | | | | 0.79 | | | | | | 6.99 | | |
Vested and expected to vest at December 31, 2020
|
| | | | 8,218,460 | | | | | $ | 0.44 | | | | | $ | 0.79 | | | | | | 6.91 | | |
Vested and exercisable at
December 31, 2020 |
| | | | 4,937,617 | | | | | $ | 0.43 | | | | | $ | 0.74 | | | | | | 5.44 | | |
Non-vested options at
December 31, 2020 |
| | | | 3,579,603 | | | | | $ | 0.45 | | | | | $ | 0.85 | | | | | | | | |
| | |
Year Ended
December 31, |
| |
Year Ended
December 31, |
| ||||||
| | |
2020
|
| |
2019
|
| ||||||
Expected volatility
|
| | | | 52.8 – 62.1% | | | | | | 53.2 – 54.4% | | |
Risk-free interest rate
|
| | | | 0.4 – 1.2% | | | | | | 1.7 – 2.6% | | |
Expected term (in years)
|
| | | | 5.2 – 6.2 | | | | | | 5.5 – 6.0 | | |
Expected dividends
|
| | | $ | — | | | | | $ | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Research and development expense
|
| | | $ | 208 | | | | | $ | 155 | | |
Sales and marketing expense
|
| | | | 131 | | | | | | 74 | | |
General and administrative expense
|
| | | | 320 | | | | | | 153 | | |
Total employee stock-based compensation
|
| | | $ | 659 | | | | | $ | 382 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Expected volatility
|
| | | | 54.5 – 59.5% | | | | | | 52.5 – 53.7% | | |
Risk-free interest rate
|
| | | | 0.6 – 0.9% | | | | | | 1.7 – 2.7% | | |
Expected term (in years)
|
| | | | 9.4 – 10.0 | | | | | | 9.2 – 10.0 | | |
Expected dividends
|
| | | $ | — | | | | | $ | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Research and development expense
|
| | | $ | 28 | | | | | $ | 27 | | |
Sales and marketing expense
|
| | | | 9 | | | | | | 25 | | |
General and administrative expense
|
| | | | 31 | | | | | | 4 | | |
Total nonemployee stock-based compensation
|
| | | $ | 68 | | | | | $ | 56 | | |
Related
Series |
| |
Grant
Date |
| |
Number of
Warrants |
| |
Exercise
Price |
| |
Fair Value Year-Ended
December 31, |
| |||||||||||||||
|
2020
|
| |
2019
|
| |||||||||||||||||||||||
Series A-2 | | |
Sep 2012
|
| | | | 26,000 | | | | | $ | 2.50 | | | | | $ | 41 | | | | | $ | 7 | | |
Series A-2 | | |
Sep 2014
|
| | | | 7,222 | | | | | $ | 2.50 | | | | | | 13 | | | | | | 4 | | |
Series B-1 | | |
Dec 2014
|
| | | | 60,000 | | | | | $ | 2.50 | | | | | | 113 | | | | | | 30 | | |
Series B-2 | | |
Dec 2015
|
| | | | 12,500 | | | | | $ | 4.00 | | | | | | 22 | | | | | | 6 | | |
Series C-1 | | |
Mar 2017
|
| | | | 16,806 | | | | | $ | 5.95 | | | | | | 31 | | | | | | 10 | | |
Series D | | |
Jul 2019
|
| | | | 47,005 | | | | | $ | 4.34 | | | | | | 254 | | | | | | 173 | | |
Total | | | | | | | | 169,533 | | | | | | | | | | | $ | 474 | | | | | $ | 230 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Series A-2 stock price fair value
|
| | | $ | 3.41 | | | | | $ | 1.53 | | |
Series B-1 stock price fair value
|
| | | $ | 3.41 | | | | | $ | 1.53 | | |
Series B-2 stock price fair value
|
| | | $ | 3.58 | | | | | $ | 1.71 | | |
Series C-1 stock price fair value
|
| | | $ | 3.89 | | | | | $ | 2.02 | | |
Series D stock price fair value
|
| | | $ | 7.35 | | | | | $ | 5.70 | | |
Expected volatility
|
| | | | 59.5 – 72.5% | | | | | | 49.8 – 53.2% | | |
Risk-free interest rate
|
| | | | 0.1 – 0.9% | | | | | | 1.6 – 1.9% | | |
Expected term (in years)
|
| | | | 1.7 – 9.1 | | | | | | 2.7 – 9.8 | | |
Expected dividends
|
| | | $ | — | | | | | $ | — | | |
| | |
Warrant
Liability Outstanding |
| |||
Outstanding – December 31, 2018
|
| | | $ | 240 | | |
Valuation of warrants to purchase preferred stock at issuance of Series D warrants
|
| | | | 175 | | |
Net decrease in fair value of preferred stock warrants
|
| | | | (185) | | |
Outstanding – December 31, 2019
|
| | | $ | 230 | | |
Net increase in fair value of preferred stock warrants
|
| | | | 244 | | |
Outstanding – December 31, 2020
|
| | | $ | 474 | | |
| | |
2021
|
| |
2022
|
| |
2023
|
| |
2024 and
Thereafter |
| |
Total
|
| |||||||||||||||
Operating leases
|
| | | $ | 545 | | | | | $ | 554 | | | | | $ | — | | | | | $ | — | | | | | $ | 1,099 | | |
Capital leases
|
| | | | 80 | | | | | | 80 | | | | | | 55 | | | | | | — | | | | | | 215 | | |
Total
|
| | | $ | 625 | | | | | $ | 634 | | | | | $ | 55 | | | | | $ | — | | | | | $ | 1,314 | | |
| | | | | |
2020
|
| |
2019
|
| ||||||
Current:
|
| | Federal | | | | $ | — | | | | | $ | — | | |
| | | State | | | | | — | | | | | | — | | |
| | | Total current provision | | | | $ | — | | | | | $ | — | | |
Deferred
|
| | Federal | | | | $ | 3,658 | | | | | $ | 3,535 | | |
| | | State | | | | | 1,498 | | | | | | 1,142 | | |
| | |
Change in valuation allowance
|
| | | | (5,156) | | | | | | (4,676) | | |
| | | Total deferred provision | | | | $ | — | | | | | $ | — | | |
Total Income tax benefit (provision)
|
| | | | | | $ | — | | | | | $ | — | | |
| | | | | |
2020
|
| |
2019
|
| ||||||||||||||||||
Computed Federal income tax benefit (expense) at the statutory rate
|
| | | | | | $ | 4,167 | | | | | | 21.00% | | | | | $ | 3,469 | | | | | | 21.00% | | |
R&D credits
|
| | | | | | | 304 | | | | | | 1.53% | | | | | | 351 | | | | | | 2.15% | | |
Equity-based expenses
|
| | | | | | | (136) | | | | | | -0.68% | | | | | | (34) | | | | | | -0.21% | | |
State income taxes, net of federal benefit
|
| | | | | | | 1,065 | | | | | | 5.36% | | | | | | 958 | | | | | | 5.79% | | |
State net operating loss carryforward true up
|
| | | | | | | 49 | | | | | | 0.25% | | | | | | (127) | | | | | | -0.77% | | |
Other
|
| | | | | | | (294) | | | | | | -1.48% | | | | | | 58 | | | | | | 0.35% | | |
Valuation allowance
|
| | | | | | | (5,156) | | | | | | -25.98% | | | | | | (4,676) | | | | | | -28.31% | | |
Income tax benefit (provision)
|
| | | | | | $ | — | | | | | | — | | | | | $ | — | | | | | | — | | |
| | |
2020
|
| |
2019
|
| ||||||
Deferred tax assets: | | | | | | | | | | | | | |
Net operating loss carryforwards
|
| | | $ | 31,234 | | | | | $ | 26,607 | | |
R&D
|
| | | | 2,033 | | | | | | 1,729 | | |
Accruals and reserves
|
| | | | 419 | | | | | | 338 | | |
Deferred revenue
|
| | | | — | | | | | | 11 | | |
Equity-based compensation
|
| | | | 220 | | | | | | 169 | | |
Other
|
| | | | 2 | | | | | | 2 | | |
Total deferred tax asset before allowance
|
| | | $ | 33,908 | | | | | $ | 28,856 | | |
Less: valuation allowance
|
| | | | (33,864) | | | | | | (28,708) | | |
Total deferred tax asset
|
| | | | 44 | | | | | | 148 | | |
Deferred tax liabilities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | (44) | | | | | | (148) | | |
Net deferred tax assets
|
| | | | — | | | | | | — | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Balance at the beginning of the year
|
| | | $ | 1,152 | | | | | $ | 918 | | |
Gross increases – prior period
|
| | | | — | | | | | | — | | |
Gross increases – current period
|
| | | | 202 | | | | | | 234 | | |
Balance at the end of the year
|
| | | $ | 1,354 | | | | | $ | 1,152 | | |
| | |
Year Ended December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Net loss
|
| | | $ | (19,848) | | | | | $ | (16,521) | | |
Weighted average common stock outstanding, basic and diluted
|
| | | | 3,234,476 | | | | | | 3,153,654 | | |
Net loss per share – basic and diluted
|
| | | $ | (6.14) | | | | | $ | (5.24) | | |
| | |
December 31,
|
| |||||||||
| | |
2020
|
| |
2019
|
| ||||||
Senior convertible preferred stock
|
| | | | 11,928,167 | | | | | | 9,451,206 | | |
Junior convertible preferred stock
|
| | | | 20,889,401 | | | | | | 20,889,401 | | |
Shares issuable under convertible note
|
| | | | 1,383,989 | | | | | | 1,247,663 | | |
Warrants to purchase convertible preferred stock
|
| | | | 169,533 | | | | | | 167,460 | | |
Warrants to purchase common stock
|
| | | | 4,198,770 | | | | | | 4,198,770 | | |
Options to purchase common stock
|
| | | | 8,517,220 | | | | | | 5,677,248 | | |
Total
|
| | | | 47,087,080 | | | | | | 41,631,748 | | |
| | |
March 31,
2021 |
| |
December 31,
2020 |
| ||||||
| | |
(unaudited)
|
| | | | | | | |||
Assets | | | | | | | | | | | | | |
Current assets: | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 60,016 | | | | | $ | 13,533 | | |
Accounts receivable
|
| | | | 8 | | | | | | 2 | | |
Prepaid expenses and other current assets
|
| | | | 421 | | | | | | 198 | | |
Total current assets
|
| | | | 60,445 | | | | | | 13,733 | | |
Property and equipment, net
|
| | | | 826 | | | | | | 965 | | |
Other assets
|
| | | | 1,473 | | | | | | 98 | | |
Total assets
|
| | | $ | 62,744 | | | | | $ | 14,796 | | |
Liabilities, Convertible Preferred Stock, and Stockholders’ Deficit | | | | | | | | | | | | | |
Current liabilities: | | | | | | | | | | | | | |
Accounts payable
|
| | | $ | 829 | | | | | $ | 441 | | |
Accrued and other current liabilities
|
| | | | 2,001 | | | | | | 1,577 | | |
Accrued interest on convertible note
|
| | | | — | | | | | | 996 | | |
Deferred rent, current portion
|
| | | | 134 | | | | | | 130 | | |
Capital lease obligation, current portion
|
| | | | 70 | | | | | | 69 | | |
Convertible promissory note, current portion
|
| | | | — | | | | | | 4,353 | | |
Loans payable, current portion
|
| | | | 702 | | | | | | 3,676 | | |
Total current liabilities
|
| | | | 3,736 | | | | | | 11,242 | | |
Deferred rent
|
| | | | 104 | | | | | | 139 | | |
Loans payable, net of current portion
|
| | | | 348 | | | | | | 348 | | |
Preferred stock warrant liability
|
| | | | 494 | | | | | | 474 | | |
Capital lease obligation, net of current portion
|
| | | | 109 | | | | | | 127 | | |
Total liabilities
|
| | | | 4,791 | | | | | | 12,330 | | |
Commitments and contingencies | | | | | | | | | | | | | |
Convertible preferred stock: | | | | | | | | | | | | | |
Junior convertible preferred stock, par value of $0.0001; 22,047,294 shares authorized, 20,414,766 shares issued and outstanding as of March 31, 2021 and December 31, 2020; aggregate liquidation preference of $78,916 as of March 31, 2021
|
| | | | 77,844 | | | | | | 77,844 | | |
Senior convertible preferred stock, par value of $0.0001; 24,496,040 and
12,320,844 shares authorized as of March 31, 2021 and December 31, 2020, respectively; 22,195,278 and 11,928,167 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively; aggregate liquidation preference of $164,035 as of March 31, 2021 |
| | | | 110,499 | | | | | | 50,192 | | |
Stockholders’ deficit: Common stock, $0.0001 par value; 78,000,000 and 55,000,000 shares authorized as of March 31, 2021 and December 31, 2020, respectively; 4,120,842 and 3,535,688 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
|
| | | | — | | | | | | — | | |
Additional paid-in capital
|
| | | | 7,428 | | | | | | 5,889 | | |
Accumulated deficit
|
| | | | (137,818) | | | | | | (131,459) | | |
Total stockholders’ deficit
|
| | | | (130,390) | | | | | | (125,570) | | |
Total liabilities, convertible preferred stock, and stockholders’ deficit
|
| | | $ | 62,744 | | | | | $ | 14,796 | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Revenue
|
| | | $ | 13 | | | | | $ | 8 | | |
Operating expenses: | | | | | | | | | | | | | |
Cost of revenue
|
| | | | 5 | | | | | | 3 | | |
Research and development
|
| | | | 2,396 | | | | | | 2,050 | | |
Selling and marketing
|
| | | | 1,350 | | | | | | 868 | | |
General and administrative
|
| | | | 2,287 | | | | | | 1,379 | | |
Total operating expenses
|
| | | | 6,038 | | | | | | 4,300 | | |
Loss from operations
|
| | | | (6,025) | | | | | | (4,292) | | |
Interest expense
|
| | | | (307) | | | | | | (437) | | |
Other income (expense), net
|
| | | | (27) | | | | | | 33 | | |
Net loss and comprehensive loss
|
| | | $ | (6,359) | | | | | $ | (4,696) | | |
Net loss per share, basic and diluted
|
| | | $ | (1.71) | | | | | $ | (1.48) | | |
Weighted-average shares of common stock outstanding, basic and diluted
|
| | | | 3,725,328 | | | | | | 3,171,251 | | |
| | |
Senior Convertible
Preferred Stock |
| |
Junior Convertible
Preferred Stock |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| ||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020
|
| | | | 11,928,167 | | | | | $ | 50,192 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | | 3,535,688 | | | | | $ | — | | | | | $ | 5,889 | | | | | $ | (131,459) | | | | | $ | (125,570) | | |
Issuance of Series E senior convertible preferred stock at $5.99 per share, net of issuance costs of $0.1 million
|
| | | | 10,267,111 | | | | | | 60,307 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Fair value of warrants to purchase common stock issued to
investor |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 1,071 | | | | | | — | | | | | | 1,071 | | |
Issuance of common stock upon exercise of stock options
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 585,154 | | | | | | — | | | | | | 229 | | | | | | — | | | | | | 229 | | |
Stock-based compensation
expense |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 239 | | | | | | — | | | | | | 239 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (6,359) | | | | | | (6,359) | | |
Balance as of March 31, 2021
|
| | | | 22,195,278 | | | | | $ | 110,499 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | | 4,120,842 | | | | | $ | — | | | | | $ | 7,428 | | | | | $ | (137,818) | | | | | $ | (130,390) | | |
| | |
Senior Convertible
Preferred Stock |
| |
Junior Convertible
Preferred Stock |
| | |
Common Stock
|
| |
Additional
Paid-In Capital |
| |
Accumulated
Deficit |
| |
Total
Stockholders’ Deficit |
| ||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| | |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019
|
| | | | 9,451,206 | | | | | $ | 39,506 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | | 3,170,805 | | | | | $ | — | | | | | $ | 4,987 | | | | | $ | (111,611) | | | | | $ | (106,624) | | |
Issuance of Series D senior convertible preferred stock at $4.34 per share, net of issuance costs of $0.5 million
|
| | | | 2,476,961 | | | | | | 10,704 | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Issuance of common stock upon exercise of stock options
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | 1,100 | | | | | | — | | | | | | 1 | | | | | | — | | | | | | 1 | | |
Stock based compensation
expense |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | 135 | | | | | | — | | | | | | 135 | | |
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | — | | | | | | — | | | | | | — | | | | | | (4,696) | | | | | | (4,696) | | |
Balance as of March 31, 2020
|
| | | | 11,928,167 | | | | | $ | 50,210 | | | | | | 20,414,766 | | | | | $ | 77,844 | | | | | | | 3,171,905 | | | | | $ | — | | | | | $ | 5,123 | | | | | $ | (116,307) | | | | | $ | (111,184) | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (6,359) | | | | | $ | (4,696) | | |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | | |
Depreciation and amortization
|
| | | | 201 | | | | | | 227 | | |
Stock-based compensation
|
| | | | 239 | | | | | | 135 | | |
Non-cash interest expense
|
| | | | 168 | | | | | | 355 | | |
Other non-cash gain (loss)
|
| | | | 19 | | | | | | (5) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accounts receivable
|
| | | | (6) | | | | | | — | | |
Prepaid expenses and other assets
|
| | | | (223) | | | | | | (118) | | |
Accounts payable
|
| | | | 339 | | | | | | 94 | | |
Deferred rent
|
| | | | (31) | | | | | | (27) | | |
Accrued and other current liabilities
|
| | | | (1,297) | | | | | | (580) | | |
Net cash used in operating activities
|
| | | | (6,950) | | | | | | (4,615) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchases of property and equipment
|
| | | | (41) | | | | | | (8) | | |
Net cash used in investing activities
|
| | | | (41) | | | | | | (8) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Proceeds from issuance of Series D senior convertible preferred stock, net of issuance
costs |
| | | | — | | | | | | 10,704 | | |
Proceeds from issuance of Series E senior convertible preferred stock, net of issuance costs
|
| | | | 60,415 | | | | | | — | | |
Proceeds allocated to issuance of common stock warrants
|
| | | | 1,071 | | | | | | — | | |
Proceeds from exercise of stock options
|
| | | | 229 | | | | | | 1 | | |
Payment of convertible notes payable
|
| | | | (4,494) | | | | | | — | | |
Payment of loan payable
|
| | | | (3,100) | | | | | | — | | |
Capital lease principal payments
|
| | | | (17) | | | | | | (38) | | |
Payment of deferred offering costs
|
| | | | (630) | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 53,474 | | | | | | 10,667 | | |
Net increase in cash and cash equivalents
|
| | | | 46,483 | | | | | | 6,044 | | |
Cash and cash equivalents at beginning of year
|
| | | | 13,533 | | | | | | 21,390 | | |
Cash and cash equivalents at end of period
|
| | | $ | 60,016 | | | | | $ | 27,434 | | |
Supplemental disclosure of cash flow information | | | | | | | | | | | | | |
Cash paid for interest
|
| | | $ | 1,277 | | | | | $ | 82 | | |
Supplemental disclosure of non-cash investing and financing information | | | | | | | | | | | | | |
Purchases of property and equipment in accounts payable and accruals
|
| | | $ | 21 | | | | | $ | 6 | | |
Series E senior convertible preferred stock offering costs included in accounts payable
and accrued liabilities |
| | | $ | 82 | | | | | $ | — | | |
Series E senior convertible preferred stock offering costs prepaid and deferred in prior
period and reclassified to Series E senior convertible preferred stock |
| | | $ | 26 | | | | | $ | — | | |
Deferred offering costs included in accounts payable and accrued liabilities
|
| | | $ | 771 | | | | | $ | — | | |
| | |
March 31,
2021 |
| |
December 31,
2020 |
| ||||||
Computer equipment
|
| | | $ | 823 | | | | | $ | 767 | | |
Software
|
| | | | 373 | | | | | | 373 | | |
Laboratory equipment
|
| | | | 4,200 | | | | | | 4,194 | | |
Furniture and fixtures
|
| | | | 292 | | | | | | 292 | | |
Leasehold improvements
|
| | | | 701 | | | | | | 701 | | |
Total property and equipment
|
| | | | 6,389 | | | | | | 6,327 | | |
Less accumulated depreciation and amortization
|
| | | | (5,563) | | | | | | (5,362) | | |
Property and equipment, net
|
| | | $ | 826 | | | | | $ | 965 | | |
| | |
March 31,
2021 |
| |
December 31,
2020 |
| ||||||
Accrued paid time off
|
| | | $ | 394 | | | | | $ | 290 | | |
Accrued compensation
|
| | | | 605 | | | | | | 996 | | |
Accrued invoices related to proposed equity offering
|
| | | | 743 | | | | | | — | | |
Bank loan final payment fee
|
| | | | — | | | | | | 100 | | |
Other current liabilities
|
| | | | 259 | | | | | | 191 | | |
Total accrued and other current liabilities
|
| | | $ | 2,001 | | | | | $ | 1,577 | | |
| | |
March 31,
2021 |
| |
March 31,
2020 |
| ||||||
Interest income
|
| | | $ | 2 | | | | | $ | 28 | | |
Fair value remeasurements
|
| | | | (10) | | | | | | 5 | | |
Other gains (losses), net
|
| | | | (19) | | | | | | — | | |
Other income (expense), net
|
| | | $ | (27) | | | | | $ | 33 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Cash equivalents
|
| | | $ | 60,016 | | | | | | — | | | | | $ | — | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | | — | | | | | | — | | | | | | 494 | | |
Total
|
| | | $ | 60,016 | | | | | | — | | | | | $ | 494 | | |
| | |
Level 1
|
| |
Level 2
|
| |
Level 3
|
| |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |
Cash equivalents
|
| | | $ | 13,533 | | | | | | — | | | | | $ | — | | |
Liabilities: | | | | | | | | | | | | | | | | | | | |
Warrant liability
|
| | | | — | | | | | | — | | | | | | 474 | | |
Total
|
| | | $ | 13,533 | | | | | | — | | | | | $ | 474 | | |
| | |
March 31, 2021
|
| |
December 31, 2020
|
| ||||||
Senior convertible preferred stock
|
| | | | 22,195,277 | | | | | | 11,928,167 | | |
Junior convertible preferred stock
|
| | | | 20,889,401 | | | | | | 20,889,401 | | |
Shares issuable under convertible note
|
| | | | — | | | | | | 1,383,989 | | |
Warrants to purchase convertible preferred stock
|
| | | | 169,533 | | | | | | 169,533 | | |
Warrants to purchase Class A common stock
|
| | | | 5,700,270 | | | | | | 4,198,770 | | |
Options to purchase Class A common stock
|
| | | | 10,308,231 | | | | | | 8,517,220 | | |
Class A common stock available for future issuance under the 2011 Equity Incentive Plan
|
| | | | 2,933,549 | | | | | | 807,702 | | |
Total
|
| | | | 62,196,261 | | | | | | 47,894,782 | | |
Series
|
| |
Shares
Authorized |
| |
Shares Issued
and Outstanding |
| |
Original
Issue Price |
| |
Aggregate
Liquidation Preference |
| |
Proceeds,
net of issuance costs |
| |||||||||||||||
Series A-1 Junior Preferred Stock
|
| | | | 1,390 | | | | | | 1,390 | | | | | $ | 1,000.00 | | | | | $ | 1,390 | | | | | $ | 1,390 | | |
Series A-2 Junior Preferred Stock
|
| | | | 7,941,499 | | | | | | 7,908,277 | | | | | | 2.50 | | | | | | 19,771 | | | | | | 19,595 | | |
Series B-1 Junior Preferred Stock
|
| | | | 2,060,000 | | | | | | 2,000,000 | | | | | | 2.50 | | | | | | 5,000 | | | | | | 4,914 | | |
Series B-2 Junior Preferred Stock
|
| | | | 5,012,500 | | | | | | 5,000,000 | | | | | | 4.00 | | | | | | 20,000 | | | | | | 19,984 | | |
Series C-1 Junior Preferred Stock
|
| | | | 5,521,905 | | | | | | 5,505,099 | | | | | | 5.95 | | | | | | 32,755 | | | | | | 32,653 | | |
Series C-2 Junior Preferred Stock
|
| | | | 1,510,000 | | | | | | — | | | | | | 8.28 | | | | | | — | | | | | | — | | |
Series D Senior Preferred Stock
|
| | | | 11,975,172 | | | | | | 11,928,167 | | | | | | 4.34 | | | | | | 102,535 | | | | | | 50,415 | | |
Series E Senior Preferred Stock
|
| | | | 12,520,868 | | | | | | 10,267,111 | | | | | | 5.99 | | | | | | 61,500 | | | | | | 61,378 | | |
Total Convertible Preferred Stock
|
| | | | 46,543,334 | | | | | | 42,610,044 | | | | | | | | | | | $ | 242,951 | | | | | $ | 190,329 | | |
Series
|
| |
Shares
Authorized |
| |
Shares Issued
and Outstanding |
| |
Original
Issue Price |
| |
Aggregate
Liquidation Preference |
| |
Proceeds,
net of issuance costs |
| |||||||||||||||
Series A-1 Junior Preferred Stock
|
| | | | 1,390 | | | | | | 1,390 | | | | | $ | 1,000.00 | | | | | $ | 1,390 | | | | | $ | 1,390 | | |
Series A-2 Junior Preferred Stock
|
| | | | 7,941,499 | | | | | | 7,908,277 | | | | | | 2.50 | | | | | | 19,771 | | | | | | 19,595 | | |
Series B-1 Junior Preferred Stock
|
| | | | 2,060,000 | | | | | | 2,000,000 | | | | | | 2.50 | | | | | | 5,000 | | | | | | 4,914 | | |
Series B-2 Junior Preferred Stock
|
| | | | 5,012,500 | | | | | | 5,000,000 | | | | | | 4.00 | | | | | | 20,000 | | | | | | 19,984 | | |
Series C-1 Junior Preferred Stock
|
| | | | 5,521,905 | | | | | | 5,505,099 | | | | | | 5.95 | | | | | | 32,755 | | | | | | 32,653 | | |
Series C-2 Junior Preferred Stock
|
| | | | 1,510,000 | | | | | | — | | | | | | 8.28 | | | | | | — | | | | | | — | | |
Series D Senior Preferred Stock
|
| | | | 12,320,844 | | | | | | 11,928,167 | | | | | | 4.34 | | | | | | 102,535 | | | | | | 50,415 | | |
Total Convertible Preferred Stock
|
| | | | 34,368,138 | | | | | | 32,342,933 | | | | | | | | | | | $ | 181,451 | | | | | $ | 128,951 | | |
Series
|
| |
March 31,
2021 |
| |
December 31,
2020 |
| ||||||
Series A-1 Junior Preferred Stock
|
| | | $ | 2.92 | | | | | $ | 2.92 | | |
Series A-2 Junior Preferred Stock
|
| | | | 2.50 | | | | | | 2.50 | | |
Series B-1 Junior Preferred Stock
|
| | | | 2.50 | | | | | | 2.50 | | |
Series B-2 Junior Preferred Stock
|
| | | | 4.00 | | | | | | 4.00 | | |
Series C-1 Junior Preferred Stock
|
| | | | 5.95 | | | | | | 5.95 | | |
Series C-2 Junior Preferred Stock
|
| | | | 8.28 | | | | | | 8.28 | | |
Series D Senior Preferred Stock
|
| | | | 4.34 | | | | | | 4.34 | | |
Series E Senior Preferred Stock
|
| | | | 5.99 | | | | |
|
—
|
| |
| | |
Number of
Shares Subject to Options Outstanding |
| |
Weighted-
Average Grant Date Fair Value |
| |
Weighted-
Average Exercise Price Per Share |
| |
Weighted-
Average Remaining Contractual Life (In Years) |
| ||||||||||||
Outstanding – December 31, 2020
|
| | | | 8,517,220 | | | | | $ | 0.44 | | | | | $ | 0.79 | | | | | | 6.99 | | |
Granted
|
| | | | 2,376,652 | | | | | | 1.47 | | | | | | 2.56 | | | | | | | | |
Expired
|
| | | | (70) | | | | | | 61.52 | | | | | | 100.00 | | | | | | | | |
Cancelled
|
| | | | (417) | | | | | | 0.49 | | | | | | 0.95 | | | | | | | | |
Exercised
|
| | | | (585,154) | | | | | | 0.25 | | | | | | 0.39 | | | | | | | | |
Outstanding – March 31, 2021
|
| | | | 10,308,231 | | | | | $ | 0.69 | | | | | $ | 1.22 | | | | | | 7.75 | | |
Vested and expected to vest at March 31, 2021
|
| | | | 9,739,423 | | | | | $ | 0.67 | | | | | $ | 1.18 | | | | | | 7.64 | | |
Vested and exercisable at March 31, 2021
|
| | | | 4,812,806 | | | | | $ | 0.46 | | | | | $ | 0.80 | | | | | | 5.88 | | |
Non-vested options at March 31, 2021
|
| | | | 5,495,425 | | | | | $ | 0.89 | | | | | $ | 1.59 | | | | | | | | |
| | |
Three months ended
March 31, |
| |||||||||
| | | | | 2021 | | | | | | 2020 | | |
Research and development expense
|
| | | $ | 64 | | | | | $ | 54 | | |
Sales and marketing expense
|
| | | | 62 | | | | | | 29 | | |
General and administrative expense
|
| | | | 113 | | | | | | 52 | | |
Total employee stock-based compensation
|
| | | $ | 239 | | | | | $ | 135 | | |
Related Series
|
| |
Grant
Date |
| |
Number of
Warrants |
| |
Exercise
Price |
| |
Fair Value as of
|
| |||||||||||||||
|
March 31,
2021 |
| |
December 31,
2020 |
| |||||||||||||||||||||||
Series A-2
|
| |
Sep 2012
|
| | | | 26,000 | | | | | $ | 2.50 | | | | | $ | 42 | | | | | $ | 41 | | |
Series A-2
|
| |
Sep 2014
|
| | | | 7,222 | | | | | $ | 2.50 | | | | | | 14 | | | | | | 13 | | |
Series B-1
|
| |
Dec 2014
|
| | | | 60,000 | | | | | $ | 2.50 | | | | | | 119 | | | | | | 113 | | |
Series B-2
|
| |
Dec 2015
|
| | | | 12,500 | | | | | $ | 4.00 | | | | | | 23 | | | | | | 22 | | |
Series C-1
|
| |
Mar 2017
|
| | | | 16,806 | | | | | $ | 5.95 | | | | | | 32 | | | | | | 31 | | |
Series D
|
| |
Feb 2020
|
| | | | 47,005 | | | | | $ | 4.34 | | | | | | 264 | | | | | | 254 | | |
Total
|
| | | | | | | 169,533 | | | | | | | | | | | $ | 494 | | | | | $ | 474 | | |
| | |
Warrant
Liability Outstanding |
| |||
Outstanding – December 31, 2020
|
| | | $ | 474 | | |
Net increase in fair value of preferred stock warrants
|
| | | | 20 | | |
Outstanding – March 31, 2021
|
| | | $ | 494 | | |
| | |
2021
|
| |
2022
|
| |
2023
|
| |
2024 and
Thereafter |
| |
Total
|
| |||||||||||||||
Operating leases
|
| | | $ | 410 | | | | | $ | 554 | | | | | $ | — | | | | | $ | — | | | | | $ | 964 | | |
Capital leases
|
| | | | 61 | | | | | | 80 | | | | | | 55 | | | | | | — | | | | | | 196 | | |
Total
|
| | | $ | 471 | | | | | $ | 634 | | | | | $ | 55 | | | | | $ | — | | | | | $ | 1,160 | | |
| | |
Three Months Ended
March 31, |
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Net loss
|
| | | $ | (6,359) | | | | | $ | (4,696) | | |
Weighted average common stock outstanding, basic and diluted
|
| | | | 3,725,328 | | | | | | 3,171,251 | | |
Net loss per share – basic and diluted
|
| | | $ | (1.71) | | | | | $ | (1.48) | | |
| | |
March 31,
|
| |||||||||
| | |
2021
|
| |
2020
|
| ||||||
Junior convertible preferred stock
|
| | | | 20,889,401 | | | | | | 20,889,401 | | |
Senior convertible preferred stock
|
| | | | 22,195,278 | | | | | | 11,928,165 | | |
Shares issuable under convertible note
|
| | | | — | | | | | | 1,247,663 | | |
Warrants to purchase convertible preferred stock
|
| | | | 169,533 | | | | | | 169,533 | | |
Warrants to purchase Class A common stock
|
| | | | 5,700,270 | | | | | | 4,198,770 | | |
Options to purchase Class A common stock
|
| | | | 10,308,231 | | | | | | 8,591,168 | | |
Total
|
| | | | 59,262,713 | | | | | | 47,024,700 | | |
| Citigroup | | |
Cowen
|
| |
William Blair
|
|
| | |
Amount
|
|
SEC registration fee
|
| | $ | |
FINRA filing fee
|
| | | |
Initial Nasdaq Global Market listing fee
|
| | | |
Blue sky qualification fees and expenses
|
| | | |
Printing and engraving expenses
|
| | | |
Legal fees and expenses
|
| | | |
Accounting fees and expenses
|
| | | |
Transfer agent and registrar fees and expenses
|
| | | |
Miscellaneous expenses
|
| | | |
Total
|
| | $ | |
Exhibit
Number |
| |
Description of Exhibit
|
|
1.1* | | | Form of Underwriting Agreement. | |
3.1 | | | Amended and Restated Certificate of Incorporation, as amended. | |
3.2* | | | Form of Amended and Restated Certificate of Incorporation (to be effective upon completion of the offering). | |
3.3 | | | By-Laws of the Registrant. | |
3.4* | | | Form of Amended and Restated By-Laws (to be effective upon completion of this offering). | |
4.1* | | | Specimen Common Stock Certificate. | |
4.2** | | | Form of Common Stock Purchase Warrant – I. | |
Exhibit
Number |
| |
Description of Exhibit
|
|
4.3** | | | Form of Common Stock Purchase Warrant – II. | |
4.4 | | | Form of Series E Warrant. | |
4.5 | | | Fourth Amended and Restated Investors' Rights Agreement, dated as of February 23, 2021. | |
5.1* | | | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. | |
10.1* | | | Form of Indemnification Agreement. | |
10.2*# | | | 2011 Employee, Director and Consultant Equity Incentive Plan. | |
10.3*# | | | 2021 Employee, Director and Consultant Equity Incentive Plan. | |
10.4*# | | | Form of 2021 Employee Stock Purchase Plan. | |
10.5†** | | | Commercial Collaboration Agreement, dated as of February 17, 2021, by and between Anthem, Inc. and the Registrant. | |
10.6†** | | | Laboratory Services Agreement, effective as of November 10, 2020, by and among Anthem Health Insurance and Amerigroup Corporation and the Registrant. | |
10.7.1†**
|
| | Commercialization Agreement, dated as of January 9, 2017, by and between Laboratory Corporation of America Holdings and the Registrant. | |
10.7.2†**
|
| | First Amendment to the Commercialization Agreement, dated as of June 25, 2018, by and between Laboratory Corporation of America Holdings and the Registrant. | |
10.7.3†**
|
| | Second Amendment to the Commercialization Agreement, dated as of January 25, 2021, by and between Laboratory Corporation of America Holdings and the Registrant. | |
10.8† | | | Side Letter with Baker Bros. Advisors LP, dated as of April 29, 2021, by and between Baker Bros. Advisors LP and the Registrant. | |
10.9#** | | | Employment Agreement by and between the Registrant and Gregory C. Critchfield, M.D., dated November 8, 2011. | |
10.10#** | | | Employment Agreement by and between the Registrant and Jay M. Moyes, dated March 24, 2020. | |
10.11#** | | | Employment Agreement by and between the Registrant and Douglas C. Fisher, dated January 27, 2015. | |
10.12#** | | | Employment Agreement by and between the Registrant and Nadia Altomare, dated May 15, 2017. | |
10.13#** | | | Employment Agreement by and between the Registrant and John J. Boniface, dated March 14, 2012. | |
10.14#** | | |
Employment Agreement by and between the Registrant and Garrett Lam, dated June 13, 2018.
