Cayman Islands | | | 2834 | | | Not Applicable |
(State or Other Jurisdiction of Incorporation or Organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Will H. Cai, Esq. Timothy Pitrelli, Esq. Cooley LLP c/o 35th Floor Two Exchange Square 8 Connaught Place Central, Hong Kong +852 3758-1200 | | | Reid S. Hooper, Esq. Cooley LLP 1299 Pennsylvania Avenue NW, Suite 700 Washington, DC 20004 (202) 842 7899 | | | Michael J. Blankenship Winston & Strawn LLP 800 Capitol Street, Suite 2400 Houston, Texas 77002 (713) 651 2600 |
† | The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification (“ASC”) after April 5, 2012. |
| | Per ordinary share | | | Total | |
Public offering price | | | $ | | | $ |
Underwriting discounts and commissions(1) | | | $ | | | $ |
Proceeds, before expenses, to APRINOIA Therapeutics Inc. | | | $ | | | $ |
(1) | See “Underwriting” for additional disclosure regarding compensation payable by us to the underwriters. |
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• | Tau & Tauopathies. Tau is an important protein in the brain that exists in different forms and plays a critical role in brain function. Tauopathies are neurodegenerative diseases characterized by accumulation of aggregated tau protein in distinct brain regions, such as Progressive Supranuclear Palsy (“PSP”), Alzheimer’s disease (“AD”) and Pick’s disease (“PiD”). Cumulative increases of these abnormal aggregates correlate with disease progression, and depending on the disorder can result in loss of memory, balance, walking and control of eye movements with the eventual loss of independent neurologic function. |
• | α-Syn & synucleinopathies. α-Syn is an important and highly abundant protein in the brain that regulates the release of neurochemicals between brain cells. Synucleinopathies are neurodegenerative diseases characterized by aggregation of abnormal α-Syn proteins. In synucleinopathies such as Parkinson’s disease (“PD”), Lewy Body Dementia (“LBD”) and Multiple System Atrophy (“MSA”), abnormal α-Syn aggregates accumulate in specific brain regions, and depending on the disorder can result in progressive loss of neurologic function, leading to problems with motor control, walking, balance, behavior and memory. |
• | PET diagnostic tracer APN-1607. We are developing APN-1607 as a PET imaging tracer for the detection of 3R and 4R tau aggregates, which contribute to the pathogenesis of various tauopathies, including PSP, |
• | Antibody platform and APNmAb005. APNmAb005 is a humanized anti-tau antibody we are developing for the treatment of AD, non-AD primary tauopathies including rare neurodegenerative disorders, such as PSP, cortico-basal degeneration (“CBD”) and behavioral variant Frontal Temporal Dementia (“FTD”) or its subcategory, Pick’s Disease (“PiD”). Unlike most other anti-tau antibodies currently in clinical development that bind to all forms of tau or phospho-tau (i.e., sites on tau protein that undergo phoshoprylation in disease state), APNmAb005 is designed to target a specific conformation epitope in the mid region that confers selectivity for misfolded tau oligomers/aggregates formed at axons/dendrites at early stages of disease that may contribute to disease progression. Based on existing clinical studies, we believe that blocking the pathological tau transmission has the potential to offer an effective treatment to slow down the disease progression for AD patients. While the recent approval of two anti-amyloid antibody treatments – aducanumab (Aduhelm®) and lecanemab (Leqembi®) – represents a significant advance in the field, their widespread use will be likely limited due to safety concerns arising from anti-amyloid imaging related abnormalities (“ARIA”). Furthermore, despite the dramatic reductions in amyloid pathology, suggested by recent studies, their efficacy in slowing cognitive decline in such studies was modest. These findings are consistent with the long-standing notion that although the accumulation of amyloid plays a critical role in the pathogenesis of AD, clearing amyloid alone is insufficient to completely block or prevent disease progression and argues for the discovery of other disease modifying targets such pathological forms of tau, which correlate with disease progression and cognitive decline. An IND for APNmAb005 was filed on February 24, 2022, and the FDA granted a Study May Proceed letter on April 20, 2022, for the Phase 1 trial to evaluate the safety of APNmAb005 in healthy volunteers. The first cohort of 8 subjects was dosed at 5mg/kg and the safety review was completed on August 18, 2023. There were no clinically significant safety findings. The study is currently active and not recruiting for the time being due to a reprioritization of resources. To accelerate development of APNmAb005, cohorts composed of patients with early AD and PSP will be dosed using a staggered parallel group design. Dosing is anticipated to resume in the fourth quarter of 2024. It is our intention to transition the study to evaluate single and |
• | Protein degrader platform and PROTAC degraders. Our proprietary PROTAC degrader programs for α-Syn and tau are our most innovative and cutting-edge platforms and have the potential to herald an entirely new class of drugs for the treatment of neurodegenerative disorders such as AD and PD. Our tau and α-Syn degrader programs are currently in the preclinical stages. Empowered by our knowledge of aggregated protein binder chemistry from our PET tracer programs we have generated a proprietary degrader library of 800+ compounds in α-Syn and tau degrader space. α-Syn degraders are identified from a cellular model of human dopaminergic neurons and the active degraders have been validated in animal models for selectivity, mechanism of action, physicochemical and metabolic properties. Based on our preclinical data disclosed in “Business — Our Differentiated Therapeutic Platforms and Pipeline — Our Therapeutic Product Candidates — α-Syn Degrader — Preclinical Results” and “Business — Our Differentiated Therapeutic Platforms and Pipeline — Our Therapeutic Product Candidates — Tau Degrader — Preclinical Results”, we believe that it would be feasible for this class of molecules to achieve reasonable brain penetration. Importantly, in preliminary studies we have observed significant reduction of pathological α-Syn in transgenic mice. Our tau degrader program is supported by Alzheimer’s Drug Discovery Foundation (“ADDF”) following their rigorous scientific review process. In the ADDF proposal, submitted to ADDF in December 2022, we described an experimental tau degrader RAC-1480, our lead compound at the time, which showed selective reduction of seed-induced tau aggregated formation in HEK293 cells and primary neurons. Intravenous injection of RAC-1480 at 25 mg/kg in rTg4510 tau transgenic mice reduced pathological tau species. The program has evolved rapidly since then and several new degraders have emerged with improved potency and ADME properties. TPD3 described in this document is one such improved tau degrader. The active compounds identified from our degrader library are highly selective for aggregated pathological tau while sparing the normal monomer tau. Similar to that with α-Syn degraders, we have conducted extensive work to validate the degrader mechanism and characterize metabolic and pharmacokinetic features. Both degrader programs are currently at lead optimization stages aiming for improved physicochemical properties, brain exposure and eventually robust in vivo efficacy by oral dosing. Our goal is to advance at least one degrader compound to IND-enabling GLP toxicology studies in 2025. |
(1) | Phase 2 clinical trial of APN-1607 tau tracer for AD in the United States, Japan and Taiwan, is active non-recruiting. |
(2) | Our tau PET tracer APN-1607 improved upon a previously developed first generation compound from National Institute for Quantum Science and Technology (“QST”) in Japan. We obtained an exclusive worldwide license from QST for its patent for APN-1607 in 2016. We have an exclusive license for worldwide rights to develop and commercialize APN-1607, except for mainland China, where we granted an exclusive sublicense for its development, manufacture, marketing and distribution to Yantai Yitai Pharmaceutical Technology Co., Ltd. |
• | Our lead diagnostic product candidate (APN-1607). APN-1607 is our 3R/4R tau PET tracer and most clinically advanced diagnostic product candidate. APN-1607 is designed as a new generation tau PET tracer to achieve a higher specificity for the pathological tau aggregates. We believe that APN-1607, if approved, has the potential to be a powerful enabling tool for the diagnosis of various tauopathies, as it has shown low non-specific binding to other brain proteins, and the ability to detect different forms of tau in clinical studies. APN-1607 may therefore potentially be used in more precise diagnosis and stage classification of various tauopathies, including PSP, AD and PiD. |
• | Our lead therapeutic product candidate (APNmAb005). APNmAb005 is a humanized anti-tau antibody and our most clinically advanced therapeutic product candidate. APNmAb005 is designed to preferentially bind pathological tau aggregates, not normal tau, that accumulate at the neuronal synapses with disease. In addition, based on preclinical studies we conducted, APNmAb005 recognizes a three-dimensional conformation-dependent epitope that is only present in tau abnormal aggregates but not in normal tau protein, thus suggesting this product candidate may achieve a high level of selectivity for pathological forms of tau. |
• | Our lead therapeutic product candidate (Degrader). PROTACs offer a highly novel platform for the targeted degradation of toxic proteins that are causative in a number of neurodegenerative disorders as described above. These are bifunctional molecules that combine an active site selective for binding to the target of interest (tau or α-Syn) and a ligand (a binding site) for E3 ubiquitin ligase to drive the selective degradation of these proteins inside the cell’s proteasome. First-generation degraders are now entering clinical trials for cancer treatment, but currently there are no degraders in clinical development for neurodegenerative diseases. PROTAC is a potentially ground-breaking approach for the treatment of proteinopathies in neurodegenerative diseases that have been considered undruggable targets for traditional small molecules. Most of the PROTAC drugs currently in development are based on published E3 ligand structures, which leaves the warhead that targets the protein of interest as the key component that drives target specificity. It is noteworthy that the popular PROTAC targets in cancer are well characterized by soluble proteins such as CDK2, BTK4 and ER and in some cases allow for structure guided drug design. By contrast, the pathological proteins implicated in neurodegenerative diseases are more complex for warhead discovery as well as degrader screening. In this regard, we believe our PROTAC program is highly competitive in this field due to innovation in our PET ligand chemistry and expertise in disease biology which have enabled us to generate a diverse library to screen tau and α-Syn degraders and characterize them in cellular assays and animal models that recapitulate pathological α-Syn or tau formation. |
• | Develop novel solutions to overcome the challenges in diagnosing and treating neurodegenerative diseases. |
• | Continue to execute our versatile R&D and commercialization strategy to maximize asset value. |
• | Create product-by-product and region-by-region commercialization strategies in anticipation of our future product launches. |
• | Our founder and chairman of the board, Dr. Ming-Kuei Jang, Ph.D., has over 20 years of experience in neurodegenerative diseases. He also serves as the Chief Scientific Officer of APRINOIA USA and President of our Asia operations. Prior to founding our company, Dr. Jang held an associate director role at GlaxoSmithKline in Shanghai, served as senior research biologist of Merck & Co in Boston, Massachusetts, and led Neurodegeneration Consortium at MD Anderson Cancer Center in Houston, Texas. |
• | Our Chief Executive Officer, Dr. Mark S. Shearman, Ph.D., has extensive experience in pharmaceutical research, drug development and strategic partnerships. Prior to joining us, Dr. Shearman served as the Chief Scientific Officer at Editas Medicine, Chief Scientific Officer at Applied Genetic Technologies Corporation, a Senior Vice President of research and early development at Merck KGAa. He also served at Merck & Co., with his last position as an executive director, and Merck, Sharp & Dohme, with his last position as a senior director of department of cellular & molecular neuroscience responsible for the research and development of AD. |
• | Our Chief Medical Officer, Dr. Bradford A. Navia, M.D., Ph.D., has over 17 years of experience in clinical development (including Phase 1 through Phase 3), neuroimaging and biomarkers in psychiatry and neurology, including several INDs, sNDAs and an NDA. Prior to joining us, Dr. Navia was an Associate |
• | Our Chief Financial Officer, Brian Achenbach, M.B.A., has over 30 years of experience in finance and accounting primarily in the biotech, pharmaceutical and medical device industries. Prior to joining us, Mr. Achenbach served as Chief Financial Officer at On Demand Pharmaceuticals, Senior Vice President of Finance & Corporate Controller at Mustang Bio (Nasdaq: MBIO), and has held leadership positions in finance and accounting in multiple life sciences companies. |
• | Our General Counsel, Lana Gladstein, J.D., has over 23 years of experience in legal and pharmaceutical industry. Prior to joining us, Ms. Gladstein served as Chief Legal Officer and General Counsel of Arranta Bio (acquired by Recipharm), Chief Legal Officer of Recipharm (Americas) post acquisition of Arranta Bio, Executive VP and General Counsel at Brammer Bio (acquired by Thermo Fisher Scientific), and General Counsel of Viral Vector Services of Thermo Fisher Scientific post acquisition of Brammer Bio. Prior to that, Ms. Gladstein spent over 16 years in private practice, including as partner at Nutter McClennen & Fish LLP and Pepper Hamilton LLP, where she focused her practices in intellectual property litigation and strategies. |
• | We are a clinical-stage biotechnology company with a limited operating history and face significant challenges and expenses as we build our capabilities and develop our pipeline of diagnostic and therapeutic product candidates. |
• | We have incurred net losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future. We have never generated any revenue from product sales and may never be profitable. |
• | We recorded net cash outflow from operating activities since our inception. We may need to acquire funding from time to time to complete the development and commercialization of our pipeline candidates, which may not be available on acceptable terms, or at all. If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate certain of our product development programs or other operations. |
• | Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.” |
• | Raising additional capital may cause dilution to the interests of our shareholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. |
• | We depend heavily on the success of our lead diagnostic product candidate APN-1607, and, to a lesser extent, our anti-tau antibody product candidate, APNmAb005, and our degrader programs, all of which are currently or expected to be in clinical development. If our clinical trials are unsuccessful, we or our collaboration partner, Yantai Yitai Pharmaceutical Technology Co., Ltd. (“Yitai”), a wholly-owned subsidiary of Dongcheng Pharma, do not obtain regulatory approval in the targeted jurisdictions, or we or Yitai are unable to commercialize APN-1607, APNmAb005 or degraders, or experience significant delays in doing so, our business, our financial condition and results of operations will be materially adversely affected. |
• | We operate in highly competitive and rapidly changing industries. Our competitors are evaluating diagnostic product candidates in the same indication as our lead diagnostic product candidate, APN-1607, such as AD and PSP, and could enter the market with competing products of our product candidates, which may result in a material decline in sales of affected product candidates. |
• | A fast track, breakthrough therapy or other designation by the FDA may not actually lead to a faster development or regulatory review or approval process. |
• | Even if we successfully obtain regulatory approvals for our product candidates, they may not gain market acceptance, in which case we may not be able to generate product revenues, which will materially adversely affect our business, financial condition and results of operations. |
• | As a company with operations outside of the United States, our business is subject to economic, political, regulatory and other risks associated with international operations. |
• | Our future growth and ability to compete depend on retaining our key personnel and recruiting additional qualified personnel. |
• | We are a fast-growing emerging company and expect to expand our development and regulatory capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations. |
• | If we fail to maintain our relationships with our current or future business and licensing partners, our business, commercialization prospects and financial condition may be materially adversely affected. |
• | We may seek to form additional strategic alliances in the future with respect to our product candidates, and if we do not realize the benefits of such alliances, our business, financial condition, commercialization prospects and results of operations may be materially adversely affected. |
• | We rely on third parties to conduct our nonclinical studies and clinical trials and perform other tasks for us. If these third parties do not successfully carry out their contractual duties, meet expected deadlines, or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our product candidates and our business could be substantially harmed. |
• | All material aspects of the research, development, manufacturing and commercialization of pharmaceutical products are heavily regulated, and we may face difficulties in complying with or be unable to comply with such regulations, which could have a material adverse effect on our business. |
• | The approval processes of regulatory authorities in the United States are lengthy, time-consuming and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. |
• | Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us from obtaining approvals for the commercialization of some or all of our product candidates. As a result, we cannot predict when or if, and in which territories, we will obtain marketing approval to commercialize product candidates. |
• | Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions. |
• | If we are unable to establish sales, marketing and distribution capabilities for our product candidates, or enter into sales, marketing and distribution agreements with third parties, we may not be successful in commercializing our product candidates, if and when they are approved. |
• | The successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies. |
• | We have never commercialized a product candidate before, which may make it difficult to evaluate the prospects for our future viability, and may lack the necessary expertise, personnel and resources to successfully commercialize our product candidates on our own or together with suitable partners. |
• | We may not have sufficient patent terms to effectively protect our future approved product candidates and business. |
• | If we or our collaboration partner are unable to obtain, maintain, defend and enforce patent and other intellectual property rights for our technologies and product candidates, or if the scope of the patent and other intellectual property rights obtained is not sufficiently broad, our competitors and other third parties could develop and commercialize technology and biologics similar or identical to ours, and our ability to successfully commercialize our technology and product candidates may be impaired. |
• | We or our collaboration partner may become subject to intellectual property-related litigation or other proceedings to protect or enforce our patents or the patents of our licensors or collaborators, any of which could be expensive, time-consuming, and unsuccessful, and may ultimately result in our loss of ownership of intellectual property. |
• | Business interruptions could seriously harm our future revenue and financial condition, increase our costs and expenses and delay us in the process of developing our product candidates. |
• | We may be subject to claims by third parties asserting that we or our employees, consultants or independent contractors have misappropriated, wrongfully used or disclosed their confidential information or trade secrets or other intellectual property or claiming ownership of what we regard as our own intellectual property. |
• | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information, or current reports on Form 8-K, upon the occurrence of specified significant events. |
• | the requirement that a majority of the board of directors must be comprised of independent directors as defined in Nasdaq Rule 5605(a)(2); |
• | the requirement that each member of the compensation committee must be an independent director as set forth in Nasdaq Rule 5605(d)(2)(A); |
• | the requirement that director nomination should be made by a vote in which only independent directors participate or by a nominations committee comprised solely of independent directors as set forth in Nasdaq Rule 5605(e)(1); |
• | the requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of stock option plans; |
• | the requirement that the board of directors shall have regularly scheduled meetings at which only independent directors are present as set forth in Nasdaq Rule 5605(b)(2); and |
• | the requirement that an annual shareholders meeting must be held no later than one year after the end of the fiscal year-end as set forth in Nasdaq Rule 5620(a). |
• | is based on the (i) 23,528,707 ordinary shares issued and outstanding as of the date of this prospectus, which consists of (a) 10,123,057 ordinary shares issued and outstanding as of the date of this prospectus, |
• | excludes 3,456,098 ordinary shares issuable upon the exercise of options outstanding as of the date of this prospectus; and |
• | excludes 11,250 ordinary shares available for future issuance under our equity incentive plans upon the completion of this offering. |
• | a 1-for-4 reverse share split of our ordinary shares and preferred shares effected on , 2024; |
• | no exercise of the outstanding options described above; |
• | no exercise of the underwriters’ option to purchase additional ordinary shares; and |
• | the effectiveness of our amended and restated memorandum and articles of association, which will occur immediately prior to the completion of this offering. |
| | For the six months ended June 30, | | | | | | | Year Ended December 31, | | ||||||||||||||
| | 2023 | | | 2022 | | | Change | | | % | | | 2022 | | | 2021 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||||||||||||||
Selected consolidated statements of operations: | | | ||||||||||||||||||||||
Revenue | | | $496 | | | $295 | | | $201 | | | 68 | | | $394 | | | $550 | | | $(156) | | | (28) |
Revenue – related party | | | 8,538 | | | — | | | 8,538 | | | — | | | — | | | — | | | — | | | — |
Total revenue | | | 9,034 | | | 295 | | | 8,739 | | | 2,962 | | | 394 | | | 550 | | | (156) | | | (28) |
Operating expenses | | | | | | | | | | | | | | | | | ||||||||
Research and development | | | 11,067 | | | 11,289 | | | (222) | | | (2) | | | 21,617 | | | 19,660 | | | 1,957 | | | 10 |
General and administrative | | | 4,704 | | | 2,849 | | | 1,855 | | | 65 | | | 7,041 | | | 4,787 | | | 2,254 | | | 47 |
Total operating expenses | | | 15,771 | | | 14,138 | | | 1,633 | | | 12 | | | 28,658 | | | 24,447 | | | 4,211 | | | 17 |
Loss from operations | | | (6,737) | | | (13,843) | | | 7,106 | | | (51) | | | (28,264) | | | (23,897) | | | (4,367) | | | 18 |
Other (expense) income: | | | | | | | | | | |||||||||||||||
Interest expense, net | | | (1,444) | | | (13) | | | (1,431) | | | 11,008 | | | (67) | | | (36) | | | (31) | | | 86 |
Change in fair value of derivative liabilities | | | 498 | | | — | | | 498 | | | — | | | — | | | — | | | — | | | — |
Other income (expense), net | | | 551 | | | 186 | | | 365 | | | 196 | | | 117 | | | 672 | | | (555) | | | (83) |
Total other income (expense), net | | | (395) | | | 173 | | | (568) | | | (328) | | | 50 | | | 636 | | | (586) | | | (92) |
Loss before income taxes | | | (7,132) | | | (13,670) | | | 6,538 | | | (48) | | | (28,214) | | | (23,261) | | | (4,953) | | | 21 |
Provision for income taxes | | | (53) | | | (6) | | | (47) | | | 783 | | | (17) | | | — | | | (17) | | | — |
Net loss | | | $(7,185) | | | $(13,676) | | | $6,491 | | | (47) | | | $(28,231) | | | $(23,261) | | | $(4,970) | | | 21 |
| | As of June 30, | | | As of December 31, | ||||
| | 2023 | | | 2022 | | | 2021 | |
| | ($ in thousands) | |||||||
Selected consolidated balance sheets: | | | | | | | |||
Assets | | | | | | | |||
Current assets: | | | | | | | |||
Cash | | | $7,731 | | | $1,221 | | | $9,674 |
Prepaid expenses and other current assets | | | 1,162 | | | 590 | | | 429 |
Note receivable - related party | | | 660 | | | — | | | 155 |
Total current assets | | | 9,553 | | | 1,811 | | | 10,258 |
Property and equipment, net | | | 1,957 | | | 2,153 | | | 509 |
Deferred offering costs | | | 2,807 | | | 1,288 | | | — |
Operating lease right-of-use assets | | | 115 | | | 154 | | | 322 |
Prepaid expenses, net of current portion and other long-term assets | | | 44 | | | 237 | | | 1,677 |
Total assets | | | $14,476 | | | $5,643 | | | $12,766 |
| | As of June 30, | | | As of December 31, | ||||
| | 2023 | | | 2022 | | | 2021 | |
| | ($ in thousands) | |||||||
| | | | | | ||||
Liabilities, Redeemable Convertible Preferred Shares, and Shareholders' Deficit | | | | | | | |||
Current liabilities: | | | | | | | |||
Accounts payable | | | $7,318 | | | $8,887 | | | $432 |
Accrued expenses and other current liabilities | | | 4,940 | | | 2,466 | | | 2,993 |
Operating lease liabilities, current | | | 102 | | | 124 | | | 154 |
Related party payable | | | — | | | 904 | | | — |
Short-term borrowings | | | 690 | | | 1,450 | | | 785 |
Convertible notes (including related parties convertible notes of $10,762 and $753 as of June 30, 2023 and December 31, 2022, respectively, net of debt discount and issuance costs) | | | 14,788 | | | 1,093 | | | — |
Derivative liabilities (including related parties derivative liabilities of $1,685 and $173 as of June 30, 2023 and December 31, 2022, respectively) | | | 2,679 | | | 251 | | | — |
Total current liabilities | | | 30,517 | | | 15,175 | | | 4,364 |
Operating lease liabilities, net of current portion | | | 15 | | | 42 | | | 177 |
Total liabilities | | | 30,532 | | | 15,217 | | | 4,541 |
Commitments and Contingencies | | | | | | | |||
Redeemable convertible preferred shares (Series B, Pre-C and C), $0.1 par value; 56,973,336 shares authorized; 53,622,601 shares issued and outstanding; redemption and liquidation value of $66,166 as of June 30, 2023 and December 31, 2022 | | | 65,876 | | | 65,876 | | | 56,913 |
Shareholders’ deficit: | | | | | | | |||
Ordinary shares, $0.1 par value, 443,026,664 shares authorized; 40,492,206 and 38,617,056 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | | | 4,049 | | | 3,862 | | | 3,835 |
Additional paid-in capital | | | 13,176 | | | 12,296 | | | 10,373 |
Accumulated deficit | | | (97,823) | | | (90,638) | | | (62,407) |
Accumulated other comprehensive loss | | | (1,334) | | | (970) | | | (489) |
Total shareholders’ deficit | | | (81,932) | | | (75,450) | | | (48,688) |
Total liabilities, redeemable convertible preferred shares, and shareholders’ deficit | | | $14,476 | | | $5,643 | | | $12,766 |
| | For the Six Months Ended June 30, | | | For the Year Ended December 31, | |||||||
| | 2023 | | | 2022 | | | 2022 | | | 2021 | |
| | ($ in thousands) | ||||||||||
Selected consolidated cash flow: | | | | | | | | | ||||
Net cash used in operating activities | | | $(5,451) | | | $(9,808) | | | $(17,237) | | | $(24,303) |
Net cash used in investing activities | | | (781) | | | (878) | | | (2,016) | | | (317) |
Net cash provided by financing activities | | | 13,287 | | | 9,002 | | | 11,354 | | | 31,492 |
Effect of exchange rates on cash | | | (545) | | | (303) | | | (554) | | | (60) |
Net increase (decrease) in cash | | | $6,510 | | | $(1,987) | | | $(8,453) | | | $6,812 |
• | continue our ongoing and planned research and development of our lead diagnostic product candidate, APN-1607; |
• | continue our ongoing and planned research and development of our pipeline of diagnostic and therapeutic product candidates, such as α-Syn PET tracers and APNmAb005; |
• | conduct preclinical studies and clinical trials for any additional product candidates that we may pursue in the future, including ongoing and planned development of additional diagnostic or therapeutic product candidates for the diagnosis or treatment of tauopathies, such as Alzheimer’s Disease (“AD”) and Progressive Supranuclear Palsy (“PSP”), and α-synucleinopathies, such as Parkinson’s Disease (“PD”) and Multiple System Atrophy (“MSA”); |
• | seek to discover and develop additional diagnostic and therapeutic product candidates and further expand our current pipeline; |
• | seek regulatory approvals for any product candidates that successfully complete clinical trials; |
• | meet the requirements for clinical trials and potential commercialization; |
• | establish sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval; |
• | develop, maintain, expand and protect our intellectual property portfolio; |
• | add clinical, operational, financial and management information systems and/or personnel, including personnel to support our product development and planned future commercialization efforts; |
• | expand our operations in the United States, Japan, Taiwan and other geographic regions; and |
• | incur additional legal, accounting and other expenses associated with operating as a public company. |
• | the progress, results and costs of laboratory testing, manufacturing, and preclinical and clinical development for our current product candidates; |
• | the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials of other diagnostic and/or therapeutic product candidates that we may pursue; |
• | the development requirements of other diagnostic and/or therapeutic product candidates that we may pursue; |
• | the timing and amounts of any milestone or royalty payments we may be required to make under future license agreements if we enter into such agreements; |
• | the costs of improving our research and development capacities and infrastructure, including hiring additional research and development, clinical, and quality control personnel; |
• | the costs, timing and outcome of regulatory review of our product candidates; |
• | the costs and timing of future commercialization activities, including product manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; |
• | the amount of revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; |
• | the costs and timing of preparing, filing and prosecuting patent applications, obtaining, maintaining, protecting and enforcing our intellectual property rights and defending against any intellectual property-related claims; |
• | the costs associated with operating as a public company; and |
• | the extent to which we acquire or in-license other product candidates and technologies. |
• | completing clinical trials that demonstrate the efficacy and safety of our product candidates; |
• | receiving marketing approvals from applicable regulatory authorities; |
• | obtaining commercial manufacturing capabilities; |
• | launching commercial sales, marketing and distribution operations; |
• | acceptance of our diagnostic and therapeutic product candidates by patients, the medical community and/or third-party payors, if such product candidates are approved; |
• | a continued acceptable safety profile following approval; |
• | competing effectively with other diagnostics or therapies; and |
• | qualifying for, obtaining, maintaining, enforcing and defending our intellectual property rights and claims and not infringing on third parties’ intellectual property rights. |
• | the accuracy of diagnosis for which our diagnostic product candidates are approved; |
• | the clinical indications for which our product candidates are approved; |
• | the accuracy and specificity to the pathological protein aggregates of our PET tracer candidates; |
• | hospitals and medical imaging centers establishing the infrastructure required, such as the PET scanners, for the administration of PET scan; |
• | the cost of our PET tracer candidates and the cost of administrating PET scan in relation to alternative diagnostic methods; |
• | the cost of product candidates in relation to alternative therapies; |
• | physicians, hospitals, and patients considering our product candidates as safe and effective therapies; |
• | the potential and perceived advantages of our product candidates over alternative therapies; |
• | the prevalence and severity of any side effects; |
• | product labeling or product insert requirements of the FDA or other regulatory authorities; |
• | limitations or warnings contained in the labeling approved by the FDA or other regulatory authorities; |
• | the timing of market introduction of our product candidates as well as competitive products; |
• | the amount of upfront costs or training required for physicians to administer our product candidates; |
• | the availability of coverage, adequate reimbursement, and pricing by third-party payors and government authorities; |
• | the willingness of patients to pay out-of-pocket in the absence of comprehensive coverage and reimbursement by third-party payors and government authorities; |
• | relative convenience and ease of administration of our diagnostics, including as compared to alternative diagnostic methods and competitive diagnostics; |
• | relative convenience and ease of administration of our product candidates including as compared to alternative treatments and therapies; and |
• | the effectiveness of our sales and marketing efforts and distribution support. |
• | be delayed in obtaining marketing approval for our product candidates; |
• | not obtain marketing approval; |
• | obtain approval for indications or patient populations that are not as broad as intended or desired; |
• | obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings; |
• | be subject to additional post-marketing testing or other requirements; or |
• | remove the product from the market after obtaining marketing approval. |
• | the patient eligibility criteria defined in the protocol; |
• | the number of patients with the disease or condition being studied; |
• | the understanding of risks and benefits of the product candidate in the clinical trial; |
• | clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available diagnostic methods or therapeutics, including any diagnostics that may be approved to diagnose the indications or new therapeutics that may be approved for the indications we are investigating or therapeutics that may be used off-label for these indications; |
• | the size and nature of the patient population who meet inclusion criteria; |
• | the proximity of patients to study sites; |
• | sufficient supply of PET tracer by third-party suppliers, including contract manufacturing organizations (“CMOs”); |
• | the design of the clinical trial; |
• | competing clinical trials for similar or other new diagnostics or therapeutics for tauopathies and α-synucleinopathies; and |
• | our ability to obtain and maintain patient consents. |
• | regulatory authorities may withdraw approvals of such products and require us to take any approved products off the market; |
• | regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies; |
• | we may be required to create a medication guide outlining the risks of such side effects and make it available to patients; |
• | we may be required to change the way the product is administered, conduct additional studies or change the labeling of such products; |
• | we may be subject to limitations in how we promote such products; |
• | sales of the product may decrease substantially; |
• | we could be sued and held liable for any harm that such products caused to patients; and |
• | our reputation and physician or patient acceptance of our products may suffer. |
• | the FDA or other regulatory authorities may disagree as to the number, design or implementation of our clinical trials, or may not interpret the results from clinical trials as we do; |
• | regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; |
• | we may not reach an agreement on acceptable terms with prospective clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different clinical trial sites; |
• | clinical trials of our product candidates may produce negative or inconclusive results; |
• | we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs; |
• | the number of patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or we may fail to recruit eligible patients to participate in a trial; |
• | our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us promptly, or at all; |
• | regulators may issue a clinical hold, or regulators or institutional review boards may require that we or our investigators suspend or terminate clinical research for various reasons, including non-compliance with regulatory requirements or a finding that the participants are being exposed to unacceptable health risks; |
• | the cost of clinical trials of our product candidates may be greater than we anticipate; |
• | the FDA or other regulatory authorities may fail to approve our manufacturing processes or facilities; |
• | the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate; |
• | our product candidates may have undesirable side effects or other unexpected characteristics, leading to possible suspension or termination of the clinical trials; and |
• | the approval policies or regulations of the FDA or other regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. |
• | we may not be successful in identifying additional product candidates; |
• | we may not be able or willing to assemble sufficient resources to acquire or discover additional product candidates; |
• | our product candidates may not succeed in preclinical or clinical studies; |
• | a product candidate may on further study be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; |
• | competitors may develop alternatives that render our product candidates obsolete or less attractive; |
• | product candidates we develop may nevertheless be covered by third parties’ patents or other exclusive rights; |
• | the market for a product candidate may change during our development program so that the continued development of that product candidate is no longer reasonable; |
• | a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and |
• | a product candidate may not be accepted as safe and effective by patients, the medical community or third-party payors, if applicable. |
• | economic weakness, including inflation, or political instability in particular non-U.S. economics and markets; |
• | changes in a specific country’s or region’s political or economic environment; |
• | different and changing regulatory requirements for product approvals in different jurisdictions; |
• | differing reimbursement regimes and price controls in certain non-U.S. markets; |
• | potentially reduced protection for intellectual property rights; |
• | different issues for securing, maintaining or obtaining freedom to operate presented in different jurisdictions; |
• | difficulties to comply with different, complex and changing laws, regulations and court systems of multiple jurisdictions and a wide variety of foreign laws, treaties and regulations, as well as potential negative consequences from any non-compliance of such laws, treaties and regulations; |
• | potential negative consequences from changes in tax laws; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad, including, for example, the variable tax treatment in different jurisdictions of options granted under our share incentive plans; |
• | litigation or administrative actions resulting from claims against us by current or former employees or consultants individually or as part of class actions, including claims of wrongful terminations, discrimination, misclassification or other violations of labor law or other alleged conduct; |
• | changes in non-U.S. regulations and customs, tariffs and trade barriers; |
• | risks relating foreign exchange and currency controls; |
• | trade protection measures, import or export licensing requirements or other restrictive actions by governments; |
• | transportation or supply chain interruption due to cancellation of public transport or restrictions on logistics; |
• | governments imposed lockdowns such as stringent quarantine measures and mandate temporary shutdown of business operations; |
• | production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; |
• | difficulties associated with staffing and managing international operations, including differing labor relations; |
• | workforce uncertainty in countries where labor unrest is more common than in the United States; and |
• | business interruptions resulting from geo-political actions, including war and terrorism, health epidemics, or natural disasters including earthquakes, typhoons, floods and fires. |
• | identifying, recruiting, integrating, maintaining and motivating additional employees; |
• | managing our internal development efforts effectively, including the clinical, FDA review processes for our product candidates; and |
• | improving our operational, financial and management controls, reporting systems and procedures. |
• | disruptions to our business and clinical activities caused by potential future governments-imposed lockdowns such as stringent quarantine measures, mandate of temporary shutdown of business operations, limitation in patient enrollment, disruptions to patient follow-up, and curtailed screening visits, delays or difficulties in enrolling patients; |
• | interruption to supply chain due to cancellation of public transport or restrictions on logistics; |
• | delays in clinical sites receiving the supplies and materials needed to conduct our clinical trials; |
• | diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials; |
• | interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by governments, employers and others; |
• | restrictions on employee resources that would otherwise be focused on the conduct of our clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with crowds; |
• | delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; |
• | interruption in global shipping that may affect the transport of clinical trial materials; |
• | changes in local regulations as part of a response to the health pandemics or epidemics which may require us to change how our clinical trials are conducted, which may result in unexpected costs, or to pause the clinical trials altogether; |
• | delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees; and |
• | refusal of the relevant regulatory authorities to accept data from clinical trials in health pandemics or epidemics affected geographic regions. |
• | we may not be able to control the amount and timing of resources that our collaboration partner chooses to dedicate to the development of such product candidates; |
• | the collaboration partner may itself experience financial difficulties and disrupt our collaboration efforts; |
• | we may be required to grant or otherwise relinquish important rights such as marketing, distribution and intellectual property rights; |
• | a collaboration partner could move forward with a competing product developed either independently or in collaboration with third parties, including our competitors; or |
• | business combinations or significant changes in a collaboration partner’s business strategy may adversely affect our willingness to complete our obligations under any arrangement. |
• | increased operating expenses and cash requirements; |
• | the assumption of additional indebtedness or contingent liabilities; |
• | assimilation of operations, intellectual property and products of an acquired company, including difficulties associated with integrating new personnel; |
• | the diversion of our management’s attention from our existing programs and initiatives in pursuing such a strategic partnership, merger or acquisition; |
• | retention of key employees, the loss of key personnel and uncertainties in our ability to maintain key business relationships; |
• | risks and uncertainties associated with the other party to such a transaction, including the prospects of that party and their existing products or product candidates and regulatory approvals; and |
• | our inability to generate revenue from acquired technology sufficient to meet our objectives in undertaking the acquisition or even to offset the associated acquisition and maintenance costs. |
• | failure to begin or complete clinical trials due to disagreements with regulatory authorities; |
• | failure to demonstrate that a product candidate is safe and effective; |
• | failure of clinical trial results to meet the level of statistical significance required for approval; |
• | reporting or data integrity issues related to our clinical trials; |
• | disagreement with our interpretation of data from preclinical studies or clinical trials; |
• | changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval or require us to amend our clinical trial protocols; |
• | regulatory requests for additional analyses, reports, data, nonclinical studies and clinical trials, or questions regarding interpretations of data and results and the emergence of new information regarding our product candidates or other products; |
• | failure to satisfy regulatory conditions regarding endpoints, patient population, available therapies and other requirements for our clinical trials in order to support marketing approval on an accelerated basis or at all; |
• | a delay in or the inability of health authorities to complete regulatory inspections of our development activities, regulatory filings or manufacturing operations, whether as a result of the COVID-19 pandemic or other reasons, or our failure to satisfactorily complete such inspections; |
• | our failure to conduct a clinical trial in accordance with regulatory requirements or our clinical trial protocols; and |
• | clinical sites, investigators or other participants in our clinical trials deviating from a trial protocol, failing to conduct the trial in accordance with regulatory requirements, or dropping out of a trial. |
• | litigation involving patients taking such products; |
• | restrictions on such products, manufacturers or manufacturing processes; |
• | restrictions on the labeling or marketing of such product; |
• | restrictions on product distribution or use; |
• | requirements to conduct post-marketing studies or clinical trials; |
• | warning or untitled letters; |
• | withdrawal of such products from the market; |
• | refusal to approve pending applications or supplements to approved applications that we submit; |
• | recall of products; |
• | fines, restitution or disgorgement of profits or revenue; |
• | suspension or withdrawal of marketing approvals; |
• | suspension of any ongoing clinical trials; |
• | damage to relationships with any potential collaborators; |
• | unfavorable press coverage and damage to our reputation; |
• | refusal to permit the import or export of our products; |
• | product seizure; or |
• | injunctions or the imposition of civil or criminal penalties. |
• | the U.S. federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other hand. Although there are several statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration that are alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the federal Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the federal Anti-Kickback Statute has been violated; |
• | U.S. federal civil and criminal false claims laws, including the federal False Claims Act, which can be enforced through civil whistleblower or qui tam actions, and civil monetary penalty laws, which, among other things, impose criminal and civil penalties, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws. Further, pharmaceutical manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. Criminal prosecution is also possible for making or presenting a false, fictitious or fraudulent claim to the federal government; |
• | HIPAA, which contains new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of whether the payor is public or private, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; |
• | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, which impose obligations on “covered entities,” including certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates “that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information. Additionally, HITECH also contains four new tiers of civil monetary penalties; amends HIPAA to make civil and criminal penalties directly applicable to business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in U.S. federal courts to enforce the federal HIPAA laws and to seek attorneys’ fees and costs associated with pursuing federal civil actions; |
• | the U.S. federal Food, Drug and Cosmetic Act, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices; |
• | the U.S. federal Physician Payments Sunshine Act, created under Section 6002 of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the ACA, and its implementing regulations, created annual reporting requirements for certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions), to report information related for certain payments and “transfers of value” provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and analogous state laws and regulations and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or to adopt compliance programs as prescribed by state laws and regulations, or that otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures or drug pricing; state and local laws that require the registration of pharmaceutical sales representatives; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts. |
• | it takes time and resources to negotiate and execute sales, marketing or distribution agreements and we may not end up with an agreement being signed and may delay the development or commercialization of the affected product candidate; |
• | sales, marketing or distribution agreements are subject to cancellation or nonrenewal by our collaborators, or may not be fully complied with by our collaborators; |
• | in the case of a license granted by us, we lose control of the development of the product candidate licensed; |
• | in such cases we would have only limited control over the means and resources allocated by our partner for the sales, marketing or distribution of our future approved product; and |
• | collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation. |
• | reduced resources of our management to pursue our business strategy; |
• | decreased demand for any product candidates or products that we may develop; |
• | injury to our reputation and significant negative media attention; |
• | withdrawal of clinical trial participants; |
• | initiation of investigations by regulators; |
• | product recalls, withdrawals or labeling, marketing or promotional restrictions; |
• | significant costs to defend the resulting litigation; |
• | substantial monetary awards paid to clinical trial participants or patients; |
• | loss of revenue; and |
• | the inability to commercialize any products that we may develop. |
• | changes in the industries in which we operate; |
• | developments involving our competitors; |
• | changes in laws and regulations affecting our business; |
• | variations in our operating performance and the performance of its competitors in general; |
• | actual or anticipated fluctuations in our quarterly or annual operating results; |
• | publication of research reports by securities analysts about us or our competitors or our industry; |
• | the public’s reaction to our press releases, its other public announcements and its filings with the SEC; |
• | actions by holders in respect of any of their ordinary shares; |
• | additions and departures of key personnel; |
• | commencement of, or involvement in, litigation involving us; |
• | changes in our capital structure, such as future issuances of securities or the incurrence of debt; |
• | the volume of our ordinary shares available for public sale; and |
• | general economic and political conditions, recessions, volatility in the markets, interest rates, local and national elections, fuel prices, international currency fluctuations, corruption, political instability, and acts of war or terrorism. |
• | our ability to execute our strategies and develop our pipeline; |
• | our ability to obtain regulatory approvals for our product candidates and gain market acceptance; |
• | our ability to generate revenue from product sales and become profitable in the future; |
• | our ability to develop and protect intellectual property; |
• | our ability to properly manage a public company; |
• | our manufacturing, commercialization, and marketing capabilities and strategy; |
• | our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy; |
• | the need to hire additional personnel and our ability to attract and retain such personnel; |
• | the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting; |
• | our ability to implement measures to address the material weakness that has been identified; |
• | our competitive position and the success of competing therapies that are or may become available; |
• | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
• | our financial performance; |
• | the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements; |
• | the impact of laws and regulations; |
• | our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates; |
• | our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act; and |
• | our anticipated use of our existing resources and the proceeds from this offering. |
• | 30% of the net proceeds to advance the clinical development of our lead diagnostic product candidate, APN-1607, including the initiation of a phase 3 clinical trial in the second half of 2024 in the United States, Europe, Japan and Taiwan and Asia for patients clinically suspected to have Progressive Supranuclear Palsy (“PSP”); |
• | 10% of the net proceeds to advance the clinical development of our lead therapeutic product candidate, APNmAb005, including the advancement of our ongoing phase 1 clinical trial in the United States; |
• | 10% of the net proceeds to advance the preclinical development of our lead protein degraders toward IND-enabling studies; and |
• | the remainder to fund other research and development activities, working capital requirements and general corporate purposes. |
• | on an actual basis; |
• | on a pro forma basis to reflect (i) the conversion of all of our issued and outstanding convertible preferred shares into 13,405,650 ordinary shares on a one-for-one basis upon the completion of this offering; and (ii) the conversion of all of our issued convertible promissory notes and associated interest into 2,300,119 ordinary shares upon the completion of this offering based on 80% of an assumed initial public offering price of $12.00 per ordinary share, which is the midpoint of the price range set forth on the cover page of this prospectus; and |
• | on a pro forma as adjusted basis to reflect (i) the pro forma adjustments set forth above, and (ii) the sale of 2,000,000 ordinary shares by us in this offering at an assumed initial public offering price of $12.00 per ordinary share, which is the midpoint of the estimated range of the initial public offering price shown on the front cover of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us, assuming the underwriters do not exercise their option to purchase additional ordinary shares. |
| | As of June 30, 2023 | |||||||
| | Actual (unaudited) | | | Pro Forma (1) | | | Pro Forma As Adjusted (1)(2) | |
| | (Amounts in thousands, except share and per share data) | |||||||
Cash | | | $7,731 | | | $12,181 | | | $32,651 |
Convertible notes (including related parties convertible notes of $10,762, net of debt discount and issuance costs) | | | $ 14,788 | | | $ — | | | $— |
Derivative liabilities (including related parties derivative liabilities of $1,685) | | | 2,679 | | | — | | | — |
Redeemable convertible preferred shares (Series B, Pre-C and C), $0.4 par value; 14,243,334 shares authorized; 13,405,650 shares issued and outstanding, actual; no shares authorized, issued and outstanding, pro forma and pro forma as adjusted | | | 65,876 | | | — | | | — |
Shareholders' equity (deficit): | | | | | | | |||
Ordinary shares, $0.4 par value, 110,756,666 shares authorized; 10,123,057 shares issued and outstanding, actual; $0.4 par value, 110,756,666 shares authorized, 25,828,826 shares issued and outstanding, pro forma; and $0.4 par value, 110,756,666 shares authorized, 27,828,826 shares issued and outstanding, pro forma as adjusted | | | 4,049 | | | 10,331 | | | 11,131 |
Additional paid-in capital | | | 13,176 | | | 94,851 | | | 114,521 |
Accumulated deficit | | | (97,823) | | | (97,987) | | | (100,678) |
Accumulated other comprehensive loss | | | (1,334) | | | (1,334) | | | (1,334) |
Total shareholders' equity (deficit) | | | (81,932) | | | 5,861 | | | 23,640 |
Total capitalization | | | $1,411 | | | $5,861 | | | $23,640 |
(1) | The unaudited pro forma and pro forma as adjusted information does not include the impact of share-based compensation expense for share options which we expect to record upon the completion of this offering. |
(2) | The pro forma as adjusted information discussed above is illustrative only. Our additional paid-in capital and total shareholders’ equity (deficit) following the completion of this offering are subject to adjustment based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $12.00 per ordinary share, the midpoint of the estimated range of the initial public offering price shown on the cover page of this prospectus, would increase (decrease) |
• | 3,292,493 ordinary shares issuable upon exercise of share options outstanding as of June 30, 2023, at a weighted average exercise price of $0.62 per share; and |
• | 274,855 ordinary shares reserved for future issuance under our Equity Incentive Plan #4, or the 2022 Plan as of June 30, 2023. |
| | Per Ordinary Share | |
Assumed initial public offering price per ordinary share | | | $12.00 |
Net tangible book value per ordinary share | | | $(8.37) |
Pro forma net tangible book value per ordinary share after giving effect to the pro forma adjustments described above | | | $0.12 |
Pro forma net tangible book value per ordinary share as adjusted to give effect to the pro forma adjustments described above, and this offering | | | $0.85 |
Amount of dilution in net tangible book value per ordinary share to new investors in the offering | | | $11.15 |
| | Ordinary Shares Purchased | | | Total Consideration | | | Average Price Per Ordinary Share | |||||||
| | Number | | | Percent | | | Amount | | | Percent | | |||
(in thousands, except share, per share and percent data) | | | | | | | | | | | |||||
Existing shareholders | | | 25,828,826 | | | 92.8% | | | $101,335 | | | 80.9% | | | $3.92 |
New investors | | | 2,000,000 | | | 7.2% | | | $24,000 | | | 19.1% | | | $12.00 |
Total | | | 27,828,826 | | | 100.0% | | | $125,335 | | | 100.0% | | |
• | political and economic stability; |
• | an effective judicial system; |
• | tax neutrality; |
• | the absence of exchange control or currency restrictions; and |
• | the availability of professional and support services. |
• | the Cayman Islands has a less-developed body of securities laws as compared to the United States and these securities laws provide significantly less protection to investors as compared to those of the United States; and |
• | Cayman Islands companies may not have standing to sue before the federal courts of the United States. |
• | continue our ongoing and planned clinical research and development of our lead diagnostic product candidate, APN-1607, in the United States for the diagnosis of AD and PSP; |
• | continue our ongoing and planned preclinical studies and clinical research and development of our other diagnostic and therapeutic product candidates, including our lead therapeutic product candidate, APNmAb005, and Tau and α-Syn degrader candidates; |
• | continue our other ongoing and planned discovery and research and development activities; |
• | seek to discover and develop additional product candidates and further expand our clinical product pipeline; |
• | seek regulatory approvals for any product candidates that successfully complete clinical trials; |
• | establish sales, marketing and distribution infrastructure to commercialize any product candidate for which we may obtain regulatory approval; |
• | develop, maintain, expand and protect our intellectual property portfolio; |
• | hire additional research, clinical, quality control, and administrative personnel; |
• | expand our operations globally; and |
• | incur additional legal, accounting, investor relations, insurance and other expenses associated with operating as a public company following the completion of this offering. |
• | expenses incurred under agreements with organizations that support our drug discovery and development activities; |
• | expenses incurred in connection with the preclinical and clinical development of our product candidates and programs; |
• | costs related to contract research organizations (“CROs”) and contract development and manufacturing organizations (“CDMOs”), that are primarily engaged to provide drug substance and product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct our clinical trials, nonclinical studies and other scientific development services; |
• | costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches; |
• | employee-related expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development functions; |
• | costs related to compliance with quality and regulatory requirements; |
• | payments made under third-party licensing agreements; and |
• | direct and allocated costs related to facilities, information technology, personnel and other overhead. |
• | per patient trial costs; |
• | the number of patients that participate in the trials; |
• | the number of sites included in the trials; |
• | the countries in which the trials are conducted; |
• | the length of time required to enroll eligible patients; |
• | the drop-out or discontinuation rates of patients; |
• | potential additional safety monitoring or other studies requested by regulatory agencies; |
• | the duration of patient follow-up; |
• | the efficacy and safety profile of the product candidates; |
• | the number of trials required for regulatory approval; |
• | the receipt of regulatory approvals from applicable regulatory authorities; |
• | the timing, receipt and terms of any marketing approvals from applicable regulatory authorities; and |
• | the extent to which we establish collaboration, licensing or similar arrangements and the performance of any related third parties. |
| | For the six months ended June 30, | | | | | | | Year Ended December 31, | | ||||||||||||||
| | 2023 | | | 2022 | | | Change | | | % | | | 2022 | | | 2021 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||||||||||||||
Revenue | | | $496 | | | $295 | | | $201 | | | 68 | | | $394 | | | $550 | | | $(156) | | | (28) |
Revenue - related party | | | 8,538 | | | — | | | 8,538 | | | — | | | — | | | — | | | — | | | — |
Total revenue | | | 9,034 | | | 295 | | | 8,739 | | | 2,962 | | | 394 | | | 550 | | | (156) | | | (28) |
Operating expenses | | | | | | | | | | |||||||||||||||
Research and development | | | 11,067 | | | 11,289 | | | (222) | | | (2) | | | 21,617 | | | 19,660 | | | 1,957 | | | 10 |
General and administrative | | | 4,704 | | | 2,849 | | | 1,855 | | | 65 | | | 7,041 | | | 4,787 | | | 2,254 | | | 47 |
Total operating expenses | | | 15,771 | | | 14,138 | | | 1,633 | | | 12 | | | 28,658 | | | 24,447 | | | 4,211 | | | 17 |
Loss from operations | | | (6,737) | | | (13,843) | | | 7,106 | | | (51) | | | (28,264) | | | (23,897) | | | (4,367) | | | 18 |
Other (expense) income: | | | | | | | | | | | | | | | | | ||||||||
Interest expense, net | | | (1,444) | | | (13) | | | (1,431) | | | 11,008 | | | (67) | | | (36) | | | (31) | | | 86 |
Change in fair value of derivative liabilities | | | 498 | | | — | | | 498 | | | — | | | — | | | — | | | — | | | — |
Other income (expense), net | | | 551 | | | 186 | | | 365 | | | 196 | | | 117 | | | 672 | | | (555) | | | (83) |
Total other income (expense), net | | | (395) | | | 173 | | | (568) | | | (328) | | | 50 | | | 636 | | | (586) | | | (92) |
| | For the six months ended June 30, | | | | | | | Year Ended December 31, | | ||||||||||||||
| | 2023 | | | 2022 | | | Change | | | % | | | 2022 | | | 2021 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||||||||||||||
Loss before income taxes | | | (7,132) | | | (13,670) | | | 6,538 | | | (48) | | | (28,214) | | | (23,261) | | | (4,953) | | | 21 |
Provision for income taxes | | | (53) | | | (6) | | | (47) | | | 783 | | | (17) | | | — | | | (17) | | | — |
Net loss | | | $(7,185) | | | $(13,676) | | | $6,491 | | | (47) | | | $(28,231) | | | $(23,261) | | | $(4,970) | | | 21 |
| | For the six months ended June 30, | | | | | ||||||
| | 2023 | | | 2022 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||
Outsourced research services | | | $5,344 | | | $7,423 | | | $(2,079) | | | (28) |
Personnel expenses (including share-based compensation) | | | 3,426 | | | 2,346 | | | 1,080 | | | 46 |
Facilities and lab supplies | | | 907 | | | 533 | | | 374 | | | 70 |
Legal, professional and consulting fees | | | 494 | | | 674 | | | (180) | | | (27) |
Other expenses | | | 896 | | | 313 | | | 583 | | | 186 |
| | $11,067 | | | $11,289 | | | $(222) | | | (2) |
| | For the six months ended June 30, | | | | | ||||||
| | 2023 | | | 2022 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||
Personnel expenses (including share-based compensation) | | | $2,550 | | | $1,021 | | | $1,529 | | | 150 |
Legal, professional and consulting fees | | | 1,585 | | | 1,432 | | | 153 | | | 11 |
Facilities and lab supplies | | | 246 | | | 241 | | | 5 | | | 2 |
Other expenses | | | 323 | | | 155 | | | 168 | | | 108 |
| | $4,704 | | | $2,849 | | | $1,855 | | | 65 |
| | For the Year Ended December 31, | | | | | ||||||
| | 2022 | | | 2021 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||
Outsourced research services | | | $12,583 | | | $14,940 | | | $(2,357) | | | (16) |
Personnel expenses (including share-based compensation) | | | 6,072 | | | 2,384 | | | 3,688 | | | 155 |
Facilities and lab supplies | | | 1,332 | | | 936 | | | 396 | | | 42 |
Legal, professional and consulting fees | | | 893 | | | 735 | | | 158 | | | 21 |
Other expenses | | | 737 | | | 665 | | | 72 | | | 11 |
| | $21,617 | | | $19,660 | | | $1,957 | | | 10 |
| | For the Year Ended December 31, | | | | | ||||||
| | 2022 | | | 2021 | | | Change | | | % | |
| | ($ in thousands, except percentages) | ||||||||||
Personnel expenses (including share-based compensation) | | | $3,549 | | | $2,056 | | | $1,493 | | | 73 |
Legal, professional and consulting fees | | | 2,709 | | | 2,011 | | | 698 | | | 35 |
Facilities and lab supplies | | | 412 | | | 237 | | | 175 | | | 74 |
Other expenses | | | 371 | | | 483 | | | (112) | | | (23) |
| | $7,041 | | | $4,787 | | | $2,254 | | | 47 |
• | the timing, receipt and amount of sales of any future approved or cleared products, if any; |
• | the scope, progress, results and costs of researching and developing our existing product candidates or any future product candidates, and conducting preclinical studies and clinical trials; |
• | the timing of, and the costs involved in, obtaining regulatory approvals or clearances for our existing product candidates or any future product candidates; |
• | the time and costs involved in obtaining regulatory approval for our product candidates and any delays we may encounter as a result of evolving regulatory requirements or adverse results with respect to any of these product candidates; |
• | the number and characteristics of any additional product candidates we develop or acquire; |
• | the cost of manufacturing our product candidates and any products we successfully commercialize, including costs associated with developing our manufacturing capabilities; |
• | the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; |
• | the extent to which we acquire or in-license other product candidates and technologies; |
• | our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of any such agreements that we may enter into; |
• | the expenses needed to attract and retain skilled personnel and senior management; and |
• | the costs associated with being a public company. |
| | For the Six Months Ended June 30, | | | For the Year Ended December 31, | |||||||
| | 2023 | | | 2022 | | | 2022 | | | 2021 | |
| | ($ in thousands) | ||||||||||
Net cash used in operating activities | | | $(5,451) | | | $(9,808) | | | $(17,237) | | | $(24,303) |
Net cash used in investing activities | | | (781) | | | (878) | | | (2,016) | | | (317) |
Net cash provided by financing activities | | | 13,287 | | | 9,002 | | | 11,354 | | | 31,492 |
Effect of exchange rates on cash | | | (545) | | | (303) | | | (554) | | | (60) |
Net increase (decrease) in cash | | | $6,510 | | | $(1,987) | | | $(8,453) | | | $6,812 |
• | Tau & Tauopathies. Tau is an important protein in the brain that exists in different forms and plays a critical role in brain function. Tauopathies are neurodegenerative diseases characterized by accumulation of aggregated tau protein in distinct brain regions, such as Progressive Supranuclear Palsy (“PSP”), Alzheimer’s disease (“AD”) and Pick’s disease (“PiD”). Cumulative increases of these abnormal aggregates correlate with disease progression, and depending on the disorder can result in loss of memory, balance, walking and control of eye movements with the eventual loss of independent neurologic function. |
• | α-Syn & synucleinopathies. α-Syn is an important and highly abundant protein in the brain that regulates the release of neurochemicals between brain cells. Synucleinopathies are neurodegenerative diseases characterized by aggregation of abnormal α-Syn proteins. In synucleinopathies such as Parkinson’s disease (“PD”), Lewy Body Dementia (“LBD”) and Multiple System Atrophy (“MSA”), abnormal α-Syn aggregates accumulate in specific brain regions, and depending on the disorder can result in progressive loss of neurologic function, leading to problems with motor control, walking, balance, behavior and memory. |