|
|
10.15#** | | | Separation Agreement by and between the Registrant and Garrett Lam, dated June 19, 2020. | |
10.16# | | | Employment Agreement by and between the Registrant and Benjamin Jackson, dated April 13, 2021. | |
10.17#** | | | Offer Letter by and between the Registrant and John Peltier, dated July 8, 2016. | |
10.18# | | | Offer Letter by and between the Registrant and Thomas Garite, dated June 17, 2020. | |
10.18.1# | | | Amendment to Offer Letter by and between the Registrant and Thomas Garite, dated July 1, 2020. | |
10.18.2# | | | Second Amendment to Offer Letter by and between the Registrant and Thomas Garite, dated July 30, 2020. | |
10.18.3# | | | Third Amendment to Offer Letter by and between the Registrant and Thomas Garite, dated April 28, 2021. | |
10.19# | | | Offer Letter by and between the Registrant and Nichole Martin, dated March 30, 2020. | |
10.20* | | | Lease Agreement, effective as of August 1, 2017, by and between Eastland Regency, L.C. and the Registrant. | |
Exhibit
Number |
| |
Description of Exhibit
|
|
21.1** | | | Subsidiaries of Registrant. | |
23.1* | | | Consent of Independent Registered Public Accounting Firm. | |
23.3* | | | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in Exhibit 5.1). | |
24.1* | | | Power of Attorney (included on signature page). | |
|
Signature
|
| |
Title
|
| |
Date
|
|
|
Gregory C. Critchfield, M.D., M.S.
|
| |
Chairman,
Chief Executive Officer, President and Director (Principal Executive Officer) |
| |
, 2021
|
|
|
Jay Moyes
|
| |
Chief Financial Officer
(Principal Accounting Officer and Principal Financial Officer) |
| |
, 2021
|
|
|
Denny Farrar
|
| |
Director
|
| |
, 2021
|
|
|
Joshua Phillips
|
| |
Director
|
| |
, 2021
|
|
|
Mansoor Raza Mirza, M.D.
|
| |
Director
|
| |
, 2021
|
|
|
Ryan Trimble
|
| |
Director
|
| |
, 2021
|
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
Kim Kamdar, Ph.D.
|
| |
Director
|
| |
, 2021
|
|
|
Michael F. Minahan
|
| |
Director
|
| |
, 2021
|
|
|
Elizabeth Canis
|
| |
Director
|
| |
, 2021
|
|
|
Marcus Wilson, Pharm.D.
|
| |
Director
|
| |
, 2021
|
|
|
Charles D. Kennedy, M.D.
|
| |
Director
|
| |
, 2021
|
|
|
Joseph Siletto
|
| |
Director
|
| |
, 2021
|
|
Exhibit 3.1
SIXTH AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
SERA PROGNOSTICS, INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Sera Prognostics, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “General Corporation Law”),
DOES HEREBY CERTIFY:
1. That the name of this corporation is Sera Prognostics, Inc., and that this corporation was originally incorporated pursuant to the General Corporation Law on January 17, 2008. An Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on February 23, 2021. Thereafter, a Certificate of Amendment to the Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 18, 2021.
2. That the Board of Directors (the “Board”) of this corporation duly adopted resolutions proposing to amend and restate the Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be amended and restated in its entirety to read as follows:
First: The name of this corporation is Sera Prognostics, Inc. (the “Corporation”).
Second: The address of the registered office of the Corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company.
Third: The nature of the business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law.
Fourth: The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 75,000,000 shares of Class A Common Stock, $0.0001 par value per share (“Class A Common Stock”), (ii) 3,000,000 shares of Class B Common Stock, $0.0001 par value per share (“Class B Common Stock”) and (iii) 46,543,334 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”). The Class A Common Stock and the Class B Common Stock are referred to together as the “Common Stock.”
The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK
1 Class A Common Stock. All Common Stock, whether outstanding on the date hereof or issued hereafter shall be Class A Common Stock unless specifically designated Class B Common Stock.
1.1 General. The voting, dividend and liquidation rights of the holders of the Class A Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.
1.2 Voting. The holders of the Class A Common Stock are entitled to one vote for each share of Class A Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). There shall be no cumulative voting. The number of authorized shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation of the Corporation (the “Certificate of Incorporation”)) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law, and without a separate class vote of the holders of Class A Common Stock.
2 Class B Common Stock.
2.1 General. The voting, dividend and liquidation rights of the holders of the Class B Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.
2.2 Voting. The Class B Common Stock shall be non-voting except as may be required by law; provided, the holders of the Class B Common Stock shall be entitled to vote, as a separate class, on any amendment to the Certificate of Incorporation that (a) modifies any powers, rights or privileges of the Class A Common Stock in a manner that differs from the powers, rights or privileges of the Class B Common Stock (other than with respect to the status of the Class B Common Stock as non-voting) or (b) modifies the non-voting status or conversion powers, rights or privileges applicable to the Class B Common Stock. The number of authorized shares of Class B Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by (in addition to any vote of the holders of one or more series of Preferred Stock that may be required by the terms of the Certificate of Incorporation) the affirmative vote of the holders of shares of capital stock of the Corporation representing a majority of the votes represented by all outstanding shares of capital stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law, and without a separate class vote of the holders of Class B Common Stock.
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2.3 Conversion. Each holder of shares of Class B Common Stock shall have the right to convert each share of Class B Common Stock held by such holder into one share of Class A Common Stock at such holder’s election, which shall be made upon written notice to the Corporation delivered as provided in Section 4.3.1 of Subsection B of this Article Fourth, provided that, upon the closing of an initial public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, the shares of Class B Common Stock may only be converted into shares of Class A Common Stock during such time or times as immediately prior to or as a result of such conversion would not result in the holder(s) thereof beneficially owning (for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (collectively, the “Exchange Act”)), when aggregated with affiliates with whom such holder is required to aggregate beneficial ownership for purposes of Section 13(d) of the Exchange Act, in excess of the Beneficial Ownership Limitation. The “Beneficial Ownership Limitation” means initially 4.99% of any class of securities of the Corporation registered under the Exchange Act, which percentage may be increased or decreased by a holder of outstanding shares of Class B Common Stock to such other percentage as such holder may designate in writing upon 61 days’ notice (delivered as provided in Section 4.3.1 of Subsection B of this Article Fourth) to the Corporation, provided, however, that such increase or decrease shall only be applicable to such holder and provided further, however, that no holder may make such an election to change the percentage unless all holders managed by the same investment advisor as such electing holder make the same election.
3 Adjustments; Distributions. The Corporation shall not give effect to any stock split, stock dividend, stock combination or similar event affecting the Class A Common Stock or Class B Common Stock without effecting the same such stock split, stock dividend, stock combination or similar event for the Class A Common Stock or Class B Common Stock, respectively. The Corporation shall not declare, pay or set aside any dividends or distributions on shares of Class A Common Stock or Class B Common Stock unless the Corporation declares, pays or sets aside the same dividend or distribution on each share of Class A Common Stock or Class B Common Stock, provided, that dividends payable in Common Stock shall be paid in the same class.
B. PREFERRED STOCK
1,390 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A1 Preferred Stock”, 7,941,499 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A2 Preferred Stock”, 2,060,000 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series B-1 Preferred Stock”, 5,012,500 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series B-2 Preferred Stock”, 5,521,905 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series C-1 Preferred Stock”, 1,510,000 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series C-2 Preferred Stock”, 11,975,172 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series D Preferred Stock”, and 12,520,868 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series E Preferred Stock”, with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. “Junior Preferred Stock” means the Series A1 Preferred Stock, the Series A2 Preferred Stock, the Series B-1 Preferred Stock, the Series B-2 Preferred Stock, the Series C-1 Preferred Stock and the Series C-2 Preferred Stock. “Senior Preferred Stock” means the Series D Preferred Stock and the Series E Preferred Stock. Unless otherwise indicated, references to “Sections” or “Subsections” in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth.
3
1 Dividends.
1.1 As of the date of the effective date of the filing of the Second Amended and Restated Certificate of Incorporation of the Corporation on November 7, 2014, any and all outstanding and unpaid dividends accrued with respect to the Series A2 Preferred Stock were forfeited.
1.2 The Corporation shall not declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock) unless (in addition to the obtaining of any consents required elsewhere in the Certificate of Incorporation) the holders of the Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Preferred Stock in an amount at least equal to (i) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Preferred Stock as would equal the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock and (B) the number of shares of Common Stock issuable upon conversion of a share of Preferred Stock, in each case calculated on the record date for determination of holders entitled to receive such dividend or (ii) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Preferred Stock determined by (A) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (B) multiplying such fraction by an amount equal to the applicable Original Issue Price (as defined below); provided that, if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Corporation, the dividend payable to the holders of Preferred Stock pursuant to this Section 1 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Preferred Stock dividend. The “Original Issue Price” for each series of Preferred Stock shall mean:
(a) with respect to the Series A1 Preferred Stock, $1,000.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A1 Preferred Stock (the “Series A1 Original Issue Price”);
(b) with respect to the Series A2 Preferred Stock, $2.50 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A2 Preferred Stock (the “Series A2 Original Issue Price”);
(c) with respect to the Series B-1 Preferred Stock, $2.50 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B-1 Preferred Stock (the “Series B-1 Original Issue Price”);
4
(d) with respect to the Series B-2 Preferred Stock, $4.00 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B-2 Preferred Stock (the “Series B-2 Original Issue Price”);
(e) with respect to the Series C-1 Preferred Stock, $5.95 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C-1 Preferred Stock (the “Series C-1 Original Issue Price”);
(f) with respect to the Series C-2 Preferred Stock, $8.28 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series C-2 Preferred Stock (the “Series C-2 Original Issue Price”);
(g) with respect to the Series D Preferred Stock, $4.34 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series D Preferred Stock (the “Series D Original Issue Price”); and
(h) with respect to the Series E Preferred Stock, $5.99 per share, subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series E Preferred Stock (the “Series E Original Issue Price”).
2 Liquidation, Dissolution or Winding Up; Certain Mergers, Consolidations and Asset Sales.
2.1 Preferential Payments to Holders of Senior Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event (as defined below), before any distribution or payment shall be made to the holders of any Common Stock or the holders of shares of any other series of Preferred Stock, the holders of shares of Senior Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Senior Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, before any payment shall be made to the holders of Common Stock, the Junior Preferred Stock or any other class or series of stock ranking on liquidation junior to the Senior Preferred Stock and together with any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock by reason of their ownership thereof, an amount per share equal to (i) with respect to each share of Series D Preferred Stock, the greater of (a) two times the Series D Original Issue Price of such share of Series D Preferred Stock plus all declared and unpaid dividends on such share of Series D Preferred Stock and (b) such amount per share as would have been payable had all shares of the Series D Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event, and (ii) with respect to each share of Series E Preferred Stock, the greater of (a) the Original Issue Price of such share of Series E Preferred Stock plus all declared and unpaid dividends on such share of Series E Preferred Stock and (b) such amount per share as would have been payable had all shares of Series E Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable in respect of Senior Preferred Stock pursuant to this sentence is hereinafter referred to as the “Senior Preferential Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Senior Preferred Stock or any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1, the holders of shares of Senior Preferred Stock or any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
5
2.2 After the payment of the Senior Preferential Liquidation Amount as set forth in Subsection 2.1 above upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the holders of shares of Junior Preferred Stock then outstanding, on a pari passu basis, shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Junior Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, before any payment shall be made to the holders of Common Stock or any other class or series of stock ranking on liquidation junior to the Junior Preferred Stock by reason of their ownership thereof, an amount per share equal to the greater of (i) the sum of applicable Original Issue Price for such series of Junior Preferred Stock, plus any dividends declared but unpaid thereon and (ii) such amount per share as would have been payable had all shares of the applicable series of Junior Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event, taking into account the simultaneous application of this Subsection 2.2 to all series of Junior Preferred Stock (the amount payable pursuant to this sentence is hereinafter referred to as the “Junior Preferential Liquidation Amount” and, with the Senior Preferential Liquidation Amount, the “Preferential Liquidation Amounts”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Junior Preferred Stock the full amount to which they shall be entitled under this Subsection 2.2, the holders of shares of Junior Preferred Stock shall share ratably on a pari passu basis in any distribution of the assets available for distribution under this Subsection 2.2 in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
2.3 Distribution of Remaining Assets. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, after the payment in full of all applicable Preferential Liquidation Amounts required to be paid to the holders of shares of Preferred Stock, the remaining assets of the Corporation available for distribution to its stockholders or, in the case of a Deemed Liquidation Event, the consideration not payable to the holders of shares of Senior Preferred Stock pursuant to Subsection 2.1, the holders of shares of Junior Preferred Stock pursuant to Subsection 2.2 or the remaining Available Proceeds, as the case may be, shall be distributed among the holders of the shares of Common Stock, pro rata based on the number of shares held by each such holder. The aggregate amount that a holder of a share of Preferred Stock is entitled to receive under Subsections 2.1 and 2.2 is hereinafter referred to as the “Total Preferred Liquidation Amount”.
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2.4 Deemed Liquidation Events.
2.4.1 Definition. Each of the following events shall be considered a “Deemed Liquidation Event” unless the holders of at least a majority of the outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis, elect otherwise by written notice sent to the Corporation at least ten (10) days prior to the effective date of any such event:
(a) a merger, consolidation or reorganization in which the Corporation is a constituent party or a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the capital stock of (i) the surviving or resulting corporation or (ii) if the surviving or resulting corporation is a wholly owned subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving or resulting corporation; or
(b) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger, consolidation or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Corporation.
2.4.2 Effecting a Deemed Liquidation Event.
(a) The Corporation shall not have the power to effect a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(i) unless the agreement or plan of merger, consolidation or reorganization for such transaction (the “Merger Agreement”) provides that the consideration payable to the stockholders of the Corporation in such Deemed Liquidation Event shall be paid to the holders of capital stock of the Corporation in accordance with Subsections 2.1, 2.2 and 2.3.
7
(b) In the event of a Deemed Liquidation Event referred to in Subsection 2.4.1(a)(ii) or 2.4.1(b), if the Corporation does not effect a dissolution of the Corporation under the General Corporation Law within ninety (90) days after such Deemed Liquidation Event, then (i) the Corporation shall send a written notice to each holder of Preferred Stock no later than the ninetieth (90th) day after the Deemed Liquidation Event advising such holders of their right (and the requirements to be met to secure such right) pursuant to the terms of the following clause (ii) to require the redemption of such shares of Preferred Stock, and (ii) if the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis, so request in a written instrument delivered to the Corporation not later than one hundred twenty (120) days after such Deemed Liquidation Event, the Corporation shall use the consideration received by the Corporation for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or technology licensed, as determined in good faith by the Board), together with any other assets of the Corporation available for distribution to its stockholders, all to the extent permitted by Delaware law governing distributions to stockholders (the “Available Proceeds”), on the one hundred fiftieth (150th) day after such Deemed Liquidation Event, to redeem all outstanding shares of Preferred Stock at a price per share equal to the applicable Total Preferred Liquidation Amount. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if the Available Proceeds are not sufficient to redeem all outstanding shares of Preferred Stock, the Corporation shall redeem a pro rata portion of each holder’s shares of Preferred Stock to the fullest extent of such Available Proceeds, based on the respective amounts which would otherwise be payable in respect of the shares to be redeemed if the Available Proceeds were sufficient to redeem all such shares, and shall redeem the remaining shares as soon as it may lawfully do so under Delaware law governing distributions to stockholders. The provisions of Section 6 shall apply, with such necessary changes in the details thereof as are necessitated by the context, to the redemption of the Preferred Stock pursuant to this Subsection 2.3.2(b). Prior to the distribution or redemption provided for in this Subsection 2.3.2(b), the Corporation shall not expend or dissipate the consideration received for such Deemed Liquidation Event, except to discharge expenses incurred in connection with such Deemed Liquidation Event or in the ordinary course of business.
2.4.3 Amount Deemed Paid or Distributed. The amount deemed paid or distributed to the holders of capital stock of the Corporation upon any such merger, consolidation, sale, transfer, exclusive license, other disposition or redemption shall be the cash or the value of the property, rights or securities paid or distributed to such holders pursuant to such Deemed Liquidation Event by the Corporation or the acquiring person, firm, or other entity. The value of such property, rights or securities shall be determined in good faith by the Board.
3 Voting.
3.1 General. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the Certificate of Incorporation, holders of Preferred Stock shall vote together with the holders of Common Stock as a single class on an as-converted basis.
8
3.2 Election of Directors.
3.2.1 The holders of record of the shares of Preferred Stock exclusively and voting together as a single class on an as-converted basis, shall be entitled to elect nine (9) directors of the Corporation (the “Preferred Directors”). The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Preferred Stock), voting together as a single class on an as-converted basis, shall be entitled to elect the balance of the total number of directors of the Corporation. Any director elected as provided in the preceding sentence may be removed without cause by, and only by, the affirmative vote of the holders of the shares of the class or series of capital stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders. If the holders of shares of Preferred Stock or Common Stock, as the case may be, fail to elect a sufficient number of directors to fill all directorships for which they are entitled to elect directors, voting exclusively and as a separate class, pursuant to the first sentence of this Subsection 3.2, then any directorship not so filled shall remain vacant until such time as the holders of the Preferred Stock, Common Stock, or the appropriate combination thereof, as the case may be, elect a person to fill such directorship by vote or written consent in lieu of a meeting; and no such directorship may be filled by stockholders of the Corporation other than by the stockholders of the Corporation that are entitled to elect a person to fill such directorship, voting exclusively and as a separate class. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director. Except as otherwise provided in this Subsection 3.2, a vacancy in any directorship filled by the holders of any class or series shall be filled only by vote or written consent in lieu of a meeting of the holders of such class or series or by any remaining director or directors elected by the holders of such class or series pursuant to this Subsection 3.2.
3.3 Preferred Stock Protective Provisions. At any time when any shares of Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.3.1 liquidate, dissolve or wind-up the business and affairs of the Corporation, effect any merger or consolidation or any other Deemed Liquidation Event, or consent to any of the foregoing;
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3.3.2 amend, alter or repeal any provision of the Certificate of Incorporation (a) in a manner that adversely affects the rights, preferences or privileges of any series of Preferred Stock or (b) to allow for the creation, authorization or issuance of additional shares of Other Securities (as defined below);
3.3.3 amend the Bylaws of the Corporation (the “Bylaws”);
3.3.4 create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock that is senior or pari pasu with any series of Preferred Stock (“Other Securities”), or increase the authorized number of shares of any series of Preferred Stock or increase the authorized number of shares of any Other Securities;
3.3.5 (i) reclassify, alter or amend any existing security of the Corporation that is pari passu with any series of Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to any series of Preferred Stock in respect of any such right, preference or privilege, or (ii) reclassify, alter or amend any existing security of the Corporation that is junior to any series of Preferred Stock in respect of the distribution of assets on the liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the payment of dividends or rights of redemption, if such reclassification, alteration or amendment would render such other security senior to or pari passu with any series of Preferred Stock in respect of any such right, preference or privilege;
3.3.6 purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock, if otherwise expressly provided herein, and (ii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then-current fair market value thereof;
3.3.7 create, or authorize the creation of, or issue, or authorize the issuance of any debt security or create any lien or security interest (except for purchase money liens or statutory liens of landlords, mechanics, materialmen, workmen, warehousemen and other similar persons arising or incurred in the ordinary course of business) or incur other indebtedness for borrowed money, including but not limited to obligations and contingent obligations under guarantees, or permit any subsidiary to take any such action with respect to any debt security lien, security interest or other indebtedness for borrowed money, if the aggregate indebtedness of the Corporation and its subsidiaries for borrowed money following such action would exceed $250,000, unless already included on the budget approved by the Board, including at least two (2) of the Preferred Directors, other than trade lines of credit in the ordinary course of business;
3.3.8 increase or decrease the size of the Board;
3.3.9 change the principal business of the Company, enter new lines of business, or exit any then-current line of business;
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3.3.10 sell, assign, license, pledge or encumber material technology or intellectual property, other than licenses granted in the ordinary course of business;
3.3.11 amend, modify or adopt any equity incentive plan or any transfer, vesting or repurchase provisions in any stock option, restricted stock or similar agreement; or
3.3.12 change the rights, preferences or privileges of the Preferred Stock in any way; or
3.3.13 amend this Subsection 3.3.
3.4 Series E Preferred Stock Protective Provisions. At any time when any shares of Series E Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series E Preferred Stock, voting together as a single class on an as-converted basis, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.4.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series E Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.4.2 amend the Certificate of Incorporation to increase the authorized number of shares of Series E Preferred Stock.
3.5 Series D Preferred Stock Protective Provisions. At any time when any shares of Series D Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series D Preferred Stock given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.5.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series D Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.5.2 amend the Certificate of Incorporation to increase the authorized number of shares of Series D Preferred Stock.
3.6 Series D Special Voting Investor Preferred Stock Protective Provisions. So long as the Special Voting Investor (as such term is defined in that certain Series D Purchase Agreement between the Corporation and the Purchasers listed therein, dated as of July 31, 2019, as amended), holds at least 1,843,318 shares of Series D Preferred Stock, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Special Voting Investor, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
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3.6.1 create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock that is senior to the Series D Preferred Stock (“Other Senior Securities”), or increase the authorized number of shares of any series of Preferred Stock or increase the authorized number of shares of any Other Senior Securities; and
3.6.2 amend the Certificate of Incorporation in any way which alters or changes Subsection 1.2 (or any subsection thereof) of Article FOURTH, Part B;
3.6.3 amend the Certificate of Incorporation in any way which alters or changes Subsection 2.1 of Article FOURTH, Part B, including the Senior Preferential Liquidation Amount described therein;
3.6.4 amend the Certificate of Incorporation in any way which alters or changes this Subsection 3.6 (or any subsection thereof) of Article FOURTH, Part B.
3.6.5 amend the Certificate of Incorporation in any way which alters or changes Subsection 4.4.4(a) of Article FOURTH, Part B; or
3.6.6 amend the Certificate of Incorporation in any way which alters or changes Subsection 6.1 of Article FOURTH, Part B.
3.7 Series C-1 Preferred Stock and Series C-2 Preferred Stock Protective Provisions. At any time when any shares of Series C-1 Preferred Stock or Series C-2 Preferred Stock (together, the “Series C Preferred Stock”) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series C Preferred Stock, voting together as a single class on an as-converted basis, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.7.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series C-1 Preferred Stock or the Series C-2 Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.7.2 amend the Certificate of Incorporation to increase the authorized number of shares of Series C-1 Preferred Stock and/or Series C-2 Preferred Stock.
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3.8 Series B-1 Preferred Stock and Series B-2 Preferred Stock Protective Provisions. At any time when any shares of Series B-1 Preferred Stock or Series B-2 Preferred Stock (together, the “Series B Preferred Stock”) are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock, voting together as a single class on an as-converted basis, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.8.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series B-1 Preferred Stock or the Series B-2 Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.8.2 amend the Certificate of Incorporation of the Corporation to increase the authorized number of shares of Series B-1 Preferred Stock and/or Series B-2 Preferred Stock.
3.9 Series A2 Preferred Stock Protective Provisions. At any time when any shares of Series A2 Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A2 Preferred Stock given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.9.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series A2 Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.9.2 amend the Certificate of Incorporation to increase the authorized number of shares of Series A2 Preferred Stock.
3.10 Series A1 Preferred Stock Protective Provisions. At any time when shares of Series A1 Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the then outstanding shares of Series A1 Preferred Stock given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect.
3.10.1 amend the Certificate of Incorporation in any way which alters or changes the powers, rights, preferences or privileges of the Series A1 Preferred Stock so as to affect them adversely in a manner that shall not so affect the entire class; or
3.10.2 amend the Certificate of Incorporation to increase the authorized number of shares of Series A1 Preferred Stock.
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4 Optional Conversion.