• | PET diagnostic tracer APN-1607. We are developing APN-1607 as a PET imaging tracer for the detection of 3R and 4R tau aggregates, which contribute to the pathogenesis of various tauopathies, including PSP, a rare neurodegenerative disease. Based on Title 21 of the Code of Federal Regulations, Part 315, Diagnostics Radiopharmaceuticals, we seek two indication claims for APN-1607: (1) as a pathological or disease marker of 4R tau in PSP and (2) as clinically useful marker for the diagnostic management in patients who present with parkinsonian syndromes in whom the diagnosis of PSP is uncertain or requires confirmation. We have received an Orphan Drug Designation (“ODD”) from the U.S. Food and Drug Administration (the “FDA”) in 2017 for APN-1607 as a diagnostic agent for PSP. Under the U.S. Orphan Drug Act, the FDA may grant ODDs to drugs or biologics intended to treat a “rare disease or condition” |
• | Antibody platform and APNmAb005. APNmAb005 is a humanized anti-tau antibody we are developing for the treatment of AD, non-AD primary tauopathies including rare neurodegenerative disorders, such as PSP, cortico-basal degeneration (“CBD”) and behavioral variant Frontal Temporal Dementia (“FTD”) or its subcategory, Pick’s Disease (“PiD”). Unlike most other anti-tau antibodies currently in clinical development that bind to all forms of tau or phospho-tau (i.e., sites on tau protein that undergo phoshoprylation in disease state), APNmAb005 is designed to target a specific conformation epitope in the mid region that confers selectivity for misfolded tau oligomers/aggregates formed at axons/dendrites at early stages of disease that may contribute to disease progression. Based on existing clinical studies, we believe blocking the pathological tau transmission has the potential to offer an effective treatment to slow down the disease progression for AD patients. While the recent approval of two anti-amyloid antibody treatments – aducanumab (Aduhelm®) and lecanemab (Leqembi®) – represents a significant advance in the field, their widespread use will be likely limited due to safety concerns arising from anti-amyloid imaging related abnormalities (“ARIA”). Furthermore, despite the dramatic reductions in amyloid pathology, suggested by recent studies, their efficacy in slowing cognitive decline in such studies was modest. These findings are consistent with the long-standing notion that although the accumulation of amyloid plays a critical role in the pathogenesis of AD, clearing amyloid alone is insufficient to completely block or prevent disease progression and argues for the discovery of other disease modifying targets such pathological forms of tau, which correlate with disease progression and cognitive decline. An IND for the APNmAb005 program was filed on February 24, 2022, and the FDA granted a Study May Proceed letter on April 20, 2022 for the Phase 1 trial to evaluate the safety of APNmAb005 in healthy volunteers. The first cohort of 8 subjects was dosed at 5mg/kg and the safety review was completed on August 18, 2023. There were no clinically significant safety findings. The study is currently active and not recruiting for the time being due to a reprioritization of resources. To accelerate development of APNmAb005, cohorts composed of patients with early AD and PSP will be dosed using a staggered parallel group design. Dosing is anticipated to resume in the fourth quarter of 2024. It is our intention to transition the study to evaluate single and multiple dosing in patients, in order to continue to evaluate safety and tolerability at higher doses but also to acquire exploratory biomarker data. We will also seek a partnership to advance this program beyond Phase 1 into potential proof-of-concept clinical studies. |
• | Protein degrader platform and PROTAC degraders. Our proprietary PROTAC degrader programs for α-Syn and tau are our most innovative and cutting-edge platforms and have the potential to herald an entirely new class of drugs for the treatment of neurodegenerative disorders such as AD and PD. Our tau and α-Syn degrader programs are currently in the preclinical stages. Empowered by our knowledge of aggregated protein binder chemistry from our PET tracer programs we have generated a proprietary degrader library of 800+ compounds in α-Syn and tau degrader space. α-Syn degraders are identified from |
(1) | Phase 2 clinical trial of APN-1607 tau tracer for AD in the United States, Japan and Taiwan, is active non-recruiting. |
(2) | Our tau PET tracer APN-1607 improved upon a previously developed first generation compound from National Institute for Quantum Science and Technology ("QST") in Japan. We obtained an exclusive worldwide license from QST for its patent for APN-1607 in 2016. We have an exclusive license for worldwide rights to develop and commercialize APN-1607, except for mainland China, where we granted an exclusive sublicense for its development, manufacture, marketing and distribution to Yantai Yitai Pharmaceutical Technology Co., Ltd. |
• | Our lead diagnostic product candidate (APN-1607). APN-1607 is our 3R/4R tau PET tracer and most clinically advanced diagnostic product candidate. APN-1607 is designed as a new generation tau PET tracer to achieve a higher specificity for the pathological tau aggregates. We believe that APN-1607, if approved, has the potential to be a powerful enabling tool for the diagnosis of various tauopathies, as it has shown low non-specific binding to other brain proteins, and the ability to detect different forms of tau in clinical studies. APN-1607 may therefore potentially be used in more precise diagnosis and stage classification of various tauopathies, including PSP, AD and PiD. |
• | Our lead therapeutic product candidate (APNmAb005). APNmAb005 is a humanized anti-tau antibody and our most clinically advanced therapeutic product candidate. APNmAb005 is designed to preferentially bind pathological tau aggregates, not normal tau, that accumulate at the neuronal synapses with disease. In addition, based on preclinical studies we conducted, APNmAb005 recognizes a three-dimensional conformation-dependent epitope that is only present in tau abnormal aggregates but not in normal tau protein, thus suggesting this product candidate may achieve a high level of selectivity for pathological forms of tau. |
• | Our lead therapeutic product candidate (Degrader). PROTACs offer a highly novel platform for the targeted degradation of toxic proteins that are causative in a number of neurodegenerative disorders as described above. These are bifunctional molecules that combine an active site selective for binding to the |
• | Our founder and chairman of the board, Dr. Ming-Kuei Jang, Ph.D., has over 20 years of experience in neurodegenerative diseases. He also serves as the Chief Scientific Officer of APRINOIA USA and President of our Asia operations. Prior to founding the Company, Dr. Jang held an associate director role at GlaxoSmithKline in Shanghai, served as senior research biologist of Merck & Co in Boston, Massachusetts, and led Neurodegeneration Consortium at MD Anderson Cancer Center in Houston, Texas. |
• | Our Chief Executive Officer, Dr. Mark S. Shearman, Ph.D., has extensive experience in pharmaceutical research, drug development and strategic partnerships. Prior to joining us, Dr. Shearman served as the Chief Scientific Officer at Editas Medicine, Chief Scientific Officer at Applied Genetic Technologies Corporation, a Senior Vice President of research and early development at Merck KGAa. He also served at Merck & Co., with his last position as an executive director, and Merck, Sharp & Dohme, with his last position as a senior director of department of cellular & molecular neuroscience responsible for the research and development of AD. |
• | Our Chief Medical Officer, Dr. Bradford A. Navia, M.D., Ph.D., has over 17 years of experience in clinical development (including Phase 1 through Phase 3), neuroimaging and biomarkers in psychiatry and neurology, including several INDs, sNDAs and an NDA. Prior to joining us, Dr. Navia was an Associate Professor of Neurology and Psychiatry at Tufts Medical School, and the recipient of numerous awards and funding from National Institute of Health; executive director of Sunovion Pharmaceuticals, where he was the global project lead for the development of KYNMOBI; senior director, strategic and clinical lead in the neuroscience division at AbbVie Inc.; senior director and head of neuroimaging at Eisai Co., Ltd. and director in the neuroscience clinical development division at Johnson & Johnson. |
• | Our Chief Financial Officer, Brian Achenbach, M.B.A., has over 30 years of experience in finance and accounting primarily in the biotech, pharmaceutical and medical device industries. Prior to joining us, Mr. Achenbach served as Chief Financial Officer at On Demand Pharmaceuticals, Senior Vice President of Finance & Corporate Controller at Mustang Bio (Nasdaq: MBIO), and has held leadership positions in finance and accounting in multiple life sciences companies. |
• | Our General Counsel, Lana Gladstein, J.D., has over 23 years of experience in legal and pharmaceutical industry. Prior to joining us, Ms. Gladstein served as Chief Legal Officer and General Counsel of Arranta |
• | Develop novel solutions to overcome the challenges in diagnosing and treating neurodegenerative diseases. We aim to develop solutions to overcome past failures in drug development by other companies in central nervous system (“CNS”) related clinical trials. These failures were attributable to one or more reasons, including wrong targets, molecules, patients, drug doses, and treatment timing or duration. We will focus our discovery and research capabilities on tau and α-Syn protein aggregates. We aim to leverage our unique PET tracers and protein binders, which specifically recognize tau and α-Syn in pathological aggregates instead of their normal forms, to develop and commercialize our diagnostic and therapeutic assets. |
• | Continue to execute our versatile R&D and commercialization strategy to maximize asset value. We plan to seek collaboration opportunities with leading pharmaceutical and biotechnology companies to develop and commercialize our product candidates at different stages of clinical development. We expect this strategy to provide us with the flexibility to optimize the value of our product pipeline and the ability to generate cash inflow with a higher degree of certainty prior to drug commercialization. |
○ | Diagnostic programs strategy. We have adopted different strategies for our early- and late-stage PET assets. We formed early research collaborations with pharmaceutical companies to support the development of our early-stage programs, such as α-Syn PET tracers. For our late-stage clinical programs, we plan to provide non-exclusive licenses to pharmaceutical companies while retaining the rights to fund our clinical trials to NDA to allow us to capture the full commercialization value. |
○ | Therapeutic programs strategy. Our clinical development strategy is to start with rare diseases attributable to pathological mechanisms involving tau or α-Syn such as PSP, PiD, and MSA, and fund the clinical trials to NDA through internal resources. For more prevalent diseases, such as AD and PD, which will require larger and more complex trials, we may consider forming partnerships with other biotechnology and pharmaceutical companies to help fund those clinical trials. In both situations, we will leverage our proprietary PET tracer, APN-1607, for patient selection and monitoring treatment response, thereby improving the probability of success of these trials. |
• | Create product-by-product and region-by-region commercialization strategies in anticipation of our future product launches. We will evaluate commercialization strategies on a product-by-product and region-by-region basis in order to maximize the value of our future approved products. We will take into consideration a matrix of factors, including capital investment necessary to execute on each option, manufacturing and distribution partners and infrastructure available in each market, availabilities of sales and marketing specialists, size of the market, competition, and availability of pharmaceutical and biotechnology partners to form a tailored commercialization strategy for each product candidate. |
• | PSP. PSP is a rare neurodegenerative disorder with a prevalence ranging from 1.39 to 17.3 affected individuals per 100,000 people. The characteristic signs of PSP are postural instability, falls, disturbances controlling in eye movements, cognitive or behavioral changes. The condition gradually worsens until death, an average of seven years after onset of symptoms. Reliable diagnosis, particularly during the early stages of disease, remains a major clinical challenge and currently a definitive diagnosis can be made only by postmortem examination. There is a significant unmet need to identify biomarkers for the diagnosis of PSP and related tauopathies, particularly during the early stages of the disease. |
• | AD. AD is the most common cause of dementia. AD and neurodegenerative diseases affected approximately 50 million people worldwide in 2020 and are expected to affect 139 million people worldwide by 2050. In the United States, approximately 6.5 million people have AD and the number could reach 12 million by 2050. AD is projected to cost the United States more than $379 billion in economic burden annually by 2040. Approximately 90% of physicians in the United States believe that early diagnosis of AD is critical to be able to delay the progression of the disease. Regardless, many physicians remain uncomfortable adopting early diagnosis given the scarcity of reliable diagnostic tools for early diagnosis, underscoring the unmet need to identify more precise diagnostics. |
• | PD. PD is the most prevalent movement disorder in the elderly and affects approximately 10 million people worldwide in 2020 and the number is growing with an aging population. Currently, PD affects about 1 million people in the United States. |
(A) | Coronal (upper) and axial (lower) APN-1607-PET images of HC and PSP-Richardson patients with different disease severities scored by PSPRS. Signals are localized to basal ganglia areas (yellow arrowhead) and midbrain (green arrowhead) and expansion to the primary motor and adjacent cerebral cortices containing white matter (white arrowhead) with clinical advancement. The asterisked image was derived from an autopsy-confirmed PSP case. |
(B) | Voxel-based analyses of brain atrophy (voxel-based morphometry [VBM]; red), APN-1607signal increase (green), and their spatial overlaps (yellow) in PSP-Richardson patients relative to HCs (p < 0.05, familywise error corrected at cluster level). Statistical maps are displayed in the Montreal Neurological Institute coordinate space. |
(C) | Comparisons of APN-1607 uptake in subcortical regions, including the globus pallidus (GP), substantia nigra (SN), raphe nucleus (RN), and subthalamic nucleus (STN) between 23 HCs (white circles) and 16 PSP-Richardson patients (black circles). *p < 0.001 by two-sample t test. |
(A) | Coronal and sagittal brain images of a 68-year-old subject clinically diagnosed with CBS (upper panels). Enhanced radioligand binding was observed in the primary motor and adjacent cortices and subcortical regions, including basal ganglia, subthalamic nucleus, midbrain, pons, and choroid plexus (red arrowheads). Neuropathological assays of biopsy tissues collected from the middle frontal gyrus revealed the existence of astrocytic plaques, ballooned neurons, and coiled bodies stained with RD4 and/or GB in the cortex and corticomedullary junction (lower panels), in agreement with CBD tau pathologies. |
(B) | Axial and coronal 18F-PM-PBB3 PET images of a 65-year-old patient with a clinical diagnosis of PSP-Richardson (PSP-3, upper panels). The radioligand binding was augmented in the midbrain, subthalamic nucleus, neighboring subcortical structures, and choroid plexus (red arrowheads). Brain autopsy conducted 2 years after the PET scan demonstrated abundant accumulation of tufted astrocytes stained with non-radiolabeled PM-PBB3,AT8, and GB in the midbrain tegmentum and subthalamic nucleus (lower panels), indicating PSP as a definite diagnosis of this individual. |
(C) | Coronal 18F-PM-PBB3 PET images of a 59-year-old patient clinically diagnosed with bvFTD (PiD-2, upper panels). Accumulations of radio signals were noticeable in the frontal cortex, in contrast with a lack of radioligand binding in the occipital cortex. Brain autopsy was carried out 1 year after the PET scan, showing great abundance of Pick bodies and neuropil threads stained with non-radiolabeled PM-PBB3 and AT8 in the inferior frontalgyrus (lower panels). This was in sharp distinction from the few tau pathologies in the primary visual cortex (lower panels), collectively supporting a definite diagnosis of this case as PiD. |
(A) | Coronal 18F-PM-PBB3-PET images of HCs and AD patients classified into different Braak tau stages. |
(B) | The topology of increased 18F-PM-PBB3 binding in subjects at each Braak stage compared to 22 HCs (stage zero). p <0.005, uncorrected, for one HC (stage I/II); p <0.05, familywise error corrected at cluster level, for four MCI/AD patients (stage III/IV) and for 13 MCI/AD patients (stage V/VI). |
(C) | Comparisons of 18F-PM-PBB3 binding in Braak stage VOIs between 23 HCs (white circles) and three MCI (black squares) and 14 AD (black triangles) cases. *p <0.001 by two-sample t test. |
(D) | Correlation of 18F-PM-PBB3 binding in the Braak stage V/VI VOI with CDRSoB points in MCI (black squares) and AD (black triangles) patients. r = 0.671 and p =0.003 by Pearson’s correlation analysis. Associations between the clinical disease severity and the extension of 18F-PM-PBB3 binding among MCI/AD patients. |
• | α-Syn PET Tracer. The discovery and development of a PET imaging tracer that can detect α-synuclein aggregates in patients with PD and related α-synucleinopathies such as MSA represents a significant unmet need in the field. There are no approved tracers for this indication. We have entered into a Research Collaboration Agreement with H. Lundbeck A/S (“Lundbeck”) and Abbvie Inc. (“Abbvie”), in which we share the responsibilities to advance development of aSyn PET tracer candidates. We initially identified 16 lead compounds. Among them, we transferred four compounds to Lundbeck and another four compound to Abbvie for further evaluation, including autoradiography, brain tissue binding, and PK studies. The remaining eight compounds were evaluated in-house by us. These results were shared among the three parties. Our α-Syn PET tracer lead candidate (RAC0523 binds to abnormal α-Syn aggregates in multiple α-Synucleinopathies including PD and MSA. Non-human primate imaging study indicates moderate brain penetration, promising kinetics and slow washout. RAC 0523 was observed to be well tolerated in a rodent toxicology study conducted by our vendor under GLP conditions, which is an important stage-gate in determining the possibility of advancing the molecule into clinical development. Lundbeck continues to perform binding studies and Abbvie is contributing radiological chemistry resources. See “— License Agreements and Collaborations” for more details. |
• | We believe our diagnostic platform has broad applicability across a wide array of targets and indications. We are also exploring other potential promising targets and indications. |
• | Degrader platform. Our degrader platform has four parts, namely (i) a proprietary PROTAC degrader compound library, (ii) cryogenic electron microscopy (“cryoEM”) technology to validate the binding of select compounds at the molecular level, (iii) diagnostic tools in the form of PET tracers which can potentially be used as pharmacodynamic biomarkers to monitor the removal of pathological tau, and (iv) animal models to confirm compounds’ activity therapeutic value in vivo. Leveraging our degrader platform, we can quickly assay our CNS protein binding compound collection to select promising candidates. Once promising candidates are identified, we can use cryoEM to confirm a binding mode and to facilitate the development and optimization of structural activity relationship (“SAR”). Finally, using our PET tracers, we can measure target engagement of our candidates in vivo. We are building a small molecule library designed to target pathological aggregates. |
• | Antibody platform. Both hybridoma and phage display library approaches were employed to generate more than 40 anti-tau antibodies for our antibody library. Moreover, we designed a disease-focus screening framework to identify several anti-tau conformational antibodies recognizing pathological tau species enriched at neuronal synapses. Our most clinically advanced product candidate from the antibody platform is APNmAb005. Based on this experience, we believe we have the capability of generating novel antibodies targeting other pathological protein aggregates. |
| |
| | Upon entering the cells, a degrader forms a ternary complex with tau and E3 ligase. The latter transfers ubiquitin to tau and marks it as substrate to be removed by proteasome degradation. |
| | Similar to that described for tau degraders, α-Syn degraders drive the formation of a ternary complex with α-Syn and E3 ligase. α-Syn labeled with ubiquitin by E3 ligase is then removed by proteasome degradation. |
• | Tau PET tracer patent family (including APN-1607 related patents licensed from QST). We exclusively license a portfolio of patents and patent applications describing composition-of-matter claims encompassing tau PET tracers including APN-1607 as well as claims to associated methods of use for PET imaging from QST in Japan. See “—License Agreements and Collaborations—License Agreement with National Institutes for Quantum Science and Technology” above for more details. As of the date of this prospectus, our tau PET tracers’ patent portfolio, licensed from QST, includes two issued U.S. patents and one pending U.S. patent application, as well as 21 issued patents in Taiwan, Australia, Canada, China, Hong Kong, Japan, South Korea, Singapore, European Patent Office, Switzerland, Germany, Denmark, Estonia, Finland, France, United Kingdom, Italy, Netherlands, and Sweden, and one pending patent application in India. The issued U.S. patents will expire in December 2032 and October 2033, respectively, and other patents granted in other jurisdictions of this patent family will expire no earlier than December 2032, without taking potential patent term extensions into account. |
• | α-Syn PET tracer patent family. As of the date of this prospectus, under our α-syn PET tracer patent family, we owned seven issued patents in Australia, China, India, Japan, South Korea, New Zealand, and South Africa, as well as two pending patent applications in the United States and 12 pending patent applications in Taiwan, Brazil, Canada, Hong Kong, European Patent Office, Israel, Japan, South Korea, Malaysia, Mexico, New Zealand, Thailand, and Vietnam. These pending patent applications contain composition-of-matter claims encompassing various α-Syn small molecules as well as claims to associated methods of manufacture and methods of use. These patents, if granted, will expire in 2039 without taking potential patent term extensions into account. |
• | Degrader patent families. As of the date of this prospectus, under our degrader patent families, we owned two issued patents in the United State claiming degrader compositions of matter targeting tau and α-syn, respectively and one issued patent in Taiwan. The issued U.S. patents will expire in November 2040, |
• | Anti-tau antibody patent family (including APNmAb005). As of the date of this prospectus, under our anti-tau antibody patent family, we owned two issued patents in the United States and five issued patents in Australia, China, Japan, South Korea and Taiwan, as well as one pending patent application in the United States and five pending patent applications in Taiwan, Canada, Hong Kong, European Patent Office, and Singapore. These issued patents and pending patent applications are directed to composition-of-matter claims encompassing anti-tau antibodies including our product candidates APNmAb005. The issued U.S. patents will expire in August 2040, and other patents granted in other jurisdictions of this patent family will expire no earlier than 2040, without taking potential patent term extensions into account. |
• | the completion of preclinical laboratory tests and animal tests conducted under cGLP regulations; |
• | the submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical studies commence; |
• | obtaining a positive opinion from the ethics committee (Europe)/institutional review board (U.S.) to commence study on human subjects; |
• | the performance of adequate and well-controlled human clinical studies to establish the safety and efficacy of the product candidate for each proposed indication and conducted in accordance with cGCP requirements; |
• | pre-NDA submission meeting with FDA (highly recommended); |
• | the submission to the FDA of an NDA; |
• | the FDA’s acceptance of the NDA; |
• | satisfactory completion of an FDA Pre-Approval Inspection (“PAI”) of the manufacturing facilities at which the product is made to assess compliance with cGMP requirements; |
• | the FDA’s review and approval of an NDA prior to any commercial marketing or sale of the drug in the United States; and |
• | having parallel scientific advice from the EMA or Health Technology Assessment body whereby the payors are involved at the outset (Phase 2), which is intended to facilitate the design of clinical studies to target primarily populations with a high chance of obtaining reimbursement and accelerate the process of time to reimbursement. |
• | restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
• | fines, warning letters or holds on post-approval clinical studies; |
• | refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals; |
• | product seizure or detention, or refusal to permit the import or export of products; or |
• | injunctions or the imposition of civil or criminal penalties. |
Name | | | Age | | | Position(s) |
Ming-Kuei Jang, Ph.D. | | | 52 | | | Chairman of the Board of Directors |
Mark S. Shearman, Ph.D. | | | 62 | | | Director and Chief Executive Officer |
Michael Xin Hui, M.B.A. | | | 52 | | | Director |
Zhigang Luo, M.B.A. | | | 53 | | | Director |
Roger James Pomerantz, M.D., F.A.C.P. | | | 66 | | | Director |
Bradford A. Navia, M.D., Ph.D. | | | 69 | | | Chief Medical Officer |
Brian Achenbach, M.B.A. | | | 59 | | | Chief Financial Officer |
Lana Gladstein, J.D. | | | 48 | | | General Counsel |
• | conducting and managing the business of our company; |
• | representing our company in contracts and deals; |
• | appointing attorneys for our company; |
• | selecting and removing senior management; |
• | providing employee benefits and pensions; |
• | managing our company’s finance and bank accounts; |
• | evaluating the performance and determining the compensation level of chief executive officer; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | exercising any other powers conferred by the shareholders meetings or under our amended and restated memorandum and articles of association. |
• | Class I, which will consist of , whose term will expire at our first annual general meeting of shareholders to be held after the closing of this offering or until their successors are elected and qualified; |
• | Class II, which will consist of , whose term will expire at our second annual general meeting of shareholders to be held after the closing of this offering or until their successors are elected and qualified; and |
• | Class III, which will consist of , whose term will expire at our third annual general meeting of shareholders to be held after the closing of this offering or until their successors are elected and qualified. |
• | selecting the independent auditor; |
• | pre-approving auditing and non-auditing services permitted to be performed by the independent auditor; |
• | annually reviewing the independent auditor’s report describing the auditing firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review, or peer review, of the independent auditors and all relationships between the independent auditor and our company; |
• | review responsibilities, budget, compensation and staffing of our internal audit function; |
• | reviewing with the independent auditor any audit problems or difficulties and management’s response; |
• | reviewing and, if material, approving all related party transactions on an ongoing basis; |
• | reviewing and discussing the annual audited financial statements with management and the independent auditor; |
• | reviewing and discussing with management and the independent auditors major issues regarding accounting principles and financial statement presentations; |
• | reviewing reports prepared by management or the independent auditors relating to significant financial reporting issues and judgments; |
• | discussing earnings press releases with management, as well as financial information and earnings guidance provided to analysts and rating agencies; |
• | reviewing with management and the independent auditors the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on our financial statements; |
• | discussing policies with respect to risk assessment and risk management with management and internal auditors; |
• | timely reviewing reports from the independent auditor regarding all critical accounting policies and practices to be used by our company, all alternative treatments of financial information within IFRS that have been discussed with management and all other material written communications between the independent auditor and management; |
• | establishing procedures for the receipt, retention and treatment of complaints received from our employees regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | such other matters that are specifically delegated to our audit committee by our board of directors from time to time; and |
• | meeting separately, periodically, with management, internal auditors and the independent auditor. |
• | reviewing, evaluating and, if necessary, revising our overall compensation policies; |
• | reviewing and evaluating the performance of our directors and relevant senior officers and determining the compensation of relevant senior officers; |
• | reviewing and approving our senior officers’ employment agreements with us; |
• | setting performance targets for relevant senior officers with respect to our incentive compensation plan and equity-based compensation plans; |
• | administering our equity-based compensation plans in accordance with the terms thereof; and |
• | such other matters that are specifically delegated to the compensation committee by our board of directors from time to time. |
• | selecting and recommending to our board of directors nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with our board of directors the current composition of our board of directors with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of our board of directors meetings and monitoring the functioning of the committees of our board of directors; and |
• | advising our board of directors periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken.] |
• | Types of Awards. The awards granted under the plan mean the option to purchase the ordinary shares of our company. |
• | Plan Administration. The plan will be administered by a committee appointed by our board of directors, which shall consist of four directors. |
• | Award Agreement. Awards granted under the plan are evidenced by a written instrument executed by the relevant participant to whom an award is granted and our company, containing such terms, conditions, limitations and restrictions as the committee that administers the plan shall deem advisable which are not inconsistent with the plan. |
• | Exercise Price. The exercise price for the ordinary shares purchased under an award shall be determined by the committee that administers the plan, but shall be no less than the fair market value per share on the date of grant. |
• | Eligibility. Persons eligible to participate in the plan include our employees, consultants and advisors. |
• | Term of the Awards. The maximum of an award shall be established by the committee that administers the plan or, if not so established, shall be ten (10) years from the date of grant. |
• | Vesting Schedule. The vesting schedule will be set forth in the written instrument evidencing the awards granted. |
• | Assignability. No award or interest in an award under the plan may be sold, assigned, pledged or transferred by the participants or made subject to attachment or similar proceedings otherwise than by will or by the applicable laws of descent and distribution. However, the committee may in its sole discretion permit the transfer of an award subject to the terms and conditions of the plan and the relevant instrument. |
• | Term and Termination. The plan shall terminate ten (10) years from its effective date, unless sooner terminated by our board of directors. |
Name | | | Ordinary Shares Underlying Options | | | Exercise Price ($/Share) | | | Date of Grant | | | Date of Expiration |
Ming-Kuei Jang | | | 250,000 | | | 0.400 | | | November 1, 2018 | | | October 31, 2023 |
| | 341,389 | | | 0.400 | | | October 1, 2019 | | | September 30, 2024 | |
| | 805,000 | | | 0.624 | | | November 1, 2019 | | | October 31, 2024 | |
| | * | | | 0.624 | | | August 15, 2022 | | | August 14, 2027 | |
| | 700,000 | | | 0.632 | | | August 15, 2022 | | | August 14, 2027 | |
Mark S. Shearman | | | * | | | 0.400 | | | November 1, 2018 | | | October 31, 2023 |
| | * | | | 0.632 | | | August 15, 2022 | | | August 14, 2027 | |
| | * | | | 0.632 | | | July 17, 2023 | | | July 16, 2028 | |
| | * | | | 0.632 | | | December 1, 2023 | | | November 30, 2028 | |
Michael Xin Hui | | | — | | | — | | | — | | | — |
| | | | | | | | |||||
Zhigang Luo | | | — | | | — | | | — | | | — |
Roger James Pomerantz | | | — | | | — | | | — | | | — |
Bradford A. Navia | | | 337,500 | | | 0.632 | | | December 1, 2021 | | | November 30, 2026 |
Brian Achenbach | | | 250,000 | | | 0.632 | | | February 1, 2023 | | | January 31, 2028 |
Lana Gladstein | | | * | | | 0.632 | | | July 17, 2023 | | | July 16, 2028 |
| | * | | | 0.632 | | | December 1, 2023 | | | November 30, 2028 | |
| | * | | | 0.632 | | | January 12, 2024 | | | January 11, 2029 | |
All directors and executive officers as a group | | | 2,961,771 | | | | | | |
* | Less than 1% of our total outstanding ordinary shares on an as-converted basis. |
| | Ordinary Shares Beneficially Owned Prior to This Offering | | | Ordinary Shares Beneficially Owned After This Offering | |||||||
| | Number | | | % | | | Number | | | % | |
Directors and Executive Officers**: | | | | | | | | | ||||
Ming-Kuei Jang(1) | | | 2,181,166 | | | 8.0% | | | 2,181,166 | | | 7.4% |
Mark S. Shearman | | | * | | | * | | | * | | | * |
Michael Xin Hui | | | — | | | — | | | — | | | — |
Zhigang Luo | | | — | | | — | | | — | | | — |
Roger James Pomerantz | | | — | | | — | | | — | | | — |
Bradford A. Navia(2) | | | 337,500 | | | 1.3% | | | 337,500 | | | 1.2% |
Brian Achenbach | | | * | | | * | | | * | | | * |
Lana Gladstein | | | * | | | * | | | * | | | * |
All Directors and Executive Officers as a Group | | | 2,882,145 | | | 11.2% | | | 2,882,145 | | | 10.4% |
| | | | | | | | |||||
Principal Shareholders: | | | | | | | | | ||||
Entities Affiliated with Dongcheng Pharma(3) | | | 4,810,052 | | | 18.6% | | | 4,810,052 | | | 17.3% |
Wealth Path Investments Limited(4) | | | 2,475,000 | | | 9.6% | | | 2,475,000 | | | 8.9% |
Daiwa Taiwan-Japan Biotech Fund(5) | | | 2,437,500 | | | 9.4% | | | 2,437,500 | | | 8.8% |
KTB China Synergy Fund(6) | | | 2,149,067 | | | 8.3% | | | 2,149,067 | | | 7.7% |
ShangPharma Investment Group Limited(7) | | | 1,625,750 | | | 6.3% | | | 1,625,750 | | | 5.8% |
* | Less than 1% of our total outstanding shares. |