The holders of the Preferred Stock shall have conversion rights as follows (the “Conversion Rights”):
4.1 Right to Convert.
4.1.1 Conversion Ratio. Each share of Preferred Stock shall be convertible, at the option of the holder thereof, at any time and from time to time, and without the payment of additional consideration by the holder thereof, into such number of fully paid and nonassessable shares of Class A Common Stock as is determined by dividing the applicable Original Issue Price for each series of Preferred Stock by the applicable Conversion Price (as defined below) for each series of Preferred Stock in effect at the time of conversion. Notwithstanding the preceding sentence, each share of Preferred Stock may, at the option of the holder thereof in accordance with Subsection 4.3.1, convert, without the payment of additional consideration by the holder thereof, into such number of fully paid and non-assessable shares of Class B Common Stock as is determined by dividing such applicable Original Issue Price by such applicable Conversion Price in effect at the time of conversion of each share of Preferred Stock. The “Conversion Price” for each series of Preferred Stock is as follows: (i) for the Series A1 Preferred Stock, the Conversion Price is the “Series A1 Conversion Price,” which shall initially be $3.00, (ii) for the Series A2 Preferred Stock, the Conversion Price is the “Series A2 Conversion Price,” which shall initially be equal to the Series A2 Original Issue Price, (iii) for the Series B-1 Preferred Stock, the Conversion Price is the “Series B-1 Conversion Price,” which shall initially be equal to the Series B-1 Original Issue Price, (iv) for the Series B-2 Preferred Stock, the Conversion Price is the “Series B-2 Conversion Price,” which shall initially be equal to the Series B-2 Original Issue Price, (v) for the Series C-1 Preferred Stock, the Conversion Price is the “Series C-1 Conversion Price,” which shall initially be equal to the Series C-1 Original Issue Price, (vi) for the Series C-2 Preferred Stock, the Conversion Price is the “Series C-2 Conversion Price,” which shall initially be equal to the Series C-2 Original Issue Price, (vii) for the Series D Preferred Stock, the Conversion Price is the “Series D Conversion Price,” which shall initially be equal to the Series D Original Issue Price, and (viii) for the Series E Preferred Stock, the Conversion Price is the “Series E Conversion Price,” which shall initially be equal to the Series E Original Issue Price. Such initial Conversion Price, and the rate at which shares of Preferred Stock may be converted into shares of Class A Common Stock or Class B Common Stock, shall be subject to adjustment as provided below.
4.1.2 Termination of Conversion Rights. In the event of a notice of redemption of any shares of Preferred Stock pursuant to Section 6, the Conversion Rights of the shares designated for redemption shall terminate at the close of business on the last full day preceding the date fixed for redemption, unless the redemption price is not fully paid on such redemption date, in which case the Conversion Rights for such shares shall continue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock.
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4.2 Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.
4.3 Mechanics of Conversion.
4.3.1 Notice of Conversion. In order for a holder of Preferred Stock to voluntarily convert shares of Preferred Stock into shares of Common Stock, such holder shall (a) provide written notice to the Corporation’s transfer agent at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent) that such holder elects to convert all or any number of such holder’s shares of Preferred Stock and, if applicable, any event on which such conversion is contingent, and the number of shares of Class A Common Stock and Class B Common Stock such series of Preferred Stock shall be converted into (in the absence of which, such shares shall be converted into Class A Common Stock) and (b), if such holder’s shares are certificated, surrender the certificate or certificates for such shares of Preferred Stock (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate), at the office of the transfer agent for the Preferred Stock (or at the principal office of the Corporation if the Corporation serves as its own transfer agent). Such notice shall state such holder’s name or the names of the nominees in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. If required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by a written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or his, her or its attorney duly authorized in writing. The close of business on the date of receipt by the transfer agent (or by the Corporation if the Corporation serves as its own transfer agent) of such certificates (or lost certificate affidavit and agreement) and notice shall be the time of conversion (the “Conversion Time”), and the shares of Common Stock issuable upon conversion of the shares represented by such certificate shall be deemed to be outstanding of record as of such date. The Corporation shall, as soon as practicable after the Conversion Time, (i) issue and deliver to such holder of Preferred Stock, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable upon such conversion in accordance with the provisions hereof and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock, (ii) pay in cash such amount as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion, and (iii) pay all declared but unpaid dividends on the shares of Preferred Stock converted.
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4.3.2 Reservation of Shares. The Corporation shall at all times when any Preferred Stock shall be outstanding, reserve and keep available out of its authorized but unissued capital stock, for the purpose of effecting the conversion of the Preferred Stock, such number of its duly authorized shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, the Corporation shall take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to the Certificate of Incorporation. Before taking any action which would cause an adjustment reducing the applicable Conversion Price of any series of Preferred Stock below the then par value of the shares of Common Stock issuable upon conversion of such series of Preferred Stock, the Corporation will take any corporate action which may, in the opinion of its counsel, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted applicable Conversion Price.
4.3.3 Effect of Conversion. All shares of Preferred Stock which shall have been surrendered for conversion as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any, to receive notices and to vote, shall immediately cease and terminate at the Conversion Time, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided in Subsection 4.2 and to receive payment of any dividends declared but unpaid thereon. Any shares of Preferred Stock so converted shall be retired and cancelled and may not be reissued as shares of the applicable series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.
4.3.4 No Further Adjustment. Upon any such conversion, no adjustment to the applicable Conversion Price shall be made for any declared but unpaid dividends on the Preferred Stock surrendered for conversion or on the Common Stock delivered upon conversion.
4.3.5 Taxes. The Corporation shall pay any and all issue and other similar taxes that may be payable in respect of any issuance or delivery of shares of Common Stock upon conversion of shares of Preferred Stock pursuant to this Section 4. The Corporation shall not, however, be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered, and no such issuance or delivery shall be made unless and until the person or entity requesting such issuance has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.
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4.4 Adjustments to Conversion Price for Diluting Issues.
4.4.1 Special Definitions. For purposes of this Article Fourth, the following definitions shall apply:
(a) “Option” shall mean rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.
(b) “Series E Original Issue Date” shall mean the date on which the first share of Series E Preferred Stock was issued.
(c) “Convertible Securities” shall mean any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.
(d) “Additional Shares of Common Stock” shall mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below, deemed to be issued) by the Corporation after the Series E Original Issue Date, other than (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities (clauses (1) and (2), collectively, “Exempted Securities”):
(i) shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on any series of Preferred Stock;
(ii) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up or other distribution on shares of Common Stock that is covered by Subsection 4.5, 4.6, 4.7 or 4.8;
(iii) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by the Board, including at least two (2) of the Preferred Directors;
(iv) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security;
(v) shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing, real property leasing transaction or other similar transaction that is primarily of a non-equity financing nature, approved by the Board, including at least two (2) of the Preferred Directors;
(vi) shares of Common Stock, Options or Convertible Securities issued pursuant to the acquisition of another corporation by the Corporation by merger, purchase of substantially all of the assets or other reorganization or to a joint venture agreement, provided, that such issuances are approved by the Board, including at least two (2) of the Preferred Directors;
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(vii) shares of Common Stock, Options or Convertible Securities issued in connection with a license, collaboration or strategic partnership arrangement and not principally for equity financing purposes, provided, that such issuances are approved by the Board, including at least two (2) of the Preferred Directors;
(viii) 148,880 shares of Common Stock, Options or Convertible Securities issued pursuant to that certain License Agreement between Brigham Young University and the Corporation, dated May 21, 2008, as amended;
(ix) shares of Common Stock, Options or Convertible Securities issued, or deemed issued, pursuant to (A) that certain Series C Preferred Stock Purchase Agreement dated as of January 9, 2017, between the Corporation and the Purchasers named therein, as amended, or (B) that certain Series E Preferred Stock Purchase Agreement dated as of February 23, 2021, between the Corporation and the Purchasers named therein (the “Series E Purchase Agreement”); or
(x) shares of Common Stock issued or issuable upon an IPO.
4.4.2 No Adjustment of Conversion Price. Subject to Subsection 4.4.4, no adjustment in the applicable Conversion Price shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Corporation receives written notice from (i) the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class, or (ii) notwithstanding subpart (i), if such adjustment purports to affect the Series A1 Conversion Price, Series A2 Conversion Price, Series B-1 Conversion Price, Series B-2 Conversion Price, Series C-1 Conversion Price, Series C-2 Conversion Price, Series D Conversion Price, or Series E Conversion Price alone, then the holders of at least a majority of the then outstanding shares of Series A1 Preferred Stock, Series A2 Preferred Stock, Series B-1 Preferred Stock, Series B-2 Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock, Series D Preferred Stock, or Series E Preferred Stock, as applicable, acting together as a separate class, agreeing that no such adjustment shall be made as a result of the issuance or deemed issuance of such Additional Shares of Common Stock.
4.4.3 Deemed Issue of Additional Shares of Common Stock.
(a) If the Corporation at any time or from time to time after the Series E Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.
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(b) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Conversion Price of any series of Preferred Stock pursuant to the terms of Subsection 4.4.4, are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (i) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (ii) any increase or decrease in the consideration payable to the Corporation upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the adjusted Conversion Price applicable to such series of Preferred Stock computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such Conversion Price as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this clause (b) shall have the effect of increasing the applicable Conversion Price for such series of Preferred Stock to an amount which exceeds the lower of (1) the Conversion Price in effect for such series of Preferred Stock immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (2) the Conversion Price that would have resulted for such series of Preferred Stock from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.
(c) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Conversion Price for any series of Preferred Stock pursuant to the terms of Subsection 4.4.4 (either because the consideration per share (determined pursuant to Subsection 4.4.5) of the Additional Shares of Common Stock subject thereto was equal to or greater than the Conversion Price then in effect for such series of Preferred Stock, or because such Option or Convertible Security was issued before the Series E Original Issue Date), are revised after the Series E Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (i) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (ii) any decrease in the consideration payable to the Corporation upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto (determined in the manner provided in Subsection 4.4.3(a)) shall be deemed to have been issued effective upon such increase or decrease becoming effective.
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(d) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the applicable Conversion Price for any series of Preferred Stock pursuant to the terms of Subsection 4.4.4, the applicable Conversion Price shall be readjusted to such Conversion Price as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.
(e) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is subject to adjustment based upon subsequent events, any adjustment to the applicable Conversion Price for any series of Preferred Stock provided for in this Subsection 4.4.3 shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (b) and (c) of this Subsection 4.4.3). If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Corporation upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the applicable Conversion Price for any series of Preferred Stock that would result under the terms of this Subsection 4.4.3 at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the applicable Conversion Price that such issuance or amendment took place at the time such calculation can first be made.
4.4.4 Adjustment of Conversion Price Upon Issuance of Additional Shares of Common Stock.
(a) Notwithstanding anything to the contrary (including Subsection 4.4.2), in the event the Corporation shall at any time after the Series E Original Issue Date issues Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 4.4.3), without consideration or for a consideration per share less than the Series D Conversion Price in effect immediately prior to such issuance or deemed issuance, then the Series D Conversion Price shall be reduced, concurrently with such issuance or deemed issuance, to the consideration per share received by the Corporation for such issue or deemed issue of the Additional Shares of Common Stock; provided that if such issuance or deemed issuance was without consideration, then the Corporation shall be deemed to have received an aggregate of $.001 of consideration for each such Additional Share of Common Stock issued or deemed to be issued.
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(b) In the event the Corporation shall at any time after the Series E Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Subsection 4.4.3), without consideration or for a consideration per share less than the applicable Conversion Price for any series of Junior Preferred Stock or Series E Preferred Stock in effect immediately prior to such issue, then the applicable Conversion Price for such series of Preferred Stock shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:
CP2 = CP1* (A + B) ÷ (A + C).
For purposes of the foregoing formula, the following definitions shall apply:
(i) “CP2” shall mean the Conversion Price in effect for each applicable series of Junior Preferred Stock immediately after such issuance or deemed issuance of Additional Shares of Common Stock;
(ii) “CP1” shall mean the Conversion Price in effect for each applicable series of Junior Preferred Stock immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock;
(iii) “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or deemed issuance or upon conversion or exchange of Convertible Securities (including the Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);
(iv) “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued or deemed issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Corporation in respect of such issue by CP1); and
(v) “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.
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4.4.5 Determination of Consideration. For purposes of this Subsection 4.4, the consideration received by the Corporation for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:
(a) Cash and Property: Such consideration shall:
(i) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Corporation, excluding amounts paid or payable for accrued interest;
(ii) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board; and
(iii) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Corporation for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (i) and (ii) above, as determined in good faith by the Board.
(b) Options and Convertible Securities. The consideration per share received by the Corporation for Additional Shares of Common Stock deemed to have been issued pursuant to Subsection 4.4.3, relating to Options and Convertible Securities, shall be determined by dividing the total amount, if any, received or receivable by the Corporation as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Corporation upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.
4.4.6 Multiple Closing Dates. In the event the Corporation shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the applicable Conversion Price for any series of Preferred Stock pursuant to the terms of Subsection 4.4.4 then, upon the final such issuance, the applicable Conversion Price for such series of Preferred Stock shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).
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4.5 Adjustment for Stock Splits and Combinations. If the Corporation shall at any time or from time to time after the Series E Original Issue Date effect a subdivision of the outstanding Common Stock, the applicable Conversion Price in effect for each series of Preferred Stock immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Corporation shall at any time or from time to time after the Series E Original Issue Date combine the outstanding shares of Common Stock, the applicable Conversion Price in effect for each series of Preferred Stock immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this subsection shall become effective at the close of business on the date the subdivision or combination becomes effective.
4.6 Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series E Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the applicable Conversion Price in effect for each series of Preferred Stock immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the applicable Conversion Price then in effect for such series of Preferred Stock by a fraction:
(a) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(b) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
Notwithstanding the foregoing, (i) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the applicable Conversion Price for each series of Preferred Stock shall be recomputed accordingly as of the close of business on such record date and thereafter the applicable Conversion Price for each series of Preferred Stock shall be adjusted pursuant to this subsection as of the time of actual payment of such dividends or distributions; and (ii) that no such adjustment shall be made if the holders of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.
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4.7 Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Series E Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.
4.8 Adjustment for Merger or Reorganization, etc. Subject to the provisions of Subsection 2.3, if there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Corporation in which the Common Stock (but not the Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Subsections 4.4, 4.6 or 4.7), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Corporation issuable upon conversion of one share of such series of Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board) shall be made in the application of the provisions in this Section 4 with respect to the rights and interests thereafter of the holders of the Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments to the applicable Conversion Price for such series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of such series of Preferred Stock. For the avoidance of doubt, nothing in this Subsection 4.8 shall be construed as preventing the holders of Preferred Stock from seeking any appraisal rights to which they are otherwise entitled under the General Corporation Law in connection with a merger triggering an adjustment hereunder, nor shall this Subsection 4.8 be deemed conclusive evidence of the fair value of the shares of Preferred Stock in any such appraisal proceeding.
4.9 Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price for any series of Preferred Stock pursuant to this Section 4, the Corporation at its expense shall, as promptly as reasonably practicable but in any event not later than ten (10) days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, as promptly as reasonably practicable after the written request at any time of any holder of Preferred Stock (but in any event not later than ten (10) days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Conversion Price then in effect for each series of Preferred Stock that is so adjusted or readjusted, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of such series of Preferred Stock.
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4.10 Notice of Record Date. In the event:
(a) the Corporation shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or
(b) of any capital reorganization of the Corporation, any reclassification of the Common Stock of the Corporation, or any Deemed Liquidation Event; or
(c) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation, then, and in each such case, the Corporation will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (i) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least 10 days prior to the record date or effective date for the event specified in such notice.
5 Mandatory Conversion.
5.1 Trigger Events. Upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least 1.2 times (1.2X) the Series D Original Issue Price (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $40,000,000 of proceeds, net of the underwriting discount and commissions, to the Corporation (a “Qualified Public Offering”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Class A Common Stock, at the then effective conversion rate as calculated pursuant to Subsection 4.1.1 and (ii) such shares may not be reissued by the Corporation; provided that, a holder of shares of Preferred Stock may elect, upon written notice to the Corporation (delivered as provided in Section 4.3.1 of Subsection B of this Article Fourth)) at least seven days prior to the closing of the Qualified Public Offering, to have all or a portion of its shares of Preferred Stock automatically convert into shares of Class B Common Stock at the then effective conversion rate as calculated pursuant to Subsection 4.1.1.
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5.2 Procedural Requirements. All holders of record of shares of Preferred Stock shall be sent written notice of the Mandatory Conversion Time and the place designated for mandatory conversion of all such shares of Preferred Stock pursuant to this Section 5. Such notice need not be sent in advance of the occurrence of the Mandatory Conversion Time. Upon receipt of such notice, each holder of shares of Preferred Stock in certified form shall surrender his, her or its certificate or certificates for all such shares (or, if such holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation at the place designated in such notice. If so required by the Corporation, any certificates surrendered for conversion shall be endorsed or accompanied by written instrument or instruments of transfer, in form satisfactory to the Corporation, duly executed by the registered holder or by his, her or its attorney duly authorized in writing. All rights with respect to the Preferred Stock converted pursuant to Subsection 5.1, including the rights, if any, to receive notices and vote (other than as a holder of Common Stock), will terminate at the Mandatory Conversion Time (notwithstanding the failure of the holder or holders thereof to surrender certificates at or prior to such time), except only the rights of the holders thereof, upon surrender of any certificate or certificates of such holders (or lost certificate affidavit and agreement) therefor, to receive the items provided for in the next sentence of this Subsection 5.2. As soon as practicable after the Mandatory Conversion Time and, if applicable, the surrender of any certificate or certificates (or lost certificate affidavit and agreement) for Preferred Stock, the Corporation shall (a) issue and deliver to such holder, or to his, her or its nominees, a certificate or certificates for the number of full shares of Common Stock issuable on such conversion in accordance with the provisions hereof and (b) pay cash as provided in Subsection 4.2 in lieu of any fraction of a share of Common Stock otherwise issuable upon such conversion and the payment of any declared but unpaid dividends on the shares of Preferred Stock converted. Such converted Preferred Stock shall be retired and cancelled and may not be reissued as shares of such series, and the Corporation may thereafter take such appropriate action (without the need for stockholder action) as may be necessary to reduce the authorized number of shares of Preferred Stock accordingly.
6 Redemption.
6.1 General. Unless prohibited by Delaware law governing distributions to stockholders, shares of the Preferred Stock shall be redeemed by the Corporation at a price equal to the applicable Total Preferred Liquidation Amount (the “Redemption Price”), in two (2) equal annual installments commencing not more than sixty (60) days after receipt by the Corporation at any time on or after the fifth (5th) anniversary of the Series E Original Issue Date, from the holders of at least a majority of the shares of the Senior Preferred Stock then outstanding of written notice requesting redemption of all shares of Preferred Stock (the “Redemption Request”). Upon receipt of a Redemption Request, the Corporation shall calculate the aggregate amount due to holders of the Preferred Stock if the applicable Total Preferred Liquidation Amount were distributed in full to such holders pursuant to Subsections 2.1 and 2.2 (such amount, the “Aggregate Redemption Amount”) and shall apply all of its assets to any such redemption, and to no other corporate purpose, except to the extent prohibited by Delaware law governing distributions to stockholders. The date of each such installment shall be referred to as a “Redemption Date” and the one-half of the Aggregate Redemption Amount due on each Redemption Date shall be referred to as the “Redemption Installment Amount”. On each Redemption Date, the Corporation shall use the Redemption Installment Amount to redeem all outstanding shares of Senior Preferred Stock and Junior Preferred Stock at a price per share equal to the amount that such holders would have received if the Redemption Installment Amount were distributed to such holders in connection with a Deemed Liquidation Event pursuant to Subsections 2.1 and 2.2. If on any Redemption Date Delaware law governing distributions to stockholders prevents the Corporation from redeeming all shares of Preferred Stock to be redeemed, subject to the priority of payments set forth in Subsections 2.1 and 2.2, the Corporation shall ratably redeem the maximum number of shares that it may redeem consistent with such law, and shall redeem the remaining shares as soon as it may lawfully do so under such law.
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6.2 Redemption Notice. The Corporation shall send written notice of the mandatory redemption (the “Redemption Notice”) to each holder of record of Preferred Stock not less than ten (10) business days prior to each Redemption Date. Each Redemption Notice shall state:
(a) the number and series of shares of Preferred Stock held by the holder that the Corporation shall redeem on the Redemption Date specified in the Redemption Notice;
(b) the Redemption Date and the Redemption Price;
(c) the date upon which the holder’s right to convert such shares terminates (as determined in accordance with Subsection 4.1); and
(d) for holders of shares in certificated form, that the holder is to surrender to the Corporation, in the manner and at the place designated, his, her or its certificate or certificates representing the shares of Preferred Stock to be redeemed.
6.3 Surrender of Certificates; Payment. On or before the applicable Redemption Date, each holder of shares of Preferred Stock to be redeemed on such Redemption Date, unless such holder has exercised his, her or its right to convert such shares as provided in Section 4, shall, if a holder of shares in certificated form, surrender the certificate or certificates representing such shares (or, if such registered holder alleges that such certificate has been lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably acceptable to the Corporation to indemnify the Corporation against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of such certificate) to the Corporation, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. In the event less than all of the shares of Preferred Stock represented by a certificate are redeemed, a new certificate representing the unredeemed shares of such series of Preferred Stock shall promptly be issued to such holder.
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6.4 Rights Subsequent to Redemption. If the Redemption Notice shall have been duly given, and if on the applicable Redemption Date the Redemption Price payable upon redemption of the shares of Preferred Stock to be redeemed on such Redemption Date is paid or tendered for payment or deposited with an independent payment agent so as to be available therefor in a timely manner, then notwithstanding that any certificates evidencing any of the shares of Preferred Stock so called for redemption shall not have been surrendered, all rights with respect to such shares shall forthwith after the Redemption Date terminate, except only the right of the holders to receive the Redemption Price without interest upon surrender of any such certificate or certificates therefor.
7 Redeemed or Otherwise Acquired Shares. Any shares of Preferred Stock that are redeemed or otherwise acquired by the Corporation or any of its subsidiaries shall be automatically and immediately cancelled and retired and shall not be reissued, sold or transferred. Neither the Corporation nor any of its subsidiaries may exercise any voting or other rights granted to the holders of Preferred Stock following redemption.
8 Waiver. Except as otherwise set forth herein, any of the rights, powers, preferences and other terms of any series of Preferred Stock set forth herein may be waived on behalf of all holders of such series of Preferred Stock by the affirmative written consent or vote of the holders of at least a majority of the shares of such series of Preferred Stock then outstanding acting together as a separate class.
9 Notices. Any notice required or permitted by the provisions of this Article Fourth to be given to a holder of shares of Preferred Stock shall be mailed, postage prepaid, to the post office address last shown on the records of the Corporation, or given by electronic communication in compliance with the provisions of the General Corporation Law, and shall be deemed sent upon such mailing or electronic transmission.
Fifth: Subject to any additional vote required by this Sixth Amended and Restated Certificate of Incorporation or Bylaws, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws.
Sixth: Subject to any additional vote required by this Sixth Amended and Restated Certificate of Incorporation, the number of directors of the Corporation shall be determined in the manner set forth in the Bylaws.
Seventh: Elections of directors need not be by written ballot unless the Bylaws shall so provide.
Eighth: Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the Bylaws.
Ninth: To the fullest extent permitted by law, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. If the General Corporation Law or any other law of the State of Delaware is amended after approval by the stockholders of this Article Ninth to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended.
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Any repeal or modification of the foregoing provisions of this Article Ninth by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of, or increase the liability of any director of the Corporation with respect to any acts or omissions of such director occurring prior to, such repeal or modification.
Tenth: To the fullest extent permitted by applicable law, the Corporation is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Corporation (and any other persons to which General Corporation Law permits the Corporation to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise, in excess of the indemnification and advancement otherwise permitted by Section 145 of the General Corporation Law.
Any amendment, repeal or modification of the foregoing provisions of this Article Tenth shall not (a) adversely affect any right or protection of any director, officer or other agent of the Corporation existing at the time of such amendment, repeal or modification or (b) increase the liability of any director of the Corporation with respect to any acts or omissions of such director, officer or agent occurring prior to, such amendment, repeal or modification.
Eleventh: The Corporation renounces, to the fullest extent permitted by law, any interest or expectancy of the Corporation in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of, (i) any director of the Corporation who is not an employee of the Corporation or any of its subsidiaries, or (ii) any holder of Preferred Stock or any partner, member, director, stockholder, employee, affiliate or agent of any such holder, other than someone who is an employee of the Corporation or any of its subsidiaries (collectively, the persons in clauses (i) and (ii) are “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Corporation.
Twelfth: Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery in the State of Delaware shall be the sole and exclusive forum for any stockholder (including a beneficial owner) to bring (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of fiduciary duty owed by any director, officer or other employee of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim against the Corporation, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law or the Corporation’s certificate of incorporation or bylaws or (iv) any action asserting a claim against the Corporation, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (i) through (iv) above, any claim as to which the Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), which is vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery does not have subject matter jurisdiction. If any provision or provisions of this Article Twelfth shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Article Twelfth (including, without limitation, each portion of any sentence of this Article Twelfth containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
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Thirteenth: In connection with repurchases by the Corporation of its Common Stock from employees, officers, directors, advisors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at cost upon the occurrence of certain events, such as the termination of employment, Sections 502 and 503 of the California Corporations Code shall not apply in all or in part with respect to such repurchases.
* * *
3. Pursuant to Section 228(a) of the General Corporation Law, the holders of outstanding shares of the Corporation having no less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted, consented to the adoption of the aforesaid amendments without a meeting, without a vote and without prior notice and that written notice of the taking of such actions has been given in accordance with Section 228(e) of the General Corporation Law.
4. That this Sixth Amended and Restated Certificate of Incorporation, which restates and integrates and further amends the provisions of this corporation’s Certificate of Incorporation, as amended, has been duly adopted in accordance with Sections 141, 228, 242 and 245 of the General Corporation Law.
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IN WITNESS WHEREOF, this Sixth Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of this corporation on this 29th day of March 2021.
By: | /s/ Gregory C. Critchfield, M.D., M.S. | |
Gregory C. Critchfield, M.D., M.S. | ||
President and Chief Executive Officer |
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
SERA PROGNOSTICS, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the “Corporation”) is Sera Prognostics, Inc. The date of filing of the Certificate of Incorporation of the Corporation with the Secretary of State of the State of Delaware was January 17, 2008. Thereafter a Restated Certificate of Incorporation was filed on March 29, 2021 (the “Restated Certificate”).
2. The Restated Certificate of Incorporation is hereby amended to change the authorized capitalization of the Corporation by striking out the first sentence of the first paragraph of Article FOURTH of the Restated Certificate in its entirety and by substituting in lieu of said first sentence of the first paragraph of Article FOURTH, the following sentence:
“The total number of shares of all classes of stock which the Corporation shall have authority to issue is (i) 80,000,000 shares of Class A Common Stock, $0.0001 par value per share (“Class A Common Stock”), (ii) 3,000,000 shares of Class B Common Stock, $0.0001 par value per share (“Class B Common Stock”) and (iii) 51,551,681 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”). ”
3. The Restated Certificate of Incorporation is hereby further amended to change the preferred stock designations of the Corporation by striking out the first paragraph of Part B of Article FOURTH of the Restated Certificate in its entirety and by substitution in lieu of said first paragraph of Part B of Article FOURTH, the following paragraph:
“1,390 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A1 Preferred Stock”, 7,941,499 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series A2 Preferred Stock”, 2,060,000 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series B-1 Preferred Stock”, 5,012,500 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series B-2 Preferred Stock”, 5,521,905 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series C-1 Preferred Stock”, 1,510,000 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series C-2 Preferred Stock”, 11,975,172 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series D Preferred Stock”, and 17,529,215 shares of the authorized Preferred Stock of the Corporation are hereby designated “Series E Preferred Stock”, with the following rights, preferences, powers, privileges and restrictions, qualifications and limitations. “Junior Preferred Stock” means the Series A1 Preferred Stock, the Series A2 Preferred Stock, the Series B-1 Preferred Stock, the Series B-2 Preferred Stock, the Series C-1 Preferred Stock and the Series C-2 Preferred Stock. “Senior Preferred Stock” means the Series D Preferred Stock and the Series E Preferred Stock. Unless otherwise indicated, references to “Sections” or “Subsections” in this Part B of this Article Fourth refer to sections and subsections of Part B of this Article Fourth.”
4. The Restated Certificate of Incorporation is hereby further amended to change the preferential payments to holders of Senior Preferred Stock of the Corporation by striking out Section 2.1 of Article FOURTH of the Restated Certificate in its entirety and by substitution in lieu of said Section 2.1 of Article FOURTH, the following Section 2.1:
“2.1 Preferential Payments to Holders of Senior Preferred Stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or a Deemed Liquidation Event (as defined below), before any distribution or payment shall be made to the holders of any Common Stock or the holders of shares of any other series of Preferred Stock, the holders of shares of Senior Preferred Stock shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders, and in the event of a Deemed Liquidation Event (as defined below), the holders of shares of Senior Preferred Stock then outstanding shall be entitled to be paid out of the consideration payable to stockholders in such Deemed Liquidation Event or out of the Available Proceeds (as defined below), as applicable, before any payment shall be made to the holders of Common Stock, the Junior Preferred Stock or any other class or series of stock ranking on liquidation junior to the Senior Preferred Stock and together with any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock by reason of their ownership thereof, an amount per share equal to (i) with respect to each share of Series D Preferred Stock, the greater of (a) one and one-half (1.5) times the Series D Original Issue Price of such share of Series D Preferred Stock plus all declared and unpaid dividends on such share of Series D Preferred Stock and (b) such amount per share as would have been payable had all shares of the Series D Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event, and (ii) with respect to each share of Series E Preferred Stock, the greater of (a) one and one-half (1.5) times the Original Issue Price of such share of Series E Preferred Stock plus all declared and unpaid dividends on such share of Series E Preferred Stock and (b) such amount per share as would have been payable had all shares of Series E Preferred Stock been converted into Common Stock pursuant to Section 4 immediately prior to such liquidation, dissolution, winding up or Deemed Liquidation Event (the amount payable in respect of Senior Preferred Stock pursuant to this sentence is hereinafter referred to as the “Senior Preferential Liquidation Amount”). If upon any such liquidation, dissolution or winding up of the Corporation or Deemed Liquidation Event, the assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of Senior Preferred Stock or any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock the full amount to which they shall be entitled under this Subsection 2.1, the holders of shares of Senior Preferred Stock or any shares of Preferred Stock ranking on liquidation pari passu with the Senior Preferred Stock shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.”