** | Except as otherwise indicated below, the business address of our directors and executive officers. |
(1) | Represents 639,264 ordinary shares held by Mr. Ming-Kuei Jang and 1,541,902 ordinary shares issuable upon the exercise of options held by Mr. Jang within 60 days of the date of this prospectus. |
(2) | Represents 337,500 ordinary shares issuable upon the exercise of options held by Mr. Bradford A. Navia within 60 days of the date of this prospectus. |
(3) | Represents 963,563 ordinary shares and 3,371,805 Series C preferred shares directly held by Yantai Dongcheng Biochemicals Co., Ltd. (“Dongcheng Pharma”) and 474,684 Series C preferred shares directly held by DongCheng International (HongKong) Limited (“Dongcheng HK”), a wholly owned subsidiary of Dongcheng Pharma. The registered address of Dongcheng Pharma is No.7 Chang Bai Shan Road, Yantai Economic and Technological Development Zone, Shandong Province, China, and the registered address of Dongcheng HK is Room 413, 4/F, Lucky Centre, 165-171 Wan Chai Road, Wan Chai, Hong Kong. Dongcheng Pharma is a company publicly listed on the Shenzhen Stock Exchange (stock code: 002675). |
(4) | Represents 2,475,000 ordinary shares held by Wealth Path Investments Limited (“Wealth Path”). Wealth Path is wholly owned by Mr. Spencer Lee. By virtue of being the controlling shareholder and the director of Wealth Path, Mr. Spencer Lee may be deemed to have beneficial ownership over shares held by Wealth Path. The registered address of Wealth Path is Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands. |
(5) | Represents 1,500,000 ordinary shares and 937,500 Series B preferred shares directly held by Daiwa Taiwan-Japan Biotech Fund (“Daiwa”). DCI Partners Co., Ltd. (“DCIP”) is the general partner of Daiwa. The voting and investment power of shares held by Daiwa is exercised by majority vote of an investment committee consisting of DCIP’s employees, each of whom disclaims beneficial ownership for the shares held by Daiwa, except to the extent of any pecuniary interest therefrom. The principal business address of Daiwa is 1-9-1 Marunouchi, Chiyoda-ku, Tokyo, 100-6756, Japan. |
(6) | Represents 1,562,500 Series B preferred shares, 400,000 Series Pre-C preferred shares and 186,567 Series C preferred shares directly held by KTB China Synergy Fund (“KTB”). The voting and investment power of shares held by KTB is exercised by its general partner, Woori Venture Partners, which disclaims beneficial ownership for the shares held by KTB. The principal business address of KTB is 670 Daewangpangyo-ro, Bundang-gu, Seongnam-si, Gyeonggi-do 10FL, USpace 2A dong, Republic of Korea. |
(7) | Represents 1,313,250 ordinary shares and 312,500 Series B preferred shares directly held by ShangPharma Investment Group Limited (“ShangPharma”). The voting and investment power of shares held by ShangPharma is exercised by its managing director, Mr. Michael Xin Hui. The registered address of ShangPharma is Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands. |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of ordinary shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as the Nasdaq may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rights, conversion rights, voting rights; |
• | the rights and terms of redemption and liquidation preferences; and |
• | any other powers, preferences and relative, participating, optional and other special rights. |
• | authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue shares or shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as a limited duration company; and |
• | may register as a segregated portfolio company. |
• | the statutory provisions as to the required majority vote have been met; |
• | the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
• | the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
• | a company acts or proposes to act illegally or ultra vires; |
• | the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and |
• | those who control the company are perpetrating a “fraud on the minority.” |
• | 1% of our then outstanding ordinary shares, which will equal approximately 278,288 ordinary shares immediately after this offering, assuming the underwriters do not exercise their over-allotment option; or |
• | the average weekly trading volume of our ordinary shares on the Nasdaq, during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC. |
• | banks, insurance companies, and certain other financial institutions; |
• | pension plans; |
• | U.S. expatriates and certain former citizens or long-term residents of the United States; |
• | persons holding ordinary shares as part of a hedging transaction, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to ordinary shares; |
• | persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar; |
• | brokers, dealers or traders in securities, commodities or currencies; |
• | tax-exempt entities or government organizations; |
• | S corporations, partnerships, or other entities or arrangements classified as partnerships for U.S. federal income tax purposes (and investors therein); |
• | regulated investment companies or real estate investment trusts; |
• | persons investing through individual retirement accounts or other tax deferred accounts; |
• | persons who acquired our ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation; |
• | persons that own or are deemed to own ten percent or more of our shares (by vote or value); and |
• | persons holding our ordinary shares in connection with a trade or business, permanent establishment, or fixed place of business outside the United States. |
(1) | an individual who is a citizen or resident of the United States; |
(2) | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States, any state therein or the District of Columbia; |
(3) | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
(4) | a trust if (1) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have authority to control all substantial decisions of the trust or (2) the trust has a valid election to be treated as a U.S. person under applicable U.S. Treasury Regulations. |
• | the excess distribution or gain will be allocated ratably over a U.S. Holder’s holding period for the ordinary shares; |
• | the amount allocated to the taxable year of the disposition or distribution (as applicable), and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income; and |
• | the amount allocated to each other year will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. |
Underwriter | | | Number of Shares |
US Tiger Securities, Inc. | | | [•] |
Total | | | 2,000,000 |
| | Per Share | | | Total Without Exercise of Over- allotment Option | | | Total With Full Exercise of Over- allotment Option | |
Initial public offering price | | | $[•] | | | [•] | | | [•] |
Underwriting discounts and commissions to be paid by us | | | $[•] | | | [•] | | | [•] |
Proceeds, before expenses, to us | | | $[•] | | | [•] | | | [•] |
• | is an “investment business” within the meaning of clause 37 of Schedule 1 of the FMCA; |
• | meets the “investment activity criteria” specified in clause 38 of Schedule 1 of the FMCA; |
• | is “large” within the meaning of clause 39 of Schedule 1 of the FMCA; or |
• | is a “government agency” within the meaning of clause 40 of Schedule 1 of the FMCA. |
SEC Registration Fee | | | $7,380 |
FINRA Filing Fee | | | 4,250 |
Stock Exchange Application and Listing Fee | | | 295,000 |
Transfer Agent’s fees and expenses | | | 3,500 |
Printing and Engraving Expenses | | | 50,000 |
Legal Fees and Expenses | | | 800,000 |
Accounting Fees and Expenses | | | 150,000 |
Miscellaneous | | | 540,000 |
Total | | | $1,850,130 |
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| | December 31, | ||||
| | 2022 | | | 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $1,221 | | | $9,674 |
Prepaid expenses and other current assets | | | 590 | | | 429 |
Accounts receivable | | | — | | | 155 |
Total current assets | | | 1,811 | | | 10,258 |
Property and equipment, net | | | 2,153 | | | 509 |
Deferred offering costs | | | 1,288 | | | — |
Operating lease right-of-use assets | | | 154 | | | 322 |
Prepaid expenses, net of current portion and other long-term assets | | | 237 | | | 1,677 |
Total assets | | | $5,643 | | | $12,766 |
Liabilities, Redeemable Convertible Preferred Shares, and Shareholders' Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $8,887 | | | $432 |
Accrued expenses and other current liabilities | | | 2,466 | | | 2,993 |
Operating lease liabilities, current | | | 124 | | | 154 |
Related party payable | | | 904 | | | — |
Short-term borrowings | | | 1,450 | | | 785 |
Convertible notes (including a related party convertible note of $753 and $0 as of December 31, 2022 and 2021, respectively, net of debt discount and issuance costs) | | | 1,093 | | | — |
Derivative liabilities (including a related party derivative liability of $173 and $0 as of December 31, 2022 and 2021, respectively) | | | 251 | | | — |
Total current liabilities | | | 15,175 | | | 4,364 |
Operating lease liabilities, net of current portion | | | 42 | | | 177 |
Total liabilities | | | 15,217 | | | 4,541 |
Commitments and Contingencies (Note 15) | | | | | ||
Redeemable convertible preferred shares (Series B, Pre-C and C), $0.1 par value; 56,973,336 shares authorized; 53,622,601 and 47,926,399 shares issued and outstanding; redemption and liquidation value of $66,166 and $57,166 as of December 31, 2022 and 2021, respectively | | | 65,876 | | | 56,913 |
Shareholders' deficit: | | | | | ||
Ordinary shares, $0.1 par value, 443,026,664 shares authorized; 38,617,056 and 38,352,056 shares issued and outstanding as of December 31, 2022 and 2021, respectively | | | 3,862 | | | 3,835 |
Additional paid-in capital | | | 12,296 | | | 10,373 |
Accumulated deficit | | | (90,638) | | | (62,407) |
Accumulated other comprehensive loss | | | (970) | | | (489) |
Total shareholders' deficit | | | (75,450) | | | (48,688) |
Total liabilities, redeemable convertible preferred shares, and shareholders' deficit | | | $5,643 | | | $12,766 |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Revenue | | | $394 | | | $550 |
Operating expenses | | | | | ||
Research and development | | | 21,617 | | | 19,660 |
General and administrative | | | 7,041 | | | 4,787 |
Total operating expenses | | | 28,658 | | | 24,447 |
Loss from operations | | | (28,264) | | | (23,897) |
Other (expense) income: | | | | | ||
Interest expense, net | | | (67) | | | (36) |
Other income (expense), net | | | 117 | | | 672 |
Total other income | | | 50 | | | 636 |
Loss before income taxes | | | (28,214) | | | (23,261) |
Provision for income taxes | | | (17) | | | — |
Net loss | | | (28,231) | | | (23,261) |
Net loss attributable to ordinary shareholders | | | $(28,231) | | | $(23,261) |
Net loss per share attributable to ordinary shareholders | | | | | ||
Basic and diluted | | | $(0.73) | | | $(0.69) |
Weighted-average shares outstanding | | | | | ||
Basic and diluted | | | 38,482,015 | | | 33,561,324 |
Comprehensive loss: | | | | | ||
Net loss | | | (28,231) | | | (23,261) |
Foreign currency translation adjustment | | | (481) | | | (103) |
Total comprehensive loss | | | $(28,712) | | | $(23,364) |
| | Redeemable Convertible Preferred | | | Ordinary Shares | | | Additional Paid-In Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Income (Loss) | | | Total Shareholders' Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance as of December 31, 2020 | | | 25,856,336 | | | $25,917 | | | 32,449,500 | | | $3,245 | | | $9,374 | | | $(39,146) | | | $(386) | | | $(26,913) |
Issuance of series C redeemable convertible preferred shares, net of issuance costs | | | 22,070,063 | | | 30,996 | | | — | | | — | | | — | | | — | | | — | | | — |
Share-based compensation expense | | | — | | | — | | | — | | | — | | | 914 | | | — | | | — | | | 914 |
Share option exercised | | | — | | | — | | | 5,902,556 | | | 590 | | | 85 | | | — | | | — | | | 675 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (23,261) | | | — | | | (23,261) |
Foreign currency translation adjustment | | | — | | | — | | | — | | | — | | | — | | | — | | | (103) | | | (103) |
Balance as of December 31, 2021 | | | 47,926,399 | | | 56,913 | | | 38,352,056 | | | 3,835 | | | 10,373 | | | (62,407) | | | (489) | | | (48,688) |
Issuance of series C redeemable convertible preferred shares, net of issuance costs | | | 5,696,202 | | | 8,963 | | | — | | | — | | | — | | | — | | | — | | | — |
Share-based compensation expense | | | — | | | — | | | — | | | — | | | 1,911 | | | — | | | — | | | 1,911 |
Share option exercised | | | — | | | — | | | 265,000 | | | 27 | | | 12 | | | — | | | — | | | 39 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (28,231) | | | — | | | (28,231) |
Foreign currency translation adjustment | | | — | | | — | | | — | | | — | | | — | | | — | | | (481) | | | (481) |
Balance as of December 31, 2022 | | | 53,622,601 | | | $65,876 | | | 38,617,056 | | | $3,862 | | | $12,296 | | | $(90,638) | | | $(970) | | | $(75,450) |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Operating Activities: | | | | | ||
Net loss | | | $(28,231) | | | $(23,261) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Depreciation expense | | | 295 | | | 206 |
Non-cash interest expense | | | 15 | | | — |
Amortization of operating lease right-of-use assets | | | 148 | | | 112 |
Share-based compensation expense | | | 1,911 | | | 914 |
Gain on asset disposal | | | — | | | (20) |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 148 | | | (158) |
Prepaid expenses and other current assets | | | 1,358 | | | 277 |
Accounts payable | | | 7,853 | | | (2,635) |
Operating lease obligations | | | (145) | | | (100) |
Accrued expenses and other current liabilities | | | (1,933) | | | 1,785 |
Prepaid expenses, net of current portion and other long-term assets | | | 1,344 | | | (1,423) |
Net cash used in operating activities | | | (17,237) | | | (24,303) |
Investing Activities: | | | | | ||
Purchase of property and equipment | | | (2,016) | | | (497) |
Proceeds from disposal of property and equipment | | | — | | | 180 |
Net cash used in investing activities | | | (2,016) | | | (317) |
Financing Activities: | | | | | ||
Proceeds from issuance of preferred shares, net of issuance costs | | | 8,963 | | | 30,996 |
Proceeds from exercise of share options | | | 39 | | | 675 |
Proceeds from issuance of convertible notes (including proceeds from a related party convertible note of $1,000 and $0 as of December 31, 2022 and 2021, respectively) | | | 1,450 | | | — |
Proceeds from short-term borrowings | | | 1,486 | | | 775 |
Proceeds from related party payable | | | 899 | | | — |
Repayment of short-term borrowings | | | (743) | | | (954) |
Deferred offering costs associated with the Business Combination | | | (740) | | | — |
Net cash provided by financing activities | | | 11,354 | | | 31,492 |
Effect of exchange rates on cash | | | (554) | | | (60) |
Net increase (decrease) in cash | | | (8,453) | | | 6,812 |
Cash at beginning of period | | | 9,674 | | | 2,862 |
Cash at end of period | | | $1,221 | | | $9,674 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for loan interest | | | $41 | | | $43 |
Supplemental cash flow information on non-cash investing and financing activities: | | | | | ||
Right-of-use assets obtained in exchange of lease liabilities | | | $— | | | $405 |
Debt issuance cost associated with convertible notes included in accounts payable | | | $116 | | | $— |
Issuance of derivative instrument related to convertible notes | | | $251 | | | $— |
Deferred offering costs associated with the Business Combination in accounts payable | | | $548 | | | $— |
Level 1 – | Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date; |
Level 2 – | Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and |
Level 3 – | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
• | expenses incurred under agreements with organizations that support the Company’s drug discovery and development activities; |
• | expenses incurred in connection with the preclinical and clinical development of the Company’s product candidates and programs; |
• | costs related to CROs or CDMOs, that are primarily engaged to provide drug substance and product for our clinical trials, research and development programs, as well as investigative sites and consultants that conduct the Company’s clinical trials, nonclinical studies and other scientific development services; |
• | the costs of acquiring and manufacturing nonclinical and clinical trial materials, including manufacturing registration and validation batches; |
• | employee-related expenses, including salaries, related benefits and equity-based compensation expense, for employees engaged in research and development functions; |
• | costs related to compliance with quality and regulatory requirements; |
• | payments made under third-party licensing agreements; and |
• | direct and allocated costs related to facilities, information technology, personnel and other overhead. |
| | Estimated Useful Life (in Years) | | | December 31, | ||||
| | 2022 | | | 2021 | ||||
Machinery and equipment | | | 3-5 | | | $2,044 | | | $190 |
Computers and purchased software | | | 3-5 | | | 65 | | | 65 |
Leasehold improvements | | | lease term | | | 141 | | | 153 |
Furniture and fixtures | | | 3-5 | | | 39 | | | 43 |
Construction in progress | | | N/A | | | 350 | | | 271 |
Property and equipment, at cost | | | | | 2,639 | | | 722 | |
Less: accumulated depreciation and amortization | | | | | (486) | | | (213) | |
Property and equipment, net | | | | | $2,153 | | | $509 |
| | December 31, | ||||
| | 2022 | | | 2021 | |
Prepayment | | | $592 | | | $1,531 |
Other receivables | | | 114 | | | 457 |
Deposit | | | 121 | | | 118 |
Total | | | 827 | | | 2,106 |
Less: current portion of prepaid expenses and other assets | | | (590) | | | (429) |
Total prepaid expenses, net of current portion and other long-term assets | | | $237 | | | $1,677 |
| | December 31, | ||||
| | 2022 | | | 2021 | |
Accrued expense and other payables | | | $1,112 | | | $2,569 |
Payroll payable | | | 1,053 | | | 273 |
Deferred revenue | | | 213 | | | 94 |
Other current liabilities | | | 88 | | | 57 |
Total accrued expenses and other current liabilities | | | $2,466 | | | $2,993 |
Lease Cost | | | 2022 | | | 2021 |
Operating lease cost | | | $137 | | | $112 |
Short-term lease cost | | | 249 | | | 206 |
Variable lease cost | | | 241 | | | 83 |
Total lease cost | | | $627 | | | $401 |
| | | | |||
Other Information: | | | | | ||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows for operating leases | | | $134 | | | $102 |
Right-of-Use assets obtained in the exchange for new operating lease liabilities | | | $— | | | $405 |
| | 2022 | | | 2021 | |
Weighted-average remaining lease terms - operating leases | | | 1.34 years | | | 2.24 years |
Weighted average discount rate - operating leases | | | 4.02% | | | 3.84% |
Years Ended December 31 | | | Amount |
2023 | | | $128 |
2024 | | | 43 |
2025 | | | — |
2026 | | | — |
2027 | | | — |
Thereafter | | | — |
Total lease payments | | | 171 |
Less: imputed interest | | | (5) |
Total operating lease liabilities | | | $166 |
| | December 31, 2022 | |
Principal | | | $1,450 |
Accrued interest | | | 2 |
Unamortized discount | | | (359) |
Total carrying value of convertible notes | | | 1,093 |
Derivative liabilities | | | 251 |
Total convertible notes and derivative liabilities | | | $1,344 |
| | December 31, | ||||
| | 2022 | | | 2021 | |
2021 Bank Loan | | | $— | | | $785 |
2022 June Bank Loan | | | 725 | | | — |
2022 July Bank Loan | | | 725 | | | — |
Total short-term borrowings from third parties | | | $1,450 | | | $785 |
| | Fair Value as of December 31, 2022 Level 3 | |
Liabilities: | | | |
Derivative liabilities | | | $251 |
Total | | | $251 |
Significant Unobservable Inputs | | | Input Range | | | Weighted Average |
Discount Rate | | | 26.69% | | | 26.69% |
Expected term (in years) | | | 0.750 - 0.978 | | | 0.61 |
Probability Scenarios: | | | | | ||
Successful Financing | | | 85% | | | |
Delay/Renegotiation | | | 10% | | | |
Dissolution | | | 5% | | |
| | Derivative Liabilities | |
Balance as of December 31, 2021 | | | $— |
Initial fair value of instrument | | | 251 |
Change in fair value | | | — |
Foreign currency translation adjustments | | | — |
Balance as of December 31, 2022 | | | $251 |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Current | | | | | ||
Federal | | | $(17) | | | $— |
State | | | — | | | — |
Foreign | | | — | | | — |
Total Current | | | $(17) | | | $— |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Foreign rate differential | | | 17.6% | | | 19.1% |
Valuation allowance | | | -8.6% | | | -9.0% |
Foreign derived intangible income | | | 0.0% | | | 0.0% |
Taxable cancellation of debt income | | | 0.0% | | | -3.2% |
Non-deductible R&D expenses | | | -8.9% | | | -6.3% |
Other | | | -0.2% | | | -0.6% |
Effective tax rate | | | -0.1% | | | 0.0% |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Deferred tax assets | | | | | ||
Tax loss carried forward | | | $6,255 | | | $4,135 |
Deferred advertising expenses | | | 7 | | | 7 |
Others | | | — | | | 123 |
Total deferred tax assets | | | 6,262 | | | 4,265 |
Less: valuation allowance | | | (6,257) | | | (4,257) |
Total deferred tax assets | | | 5 | | | 8 |
Deferred tax liabilities | | | | | ||
Depreciation | | | (5) | | | (8) |
Total deferred tax liabilities | | | (5) | | | (8) |
Deferred tax assets, net of valuation allowance and deferred tax liabilities | | | $— | | | $— |
| | December 31, 2022 | |||||||||||||
| | Preferred Shares Authorized | | | Preferred Shares Issued and Outstanding | | | Carrying Value | | | Liquidation Preference | | | Ordinary Shares Issuable Upon Conversion | |
Series B Preferred Shares | | | 15,000,000 | | | 13,883,000 | | | $10,995 | | | $11,106 | | | 13,883,000 |
Pre-Series C Preferred Shares | | | 11,973,336 | | | 11,973,336 | | | 14,918 | | | 14,967 | | | 11,973,336 |
Series C Preferred Shares | | | 30,000,000 | | | 27,766,265 | | | 39,963 | | | 40,093 | | | 27,766,265 |
Total | | | 56,973,336 | | | 53,622,601 | | | $65,876 | | | $66,166 | | | 53,622,601 |
| | December 31, 2021 | |||||||||||||
| | Preferred Shares Authorized | | | Preferred Shares Issued and Outstanding | | | Carrying Value | | | Liquidation Preference | | | Ordinary Shares Issuable Upon Conversion | |
Series B Preferred Shares | | | 15,000,000 | | | 13,883,000 | | | $10,995 | | | $11,106 | | | 13,883,000 |
Pre-Series C Preferred Shares | | | 11,973,336 | | | 11,973,336 | | | 14,918 | | | 14,967 | | | 11,973,336 |
Series C Preferred Shares | | | 30,000,000 | | | 22,070,063 | | | 31,000 | | | 31,093 | | | 22,070,063 |
Total | | | 56,973,336 | | | 47,926,399 | | | $56,913 | | | $57,166 | | | 47,926,399 |
a. | Dividend Rights - If declared, each holder of the Preferred Shares shall be entitled to receive dividends for the respective Preferred Share held by the holder, payable out of funds or assets when and as such funds or assets become legally available therefor, prior and in preference to, and satisfied before, any dividend on the Company’s ordinary shares. |
b. | Conversion Feature - The holder of Preferred Shares shall have the right to convert all or a portion of its Preferred Shares into the Company’s ordinary shares at the then-applicable Series B, Pre-Series C and Series C conversion price at any time without payment of additional consideration. The initial conversion price for each Preferred Shares shall be the original Series B, Pre-Series C and Series C purchase price paid, with the initial conversion made on a one-for-one basis, subject to the conversion price adjustment made. The Series B, Pre-Series C and Series C conversion price for the Preferred Shares shall be adjusted appropriately for subdivision or combination of the Company’s ordinary shares, distribution of dividends on the Company’s ordinary shares, capital reorganization, recapitalization, or reclassification of the Company’s ordinary shares. If the Company issues or proposes to issue any new securities at a per share price or conversion price less than the original Series B, Pre-Series C and Series C purchase price, such Series B, Pre-Series C and Series C conversion price for the Preferred Shares will be adjusted based on the broad-based weighted average method. |
c. | Liquidation preferences – In the event of any voluntary or involuntary liquidation, change in control, sale of substantially all of the Company’s assets or upon the occurrence of other transaction defined as a deemed liquidation event pursuant to the Company’s articles of association (a “Deemed Liquidation Event”), each shareholder of Preferred Shares shall be entitled to receive, prior to, and in preference to, any distribution of assets or property of the Company to the holders of the Company’s ordinary shares, in an amount per share equal to the Preferred Shares’ original purchase price, plus any declared unpaid dividends. The assets of the Company shall be distributed to the holders of Preferred Shares in the following order: Series C Preferred Shares, Pre-Series C Preferred Shares, Series B Preferred Shares. If upon any such liquidation event or a deemed liquidation event, the assets of the Company available for distribution to its shareholders is insufficient to pay all holders of redeemable convertible preferred shares the full amount to which they shall be entitled, the holders of redeemable convertible preferred shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise have been payable in the order indicated. |
d. | Voting Rights – Each holder of outstanding shares of Preferred Shares shall be entitled to cast the number of votes equal to the number of the Company’s ordinary shares into which the shares of such Preferred Shares held by such holder are convertible as of the record date for determining shareholders entitled to vote on such matter. |
e. | Redemption Rights – The holders of the Company’s Preferred Shares have no voluntary rights to redeem shares. Upon certain change in control events that are outside of the Company’s control, including sale of substantially all of the Company’s assets or the occurrence of a Deemed Liquidation Event, the holders of the Preferred Shares may cause redemption of the Preferred Shares. Accordingly, these shares are considered contingently redeemable and are classified as temporary equity on the accompanying consolidated balance sheets. |
| | Number of Options | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value | |
Outstanding as of December 31, 2020 | | | 11,753,673 | | | $0.13 | | | 3.53 | | | $3,115 |
Granted | | | 1,350,000 | | | 0.16 | | | — | | | — |
Exercised | | | (5,902,556) | | | 0.11 | | | — | | | — |
Outstanding as of December 31, 2021 | | | 7,201,117 | | | $0.15 | | | 3.19 | | | $2,757 |
Granted | | | 7,151,608 | | | 0.16 | | | — | | | — |
Exercised | | | (265,000) | | | 0.15 | | | — | | | — |
Outstanding as of December 31, 2022 | | | 14,087,725 | | | $0.15 | | | 3.43 | | | $3,939 |
Options exercisable as of December 31, 2022 | | | 11,889,225 | | | $0.15 | | | 1.19 | | | $3,333 |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Exercise period | | | 5 years | | | 5 years |
Volatility | | | 75.85% | | | 72.16% |
Risk-free interest rate | | | 2.91% | | | 1.13% |
Expected dividend yield | | | 0.00% | | | 0.00% |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
General and administrative | | | $1,143 | | | $687 |
Research and development | | | 768 | | | 227 |
Total share-based compensation expense | | | $1,911 | | | $914 |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Numerator: | | | | | ||
Net loss | | | $(28,231) | | | $(23,261) |
Net loss attributable to ordinary shareholders | | | $(28,231) | | | $(23,261) |
| | | | |||
Denominator: | | | | | ||
Weighted-average shares outstanding used in calculating net loss per share – basic and diluted | | | 38,482,015 | | | 33,561,324 |
Net loss per share attributable to ordinary shareholders – basic and diluted | | | $(0.73) | | | $(0.69) |
| | Year Ended December 31, | ||||
| | 2022 | | | 2021 | |
Redeemable convertible preferred shares (as converted to ordinary shares) | | | 53,622,601 | | | 47,926,399 |
Outstanding options to purchase ordinary shares | | | 14,087,725 | | | 7,201,117 |
Total | | | 67,710,326 | | | 55,127,516 |
| | June 30, 2023 | | | December 31, 2022 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $7,731 | | | $1,221 |
Prepaid expenses and other current assets | | | 1,162 | | | 590 |
Note receivable - related party | | | 660 | | | — |
Total current assets | | | 9,553 | | | 1,811 |
Property and equipment, net | | | 1,957 | | | 2,153 |
Deferred offering costs | | | 2,807 | | | 1,288 |
Operating lease right-of-use assets | | | 115 | | | 154 |
Prepaid expenses, net of current portion and other long-term assets | | | 44 | | | 237 |
Total assets | | | $14,476 | | | $5,643 |
Liabilities, Redeemable Convertible Preferred Shares, and Shareholders' Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $7,318 | | | $8,887 |
Accrued expenses and other current liabilities | | | 4,940 | | | 2,466 |
Operating lease liabilities, current | | | 102 | | | 124 |
Related party payable | | | — | | | 904 |
Short-term borrowings | | | 690 | | | 1,450 |
Convertible notes (including related parties convertible notes of $10,762 and $753 as of June 30, 2023 and December 31, 2022, respectively, net of debt discount and issuance costs) | | | 14,788 | | | 1,093 |
Derivative liabilities (including related parties derivative liabilities of $1,685 and $173 as of June 30, 2023 and December 31, 2022, respectively) | | | 2,679 | | | 251 |
Total current liabilities | | | 30,517 | | | 15,175 |
Operating lease liabilities, net of current portion | | | 15 | | | 42 |
Total liabilities | | | 30,532 | | | 15,217 |
Commitments and Contingencies (Note 11) | | | | | ||
Redeemable convertible preferred shares (Series B, Pre-C and C), $0.1 par value; 56,973,336 shares authorized; 53,622,601 shares issued and outstanding; redemption and liquidation value of $66,166 as of June 30, 2023 and December 31, 2022 | | | 65,876 | | | 65,876 |
Shareholders' deficit: | | | | | ||
Ordinary shares, $0.1 par value, 443,026,664 shares authorized; 40,492,206 and 38,617,056 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | | | 4,049 | | | 3,862 |
Additional paid-in capital | | | 13,176 | | | 12,296 |
Accumulated deficit | | | (97,823) | | | (90,638) |
Accumulated other comprehensive loss | | | (1,334) | | | (970) |
Total shareholders' deficit | | | (81,392) | | | (75,450) |
Total liabilities, redeemable convertible preferred shares, and shareholders' deficit | | | $14,476 | | | $5,643 |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
Revenue | | | $496 | | | $295 |
Revenue – related party | | | 8,538 | | | — |
Total revenue | | | 9,034 | | | 295 |
Operating expenses | | | | | ||
Research and development | | | 11,067 | | | 11,289 |
General and administrative | | | 4,704 | | | 2,849 |
Total operating expenses | | | 15,771 | | | 14,138 |
Loss from operations | | | (6,737) | | | (13,843) |
Other (expense) income | | | | | ||
Interest expense, net | | | (1,444) | | | (13) |
Change in fair value of derivative liabilities | | | 498 | | | — |
Other income (expense), net | | | 551 | | | 186 |
Total other income (expense), net | | | (395) | | | 173 |
Loss before income taxes | | | (7,132) | | | (13,670) |
Provision for income taxes | | | 53 | | | 6 |
Net loss | | | (7,185) | | | (13,676) |
Net loss attributable to ordinary shareholders | | | $(7,185) | | | $(13,676) |
Net loss per share attributable to ordinary shareholders | | | | | ||
Basic and diluted | | | $(0.18) | | | $(0.36) |
Weighted-average shares outstanding | | | | | ||
Basic and diluted | | | 38,991,062 | | | 38,352,056 |
Comprehensive loss: | | | | | ||
Net loss | | | $(7,185) | | | $(13,676) |
Foreign currency translation adjustment, net of tax | | | (364) | | | (296) |
Total comprehensive loss | | | $(7,549) | | | $(13,972) |
| | Redeemable Convertible Preferred | | | Ordinary Shares | | | Additional Paid-In Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Total Shareholders' Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance as of December 31, 2022 | | | 53,622,601 | | | $65,876 | | | 38,617,056 | | | $3,862 | | | $12,296 | | | $(90,638) | | | $(970) | | | $(75,450) |
Share-based compensation expense | | | — | | | — | | | — | | | — | | | 779 | | | — | | | — | | | 779 |
Share option exercised | | | — | | | — | | | 1,875,150 | | | 187 | | | 101 | | | — | | | — | | | 288 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (7,185) | | | — | | | (7,185) |
Foreign currency translation adjustment, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (364) | | | (364) |
Balance as of June 30, 2023 | | | 53,622,601 | | | $65,876 | | | 40,492,206 | | | $4,049 | | | $13,176 | | | $(97,823) | | | $(1,334) | | | $(81,932) |
| | Redeemable Convertible Preferred | | | Ordinary Shares | | | Additional Paid-In Capital | | | Accumulated Deficit | | | Accumulated Other Comprehensive Loss | | | Total Shareholders' Deficit | |||||||
| | Shares | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balance as of December 31, 2021 | | | 47,926,399 | | | $56,913 | | | 38,352,056 | | | $3,835 | | | $10,373 | | | $(62,407) | | | $(489) | | | $(48,688) |
Issuance of series C redeemable convertible preferred shares, net of issuance costs | | | 5,696,202 | | | 8,963 | | | — | | | — | | | — | | | — | | | — | | | — |
Share-based compensation expense | | | — | | | — | | | — | | | — | | | 163 | | | — | | | — | | | 163 |
Share option exercised | | | — | | | — | | | 265,000 | | | 27 | | | 12 | | | — | | | — | | | 39 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (13,676) | | | — | | | (13,676) |
Foreign currency translation adjustment, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | (296) | | | (296) |
Balance as of June 30, 2022 | | | 53,622,601 | | | $65,876 | | | 38,617,056 | | | $3,862 | | | $10,548 | | | $(76,083) | | | $(785) | | | $(62,458) |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
Operating Activities: | | | | | ||
Net loss | | | $(7,185) | | | $(13,676) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Depreciation expense | | | 220 | | | 96 |
Non-cash interest expense | | | 1,429 | | | — |
Amortization of operating lease right-of-use assets | | | 63 | | | 86 |
Share-based compensation expense | | | 779 | | | 163 |
Change in fair value of derivative liability | | | (498) | | | — |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | — | | | (49) |
Prepaid expenses and other current assets | | | (555) | | | 969 |
Accounts payable | | | (1,486) | | | 3,180 |
Accrued expenses and other current liabilities | | | 1,665 | | | (1,009) |
Operating lease obligations | | | (72) | | | (84) |
Prepaid expenses, net of current portion and other long-term assets | | | 189 | | | 516 |
Net cash used in operating activities | | | (5,451) | | | (9,808) |
Investing Activities: | | | | | ||
Purchase of property and equipment | | | (121) | | | (878) |
Note Receivable - Related Party | | | (660) | | | — |
Net cash used in investing activities | | | (781) | | | (878) |
Financing Activities: | | | | | ||
Proceeds from issuance of preferred shares, net of issuance costs | | | — | | | 8,963 |
Proceeds from exercise of share options | | | 288 | | | 39 |
Proceeds from issuance of convertible notes (including proceeds from a related party convertible note of $10,750 and $0 as of June 30, 2023 and 2022, respectively) | | | 15,208 | | | — |
Proceeds from short-term borrowings | | | — | | | 772 |
Proceeds from related party payable | | | 280 | | | — |
Repayment of related party payable | | | (1,174) | | | — |
Repayment of short-term borrowings | | | (722) | | | (772) |
Deferred offering costs associated with the Business Combination | | | (593) | | | — |
Net cash provided by financing activities | | | 13,287 | | | 9,002 |
Effect of exchange rates on cash | | | (545) | | | (303) |
Net increase (decrease) in cash | | | 6,510 | | | (1,987) |