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5. The Restated Certificate of Incorporation is hereby further amended to change the definition of “Qualified Public Offering” by striking out Section 5.1 of Article FOURTH of the Restated Certificate in its entirety and by substitution in lieu of said Section 5.1 of Article FOURTH, the following Section 5.1:
“5.1 Trigger Events. Upon either (a) the closing of the sale of shares of Common Stock to the public at a price of at least 1.2 times (1.2X) the Series E Original Issue Price (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Common Stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $40,000,000 of proceeds, net of the underwriting discount and commissions, to the Corporation (a “Qualified Public Offering”) or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis (the time of such closing or the date and time specified or the time of the event specified in such vote or written consent is referred to herein as the “Mandatory Conversion Time”), (i) all outstanding shares of Preferred Stock shall automatically be converted into shares of Class A Common Stock, at the then effective conversion rate as calculated pursuant to Subsection 4.1.1 and (ii) such shares may not be reissued by the Corporation; provided that, a holder of shares of Preferred Stock may elect, upon written notice to the Corporation (delivered as provided in Section 4.3.1 of Subsection B of this Article Fourth)) at least seven days prior to the closing of the Qualified Public Offering, to have all or a portion of its shares of Preferred Stock automatically convert into shares of Class B Common Stock at the then effective conversion rate as calculated pursuant to Subsection 4.1.1.”
6. This Certificate of Amendment to the Restated Certificate has been duly adopted in accordance with the provisions of Sections 141, 228 and 242 of the Delaware General Corporation Law.
7. Pursuant to Section 228(a) of the Delaware General Corporation Law, the holders of outstanding shares of the Corporation having no less than the minimum number of votes that would be necessary to authorize or take such actions at a meeting at which all shares entitled to vote thereon were present and voted, consented to the adoption of the aforesaid amendments without a meeting, without a vote and without prior notice and that written notice of the taking of such actions has been given in accordance with Section 228(e) of the Delaware General Corporation Law.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed this 26th day of April, 2021.
SERA PROGNOSTICS, INC. | ||
By: | /s/ Gregory C. Critchfield, M.D. | |
Gregory C. Critchfield, M.D. | ||
President |
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Exhibit 3.3
AMENDED AND RESTATED BYLAWS
OF
SERA PROGNOSTICS, INC.
(a Delaware corporation)
ARTICLE I — MEETINGS OF STOCKHOLDERS
1.1 Place of Meetings; Telephonic Meetings. Meetings of stockholders of Sera Prognostics, Inc. (the “Corporation”) shall be held at any place, within or outside the State of Delaware, designated by the Corporation’s board of directors (the “Board”). The Board may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211(a)(2) of the Delaware General Corporation Law (the “DGCL”). In the absence of any such designation or determination, stockholders’ meetings shall be held at the Corporation’s principal executive office. Unless otherwise restricted by the certificate of incorporation or these bylaws, the stockholders may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
1.2 Annual Meeting. An annual meeting of stockholders shall be held for the election of directors at such date and time as may be designated by resolution of the Board from time to time. Any other proper business may be transacted at the annual meeting. The Corporation shall not be required to hold an annual meeting of stockholders provided that (i) the stockholders are permitted to act by written consent under the Corporation’s certificate of incorporation and these bylaws, (ii) the stockholders take action by written consent to elect directors, and (iii) the stockholders unanimously consent to such action or, if such consent is less than unanimous, all of the directorships to which directors could be elected at an annual meeting held at the effective time of such action are vacant and are filled by such action.
1.3 Special Meeting. A special meeting of the stockholders may be called at any time by the Board, chairperson of the Board, chief executive officer or president (in the absence of a chief executive officer) or by one or more stockholders holding shares in the aggregate entitled to cast not less than ten percent (10%) of the votes at that meeting.
If any person(s) other than the Board calls a special meeting, the request shall:
(i) be in writing;
(ii) specify the time of such meeting and the general nature of the business proposed to be transacted; and
(iii) be delivered personally or sent by registered mail or by facsimile transmission to the chairperson of the Board, the chief executive officer, the president (in the absence of a chief executive officer) or the secretary of the Corporation.
The officer(s) receiving the request shall cause notice to be promptly given to the stockholders entitled to vote at such meeting, in accordance with the provisions of Sections 1.4 and 1.5 of these bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting. No business may be transacted at such special meeting other than the business specified in such notice to stockholders. Nothing contained in this paragraph of this Section 1.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
1.4 Notice of Stockholders’ Meetings. All notices of meetings of stockholders shall be sent or otherwise given in accordance with either Section 1.5 or Section 7.1 of these bylaws not less than ten (10) or more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called.
1.5 Manner of Giving Notice; Affidavit of Notice. Notice of any meeting of stockholders shall be given:
(i) if mailed, when deposited in the United States mail, postage prepaid, directed to the stockholder at his or her address as it appears on the Corporation’s records;
(ii) if transmitted by private carrier, upon the day delivery is guaranteed by the carrier;
(iii) if personally delivered, upon delivery; or
(iv) if electronically transmitted as provided in Section 7.1 of these bylaws.
An affidavit of the secretary or an assistant secretary of the Corporation or of the transfer agent or any other agent of the Corporation that the notice has been given by mail or by a form of electronic transmission, as applicable, shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
1.6 Quorum. Except as otherwise provided by law, the certificate of incorporation or these bylaws, at each meeting of stockholders the presence in person or by proxy of the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote at the meeting shall be necessary and sufficient to constitute a quorum. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii) the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present or represented.
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1.7 Adjourned Meeting; Notice. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of the adjourned meeting if the time, place if any thereof, and the means of remote communications if any by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the continuation of the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
1.8 Conduct of Business. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in his or her absence by the Vice Chairman of the Board, if any, or in his or her absence by the President, or in his or her absence by a Vice President, or in the absence of the foregoing persons by a chairperson designated by the Board, or in the absence of such designation by a chairperson chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairperson of the meeting may appoint any person to act as secretary of the meeting. The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of business.
1.9 Voting. The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 1.11 of these bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and other voting agreements) of the DGCL.
Except as may be otherwise provided in the certificate of incorporation or these bylaws, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. Voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors of election unless so determined by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or by proxy at such meeting. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by law, the certificate of incorporation or these bylaws, be decided by the vote of the holders of shares of stock having a majority of the votes which could be cast by the holders of all shares of stock entitled to vote thereon which are present in person or represented by proxy at the meeting.
1.10 Stockholder Action by Written Consent Without a Meeting. Unless otherwise provided in the certificate of incorporation, any action required by the DGCL to be taken at any annual or special meeting of stockholders of a corporation, or any action which may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
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Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided in Section 228 of the DGCL. In the event that the action which is consented to is such as would have required the filing of a certificate under any provision of the DGCL, if such action had been voted on by stockholders at a meeting thereof, the certificate filed under such provision shall state, in lieu of any statement required by such provision concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
1.11 Record Date for Stockholder Notice; Voting; Giving Consents. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board and which record date:
(i) in the case of determination of stockholders entitled to notice of or to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting;
(ii) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board; and
(iii) in the case of determination of stockholders for any other action, shall not be more than sixty (60) days prior to such other action.
If no record date is fixed by the Board:
(i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held;
(ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting when no prior action of the Board is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board is required by law, shall be at the close of business on the day on which the Board adopts the resolution taking such prior action; and
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(iii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
1.12 Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
1.13 List of Stockholders Entitled to Vote. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. The Corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the Corporation’s principal executive office. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. Such list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
ARTICLE II — DIRECTORS
2.1 Powers. Subject to the provisions of the DGCL and any limitations in the certificate of incorporation or these bylaws relating to action required to be approved by the stockholders or by the outstanding shares, the business and affairs of the Corporation shall be managed and all corporate powers shall be exercised by or under the direction of the Board.
2.2 Number of Directors. The number of directors shall be determined from time to time by resolution of the Board, provided the Board shall consist of at least one member. No reduction of the authorized number of directors shall have the effect of removing any director before that director’s term of office expires.
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2.3 Election, Qualification and Term of Office of Directors. Except as provided in Section 2.4 of these bylaws, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these bylaws may prescribe other qualifications for directors. Each director, including a director elected to fill a vacancy, shall hold office until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal.
2.4 Resignation and Vacancies. Any director may resign at any time upon notice given in writing or by electronic transmission to the Corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this Section in the filling of other vacancies.
Unless otherwise provided in the certificate of incorporation or these bylaws:
(i) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.
(ii) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected.
If at any time, by reason of death or resignation or other cause, the Corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.
If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole Board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least ten percent (10%) of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the DGCL as far as applicable.
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2.5 Place of Meetings; Meetings by Telephone. The Board may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the Board, or any committee designated by the Board, may participate in a meeting of the Board, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.
2.6 Regular Meetings. Regular meetings of the Board may be held without notice at such time and at such place as shall from time to time be determined by the Board.
2.7 Special Meetings; Notice.
Special meetings of the Board for any purpose or purposes may be called at any time by the chairperson of the Board, the chief executive officer, the president, the secretary or any two directors.
Notice of the time and place of special meetings shall be:
(i) delivered personally by hand, by courier or by telephone;
(ii) sent by United States first-class mail, postage prepaid;
(iii) sent by facsimile; or
(iv) sent by electronic mail,
directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the Corporation’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the United States mail at least four (4) days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice need not specify the place of the meeting (if the meeting is to be held at the Corporation’s principal executive office) nor the purpose of the meeting.
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2.8 Quorum. At all meetings of the Board, a majority of the total number of directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the Board, except as may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws. If a quorum is not present at any meeting of the Board, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
2.9 Board Action by Written Consent Without a Meeting. Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the Board, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
2.10 Fees and Compensation of Directors. Unless otherwise restricted by the certificate of incorporation or these bylaws, the Board shall have the authority to fix the compensation of directors.
2.11 Approval of Loans to Officers. The Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiary, including any officer or employee who is a director of the Corporation or its subsidiary, whenever, in the judgment of the Board, such loan, guaranty or assistance may reasonably be expected to benefit the Corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the Corporation.
2.12 Removal of Directors. Unless otherwise restricted by statute, the certificate of incorporation or these bylaws, any director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.
ARTICLE III — COMMITTEES
3.1 Committees of Directors. The Board may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board or in these bylaws, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopt, amend or repeal any bylaw of the Corporation,
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3.2 Committee Minutes. Each committee shall keep regular minutes of its meetings and report the same to the Board when required.
3.3 Meetings and Action of Committees. Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(i) Section 2.5 (place of meetings and meetings by telephone);
(ii) Section 2.6 (regular meetings);
(iii) Section 2.7 (special meetings and notice);
(iv) Section 2.8 (quorum);
(v) Section 2.9 (action without a meeting); and
(vi) Section 6.10 (waiver of notice)
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the Board and its members. However:
(i) the time of regular meetings of committees may be determined either by resolution of the Board or by resolution of the committee;
(ii) special meetings of committees may also be called by resolution of the Board; and
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board may adopt rules for the government of any committee not inconsistent with the provisions of these bylaws.
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ARTICLE IV — OFFICERS
4.1 Officers. The initial officers of the Corporation shall be a Chairman of the Board, Chief Executive Officer, Vice President - Development, a Secretary and a Chief Financial Officer. The Corporation may also have, at the discretion of the Board, a chairperson, one or more vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
4.2 Appointment of Officers. The Board shall appoint the officers of the Corporation, except such officers as may be appointed in accordance with the provisions of Section 4.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
4.3 Subordinate Officers. The Board may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to appoint, such other officers and agents as the business of the Corporation may require. Each of such officers and agents shall hold office for such period, have such authority, and perform such duties as are provided in these bylaws or as the Board may from time to time determine.
4.4 Removal and Resignation of Officers. Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board at any regular or special meeting of the Board or, except in the case of an officer chosen by the Board, by any officer upon whom such power of removal may be conferred by the Board.
Any officer may resign at any time by giving written notice to the Corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the Corporation under any contract to which the officer is a party.
4.5 Vacancies in Offices. Any vacancy occurring in any office of the Corporation shall be filled by the Board or as provided in Section 4.2.
4.6 Representation of Shares of Other Corporations. The chairperson of the Board, the president, any vice president, the treasurer, the secretary or assistant secretary of the Corporation, or any other person authorized by the Board or the president or a vice president, is authorized to vote, represent, and exercise on behalf of the Corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of the Corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such person having the authority.
4.7 Authority and Duties of Officers. All officers of the Corporation shall respectively have such authority and perform such duties in the management of the business of the Corporation as may be designated from time to time by the Board or the stockholders and, to the extent not so provided, as generally pertain to their respective offices, subject to the control of the Board.
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4.8 Salaries. The salaries of the officers shall be fixed from time to time by the Board, and no officer shall be prevented from receiving such salary by reason of the fact that such officer is also a director of the Corporation.
ARTICLE V — RECORDS AND REPORTS
5.1 Maintenance and Inspection of Records. The Corporation shall, either at its principal executive office or at such place or places as designated by the Board, keep a record of the minutes of all meetings of its stockholders and the Board, a record of all actions taken by the stockholders and the Board without a meeting, a record of all actions taken by a committee of the Board exercising authority of the Board on behalf of the Corporation, a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these bylaws as amended to date, accounting books, and other records.
Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the Corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent so to act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office in Delaware or at its principal executive office.
5.2 Inspection by Directors. Any director shall have the right to examine the Corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the Corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.
5.3 Annual Report. The Corporation shall cause an annual report to be sent to the stockholders of the Corporation to the extent required by applicable law. If and so long as there are fewer than one hundred (100) holders of record of the Corporation’s shares, the requirement of sending of an annual report to the stockholders of the Corporation is expressly waived (to the extent permitted under applicable law).
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ARTICLE VI — GENERAL MATTERS
6.1 Stock Certificates; Partly Paid Shares. The shares of the Corporation shall be represented by certificates, provided that the Board may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Notwithstanding the adoption of such a resolution by the Board, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the Corporation by the chairperson or vice-chairperson of the Board, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the Corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
The Corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the Corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the Corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.
6.2 Special Designation on Certificates. If the Corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.
6.3 Lost Certificates. Except as provided in this Section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the Corporation and cancelled at the same time. The Corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner’s legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 Construction; Definitions. Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.
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6.5 Dividends. The Board, subject to any restrictions contained in either (i) the DGCL, or (ii) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock.
The Board may set apart out of any of the funds of the Corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the Corporation, and meeting contingencies.
6.6 Fiscal Year. The fiscal year of the Corporation shall be the twelve (12)-month period ending December 31 in each year and may be changed by the Board.
6.7 Seal. The Corporation may adopt a corporate seal, which shall be adopted and which may be altered by the Board. The Corporation may use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
6.8 Stock Transfer Agreements. The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
6.9 Registered Stockholders. The Corporation:
(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner;
(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and
(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
6.10 Waiver of Notice. Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of incorporation or these bylaws.
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ARTICLE VII — NOTICE BY ELECTRONIC TRANSMISSION
7.1 Notice by Electronic Transmission. Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of incorporation or these bylaws, any notice to stockholders given by the Corporation under any provision of the DGCL, the certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if:
(i) the Corporation is unable to deliver by electronic transmission two consecutive notices given by the Corporation in accordance with such consent; and
(ii) such inability becomes known to the secretary or an assistant secretary of the Corporation or to the transfer agent, or other person responsible for the giving of notice.
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i) if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
(ii) if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
(iii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (A) such posting and (B) the giving of such separate notice; and
(iv) if by any other form of electronic transmission, when directed to the stockholder.
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the Corporation that the notice has been given by a form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
7.2 Definition of Electronic Transmission. An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved, and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
7.3 Inapplicability. Notice by a form of electronic transmission shall not apply to Sections 164, 296, 311, 312 or 324 of the DGCL.
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ARTICLE VIII — INDEMNIFICATION
8.1 Indemnification of Directors and Officers. The Corporation shall indemnify and hold harmless, to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended, any director or officer of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding. The Corporation shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized by the Board.
8.2 Indemnification of Others. The Corporation shall have the power to indemnify and hold harmless, to the extent permitted by applicable law as it presently exists or may hereafter be amended, any employee or agent of the Corporation who was or is made or is threatened to be made a party or is otherwise involved in any Proceeding by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was an employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses reasonably incurred by such person in connection with any such Proceeding.
8.3 Prepayment of Expenses. The Corporation shall pay the expenses incurred by any officer or director of the Corporation, and may pay the expenses incurred by any employee or agent of the Corporation, in defending any Proceeding in advance of its final disposition; provided, however, that the payment of expenses incurred by a person in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking by the person to repay all amounts advanced if it should be ultimately determined that the person is not entitled to be indemnified under this Article VIII or otherwise.
8.4 Determination; Claim. If a claim for indemnification or payment of expenses under this Article VIII is not paid in full within sixty days after a written claim therefor has been received by the Corporation the claimant may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action the Corporation shall have the burden of proving that the claimant was not entitled to the requested indemnification or payment of expenses under applicable law.
8.5 Non-Exclusivity of Rights. The rights conferred on any person by this Article VIII shall not be exclusive of any other rights which such person may have or hereafter acquire under any statute, provision of the certificate of incorporation, these bylaws, agreement, vote of stockholders or disinterested directors or otherwise.
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8.6 Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of the DGCL.
8.7 Other Indemnification. The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, enterprise or non-profit entity shall be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, enterprise or non-profit enterprise.
8.8 Amendment or Repeal. Any repeal or modification of the foregoing provisions of this Article VIII shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the time of such repeal or modification.
ARTICLE IX — AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the Corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.
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SERA PROGNOSTICS, INC.
CERTIFICATE OF ADOPTION OF AMENDED AND RESTATED BYLAWS
The undersigned hereby certifies that he is the duly elected, qualified and acting Secretary of Sera Prognostics, Inc., a Delaware corporation (the “Corporation”), and that the foregoing Amended and Restated Bylaws, comprising 16 pages, were adopted as the Corporation’s Amended and Restated Bylaws on November 8, 2011 by the Corporation’s Board of Directors.
The undersigned has executed this Certificate effective as of November 8, 2011.
/s/ Jonathan L. Kravetz, Secretary | |
Jonathan L. Kravetz, Secretary |
Exhibit 4.4
THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN SECTIONS 5.3 AND 5.4 BELOW, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
WARRANT TO PURCHASE COMMON STOCK
Corporation: Number of Shares: Class of Stock: Initial Exercise Price: Issue Date: Expiration: |
Sera Prognostics, Inc., a Delaware corporation [__] Common Stock, $0.0001 par value per share $9.99 per share [__], 2021 [__], 2026 |
THIS WARRANT CERTIFIES THAT, for good and valuable consideration, the receipt of which is hereby acknowledged, [__] or its assignee or transferee (“Holder”) is entitled to purchase the number of fully paid and nonassessable shares of Common Stock, $0.0001 par value per share (the “Shares”) of Sera Prognostics, Inc. (the “Company”) at the initial exercise price per Share (the “Warrant Price”) all as set forth above and as adjusted pursuant to Article 2 of this warrant, subject to the provisions and upon the terms and conditions set forth in this warrant.
ARTICLE
1
EXERCISE
1.1 Method of Exercise. Holder may exercise this warrant by delivering this warrant, a duly executed Notice of Exercise in substantially the form attached as Appendix 1, and a duly executed Joinder to the Fourth Amended and Restated Investors’ Rights Agreement, dated as of February 23, 2021, between the Company and certain stockholders of the Company (as amended from time to time, the “Investors’ Rights Agreement”), and the Fourth Amended and Restated Voting Agreement, dated as of February 23, 2021, between the Company and certain stockholders of the Company (as amended from time to time, the “Voting Agreement”), in substantially the form attached as Appendix 2 to the principal office of the Company. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased.
1.2 Conversion Right. In lieu of exercising this warrant as specified in Section 1.1, Holder may from time to time convert this warrant, in whole or in part, into a number of Shares determined by dividing (a) the aggregate fair market value of the Shares or other securities otherwise issuable upon exercise of this warrant minus the aggregate Warrant Price of such Shares by (b) the fair market value of one Share. The fair market value of the Shares shall be determined pursuant to Section 1.3.
1.3 Fair Market Value. If the Shares are traded regularly in a public market, the fair market value of the Shares shall be the closing price of the Shares reported for the business day immediately before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company and the Holder shall jointly determine fair market value in their collective reasonable good faith judgment; provided, that if the Board of Directors of the Company and the Holder are unable to agree on the fair market value per share of the Shares within a reasonable period of time (not to exceed twenty days from the Company’s receipt of the Notice of Exercise), such fair market value shall be determined by a nationally recognized investment banking, accounting or valuation firm jointly selected by the Board of Directors of the Company and the Holder. The determination of such firm shall be final and conclusive, and the fees and expenses of such firm shall be borne equally by the Company and the Holder. In determining the Fair Market Value of the Shares, an orderly sale transaction between a willing buyer and a willing seller shall be assumed, using valuation techniques then prevailing in the securities industry without regard to the lack of liquidity of the Shares due to any restrictions (contractual or otherwise) applicable thereto or any discount for minority interests and assuming full disclosure of all relevant information and a reasonable period of time for effectuating such sale and assuming the sale of all of the issued and outstanding Common Stock (including fractional interests) calculated on a fully diluted basis to include the conversion or exchange of all securities then outstanding that are convertible into or exchangeable for Common Stock and the exercise of all rights and warrants then outstanding and exercisable to purchase shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock; provided, that such assumption shall not include those securities, rights and warrants (a) owned or held by or for the account of the Company or any of its subsidiaries, or (b) convertible or exchangeable into Common Stock where the conversion, exchange or exercise price per share is greater than the Fair Market Value.
1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or converts this warrant, the Company shall deliver to Holder certificates for the Shares acquired and, if this warrant has not been fully exercised or converted and has not expired, a new warrant representing the Shares not so acquired.
1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form, substance and amount to the Company or, in the case of mutilation, on surrender and cancellation of this warrant, the Company at its expense shall execute and deliver, in lieu of this warrant, a new warrant of like tenor.
1.6 Treatment of Warrant Upon Acquisition of the Company.
1.6.1 “Acquisition.” For the purpose of this warrant, “Acquisition” means (a) merger or consolidation of the Company into or with another entity, or a plan of exchange between the Company and any other entity, or the merger or consolidation of any other entity into or with the Company (except for a merger, consolidation or exchange in which the holders of the voting power of the capital stock of the Company immediately prior to such merger, consolidation or exchange continue to hold at least 50% of the voting power of the capital stock of the Company or the surviving or acquiring entity), (b) sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company, or (c) the acquisition of ownership by any Person or group of more than 50% of the Company’s voting stock.
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1.6.2 Exercise Upon Acquisition. Upon the closing of any Acquisition in which the consideration to be received by the Company’s stockholders consists of cash, marketable securities, or a combination of both cash and marketable securities, this warrant shall be deemed to have been automatically converted pursuant to Section 1.2, and thereafter Holder shall participate in the Acquisition on the same terms as other holders of the same class of securities of the Company.
1.6.3 Assumption of Warrant. The Company shall not effect any Acquisition not referred to in Section 1.6.2 unless, prior to the consummation thereof, the successor person or entity (if other than the Company) resulting from such transaction, shall assume, by written instrument satisfactory to the Holder, the obligations of this warrant, upon which this warrant shall thereafter be exercisable for the same securities and/or other property as would have been paid for the Shares issuable upon exercise of the unexercised portion of this warrant as if such Shares were outstanding on and as of the closing of such Acquisition, subject to further adjustment from time to time in accordance with the provisions of this warrant. Alternatively (and notwithstanding anything to the contrary herein), with respect to any Acquisition, Holder shall have the right to elect prior to the consummation thereof, to give effect to the exercise rights contained in Section 1.1 or the conversion rights contained in Section 1.2.
ARTICLE
2
ADJUSTMENTS TO THE SHARES
2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend or any other distribution on its Common Stock payable in Common Stock, cash or other securities, or subdivides the outstanding Common Stock into a greater amount of Common Stock, then upon exercise of this warrant, for each Share acquired, Holder shall receive, without cost to Holder, the total number and kind of securities, cash or other property to which Holder would have been entitled had Holder owned the Shares of record as of the date the dividend, distribution or subdivision occurred (subject to further adjustment in the event the rights of any such securities or property are subsequently amended to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof).
2.2 Reclassification, Exchange or Substitution. Upon any reclassification, exchange, consolidation, substitution, or other event that results in a change of the number and/or class of the securities issuable upon exercise or conversion of this warrant, Holder shall be entitled to receive, upon exercise or conversion of this warrant, the number and kind of securities and property that Holder would have received for the Shares if this warrant had been exercised in full immediately before such reclassification, exchange, consolidation, substitution, or other event (subject to further adjustment in the event the rights of any such securities or property are subsequently amended to increase the number of shares of Common Stock issuable thereunder or to lower the exercise or conversion price thereof). The Company or its successor shall promptly issue to Holder a new warrant for such new securities or other property. The new warrant shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Article 2 including, without limitation, adjustments to the Warrant Price and to the number of securities or property issuable upon exercise of the new warrant. The provisions of this Section 2.2 shall similarly apply to successive reclassifications, exchanges, substitutions, or other events.
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2.3 Adjustments for Combinations, Etc. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a lesser number of shares, the Warrant Price shall be proportionately increased. If the outstanding Shares are combined or consolidated, by reclassification or otherwise, into a greater number of shares, the Warrant Price shall be proportionately decreased.
2.4 Certificate as to Adjustments. Upon each adjustment of the Warrant Price, the Company at its expense shall promptly compute such adjustment, and furnish Holder with a certificate of its Chief Financial Officer setting forth such adjustment and the facts upon which such adjustment is based. The Company shall, upon written request, furnish Holder a certificate setting forth the Warrant Price in effect upon the date thereof and the series of adjustments leading to such Warrant Price.
2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise or conversion of the warrant, and the Number of Shares to be issued shall be rounded up to the nearest whole Share.
ARTICLE
3
REPRESENTATIONS AND COVENANTS OF THE COMPANY AND HOLDER
3.1 Representations and Warranties. The Company hereby represents and warrants to the Holder that all Shares which may be issued upon the exercise of the purchase right represented by this warrant shall, upon issuance, be duly authorized, validly issued, fully paid and nonassessable, without violation of any preemptive right or similar rights, and free of any liens, taxes, and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws. The Company will pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Shares upon exercise (or conversion) of this warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.
3.2 Notice of Certain Events. The Company shall provide Holder with not less than 10 days prior written notice of, including a description of the material facts surrounding, any of the following events: (a) declaration of any dividend or distribution upon its Common Stock, whether in cash, property, stock, or other securities and whether or not a regular cash dividend; (b) offering for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of any class or series or other rights; (c) effecting any reclassification or recapitalization of Common Stock; or (d) the merger or consolidation with or into any other corporation, or sale, lease, license, or conveyance of all or substantially all of its assets, or liquidation, dissolution or winding up.
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3.3 Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares shall be “Registrable Securities” and Holder shall be an “Investor” and a “Holder” under the Investors’ Rights Agreement upon Holder’s due execution and delivery to the Company of a Joinder in substantially the form of Appendix 2, and the Company will use its best efforts to cause the Shares into which this warrant is exercised (or converted), immediately upon such exercise (or conversion), to be listed on any domestic securities exchange upon which shares of Common Stock or other securities constituting Shares are listed at the time of such exercise (or conversion).
3.4 Holder Investment Representations. Holder makes the following representations to the Company in connection with the issuance of this warrant and the Shares (collectively, the “Securities”):
(a) The Holder is aware of the Company’s business affairs and financial condition, and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Securities. The undersigned is purchasing the Securities for its own account for investment purposes only, not as a nominee or agent, and not with a view towards, or for resale in connection with, any “distribution” thereof for purposes of the Securities Act of 1933, as amended (the “Securities Act”). The undersigned has such knowledge and experience in financial business matters and the undersigned is capable of evaluating the merits and risks of the purchase of the Securities and of protecting its interests in connection therewith.
(b) The Holder understands that the Securities have not been registered under the Securities Act in reliance upon a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of the undersigned’s investment intent as expressed herein.
(c) The Holder further understands that the Securities must be held indefinitely, and the undersigned must therefore bear the economic risk therewith, unless the Securities are subsequently registered under the Securities Act or unless an exemption from registration is otherwise available. In addition, the undersigned understands that the certificate evidencing the Securities will be imprinted with a legend which prohibits the transfer of the Securities unless they are registered or such registration is not required. Holder is aware of the provisions of Rule 144 promulgated under the Act.
(d) The Holder is familiar with the provisions of Rule 144, promulgated pursuant to the Securities Act, which, in substance, permits limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof, in a non-public offering subject to the satisfaction of certain conditions.
(e) The Holder further understands that in the event that all of the applicable requirements of Rule 144 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required.
(f) The Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
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3.5 “Market Stand Off” Agreement. The Holder agrees that the Shares shall be subject to the Market Standoff provisions in Section 2.11 of Investors’ Rights Agreement.
3.6 No Voting Rights. Holder, as a Holder of this warrant, will not have any voting rights until the exercise of this warrant.
3.7 Reservation of Shares. During the period between the Issue Date and the Expiration, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Shares, solely for the purpose of issuance upon the exercise of this warrant, the maximum number of Shares issuable upon the exercise of this warrant, and the par value per Share shall at all times be less than or equal to the applicable Warrant Price. The Company shall not increase the par value of any Shares receivable upon the exercise of this warrant above the Warrant Price then in effect, and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this warrant.
ARTICLE
4
MISCELLANEOUS
4.1 Term: Exercise Upon Expiration. This warrant is exercisable in whole or in part, at any time and from time to time on or before the Expiration Date set forth above. If this warrant has not been exercised prior to the Expiration Date, this warrant shall be deemed to have been automatically exercised on the Expiration Date by “cashless” conversion pursuant to Section 1.2.
4.2 Legends. This warrant shall be imprinted with a legend in substantially the following form as well as any additional legends that the Company and Holder mutually agree upon with respect to such Shares:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE AND, EXCEPT AS SET FORTH IN THAT CERTAIN WARRANT TO PURCHASE STOCK ISSUED BY THE ISSUER TO HOLDER DATED FEBRUARY __, 2021, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS AND UNTIL REGISTERED UNDER SAID ACT AND LAWS OR, IN THE OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER, SUCH OFFER, SALE, PLEDGE OR OTHER TRANSFER IS EXEMPT FROM SUCH REGISTRATION.
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4.3 Compliance with Securities Laws on Transfer. This warrant and the Shares issued upon exercise of this warrant may not be transferred or assigned in whole or in part except in compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, as reasonably requested by the Company). The Company shall not require Holder to provide an opinion of counsel if the transfer is to any affiliate of Holder, provided that any such transferee is an “accredited investor” as defined in Regulation D promulgated under the Act. Additionally, the Company shall also not require an opinion of counsel if there is no material question as to the availability of Rule 144 promulgated under the Act. This warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and assigns of the Holder. Subject to the foregoing, such successors and/or assigns of the Holder shall be deemed to be a Holder for all purposes hereunder. In the case of a transfer of the warrant, upon surrender and delivery by Holder, the Company shall execute and deliver a new warrant or warrants in the name of the assignee or assignees and in the denominations specified in any instrument of assignment provided to the Company by the assignor, and shall issue to the assignor a new warrant evidencing the portion of this warrant, if any, not so assigned and this warrant shall promptly be cancelled.
4.4 Notices. All notices and other communications from the Company to the Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or the Holder, as the case may be, in writing by the Company or such Holder from time to time. All notices to the Holder shall be addressed as provided in the Investors’ Rights Agreement.
4.5 Amendments. This warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.
4.6 Attorneys’ Fees. In the event of any dispute between the parties concerning the terms and provisions of this warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys’ fees.
4.7 Governing Law. This warrant shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to its principles regarding conflicts of law.
4.8 Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the warrant and any transfers thereof. The Company may deem and treat the person or entity in whose name the warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the warrant effected in accordance with the provisions of this warrant.
4.9 Cumulative Remedies. The rights and remedies provided in this warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.
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4.10 Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.
4.11 Entire Agreement. This warrant, together with the Investors’ Rights Agreement, the Voting Agreement and that certain Stock Purchase Agreement dated February __, 2021 (the “Purchase Agreement”), constitutes the sole and entire agreement of the parties to this warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this warrant, the Investors’ Rights Agreement, the Voting Agreement and the Purchase Agreement, the statements in the body of this warrant shall control.
[Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned has executed this Warrant to Purchase Common Stock as of the date set forth above.
Sera Prognostics, Inc. | ||
By: | ||
Name: | Gregory C. Critchfield, M.D., MS | |
Title: | President and Chief Executive Officer |
APPENDIX 1
NOTICE OF EXERCISE
1. The undersigned hereby elects to purchase ______________ shares of Common Stock, $0.0001 par value per share of SERA PROGNOSTICS, INC. pursuant to the terms of the attached warrant, and tenders herewith payment of the purchase price of such shares in full.
1. The undersigned hereby elects to convert the attached warrant into shares in the manner specified in the warrant. This conversion is exercised with respect to _____________ of the shares covered by the warrant.
[Strike paragraph that does not apply.]
2. Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below:
(Holder’s Name) | |
(Address) |
3. The undersigned represents it is acquiring the shares solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.
Holder or Registered Assignee
(Signature) | |
(Date) |
APPENDIX 2
JOINDER
DATE:
The undersigned hereby agrees, effective as of the date hereof, (i) to become a party to that certain Fourth Amended and Restated Investors’ Rights Agreement (the “Investors’ Rights Agreement”) dated as of February __, 2021, as amended from time to time, by and among Sera Prognostics, Inc. and the other parties thereto and for all purposes of the Investors’ Rights Agreement, the undersigned shall be included within the terms “Investor” and “Holder” as defined in the Investors’ Rights Agreement, and the undersigned agrees to be bound by the terms and conditions of the Investors’ Rights Agreement as an Investor and Holder thereunder, and (ii) to become a party to that certain Third Amended and Restated Voting Agreement (the “Voting Agreement”) dated as of February __, 2021, as amended from time to time, by and among Sera Prognostics, Inc. and the other parties thereto and for all purposes of the Voting Agreement, the undersigned shall be included within the terms “Investor” and “Stockholder” as defined in the Voting Agreement, and the undersigned agrees to be bound by the terms and conditions of the Voting Agreement as an Investor and Stockholder thereunder. The address and facsimile number to which notices may be sent to the undersigned is as follows:
ADDRESS: | ||
Fax: |
By: | ||
Name: |
Exhibit 4.5
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
THIS FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (this “Agreement”) is made as of the 23rd day of February, 2021, by and among Sera Prognostics, Inc., a Delaware corporation (the “Company”), each of the investors listed on Schedule A hereto, each of which is referred to in this Agreement as an “Investor”, each of the stockholders listed on Schedule B hereto, each of whom is referred to herein as a “Key Holder”, and any Additional Purchaser (as defined in the Purchase Agreement (as defined below)) that becomes a party to this Agreement in accordance with Section 6.9 hereof.
RECITALS
WHEREAS, the Company, the Key Holders and certain of the Investors previously entered into the Third Amended and Restated Investors’ Rights Agreement, dated July 31, 2019 (the “Prior Agreement”), in connection with the sale of shares of the Series D Preferred Stock by certain of the Investors;
WHEREAS, the Company and the Investors are holders of shares of the Company’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or are parties to the Series E Preferred Stock Purchase Agreement of even date herewith (the “Purchase Agreement”); and
WHEREAS, in order to induce the Company to enter into the Purchase Agreement and to induce the Investors to invest funds in the Company pursuant to the Purchase Agreement, the Investors and the Company hereby agree to amend and restate the Prior Agreement as set forth herein, and agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock issuable to the Investors, to receive certain information from the Company, and to participate in future equity offerings by the Company, and shall govern certain other matters as set forth in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Definitions. For purposes of this Agreement:
1.1. “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with such Person, including without limitation any general partner, managing member, officer or director of such Person or any venture capital fund now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company with, such Person.
1.2. “ATH Holding” means ATH Holding Company, LLC, an Indiana limited liability company.
1.3. “Board” means the board of directors of the Company.
1.4. “Blue Ox” means Blue Ox Healthcare Partners SP, LLC, a Delaware limited liability company, BXHCP SP II, LLC, a Delaware limited liability company, and BXHCP SP III, LLC, a Delaware limited liability company.
1.5. “Common Stock” means shares of the Company’s common stock, par value $0.0001 per share.
1.6. “Damages” means any loss, damage, claim or liability (joint or several) to which a party hereto may become subject under the Securities Act, the Exchange Act, or other federal or state law, insofar as such loss, damage, claim or liability (or any action in respect thereof) arises out of or is based upon (i) any untrue statement or alleged untrue statement of a material fact contained in any registration statement of the Company, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto; (ii) an omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading; or (iii) any violation or alleged violation by the indemnifying party (or any of its agents or Affiliates) of the Securities Act, the Exchange Act, any state securities law, or any rule or regulation promulgated under the Securities Act, the Exchange Act, or any state securities law.
1.7. “Derivative Securities” means any securities or rights convertible into, or exercisable or exchangeable for (in each case, directly or indirectly), Common Stock, including options and warrants.
1.8. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
1.9. “Excluded Registration” means (i) a registration relating to the sale of securities to employees of the Company or a subsidiary pursuant to a stock option, stock purchase, or similar plan; (ii) a registration relating to an SEC Rule 145 transaction; (iii) a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities; or (iv) a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered.
1.10. “Form S-1” means such form under the Securities Act as in effect on the date hereof or any successor registration form under the Securities Act subsequently adopted by the SEC.
1.11. “Form S-3” means such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the SEC that permits incorporation of substantial information by reference to other documents filed by the Company with the SEC.
1.12. “FOSUN” means Fosun Industrial Co., Limited, a corporation organized under the laws of the Hong Kong Special Administrative Region of China.
1.13. “GAAP” means generally accepted accounting principles in the United States.
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1.14. “Holder” means any holder of Registrable Securities who is a party to this Agreement.
1.15. “Immediate Family Member” means a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, of a natural person referred to herein.
1.16. “Initiating Holders” means, collectively, Holders who properly initiate a registration request under this Agreement.
1.17. “IPO” means the Company’s first underwritten public offering of its Common Stock under the Securities Act.
1.18. “Key Employee” means any executive-level employee (including division director and vice president-level positions) as well as any employee who, either alone or in concert with others, develops, invents, programs, or designs any Company Intellectual Property (as defined in the Purchase Agreement).
1.19. “Key Holder Registrable Securities” means (i) shares of Common Stock held by the Key Holders, and (ii) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of such shares.
1.20. “Major Investor” means any Investor that, individually or together with such Investor’s Affiliates, holds at least fifteen percent (15%) of the shares of Registrable Securities (as adjusted for any stock split, stock dividend, combination, or other recapitalization or reclassification effected after the date hereof) originally purchased thereby.
1.21. “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such equity securities.
1.22. “Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
1.23. “Preferred Director” means any director of the Company that the holders of record of the Preferred Stock, voting as a single class on an as-converted basis, are entitled to elect pursuant to the Restated Certificate.
1.24. “Preferred Stock” means, collectively, shares of the Company’s Series A1 Preferred Stock, Series A2 Preferred Stock, Series B-1 Preferred Stock, Series B-2 Preferred Stock, Series C-1 Preferred Stock, Series C-2 Preferred Stock, Series D Preferred Stock, and Series E Preferred Stock.
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1.25. “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of the Preferred Stock; (ii) any Common Stock, or any Common Stock issued or issuable (directly or indirectly) upon conversion and/or exercise of any other securities of the Company, acquired by the Investors after the date hereof; (iii) the Key Holder Registrable Securities, provided, however, that such Key Holder Registrable Securities shall not be deemed Registrable Securities and the Key Holders shall not be deemed Holders for purposes of Subsections 2.1, 2.10, 3.1, 3.2, 4.1 and 6.6; (iv) any Common Stock issuable or issued upon exercise of the Warrants (as defined in the Series D Preferred Stock Purchase Agreement between the Company and the Investors party thereto, dated as of July 31, 2019); and (v) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right, or other security that is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares referenced in clauses (i), (ii), and (iv) above; excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which the applicable rights under this Agreement are not assigned pursuant to Subsection 6.1, and excluding for purposes of Section 1.44 any shares for which registration rights have terminated pursuant to Subsection 2.13 of this Agreement.
1.26. “Registrable Securities then outstanding” means the number of shares determined by adding the number of shares of outstanding Common Stock that are Registrable Securities and the number of shares of Common Stock that are Registrable Securities issuable (directly or indirectly) pursuant to then exercisable and/or convertible securities.
1.27. “Restated Certificate” means the Company’s Fifth Amended and Restated Certificate of Incorporation, as amended from time to time.
1.28. “Restricted Securities” means the securities of the Company required to bear the legend set forth in Subsection 2.12(b) hereof.
1.29. “SEC” means the Securities and Exchange Commission.
1.30. “SEC Rule 144” means Rule 144 promulgated by the SEC under the Securities Act.
1.31. “SEC Rule 145” means Rule 145 promulgated by the SEC under the Securities Act.
1.32. “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
1.33. “Selling Expenses” means all underwriting discounts, selling commissions, and stock transfer taxes applicable to the sale of Registrable Securities, and fees and disbursements of counsel for any Holder, except for the fees and disbursements of the Selling Holder Counsel borne and paid by the Company as provided in Subsection 2.6.
1.34. “Series A Preferred Stock” means, collectively, shares of the Series A1 Preferred Stock and Series A2 Preferred Stock.
1.35. “Series A1 Preferred Stock” means shares of the Company’s Series A1 Preferred Stock, par value $0.0001 per share.
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1.36. “Series A2 Preferred Stock” means shares of the Company’s Series A2 Preferred Stock, par value $0.0001 per share.
1.37. “Series B Preferred Stock” means, collectively, shares of the Series B-1 Preferred Stock and Series B-2 Preferred Stock.
1.38. “Series B-1 Preferred Stock” means shares of the Company’s Series B-1 Preferred Stock, par value $0.0001 per share.
1.39. “Series B-2 Preferred Stock” means shares of the Company’s Series B-2 Preferred Stock, par value $0.0001 per share.
1.40. “Series C Preferred Stock” means, collectively, shares of the Series C-1 Preferred Stock and Series C-2 Preferred Stock.
1.41. “Series C-1 Preferred Stock” means shares of the Company’s Series C-1 Preferred Stock, par value $0.0001 per share.
1.42. “Series C-2 Preferred Stock” means shares of the Company’s Series C-2 Preferred Stock, par value $0.0001 per share.
1.43. “Series D Preferred Stock” means shares of the Company’s Series D Preferred Stock, par value $0.0001 per share.
1.44. “Series E Preferred Stock” means shares of the Company’s Series E Preferred Stock, par value $0.0001 per share.
2. Registration Rights. The Company covenants and agrees as follows:
2.1. Demand Registration.
(a) Form S-1 Demand. If at any time after the earlier to occur of (i) three (3) years after the date of this Agreement; or (ii) one hundred eighty (180) days after the effective date of the registration statement for the IPO, the Company receives a request from the Holders of at least a majority of the Registrable Securities then outstanding that the Company file a Form S-1 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price of at least $5 million, then the Company shall (A) within ten (10) days after the date such request is given, give notice thereof (the “Demand Notice”) to all Holders other than the Initiating Holders; and (B) as soon as practicable, and in any event within one hundred twenty (120) days after the date such request is given by the Initiating Holders, file a Form S-1 registration statement under the Securities Act covering all Registrable Securities that the Initiating Holders requested to be registered and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.
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(b) Form S-3 Demand. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least twenty-five percent (25%) of the Registrable Securities then outstanding that the Company file a Form S-3 registration statement with respect to outstanding Registrable Securities of such Holders having an anticipated aggregate offering price of at least $3 million, then the Company shall (i) within twenty (20) days after the date such request is given, give a Demand Notice to all Holders other than the Initiating Holders; and (ii) as soon as practicable, and in any event within ninety (90) days after the date such request is given by the Initiating Holders, file a Form S-3 registration statement under the Securities Act covering all Registrable Securities requested to be included in such registration by any other Holders, as specified by notice given by each such Holder to the Company within twenty (20) days of the date the Demand Notice is given, and in each case, subject to the limitations of Subsections 2.1(c) and 2.3.
(c) Notwithstanding the foregoing obligations, if the Company furnishes to Holders requesting a registration pursuant to this Subsection 2.1 a certificate signed by the Company’s chief executive officer stating that in the good faith judgment of the Board it would be materially detrimental to the Company and its stockholders for such registration statement to either become effective or remain effective for as long as such registration statement otherwise would be required to remain effective, because such action would (i) materially interfere with a significant acquisition, corporate reorganization, or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act, then the Company shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than one hundred twenty (120) days after the request of the Initiating Holders is given; provided, however, that the Company may not invoke this right more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for its own account or that of any other stockholder during such one hundred twenty (120) day period other than an Excluded Registration.
(d) The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(a) (i) during the period that is sixty (60) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is one hundred eighty (180) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; (ii) after the Company has effected two (2) registrations pursuant to Subsection 2.1(a); or (iii) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Subsection 2.1(b). The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Subsection 2.1(b) (A) during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided, that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective; or (B) if the Company has effected two (2) registrations pursuant to Subsection 2.1(b) within the twelve (12) month period immediately preceding the date of such request. A registration shall not be counted as “effected” for purposes of this Subsection 2.1(d) until such time as the applicable registration statement has been declared effective by the SEC, unless the Initiating Holders withdraw their request for such registration, elect not to pay the registration expenses therefor, and forfeit their right to one (1) demand registration statement pursuant to Subsection 2.6, in which case such withdrawn registration statement shall be counted as “effected” for purposes of this Subsection 2.1(d).
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2.2. Company Registration. If the Company proposes to register (including, for this purpose, a registration effected by the Company for stockholders other than the Holders) any of its Common Stock under the Securities Act in connection with the public offering of such securities solely for cash (other than in an Excluded Registration), the Company shall, at such time, promptly give each Holder notice of such registration. Upon the request of each Holder given within ten (10) days after such notice is given by the Company, the Company shall, subject to the provisions of Subsection 2.3, cause to be registered all of the Registrable Securities that each such Holder has requested to be included in such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Subsection 2.2 before the effective date of such registration, whether or not any Holder has elected to include Registrable Securities in such registration. The expenses (other than Selling Expenses) of such withdrawn registration shall be borne by the Company in accordance with Subsection 2.6.
2.3. Underwriting Requirements.
(a) If, pursuant to Subsection 2.1, the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to Subsection 2.1, and the Company shall include such information in the Demand Notice. The underwriter(s) will be selected by the Company and shall be reasonably acceptable to a majority in interest of the Initiating Holders. In such event, the right of any Holder to include such Holder’s Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in Subsection 2.4(e)) enter into an underwriting agreement in customary form with the underwriter(s) selected for such underwriting. Notwithstanding any other provision of this Subsection 2.3, if the managing underwriter(s) advise(s) the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, then the Initiating Holders shall so advise all Holders of Registrable Securities that otherwise would be underwritten pursuant hereto, and the number of Registrable Securities that may be included in the underwriting shall be allocated among such Holders of Registrable Securities, including the Initiating Holders, in proportion (as nearly as practicable) to the number of Registrable Securities owned by each Holder or in such other proportion as shall mutually be agreed to by all such selling Holders; provided, however, that the number of Registrable Securities held by the Holders to be included in such underwriting shall not be reduced unless all other securities are first entirely excluded from the underwriting.
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(b) In connection with any offering involving an underwriting of shares of the Company’s capital stock pursuant to Subsection 2.2, the Company shall not be required to include any of the Holders’ Registrable Securities in such underwriting unless the Holders accept the terms of the underwriting as agreed upon between the Company and its underwriters, and then only in such quantity as the underwriters in their sole discretion determine will not jeopardize the success of the offering by the Company. If the total number of securities, including Registrable Securities, requested by stockholders to be included in such offering exceeds the number of securities to be sold (other than by the Company) that the underwriters in their reasonable discretion determine is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters and the Company in their sole discretion determine will not jeopardize the success of the offering. If the underwriters determine that less than all of the Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be allocated among the selling Holders in proportion (as nearly as practicable to) the number of Registrable Securities owned by each selling Holder or in such other proportions as shall mutually be agreed to by all such selling Holders. To facilitate the allocation of shares in accordance with the above provisions, the Company or the underwriters may round the number of shares allocated to any Holder to the nearest one hundred (100) shares. Notwithstanding the foregoing, in no event shall (i) the number of Registrable Securities included in the offering be reduced unless all other securities (other than securities to be sold by the Company) are first entirely excluded from the offering, (ii) the number of Registrable Securities included in the offering be reduced below twenty percent (20%) of the total number of securities included in such offering, unless such offering is the IPO, in which case the selling Holders may be excluded further if the underwriters make the determination described above and no other stockholder’s securities are included in such offering, or (iii) notwithstanding (ii) above, any Registrable Securities which are not Key Holder Registrable Securities be excluded from such underwriting unless all Key Holder Registrable Securities are first excluded from such offering. For purposes of the provision in this Subsection 2.3(b) concerning apportionment, for any selling Holder that is a partnership, limited liability company, or corporation, the partners, members, retired partners, retired members, stockholders, and Affiliates of such Holder, or the estates and Immediate Family Members of any such partners, retired partners, members, and retired members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate number of Registrable Securities owned by all Persons included in such “selling Holder,” as defined in this sentence.
(c) For purposes of Subsection 2.1, a registration shall not be counted as “effected” if, as a result of an exercise of the underwriter’s cutback provisions in Subsection 2.3(a), fewer than fifty percent (50%) of the total number of Registrable Securities that Holders have requested to be included in such registration statement are actually included.
2.4. Obligations of the Company. Whenever required under this Section 1.44 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable efforts to cause such registration statement to become effective and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred twenty (120) days or, if earlier, until the distribution contemplated in the registration statement has been completed; provided, however, that (i) such one hundred twenty (120) day period shall be extended for a period of time equal to the period the Holder refrains, at the request of an underwriter of Common Stock (or other securities) of the Company, from selling any securities included in such registration, and (ii) in the case of any registration of Registrable Securities on Form S-3 that are intended to be offered on a continuous or delayed basis, subject to compliance with applicable SEC rules, such one hundred twenty (120) day period shall be extended for up to sixty (60) days, if necessary, to keep the registration statement effective until all such Registrable Securities are sold;
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(b) prepare and file with the SEC such amendments and supplements to such registration statement, and the prospectus used in connection with such registration statement, as may be necessary to comply with the Securities Act in order to enable the disposition of all securities covered by such registration statement;
(c) furnish to the selling Holders such numbers of copies of a prospectus, including a preliminary prospectus, as required by the Securities Act, and such other documents as the Holders may reasonably request in order to facilitate their disposition of their Registrable Securities;
(d) use its commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or blue-sky laws of such jurisdictions as shall be reasonably requested by the selling Holders; provided that the Company shall not be required to qualify to do business or to file a general consent to service of process in any such states or jurisdictions, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act;
(e) in the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;
(f) use its commercially reasonable efforts to cause all such Registrable Securities covered by such registration statement to be listed on a national securities exchange or trading system and each securities exchange and trading system (if any) on which similar securities issued by the Company are then listed;
(g) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and provide a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(h) promptly make available for inspection by the selling Holders, any managing underwriter(s) participating in any disposition pursuant to such registration statement, and any attorney or accountant or other agent retained by any such underwriter or selected by the selling Holders, all financial and other records, pertinent corporate documents, and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant, or agent, in each case, as necessary or advisable to verify the accuracy of the information in such registration statement and to conduct appropriate due diligence in connection therewith;
(i) notify each selling Holder, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed; and
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(j) after such registration statement becomes effective, notify each selling Holder of any request by the SEC that the Company amend or supplement such registration statement or prospectus.
In addition, the Company shall ensure that, at all times after any registration statement covering a public offering of securities of the Company under the Securities Act shall have become effective, its insider trading policy shall provide that the Company’s directors may implement a trading program under Rule 10b5-1 of the Exchange Act.
2.5. Furnish Information. It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 1.44 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as is reasonably required to effect the registration of such Holder’s Registrable Securities.
2.6. Expenses of Registration. All expenses (other than Selling Expenses) incurred in connection with registrations, filings, or qualifications pursuant to Section 1.44, including all registration, filing, and qualification fees; printers’ and accounting fees; fees and disbursements of counsel for the Company; and the reasonable fees and disbursements of one (1) counsel for the selling Holders (“Selling Holder Counsel”), shall be borne and paid by the Company; provided, however, that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Subsection 2.1 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all selling Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to be included in the withdrawn registration), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one (1) registration pursuant to Subsection 2.1(a) or Subsection 2.1(b), as the case may be; provided further that if, at the time of such withdrawal, the Holders shall have learned of a material adverse change in the condition, business, or prospects of the Company from that known to the Holders at the time of their request and have withdrawn the request with reasonable promptness after learning of such information, then the Holders shall not be required to pay any of such expenses and shall not forfeit their right to one (1) registration pursuant to Subsection 2.1(a) or Subsection 2.1(b). All Selling Expenses relating to Registrable Securities registered pursuant to this Section 1.44 shall be borne and paid by the Holders pro rata on the basis of the number of Registrable Securities registered on their behalf.
2.7. Delay of Registration. No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any registration pursuant to this Agreement as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
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2.8. Indemnification. If any Registrable Securities are included in a registration statement under this Section 1.44:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each selling Holder, and the partners, members, officers, directors, and stockholders of each such Holder; legal counsel and accountants for each such Holder; any underwriter (as defined in the Securities Act) for each such Holder; and each Person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any Damages, and the Company will pay to each such Holder, underwriter, controlling Person, or other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(a) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be liable for any Damages to the extent that they arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of any such Holder, underwriter, controlling Person, or other aforementioned Person expressly for use in connection with such registration.
(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, and each of its directors, each of its officers who has signed the registration statement, each Person (if any), who controls the Company within the meaning of the Securities Act, legal counsel and accountants for the Company, any underwriter (as defined in the Securities Act), any other Holder selling securities in such registration statement, and any controlling Person of any such underwriter or other Holder, against any Damages, in each case only to the extent that such Damages arise out of or are based upon actions or omissions made in reliance upon and in conformity with written information furnished by or on behalf of such selling Holder expressly for use in connection with such registration; and each such selling Holder will pay to the Company and each other aforementioned Person any legal or other expenses reasonably incurred thereby in connection with investigating or defending any claim or proceeding from which Damages may result, as such expenses are incurred; provided, however, that the indemnity agreement contained in this Subsection 2.8(b) shall not apply to amounts paid in settlement of any such claim or proceeding if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; and provided further that in no event shall the aggregate amounts payable by any Holder by way of indemnity or contribution under Subsections 2.8(b) and 2.8(d) exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of fraud or willful misconduct by such Holder.
(c) Promptly after receipt by an indemnified party under this Subsection 2.8 of notice of the commencement of any action (including any governmental action) for which a party may be entitled to indemnification hereunder, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Subsection 2.8, give the indemnifying party notice of the commencement thereof. The indemnifying party shall have the right to participate in such action and, to the extent the indemnifying party so desires, participate jointly with any other indemnifying party to which notice has been given, and to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such action. The failure to give notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Subsection 2.8, to the extent that such failure materially prejudices the indemnifying party’s ability to defend such action. The failure to give notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Subsection 2.8.
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(d) To provide for just and equitable contribution to joint liability under the Securities Act in any case in which either (i) any party otherwise entitled to indemnification hereunder makes a claim for indemnification pursuant to this Subsection 2.8 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case, notwithstanding the fact that this Subsection 2.8 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of any party hereto for which indemnification is provided under this Subsection 2.8, then, and in each such case, such parties will contribute to the aggregate losses, claims, damages, liabilities, or expenses to which they may be subject (after contribution from others) in such proportion as is appropriate to reflect the relative fault of each of the indemnifying party and the indemnified party in connection with the statements, omissions, or other actions that resulted in such loss, claim, damage, liability, or expense, as well as to reflect any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or allegedly untrue statement of a material fact, or the omission or alleged omission of a material fact, relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission; provided, however, that, in any such case, (x) no Holder will be required to contribute any amount in excess of the public offering price of all such Registrable Securities offered and sold by such Holder pursuant to such registration statement, and (y) no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this Subsection 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Subsection 2.8(b), exceed the proceeds from the offering received by such Holder (net of any Selling Expenses paid by such Holder), except in the case of willful misconduct or fraud by such Holder.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.
(f) Unless otherwise superseded by an underwriting agreement entered into in connection with the underwritten public offering, the obligations of the Company and Holders under this Subsection 2.8 shall survive the completion of any offering of Registrable Securities in a registration under this Section 1.44, and otherwise shall survive the termination of this Agreement.
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2.9. Reports Under Exchange Act. With a view to making available to the Holders the benefits of SEC Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company shall:
(a) make and keep available adequate current public information, as those terms are understood and defined in SEC Rule 144, at all times after the effective date of the registration statement filed by the Company for the IPO;
(b) use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act (at any time after the Company has become subject to such reporting requirements); and
(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) to the extent accurate, a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after ninety (90) days after the effective date of the registration statement filed by the Company for the IPO), the Securities Act, and the Exchange Act (at any time after the Company has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after the Company so qualifies); (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company; and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC that permits the selling of any such securities without registration (at any time after the Company has become subject to the reporting requirements under the Exchange Act) or pursuant to Form S-3 (at any time after the Company so qualifies to use such form).
2.10. Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (i) to include such securities in any registration unless, under the terms of such agreement, such securities are included in such registration only to the extent that the inclusion of such securities will not reduce the number of the Registrable Securities of the Holders that are included, except for shares that are Exempted Securities (as defined in the Company’s Certificate of Incorporation), or (ii) to initiate a demand for registration of any securities held by such holder or prospective holder; provided that this limitation shall not apply (a) to any additional Investor who becomes a party to this Agreement in accordance with Subsection 6.9, or (b) to the issuance of a warrant to purchase securities of the Company to a bank, equipment lessor or other financial institution, or to a real property lessor, in connection with a third party bona fide loan, lease or other similar financing arrangement for the benefit of the Company.
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2.11. “Market Stand-off” Agreement. Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the registration by the Company of shares of its Common Stock or any other equity securities under the Securities Act on a registration statement on Form S-1 or Form S-3 and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days in the case of the IPO, or such other period not to exceed an additional thirty-five (35) days as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (1) the publication or other distribution of research reports and (2) analyst recommendations and opinions, including, but not limited to, the restrictions contained in applicable FINRA rules, or any successor provisions or amendments thereto), (i) lend; offer; pledge; sell; contract to sell; sell any option or contract to purchase; purchase any option or contract to sell; grant any option, right, or warrant to purchase; or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable or exchangeable (directly or indirectly) for Common Stock held immediately before the effective date of the registration statement for such offering or (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of such securities, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities, in cash, or otherwise. The foregoing provisions of this Subsection 2.11 shall apply only to the IPO, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, or the transfer of any shares to any trust for the direct or indirect benefit of the Holder or the immediate family of the Holder, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, and shall be applicable to the Holders only if all officers and directors are subject to the same restrictions and the Company uses commercially reasonable efforts to obtain a similar agreement from all stockholders individually owning more than one percent (1%) of the Company’s outstanding Common Stock (after giving effect to conversion into Common Stock of all outstanding Preferred Stock). The underwriters in connection with such registration are intended third-party beneficiaries of this Subsection 2.11 and shall have the right, power, and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in connection with such registration that are consistent with this Subsection 2.11 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Holders subject to such agreements, based on the number of shares subject to such agreements.
2.12. Restrictions on Transfer.
(a) The Preferred Stock and the Registrable Securities shall not be sold, pledged, or otherwise transferred, and the Company shall not recognize and shall issue stop-transfer instructions to its transfer agent with respect to any such sale, pledge, or transfer, except upon the conditions specified in this Agreement, which conditions are intended to ensure compliance with the provisions of the Securities Act. A transferring Holder will cause any proposed purchaser, pledgee, or transferee of the Preferred Stock and the Registrable Securities held by such Holder to agree to take and hold such securities subject to the provisions and upon the conditions specified in this Agreement.
(b) Each certificate or instrument representing (i) the Preferred Stock, (ii) the Registrable Securities, and (iii) any other securities issued in respect of the securities referenced in clauses (i) and (ii), upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event, shall (unless otherwise permitted by the provisions of Subsection 2.12(c)) be stamped or otherwise imprinted with a legend substantially in the following form:
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THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.THE SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
The Holders consent to the Company making a notation in its records and giving instructions to any transfer agent of the Restricted Securities in order to implement the restrictions on transfer set forth in this Subsection 2.12.