Cash at beginning of period | | | 1,221 | | | 9,674 |
Cash at end of period | | | $7,731 | | | $7,687 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for loan interest | | | $38 | | | $14 |
Cash paid for income tax | | | $22 | | | $— |
Supplemental cash flow information on non-cash investing and financing activities: | | | | | ||
Right-of-use assets obtained in exchange of lease liabilities | | | $29 | | | $— |
Debt issuance cost associated with convertible notes included in accounts payable | | | $18 | | | $— |
Issuance of derivative instrument related to convertible notes | | | $2,925 | | | $— |
Deferred offering costs associated with the Business Combination in accrued expenses and other current liabilities | | | $926 | | | $— |
| | June 30, 2023 | | | December 31, 2022 | |
Prepayment | | | $807 | | | $592 |
Other receivables | | | 290 | | | 114 |
Deposit | | | 109 | | | 121 |
Total | | | 1,206 | | | 827 |
Less: current portion of prepaid expenses and other assets | | | (1,162) | | | (590) |
Total prepaid expenses, net of current portion and other long-term assets | | | $44 | | | $237 |
| | June 30, 2023 | | | December 31, 2022 | |
Accrued expense and other payables | | | $3,889 | | | $1,112 |
Payroll payable | | | 866 | | | 1,053 |
Deferred revenue | | | 16 | | | 213 |
Other current liabilities | | | 169 | | | 88 |
Total accrued expenses and other current liabilities | | | $4,940 | | | $2,466 |
Lease Cost | | | Six Months Ended June 30, | |||
| | 2023 | | | 2022 | |
Operating lease cost | | | $68 | | | $70 |
Short-term lease cost | | | 105 | | | 130 |
Variable lease cost | | | 163 | | | 130 |
Total lease cost | | | $336 | | | $330 |
Other Information: | | | | | ||
Cash paid for amounts included in the measurement of lease liabilities: | | | | | ||
Operating cash flows for operating leases | | | $76 | | | $66 |
Right-of-Use assets obtained in the exchange for new operating lease liabilities | | | $29 | | | $— |
| | June 30, 2023 | | | December 31, 2022 | |
Weighted-average remaining lease terms - operating leases | | | 1.1 years | | | 1.34 years |
Weighted average discount rate - operating leases | | | 6.68% | | | 4.02% |
Years Ending | | | Amount |
2023 | | | $61 |
2024 | | | 57 |
2025 | | | 5 |
2026 | | | — |
2027 | | | — |
2028 and thereafter | | | — |
Total lease payments | | | 123 |
Less: imputed interest | | | (6) |
Total operating lease liabilities | | | $117 |
| | June 30, 2023 | | | December 31, 2022 | |
Principal | | | $16,658 | | | $1,450 |
Accrued interest | | | 311 | | | 2 |
Unamortized discount | | | (2,181) | | | (359) |
Total carrying value of convertible notes | | | 14,788 | | | 1,093 |
Derivative liabilities | | | 2,679 | | | 251 |
Total convertible notes and derivative liabilities | | | $17,467 | | | $1,344 |
| | June 30, 2023 | | | December 31, 2022 | |
2022 June Bank Loan | | | $— | | | $725 |
2022 July Bank Loan | | | 690 | | | 725 |
Total short-term borrowings from third parties | | | $690 | | | $1,450 |
| | Level 3 Fair Value | ||||
| | As of June 30, 2023 | | | As of December 31, 2022 | |
Liabilities: | | | | | ||
Derivative liabilities | | | $2,679 | | | $251 |
Total | | | $2,679 | | | $251 |
| | June 30, 2023 | | | December 31, 2022 | |||||||
Significant Unobservable Inputs | | | Input Range | | | Weighted Average | | | Input Range | | | Weighted Average |
Discount Rate | | | 28.41% - 32.44% | | | 30.60% | | | 26.69% | | | 26.69% |
Expected term (in years) | | | 0.500 - 1.000 | | | 0.45 | | | 0.750 - 0.978 | | | 0.61 |
Probability Scenarios: | | | | | | | | | ||||
Successful Financing/IPO | | | 85% | | | | | 85% | | | ||
Delayed Offering/Renegotiation | | | 10% | | | | | 10% | | | ||
Dissolution | | | 5% | | | | | 5% | | |
| | Derivative Liabilities | |
Balance as of December 31, 2022 | | | $251 |
Initial fair value of instrument | | | 2,926 |
Change in fair value | | | (498) |
Foreign currency translation adjustments | | | — |
Balance as of June 30, 2023 | | | $2,679 |
| | Number of Options | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value | |
Outstanding as of December 31, 2022 | | | 14,087,725 | | | $0.15 | | | 3.43 | | | $3,939 |
Granted | | | 1,385,000 | | | 0.16 | | | — | | | — |
Exercised | | | (1,875,150) | | | 0.15 | | | — | | | — |
Cancelled or forfeited | | | (427,608) | | | 0.12 | | | — | | | — |
Outstanding as of June 30, 2023 | | | 13,169,967 | | | $0.16 | | | 3.11 | | | $10,232 |
Options exercisable as of June 30, 2023 | | | 11,252,292 | | | $0.15 | | | 2.92 | | | $8,747 |
Exercise period | | | 5 years |
Volatility | | | 76.80% - 79.86% |
Risk-free interest rate | | | 3.50% - 3.58% |
Expected dividend yield | | | 0.00% |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
General and administrative | | | $360 | | | $9 |
Research and development | | | 419 | | | 154 |
Total share-based compensation expense | | | $779 | | | $163 |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
Numerator: | | | | | ||
Net loss | | | $(7,185) | | | $(13,676) |
Net loss attributable to ordinary shareholders | | | $(7,185) | | | $(13,676) |
| | | | |||
Denominator: | | | | | ||
Weighted-average shares outstanding used in calculating net loss per share – basic and diluted | | | 38,991,062 | | | 38,352,056 |
Net loss per share attributable to ordinary shareholders – basic and diluted | | | $(0.18) | | | $(0.36) |
| | Six Months Ended June 30, | ||||
| | 2023 | | | 2022 | |
Redeemable convertible preferred shares (as converted to ordinary shares) | | | 53,622,601 | | | 53,622,601 |
Outstanding options to purchase ordinary shares | | | 13,169,967 | | | 6,936,117 |
Total | | | 66,792,568 | | | 60,558,718 |
Item 6. | Indemnification of Directors and Officers |
Item 7. | Recent Sales of Unregistered Securities. |
Item 8. | Exhibits and Financial Statement Schedules. |
Item 9. | Undertakings. |
Exhibit Number | | | Description of Document |
1.1* | | | Form of Underwriting Agreement |
| | Memorandum and Articles of Association of the Registrant | |
3.2* | | | Form of Amended and Restated Memorandum and Articles of Association of the Registrant (to be effective immediately prior to the completion of this offering) |
4.1* | | | Registrant’s Specimen Certificate for ordinary shares |
| | Shareholders’ Agreement, dated as of September 24, 2021, among the Registrant, the holders of the Registrant’s ordinary and preferred shares and certain parties thereto | |
| | Addendum to Shareholders’ Agreement, dated November 16, 2021, among the Registrant, the holders of the Registrant’s ordinary and preferred shares and certain parties thereto | |
5.1* | | | Opinion of Maples and Calder (Hong Kong) LLP regarding the validity of the ordinary shares being registered |
8.1* | | | Opinion of Maples and Calder (Hong Kong) LLP regarding certain Cayman Islands tax matters (included in Exhibit 5.1) |
| | 2018 Equity Incentive Plan | |
| | 2019 Equity Incentive Plan #2 | |
| | 2021 Equity Incentive Plan #3 | |
| | 2022 Equity Incentive Plan #4 | |
10.5* | | | Form of Indemnification Agreement between the Registrant and a director of Registrant |
10.6* | | | Form of Employment Agreement between the Registrant and an executive officer of Registrant |
| | Exclusive License Agreement dated October 20, 2016 among National Institutes for Quantum and Radiological Science and Technology and APRINOIA Therapeutics Inc. (a corporation of Taiwan) | |
| | Amendment Agreement of Exclusive License Agreement dated January 11, 2018 among National Institutes for Quantum and Radiological Science and Technology, APRINOIA Therapeutics Inc. (a corporation of Taiwan) and APRINOIA Therapeutics Inc. (a corporation of Cayman Islands) | |
| | Amendment Number Two Agreement of Exclusive License Agreement dated May 27, 2019 among National Institutes for Quantum and Radiological Science and Technology, APRINOIA Therapeutics Inc. (a corporation of Taiwan) and APRINOIA Therapeutics Inc. (a corporation of Cayman Islands) | |
| | Amendment Number Three Agreement of Exclusive License Agreement dated March 16, 2021 among National Institutes for Quantum and Radiological Science and Technology, APRINOIA Therapeutics Inc. (a corporation of Taiwan), APRINOIA Therapeutics Inc. (a corporation of Japan) and Suzhou APRINOIA Therapeutics Co., Ltd. | |
| | Amendment Number Four Agreement of Exclusive License Agreement dated November 21, 2022 among National Institutes for Quantum and Radiological Science and Technology, APRINOIA Therapeutics Inc. (a corporation of Japan) and Suzhou APRINOIA Therapeutics Co., Ltd. | |
| | License and Commercialization Agreement dated March 30, 2023 among APRINOIA Therapeutics Inc. (a corporation of Japan), APRINOIA Therapeutics Inc. (a corporation of the Cayman Islands), Yantai Yitai Pharmaceutical Technology Co., Ltd. and Yantai Dongcheng Pharmaceutical Group Co., Ltd. | |
| | Assignment and Consulting Service Agreement dated March 30, 2023 among Suzhou Aprinoia Therapeutics Co., Ltd., APRINOIA Therapeutics Inc. (a corporation of the Cayman Islands), Yantai Yitai Pharmaceutical Technology Co., Ltd. and Yantai Dongcheng Pharmaceutical Group Co., Ltd. | |
| | Research Collaboration Agreement dated December 20, 2018 among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Inc. (a corporation of Taiwan) | |
| | First Amendment, effective February 20, 2019, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Inc. (a corporation of Taiwan) | |
| | Second Amendment, effective December 1, 2019, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Inc. (a corporation of Taiwan) | |
| | Third Amendment, effective November 30, 2020, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Inc. (a corporation of Taiwan) | |
| | Assignment Agreement dated August 4, 2021 among H. Lundbeck A/S, AbbVie Inc., APRINOIA Therapeutics Inc. (a corporation of Taiwan) and APRINOIA Therapeutics Limited |
Exhibit Number | | | Description of Document |
| | Fourth Amendment, effective January 25, 2022, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Limited | |
| | Fifth Amendment, effective January 25, 2023, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Limited | |
| | Sixth Amendment, effective September 20, 2023, to the Research Collaboration Agreement among H. Lundbeck A/S, AbbVie Inc. and APRINOIA Therapeutics Limited | |
14.1* | | | Code of Business Conduct and Ethics of the Registrant |
| | Principal subsidiaries of the Registrant | |
| | Consent of MaloneBailey, LLP | |
23.2* | | | Consent of Maples and Calder (Hong Kong) LLP (included in Exhibit 5.1) |
| | Powers of Attorney (included on signature page) | |
| | Filing Fee Table |
* | To be filed by amendment. |
** | Previously filed. |
† | Schedules and/or certain portions of the exhibits omitted pursuant to Item 601(b)(10) of Regulation S-K. The registrant agrees to furnish supplementally a copy of such schedules, or any section thereof, to the SEC upon request. |
| | APRINOIA Therapeutics Inc. | ||||
| | | | |||
| | By: | | | /s/ Mark S. Shearman | |
| | | | Name: Mark S. Shearman | ||
| | | | Title: Chief Executive Officer |
Signature | | | Title | | | Date |
* | | | Founder and Chairman of the Board | | | February 26, 2024 |
Ming-Kuei Jang | | |||||
| | | | |||
/s/ Mark S. Shearman | | | Chief Executive Officer and Director (principal executive officer) | | | February 26, 2024 |
Mark S. Shearman | | |||||
| | | | |||
/s/ Brian Achenbach | | | Chief Financial Officer (principal financial and accounting officer) | | | February 26, 2024 |
Brian Achenbach | | |||||
| | | | |||
| | | | |||
* | | | Director | | | February 26, 2024 |
Michael Xin Hui | | |||||
| | | | |||
* | | | Director | | | February 26, 2024 |
Zhigang Luo | | |||||
| | | | |||
* | | | Director | | | February 26, 2024 |
Roger James Pomerantz | | |||||
| ||||||
*By: /s/ Mark S. Shearman | | |||||
Mark S. Shearman | | |||||
Attorney-in-Fact | | |||||
|
Exhibit 3.1
Registrar of Companies
Government Administration Building
133 Elgin Avenue
George Town
Grand Cayman
APRINOIA Therapeutics Inc. (ROC # 312841) (the “Company”)
TAKE NOTICE that at an Extraordinary General Meeting of the Shareholders of the Company held on 22 November 2022, the
following resolutions were passed:
4 |
INCREASE OF AUTHORIZED SHARE CAPITAL |
4.1 |
It was resolved as an ordinary resolution that the authorized share capital of the Company be increased and amended:
FROM: US$16,697,333.6 divided into four classes of shares as follows (a) 110,000,000 Ordinary Shares of a nominal or par value of US$0.10 each; (b)
15,000,000 Series B Preferred Shares of a nominal or par value of US$0.10 each; (c) 11,973,336 Pre-Series C Preferred Shares of a nominal or par value of US$0.10 each; and (d) 30,000,000 Series C Preferred Shares of a nominal or par value of
US$0.10 each. TO: US$50,000,000 divided into four classes of shares as follows (a) 443,026,664 Ordinary Shares of a nominal or par value of US$0.10 each; (b) 15,000,000
Series B Preferred Shares of a nominal or par value of US$0.10 each; (c) 11,973,336 Pre-Series C Preferred Shares of a nominal or par value of US$0.10 each; and (d) 30,000,000 Series C Preferred Shares of a nominal or par value of US$0.10
each by the creation of additional 333,026,664 Ordinary Shares of a nominal or par value of US$0.10 each. |
/s/ Sophia Marsh |
|
Sophia Marsh Senior Corporate Administrator for and on behalf of Maples Corporate Services Limited |
|
Dated this 8th day of December 2022
www.verify.gov.ky File#: 312841 | Filed: 08-Dec-2022 11:32 EST Auth Code: C04671256467 |
Registrar of Companies
Government Administration Building
133 Elgin Avenue
George Town
Grand Cayman
APRINOIA Therapeutics Inc. (ROC# 312841) (the “Company”)
TAKE NOTICE that an extraordinary general meeting of the shareholders of the Company held on 26 September
2021, the following resolution was passed and became effective on 14 October 2021:
ADOPTION OF THE AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION
It was noted that the Existing M&A currently in effect were proposed to be amended and restated by their deletion in their entirety and the
substitution in their place of the Amended and Restated Memorandum and Articles of Association (“Amended M&A”), a copy of which is annexed hereto as Schedule 1.
It was resolved as a special resolution that the Existing M&A be amended and restated by their deletion in their entirety and the
substitution in their place of the Amended M&A to take effect immediately prior to the date of the first C-2 Closing (as defined in the series C preferred share purchase agreements dated September-24th, 2021 entered into between the Company and
certain subscribers).
/s/ Edward A. Caudeiron | |
Edward A. Caudeiron Corporate Administrator For and on behalf of Maples Corporate Services Limited Dated this 21st day of October 2021 |
|
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: C26221669196 |
THE COMPANIES ACT (AS REVISED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
MEMORANDUM OF ASSOCIATION
OF
APRINOIA Therapeutics Inc.
(Adopted by Special Resolution dated the 26th day of September 2021, effective on the 14th day of October 2021)
1. | The name of the Company is APRINOIA Therapeutics Inc. |
2. | The Registered Office shall be at the offices of Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
3. | Subject to the following provisions of this Memorandum, the objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by law. |
4. | Subject to the following provisions of this Memorandum, the Company shall have and be capable of exercising all the functions of a natural person of full capacity irrespective of any question of corporate benefit, as provided by Section 27(2) of The Companies Act. |
5. | Nothing in this Memorandum shall permit the Company to carry on a business for which a license is required under the laws of the Cayman Islands unless duly licensed. |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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6. | If the Company is an exempted company, it shall not trade in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the Company carried on outside the Cayman Islands; provided that nothing in this clause shall be construed as to prevent the Company effecting and concluding contracts in the Cayman Islands, and exercising in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands. |
7. | The liability of each member is limited to the amount from time to time unpaid on such member’s shares. |
8. | The share capital of the Company is US$16,697,333.6 divided into four classes of shares as follows: |
(a) | 110,000,000 Ordinary Shares of a nominal or par value of US$0.10 each; |
(b) | 15,000,000 Series B Preferred Shares of a nominal or par value of US$0.10 each; |
(c) | 11,973,336 Pre-Series C Preferred Shares of a nominal or par value of US$0.10 each; and |
(d) | 30,000,000 Series C Preferred Shares of a nominal or par value of US$0.10 each. |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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THE COMPANIES ACT (AS REVISED)
COMPANY LIMITED BY SHARES
AMENDED AND RESTATED
ARTICLES OF ASSOCIATION
OF
APRINOIA Therapeutics Inc.
(Adopted by Special Resolution dated the 26th day of September 2021, effective on the 14th day of October 2021)
INTERPRETATION
1. | The Regulations contained or incorporated in Table A of the First Schedule of the Companies Act shall not apply to this Company. |
2. | (a) | In these Articles the following terms shall have the meanings set opposite unless the context otherwise requires:- |
(i) | Act | means the Companies Act (As Revised) of the Cayman Islands and any amendment or other statutory modification thereof and where in these Articles any provision of the Act is referred to, the reference is to that provision as modified by any law for the time being in force; |
(ii) | APRINOIA Suzhou | means Suzhou APRINOIA Therapeutics Co., Ltd (China); |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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(iii) | Articles | means these Amended and Restated Articles of Association as from time to time amended by Special Resolution; |
(iv) | Auditors | means the Auditors for the time being of the Company, if any; |
(v) | Business Plan | has the meaning given to it in Article 122(b); |
(vi) | Company | means the above-named company; |
(vii) | Control | of a given Person means the power or authority, whether exercised or not, to direct the business, management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; provided, that such power or authority shall conclusively be presumed to exist upon possession of beneficial ownership or power to direct the vote of more than fifty percent (50%) of the votes entitled to be cast at a meeting of the members or shareholders of such Person or power to control the composition of a majority of the board of directors of such Person. The terms “Controlled” and “Controlling” have meanings correlative to the foregoing; |
(viii) | Cooperation Agreements | has the meaning given to it in Article 89(h); |
(ix) | Daiwa | means Daiwa Taiwan-Japan Biotech Fund; |
(x) | DCB | means Yantai Dongcheng Biochemicals Co., Ltd.; |
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(xi) | Deemed Liquidation Event | has the meaning given to it in Article 3(e)(i); |
(xii) | Directors | means the directors of the Company for the time being or, as the case may be, the directors assembled as a board or as a committee thereof; |
(xiii) | Drag-Along Sale | has the meaning given to it in Article 44(c); |
(xiv) | Electronic Record | has the same meaning as in the Electronic Transactions Act; |
(xv) | Electronic Transactions Act |
means the Electronic Transactions Act (As Revised) of the Cayman Islands; |
(xvi) | Exercising Institutional Shareholders | has the meaning given to it in Article 40; |
(xvii) | Group Companies | means, collectively, the Company and all other Subsidiaries of the Company; |
(xviii) | Harvest Capital | means Suzhou Harvest Capital Co., Ltd.; |
(xix) | Initial Refusal Period | has the meaning given to in Article 39; |
(xx) | Institutional Shareholder | means any Member who enters into the Shareholders’ Agreement as defined in the Shareholders’ Agreement, as may be amended from time to time; |
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(xxi) | Institutional Shareholder Directors | has the meaning given to it in Article 104; |
(xxii) | Institutional Shareholder Notice Period | has the meaning given to in Article 40; |
(xxiii) | KTB | means KTB China Synergy Fund; |
(xxiv) | Liquidation Event | means any voluntary or involuntary liquidation, dissolution, or winding-up concerning the Company, or the appointment of a receiver, administrator, external or judicial manager or like officer; |
(xxv) | Management Team | means the chief executive officer of the Company and certain employees as determined by the board of Directors from time to time; |
(xxvi) | Member | means a person who is registered in the Register of members as the holder of any Share in the Company; |
(xxvii) | Memorandum or Memorandum of Association | means the Amended and Restated Memorandum of Association of the Company as from time to time amended by Special Resolution; |
(xxviii) | Minimum Price | means the per share price at the Drag-Along Sale that is equal to two (2) times of the applicable Series C Original Purchase Price; |
(xxix) | month | means a calendar month; |
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(xxx) | New Securities | means any shares or any securities, warrants or options convertible into or exercisable for Shares in the Company; |
(xxxi) | Offered Shares | has the meaning given to it in Article 37; |
(xxxii) | Ordinary Resolution | means a resolution passed by a simple majority of the Members as, being entitled to vote in person or, where proxies are allowed by proxy at a general meeting, and includes a unanimous written resolution signed by all Members entitled to vote. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the Articles; |
(xxxiii) | Ordinary Share | means a voting ordinary share of a nominal or par value of US$0.10 each in the capital of the Company; |
(xxxiv) | Original Pre-Series C Purchase Price | means the subscription price for a Pre-Series C Preferred Share; |
(xxxv) | Original Series B Purchase Price | means the subscription price for a Series B Preferred Share; |
(xxxvi) | Original Series C Purchase Price | means the subscription price for a Series C Preferred Share; |
(xxxvii) | Participating Period | has the meaning given to it in Article 47; |
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(xxxviii) | Person | means any individual, corporation, partnership, trust, limited liability company, association or other entity. |
(xxxix) | Pre-Series C Preferred Share | means a convertible preferred share of a nominal or par value of US$0.10 each in the capital of the Company; |
(xl) | Pre-Series C Conversion Price | has the meaning given to it in Article 4(c)(ii); |
(xli) | Preferred Shares | means any and all series of preferred shares of the Company, including the Series B Preferred Shares, the Pre-Series C Preferred Shares and the Series C Preferred Shares; |
(xlii) | Proposed Transfer | means any proposed assignment, sale, offer to sell, disposition of or any other like transfer of any shares (or any interest therein) proposed by any of the Institutional Shareholders or the individuals of the Management Team; |
(xliii) | Proposed Transfer Notice | means the written notice delivered by an Institutional Shareholder or an individual of the Management Team pursuant to Article 38 setting forth the terms and conditions of a Proposed Transfer; |
(xliv) | Pro Rata Share | means, in relation to each Institutional Shareholder and each individual of the Management Team, such proportion calculated according to the respective number of Shares for the time being registered |
in the name of such Institutional Shareholder and individual of the Management Team as such Shares bear to the total number of issued Shares held by all Institutional Shareholders and individuals of the Management Team (and in the case of the Series B Preferred Shares, the Pre- Series C Preferred Shares and the Series C Preferred Shares, on an as-if converted basis), excluding the Shares held by the Transferor immediately prior to the issue of a Transfer Notice; |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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(xlv) | Prospective Transferee | means any person to whom an Institutional Shareholder or an individual of the Management Team proposes to make a Proposed Transfer; |
(xlvi) | Purchasing Parties | has the meaning given to it in Article 40; |
(xlvii) | Qualified IPO | means a firm underwritten public offering of Ordinary Shares of the Company on a recognized regional or national securities exchange in the United States or Hong Kong (or any other exchange in any other jurisdiction acceptable to the Institutional Shareholders), with an offering price (exclusive of underwriting commissions and expenses) that reflects the pre-offering valuation of the Company being at least US$231,000,000 before December 31, 2023; |
(xlviii) | Re-allotment Notice | has the meaning given to it in Article 40; |
(xlix) | Registered Office | means the registered office of the Company as provided in section 50 of the Act; |
(l) | Register of Members | means the register of Members to be kept pursuant to section 40 of the Act; |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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(li) | Right of First Refusal | means the right, but not an obligation, of the Company, or its permitted transferees or assigns, to purchase some or all of the Transfer Shares with respect to a Proposed Transfer, on the terms and conditions specified in the Proposed Transfer Notice, as set out in Article 38; |
(lii) | Seal | means the common seal of the Company (if applicable) or any facsimile or official seal (if applicable) and includes every duplicate seal; |
(liii) | Secondary Notice | means the written notice delivered by the Company to each Institutional Shareholder pursuant to Article 39 when the Company does not intend to exercise its Right of First Refusal for all Transfer Shares with respect to any Proposed Transfer; |
(liv) | Secondary Refusal Right | has the meaning given to it in Article 39; |
(lv) | Secretary | means any person appointed by the Directors to perform any of the duties of the secretary of the Company and including any assistant secretary; |
(lvi) | Selling Notice | has the meaning given to it in Article 46; |
(lvii) | Selling Party | has the meaning given to it in Article 46; |
(lviii) | Selling Shares | has the meaning given to it in Article 46; |
(lix) | Series B Conversion Price | has the meaning given to it in Article 4(c)(ii); |
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(lx) | Series B Preferred Share | means a convertible preferred share of a nominal or par value of US$0.10 each in the capital of the Company; |
(lxi) | Series C Conversion Price | has the meaning given to it in Article 4(c)(ii); |
(lxii) | Series C Preferred Share | means a convertible preferred share of a nominal or par value of US$0.10 each in the capital of the Company; |
(lxiii) | ShangPharma | means ShangPharma Investment Group Limited; |
(lxiv) | Share | means a share in the capital of the Company of any class including a fraction of such share; |
(lxv) | Shareholders’ Agreement | means the effective shareholders’ agreement (as amended or restated from time to time) entered into by the Company and certain Institutional Shareholders thereto (from time to time); |
(lxvi) | Shareholding Proportion | means, in relation to each Member, such proportion calculated according to the respective number of Shares for the time being registered in the name of such Member as such Shares bear to the total number of issued Shares held by all Members (and in the case of the Series B Preferred Shares, the Pre-Series C Preferred Shares and the Series C Preferred Shares on an as-if converted basis); |
(lxvii) | Special Resolution | has the same meaning as in the Act, and for this purpose, means a resolution passed by a majority at least two-thirds of such Members as, being entitled to vote in person or, where proxies are allowed by proxy at a general meeting, and includes a unanimous written resolution signed by all Members entitled to vote; |
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(lxviii) | Subsequent Refusal Period | has the meaning given to it in Article 40; |
(lxix) | Subsidiary | means, with respect to any given Person (except any individual), any other Person (except any individual) that is Controlled directly or indirectly by such given Person; |
(lxx) | Transfer | has the meaning given to it in Article 38; |
(lxxi) | Transfer Notice | has the meaning given to it in Article 38; |
(lxxii) | Transferor | has the meaning given to it in Article 37; |
(lxxiii) | Treasury Shares | means the shares that were previously issued but were purchased, redeemed, surrendered or otherwise acquired by the Company and not cancelled; |
(lxxiv) | Transfer Shares | means the shares of the Company subject to a Proposed Transfer; |
(lxxv) | Undersubscription Notice | means the written notice delivered by an Exercising Institutional Shareholder pursuant to Article 41 indicating its intention to exercise the option to purchase a portion of the Transfer Shares not purchased pursuant to the Right of First Refusal or the Secondary Refusal Right; |
(lxxvi) | Wealth Path | means Wealth Path Investments Limited. |
(b) | Unless the context otherwise requires, expressions defined in the Act and used herein shall have the meanings so defined. |
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
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(c) | In these Articles unless the context otherwise requires:- |
(i) | words importing the singular number shall include the plural number and vice-versa; |
(ii) | words importing the masculine gender only shall include the feminine gender; |
(iii) | words importing persons only shall include companies, partnerships, trusts, associations or bodies of persons whether incorporated or not; |
(iv) | a notice provided for herein shall be in writing unless otherwise specified and all reference herein to “in writing” and “written” shall include printing, lithography, photography and other modes of representing or reproducing words in permanent visible form including in the form of an Electronic Record; |
(v) | in these Articles, Sections 8 and 19(3) of the Electronic Transactions Act shall not apply; and |
(vi) | “may” shall be construed as permissive and “shall” shall be construed as imperative. |
(d) | Heading used herein are intended for convenience only and shall not affect the construction of these Articles. |
RIGHTS OF SERIES C PREFERRED SHARES
3. | The holders of Series C Preferred Shares shall have the rights and privileges and be subject to the restrictions set out in this Article 3. Except to the extent expressly set out in this Article, the Series C Preferred Shares shall rank at least pari passu in all respects with all other Shares of the Company: |
(a) | Voting Rights. The holders of Series C Preferred Shares shall be entitled to: |
(i) | receive notice of and to attend and speak and to vote at all general meetings of the Company and on any Ordinary Resolution or Special Resolution; |
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(ii) | vote together with holders of Pre-Series C Preferred Shares, Series B Preferred Shares and the Ordinary Shares as a single class; and |
(iii) | cast such number of votes equal to the number of Ordinary Shares into which the Series C Preferred Shares held by it are convertible as of the record date for determining the Members entitled to vote on such matter; |
(b) | Dividends. A holder of Series C Preferred Shares shall be entitled to receive dividends, for each Series C Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor, prior and in preference to, and satisfied before, any dividend on the Pre-Series C Preferred Shares, Series B Preferred Shares and the Ordinary Shares. Such dividends shall be cumulative, but a holder of Series C Preferred Shares may not further participate in any subsequent distribution among the Pre-Series C Preferred Shares, Series B Preferred Shares or the Ordinary Shares. |
(c) | Conversion. |
(i) | Optional Conversion. A holder of Series C Preferred Shares shall have the right to convert all or a portion of its Series C Preferred Shares into Ordinary Shares at the then-applicable Series C Conversion Price at any time without payment of additional consideration; |
(ii) | Conversion Price. The initial conversion price for each Series C Preferred Share shall be the Original Series C Purchase Price (i.e., the initial conversion shall be on a one-for-one basis), subject to the conversion price adjustments made pursuant to Article 44(d) (the “Series C Conversion Price”); |
(iii) | Fractional Shares. No fractional Ordinary Shares will be issued upon the conversion of the Series C Preferred Shares. For any fraction of a Share that a holder of Series C Preferred Shares would otherwise be entitled to upon conversion, the Company may, at its election, pay cash for such fractional Share in an amount equal to such fraction multiplied by the then-applicable Series C Conversion Price, or the Company may round up to the next whole Ordinary Share, in lieu of issuing fractional shares; |
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(iv) | Mandatory Conversion. The Series C Preferred Shares will automatically convert into Ordinary Shares at the then-applicable Series C Conversion Price upon the occurrence of one of the following events: |
(1) | immediately prior to the closing of a firmly underwritten public offering of Ordinary Shares at a price per share of not less than the Original Series C Purchase Price per share; or |
(2) | the affirmative vote or written consent of at least 100% or more of the then-outstanding Series C Preferred Shares; |
(d) | Conversion Price Adjustment. |
(i) | The Series C Conversion Price for the Series C Preferred Shares shall be adjusted appropriately for subdivision or combination of the Ordinary Shares, distribution of dividends on Ordinary Shares, capital reorganization, recapitalization or reclassification of Ordinary Shares and the like based on the mechanisms set forth in paragraphs (iii) to (vi) below. In the event that the Company issues or proposes to issue any New Securities at a per share price or conversion price less than the Original Series C Purchase Price, such Series C Conversion Price for the Series C Preferred Shares will be adjusted based on the broad-based weighted average method by multiplying by a fraction equal to: |
(1) | the numerator of which shall be (A) the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale, plus (B) the number of Ordinary Shares which the consideration received by the Company for the total number of additional Ordinary Shares so issued would purchase at the applicable Series C Conversion Price in effect immediately prior to such issuance or sale, and |
(2) | the denominator of which shall be the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of additional Ordinary Shares so issued. |
For the purposes of the preceding paragraph, the number of Ordinary Shares deemed to be outstanding as of a given date shall be the sum of (A) the number of Ordinary Shares actually outstanding, (B) the number of Ordinary Shares into which the then outstanding Preferred Shares could be converted if fully converted on the day immediately preceding the given date, (C) the number of Ordinary Shares which could be obtained through the exercise or conversion of all other rights, options and convertible securities outstanding, and (D) the number of Ordinary Shares reserved for future issuance under the Company’s stock incentive plan on the date immediately preceding the given date.