(c) The holder of each certificate representing Restricted Securities, by acceptance of ownership thereof, agrees to comply in all respects with the provisions of this Section 1.44. Before any proposed sale, pledge, or transfer of any Restricted Securities, unless there is in effect a registration statement under the Securities Act covering the proposed transaction, the Holder thereof shall give notice to the Company of such Holder’s intention to effect such sale, pledge, or transfer. Each such notice shall describe the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, shall be accompanied at such Holder’s expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a “no action” letter from the SEC to the effect that the proposed sale, pledge, or transfer of such Restricted Securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to counsel to the Company to the effect that the proposed sale, pledge, or transfer of the Restricted Securities may be effected without registration under the Securities Act, whereupon the Holder of such Restricted Securities shall be entitled to sell, pledge, or transfer such Restricted Securities in accordance with the terms of the notice given by the Holder to the Company. The Company will not require such a legal opinion or “no action” letter (x) in any transaction in compliance with SEC Rule 144 or (y) in any transaction in which such Holder distributes Restricted Securities to an Affiliate of such Holder for no consideration; provided that each transferee agrees in writing to be subject to the terms of this Subsection 2.12. Each certificate, instrument or book entry evidencing the Restricted Securities transferred as above provided shall bear, except if such transfer is made pursuant to SEC Rule 144, the appropriate restrictive legend set forth in Subsection 2.12(b), except that such certificate, instrument or book entry shall not bear such restrictive legend if, in the opinion of counsel for such Holder and the Company, such legend is not required in order to establish compliance with any provisions of the Securities Act.
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2.13. Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Subsection 2.1 or Subsection 2.2 shall terminate upon the earlier to occur of:
(a) the closing of a Deemed Liquidation Event, as such term is defined in the Restated Certificate;
(b) such time as such Holder holds less than 1% of the Company’s outstanding Common Stock, the Company has completed an IPO and all Registrable Securities of the Company issuable or issued upon conversion of the shares held by and issuable to such Holder (and its Affiliates) may be sold pursuant to Rule 144 during any ninety (90) day period; and
(c) the five (5) year anniversary of the IPO.
3. Information.
3.1. Delivery of Financial Statements. The Company shall deliver to each Major Investor:
(a) as soon as practicable, but in any event within one hundred twenty (120) days after the end of each fiscal year of the Company, (i) a balance sheet as of the end of such year, (ii) statements of income and of cash flows for such year, and (iii) a statement of stockholders’ equity as of the end of such year, all such financial statements audited and certified by independent public accountants of regionally recognized standing selected by the Company;
(b) as soon as practicable, but in any event within forty-five (45) days after the end of each of the first three (3) quarters of each fiscal year of the Company, unaudited statements of income and of cash flows for such fiscal quarter, and an unaudited balance sheet and a statement of stockholders’ equity as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP);
(c) as soon as practicable, but in any event within thirty (30) days after the end of each quarter, executive summaries of the Company’s financial operations and activities;
(d) as soon as practicable, but in any event thirty (30) days before the end of each fiscal year, a budget and business plan for the next fiscal year (collectively, the “Budget”), approved by the Board and prepared on a monthly basis, including balance sheets, income statements, and statements of cash flow for such months and, promptly after prepared, any other budgets or revised budgets prepared by the Company;
(e) such other information relating to the financial condition, business, prospects, or corporate affairs of the Company as any Major Investor may from time to time reasonably request; provided, however, that the Company shall not be obligated under this Subsection 3.1 to provide information (i) that the Company reasonably determines in good faith to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company); or (ii) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel; and
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(f) upon the request of any Major Investor, unaudited statements of income and of cash flows for such month, and an unaudited balance sheet and a statement of stockholders’ equity as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (i) be subject to normal year-end audit adjustments and (ii) not contain all notes thereto that may be required in accordance with GAAP).
If, for any period, the Company has any subsidiary whose accounts are consolidated with those of the Company, then in respect of such period the financial statements delivered pursuant to the foregoing sections shall be the consolidated and consolidating financial statements of the Company and all such consolidated subsidiaries.
Notwithstanding anything else in this Subsection 3.1 to the contrary, the Company may cease providing the information set forth in this Subsection 3.1 during the period starting with the date sixty (60) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Subsection 3.1 shall be reinstated at such time as the Company is no longer actively employing its commercially reasonable efforts to cause such registration statement to become effective.
3.2. Inspection. The Company shall permit each Major Investor, at such Major Investor’s expense, to visit and inspect the Company’s properties; examine its books of account and records; and discuss the Company’s affairs, finances, and accounts with its officers, during normal business hours of the Company as may be reasonably requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Subsection 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information (unless covered by an enforceable confidentiality agreement, in form acceptable to the Company) or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.
3.3. Observer Rights.
(a) So long as (i) Blue Ox owns more than zero percent (0%) and less than ten percent (10%) of the shares of the Common Stock (including shares of Common Stock issued or issuable upon conversion of Preferred Stock) it has originally purchased, which number is subject to appropriate adjustment for all stock splits, dividends, combinations, recapitalizations and the like, and (ii) ATH Holding does not have the right to appoint an observer pursuant to clause (b) below, the Company shall invite a representative of Blue Ox to attend all meetings of the Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust all information so provided (provided, that, notwithstanding the foregoing and for the avoidance of doubt, nothing herein shall restrict such representative from disclosing such information to Blue Ox, subject to Section 3.5 below); and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting would adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the Company.
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(b) So long as ATH Holding owns Preferred Stock, the Company shall invite a representative of ATH Holding to attend all meetings of the Board of Directors in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors; provided, however, that such representative shall agree to hold in confidence and trust all information so provided (provided, that, notwithstanding the foregoing and for the avoidance of doubt, nothing herein shall restrict such representative from disclosing such information to ATH Holding, subject to Section 3.5 below); provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting would adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if ATH Holding or its representative is a competitor of the Company.
3.4. Termination of Information and Observer Rights. The covenants set forth in Subsections 3.1, 3.2 and 3.3 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first.
3.5. Confidentiality. Each Investor agrees that such Investor will keep confidential and will not disclose, divulge, or use for any purpose (other than to monitor its investment in the Company) any confidential information obtained from the Company pursuant to the terms of this Agreement (including notice of the Company’s intention to file a registration statement), unless such confidential information (a) is known or becomes known to the public in general (other than as a result of a breach of this Subsection 3.5 by such Investor), (b) is or has been independently developed or conceived by the Investor without use of the Company’s confidential information, or (c) is or has been made known or disclosed to the Investor by a third party without a breach of any obligation of confidentiality such third party may have to the Company; provided, however, that an Investor may disclose confidential information (i) to its attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with monitoring its investment in the Company; (ii) to any prospective purchaser of any Registrable Securities from such Investor, if such prospective purchaser agrees to be bound by the provisions of this Subsection 3.5; (iii) to any existing or prospective Affiliate, partner, member, stockholder, or wholly owned subsidiary of such Investor in the ordinary course of business, provided that such Investor informs such Person that such information is confidential and directs such Person to maintain the confidentiality of such information; or (iv) as may otherwise be required by law, provided that the Investor promptly notifies the Company of such disclosure and takes reasonable steps to minimize the extent of any such required disclosure.
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4. Rights to Future Stock Issuances.
4.1. Right of First Offer. Subject to the terms and conditions of this Subsection 4.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Investor. An Investor shall be entitled to apportion the right of first offer hereby granted to it in such proportions as it deems appropriate, among (i) itself, and (ii) its Affiliates, provided that, each such Affiliate agrees (a) to enter into this Agreement and each of the Fourth Amended and Restated Voting Agreement and Fifth Amended and Restated Right of First Refusal and Co-Sale Agreement of even date herewith among the Company, the Investors and the other parties named therein, as an “Investor” under each such agreement, and (b) agrees to purchase at least such number of New Securities as are allocable hereunder to the Investor holding the fewest number of Preferred Stock and any other Derivative Securities.
(a) The Company shall give notice (the “Offer Notice”) to each Investor, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities.
(b) By notification to the Company within twenty (20) days after the Offer Notice is given, each Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals (i) the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by such Investor bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and other Derivative Securities) (the “Pro Rata Share”) plus (ii) to the extent any New Securities are not included in any Investor’s Pro Rata Share, each Investor that is a Holder of Series D Preferred Stock, an additional number of New Securities equal as nearly as possible to such Investor’s Pro Rata Share (it being the intention that Investors holding shares of Series D Preferred Stock be entitled, as nearly as possible, to 200% of their Pro Rata Share). At the expiration of such twenty (20) day period, the Company shall promptly notify each Investor that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Investor”) of any other Investor’s failure to do likewise. During the ten (10) day period commencing after the Company has given such notice, each Fully Exercising Investor may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Investors were entitled to subscribe but that were not subscribed for by the Investors (“Over Allotment Securities”) which is equal to the proportion that the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of Preferred Stock and any other Derivative Securities then held, by such Fully Exercising Investor bears to the Common Stock issued and held, or issuable (directly or indirectly) upon conversion and/or exercise, as applicable, of the Preferred Stock and any other Derivative Securities then held, by all Fully Exercising Investors who wish to purchase such unsubscribed shares; provided, however, that such Over Allotment Securities shall first be allocated to Investors holding shares of Series D Preferred Stock until such Investors shall have been given the opportunity to purchase 200% of their Pro Rata Share and thereafter to all Fully Exercising Investors. The closing of any sale pursuant to this Subsection 4.1(b) shall occur within the later of ninety (90) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Subsection 4.1(c).
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(c) If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Subsection 4.1(b), the Company may, during the ninety (90) day period following the expiration of the periods provided in Subsection 4.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Subsection 4.1.
(d) The right of first offer in this Subsection 4.1 shall not be applicable to (i) Exempted Securities (as defined in the Restated Certificate); (ii) shares of Common Stock issued in the IPO; and (iii) the issuance of additional shares of Preferred Stock pursuant to the Purchase Agreement.
(e) Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Subsection 4.1, the Company may elect to give notice to the Investors within thirty (30) days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Investor shall have twenty (20) days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Investor, maintain such Investor’s percentage-ownership position, calculated as set forth in Subsection 4.1(b) before giving effect to the issuance of such New Securities. The closing of such sale shall occur within sixty (60) days of the date notice is given to the Investors.
4.2. Termination. The covenants set forth in Subsection 4.1 shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first and, as to each Investor, in accordance with Subsection 4.1(e).
5. Additional Covenants.
5.1. Insurance. If the Board so determines, the Company shall use its commercially reasonable efforts to obtain within ninety (90) days of the date hereof Directors and Officers liability insurance and term “key-person” insurance on such individual or individuals designated by the Board from financially sound and reputable insurers, each in an amount and on terms and conditions satisfactory to the Board, and will use commercially reasonable efforts to cause such insurance policies to be maintained until such time as the Board determines that such insurance should be discontinued.
5.2. Employee Agreements. The Company will cause (i) each person now or hereafter employed by it or by any subsidiary (or engaged by the Company or any subsidiary as a consultant/independent contractor) with access to confidential information and/or trade secrets to enter into a nondisclosure and proprietary rights assignment agreement and (ii) each Key Employee to enter into a one (1) year noncompetition and nonsolicitation agreement, substantially in the form attached hereto as Exhibit A. In addition, the Company shall not materially amend, modify, terminate, waive, or otherwise alter, in whole or in part, any of the above-referenced agreements or any restricted stock agreement between the Company and any employee, without the consent of at least seventy percent (70%) of the Preferred Directors.
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5.3. Employee Stock. Unless otherwise approved by the Board , including the Preferred Directors, all future employees and consultants of the Company who purchase, receive options to purchase, or receive awards of shares of the Company’s capital stock after the date hereof shall be required to execute restricted stock or option agreements, as applicable, providing for (i) vesting of shares over a four (4) year period, with the first twenty-five percent (25%) of such shares vesting following one (1) year of continued employment or service, and the remaining shares vesting in equal monthly installments over the following thirty-six (36) months, and (ii) a market stand-off provision substantially similar to that in Subsection 2.11. In addition, unless otherwise approved by the Board, including at least seventy percent (70%) of the Preferred Directors, the Company shall retain a “right of first refusal” on employee transfers until the Company’s IPO and shall have the right to repurchase unvested shares at cost upon termination of employment of a holder of restricted stock.
5.4. Qualified Small Business Stock. The Company shall use commercially reasonable efforts to cause the shares of Preferred Stock issued pursuant to the Purchase Agreement, as well as any shares into which such shares are converted, within the meaning of Section 1202(f) of the Internal Revenue Code (the “Code”), to constitute “qualified small business stock” as defined in Section 1202(c) of the Code; provided, however, that such requirement shall not be applicable if the Board determines, in its good-faith business judgment, that such qualification is inconsistent with the best interests of the Company. The Company shall submit to its stockholders (including the Investors) and to the Internal Revenue Service any reports that may be required under Section 1202(d)(1)(C) of the Code and the regulations promulgated thereunder. In addition, within twenty (20) business days after any Investor’s written request therefor, the Company shall, at its option, either (i) deliver to such Investor a written statement indicating whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code or (ii) deliver to such Investor such factual information in the Company’s possession as is reasonably necessary to enable such Investor to determine whether (and what portion of) such Investor’s interest in the Company constitutes “qualified small business stock” as defined in Section 1202(c) of the Code.
5.5. Matters Requiring Investor Director Approval. So long as the holders of Series A2 Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock are entitled to elect at least one (1) Preferred Director, the Company hereby covenants and agrees with each of the Investors that it shall not, without approval of the Board, which approval must include the affirmative vote of at least two (2) of the Preferred Directors (or if there be only one (1) Preferred Director, then the affirmative vote of the Preferred Director):
(a) enter into any corporate strategic relationship involving the payment, contribution or assignment by the Company or to the Company of assets greater than $100,000;
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(b) approve, adopt or modify the Budget or incur expenditures or expenses (or commit the Company to incur expenditures or expenses) not reflected in the Budget for any particular fiscal year of the Company;
(c) guarantee any indebtedness except for trade accounts of the Company or any subsidiary arising in the ordinary course of business;
(d) make any investment inconsistent with any investment policy approved by the Board;
(e) make, or permit any subsidiary to make, any loan or advance to, or own any stock or other securities of, any subsidiary or other corporation, partnership, or other entity unless it is wholly owned by the Company;
(f) make, or permit any subsidiary to make, any loan or advance to any Person, including, without limitation, any employee or director of the Company or any subsidiary, except advances and similar expenditures in the ordinary course of business or under the terms of an employee stock or option plan approved by the Board;
(g) enter into or become a party to any transaction with any director, officer or employee of the Company or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person;
(h) make any grants of equity compensation to employees or service providers of the Company; or
(i) hire or terminate any member of senior management, at the Vice President and above levels, of the Company and approve salary, bonus and other compensation or titles (or make changes thereto) for any such members of senior management.
5.6. Board Matters. Unless otherwise determined by the vote of a majority of the directors then in office, the Board shall meet at least quarterly in accordance with an agreed-upon schedule. The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board.
5.7. Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Restated Certificate, or elsewhere, as the case may be.
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5.8. Indemnification Matters. The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of their affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund Director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Restated Certificate or the Company’s Bylaws (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company.
5.9. Fosun Right to Conduct Activities. The Company hereby agrees and acknowledges that Fosun (together with its affiliates) invests in numerous portfolio companies, some of which may be deemed competitive with the Company’s business (as currently conducted or as currently propose to be conducted). The Company hereby agrees that, to the extent permitted under applicable law, Fosun shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by Fosun in any entity competitive with the Company, or (ii) actions taken by any partner, officer or other representative of Fosun to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized use or disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.
5.10. Blue Ox and ATH Holding Right to Conduct Activities. The Company hereby agrees and acknowledges that Blue Ox and ATH Holding (together with the affiliates of each) invest in numerous portfolio companies, some of which may be deemed competitive with the Company’s business (as currently conducted or as currently propose to be conducted). The Company hereby agrees that, to the extent permitted under applicable law, neither Blue Ox nor ATH Holding shall be liable to the Company for any claim arising out of, or based upon, (i) the investment by Blue Ox or ATH Holding in any entity competitive with the Company, or (ii) actions taken by any partner, officer or other representative of Blue Ox or ATH Holding to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized disclosure of the Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company.
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5.11. Termination of Covenants. The covenants set forth in this Section 5, except for Subsection 5.7, shall terminate and be of no further force or effect (i) immediately before the consummation of the IPO, (ii) when the Company first becomes subject to the periodic reporting requirements of Section 12(g) or 15(d) of the Exchange Act, or (iii) upon a Deemed Liquidation Event, as such term is defined in the Restated Certificate, whichever event occurs first.
6. Miscellaneous.
6.1. Successors and Assigns. The rights under this Agreement may be assigned (but only with all related obligations) by a Holder to a transferee of Registrable Securities that (i) is an Affiliate of a Holder; (ii) is a Holder’s Immediate Family Member or trust for the benefit of an individual Holder or one or more of such Holder’s Immediate Family Members; or (iii) after such transfer, holds at least ten percent (10%) of the outstanding shares of Registrable Securities (subject to appropriate adjustment for stock splits, stock dividends, combinations, and other recapitalizations) originally held by such Holder; provided, however, that (x) the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the Registrable Securities with respect to which such rights are being transferred; and (y) such transferee agrees in a written instrument delivered to the Company to be bound by and subject to the terms and conditions of this Agreement, including the provisions of Subsection 2.11. For the purposes of determining the number of shares of Registrable Securities held by a transferee, the holdings of a transferee (1) that is an Affiliate or stockholder of a Holder; (2) who is a Holder’s Immediate Family Member; or (3) that is a trust for the benefit of an individual Holder or such Holder’s Immediate Family Member shall be aggregated together and with those of the transferring Holder; provided further that all transferees who would not qualify individually for assignment of rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices, or taking any action under this Agreement. The terms and conditions of this Agreement inure to the benefit of and are binding upon the respective successors and permitted assignees of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assignees any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided herein.
6.2. Governing Law. This Agreement and any controversy arising out of or relating to this Agreement shall be governed by and construed in accordance with the General Corporation Law of the State of Delaware as to matters within the scope thereof, and as to all other matters shall be governed by and construed in accordance with the internal laws of the State of Delaware, without regard to its principles of conflicts of laws.
6.3. Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
6.4. Titles and Subtitles. The titles and subtitles used in this Agreement are for convenience only and are not to be considered in construing or interpreting this Agreement.
24
6.5. Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (i) personal delivery to the party to be notified; (ii) when sent, if sent by electronic mail or facsimile during the recipient’s normal business hours, and if not sent during normal business hours, then on the recipient’s next business day; (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (iv) one (1) business day after the business day of deposit with a nationally recognized overnight courier, freight prepaid, specifying next-day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their addresses as set forth on Schedule A or Schedule B (as applicable) hereto, or to the principal office of the Company and to the attention of the Chief Executive Officer, in the case of the Company, or to such email address, facsimile number, or address as subsequently modified by written notice given in accordance with this Subsection 6.5. If notice is given to the Company, a copy shall also be sent to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, MA 02111, Attn: Jonathan L. Kravetz and if notice is given to Stockholders, a copy shall also be given to such counsel as may appear with such Investor’s address on the Schedule of Purchasers attached to the Purchase Agreement.
6.6. Amendments and Waivers. Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance, and either retroactively or prospectively) only with the written consent of the Company and the holders of a majority of the Registrable Securities then outstanding; provided that the Company may in its sole discretion waive compliance with Subsection 2.12(c) (and the Company’s failure to object promptly in writing after notification of a proposed assignment allegedly in violation of Subsection 2.12(c) shall be deemed to be a waiver); and provided further that any provision hereof may be waived by any waiving party on such party’s own behalf, without the consent of any other party. Notwithstanding the foregoing, this Agreement may not be amended or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless, other than with respect to this Section 6.6 (which shall require the consent of the holders of a majority of the Registrable Securities then outstanding, including Blue Ox so long as Blue Ox holds any Registrable Securities), such amendment, termination, or waiver applies to all Investors in the same fashion (it being agreed that (x) a waiver of the provisions of Section 4 with respect to a particular transaction shall be deemed to apply to all Investors in the same fashion if such waiver does so by its terms, notwithstanding the fact that certain Investors may nonetheless, by agreement with the Company, purchase securities in such transaction and (y) any waiver, amendment or termination of any provision or right set forth herein that specifically references an Investor (e.g. the provisions of Section 5.9 and Section 5.10) shall not be deemed to apply to all Investors in the same fashion). Further, this Agreement may not be amended, and no provision hereof may be waived, in each case, in any way which would adversely affect the rights of the Key Holders hereunder in a manner disproportionate to any adverse effect such amendment or waiver would have on the rights of the Investors hereunder, without also the written consent of the holders of at least a majority of the Key Holder Registrable Securities held by the Key Holders. The Company shall give prompt notice of any amendment or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, termination, or waiver. Any amendment, termination, or waiver effected in accordance with this Subsection 6.6 shall be binding on all parties hereto, regardless of whether any such party has consented thereto. No waivers of or exceptions to any term, condition, or provision of this Agreement, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such term, condition, or provision.
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6.7. Severability. In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal, or unenforceable provision shall be reformed and construed so that it will be valid, legal, and enforceable to the maximum extent permitted by law.
6.8. Aggregation of Stock. All shares of Registrable Securities held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliated persons may apportion such rights as among themselves in any manner they deem appropriate.
6.9. Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company issues additional shares of Series C Preferred Stock or Series E Preferred Stock after the date hereof, any purchaser of such shares of Preferred Stock may become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement, and thereafter shall be deemed an “Investor” for all purposes hereunder. No action or consent by the Investors shall be required for such joinder to this Agreement by such additional Investor, so long as such additional Investor has agreed in writing to be bound by all of the obligations as an “Investor” hereunder.
6.10. Entire Agreement. This Agreement (including any Schedules and Exhibits hereto) constitutes the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. Upon the effectiveness of this Agreement, the Prior Agreement shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.
6.11. Dispute Resolution. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.
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6.12. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
6.13. Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power, or remedy of such nonbreaching or nondefaulting party, nor shall it be construed to be a waiver of or acquiescence to any such breach or default, or to any similar breach or default thereafter occurring, nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. All remedies, whether under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
6.14. Acknowledgment. The Company acknowledges that the Investors are in the business of venture capital investing and therefore review the business plans and related proprietary information of many enterprises, including enterprises which may have products or services which compete directly or indirectly with those of the Company. Nothing in this Agreement shall preclude or in any way restrict the Investors from investing or participating in any particular enterprise whether or not such enterprise has products or services which compete with those of the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
SERA PROGNOSTICS, INC. | ||
By: | /s/ Gregory C. Critchfield, MD, MS | |
Name: | Gregory C. Critchfield, MD, MS | |
Title: | President and Chief Executive Officer |
Address: | 2749 E Parleys Way, Suite 200 | |
Salt Lake City, UT 84109 |
SIGNATURE PAGE TO FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
LEAD INVESTOR: | ||
BLUE OX HEALTHCARE | ||
PARTNERS SP, LLC | ||
By: | /s/ John A. Neczesny | |
Name: | John A. Neczesny | |
(print) | ||
Title: | Authorized Person | |
Address: | 239 Dawson Rd. | |
Hillsdale, NY 12529 | ||
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
LEAD INVESTOR: | |
BXHCP SP II, LLC |
By: | /s/ John A. Neczesny |
Name: | John A. Neczesny | |
(print) | ||
Title: | Authorized Person |
Address: | 239 Dawson Rd. | ||
Hillsdale, NY 12529 | |||
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
LABORATORY CORPORATION OF AMERICA HOLDINGS |
By: | /s/ Megann Vaughn Watters |
Name: | Megann Vaughn Watters | |
(print) | ||
Title: | VP |
Address: | Attn: Law Department | ||
531 S Spring St. | |||
Burlington, NC 27215 |
If notice is given, a copy should also be sent to: |
Address: | Attn: Corporate Development | ||
531 S Spring St. | |||
Burlington, NC 27215 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
DOMAIN PARTNERS VIII, L.P. |
By: | One Palmer Square Associates VIII, L.L.C., its General Partner |
By: | /s/ Lisa A. Kraeutler |
Name: | Lisa A. Kraeutler | |
Title: | Attorney-in-Fact |
Address: | 202 Carnegie Center | ||
Suite 104 | |||
Princeton, NJ 08540 |
INVESTOR: | |
DP VIII ASSOCIATES, L.P. |
By: | One Palmer Square Associates VIII, L.L.C., its General Partner |
By: | /s/ Lisa A. Kraeutler |
Name: | Lisa A. Kraeutler | |
Title: | Attorney-in-Fact |
Address: | 202 Carnegie Center | ||
Suite 104 | |||
Princeton, NJ 08540 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
INTERWEST PARTNERS X, L.P. |
By: InterWest Management Partners X, LLC, its General Partner |
By: | /s/ Khaled A. Nasr |
Name: | Khaled A. Nasr | |
(print) | ||
Title: | Venture Member |
Address: | 2710 Sand Hill Road | ||
Second Floor | |||
Menlo Park, CA 94025 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
CATALYST HEALTH VENTURES, L.P. |
By: CHV GP, LLC, its General Partner |
By: | /s/ Joshua S. Phillips |
Name: | Joshua S. Phillips | |
Title: | Manager |
Address: | 50 Braintree Hill Office Park, | ||
Suite 301 | |||
Braintree, MA 02184 |
INVESTOR: | |
CATALYST HEALTH VENTURES (PF), L.P. |
By: CHV GP, LLC, its General Partner |
By: | /s/ Joshua S. Phillips |
Name: | Joshua S. Phillips | |
Title: | Manager |
Address: | 50 Braintree Hill Office Park, | ||
Suite 301 | |||
Braintree, MA 02184 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
CATALYST HEALTH VENTURES | |
FOLLOW-ON FUND L.P. |
By: CHV GP, LLC, its General Partner |
By: | /s/ Joshua S. Phillips |
Name: | Joshua S. Phillips | |
Title: | Manager |
Address: | 50 Braintree Hill Office Park, | ||
Suite 301 | |||
Braintree, MA 02184 |
INVESTOR: | |
CHV INVESTMENTS LLC |
By: CHV III GP, LLC its Manager |
By: | /s/ Joshua S. Phillips |
Name: | Joshua S. Phillips | |
Title: | Manager |
Address: | 50 Braintree Hill Office Park, | ||
Suite 301 | |||
Braintree, MA 02184 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
UPSTART LIFE SCIENCES CAPITAL, L.P. |
By: | /s/ Dennis B. Farrar |
Name: | Dennis B. Farrar | |
Title: | Managing Director |
Address: | 417 Wakara Way, Suite 3510 | ||
Salt Lake City, UT 84108 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | |
CHIONE LTD. |
By: | /s/ Marcin Czernik |
Name: | Marcin Czernik | |
(print) | ||
Title: | Director |
Address: | Simou Menardou 5, Kifisia Court | ||
Office 225 | |||
6015 Larnaca, Cyprus |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | ||
BILL & MELINDA GATES FOUNDATION | ||
/s/ Vidya Vasu-Devan | ||
Name: | Vidya Vasu-Devan | |
Title: | Director, Strategic Investment Fund |
Address: | P.O. Box 23350 | |
Seattle, WA 98102 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | ||
GREGORY C. CRITCHFIELD, M.D., MS | ||
/s/ Gregory C. Critchfield, M.D., MS | ||
Gregory C. Critchfield, M.D., MS | ||
Address: | 6170 Murdock Woods | |
Holladay, UT 84121 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
INVESTOR: | ||
ATH HOLDING COMPANY, LLC | ||
/s/ Vincent Scher | ||
By: | Vincent Scher | |
Title: | Treasurer |
Address: | ATH Holding Company, LLC | |
c/o Anthem, Inc. | ||
220 Virginia Avenue | ||
Indianapolis, IN 46204 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
KEY HOLDERS: | ||
GREGORY C. CRITCHFIELD, M.D. | ||
Signature: | /s/ Gregory C. Critchfield, M.D. |
By: | Gregory C. Critchfield, M.D. |
Address: | 6170 Murdock Woods | |
Holladay, UT 84121 |
DURLIN E. HICKOK, M.D. | ||
Signature: |
By: | Durlin E. Hickok, M.D. |
Address: | 18009 Couch Market Road | |
Bend, OR 97703 |
ANDREW A. SAUTER | ||
Signature: |
By: | Andrew A. Sauter |
Address: | 3318 Whitehaven Dr. | |
Walnut Creek, CA 94598 |
JAY BONIFACE, PhD | ||
Signature: |
By: | Jay Boniface, PhD |
Address: | 1020 South Douglas Street | |
Salt Lake City, UT 84105 |
DOUGLAS C FISHER, MD | ||
Signature: |
By: | Douglas C Fisher, MD |
Address: | 587 Patrol Road | |
Woodside CA 94062 |
SIGNATURE PAGE TO
FOURTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT
SCHEDULE A
Investors
Blue Ox Healthcare Partners SP, LLC
135 East 57th St. 23rd Floor
New York, NY 10022
BXHCP SP II, LLC
135 East 57th St. 23rd Floor
New York, NY 10022
BXHCP SP III, LLC
135 East 57th St. 23rd Floor
New York, NY 10022
ATH Holding Company, LLC
c/o Anthem, Inc.
220 Virginia Avenue
Indianapolis, IN 46204
Laboratory Corporation of America Holdings
Attn: Law Department
531 S. Spring St.
Burlington, NC 27215
Vaughm2@LabCorp.com
If notice is given, a copy should also be sent to:
Attn: Corporate Development
531 S. Spring St.
Burlington, NC 27215
DP VIII Associates, L.P.
202 Carnegie Center
Suite 104
Princeton, NJ 08540
(609) 683-5656
(609) 683-4581 fax
kraeutler@domainvc.vom
Domain Partners VIII, L.P.
202 Carnegie Center
Suite 104
Princeton, NJ 08540
(609) 683-5656
(609) 683-4581 fax
kraeutler@domainvc.vom
Catalyst Health Ventures, L.P.
50 Braintree Hill Office Park, Suite 301
Braintree, MA 02184
(781) 228-5228
(781) 228-5150 fax
jphillips@catalysthealthventures.com
Catalyst Health Ventures (PF), L.P.
50 Braintree Hill Office Park, Suite 301
Braintree, MA 02184
(781) 228-5228
(781) 228-5150 fax
jphillips@catalysthealthventures.com
Catalyst Health Ventures Follow-On Fund L.P.
50 Braintree Hill Office Park, Suite 301
Braintree, MA 02184
(781) 228-5228
(781) 228-5150 fax
jphillips@catalysthealthventures.com
CHV Investments LLC
50 Braintree Hill Office Park, Suite 301
Braintree, MA 02184
(781) 228-5228
(781) 228-5150 fax
jphillips@catalysthealthventures.com
NI-LPT, LLC
1 Elm Sq., Suite 1B
Andover, MA 01810
InterWest Partners X, L.P.
2710 Sand Hill Road
Suite 200
Menlo Park, CA 94025
Chione Ltd.
Simou Menardou 5, KIFISIA COURT
2nd Floor, Office 225
6015 Larnaca, Cyprus
Osage University Partners I, L.P.
50 Monument Road, Suite 201
Bala Cynwyd, PA 19004
UpStart Life Sciences Capital, L.P.
417 Wakara Way, Suite 3510
Salt Lake City, UT 84108
(801) 505-0636
(801) 505-0631 fax
denny@upstartvc.com
Richard Novak Dynasty Trust
36 Church Street
Greenwich, CT 06830
Gregory C. Critchfield, MD, MS
6170 Murdock Woods Place
Holladay, UT 84121
The Trimble Trust
27342 Lost Colt Drive
Laguna Hills, CA 92653
Deer Ridge Consulting, LLC
P.O. Box 500
20 Johnson Drive
Raritan, NJ 08869
(908) 252-7900
(908) 252-7904
Reed Corry
3316 E Shore Drive
Seattle, WA 98112
(206) 625-1292
Email: reed@allegiant1.com
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
(617) 542-6000
(617) 542-2241 fax
jkravetz@mintz.com
Steven Robert Garen Family Trust
c/o Eric Garen
11355 W. Olympic Blvd.
Los Angeles, CA 90064
Nicole Suzanne Garen Family Trust
c/o Eric Garen
11355 W. Olympic Blvd.
Los Angeles, CA 90064
Amos Madanes
1814 North Orleans St.
Chicago, IL 60614
Deseret Foundation
c/o Lori Piscopo
5121 S. Cottonwood St.
Murray, UT 84157
Maurice J. McSweeney
c/o Foley & Lardner
777 E. Wisconsin Ave.
Milwaukee, WI 53202
Mark Fischer-Colbrie
21211 Rainbow Dr.
Cupertino, CA 95014
Bill and Melinda Gates Foundation
P.O. Box 23350
Seattle, WA 98102
2014 Exchange Place Fund A, LLC
c/o Goodwin Procter LLP
Attn: Finance Department
100 Northern Avenue
Boston, MA 02210
2014 Exchange Place Fund B, LLC
c/o Goodwin Procter LLP
Attn: Finance Department
100 Northern Avenue
Boston, MA 02210
Stephen M. Davis
115 E. 87th Street, Apt. 39F
New York, NY 10128
Kurt Fischer
4192 Bay Beach Lane #892
Fort Myers Beach, FL 33931
SCHEDULE B
Key Holders
Gregory C. Critchfield, MD, MS
6170 Murdock Woods Place
Holladay, UT 84121
Durlin E. Hickok, M.D.
18009 Couch Market Road
Bend, OR 97703
Andrew A. Sauter
3318 Whitehaven Dr.
Walnut Creek, CA 94598
Jay Boniface, PhD
1020 Douglas Street
Salt Lake City, UT 84105
Douglas C Fisher, MD
587 Patrol Road
Woodside, CA 94062
Nadia Altomare
29 Oliver Road
Belmont, MA 02478
Garrett Lam, MD
1864 Mountain Crest Drive
Draper, UT 84020
Exhibit A
Non-Solicitation Agreement
Exhibit 10.8
April 29, 2021
c/o Baker Bros. Advisors LP
860 Washington St. – 3rd fl.
New York, NY 10014
Re: IPO Participation, Board, Observer and [***] Rights
Ladies and Gentlemen:
Subject to and in consideration of the purchase of shares of Series E Preferred Stock, par value $0.0001 per share (the “Preferred Stock”), of Sera Prognostics, Inc., a Delaware corporation (the “Company”), by Baker Bros. Advisors LP (“BBA”) and/or one or more of its Affiliates (as defined below) (each, an “Investor” and together, the “Investors”) pursuant to the terms and conditions of that certain Series E Preferred Stock Purchase Agreement, by and among the Company, the Investors and the other parties named therein, dated as of February 23, 2021 (the “Purchase Agreement”), the parties to this letter hereby agree as follows:
1. Public Offering Participation.
a. In the event that any Investor indicates an interest to purchase shares of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”) in any firm commitment underwritten public offering (each, an “Offering”) of the Company’s capital stock prior to and including an initial public offering resulting in the listing of the Company’s Common Stock on a national securities exchange (a “Qualified IPO”), then, subject to compliance with all applicable securities laws and regulations, the Company will use its commercially reasonable efforts (which must include at least three attempts, on three dates, with at least two representatives of the managing underwriter, including the most senior underwriter personnel devoting substantial time to the applicable Offering, both orally and in writing) to cause the managing underwriter(s) of such Offering to provide to the Investors, on the same terms, including the price per share, and subject to the same conditions, as are applicable to the public in such Offering, the opportunity to purchase that number of shares of capital stock of the Company being issued in such Offering equal to their aggregate Pro Rata Share (as defined below) of the total number of shares offered for sale in such Offering (excluding shares issuable to the underwriter(s) of the Offering upon exercise of an overallotment option to purchase additional shares) (such aggregate Pro Rata Share, the “New Shares”). The Investors may apportion such New Shares in such proportion as they deem appropriate among themselves and any Affiliate.
b. The rights of the Investors to purchase shares in an Offering will be conditioned upon the completion of such Offering. The Company may withdraw its registration statement for an Offering at any time without incurring any liability under this letter to the Investors or any of its Affiliates. Without limiting the foregoing, the rights of the Investors described in clauses (a) through (c) of this Section 1, will terminate and be of no further force or effect upon the earliest to occur of the following: (i) the closing of a Qualified IPO; (ii) such time as the Investors and/or their Affiliates cease to beneficially own (in the aggregate) (A) at least 75% of the Preferred Stock purchased by the Investors (as adjusted for stock splits, recapitalizations and other similar events and including all shares of Common Stock issued upon the conversion of the Preferred Stock to the extent still beneficially owned by the Investors), or (B) shares or other equity securities of the Company representing at least 4% of the Company’s outstanding voting power in an election of directors; and (iii) the closing of a Deemed Liquidation Event (as such term is defined in the Fifth Amended and Restated Certificate of Incorporation of the Company (the “Company Charter”).
[***] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED BECAUSE THE INFORMATION (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED.
2749 East Parleys Way - Suite 200 | Salt Lake City, Utah 84109 | Phone 801.990.0520 | Fax 801.990.0640
c. The Investors hereby acknowledge that, despite the Company’s use of its commercially reasonable efforts, the underwriter(s) for the applicable Offering may determine in its or their sole discretion that it is not advisable to designate the maximum number of shares being issued and sold in such Offering as New Shares, in which case the number of New Shares may be reduced or no New Shares may be designated. The Investors also acknowledge that notwithstanding the terms hereof, the sale of any New Shares to any Person will only be made in compliance with FINRA Rules 5110 and 5130 and applicable federal, state, and local laws, rules, and regulations and stock exchange rules, regulations and listing requirements. The Company hereby acknowledges that nothing in this letter constitutes an offer or the commitment by any Person to purchase any New Shares in any Offering. The Company and the Investors further acknowledge and agree that any New Shares shall be excluded from and shall not be subject to the “Market Stand-Off Agreement” as provided in Section 2.11 of the Investor Rights Agreement (defined below).
d. The Company shall not, either directly or indirectly or by amendment, merger, consolidation or otherwise, authorize, approve, or adopt any “evergreen” option plan or other equity incentive plan of the Company or any of its subsidiaries pursuant to which the number of shares of Common Stock of the Company available for equity awards thereunder would increase automatically (without further stockholder approval) on an annual basis by an amount that exceeds 4% of the total number of shares of Common Stock then issued and outstanding (calculated on a fully diluted basis). The rights set forth in this clause (d) of Section 1 shall terminate and be of no further force or effect immediately upon such time as the Investors and/or their Affiliates cease to collectively own beneficially (i) whether prior to or after a Qualified IPO, at least 75% of the aggregate number of shares of the Preferred Stock purchased by the Investors (as adjusted for stock splits, recapitalizations and other similar events and including all shares of Common Stock issued upon the conversion of the Preferred Stock to the extent still beneficially owned by the Investors) or (ii) if after a Qualified IPO, at least 4% of the then-outstanding total voting power of the Company.
2. Registration Rights. [***].
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3. Board Rights.
a. From and after the closing of a Qualified IPO, at any time (and from time to time) that the Investors and/or their Affiliates collectively own beneficially shares or other equity securities of the Company representing at least 4% of the then-outstanding total voting power of the Company, the Investors shall collectively be entitled to nominate one individual (an “Investor Designee”) to serve as a director on the Board of Directors of the Company (the “Board”) provided, in the event that the Investors do not exercise such right such that they nominate an Investor Designee to serve as a director immediately following the closing of the Qualified IPO (which right must be exercised not less than twenty-one (21) days in advance of the closing of the Qualified IPO), the Investors shall not exercise such right until after the 90th day following the closing date of the Qualified IPO). The Company shall include the Investor Designee in the slate of nominees recommended to the Company’s stockholders for election as directors of the Company at each annual or special meeting of the Company’s stockholders at which directors are to be elected and every adjournment or postponement thereof (including, for the avoidance of doubt, every action or approval by written consent of the stockholders of the Company or the Board in lieu of such meeting) (an “Election Meeting”). The Company will recommend, support and solicit proxies for the election of the Investor Designee in the same manner as for all other Board members nominated for election. The Investors will provide to the Company, in writing, the information about the Investor Designee that is reasonably required by applicable law for inclusion in the Company’s proxy materials for Election Meetings promptly after the Company requests such information from the Investors, and will cause such Investor Designee to submit on a timely basis to the Company a completed and executed questionnaire in the form that the Company provides to its outside directors generally.
b. In the event that an Investor Designee fails to be elected for any reason, or resigns from his or her seat on the Board or is removed or otherwise ceases to be a director (whether as a result of his or her death, disability, disqualification, or otherwise), the Investors shall be entitled to promptly designate another Investor Designee and the Company will take all necessary and desirable actions within its control such that (i) the resulting vacancy on the Board shall not be filled pending such designation or (ii) the size of the Board shall be increased by one and the Company will, as promptly as practicable but in no event more ten days following such designation, take all necessary and desirable actions within its control such that such vacancy shall be filled with such successor Investor Designee.
c. For so long as the Investors’ rights under this Section 3 remain in effect, the Board will not create any “executive committee” of the Board, or delegate to any existing committee or subsidiary’s governing body, responsibilities substantially similar to those of an executive committee, without including the then-current Investor Designee, if any, thereon.
d. Notwithstanding the provisions of Section 3(a), the Investors shall not be entitled to designate any individual as a nominee to the Board if a majority of the disinterested members of the Board (or the nominating committee thereof) reasonably and in good faith determine, (i) after consultation with the Company’s outside legal counsel and upon written advice of such counsel, that such person would not be qualified to serve as a director of the Company under any applicable law (including requirements of fiduciary duties under applicable law), rule or regulation, rule of the stock exchange on which the Company’s shares are listed, the organizational documents of the Company, or any policy, or guidelines previously approved by the Board, but only if a direct or indirect purpose of any such policy or guideline is not to obstruct the Investors’ right to designate an individual as a nominee to the Board or its rights under this letter, or (ii) that such person is an employee or director of a competitor of the Company (provided, no senior employee of BBA or its Affiliates shall be subject to exclusion pursuant to this clause (ii) as a result of such person’s participation on any board of directors in connection with investments by BBA or its Affiliates). Notwithstanding anything set forth herein to the contrary, a person’s status as a director, officer, employee or affiliate of any Investor or such person’s service on the board of any other company shall not cause such person to be deemed not qualified to serve as a director of the Company, except as required by applicable law or regulation pursuant to clause (i) of the preceding sentence. In the event the Board (or the nominating committee thereof) does not accept an Investor Designee as a result of such Investor Designee failing to meet the requirements set forth in this Section 3(d), the Investors shall have the right to recommend another Investor Designee in accordance with Section 3(a). The Company shall notify the Investors of any objection to an Investor Designee pursuant to this Section 3(d) sufficiently in advance of the date on which the proxy materials related to any such designee are to be mailed by the Company in connection with such election of directors so as to enable the Investor to propose a replacement Investor Designee in accordance with the terms of this letter.
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e. The rights set forth in this Section 3 shall terminate and be of no further force or effect immediately upon such time as the Investors and/or their Affiliates cease to collectively own beneficially at least 75% of the aggregate number of shares of the Preferred Stock purchased by the Investors (as adjusted for stock splits, recapitalizations and other similar events and including all shares of Common Stock issued upon the conversion of the Preferred Stock to the extent still beneficially owned by the Investors).
4. Observer Rights.
a. At any time prior to or after a Qualified IPO that an Investor Designee is not a member of the Board, the Company shall invite a single representative of the Investors (a “BBA Observer”), as designated by the Investors from time to time, to attend and participate in all meetings of the Board, in a nonvoting observer capacity. In this respect, the Company shall give the BBA Observer (i) written notice of, agendas and participation details for such meetings and (ii) copies of all notices, minutes, consents, and other materials, in each case, that it provides to the members of the Board, as applicable, at the same time and in the same manner as provided to such members; provided, however, that the Company reserves the right to withhold any information and to exclude the BBA Observer from any meeting or portion thereof if (1) the Board determines in good faith and based upon the advice of outside counsel that access to such information or attendance at such meeting could (x) adversely affect the attorney-client privilege between the Company and its counsel or (y) result in a conflict of interest, or (2) the Board of Directors reasonably determines in good faith that the BBA Observer or an Affiliate of such BBA Observer is a competitor of the Company (provided, no senior employee of BBA or its Affiliates shall be subject to exclusion pursuant to this clause (2) as a result of such person’s participation on any board of directors in connection with investments by BBA or its Affiliates) and the Board of Directors provides the BBA Observer advanced written notice that access to such information or attendance at such meeting are being withheld or denied, as the case may be, pursuant to this Section 4(a) (and the reason therefore).
b. Except as provided in Section 4(c) below, the BBA Observer shall not, by virtue of his or her capacity as such, have or be deemed to have, or otherwise be subject to, any duties (fiduciary or otherwise) to the Company or any of its Affiliates or subsidiaries or its or their respective equityholders or any other Person or any duties (fiduciary or otherwise) otherwise applicable to the members of the Board.
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c. With respect to the BBA Observer, the Company’s obligations under this Section 4 are contingent upon such BBA Observer’s (i) entering into a confidentiality agreement with the Company and BBA in the form attached hereto as Exhibit B and (ii) agreeing, solely in such individual’s capacity as a BBA Observer, to be bound by the Company’s insider trading and window policies then in effect and applicable to members of the Board.
d. The rights set forth in this Section 4 shall terminate and be of no further force or effect immediately upon such time as the Investors and/or their Affiliates cease to collectively own beneficially (i) whether prior to or after a Qualified IPO, at least 75% of the aggregate number of shares of the Preferred Stock purchased by the Investors (as adjusted for stock splits, recapitalizations and other similar events and including all shares of Common Stock issued upon the conversion of the Preferred Stock to the extent still beneficially owned by the Investors) or (ii) if after a Qualified IPO, at least 4% of the then-outstanding total voting power of the Company.
5. No Publicity. [***], except that the Company may make any such disclosure if, upon the advice of counsel, there is no alternative to such disclosure because it is required by applicable law, rule or regulation (including the rules of the SEC, FINRA or the stock exchange on which the Common Stock is listed) [***]. [***]; provided, however, that the Company may disclose the name of the Investors in connection with the provision of any details regarding the Purchase Agreement and the other agreements executed by Company and the Investors in connection with the Preferred Stock financing and the transactions contemplated thereby, and to any of its executive officers, directors, accountants, counsel, underwriters, and financial advisors with a need to know such information, provided that such recipient agrees to abide by the foregoing confidentiality obligations or is subject to confidentiality obligations that are substantially at least as restrictive. [***].
6. Indemnification. The Company shall enter into a customary indemnification agreement with any Investor Designee that is elected a member of the Board, in substantially the form as entered into between the Company and the other members of the Board in the ordinary course of business.
7. [***].
8. Definitions. When used in this letter, the following terms shall have the meanings assigned to them in this Section 8:
a. “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities or otherwise.
b. “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder from time to time.
c. “Person” means any individual, corporation, partnership, limited liability company, trust, unincorporated association, governmental entity or other legal entity.
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d. “Pro Rata Share” means the greater of (i) 10% and (ii) the percentage determined by dividing (A) the number of shares of Common Stock (including all shares of Common Stock issuable or issued upon conversion of the shares of the Preferred Stock and any other outstanding securities of the Company convertible or exercisable in exchange for shares of Common Stock) collectively owned beneficially by such Investors immediately prior to the Offering by (B) the total number of shares of outstanding Common Stock (including all shares of Common Stock issued or issuable upon conversion of all outstanding shares of Preferred Stock, any other outstanding securities of the Company convertible or exercisable in exchange for shares of Common Stock and all shares reserved for future issuance pursuant to any equity incentive or similar plan) immediately prior to the Offering, in each case, excluding shares issuable to the underwriter(s) of the Offering upon exercise of an overallotment option to purchase additional shares.
9. Amendments; Waiver; Entire Agreement. This letter may not be amended or modified in any manner except by a written instrument signed by the Investors and the Company. Any waiver of any term or condition shall be in writing executed by the party entitled to waive such term or condition. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this letter. The failure of either party to assert any of its rights hereunder shall not constitute a waiver of such rights. This letter (including the Exhibits hereto), together with the Purchase Agreement and the other transaction documents entered into in connection therewith (including, for the avoidance of doubt, the Investor Rights Agreement and the Fourth Amended and Restated Voting Agreement, dated as of February 23, 2021, by and between the Company, the Investors, and the other Investors party thereto), constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled. This letter amends, restates and supersedes in all respects the letter agreement, dated as of March 29, 2021, by and between the Company and BBA.
10. Assignment. No party may assign this letter or any of its rights, interests or obligations hereunder without the prior written consent of the other parties, and any purported assignment by a party without prior written consent of the other parties will be null and void and not binding on such other party; provided, however, that notwithstanding the foregoing, an Investor may assign this letter or any of its rights, interests or obligations hereunder to its Affiliates. Subject to the preceding sentence, all of the terms, agreements, covenants, representations, warranties and obligations of this letter are binding upon, and inure to the benefit of and are enforceable by, the parties and their respective successors and assigns.
11. Governing Law; Jurisdiction. This letter shall be governed by the laws of the State of Delaware, without regard to conflict of law principles. The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of the State of Delaware and to the jurisdiction of the United States District Court for the District of Delaware for the purpose of any suit, action or other proceeding arising out of or based upon this letter, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this letter except in the state courts of the State of Delaware or the United States District Court for the District of Delaware, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this letter or the subject matter hereof may not be enforced in or by such court.
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12. WAIVER OF JURY TRIAL. EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LETTER OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS LETTER, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION 12 HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
13. Notices. All notices under this letter must be in writing and given by personal delivery, by United States Express Mail or a nationally recognized overnight delivery service for next day delivery, or by electronic mail, as follows (or to such other Person or address as any party may give in a notice given in accordance with the provisions hereof):
If to the Company:
Sera Prognostics, Inc.
2749 E Parleys Way, Suite 200
Salt Lake City, UT 84109
Attn: Gregory C. Critchfield, M.D., M.S.
Email: gcritchfield@seraprognostics.com
with a copy (which shall not constitute notice) to:
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attn: Jonathan L. Kravetz
Email: JLKravetz@mintz.com
If to the Investors:
c/o Baker Bros. Advisors LP
860 Washington St. – 3rd fl.
New York, NY 10014
Email: [***]
with a copy (which shall not constitute notice) to:
[***]
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Notice will be effective and deemed given only as follows: (a) if given by personal delivery, up-on such personal delivery, (b) if sent for next day delivery by United States Express Mail or overnight delivery service, on the date of delivery as confirmed by written confirmation of delivery, or (c) if sent by electronic mail, upon acknowledgement of receipt other than by automatic means.
14. Equitable Relief; Remedies. The Company acknowledges and agrees that the Investors may be damaged irreparably and may not have an adequate remedy at law if any provision of this letter is not performed in accordance with its specific terms or is otherwise breached. Accordingly, in addition to any other remedy to which the Investors may be entitled, at law or in equity, the Investors will be entitled to seek an injunction or injunctions to prevent breaches or threatened breaches of the provisions of this letter and to seek to enforce specifically this letter and its provisions, without bond or other security being required and without any proof of actual damages. The rights, obligations and remedies created by this letter are cumulative and in addition to any other rights, obligations or remedies otherwise available at law or in equity. Nothing herein will be considered an election of remedies or a waiver of the right to pursue any other right or remedy to which the Investors may be entitled.
15. Headings; Construction. The section headings contained in this letter are inserted for convenience only and will not affect in any way the meaning or interpretation of this letter. Except as otherwise expressly provided herein, the following rules of interpretation apply hereto: (i) the singular includes the plural and vice versa; (ii) “or” and “any” are not exclusive; (iii) “includes,” “include,” “included” and “including” are deemed to be followed by “without limitation”; and (iv) the words “hereby,” “herein,” “hereunder,” “hereof” and words of similar import refer to this letter as a whole and not merely to the specific section or clause in which any such word appears. No presumption or burden of proof shall arise favoring or disfavoring a party by virtue of the authorship of any provision of this letter.
16. Counterparts. This letter may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same instrument. This letter will become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. The exchange of copies of this letter and of executed signature pages by facsimile transmission or by electronic mail in “portable document format” (“.pdf”) or by a combination of such means, will constitute effective execution and delivery of this letter as to the parties and may be used in lieu of an original letter for all purposes. Signatures of the parties transmitted by facsimile or by .pdf shall be deemed to be their original signatures for all purposes.
17. Severability. The provisions of this letter will be deemed severable and the invalidity or unenforceability of any provision will not affect the validity or enforceability of the other provisions hereof.
[Signature Page Follows]
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Very truly yours, | ||
SERA PROGNOSTICS, INC. | ||
By: | /s/ Gregory C. Critchfield, M.D., M.S. | |
Name: Gregory C. Critchfield, M.D., M.S. | ||
Title: President and Chief Executive Officer |
AGREED AND ACCEPTED: | |
Baker Bros. Advisors LP | |
By:
[***] Name: [***] Title: [***] |
Exhibit A
[***]
Exhibit B
[***]
Exhibit 10.16
FINAL
SERA PROGNOSTICS, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is effective for all purposes as of April 13, 2021 (the “Effective Date”), by and between Sera Prognostics, Inc., a Delaware corporation (the “Company”), and Benjamin Jackson (the “Employee”).
NOW, THEREFORE, in consideration of the mutual covenants, conditions and undertakings set forth herein, the parties hereto hereby agree as follows:
1. Employment and Duties. Subject to the terms and conditions set forth in this Agreement, the Company shall employ Employee, and Employee hereby accepts employment, as the General Counsel of the Company, with those duties and responsibilities which are appropriate and customary for a general counsel of a company similar to the Company. In such capacity, the Employee shall report to the Company’s Chief Executive Officer. During the term of this Agreement, the Employee shall faithfully perform the Employee’s duties, responsibilities and obligations hereunder.
2. Base Compensation and Related Matters.
(a) Salary. In consideration for the services rendered by the Employee to the Company as provided herein, the Company shall pay the Employee an annual base salary of $310,000 per year (the “Base Salary”), provided that the Employee’s employment with the Company remains active at a full-time rate. The Base Salary shall be paid according to the Company’s standard payroll policy and will be subject to applicable federal and state tax withholdings as required by applicable law. The Base Salary may be increased or decreased at any time by the Company’s Board of Directors (the “Board”) or the Compensation Committee of the Board in its sole discretion.
(b) Stock Option Grant(s) and Bonuses. Subject to Board of Directors approval, the Employee shall be granted as soon as practicable on or after the Effective Date an option to purchase 404,000 shares of the Company’s common stock (the “Option”) (which option shall be issued as an incentive stock option to the maximum extent allowed under Section 422 of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder (the “Code”)) pursuant to the Company’s 2011 Employee, Director and Consultant Equity Incentive Plan (the “Plan”). The Option shall vest as to twenty-five percent (25%) of the shares subject thereto one (1) year from the Effective Date (“Vesting Start Date”), and shall vest with respect to the remaining shares subject thereto in equal monthly installments over an additional thirty-six (36) months thereafter commencing on the first day of the month following the Vesting Start Date, subject to continued employment by the Company. In addition, the Option shall accelerate with respect to thirty-seven and one-half percent (37.5%) of the outstanding unvested shares at that time then subject thereto upon a Change of Control (as defined in the Plan) pursuant to which the Option is terminated pursuant to Section 24(b)(ii) of the Plan or cashed out pursuant to Section 24(b)(iii) of the Plan. The Employee shall be eligible, after the Effective Date, to receive (i) additional stock options pursuant to the Plan, and (ii) additional bonus compensation, as determined by the Board, in its sole discretion; it being the intention of the Board to maintain Employee’s aggregate compensation at levels appropriate and customary to those of companies similar in industry, stage and circumstances to that of the Company. Unless otherwise approved by the Board, all future options granted to the Employee after the Effective Date shall vest in equal monthly installments over a period of forty-eight (48) months from the date of grant. Notwithstanding the foregoing, in the event that the Employee’s employment with the Company is terminated by the Company without Cause (as defined in Section 5(a)(iii) below) or by the Employee for Good Reason (as defined in Section 5(b)(ii) below), then the vesting of all options held by the Employee at the time of the termination shall accelerate (i) with respect to thirty-seven and one-half percent (37.5%) of the unvested shares subject thereto, or (ii) if such termination occurs within 30 days prior to or within 12 months after a Change of Control (as defined in the Plan), with respect to one hundred percent (100%) of the unvested shares subject thereto. You will be eligible to participate in the Company’s Annual Incentive Plan, which currently provides for a bonus target of 30% of your base salary, prorated for time of service, and with respect to the calendar year ending December 31, 2021, payment will be contingent based on achievements mutually agreed by you and your supervisor.
(c) Expenses. The Employee will be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee (which are eligible for reimbursement under the Code) actually incurred by him in performing his duties; provided; however, that such expenses are approved in accordance with the Company’s then-current policies and procedures applicable to the most senior-level executive employees of the Company, other than the Employee, or if such policies and procedures are not in place, then as determined in the sole discretion of the Board.
(d) Employee Benefits. Upon beginning his employment with the Company, the Employee will be entitled to participate in the group health, dental, vision, and group life insurance benefit plans, as well as the Company’s 401(k) and Flexible Spending Account Plans available to all Company employees. In addition, the Employee is entitled to participate in any employee benefit plans that the Company may make available to its most senior-level executive employees generally, which may include but not be limited to, profit sharing plans, 401(k) and cafeteria plans, or life, hospitalization, optical, disability, or other insurance plans as may be in effect, from time to time, and in accordance with rules established, from time to time, for individual participation in such plans.
(e) Paid Time Off. Upon beginning his employment with the Company, the Employee will be entitled to take five (5) weeks of paid time off per calendar year and shall be entitled to compensation in connection therewith, in accordance with Company policy applicable to senior-level executive employees of the Company, as approved by the Chief Executive Officer in its sole discretion. Paid time off accrues on a semi-monthly basis starting on date of hire. A maximum of 120 hours are allowed to roll over to the next calendar year. The Company will pay out all unused, accrued paid time off upon the Employee’s separation from the Company.
3. Facilities and Services Furnished. The Company will furnish the Employee with office space at its headquarters in Salt Lake City, Utah, and such other facilities, furniture, equipment and services as it may determine to be reasonably necessary for the performance of the Employee’s duties as set forth herein.
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4. Termination.
(a) Termination by the Company. The Employee’s employment hereunder may be terminated by the Company under any of the following circumstances:
(i) Death. This Agreement shall automatically terminate upon the Employee’s death.
(ii) Disability. The Company may elect to terminate the Employee’s employment in the event of Employee’s Disability upon delivery of written notice to the Employee. For purposes of this Agreement, “Disability” shall mean any condition that, in the reasonable, good faith judgment of a licensed physician selected by the Company, causes the Employee to be unable, after any accommodation required by applicable law, to perform his duties, responsibilities and obligations under this Agreement for a period of at least twelve (12) months.
(iii) Cause. The Company may terminate the Employee’s employment hereunder for Cause (as defined below) at any time upon delivery of written notice to the Employee. For purposes of this Agreement, “Cause” shall mean (A) the conviction of the Employee by a court of competent jurisdiction of any felony involving dishonesty, breach of trust or misappropriation or the entering of a plea by the Employee of nolo contendre thereto; (B) the Employee’s willful failure or refusal to follow reasonable and lawful directives of the Board or the Company’s Chief Executive Officer, provided such failure or refusal continues after the Employee’s receipt of reasonable notice in writing of such failure or refusal and an opportunity of not less than thirty (30) days to correct the problem; (C) a material breach by the Employee of any of the provisions of this Agreement, with notification of such breach by the process outlined Section 5(a)(iii)(B) above; or (D) the Employee’s commission of any immoral or illegal act or any gross or willful misconduct, where a majority of the non-employee members of the Board reasonably determines that such act or misconduct has (1) seriously undermined the ability of the Board to entrust Employee with important matters or otherwise work effectively with Employee, (2) contributed to the Company’s loss of significant revenues or business opportunities, or (3) significantly and detrimentally affected the business or reputation of the Company or any of its subsidiaries.
(iv) Other Termination. The Company may terminate Employee’s employment with the Company at any time and for any reason, with or without cause, subject to the provisions hereof. Employee acknowledges that Employee is, and at all times shall be, an employee at will of the Company and nothing contained herein shall be construed to alter or affect such employee at-will status. Employee may terminate his employment with the Company at any time, for any or no reason, subject to the provisions hereof. Inclusion under any benefit plan or compensation arrangement will not give Employee any right or claim to any benefit hereunder except to the extent such right has become fixed under the express terms of this Agreement.
(b) Termination by the Employee. The Employee may terminate the Employee’s employment with the Company under the following circumstances:
(i) Voluntary Termination. Employee may terminate his employment with the Company for any reason or no reason, upon delivery of written notice to the Company at least fifteen (15) days prior to the specified termination date.