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(ii) | Notwithstanding paragraph (i) above, the following issues will not trigger a conversion price adjustment as required in Article 3(d)(i) above: |
(1) | Shares issued to employees, directors, advisors, consultants and officers pursuant to share incentive plans approved by the Company’s board of Directors; |
(2) | Shares issued in connection with sponsored research, collaboration, technology license, development, marketing, or of similar nature approved by the Company’s board of Directors; |
(3) | Shares issued upon conversion of any preferred shares, debenture, warrant, option, or other convertible security that are issued with the approval by the Company’s board of Directors; |
(4) | Shares issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar business combination approved by the Company’s board of Directors; and |
(5) | Shares with respect to which the holders of at least 100% or more of the outstanding Series C Preferred Shares waive their rights on the conversion price adjustment; |
(iii) | Adjustment for Subdivision and Combinations. If the Company effects a subdivision of the outstanding Ordinary Shares without a corresponding subdivision of the Series C Preferred Shares, the Series C Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if the Company consolidates the Ordinary Shares then outstanding without a corresponding consolidation of the Series C Preferred Shares, the Series C Conversion Price in effect immediately before the consolidation shall be proportionately increased. Any adjustment under this Article 3(d)(iii) shall become effective at the close of business on the date the subdivision or consolidation becomes effective; |
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(iv) | Adjustment for Distributions Paid in Kind. If the Company pays a dividend or other distribution in additional Ordinary Shares, the Series C Conversion Price then in effect shall be decreased as of the time of such issuance, as provided below: |
(1) | the Series C Conversion Price shall be adjusted by multiplying the Series C Conversion Price then in effect by a fraction equal to: |
(a) | the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date; and |
(b) | the denominator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date, plus the number of Ordinary Shares issuable in payment of such dividend or distribution. |
(2) | Notwithstanding the foregoing, no adjustment to the Series C Conversion Price shall be made if all holders of Series C Preferred Shares simultaneously receive a dividend or other distribution of Ordinary Shares in an amount equal to the Ordinary Shares it would have received if all outstanding Series C Preferred Shares had been converted into Ordinary Shares on the date of such event. |
(v) | Adjustment for Reclassification, Exchange and Substitution. If at any time the Ordinary Shares issuable upon conversion of the Series C Preferred Shares are changed into the same or a different number of Shares of any class or classes, whether by recapitalization, reclassification or otherwise (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to herein), on the happening of such event the holders of Series C Preferred Shares shall have a right to convert such Series C Preferred Shares into the kind and amount of Shares and other securities and property receivable upon such recapitalization, reclassification or other change so that such holders receive the maximum number of Ordinary Shares into which such Series C Preferred Shares would have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. |
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(vi) | Reorganizations, Mergers or Consolidations. If at any time there is a capital reorganization of the Ordinary Shares or the merger or consolidation of the Company with or into another company or another person (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to above), as a part of such capital reorganization, provision shall be made so that the holders of Series C Preferred Shares shall thereafter be entitled to receive upon conversion of their Series C Preferred Shares the number of Shares or other securities or property of the Company to which a holder of the number of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, subject to adjustment in respect of such Shares or securities by the terms thereof. In such case, appropriate adjustment shall be made in the application of the provisions of this Article 3(d)(vi) with respect to the rights of the holders of Series C Preferred Shares after the capital reorganization, such that the provisions of this Article 3(d)(vi) (including adjustment of the Series C Conversion Price then in effect and the number of Shares issuable upon conversion of the Series C Preferred Shares) shall be applicable after that event and be as nearly equivalent as practicable. |
(vii) | Certificate of Adjustment. The Company shall, at its own expense, compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the holders of Series C Preferred Shares at their addresses shown in the Company’s register of members. The Company shall update its register of members to reflect such adjustment in accordance with the laws of the Cayman Islands. |
(viii) | Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Ordinary Shares upon conversion of Series C Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Ordinary Shares in a name other than that in which the Series C Preferred Shares so converted were registered. |
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(e) | Distribution of capital upon liquidation. |
(i) | Any of the following whether in a single transaction or series of related transactions shall be considered a “Deemed Liquidation Event”: |
(1) | any merger, amalgamation, consolidation, acquisition, tender offer, reorganization or scheme thereof or other business combination in which the Members holding a majority of the voting power of the Company immediately prior to such transaction do not hold a majority of the voting power of the Company or the surviving or acquiring entity (or its parent) immediately after the consummation of the transaction; or |
(2) | any sale of all or substantially all of any assets of the Company (including by means of the exclusive licensing of all or substantially all of any intellectual property of the Company); excluding the sale to other Group Companies. |
(ii) | The Company shall ensure that the agreement for a Deemed Liquidation Event provides that the consideration payable to the Members of the Company shall be allocated among the holders of Shares of the Company in accordance with Articles 3(e)(ii) to 3(e)(v). |
(iii) | In the event of a Deemed Liquidation Event where the Company exclusively licenses all or substantially all of any intellectual property of the Company, so long as the holders of (i) 75% or more of the then outstanding Series C Preferred Shares, (ii) 75% or more of the then outstanding Pre-Series C Preferred Shares and (iii) 75% or more of the then outstanding Series B Preferred Shares agree, the liquidation preference as described under this Article 44(e) shall not be triggered. Notwithstanding the foregoing, at the request of the holders of 75% or more of the then outstanding Series C Preferred Shares in a written instrument delivered to the Company not later than one hundred twenty (120) days after the occurrence of such Deemed Liquidation Event, the Company shall use the assets of the Company available for distribution to its Members, including the consideration received by the Company for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or intellectual property licensed, as determined in good faith by the board of Directors), to redeem all outstanding Series C Preferred Shares in accordance with Articles 3(e)(ii) to 3(e)(v); |
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(iv) | Except as prohibited by law, on the occurrence of a Liquidation Event or a Deemed Liquidation Event, the holders of Series C Preferred Shares shall be entitled to be paid out of the assets of the Company available for distribution to its Members before any payment shall be made to the holders of Pre-Series C Preferred Shares, Series B Preferred Shares and the holders of Ordinary Shares, an amount per share equal to the Original Series C Purchase Price, plus any dividends declared but unpaid thereon; |
(v) | If upon any such Liquidation Event or Deemed Liquidation Event, the assets of the Company available for distribution to its Members shall be insufficient to pay the holders of Series C Preferred Shares the full amount to which they shall be entitled under Article 3(e)(i) the holders of Series C Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise have been payable under Article 3(e)(i). |
(vi) | After payment of all preferential amounts required to be paid to the holders of Series C Preferred Shares, the remaining assets of the Company available for distribution to its Members shall be distributed among the holders of Series C Preferred Shares, Series B Preferred Shares and then the Ordinary Shares in accordance with Article 4(e)(ii) and Article 5(e)(ii). |
(vii) | Notwithstanding the forgoing, the holders of Series C Preferred Shares shall be entitled to the greater of: |
(1) | the aggregate amount of assets calculated in accordance with Article 3(e)(ii); or |
(2) | the amount of assets that such holder of Series C Preferred Shares would have received had the outstanding Series C Preferred Shares held by such holder been converted into Ordinary Shares, in each case taking into account any carve-outs, escrows, or other delayed or contingent payments. |
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(f) | Limited Redemption Right. If the Company breaches Articles 89, 90 or 123 or uses the Institutional Shareholder’s subscription monies in a manner not contemplated by the terms of such Institutional Shareholder’s subscription, each Institutional Shareholder may request such breach to be cured within a reasonable deadline. If the Company fails to cure such breach to the reasonable satisfaction of such Institutional Shareholder within the prescribed deadline specified by such Institutional Shareholder, such Institutional Shareholder is entitled to demand, within 60 days after such deadline, acting separately but not jointly, the Company to redeem all of the Series C Preferred Shares it holds at a price per Series C Preferred Shares equal to the Original Series C Purchase Price plus an annual compounded rate of return of eight percent (8%) yield. |
RIGHTS OF PRE-SERIES C PREFERRED SHARES
4. | The holders of Pre-Series C Preferred Shares shall have the rights and privileges and be subject to the restrictions set out in this Article 4. Except to the extent expressly set out in Article 3 and this Article, the Pre-Series C Preferred Shares shall rank at least pari passu in all respects with all other Shares of the Company: |
(a) | Voting Rights. The holders of Pre-Series C Preferred Shares shall be entitled to: |
(i) | receive notice of and to attend and speak and to vote at all general meetings of the Company and on any Ordinary Resolution or Special Resolution; |
(ii) | vote together with holders of Series B Preferred Shares, Series C Preferred Shares and the Ordinary Shares as a single class; and |
(iii) | cast such number of votes equal to the number of Ordinary Shares into which the Pre-Series C Preferred Shares held by it are convertible as of the record date for determining the Members entitled to vote on such matter; |
(b) | Dividends. A holder of Pre-Series C Preferred Shares shall be entitled to receive dividends, for each Pre-Series C Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor (after the satisfaction of the payment of any dividends payable to the holders of the Series C Preferred Shares), prior and in preference to, and satisfied before, any dividend on the Series B Preferred Shares and the Ordinary Shares. Such dividends shall be cumulative, but a holder of Pre-Series C Preferred Shares may not further participate in any subsequent distribution among the Series B Preferred Shares or the Ordinary Shares. |
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(c) | Conversion. |
(i) | Optional Conversion. A holder of Pre-Series C Preferred Shares shall have the right to convert all or a portion of its Pre-Series C Preferred Shares into Ordinary Shares at the then-applicable Pre-Series C Conversion Price at any time without payment of additional consideration; |
(ii) | Conversion Price. The initial conversion price for each Pre-Series C Preferred Share shall be the Original Pre-Series C Purchase Price (i.e., the initial conversion shall be on a one-for-one basis), subject to the conversion price adjustments made pursuant to Article 4(d) (the “Pre-Series C Conversion Price”); |
(iii) | Fractional Shares. No fractional Ordinary Shares will be issued upon the conversion of the Pre-Series C Preferred Shares. For any fraction of a Share that a holder of Pre-Series C Preferred Shares would otherwise be entitled to upon conversion, the Company may, at its election, pay cash for such fractional Share in an amount equal to such fraction multiplied by the then-applicable Pre-Series C Conversion Price, or the Company may round up to the next whole Ordinary Share, in lieu of issuing fractional shares; |
(iv) | Mandatory Conversion. The Pre-Series C Preferred Shares will automatically convert into Ordinary Shares at the then-applicable Pre-Series C Conversion Price upon the occurrence of one of the following events: |
(1) | immediately prior to the closing of a firmly underwritten public offering of Ordinary Shares at a price per share of not less than the Original Pre-Series C Purchase Price per share; or |
(2) | the affirmative vote or written consent of at least a majority of the then-outstanding Pre-Series C Preferred Shares; |
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(d) | Conversion Price Adjustment. |
(i) | The Pre-Series C Conversion Price for the Pre-Series C Preferred Shares shall be adjusted appropriately for subdivision or combination of the Ordinary Shares, distribution of dividends on Ordinary Shares, capital reorganization, recapitalization or reclassification of Ordinary Shares and the like based on the mechanisms set forth in paragraphs (iii) to (vi) below. In the event that the Company issues or proposes to issue any New Securities at a per share price or conversion price less than the Original Pre-Series C Purchase Price, such Pre-Series C Conversion Price for the Pre-Series C Preferred Shares will be adjusted based on the broad-based weighted average method by multiplying by a fraction equal to: |
(1) | the numerator of which shall be (A) the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale, plus (B) the number of Ordinary Shares which the consideration received by the Company for the total number of additional Ordinary Shares so issued would purchase at the applicable Pre-Series C Conversion Price in effect immediately prior to such issuance or sale, and |
(2) | the denominator of which shall be the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of additional Ordinary Shares so issued. |
For the purposes of the preceding paragraph, the number of Ordinary Shares deemed to be outstanding as of a given date shall be the sum of (A) the number of Ordinary Shares actually outstanding, (B) the number of Ordinary Shares into which the then outstanding Preferred Shares could be converted if fully converted on the day immediately preceding the given date, (C) the number of Ordinary Shares which could be obtained through the exercise or conversion of all other rights, options and convertible securities outstanding, and (D) the number of Ordinary Shares reserved for future issuance under the Company’s stock incentive plan on the date immediately preceding the given date.
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(ii) | Notwithstanding paragraph (i) above, the following issues will not trigger a conversion price adjustment as required in Article 4(d)(i) above: |
(1) | Shares issued to employees, directors, advisors, consultants and officers pursuant to share incentive plans approved by the Company’s board of Directors; |
(2) | Shares issued in connection with sponsored research, collaboration, technology license, development, marketing, or of similar nature approved by the Company’s board of Directors; |
(3) | Shares issued upon conversion of any preferred shares, debenture, warrant, option, or other convertible security that are issued with the approval by the Company’s board of Directors; |
(4) | Shares issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar business combination approved by the Company’s board of Directors; and |
(5) | Shares with respect to which the holders of a majority of the outstanding Pre-Series C Preferred Shares waive their rights on the conversion price adjustment; |
(iii) | Adjustment for Subdivision and Combinations. If the Company effects a subdivision of the outstanding Ordinary Shares without a corresponding subdivision of the Pre-Series C Preferred Shares, the Pre-Series C Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if the Company consolidates the Ordinary Shares then outstanding without a corresponding consolidation of the Pre-Series C Preferred Shares, the Pre-Series C Conversion Price in effect immediately before the consolidation shall be proportionately increased. Any adjustment under this Article 4(d)(iii) shall become effective at the close of business on the date the subdivision or consolidation becomes effective; |
(iv) | Adjustment for Distributions Paid in Kind. If the Company pays a dividend or other distribution in additional Ordinary Shares, the Pre-Series C Conversion Price then in effect shall be decreased as of the time of such issuance, as provided below: |
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(1) | the Pre-Series C Conversion Price shall be adjusted by multiplying the Pre-Series C Conversion Price then in effect by a fraction equal to: |
(a) | the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date; and |
(b) | the denominator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date, plus the number of Ordinary Shares issuable in payment of such dividend or distribution. |
(2) | Notwithstanding the foregoing, no adjustment to the Pre-Series C Conversion Price shall be made if all holders of Pre-Series C Preferred Shares simultaneously receive a dividend or other distribution of Ordinary Shares in an amount equal to the Ordinary Shares it would have received if all outstanding Pre-Series C Preferred Shares had been converted into Ordinary Shares on the date of such event. |
(v) | Adjustment for Reclassification, Exchange and Substitution. If at any time the Ordinary Shares issuable upon conversion of the Pre-Series C Preferred Shares are changed into the same or a different number of Shares of any class or classes, whether by recapitalization, reclassification or otherwise (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to herein), on the happening of such event the holders of Pre-Series C Preferred Shares shall have a right to convert such Pre-Series C Preferred Shares into the kind and amount of Shares and other securities and property receivable upon such recapitalization, reclassification or other change so that such holders receive the maximum number of Ordinary Shares into which such Pre-Series C Preferred Shares would have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. |
(vi) | Reorganizations, Mergers or Consolidations. If at any time there is a capital reorganization of the Ordinary Shares or the merger or consolidation of the Company with or into another company or another person (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to above), as a part of such capital reorganization, provision shall be made so that the holders of Pre-Series C Preferred Shares shall thereafter be entitled to receive upon conversion of their Pre-Series C Preferred Shares the number of Shares or other securities or property of the Company to which a holder of the number of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, subject to adjustment in respect of such Shares or securities by the terms thereof. In such case, appropriate adjustment shall be made in the application of the provisions of this Article 4(d)(v) with respect to the rights of the holders of Pre-Series C Preferred Shares after the capital reorganization, such that the provisions of this Article 4(d)(v) (including adjustment of the Pre-Series C Conversion Price then in effect and the number of Shares issuable upon conversion of the Pre-Series C Preferred Shares) shall be applicable after that event and be as nearly equivalent as practicable. |
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(vii) | Certificate of Adjustment. The Company shall, at its own expense, compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the holders of Pre-Series C Preferred Shares at their addresses shown in the Company’s register of members. The Company shall update its register of members to reflect such adjustment in accordance with the laws of the Cayman Islands. |
(viii) | Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Ordinary Shares upon conversion of Pre-Series C Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Ordinary Shares in a name other than that in which the Pre-Series C Preferred Shares so converted were registered. |
(e) | Distribution of capital upon liquidation. |
(i) | In the event of a Deemed Liquidation Event referred to in Article 3(e)(i) where the Company exclusively licenses all or substantially all of any intellectual property of the Company, so long as the holders of (i) 75% or more of the then outstanding Series C Preferred Shares, (ii) 75% or more of the then outstanding Pre-Series C Preferred Shares and (iii) 75% or more of the then outstanding Series B Preferred Shares agree, the liquidation preference as described under this Article 4(e) shall not be triggered. Notwithstanding the foregoing, at the request of both the holders of 75% or more of the then outstanding Pre-Series C Preferred Shares in a written instrument delivered to the Company not later than one hundred twenty (120) days after the occurrence of such Deemed Liquidation Event, the Company shall use the assets of the Company available for distribution to its Members, including the consideration received by the Company for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or intellectual property licensed, as determined in good faith by the board of Directors), to redeem all outstanding Pre-Series C Preferred Shares in accordance with Articles 4(e)(ii) to 4(e)(v) below; |
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(ii) | Except as prohibited by law, on the occurrence of a Liquidation Event or a Deemed Liquidation Event, the holders of Pre-Series C Preferred Shares shall be entitled to be paid out of the assets of the Company available for distribution to its Members (after the satisfaction of the distribution to the holders of the Series C Preferred Shares in accordance with Articles 3(e)(iv) to (v)) before any payment shall be made to the holders of Series B Preferred Shares and the holders of Ordinary Shares, an amount per share equal to the Original Pre-Series C Purchase Price, plus any dividends declared but unpaid thereon; |
(iii) | If upon any such Liquidation Event or Deemed Liquidation Event, the assets of the Company available for distribution to its Members shall be insufficient to pay the holders of Pre-Series C Preferred Shares the full amount to which they shall be entitled under Article 4(e)(i) the holders of Pre-Series C Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise have been payable under Article 4(e)(i) . |
(iv) | After payment of all preferential amounts required to be paid to the holders of Pre-Series C Preferred Shares, the remaining assets of the Company available for distribution to its Members shall be distributed among the holders of Series B Preferred Shares and then the Ordinary Shares in accordance with Article 5(e)(ii). |
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(v) | Notwithstanding the forgoing, the holders of Pre-Series C Preferred Shares shall be entitled to the greater of: |
(1) | the aggregate amount of assets calculated in accordance with Article 4(e)(i); or |
(2) | the amount of assets that such holder of Pre-Series C Preferred Shares would have received had the outstanding Pre-Series C Preferred Shares held by such holder been converted into Ordinary Shares, in each case taking into account any carve-outs, escrows, or other delayed or contingent payments. |
(f) | Limited Redemption Right. If the Company breaches Articles 89, 90 or 123 or uses the Institutional Shareholder’s subscription monies in a manner not contemplated by the terms of such Institutional Shareholder’s subscription, each Institutional Shareholder may request such breach to be cured within a reasonable deadline. If the Company fails to cure such breach to the reasonable satisfaction of such Institutional Shareholder within the prescribed deadline specified by such Institutional Shareholder, such Institutional Shareholder is entitled to demand, within 60 days after such deadline, acting separately but not jointly, the Company to redeem all of the Pre-Series C Preferred Shares it holds at a price per Pre-Series C Preferred Shares equal to the Original Pre-Series C Purchase Price plus an annual compounded rate of return of eight percent (8%) yield. |
RIGHTS OF SERIES B PREFERRED SHARES
5. | The holders of Series B Preferred Shares shall have the rights and privileges and be subject to the restrictions set out in this Article 5. Except to the extent expressly set out in Article3, Article 4 and this Article, the Series B Preferred Shares shall rank at least pari passu in all respects with all other Shares of the Company: |
(a) | Voting Rights. The holders of Series B Preferred Shares shall be entitled to: |
(i) | receive notice of and to attend and speak and to vote at all general meetings of the Company and on any ordinary resolution or Special Resolution; |
(ii) | vote together with holders of the Series C Preferred Shares, Pre-Series C Preferred Shares and the Ordinary Shares as a single class; and |
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(iii) | cast such number of votes equal to the number of Ordinary Shares into which the Series B Preferred Shares held by it are convertible as of the record date for determining the Members entitled to vote on such matter; |
(b) | Dividends. A holder of Series B Preferred Shares shall be entitled to receive dividends, for each Series B Preferred Share held by such holder, payable out of funds or assets when and as such funds or assets become legally available therefor (after the satisfaction of the payment of any dividends payable to the holders of the Pre-Series C Preferred Shares and the Series C Preferred Shares), prior and in preference to, and satisfied before, any dividend on the Ordinary Shares. Such dividends shall be cumulative, but a holder of Series B Preferred Share may not further participate in any subsequent distribution among the Ordinary Shares. |
(c) | Conversion. |
(i) | Optional Conversion. A holder of Series B Preferred Shares shall have the right to convert all or a portion of its Series B Preferred Shares into Ordinary Shares at the then-applicable Series B Conversion Price at any time without payment of additional consideration; |
(ii) | Conversion Price. The initial conversion price for each Series B Preferred Share shall be the Original Series B Purchase Price (i.e., the initial conversion shall be on a one-for-one basis), subject to the conversion price adjustments made pursuant to Article 5(d) (the “Series B Conversion Price”); |
(iii) | Fractional Shares. No fractional Ordinary Shares will be issued upon the conversion of the Series B Preferred Shares. For any fraction of a Share that a holder of Series B Preferred Shares would otherwise be entitled to upon conversion, the Company may, at its election, pay cash for such fractional Share in an amount equal to such fraction multiplied by the then-applicable Series B Conversion Price, or the Company may round up to the next whole Ordinary Share, in lieu of issuing fractional shares; |
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(iv) | Mandatory Conversion. The Series B Preferred Shares will automatically convert into Ordinary Shares at the then-applicable Series B Conversion Price upon the occurrence of one of the following events: |
(1) | immediately prior to the closing of a firmly underwritten public offering of Ordinary Shares at a price per share of not less than the Original Series B Purchase Price per share; or |
(2) | the affirmative vote or written consent of at least a majority of the then-outstanding Series B Preferred Shares; |
(d) | Conversion Price Adjustment. |
(i) | The Series B Conversion Price for the Series B Preferred Shares shall be adjusted appropriately for subdivision or combination of the Ordinary Shares, distribution of dividends on Ordinary Shares, capital reorganization, recapitalization or reclassification of Ordinary Shares and the like based on the mechanisms set forth in paragraphs (iii) to (vi) below. In the event that the Company issues or proposes to issue any New Securities at a per share price or conversion price less than the Original Series B Purchase Price, such Series B Conversion Price for the Series B Preferred Shares will be adjusted based on the broad-based weighted average method by multiplying by a fraction equal to: |
(1) | the numerator of which shall be (A) the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale, plus (B) the number of Ordinary Shares which the consideration received by the Company for the total number of additional Ordinary Shares so issued would purchase at the applicable Series B Conversion Price in effect immediately prior to such issuance or sale, and |
(2) | the denominator of which shall be the number of Ordinary Shares deemed outstanding (as defined below) immediately prior to such issue or sale plus the total number of additional Ordinary Shares so issued. |
For the purposes of the preceding paragraph, the number of Ordinary Shares deemed to be outstanding as of a given date shall be the sum of (A) the number of Ordinary Shares actually outstanding, (B) the number of Ordinary Shares into which the then outstanding Preferred Shares could be converted if fully converted on the day immediately preceding the given date, (C) the number of Ordinary Shares which could be obtained through the exercise or conversion of all other rights, options and convertible securities outstanding, and (D) the number of Ordinary Shares reserved for future issuance under the Company’s stock incentive plan on the date immediately preceding the given date.
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(ii) | Notwithstanding paragraph (i) above, the following issues will not trigger a conversion price adjustment as required in Article 5(d)(i) above: |
(1) | Shares issued to employees, directors, advisors, consultants and officers pursuant to share incentive plans approved by the Company’s board of Directors; |
(2) | Shares issued in connection with sponsored research, collaboration, technology license, development, marketing, or of similar nature approved by the Company’s board of Directors; |
(3) | Shares issued upon conversion of any preferred shares, debenture, warrant, option, or other convertible security that are issued with the approval by the Company’s board of Directors; |
(4) | Shares issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar business combination approved by the Company’s board of Directors; and |
(5) | Shares with respect to which the holders of a majority of the outstanding Series B Preferred Shares waive their rights on the conversion price adjustment; |
(iii) | Adjustment for Subdivision and Combinations. If the Company effects a subdivision of the outstanding Ordinary Shares without a corresponding subdivision of the Series B Preferred Shares, the Series B Conversion Price in effect immediately before that subdivision shall be proportionately decreased. Conversely, if the Company consolidates the Ordinary Shares then outstanding without a corresponding consolidation of the Series B Preferred Shares, the Series B Conversion Price in effect immediately before the consolidation shall be proportionately increased. Any adjustment under this Article 5(d)(iii) shall become effective at the close of business on the date the subdivision or consolidation becomes effective; |
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(iv) | Adjustment for Distributions Paid in Kind. If the Company pays a dividend or other distribution in additional Ordinary Shares, the Series B Conversion Price then in effect shall be decreased as of the time of such issuance, as provided below: |
(1) | the Series B Conversion Price shall be adjusted by multiplying the Series B Conversion Price then in effect by a fraction equal to: |
(a) | the numerator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date; and |
(b) | the denominator of which shall be the total number of Ordinary Shares issued and outstanding immediately prior to the time of such issuance or the close of business on the record date, plus the number of Ordinary Shares issuable in payment of such dividend or distribution. |
(2) | Notwithstanding the foregoing, no adjustment to the Series B Conversion Price shall be made if all holders of Series B Preferred Shares simultaneously receive a dividend or other distribution of Ordinary Shares in an amount equal to the Ordinary Shares it would have received if all outstanding Series B Preferred Shares had been converted into Ordinary Shares on the date of such event. |
(v) | Adjustment for Reclassification, Exchange and Substitution. If at any time the Ordinary Shares issuable upon conversion of the Series B Preferred Shares are changed into the same or a different number of Shares of any class or classes, whether by recapitalization, reclassification or otherwise (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to herein), on the happening of such event the holders of Series B Preferred Shares shall have a right to convert such Series B Preferred Shares into the kind and amount of Shares and other securities and property receivable upon such recapitalization, reclassification or other change so that such holders receive the maximum number of Ordinary Shares into which such Series B Preferred Shares would have been converted immediately prior to such recapitalization, reclassification or change, all subject to further adjustment as provided herein or with respect to such other securities or property by the terms thereof. |
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(vi) | Reorganizations, Mergers or Consolidations. If at any time there is a capital reorganization of the Ordinary Shares or the merger or consolidation of the Company with or into another company or another person (other than as a result of a share dividend, subdivision, split or consolidation otherwise referred to above), as a part of such capital reorganization, provision shall be made so that the holders of Series B Preferred Shares shall thereafter be entitled to receive upon conversion of their Series B Preferred Shares the number of Shares or other securities or property of the Company to which a holder of the number of Ordinary Shares deliverable upon conversion would have been entitled on such capital reorganization, subject to adjustment in respect of such Shares or securities by the terms thereof. In such case, appropriate adjustment shall be made in the application of the provisions of this Article 5(d)(v) with respect to the rights of the holders of Series B Preferred Shares after the capital reorganization, such that the provisions of this Article 5(d)(v) (including adjustment of the Series B Conversion Price then in effect and the number of Shares issuable upon conversion of the Series B Preferred Shares) shall be applicable after that event and be as nearly equivalent as practicable. |
(vii) | Certificate of Adjustment. The Company shall, at its own expense, compute such adjustment or readjustment in accordance with the provisions hereof and prepare a certificate showing such adjustment or readjustment, and shall mail such certificate, by first class mail, postage prepaid, to the holders of Series B Preferred Shares at their addresses shown in the Company’s register of members. The Company shall update its register of members to reflect such adjustment in accordance with the laws of the Cayman Islands. |
(viii) | Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of Ordinary Shares upon conversion of Series B Preferred Shares, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of Ordinary Shares in a name other than that in which the Series B Preferred Shares so converted were registered. |
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(e) | Distribution of capital upon liquidation. |
(i) | In the event of a Deemed Liquidation Event referred to in Article 3(e)(i) where the Company exclusively licenses all or substantially all of any intellectual property of the Company, so long as both the holders of (i) 75% or more of the then outstanding Series C Preferred Shares, (ii) 75% or more of the then outstanding Pre-Series C Preferred Shares and (iii) 75% or more of the then outstanding Series B Preferred Shares agree, the liquidation preference as described under this Article 5(e) shall not be triggered. Notwithstanding the foregoing, at the request of both the holders of 75% or more of the then outstanding Series B Preferred Shares in a written instrument delivered to the Company not later than one hundred twenty (120) days after the occurrence of such Deemed Liquidation Event, the Company shall use the assets of the Company available for distribution to its Members, including the consideration received by the Company for such Deemed Liquidation Event (net of any retained liabilities associated with the assets sold or intellectual property licensed, as determined in good faith by the board of Directors), to redeem all outstanding Series B Preferred Shares in accordance with Articles 5(e)(ii) to 5(e)(v) below; |
(ii) | Except as prohibited by law, on the occurrence of a Liquidation Event or a Deemed Liquidation Event, the holders of Series B Preferred Shares shall be entitled to be paid out of the assets of the Company available for distribution to its Members (after the satisfaction of the distribution to the holders of the Series C Preferred Shares in accordance with Articles 3(e)(ii) to 3(e)(v) and Pre-Series C Preferred Shares in accordance with Articles 4(e)(ii) to 4(e)(v)) before any payment shall be made to the holders of Ordinary Shares, an amount per share equal to the Original Series B Purchase Price, plus any dividends declared but unpaid thereon; |
(iii) | If upon any such Liquidation Event or Deemed Liquidation Event, the assets of the Company available for distribution to its Members shall be insufficient to pay the holders of Series B Preferred Shares the full amount to which they shall be entitled under Article 5(e)(i) the holders of Series B Preferred Shares shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise have been payable under Article 5(e)(i). |
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(iv) | After payment of all preferential amounts required to be paid to the holders of Series B Preferred Shares, the remaining assets of the Company available for distribution to its Members shall be distributed ratably among the holders of the Ordinary Shares. |
(v) | Notwithstanding the forgoing, the holders of Series B Preferred Shares shall be entitled to the greater of: |
(1) | the aggregate amount of assets calculated in accordance with Article 5(e)(i); or |
(2) | the amount of assets that such holder of Series B Preferred Shares would have received had the outstanding Series B Preferred Shares held by such holder been converted into Ordinary Shares, in each case taking into account any carve-outs, escrows, or other delayed or contingent payments. |
(f) | Limited Redemption Right. If the Company breaches Articles 89, 90 or 123 or uses the Institutional Shareholder’s subscription monies in a manner not contemplated by the terms of such Institutional Shareholder’s subscription, each Institutional Shareholder may request such breach to be cured within a reasonable deadline. If the Company fails to cure such breach to the reasonable satisfaction of such Institutional Shareholder within the prescribed deadline specified by such Institutional Shareholder, such Institutional Shareholder is entitled to demand, within 60 days after such deadline, acting separately but not jointly, the Company to redeem all of the Series B Preferred Shares it holds at a price per Series B Preferred Share equal to the Original Series B Purchase Price plus an annual compounded rate of return of eight percent (8%) yield. |
RIGHTS OF ORDINARY SHARES
6. | The holders of Ordinary Shares shall have the rights and privileges and be subject to the restrictions set out in this Article 6. Where the Directors issue a Share having no preferred, deferred, redemption or other special rights, it shall be issued as an Ordinary Share and shall entitle the holder to: |
(a) | Voting Rights. Receive notice of and to attend and speak and to vote at all general meetings of the Company and on any ordinary resolution or Special Resolution (with each Ordinary Share entitling its holder to one vote) |
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(b) | Dividends. No dividends shall be declared and paid on any Ordinary Shares unless and until a dividend in the same amount on a per Share basis has been declared and paid in full on each (i) Series C Preferred Share, (ii) Pre-Series C Preferred Share and (iii) Series B Preferred Share; |
(c) | Distribution of capital upon liquidation. Subject to the rights of the Series C Preferred Shares, Pre-Series C Preferred Shares and the Series B Preferred Shares, on a Liquidation Event, the assets of the Company shall be distributed to holders of Ordinary Shares in accordance with Article137. |
SHARES
7. | (a) | Subject to the provisions of the Act, if any, in that behalf in the Memorandum of Association, and without prejudice to any special rights previously conferred on the holders of existing Shares, including the Series C Preferred Shares , Pre-Series C Preferred Shares and the Series B Preferred Shares, any Share may be issued with such preferred, deferred, or other special rights, or such restrictions, whether in regard to dividend, voting, return of Share capital or otherwise, as the Company may from time to time by Special Resolution determine, and subject to the provisions of section 37 of the Act, any Share may, with the sanction of a Special Resolution, be issued on the terms that it is, or at the option of the Company or the holder is liable, to be redeemed. |
(b) | Subject to Articles 122(k) and 123(d), if at any time the share capital is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may be varied with the consent in writing of the holders of three-fourths of the issued Shares of that class or with the sanction of a resolution passed by not less than three-fourths of such holders of the Shares of that class as may be present in person or by proxy at a separate general meeting of the holders of the Shares of that class. To every such separate general meeting, the provisions of these Articles relating to general meetings shall mutatis mutandis apply, but so that the necessary quorum shall be any one or more persons holding or representing by proxy not less than one-third of the issued Shares of the class and that any holder of Shares of the class present in person or by proxy may demand a poll. |
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8. | (a) | Every person whose name is entered as a Member in the Register of Members shall be entitled, without payment, to a certificate of the Company specifying the Share or Shares held by him and the amount paid up thereon, provided that in respect of a Share or Shares held jointly by several persons, the Company shall not be bound to issue more than one certificate, and delivery of a certificate for a Share to one of several joint holders shall be sufficient delivery to all. |
(b) | If a Share certificate is defaced, lost or destroyed it may be renewed on payment of such fee, if any, and on such terms, if any, as to evidence and indemnity, as the Directors think fit. |
9. | Except as required by law, no person shall be recognised by the Company as holding any Share upon any trust, and the Company shall not be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share (except only as by these Articles or by law otherwise provided or under an order of a court of competent jurisdiction) or any other rights in respect of any Share except an absolute right to the entirety thereof in the registered holder, but the Company may, subject to Article 3(c)(iii), Article 4(c)(iii) and Article 5(c)(iii), in accordance with the Act issue fractions of Shares. |
ISSUE OF SHARES
10. | Subject to Articles 11, 122(g) and 89(e), the Shares shall be at the disposal of the Directors, and they may (subject to the provisions of the Act) allot, grant options over, or otherwise dispose of them to such persons, on such terms and conditions, and at such times as they think fit, but so that no Share shall be issued at a discount, except in accordance with the provisions of the Act. |
11. | If the Company intends to issue any New Securities, to the extent permitted by applicable laws, the Company shall offer to: |
(a) | the Institutional Shareholders; and |
(b) | each individual of the Management Team, |
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the right to participate in the subscription of New Securities according to their Shareholding Proportion.