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(ii) Termination for Good Reason. The Employee also may terminate the Employee’s employment with the Company for “Good Reason,” which shall mean for purposes of this Agreement (A) a material breach by the Company of any of the provisions of this Agreement; (B) assignment of Employee to a role, duties or responsibilities materially inconsistent with that of senior executive management; (C) any circumstances caused by the Company that would require Employee to move his principal location of employment in excess of one hundred (100) miles from the Company’s principal business location in Salt Lake City, Utah; or (D) an involuntary material reduction of Employee’s then current Base Salary other than a reduction proportionately affecting all of the Company’s other senior-level executive employees. The Employee must provide the Company with a written Notice of Termination that describes the existence of the condition the Employee believes gives rise to Good Reason under this Section 5(b)(ii) within thirty (30) days following the initial existence of the condition. The Company may elect to cure any condition giving rise to Good Reason within thirty (30) days of receipt of notice. The Employee’s termination for Good Reason must, in any event, occur within the six (6) month period immediately following the initial existence of the condition giving rise to Good Reason.
(c) Effect of Termination. In the event the Employee’s employment is terminated, all obligations of the Company and the Employee under this Agreement shall cease, except that the accelerated vesting of Options set forth in Section 2(b) and the terms of Section 6 through Section 9 shall survive such termination. Upon such termination, the Employee or the Employee’s representative or estate shall be entitled to receive the applicable compensation, benefits and reimbursements set forth in Section 5. The Employee acknowledges that, upon termination of the Employee’s employment, the Employee is entitled to no other compensation, severance or other benefits other than those specifically set forth in Section 5.
5. Compensation and Benefits Upon Termination of Employment. At all times after the Effective Date, the Employee shall be entitled to receive additional compensation and benefits upon a termination of Employee’s employment as follows:
(a) Severance Pay. If either (i) the Company terminates the Employee’s employment for any reason other than Cause, death or Disability or (ii) the Employee terminates his employment for Good Reason; then, on the sixtieth (60th) day following the termination of employment, the Company shall pay the Employee a lump sum amount equal to six (6) months of the Base Salary at the rate in effect at the time of the termination of employment. If the Company terminates the Employee’s employment due to death or Disability and (y) the Company does not provide any disability or life, as applicable, insurance benefits payable to the Employee or his beneficiaries, as applicable, upon his death or Disability and (z) the Company has previously, but not necessarily in the then applicable calendar year, achieved Ten Million Dollars in annual gross revenue in a calendar year, then, on the sixtieth (60th) day following the termination of employment due to death or Disability, the Company shall pay the Employee a lump sum amount equal to six (6) months of the Base Salary at the rate in effect at the time of the termination of employment.
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(b) Health Insurance. If, while participating in the Company’s group health insurance plan(s), either (i) the Company terminates the Employee’s employment for any reason other than Cause, death or Disability or (ii) the Employee terminates his employment for Good Reason, and if the Employee elects to continue his health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following the termination of his employment, then the Company shall pay the portion of the Employee’s monthly premium under COBRA until the earliest of (x) the close of the twelve (12) month period following the Employee’s termination date, (y) the expiration of the Employee’s continuation coverage under COBRA or (z) the date when the Employee receives health insurance coverage in connection with new employment. If the payment of any COBRA or health insurance premiums would otherwise violate the nondiscrimination rules or cause the reimbursement of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education Reconciliation Act of 2010 (collectively, the “Act”) or Section 105(h) of the Code, the Company paid premiums shall be treated as taxable payments and be subject to imputed income tax treatment to the extent necessary to eliminate any discriminatory treatment or taxation under the Act or Section 105(h) of the Code.
(c) General Release. Any other provision of this Agreement notwithstanding, subsections (a) and (b) above shall not apply unless the Employee has (i) executed a general release of all claims (in a form prescribed by the Company), which must be effective and irrevocable prior to the sixtieth (60th) day following the termination of employment, (ii) returned all property of the Company in the Employee’s possession and (iii) cooperated in good faith with the Company for a transition period not to exceed sixty (60) days to ensure an efficient transfer of the Employee’s duties and responsibilities.
6. Non-Competition; Non-Solicitation. The Employee and the Company hereby acknowledge and agree that in connection with the employment of the Employee, the Employee has been and will be provided with trade secrets of the Company and that the Employee and the Company are entering into this Agreement for the protection of such trade secrets. The Employee agrees to abide by the provisions set forth in this Section 6.
(a) Non-Competition. The Employee shall not, during his employment with the Company and during the one (1) year period following the termination of his employment with the Company (the “Restrictive Period”) directly or indirectly, as a manager, member, promoter, shareholder, agent, representative, director, officer, owner, independent contractor or otherwise, or in connection with any of his consultants, employees, agents, partners, relatives, affiliates or representatives or through any third party:
(i) anywhere in the world (the “Restricted Area”) compete with or own, manage, operate or control any business that directly competes in the Company’s field of interest or products in the active development pipeline of the Company (for purposes of this paragraph, ownership of securities of not in excess of one percent (1%) of the outstanding capital stock of a public company shall not be considered to be competition with the Company); or
(ii) anywhere in the Restricted Area, act as an employee, director, officer, manager, member, advisor, consultant, representative or agent for any business of the type and character engaged in and competitive with the Company.
(b) Non-Solicitation. The Employee shall not, during the Restrictive Period directly or indirectly, as a manager, member, promoter, shareholder, agent, representative, director, officer, owner, independent contractor or otherwise, or in connection with any of his consultants, employees, agents, partners, relatives, affiliates or representatives or through any third party, solicit the employment of or hire any current employee of the Company, or solicit a relationship with any customer of the Company, located anywhere in the Restricted Area.
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(c) Definitions. For purposes of this Section 6, the terms “compete with the Company,” “competitive with the Company,” “field of interest” and similar terms referring to competition with the Company shall mean any business that is engaged in identifying and commercializing biomarkers in blood samples of pregnant women which are predictive of preterm birth and other pregnancy complications or any other anticipated business ventures of the Company which have been discussed with the Board or amongst the senior-level executive employees as of the date of Employee’s termination.
7. Maintaining Confidential Information.
(a) Company Confidential Information. The Employee hereby agrees at all times during which he provides services as a director, officer, employee or consultant of the Company (“Employee’s Service”), and thereafter to hold in strictest confidence, and not to use, except for the benefit of the Company, any trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, formulas, developmental or experimental work, computer lists, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its clients, consultants or licensees (collectively “Confidential Information”).
Notwithstanding the above, Employee shall not have liability to the Company with regard to any Confidential Information which Employee can prove:
(i) was in the public domain at the time it was disclosed by the Company or has entered the public domain through no fault of Employee;
(ii) was known to the Employee without restriction, at the time of disclosure, as demonstrated by files in existence at the time of disclosure;
(iii) is disclosed with the prior written approval of the Company;
(iv) becomes known to Employee, without restriction, from a source other than the Company without breach of this Agreement by Employee and otherwise not in violation of the Company’s rights; or
(v) is disclosed pursuant to the order or requirement of a court, administrative agency, or other governmental body; provided, however, that Employee shall provide prompt notice of such court order or requirement to the Company to enable the Company to seek a protective order or otherwise prevent such disclosure.
(b) Former Employer Information. The Employee hereby agrees that he will not, during Employee’s Service, improperly use or disclose any proprietary information or trade secrets of his former or concurrent employers or companies, if any, and that he will not make available to the Company any unpublished document or any property belonging to his former or concurrent employers or companies, if any, unless consented to in writing by said employers or companies.
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(c) Third-Party Information. The Employee recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. The Employee hereby agrees, during Employee’s Service and thereafter, to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation (except as necessary in carrying out his work for the Company consistent with the Company’s agreement with such third party) or to use it for the benefit of anyone other than the Company or such third party (consistent with the Company’s agreement with such third party) without the express written authorization of the Board.
(d) Outside Activities. During the Employee’s employment with the Company, the Employee shall not perform consulting/business activities beyond those disclosed in Exhibit A, without prior written consent of the Company’s Board of Directors Compensation Committee.
8. Availability of Equitable Remedies. The Employee hereby acknowledges and agrees that a breach of Section 6 or Section 7 will cause irreparable harm and damage to the Company, that the remedy at law for the breach or threatened breach of Section 6 or Section 7 will be inadequate, and that, in addition to all other remedies available to the Company for such breach or threatened breach (including, without limitation, the right to recover damages), the Company will be entitled to injunctive relief for any breach or threatened breach of Section 6 or Section 7.
9. Miscellaneous.
(a) Notification of New Employer. In the event that the Employee leaves the employ of the Company, he hereby grants consent to notification by the Company to his new employer about his rights and obligations under this Agreement.
(b) Severability. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any statute or public policy, then only the portions of this Agreement which violate such statute or public policy shall be stricken. All portions of this Agreement which do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms to give as much effect as possible to the intentions of the parties under this Agreement.
(c) Notices. Any notices, requests or consents hereunder shall be deemed given, and any instrument delivered, three (3) days after they have been mailed by first class mail, postage prepaid, one (1) day after they have been delivered by overnight courier, twelve (12) hours after such notice has been sent by facsimile, or upon receipt if delivered personally, as follows:
To the Company:
2749 Parleys Way, Suite 200
Salt Lake City, UT 84109
To the Employee:
2863 East Oquirrh Drive
Salt Lake City, UT 84108
except that any of the foregoing may, from time to time, by written notice to the others, designate another address or fax number which shall thereupon become his or its effective address for the purposes of this Section 9(c).
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(d) Governing Law. This Agreement shall be governed by the laws of the State of Utah, without giving effect to its conflict of laws principles.
(e) Successors and Assigns. The rights and obligations of the Company under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Company. This Agreement is for the unique personal services of the Employee, and the Employee shall not be entitled to assign any of the Employee’s rights or obligations hereunder.
(f) Entire Agreement; Amendment. This Agreement constitutes the entire agreement and understanding between the parties hereto with respect to the subject matter of this Agreement, and supersedes all other prior agreements and understandings with respect thereto. This Agreement can be amended or modified only in a writing signed by the Employee and the Company.
(g) No Waiver. No waiver by either party at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by the other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same time or any prior or subsequent time.
(h) Headings. The headings herein contained are for reference only and shall not affect the meaning or interpretation of any provision of this Agreement.
(i) 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 will constitute one and the same instrument.
(j) Costs and Expenses. The Company shall reimburse all of the Employee’s reasonable costs and expenses (including, without limitation, attorneys’ fees), incurred in connection with the negotiation and preparation of this Agreement.
(k) Attorneys’ Fees. In the event of any action at law, equity or under this Agreement to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees and court costs in addition to any other relief to which such party may be entitled, unless the action is one in which only a prevailing plaintiff is entitled to prevailing party fees and costs (such as a Title VII action).
(l) Section 409A. The Company intends that the cash severance payments to which the Employee is entitled on his termination of employment pursuant to Section 5 are payable on the Employee’s Separation from Service (as defined below) and are exempt from, or are otherwise payable in compliance with Section 409A. The Company intends that the Company’s continued payment for the cost of the Employee’s welfare benefits (including the payment of all COBRA administrative costs and expenses) provided by Section 5 will comply with the exception to Section 409A for reimbursements and certain other separation payments, as described in Treas. Reg. § 1.409A-1(b)(9)(v)(B), to the extent such costs are taxable and subject to imputed income treatment.
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(i) Separation from Service Defined. For purposes of this Agreement, the term “termination of employment” means the Employee’s “Separation from Service.” The term “Separation from Service” means (A) the termination of the Employee’s employment with the Company and all affiliates for any reason or (B) a permanent reduction in the level of bona fide services the Employee provides to the Company and all affiliates to an amount that is twenty percent (20%) or less of the average level of bona fide services the Employee provided to the Company and all affiliates in the immediately preceding thirty-six (36) months (or the entire time period during which the Employee provided services to the Company and all affiliates if the Employee has been providing such services for less than thirty-six (36) months), with the level of bona fide service calculated in accordance with Treas. Reg. § 1.409A-1(h)(1)(ii). Solely for purposes of determining whether an organization is an “affiliate” of the Company, the Company will follow the rules set forth in Treas. Reg. § 1.409A-1(h)(3) (which generally requires fifty percent (50%) common ownership or control). The Employee’s employment relationship is treated as continuing while the Employee is on military leave, sick leave, or other bona fide leave of absence (if the period of such leave does not exceed six (6) months; or, if longer, so long as the Employee’s right to reemployment with the Company or an affiliate is provided either by statute or contract). If the Employee’s period of leave exceeds six (6) months and his right to re-employment is not provided either by statute or by contract, the employment relationship is deemed to terminate on the first day immediately following the expiration of such six (6) month period. Whether a termination of employment has occurred will be determined based on all of the facts and circumstances and in accordance with regulations issued by the United States Treasury Department pursuant to Section 409A of the Code.
(ii) Delay in Payments. Notwithstanding any provision of this Agreement to the contrary, if any of the severance payments are subject to Section 409A and the Employee is a “Specified Employee” at the time of his Separation from Service, no payments shall be made to the Employee prior to the first business day following the date which is six (6) months after the Employee’s Separation from Service. Any amounts that would have been paid during the six (6) months following the Employee’s Separation from Service will be paid on the first business day following the expiration of the six (6) month period without interest thereon. The Employee may not elect the taxable year of such payment. The six (6) month delay for a Specified Employee does not apply if the Employee dies.
(iii) Specified Employee Defined. For purposes of this Agreement, the term “Specified Employee” means certain officers and highly-compensated employees of the Company as defined in Treas. Reg. 1.409A-1(i), and as determined in accordance with such procedures as may be adopted from time to time by the Company.
(iv) Miscellaneous Payment Provisions. If payment is not made, in whole or in part, due to a dispute between the Employee and the Company, the payments shall be made in accordance with Treas. Reg. § 1.409A-3(g), as applicable. It is intended that each installment of the payments and benefits provided under Section 5 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. If an expense reimbursement or provision of in-kind benefit provided pursuant to this Agreement is not exempt from Section 409A of the Code, the following rules apply: (A) in no event shall any reimbursement be paid after the last day of the taxable year following the taxable year in which the expense was incurred; (B) the amount of reimbursable expenses incurred or provision of in-kind benefits in one tax year shall not affect the expenses eligible for reimbursement or the provision of in-kind benefits in any other tax year; and (C) the right to reimbursement for expenses or provision of in-kind benefits is not subject to liquidation or exchange for any other benefit.
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(v) Ban on Acceleration or Deferral. Under no circumstances may the time or schedule of any payment made or benefit provided pursuant to this Agreement be accelerated or subject to a further deferral, except as otherwise permitted or required pursuant to regulations and other guidance issued pursuant to Section 409A of the Code.
(vi) No Elections. The Employee does not have any right to make any election regarding the time or form of any payment due under this Agreement.
(vii) Compliant Operation and Interpretation. This Agreement shall be operated in compliance with the requirements of Section 409A or an exception thereto and each provision of this Agreement shall be interpreted, to the extent possible, to comply with Section 409A or to qualify for an exception thereto.
(m) Dispute Resolution; Venue.
(i) The Company and the Employee shall use reasonable, good faith efforts to settle any dispute through non-binding mediation before a mutually-acceptable, neutral, third-party mediator. The mediation shall be held in Salt Lake City, Utah and administered by the CPR Institute for Dispute Resolution (the “CPR Institute”) under the CPR Mediation Procedure then in effect. Unless otherwise agreed, the parties shall jointly select a single mediator from the CPR Panels of Distinguished Neutrals based on a list of mediator candidates supplied by the CPR Institute. If, within fourteen (14) days after either party makes a written request for mediation under this Section 9(m)(i), the parties have not reached agreement on the selection of a mediator, the mediator shall be selected in accordance with the CPR Mediation Procedure currently in effect. A good faith attempt at mediation shall be a condition precedent to the commencement of litigation, but nothing in this Agreement, including, but not limited to paragraph (ii) below, shall be deemed a condition precedent to any court action for injunction or other interim relief pending the outcome of mediation.
(ii) If the parties are unable to resolve the dispute by mediation in a timely manner (which, in any case, shall not exceed sixty (60) days from the first notice of mediation), either party may attempt to resolve the dispute by commencing an action (or defending or responding to such action) exclusively in the jurisdiction and venue of the courts, whether federal or state, located in Salt Lake County, Utah.
(n) The Company shall, at all times, maintain Directors & Officers insurance with a policy limit of least $5,000,000.00 that will cover Employee in his capacity as an officer of the Company.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be effective for all purposes as of the Effective Date.
THE COMPANY: | ||
SERA PROGNOSTICS, INC. | ||
By: | /s/ Gregory C. Critchfield, M.D. | |
Name: Gregory C. Critchfield, M.D. | ||
Title: Chairman, President, and CEO | ||
THE EMPLOYEE: | ||
/s/ Benjamin Jackson | ||
Name: Benjamin Jackson | ||
Title: General Counsel |
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EXHIBIT A
THE OUTSIDE INTERESTS
TITLE | COMPANY NAME | HOURS PER WEEK |
ACTIVITIES |
Owner | TBD | ≤10 | Writing, mostly fiction |
Owner | The Ugly Dumpling | ≤10 | Home-based food business |
Exhibit 10.18
June 17, 2020
Thomas Garite, MD
653 Round Tree Drive
Grand Junction, CO 81506
Dear Tom,
We have greatly appreciated the consulting services that you have provided to Sera Prognostics, Inc. (“Sera”) as an independent contractor under the Consulting Agreement between us dated December 1, 2018. As we have discussed with you, we are terminating that Agreement effective June 22, 2020 and are pleased to offer you employment at Sera in the position of Vice President, Clinical Sciences, to start on June 22, 2020. We are very excited about having you join our team in an employee capacity.
So please take the next step and review the details of this offer:
Position Details:
Job Title: | Vice President, Clinical Sciences |
Salary: | $9,600.00 per month, paid semi-monthly on the 15th & last day of each month |
Annual Incentive: | Sera’s Board of Directors has adopted an annual incentive plan (“AIP”) designed to reward the achievement of corporate objectives and individual performances. Under the AIP, you will be eligible to earn a 25% annual target cash incentive based on payments made to you as a part-time employee, and measured on a calendar year basis, to be prorated in 2020 based on time of service. |
Status: | Part-time, Exempt; Assuming an average of 48 hours’ work per month Anticipated Start Date: June 22, 2020 |
Reporting to: | Gregory Critchfield, Chairman, President & CEO |
Benefits:
Health/PTO: | Since this is a part-time position, defined as working less than 30 hours per week, you will not be eligible for health benefits or paid time off. |
Equity: | You will be initially recommended to the Sera Board to be granted the option to purchase 20,000 shares of common stock of Sera at an exercise price equal to the fair market value of the shares on the date the option is granted, subject to final approval by the Sera Board of Directors. These granted options shall have a four-year vesting schedule as follows: 25% of the shares shall vest on the one-year anniversary of your start date with Sera, and an additional 1/36th of the total shares subject to the option shall vest each month thereafter, in each case provided that you continue to be an employee, consultant or director of Sera through each applicable vesting date. The terms of this stock option grant will be governed in all respects by the 2749 East Parleys Way - Suite 200 | Salt Lake City, Utah 84109 | Phone 801.990.0520 | Fax 801.990.0640 terms of the Sera Prognostics 2011 Employee, Director and Consultant Equity Incentive Plan (the “Plan”) and the stock option agreement for the Plan, which will be provided to you after the effective date of the grant. Any future grant of stock options shall be governed by its respective Sera Prognostics Employee, Director and Consultant Equity Incentive Plan, which shall be provided to you after such a grant is awarded. |
Your employment with Sera is employment at-will. As a result, you are free to resign at any time, with or without notice and with or without cause or reason. Similarly, Sera is free to terminate its employment relationship with you at any time, with or without notice and with or without cause or reason. Sera’s supervisors and managers have no actual or apparent authority to change the at-will nature of your employment unless they are expressly given that authority by Sera’s CEO in writing. Any change to the at-will nature of your employment will not be valid unless it is expressed with specificity in a written contract that is signed and dated both by you (or your authorized representative) and a properly authorized Sera representative.
Your offer of employment is subject to successful completion of reference checks and a background investigation to be concluded prior to start of employment. Your employment is also contingent on your acceptance of Sera’s Confidentiality, Nondisclosure, and Inventions Assignment Agreement, which will be included with your new hire paperwork, as well as your ability to show proof of your right to work in the United States. This proof must be provided on your first work day and consist of either a passport or driver’s license and Social Security card. We also expect you to abide by Sera’s policies and procedures as they may be adopted by Sera and in effect from time to time, and do not contradict the terms and conditions set forth in this letter.
Tom, we are impressed with your intellect, drive and experience. We anticipate greatly the confirmation of your decision to accept this position and be a part of the exciting, ongoing developments at Sera Prognostics as a member of our team. If you have any questions, please do not hesitate to contact me.
In accepting employment with Sera, you agree to treat the details of your compensation as sensitive and confidential information, not to be discussed with anyone else within the company.
To confirm acceptance of this offer, please return a signed copy of this letter to our attention by June 22, 2020 and confirming your start date as an employee.
Sincerely Yours,
/s/ Gregory C. Critchfield, MS, MD |
Gregory C. Critchfield, MS, MD
Chairman, President & CEO
I accept employment with Sera Prognostics on the foregoing terms.
/s/ Thomas Garite, MD | 6/17/20 | |
Thomas Garite, MD | Date |
Anticipated Start Date: | 6/22/20 |
[Acceptance page to offer letter dated June 17, 2020]
Exhibit 10.18(1)
July 1, 2020
Thomas Garite, MD
653 Round Tree Drive
Grand Junction, CO 81506
Re: Amendment to Offer of Employment for Thomas Garite, MD dated June 17, 2020
Dear Tom:
This letter is an amendment (the “Amendment”) to the aforementioned Offer of Employment from Sera Prognostics, Inc. dated June 17, 2020 (the “Offer of Employment”).
Effective July 1, 2020, your salary will be $16,000.00 per month, paid semi-monthly on the 15th & last day of each month. This is based on an assumption of an average monthly effort of 80 hours.
All other terms, conditions and provisions of the Offer of Employment remain unchanged by this amendment and are in full force and effect.
Sincerely, | ||
Sera Prognostics, Inc. | ||
By: | /s/ Gregory Critchfield | |
Gregory Critchfield | ||
Its: | Chairman, President, and CEO |
This Amendment is accepted and agreed to as of the date hereof: | ||
/s/ Thomas Garite, MD | ||
Thomas Garite, MD | ||
Dated: | 7/1/20 |
Exhibit 10.18(2)
July 30, 2020
Thomas Garite, MD
653 Round Tree Drive
Grand Junction, CO 81506
Re: 2nd Amendment to Offer of Employment for Thomas Garite, MD dated June 17, 2020
Dear Tom:
This letter is the 2nd amendment (the “2nd Amendment”) to the aforementioned Offer of Employment from Sera Prognostics, Inc. dated June 17, 2020 (the “Offer of Employment”), as amended on July 1, 2020 (the 1st Amendment) for the purpose of a change in salary.
Equity: | You will be initially recommended to the Sera Board to be granted the option to purchase 50,000 shares of common stock of Sera at an exercise price equal to the fair market value of the shares on the date the option is granted, subject to final approval by the Sera Board of Directors. These granted options shall have a four-year vesting schedule as follows: 25% of the shares shall vest on the one-year anniversary of your start date with Sera, and an additional 1/36th of the total shares subject to the option shall vest each month thereafter, in each case provided that you continue to be an employee, consultant or director of Sera through each applicable vesting date. The terms of this stock option grant will be governed in all respects by the terms of the Sera Prognostics 2011 Employee, Director and Consultant Equity Incentive Plan (the “Plan”) and the stock option agreement for the Plan, which will be provided to you after the effective date of the grant. Any future grant of stock options shall be governed by its respective Sera Prognostics Employee, Director and Consultant Equity Incentive Plan, which shall be provided to you after such a grant is awarded. |
All other terms, conditions and provisions of the Offer of Employment as amended by the 1st Amendment remain unchanged by this 2nd amendment and are in full force and effect.
Sincerely, |
Sera Prognostics, Inc. |
By: | /s/ Gregory Critchfield |
Gregory Critchfield |
Its: | Chairman, President, and CEO |
This Amendment is accepted and agreed to as of the date hereof:
/s/ Thomas Garite, MD |
Thomas Garite, MD
Dated: | July 30, 2020 |
Exhibit 10.18(3)
April 28, 2021
Thomas Garite, MD
653 Round Tree Drive
Grand Junction, CO 81506
Re: 3rd Amendment to Offer of Employment for Thomas Garite, MD dated June 17, 2020
Dear Tom:
This letter is the 3rd amendment (the “3rd Amendment”) to the aforementioned Offer of Employment from Sera Prognostics, Inc. dated June 17, 2020 (the “Offer of Employment”), as amended on July 1, 2020 (the 1st Amendment) for the purpose of a change in salary and on July 30, 2021 (the 2nd Amendment) for the purpose of a change in the initial number of options.
Effective date: | January 1, 2021 |
Annual Salary: | $267,000, based on an assumption of an average monthly effort of 112 hours or .65 FIE, paid semi-monthly on the 15th & last day of each month. |
Annual Incentive: | Under the annual incentive plan (“AIP”) you will be eligible to earn a 35% annual target cash incentive, measured on a calendar year basis. |
All other terms, conditions, and provisions of the Offer of Employment as amended by the 1st and 2nd Amendments remain unchanged by this 3rd amendment and are in full force and effect.
Sincerely, |
Sera Prognostics, Inc. |
By: | /s/ Gregory Critchfield |
Gregory Critchfield | ||
Its: | Chairman, President, and CEO |
This Amendment is accepted and agreed to as of the ‘hate hereof:
/s/ Thomas Garite, MD | Dated: | |
Thomas Garite, MD |
Exhibit 10.19
March 30,2020
Nichole Martin
810 Silver Charm Drive
Saline, MI 48175
Dear Nikki,
It has been a great pleasure for all of us to speak with you and to learn about your background and expertise. We are very pleased to offer you the position of Vice President of Quality/Regulatory at Sera Prognostics, Inc. (“Sera”). Sera is currently focused on executing the commercial launch of PreTRM®, the Company’s preterm birth diagnostic test, and we are very excited about having you join our team.
So please take the next step and review the detail of the verbal offer that was extended to you:
Position Details:
Job Title: | Vice President of Quality/Regulatory |
Annual Salary: | $265,000, paid semi-monthly on the 15th & last day of each month |
Annual Incentive: | Sera’s Board of Directors has adopted an annual incentive plan (“AIP”) designed to reward the achievement of corporate objectives and individual performances. Under the AIP, you will be eligible to earn a 25% annual target cash incentive, measured on a calendar year basis, to be prorated in 2020 based on time of service. |
State: | Full-time, Exempt |
Anticipated Start Date: | On or before May 26, 2020 |
Reporting to: | Gregory Critchfield, Chairman, President & CEO |
Benefits: | |
Insurance: | Sera Prognostics offers major medical, dental, vision, short and long-term disability, term life insurance, 401(k), and a flexible spending account. You are eligible for these benefits on the 1st day of the month following your hire date. |
Paid Time Off: | You are eligible for 4 weeks paid time off per year (based on calendar year and prorated for the first year of employment); accruals begin with the first pay period following employment. In addition, you will receive paid time off for 13 company recognized holidays. |
You will be initially recommended to the Sera Board to be granted the option to purchase 250,222 shares of common stock of Sera at an exercise price equal to the fair market value of the shares on the date the option is granted, subject to final approval by the Sera Board of Directors. These granted options shall have a four-year vesting schedule as follows: 25% of the shares shall vest on the one-year anniversary of you start date with Sera, and an additional 1/36th of the total share subject to the option shall vest each month thereafter, in each case provided that you continue to be an employee, consultant or director of Sera through each applicable vesting date. The terms of this stock option grant will be governed in all respects by the terms of the Sera Prognostics 2011 Employee, Director and Consultant Equity Incentive Plan (the “Plan”) and the stock option agreement for the Plan, which will be provided to you after the effective date of the grant. And future grant of stock options shall be governed by its respective Sera Prognostics Employee, Director and Consultant Equity Incentive Plan, which shall be provided to you after such a grant is awarded.
Sign-on Bonus: A one-time sign-on bonus of $5,000 shall be given to you upon your hiring at Sera.
Relocation: Sera will reimburse you for documented moving expenses, up to $30,000, involved in relocating to the Wasatch front metropolitan area. Reimbursement of moving expenses must be forfeited if you leave the company before the 12-month anniversary of your hire date, and forgiveness of this repayment obligation will accrue at a rate of 1/12th of the total amount reimbursed per month after your hire date.
Your employment with Sera is employment at-will. As a result, you are free to resign at any time, with or without notice and with or without cause or reason. Similarly, Sera is free to terminate its employment relationship with you at any time, with or without notice and with or without cause or reason. Sera's supervisors and managers have no actual or apparent authority to change the at-will nature of your employment unless they are expressly given that authority by Sera's CEO in writing. Any change to the at-will nature of your employment will not be valid unless it is expressed with specificity in a written contract that is signed and dated both by you (or your authorized representative) and a properly authorized Sera representative.
Your offer of employment is subject to successful completion of reference checks and a background investigation to be concluded prior to start of employment. Your employment is also contingent on your acceptance of Sera's Confidentiality, Nondisclosure, and Inventions Assignment Agreement, which will be included with your new hire paperwork, as well as your ability to show proof of your right to work in the United States. This proof must be provided on your first work day and consist of either a passport or driver's license and Social Security card. We also expect you to abide by Sera's policies and procedures as they may be adopted by Sera and in effect from time to time, and do not contradict the terms and conditions set forth in this letter.
Nikki, we are impressed with your intellect, drive and experience. We anticipate greatly the confirmation of your decision to accept this position and be a part of the exciting, ongoing developments at Sera Prognostics as a member of our team. If you have any questions, please do not hesitate to talk to me.
In accepting employment with Sera, you agree to treat the details of your compensation as sensitive and confidential information, which should be discussed within the company with only your supervisor or Sera's human resources manager.
To confirm acceptance of this offer, please return a signed copy of this letter to our attention by April 2, 2020 and confirming your start date as an employee.
Sincerely Yours,
/s/ Gregory C. Critchfield, MS, MD | |
Gregory C. Critchfield, MS, MD | |
Chairman, President & Chief Executive Officer |
I accept employment with Sera Prognostics on the foregoing terms.
Start date: | 20 May 2020 |
/s/ Nichole Martin | 30 March 2020 | |
Nichole Martin | Date |
[Acceptance page to offer letter dated March 30,2020]
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