12. | Each Institutional Shareholder and individual of the Management Team that subscribes for their respective Shareholding Proportion of New Securities shall have a right of over-allotment such that, if any other Institutional Shareholder or individual of the Management Team fails to exercise in full its/his/her right hereunder to subscribe its/his/her Shareholding Proportion of New Securities, such Institutional Shareholder and individuals of the Management Team may subscribe for the non-subscribed portion of the New Securities on a pro rata basis. |
13. | The Company may issue New Securities without complying with provisions of Articles 11 and 12 if such New Securities are: |
(a) | Shares issued to employees, directors, advisors, consultants and officers pursuant to stock incentive plans approved by the board of Directors; |
(b) | Shares issued in connection with sponsored research, collaboration, technology license, development, marketing, or of similar nature approved by the board of Directors; |
(c) | Shares issued upon conversion of any preferred shares, debenture, warrant, option, or other convertible security that are issued with the approval by the board of Directors; or |
(d) | Shares issued for consideration other than cash pursuant to a merger, consolidation, acquisition, or similar business combination approved by the board of Directors. |
TREASURY SHARES
14. | Shares that the Company purchases, redeems or acquires (by way of surrender or otherwise) may, at the option of the Company, be cancelled immediately or held as Treasury Shares in accordance with the Act. In the event that the Directors do not specify that the relevant Shares are to be held as Treasury Shares, such Shares shall be cancelled. |
15. | No dividend may be declared or paid, and no other distribution (whether in cash or otherwise) of the Company’s assets (including any distribution of assets to members on a winding up) may be declared or paid in respect of a Treasury Share. |
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16. | The Company shall be entered in the Register of Members as the holder of the Treasury Shares provided that: |
(a) | the Company shall not be treated as a member for any purpose and shall not exercise any right in respect of the Treasury Shares, and any purported exercise of such a right shall be void; |
(b) | a Treasury Share shall not be voted, directly or indirectly, at any meeting of the Company and shall not be counted in determining the total number of issued shares at any given time, whether for the purposes of these Articles or the Act, save that an allotment of Shares as fully paid bonus shares in respect of a Treasury Share is permitted and Shares allotted as fully paid bonus shares in respect of a treasury share shall be treated as Treasury Shares. |
17. | Treasury Shares may be disposed of by the Company on such terms and conditions as determined by the Directors. |
LIEN
18. | The Company shall have a first and paramount lien on every Share (not being a fully paid Share) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that Share, and the Company shall also have a lien on all Shares (other than fully paid-up Shares) standing registered in the name of a single person for all moneys presently payable by him or his estate to the Company; but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The Company’s lien, if any, on a Share shall extend to all dividends payable thereon. |
19. | The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, but no sale shall be made unless some sum in respect of which the lien exists is presently payable nor until the expiration of fourteen days after a notice in writing, stating and demanding payment of such part of the amount in respect of which the lien exists as is presently payable, has been given to the registered holder for the time being of the Share, or the persons entitled thereto by reason of his death or bankruptcy. |
20. | For giving effect to any such sale, the Directors may authorise some person to transfer the Shares sold to the purchaser thereof. The purchaser shall be registered as the holder of the Shares comprised in any such transfer and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the proceedings in reference to the sale. |
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21. | The proceeds of the sale shall be received by the Company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable, and the residue shall (subject to a like lien for sums not presently payable as existed upon the Shares prior to the sale) be paid to the person entitled to the Shares at the date of the sale. |
CALLS ON SHARES
22. | The Directors may from time to time make calls upon the Members in respect of any moneys unpaid on their Shares provided that no call shall be payable earlier than one month from the last call; and each Member shall (subject to receiving at least fourteen days’ notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on his Shares. |
23. | The joint holders of a Share shall be jointly and severally liable to pay calls in respect thereof. |
24. | If a sum called in respect of a Share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest upon the sum at the rate of six per cent per annum from the day appointed for the payment thereof to the time of the actual payment, but the Directors shall be at liberty to waive payment of that interest wholly or in part. |
25. | The provisions of these Articles as to the liability of joint holders and as to payment of interest shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had become payable by virtue of a call duly made and notified. |
26. | The Directors may make arrangements on the issue of Shares for a difference between the holders in the amount of calls to be paid and in the times of payment. |
27. | The Directors may, if they think fit, receive from any Member willing to advance the same all or any part of the moneys uncalled and unpaid upon any Shares held by him; and upon all or any of the moneys so advanced may (until the same would, but for such advance, become presently payable) pay interest at such rate (not exceeding without the sanction of the Company in general meeting six per cent) as may be agreed upon between the Member paying the sum in advance and the Directors. |
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FORFEITURE OF SHARES
28. | If a Member fails to pay any call or instalment of a call on the day appointed for payment thereof, the Directors may, at any time thereafter during such time as any part of such call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. |
29. | The notice shall name a further day (not earlier than the expiration of fourteen days from the date of the notice) on or before which the payment required by the notice is to be made, and shall state that in the event of non-payment at or before the time appointed, the Shares in respect of which the call was made will be liable to be forfeited. |
30. | If the requirements of any such notice as aforesaid are not complied with, any Share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Directors to that effect. |
31. | A forfeited Share may be sold or otherwise disposed of on such terms and in such manner as the Directors think fit, and at any time before a sale or disposition, the forfeiture may be cancelled on such terms as the Directors think fit. |
32. | A person whose Shares have been forfeited shall cease to be a Member in respect of the forfeited Shares, but shall, notwithstanding, remain liable to pay to the Company all moneys which at the date of forfeiture were payable by him to the Company in respect of the Shares, but his liability shall cease if and when the Company receives payment in full of the amount due on the Shares. |
33. | A statutory declaration in writing that the declarant is a Director of the Company, and that a Share in the Company has been duly forfeited on a date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the Share. The Company may receive the consideration, if any, given for the Share on any sale or disposition thereof and may execute a transfer of the Share in favour of the person to whom the Share is sold or disposed of and he shall thereupon be registered as the holder of the Share, and shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share. |
34. | The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the amount of the Share, or by way of premium, as if the same had been made payable by virtue of a call duly made and notified. |
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RESTRICTIONS ON TRANSFERS OF SHARES
35. | No Shares owned by any of the Management Team may be sold, transferred, or disposed of without the prior written approval of the Institutional Shareholders who in aggregate hold more than 50% of the total shareholding of the Institutional Shareholders of the Company on a fully diluted basis, and shall be further subject to the Right of First Refusal by the Company and the Institutional Shareholders as stipulated in Article 37 below. |
36. | Shares owned by an Institutional Shareholder shall be freely transferable to: |
(a) | subject to Article 37, any third party that is not a direct competitor to the Company’s products or services; and |
(b) | any holding company or subsidiary wholly owned by the Institutional Shareholder or any company which is managed by the same fund management company retained by it without any restriction notwithstanding any other provision in these Articles. |
RIGHTS OF FIRST REFUSAL
37. | The Company shall have a Right of First Refusal to purchase all or any portion of Transfer Shares that the Institutional Shareholders and/or individuals of the Management Team (the “Transferor”) may propose to transfer in a Proposed Transfer, at the same price and on the same terms and conditions as those offered to the Prospective Transferee. |
38. | Each Transferor proposing to make a Proposed Transfer must promptly deliver a Proposed Transfer Notice to the Company and each Institutional Shareholder not later than 60 calendar days prior to the consummation of such Proposed Transfer. Such Proposed Transfer Notice shall contain: (i) a description and the number of the Transfer Shares to be transferred, (ii) subject to any applicable non-disclosure agreement with such third party, the identity of the Prospective Transferee, and (iii) the consideration and the material terms and conditions upon which the Proposed Transfer is to be made. The Proposed Transfer Notice shall certify that the Transferor has received a firm offer from the Prospective Transferee and in good faith believes a binding agreement for the Proposed Transfer is obtainable on the terms set forth in the Proposed Transfer Notice. Upon receipt of a Proposed Transfer Notice, the Company shall have the right to purchase all or a portion of the Transfer Shares described in the Proposed Transfer Notice subject to the same terms and conditions as set forth in the Proposed Transfer Notice. The Company may exercise its Right of First Refusal under Article 37 by giving a Company Notice to the selling Institutional Shareholder or the individual of the Management Team within 30 calendar days after receipt of the Proposed Transfer Notice. |
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39. | Each Institutional Shareholders shall have a right of refusal (the “Secondary Refusal Right”) to purchase all or any portion of the Transfer Shares not purchased by the Company pursuant to the Right of First Refusal. If the Company does not intend to exercise its Right of Refusal with respect to all Transfer Shares subject to a Proposed Transfer, the Company must deliver a Secondary Notice to each Institutional Shareholder no later than 30 calendar days after the Transferor delivers the Proposed Transfer Notice to the Company. Upon receipt of a Secondary Notice, each Institutional Shareholder shall have the right to purchase all or a portion of the Transfer Shares described in the Secondary Notice subject to the same terms and conditions as set forth in the Secondary Notice. The Institutional Shareholder that chooses to exercise such right shall do so on a pro rata basis based on the Company’s fully diluted capitalization with respect to the Proposed Transfer. To exercise its Secondary Refusal Right, an Institutional Shareholder may deliver an Institutional Shareholder Notice to the Transferor and the Company within 20 calendar days after the date of delivery of the Secondary Notice. |
40. | If options to purchase in accordance with any rights of refusal have been exercised by the Company or the Institutional Shareholders with respect to some but not all of the Transfer Shares by the end of the 20-day period specified in the last sentence of Article 39 (the “Institutional Shareholder Notice Period”), then the Company shall, immediately after the expiration of the Institutional Shareholder Notice Period, send written notice to those Institutional Shareholders who fully exercised their options within the Institutional Shareholder Notice Period (the “Exercising Institutional Shareholders”). |
41. | Each Exercising Institutional Shareholder shall have an additional option to purchase all or any part of the balance of any such remaining unsubscribed shares of Transfer Shares on the terms and conditions set forth in the Proposed Transfer Notice. To exercise such option, an Exercising Institutional Shareholder may deliver an Undersubscription Notice to the selling Institutional Shareholder or the individual of the Management Team and the Company within 10 calendar days after the expiration of the Institutional Shareholder Notice Period (the “Subsequent Refusal Period”). In the event there are two or more such Exercising Institutional Shareholders that choose to exercise the last-mentioned option for a total number of remaining shares in excess of the number available, the remaining shares available for purchase under this Article 41 shall be allocated to such Exercising Institutional Shareholders on a pro rata basis among all Exercising Institutional Shareholders who have elected to purchase. If the options to purchase the remaining shares are exercised in full by the Institutional Shareholders, the Company shall immediately notify all of the Exercising Institutional Shareholders of that fact. |
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42. | If any Transfer Shares remain unpurchased after completion of the procedures stipulated above, the Transferor shall be free to sell such remaining Transfer Shares pursuant to the Proposed Transfer Notice, provided that such sale shall be completed within 45 calendar days after the end of the Subsequent Refusal Period based on terms and conditions that are not favorable to those set forth in the Proposed Transfer Notice. If the Transfer Shares are not so transferred during such 45-calendar day period, then the Transferor may not transfer any of such Offered Shares without complying again in full with the provisions of Articles 37 to 42. For the avoidance of doubt, no Institutional Shareholder or individual of the Management Team may invoke the Right of First Refusal as stipulated herein in the event of a Drag-Along Sale. |
43. | For the avoidance of doubt, the Company may not invoke the Right of First Refusal and no Institutional Shareholder may invoke the Secondary Refusal Right as stipulated herein in the event of a Drag-Along Sale. |
DRAG-ALONG RIGHTS
44. | If there is: |
(a) | an offer that may constitute a Deemed Liquidation Event of the Company; |
(b) | an offer for the sale of all or more than 50% of the equity or assets of the Company by way of a merger, acquisition, share swap and/or other means; or |
(c) | an offer of an asset purchase transaction where all or substantially all of the assets of the Company or any of the Subsidiary will be disposed of in a transaction or a series of transactions within six (6) months taken as a whole, and in each case the Series C Holders will be entitled to receive consideration with a value that is equal to or greater than the Minimum Price with respect to each of the Series C Preferred Shares then held by it (on a fully-diluted basis), |
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(collectively, a “Drag-Along Sale”), then subject to the approval of:
(i) | (x) the approval of Institutional Shareholders who in aggregate hold more than 50% of the total shareholding of the Institutional Shareholders, on a fully diluted basis; and (y) the approval of Members, including the Institutional Shareholders giving their approval under this Article 44(c)(i), who in aggregate hold more than 50% of the issued and outstanding Shares of the Company, on a fully diluted basis; or |
(ii) | the Drag-Along Sale takes place after December 31, 2023 and no less than 75% of the total shareholding of the Institutional Shareholders of the Company on a fully diluted and as converted basis approve the Drag-Along Sale, |
then the Institutional Shareholders and the Management Team shall vote in favour of such Drag-Along Sale and sell and transfer their Shares, respectively, pursuant to the Drag-Along Sale.
45. | In the event of a Drag-Along Sale (regardless of whether the Drag-Along Rights stipulated in Article 44 above are exercised or not), subject to the approval of: |
(a) | the Institutional Shareholders who in aggregate hold more than 50% of the total shareholding of the Institutional Shareholders, on a fully diluted basis; and |
(b) | Members, including the Institutional Shareholders giving their approval under Article 45(a), who in aggregate hold more than 50% of the issued and outstanding Shares of the Company, on a fully diluted basis, |
the Institutional Shareholders and the Management Team shall take all necessary actions to procure that the fees incurred by the Company in engaging and retaining any financial advisor, chartered professional accountant, legal and other out-sourced professionals in respect of the Drag-Along Sale, shall be borne by all Members in proportion to each Members Shareholding Proportion. This allocation of fees shall apply notwithstanding that the Drag-Along Sale is commenced but not consummated. In the event that only some Shares are included in the Drag-Along Sale, the aforementioned fees shall be borne by the Members who participate in such Drag-Along Sale in proportion to their selling percentage of the aggregate Shares to be sold in such Drag-Along Sale.
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TAG-ALONG RIGHTS
46. | If each individual of the Management Team (the “Selling Party”) intends to sell his/her Shares (the “Selling Shares”) at any time (the “Selling”), to the extent permitted by applicable laws, the Selling Party shall give the Institutional Shareholders and the Company a written notice of the Selling Party’s intention to transfer the Selling Shares (the “Selling Notice”), which shall include (i) a description and the number of the Selling Shares to be transferred, (ii) subject to any applicable non-disclosure agreement with such third party, the identity of the prospective transferee, and (iii) the consideration and the material terms and conditions upon which the proposed Selling is to be made. The Selling Notice shall certify that the Selling Party has received a firm offer from the prospective transferee and in good faith believes a binding agreement for the Selling is obtainable on the terms set forth in the Selling Notice. |
47. | Each Institutional Shareholder shall have an option but not an obligation for a period of 30 calendar days following their receipt of the Selling Notice (the “Participating Period”) to elect to sell its respective pro rata share of the Selling Shares at the same price and subject to the same material terms and conditions as described in the Selling Notice. “Pro rata share” used in this Article 47 shall be determined according to the respective number of Shares owned by each Institutional Shareholder respectively on an as-converted basis in relation to the total number of the Shares owned by the Selling Party and all the Institutional Shareholders exercising their tag-along rights hereunder on an as-converted basis immediately prior to the issue of a Selling Notice. |
48. | Each Institutional Shareholder may exercise its right to participate in the Selling and sell its Shares proportionately, by notifying the Selling Party and the Company in writing, before the expiration of the Participating Period. |
PROCEDURE FOR TRANSFERS OF SHARES
49. | The instrument of transfer of any Share shall be executed by or on behalf of the transferor and transferee, and the transferor shall be deemed to remain a holder of the Share until the name of the transferee is entered in the Register of Members in respect thereof. |
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50. | Shares shall be transferred in the following form, or in any usual or common form approved by the Directors: |
I/we, ____________________ of _________________________ in consideration of the sum of $________________ paid to me/us by _____________________, of _____________________ (hereinafter called “the Transferee”) do hereby transfer to the Transferee the _____ Share (or Shares) numbered ___________ in the Company called _________________ to hold the same unto the Transferee, subject to the several conditions on which I/we hold the same and I/we, the Transferee, do hereby agree to take the said Share (or Shares) subject to the conditions aforesaid.
As witness our hands on the ______ day of _______________, 20__.
Transferor | Transferee |
51. | (a) | The Directors may refuse to register any transfer of Shares not complying with Articles 35 to 45. |
(b) | The Directors may, in their absolute discretion and without assigning any reason therefor, decline to register any transfer of Shares to a person of whom they do not approve. |
(c) | The Directors may also suspend the registration of transfers during the fourteen days immediately preceding the annual general meeting in each year. |
(d) | The Directors may decline to recognise any instrument of transfer unless (a) a fee not exceeding one dollar is paid to the Company in respect thereof, and (b) the instrument of transfer is accompanied by the certificate of the Shares to which it relates, and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. |
(e) | If the Directors refuse to register a transfer of Shares, they shall within one month after the date on which the transfer was lodged with the Company, send to the transferee notice of the refusal. |
TRANSMISSION OF SHARES
52. | The legal personal representative of a deceased sole holder of a Share shall be the only person recognised by the Company as having any title to the Share. In case of a Share registered in the names of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor, shall be the only persons recognised by the Company as having any title to the Share. |
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53. | Any person becoming entitled to a Share in consequence of the death or bankruptcy of a Member shall upon such evidence being produced as may from time to time be properly required by the Directors, have the right either to be registered as a Member in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt person before the death or bankruptcy. |
54. | A person becoming entitled to a Share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the Share, except that he shall not, before being registered as a Member in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company. |
CONVERSION OF SHARES INTO STOCK
55. | The Company may by Ordinary Resolution convert any paid-up Shares into stock, and reconvert any stock into paid-up Shares of any denomination. |
56. | The holders of stock may transfer the same, or any part thereof in the same manner and subject to the same regulations as and subject to which the Shares from which the stock arose might prior to conversion have been transferred, or as near thereto as circumstances admit; but the Directors may from time to time fix the minimum amount of stock transferable, and restrict or forbid the transfer of fractions of that minimum, but the minimum shall not exceed the nominal amount of the Shares from which the stock arose. |
57. | The holders of stock shall, according to the amount of the stock held by them, have the same rights, privileges and advantages as regards dividends, voting at meetings of the Company and other matters as if they held the Shares from which the stock arose, but no such privilege or advantage (except participation in the dividends and profits of the Company) shall be conferred by any such aliquot part of stock as would not, if existing as Shares, have conferred that privilege or advantage. |
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58. | Such of the Articles of the Company as are applicable to paid-up Shares shall apply to stock, and the words “Share” and “Member” herein shall include “stock” and “stock-holder”. |
ALTERATION OF CAPITAL
59. | Subject to Articles 122(g) and 89(e), the Company may from time to time by Ordinary Resolution increase the share capital by such sum, to be divided into new Shares of such amount, as the resolution shall prescribe. |
60. | Subject to any direction to the contrary that may be given by the Company in general meeting, all new Shares shall be at the disposal of the Directors in accordance with Article 10. |
61. | The new Shares shall be subject to the same provisions with reference to the payment of calls, lien, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. |
62. | Subject to Articles 122(k) and 123(d), the Company may by Ordinary Resolution: |
(a) | consolidate and divide all or any of its Share capital into Shares of larger amount than its existing Shares; |
(b) | sub-divide its existing Shares, or any of them, into Shares of smaller amount than is fixed by the Memorandum of Association, subject nevertheless to the provisions of section 13 of the Act; and |
(c) | cancel any Shares which, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person. |
63. | Subject to the provisions of the Act, the Memorandum and Articles 122(k) and 123(d), the Company may purchase its own Shares, including any redeemable Shares, provided that the manner of purchase has first been authorised by Ordinary Resolution and may make payment therefor or for any redemption or purchase of Shares in any manner authorised by the Act, including out of capital. |
64. | Subject to the provisions of the Act and Articles 122(k) and 123(d), the Company may accept the surrender for no consideration of any fully paid Share (including any redeemable Share) on such terms and in such manner as the Directors may determine. |
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GENERAL MEETINGS
65. | The Company shall in each year hold a general meeting as its annual general meeting, provided that, if the Company is an exempted company, an annual general meeting need not be held unless determined by the Directors. The time and place of an annual general meeting shall be determined by the Directors. |
66. | General Meetings other than annual general meetings shall be called extraordinary general meetings. The Directors may call or authorise the calling of an extraordinary general meeting whenever they think fit. |
REQUISITION OF GENERAL MEETINGS
67. | The Directors may whenever they think fit, convene an extraordinary general meeting. If at any time there are not sufficient Directors capable of acting to form a quorum, any Director or any one or more Members holding in the aggregate not less than one-third of the total issued share capital of the Company entitled to vote may convene an extraordinary general meeting in the same manner as nearly as possible as that in which meetings may be convened by the Directors. The Directors shall, upon the requisition in writing of one or more Members holding in the aggregate not less than one-tenth of such paid-up capital of the Company as at the date of the requisition carries the right of voting at general meetings, convene an extraordinary general meeting. Any such requisition shall express the object of the meeting proposed to be called, and shall be left at the Registered Office of the Company. If the Directors do not proceed to convene a general meeting within twenty-one days from the date of such requisition being left as aforesaid, the requisitionists or any or either of them or any other Member or Members holding in the aggregate not less than one-tenth of such paid-up capital of the Company as at the date of the requisition carries the right of voting at general meetings, may convene an extraordinary general meeting to be held at the Registered Office of the Company or at some convenient place within the Cayman Islands at such time, subject to the Company’s Articles as to notice, as the persons convening the meeting fix. |
68. | Seven days’ notice at the least (exclusive of the day on which the notice is served or deemed to be served, but inclusive of the day for which the notice is given) specifying the place, the day and the hour of meeting and, in the case of special business, the general nature of that business shall be given in manner hereinafter provided, or in such other manner (if any) as may be prescribed by the Company in general meetings, to such persons as are entitled to vote or may otherwise be entitled under the Articles of the Company to receive such notices from the Company; but with the consent of all the Members entitled to receive notice of some particular meeting, that meeting may be convened by such shorter notice or without notice and in such manner as those Members may think fit. |
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69. | The accidental omission to give notice of a meeting to, or the non-receipt of a notice of a meeting by, any Member entitled to receive notice shall not invalidate the proceedings at any meeting. |
70. | All business shall be deemed special that is transacted at an extraordinary general meeting, and all that is transacted at an annual general meeting shall be deemed special with the exception of sanctioning a dividend, the consideration of the accounts, balance sheets, the report of the Directors and Auditors, the election of Directors and other officers in the place of those retiring (if any) and the appointment and fixing of remuneration of Auditors. |
71. | (a) | No business shall be transacted at any general meeting unless a quorum of Members is present at the time that the meeting proceeds to business; save as herein otherwise provided, one or more Members holding in the aggregate not less than one-third of the total issued share capital of the Company present in person or by proxy and entitled to vote shall be a quorum. |
(b) | An Ordinary Resolution or a Special Resolution (subject to the provisions of the Act) in writing signed by all the Members for the time being entitled to receive notice of and to attend and vote at general meetings, (or being corporations by their duly authorised representatives) including a resolution signed in counterpart by or on behalf of such Members or by way of signed telefax transmission, shall be as valid and effective as if the same had been passed at a general meeting of the Company duly convened and held. |
72. | If within half an hour from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Members, shall be dissolved. In any other case it shall stand adjourned to the same day in the next week, at the same time and place, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting, the Members present shall be a quorum. |
73. | The chairman, if any, of the Board of Directors shall preside as chairman at every general meeting of the Company. |
74. | If there is no such chairman, or if at any meeting he is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, the Members present shall choose one of their number to be chairman. |
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75. | The chairman may with the consent of any meeting at which a quorum is present (and shall if so directed by the meeting) adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting is adjourned for ten days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting. |
76. | At any general meeting a resolution put to the vote of the meeting shall be decided on a show of hands, unless a poll is (before or on the declaration of the result of the show of hands) demanded by one or more Members present in person or by proxy who together hold not less than fifteen per cent of the paid-up capital of the Company entitled to vote, and, unless a poll is so demanded, a declaration by the chairman that a resolution has, on a show of hands, been carried or carried unanimously, or by a particular majority, or lost and an entry to that effect in the minutes of the proceedings of the Company, shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of, or against, that resolution. |
77. | If a poll is duly demanded it shall be taken in such manner as the chairman directs, and the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. |
78. | In the case of an equality of votes, whether on a show of hands or on a poll, the chairman of the meeting at which the show of hands takes place or at which the poll is demanded, shall be entitled to a second or casting vote. |
79. | A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the meeting directs. |
VOTES OF MEMBERS
80. | On a show of hands every Member present in person or by proxy and entitled to vote shall have one vote. For the avoidance of doubt, holders of Series C Preferred Share, Pre-Series C Preferred Shares and Series B Preferred Shares shall vote together with holders of Ordinary Shares as a single class. On a poll every Member present in person or by proxy and entitled to vote shall have one vote for each Share of which he is the holder. Each holder of a Series C Preferred Share, Pre-Series C Preferred Share and Series B Preferred Share shall be entitled to cast such number of votes equal to the number of Ordinary Shares into which the Series C Preferred Share, Pre-Series C Preferred Shares and Series B Preferred Shares held by it are convertible as of the record date for determining the Members entitled to vote on such matter. |
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81. | In the case of joint holders the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders; and for this purpose seniority shall be determined by the order in which the names stand in the Register of Members. |
82. | A Member of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee or other person in the nature of a committee appointed by that court, and any such committee or other person may vote by proxy. |
83. | No Member shall be entitled to vote at any general meeting, unless all calls or other sums presently payable by him in respect of Shares in the Company have been paid. |
84. | On a poll votes may be given either personally or by proxy. |
85. | The instrument appointing a proxy shall be in writing under the hand of the Member or, if the Member is a corporation, either under seal or under the hand of a director or officer or attorney duly authorised. A proxy need not be a Member of the Company. A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy is given Provided that no intimation in writing of such death, insanity or revocation as aforesaid shall have been received by the Company at its Registered Office before the commencement of the general meeting, or adjourned meeting, at which it is sought to use the proxy. |
86. | The instrument appointing a proxy shall be deposited at the Registered Office of the Company or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid PROVIDED that the chairman of the meeting may in his discretion accept an instrument of proxy sent by fax, email or other electronic means. |
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87. | An instrument appointing a proxy may be in the following form or any other form approved by the Directors: |
[Ltd./Limited]
“I, _________________, of ____________________________, hereby appoint ____________________ of ____________________ as my proxy, to vote for me and on my behalf at the [annual or extraordinary, as the case may be] general meeting of the Company to be held on the _____ day of _______________, 20__.
Signed this ______ day of ______________________, 20__.
88. | The instrument appointing a proxy shall be deemed to confer authority to demand or join in demanding a poll. |
GENERAL PROTECTIVE PROVISIONS
89. | The Company shall not undertake, enter into, or give effect to any of the matters listed below without the consent of Institutional Shareholders who in aggregate hold more than 75% of the total shareholding of the Institutional Shareholders of the Company on a fully diluted and as converted basis. For the avoidance of doubt, unless required by Act or the Memorandum or these Articles, the following matters need not be resolved upon by a resolution of the Directors: |
(a) | any adoption or change to the Memorandum or the Articles (subject also to compliance with Article 146); |
(b) | any material change in the scope of business, operations or activities of the Company (subject also to compliance with Article 122(e)); |
(c) | any changes in the dividend policy of the Company (subject also to compliance with Articles 4(b), 4(b), 6(b), 6(b) and 126 to 134); |
(d) | any change in the authorized number, manner of election, or term of office of Directors of the Company; |
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(e) | the allotment or issue of, or agreement to allot or issue, any Shares (whether voting or non-voting) or debenture or other securities convertible into Shares (whether voting or non-voting) or other debenture or other securities or capital of the Company in whatever form and upon whatever terms, other than pursuant to employee share option plan approved by the board of Directors of the Company (subject also to compliance with Articles 11, 59 and 122(g)); |
(f) | any material decision on making an initial public offering or listing of the Company and/or any withdrawal therefrom; |
(g) | any sale, assignment, disposal or transfer by the Company (whether in a single transaction or series of transactions) of all or substantially all of the assets, undertaking or business of the Company (subject also to compliance with Articles 44 and 45); |
(h) | entry by the Company into, or the modification of the terms of, any agreement, contract, arrangement or transaction with parties in which a Director or Member or an affiliate of either or affiliated companies, employees, officers, Members, or any of their related parties has a direct or indirect pecuniary or beneficial interest (subject also to compliance with Article 122(i)), except for the business cooperation agreements between the Company and DCB (the “Cooperation Agreements”), pursuant to which (i) DCB shall be engaged by the Group Companies as the exclusive supplier of the Group Companies’ CMO business in the PRC; and (ii) to the extent any Group Company has a demand for CRO or CSO services or has any businesses in relation thereof in the PRC, the Group Companies shall consider giving preference to the services provided by DCB if the terms of the services offered by DCB are no less favorable than other service provider(s), provided that the Company is not obligated to procure such services from DCB and shall have full discretion to decide the service provider in the best interest of the Company in all respects; |
(i) | winding up, dissolution, liquidation or similar bankruptcy action, or any reorganization, restructuring, merger or amalgamation of the Company, or the taking of any step by the Company or its Members for the appointment of a receiver, judicial manager or like officer (subject also to compliance with Articles 4(e), 4(e), 6(c) and 6(c)), |
provided that, notwithstanding anything to the contrary in these Articles, where any of the matters listed in this Article 89 has not received the written consent of 75% of the Institutional Shareholder, the shares of any Shareholder who votes against any resolution relating to such matter shall carry the number of votes equal to the votes of all Shareholders voting in favour of such resolution plus one.
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SPECIAL PROTECTIVE PROVISIONS FOR HOLDERS OF PREFERRED SHARES
90. | The Company undertakes not to enter into, or give effect to, any of the matters listed below without the prior written approval of the holders of, as applicable, (1) Series C Preferred Shares who aggregately represent at least 75% of Series C Preferred Shares, (2) Pre-Series C Preferred Shares who aggregately represent at least 50% of the Pre-Series C Preferred Shares, or (3) Series B Preferred Shares who aggregately represent at least 50% of the Series B Preferred Shares, in each case the required prior written approval of holders of such class of Shares is required only when such action in (a) and (b) below affects that class of Shares: |
(a) | any action that alters or changes the rights, preferences, or privileges of Pre-Series C Preferred Shares or Series B Preferred Shares; or any action relating to the merger, consolidation, acquisition, or similar business combination that has been approved by the Company’s board of Directors or by the general meeting and equally alter or changes the powers, preferences or special rights of the Series C Preferred Shares; and |
(b) | increase or decrease the authorized number of shares of such class of the Preferred Shares. |
CORPORATIONS ACTING BY REPRESENTATIVES AT MEETING
91. | Any corporation which is a Member of the Company may by resolution of its directors or other governing body authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members of the Company, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Member of the Company. |
DIRECTORS AND OFFICERS
92. | (a) | The names of the first Directors shall be determined in writing by the subscribers of the Memorandum of Association. |
(b) | Notwithstanding any provision in these Articles to the contrary, a sole Director shall be entitled to exercise all of the powers and functions of the Directors which may be imposed on them by Act or by these Articles. |
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93. | The remuneration of the Directors shall from time to time be determined by the Directors. The Directors shall also be entitled to be reimbursed their reasonable out-of-pocket travelling, hotel and other expenses (consistent with the Company’s travel policy) properly incurred by them in going to, attending and returning from meetings of the Directors, or any committee of the Directors, or general meetings of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the Directors from time to time, or a combination partly of one such method and partly the other. |
94. | No shareholding qualification shall be required for Directors unless otherwise required by the Company by Ordinary Resolution. |
95. | Each Director shall have the power to nominate another Director or any other person to act as alternate Director in his place at any meeting of the Directors at which he is unable to be present and at his discretion to remove such alternate Director. On such appointment being made the alternate Director shall (except as regards the power to appoint an alternate Director) be subject in all respects to the terms and conditions existing with reference to the other Directors of the Company and each alternate Director, whilst acting in the place of an absent Director, shall exercise and discharge all the functions powers and duties of the Director he represents. Any Director of the Company who is appointed as alternate Director shall be entitled at a meeting of the Directors to cast a vote on behalf of his appointor in addition to the vote to which he is entitled in his own capacity as a Director of the Company, and shall also be considered as two Directors for the purpose of making a quorum of Directors. Any person appointed as an alternate Director shall automatically vacate such office as such alternate Director if and when the Director by whom he has been appointed vacates his office of Director. The remuneration of an alternate Director shall be payable out of the remuneration of the Director appointing him and shall be agreed between them. |
96. | The Directors may by resolution appoint a managing director or president upon such terms as to duration of office, remuneration and otherwise as they may think fit. |
97. | The Directors may also by resolution appoint a Secretary and such other officers as may from time to time be required upon such terms as to duration of office, remuneration and otherwise as they may think fit. Such Secretary or other officers need not be Directors and in the case of the other officers may be ascribed such titles as the Directors may decide. |
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POWERS AND DUTIES OF DIRECTORS
98. | The business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all such powers of the Company as are not, by the Act or these Articles, required to be exercised by the Company in general meeting, subject, nevertheless, to any clause of these Articles, to the provisions of the Act, and to such regulations, being not inconsistent with the aforesaid clauses or provisions, as may be prescribed by the Company in general meeting but no regulation made by the Company in general meeting shall invalidate any prior act of the Directors which would have been valid if that regulation had not been made. |
99. | Subject to Articles 122(d) and 123(b), the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party. |
100. | (a) | The Directors may from time to time and at any time by power of attorney appoint any company, firm or person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such appointment may contain such provisions for the protection and convenience of persons dealing with any such attorney as the Directors may think fit and may also authorise any such attorney to sub-delegate all or any of the powers, authorities and discretions vested in him. |
(b) | The Directors may delegate any of the powers exercisable by them to a managing director or any other person or persons acting individually or jointly as they may from time to time by resolution appoint upon such terms and conditions and with such restrictions as they may think fit, and may from time to time by resolution revoke, withdraw, alter or vary all or any such powers. |
(c) | All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments, and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed, or otherwise executed, as the case may be, in such manner as the Directors shall from time to time by resolution determine. |
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(d) | No document or deed otherwise duly executed and delivered by or on behalf of the Company shall be regarded as invalid merely because at the date of delivery of the deed or document, the Director, Secretary or other officer or person who shall have executed the same and/or affixed the Seal (if any) thereto as the case may be for and on behalf of the Company shall have ceased to hold such office or to hold such authority on behalf of the Company. |
101. | The Directors shall cause minutes to be prepared:- |
(a) | of all appointments of officers made by the Directors; |
(b) | of the names of the Directors or Alternate Directors present at each meeting of the Directors and of any committee of the Directors; |
(c) | of all resolutions and proceedings at all meetings of the Members of the Company and of the Directors and of committees of Directors; and the chairman of all such meetings or of any meeting confirming the minutes thereof shall sign the same. |
DISQUALIFICATION AND CHANGES OF DIRECTORS
102. | The office of Director shall be vacated if the Director:- |
(a) | becomes bankrupt or makes any arrangement or composition with his creditors generally; or |
(b) | is found to be or becomes of unsound mind; or |
(c) | resigns his office by notice in writing to the Company; or |
(d) | if he ceases to be a Director by virtue of, or becomes prohibited from being a Director by reason of, an order made under any provisions of any law or enactment. |
103. | Subject to Article 89(d), the number of Directors shall be up to seven (7). |
104. | As long as each of KTB, DAIWA, Wealth Path, ShangPharma and DCB holds any Shares in the Company, each of them shall have the right to nominate one (1) Director to the board of the Company (together, the “Institutional Shareholder Directors”) and to replace such nominees. |
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105. | The Management Team shall, collectively (and not individually), have a right to nominate two (2) Directors to the board of the Company and to replace such nominees. |
106. | Each Member shall, by Ordinary Resolution, vote its Shares or execute any written resolutions of the Shareholders to appoint and remove such Directors nominated by the Institutional Shareholders and the Management Team to give effect to the provisions of Articles 103 and 104. |
107. | If an Institutional Shareholder or the Management Team wishes to remove or replace its nominee Director, it shall deliver a written notice to the Director, the other Members and the Company. |
108. | Any vacancy occurring on the Board by reason of the death, disqualification, inability to act, resignation, or removal of any director may be filled only by a new nominee of the Institutional Shareholder or Management Team whose nominee was so affected, and the provisions of Article 106 shall apply to any such replacement. |
PROCEEDINGS OF DIRECTORS
109. | The Directors shall meet together (either within or outside of the Cayman Islands) at least once each quarter, or at such other frequency as the Directors may determine, for the dispatch of business, and they may adjourn, and otherwise regulate their meetings and proceedings, as they think fit. The Directors shall notify each Institutional Shareholder in writing, together with a detailed agenda at least seven (7) calendar days before such meeting is held. Subject to Article 122, questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. |
110. | Each of KTB, DAIWA, Wealth Path and ShangPharma shall be allowed to appoint a representative as an observer and all holders of Pre-Series C Preferred Shares as a class and all holders of Series C Preferred Shares as a class shall be allowed to respectively appoint a representative as an observer to attend any meeting, provided, however, such observer may not express his or her opinion at any such meeting without the invitation of the chairman of the meeting. |
111. | A Director or alternate Director may, and the Secretary on the requisition of a Director or alternate Director shall, at any time, summon a meeting of Directors by at least five days’ notice in writing to every Director and alternate Director which notice shall set forth the general nature of the business to be considered PROVIDED HOWEVER that notice may be waived by all the Directors (or their alternates) either at, before or after the meeting is held PROVIDED FURTHER that notice or waiver thereof may be given by telex, telefax, electronic mail or other electronic means. |
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112. | Subject to Article 122, the quorum necessary for the transaction of the business of the Directors, may be fixed by the Directors and unless so fixed by the Directors, shall be two Directors or their proxies if there are two or more Directors, and shall be one if there is only one Director. For the purpose of this Article, an alternate appointed by a Director shall be counted in a quorum at a meeting at which the Director appointing him is not present. |
113. | The continuing Directors may act notwithstanding any vacancy in their body, but, if and so long as their number is reduced below the number fixed by or pursuant to the Articles of the Company as the necessary quorum of Directors, the continuing Directors may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose. |
114. | Any Director or officer may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or officer provided that nothing herein contained shall authorise a Director or officer or his firm to act as Auditor of the Company. |
115. | No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director holding office or of the fiduciary relation thereby established. A Director (or his alternate Director in his absence) shall be counted in the quorum of any relevant meeting which he attends and shall be at liberty to vote in respect of any contract or transaction in which he is so interested as aforesaid PROVIDED HOWEVER that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him or the alternate Director appointed by him at or prior to its consideration and any vote thereon and a general notice that a Director or alternate Director is a shareholder of any specified firm or company and/or is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure hereunder and after such general notice it shall not be necessary to give special notice relating to any particular transaction. |
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116. | The Directors may elect a chairman of their meetings and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present in person or his alternate Director within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting. |
117. | The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall, in the exercise of the powers so delegated, conform to any regulations that may be imposed on it by the Directors. |
118. | A committee may elect a chairman of its meetings; if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the members present may choose one of their number to be chairman of the meeting. |
119. | A committee may meet and adjourn as it thinks proper. Subject to Article 122, questions arising at any meeting of the committee shall be determined by a majority of votes of the members present and in case of an equality of votes the chairman shall have a second or casting vote. |
120. | All acts done by any meeting of the Directors or of a committee of Directors, or by any person acting as a Director shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and was qualified to be a Director. |
121. | (a) | A resolution signed by all of the Directors or all of the members of a committee of Directors, including a resolution signed in counterpart or in the form of an Electronic Record, shall be as valid and effectual as if it had been passed at a meeting of the Directors or of a committee of Directors duly called and constituted. |
(b) | To the extent permitted by law, the Directors or a committee of Directors may also meet by telephone conference call where all Directors or committee members are capable of speaking to and hearing the other Directors or committee members at the same time. |
(c) | When the chairman signs the minutes of a meeting of the Directors the same shall be deemed to have been duly held notwithstanding that the Directors have not actually come together physically or that there may have been a technical defect in the proceedings. |
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BOARD MATTERS REQUIRING SPECIAL APPROVAL
122. | The Company shall not undertake, enter into, or give effect to any of the matters listed below without the approval of at least four (4) Directors at a duly convened meeting of the board of Directors attended by at least six (6) Directors of the Company: |
(a) | approval of unbudgeted investment by the Company in any business opportunity, or any unbudgeted transaction, exceeding USD 300,000 (subject also to compliance with Article 123(a)); |
(b) | approval of the annual business plan and budget of the Company (the “Business Plan”); |
(c) | approval of dividends or other distributions to Members (subject also to compliance with Articles 4(b), 4(b), 6(b), 6(b) and 126 to 134); |
(d) | incurring of indebtedness or liabilities, and extension of credit or guarantees by the Company exceeding budget and in excess of USD 300,000 (subject also to compliance with Article 123(b)); |
(e) | approval of a material change in the scope of business, operations or activities of the Company (subject also to compliance with Article 89(b)); |
(f) | unbudgeted purchases or disposals of major assets by the Company in excess of USD 300,000 in transaction value; |
(g) | changes in the share capital structure of the Company, including the issue of any New Securities, other than pursuant to an employee share option plan approved by the board of Directors of the Company (subject also to compliance with Articles 11, 59 and 89(e)); |
(h) | introduction of, or modification to, management incentive schemes, share options, and compensation plans of the Company; |
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(i) | transactions by the Company with its Directors, Members and/or related parties (subject also to compliance with Article 89(h)) except for the transaction as contemplated under the Cooperation Agreements; |
(j) | appointment or removal of auditors of the Company; or |
(k) | any change in the issued share capital of the Company (including, without prejudice to the generality of the foregoing, the alteration, increase, purchase, redemption, cancellation, consolidation, sub-division, conversion or reduction of all or any part of the issued Shares of the Company, or the creation or issue of any other interest or rights in the capital of the Company or the variation of any rights attaching to any Shares (whether voting or non-voting) of the Company (subject also to compliance with Articles 7(b), 62 to 64, and 123(d)). |
SPECIAL PROTECTIVE PROVISIONS FOR IMPORTANT MATTERS
123. | The Company shall not undertake, enter into, or give effect to any of the matters listed below without the unanimous written consent of the Institutional Shareholder Directors. For the avoidance of doubt, unless required by Act or the Memorandum or these Articles, the following matters need not be resolved upon by a resolution of the Directors: |
(a) | the entry by the Company into any joint ventures, partnerships or any other form of investment or participation by way of equity which is not budgeted for in the Business Plan (subject also to compliance with Article 122(a)); |
(b) | the entry by the Company into any transaction of a financial nature, including the incurrence of any borrowing under any existing or future banking and credit facilities, or the granting of any debenture, note, loan stock, guarantee, indemnity, performance bond, lien, pledge, charge (including fixed and floating charges), mortgage or other security, or the incurrence of any other form of indebtedness in excess of $1 million (USD1,000,000) (subject also to compliance with Article 122(d)); |
(c) | the Company engaging in any activities which involve any loan to third party or the purchase of equity interests of any third party; and |
(d) | any action that alters or changes the rights, preferences, or privileges of the Ordinary Shares, the Series B Preferred Shares or the Pre-Series C Preferred Shares or the Series C Preferred Shares (subject also to compliance with Articles 7(b) and 122(k)). |
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SPECIAL REDEMPTION RIGHTS
124.
(a) | At any time and from time to time, (i) in the event that any of the Group Companies or Management Team breaches Articles 89, 90 or 123, its undertaking to use its best efforts complete a Qualified IPO, or such other rights as approved by the Company; or (ii) in the event that there is any breaches or violation of applicable laws and/or regulations which is reasonably expected to have a material adverse effect on the Company (including but not limited to the violation by Management Team of any criminal laws, misrepresentation or moral turpitude or violation of applicable securities law, violation of any anti-corruption/anti-bribery laws, regulations or policies or any conviction, in each case causing any member of the Management Team unable to perform his duties to the Group Companies); or (iii) applicable to Harvest Capital only, in the event that APRINOIA Suzhou moves its principal place of business out of Suzhou Industrial Park, each affected Institutional Shareholder (and Harvest Capital in the case of (iii)) may request such breach to be cured within a reasonable deadline. If the Company fails to cure such breach to the reasonable satisfaction of such Institutional Shareholder within the prescribed deadline specified by such Institutional Shareholder, such Institutional Shareholder is entitled to demand by mailing written notice (a “Redemption Request”), within 60 days after such deadline, acting separately but not jointly, the Company to redeem all of the shares it holds (the “Redemption Shares”) at a price per share equal to the applicable original purchase price of the Preferred Shares plus an annual compounded rate of return of eight percent (8%) yield (the “Redemption Price”) pursuant to the procedures set forth in this Article 124. |
(b) | No later than three months following delivery of the Redemption Request (the “Redemption Date”), the Company shall pay the holders of the Redemption Shares the Redemption Price in immediately available funds in U.S. dollars. |
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(c) | Notwithstanding anything to the contrary contained herein, if the Company’s assets and funds which are legally available on the date that any amount of aggregate Redemption Price for any series of Redemption Shares under this Article 124 is due are insufficient to pay in full such amount of aggregate Redemption Price to be paid on such due date, or if the Company is otherwise prohibited by applicable laws from making such redemption, the funds that are legally available shall nonetheless be paid and applied on the Redemption Date as follows: (i) prior and in preference to redeeming Pre-Series C Preferred Share, redeeming Series B Preferred Share and redeeming Ordinary Share, in a pro-rata manner against each redeeming Series C Preferred Share in accordance with the relative full amounts owed thereon, and the shortfall shall be paid and applied from time to time out of legally available funds immediately as and when such funds become legally available in a pro-rata manner against each redeeming Series C Preferred Share in accordance with the relative remaining amounts owed thereon; (ii) then if there is any remaining fund after the Redemption Price in respect of the redeeming Series C Preferred Shares have been paid in full, and prior and in preference to redeeming Series B Preferred Shares and Ordinary Share, in a pro-rata manner against each redeeming Pre-Series C Preferred Share in accordance with the relative full amounts owed thereon, and the shortfall shall be paid and applied from time to time out of legally available funds immediately as and when such funds become legally available in a pro-rata manner against each redeeming Pre-Series C Preferred Share in accordance with the relative remaining amounts owed thereon; (iii) then if there is any remaining fund after the Redemption Price in respect of the redeeming Series C Preferred Shares and redeeming Pre-Series C Preferred Shares have been paid in full, and prior and in preference to redeeming Ordinary Share, in a pro-rata manner against each redeeming Series B Preferred Share in accordance with the relative full amounts owed thereon, and the shortfall shall be paid and applied from time to time out of legally available funds immediately as and when such funds become legally available in a pro-rata manner against each redeeming Series B Preferred Share in accordance with the relative remaining amounts owed thereon; and (iv) then if there is any remaining fund after the Redemption Price in respect of the redeeming Series C Preferred Shares, redeeming Pre-Series C Preferred Shares and redeeming Series B Preferred Shares have been paid in full, in a pro-rata manner against each redeeming Ordinary Share in accordance with the relative full amounts owed thereon, and the shortfall shall be paid and applied from time to time out of legally available funds immediately as and when such funds become legally available in a pro-rata manner against each redeeming Ordinary Share in accordance with the relative remaining amounts owed thereon. |
(d) | Without limiting any rights of the Institutional Shareholders, or are otherwise available under the applicable laws, the full amount of the aggregate Redemption Price for any series of Redemption Shares due but not paid to the holders of such Redemption Shares shall accrue interest daily (on the basis of a 365-day year) at a rate of ten percent (10%) per annum from the 60th day after the date of delivery of Redemption Request to the date on which such aggregate Redemption Price for such series of Redemption Shares and all accrued interest thereon has been paid in full. Once the Company has received the Redemption Request, it shall not, and shall procure that none of the Group Companies shall, take any action which might have the effect of delaying, undermining or restricting the redemption, and the Company shall in good faith use all best efforts to increase as expeditiously as possible the amount of legally available redemption funds including causing any other Group Companies to distribute any and all available funds to the Company for purposes of paying the applicable Redemption Price for all Redemption Shares on the Redemption Date. If the Company fails to redeem any Redemption Shares on its due date for redemption then, as from such date until the date on which the same are redeemed, the Company shall not declare or pay any dividend nor otherwise make any distribution of or otherwise decrease its profits available for distribution. |
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SEALS AND DEEDS
125. | (a) | If the Directors determine that the Company shall have a Seal, the Directors shall provide for the safe custody of the common Seal and the common Seal of the Company shall not be affixed to any instrument except by the authority of a resolution of the Directors, and in the presence of a Director or of the Secretary or of such other person as the Directors may appoint for the purpose; and that Director or the Secretary or other person as aforesaid shall sign every instrument to which the common Seal of the Company is so affixed in his presence. Notwithstanding the provisions hereof, annual returns and notices filed under the Act may be executed either as a deed in accordance with the Act or by the common Seal being affixed thereto in either case without the authority of a resolution of the Directors by one Director or the Secretary. |
(b) | The Company may maintain a facsimile of any common Seal in such countries or places as the Directors shall appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of the Directors and in the presence of such person or persons as the Directors shall for this purpose appoint and such person or persons as aforesaid shall sign every instrument to which the facsimile Seal of the Company is so affixed in his presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the common Seal had been affixed in the presence of and the instrument signed by a Director or the Secretary or such other person as the Directors may appoint for the purpose. |
(c) | In accordance with the Act, the Company may execute any deed or other instrument which would otherwise be required to be executed under Seal by the signature of such deed or instrument as a deed by a Director or by the Secretary of the Company or by such other person as the Directors may appoint or authorise or by any other person or attorney on behalf of the Company appointed by a deed or other instrument executed as a deed by a Director or the Secretary or such other person as aforesaid. |
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DIVIDENDS, DISTRIBUTIONS AND RESERVE
126. | Subject to the Act, Articles 4(b), 4(b), 6(b), 6(b), 122(c) and 89(c), and the special rights attaching to Shares of any class, including the Series C Preferred Shares, Pre-Series C Preferred Shares and the Series B Preferred Shares, the Directors may, in their absolute discretion, declare dividends and distributions on Shares in issue and authorise payment of the dividends or distributions out of the funds of the Company lawfully available therefor. |
127. | Subject to compliance with Article 126, the Directors may from time to time pay to the Members interim dividends. |
128. | No dividend or distribution shall be paid otherwise than out of realised or unrealised profits or out of the share premium account of the Company, or as otherwise permitted by the Act. |
129. | Subject to the rights of persons, if any, entitled to Shares with special rights as to dividends or distributions, all dividends or distributions on any class of Shares not fully paid shall be declared and paid according to the amounts paid on the Shares of that class, but if and so long as nothing is paid-up on any of the Shares in the Company, dividends or distributions may be declared and paid according to the number of Shares. No amount paid on a Share in advance of calls shall, while carrying interest, be treated for the purposes of this Article as paid on the Share. |
130. | The Directors may, before recommending any dividend or distributions, set aside out of the profits of the Company such sums as they think proper as a reserve or reserves which shall, at the discretion of the Directors, be applicable for meeting contingencies, or for equalising dividends, or for any other purpose to which the profits of the Company may be properly applied, and pending such application may, at the like discretion, either be employed in the business of the Company or be invested in such investments as the Directors may from time to time think fit. |
131. | If several persons are registered as joint holders of any Share, any of them may give effectual receipts for any dividend, distributions or other moneys payable on or in respect of the Share. |
132. | Any dividend or distribution may be paid by cheque or warrant sent through the post to the registered address of the Member or person entitled thereto or in the case of joint holders to any one of such joint holders at his registered address or to such person and such address as the Member or person entitled or such joint holders as the case may be may direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent or to the order of such other person as the Member or person entitled or such joint holders as the case may be may direct. |
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133. | The Directors may declare that any dividend or distribution is paid wholly or partly by the distribution of specific assets and in particular of paid-up shares, debentures or debenture stock of any other company or in any one or more of such ways, and the Directors shall give effect to such resolution, and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient, and in particular may issue fractional certificates and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the footing of the value so fixed in order to adjust the rights of all parties, and may vest any such specific assets in trustees as may seem expedient to the Directors. |
134. | No dividend or distribution shall bear interest against the Company. All unclaimed dividends or distributions may be invested or otherwise made use of by the Directors for the benefit of the Company until claimed. Any dividend or distribution unclaimed by a Member six years after the dividend or distribution payment date shall revert to the Company. |
CAPITALISATION OF PROFITS
135. | The Company may upon the recommendation of the Directors by Ordinary Resolution authorise the Directors to capitalise any sum standing to the credit of any of the Company’s reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of the profit and loss account or otherwise available for distribution and to appropriate such sums to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provision as they think fit for the case of Shares becoming distributable in fractions (including provision whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned. |
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ACCOUNTS
136. | The books of account relating to the Company’s affairs shall be kept in accordance with the Act and otherwise in such manner as may be determined from time to time by the Directors of the Company. |
137. | Subject to Article 122(j), such Auditors may be appointed and the accounts relating to the Company’s affairs may be audited in such manner as may be determined by the Directors. |
WINDING UP
138. | If the Company shall be wound up, the liquidator may, with the sanction of a Special Resolution of the Company and any other sanction required by the Act, divide amongst the Members in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator, with the like sanction, shall think fit, but so that no Member shall be compelled to accept any Shares or other securities whereon there is any liability. |
139. | If the Company shall be wound up and the assets available for distribution amongst the Members as such shall be insufficient to repay the whole of the paid-up capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Members in proportion to the capital paid up, or which ought to have been paid up, at the commencement of the winding up, on the Shares held by them respectively. And if in a winding up the assets available for distribution amongst the Members shall be more than sufficient to repay the whole of the capital paid up at the commencement of the winding up, the excess shall be distributed amongst the Members in proportion to the capital paid up at the commencement of the winding up on the Shares held by them respectively. This Article is to be without prejudice to the rights of the holders of Shares issued upon special terms and conditions. |
NOTICES
140. | (a) | A notice may be given by the Company to any Member either personally or by sending it by post, electronic mail, telex or telefax to him to his registered address, or (if he has no registered address) to the address, if any, supplied by him to the Company for the giving of notices to him. |
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(b) | Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, prepaying, and posting a letter containing the notice (by airmail if available) and to have been effected, in the case of a notice of a meeting at the expiration of three days after it was posted. |
(c) | Where a notice is sent by telex, electronic mail or telefax, service of the notice shall be deemed to be effected by properly addressing and sending such notice through the appropriate transmitting medium and to have been effected on the day the same is sent. |
141. | If a Member has no registered address and has not supplied to the Company an address for the giving of notice to him, a notice addressed to him and advertised in a newspaper circulating in the Cayman Islands shall be deemed to be duly given to him at noon on the day following the day on which the newspaper is circulated and the advertisement appeared therein. |
142. | A notice may be given by the Company to the joint holders of a Share by giving the notice to the joint holder named first in the Register of Members in respect of the Share. |
143. | A notice may be given by the Company to the person entitled to a Share in consequence of the death or bankruptcy of a Member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description, at the address, if any, supplied for the purpose by the persons claiming to be so entitled, or (until such an address has been so supplied) by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. |
144. | Notice of every general meeting shall be given in some manner hereinbefore authorised to: |
(a) | every Member entitled to vote except those Members entitled to vote who (having no registered address) have not supplied to the Company an address for the giving of notices to them; and |
(b) | every person entitled to a Share in consequence of the death or bankruptcy of a Member, who, but for his death or bankruptcy would be entitled to receive notice of the meeting. |
No other persons shall be entitled to receive notices of general meetings.
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RECORD DATE
145. | The Directors may fix in advance a date as the record date for any determination of Members entitled to notice of or to vote at a meeting of the Members and, for the purpose of determining the Members entitled to receive payment of any dividend, the Directors may, at or within 90 days prior to the date of the declaration of such dividend, fix a subsequent date as the record date for such determination. |
AMENDMENT OF MEMORANDUM AND ARTICLES
146. | Subject to Article 89(a), and insofar as permitted by the provisions of the Act, the Company may from time to time by Special Resolution alter or amend its Memorandum or these Articles in whole or in part Provided however that no such amendment shall affect the rights attaching to any class of Shares without the consent or sanction provided for in Article 7(b). |
ORGANISATION EXPENSES
147. | The preliminary and organisation expenses incurred in forming the Company shall be paid by the Company and may be amortised in such manner and over such period of time and at such rate as the Directors shall determine and the amount so paid shall in the accounts of the Company, be charged against income and/or capital. |
OFFICES OF THE COMPANY
148. | The Registered Office of the Company shall be at such address in the Cayman Islands as the Directors shall from time to time determine. The Company, in addition to its Registered Office, may establish and maintain an office in the Cayman Islands or elsewhere as the Directors may from time to time determine. |
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INDEMNITY
149. | Every Director and officer for the time being of the Company or any trustee for the time being acting in relation to the affairs of the Company and their respective heirs, executors, administrators, personal representatives or successors or assigns shall, in the absence of willful neglect or default, be indemnified by the Company against, and it shall be the duty of the Directors out of the funds and other assets of the Company to pay, all costs, losses, damages and expenses, including travelling expenses, which any such Director, officer or trustee may incur or become liable in respect of by reason of any contract entered into, or act or thing done by him as such Director, officer or trustee or in any way in or about the execution of his duties and the amount for which such indemnity is provided shall immediately attach as a lien on the property of the Company and have priority as between the Members over all other claims. No such Director, officer or trustee shall be liable or answerable for the acts, receipts, neglects or defaults of any other Director, officer or trustee or for joining in any receipt or other act for conformity or for any loss or expense happening to the Company through the insufficiency or deficiency of any security in or upon which any of the monies of the Company shall be invested or for any loss of any of the moneys of the Company which shall be invested or for any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom any monies, securities or effects shall be deposited, or for any other loss, damage or misfortune whatsoever which shall happen in or about the execution of the duties of his respective office or trust or in relation thereto unless the same happen through his own willful neglect or default. |
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Annex
The financial year of the Company shall end on 31st December in each year.1
1 As confirmed by the Company by way of e-mail on 20 October 2021.
www.verify.gov.ky File#: 312841 | Filed: 21-Oct-2021 09:02 EST Auth Code: F60677028394 |
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is
the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.14
RESEARCH COLLABORATION AGREEMENT
THIS RESEARCH COLLABORATION AGREEMENT (“Agreement”) is made and effective as the 20th day of December, 2018 (“Effective Date”), by and between APRINOIA Therapeutics Inc. (“APN”), a company having an office at 17F, No.3, Park St., Nangang District, Taipei City 11503, Taiwan, and H. Lundbeck A/S. (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA (each a “Party” and collectively, “Parties”).
Recitals
A. | WHEREAS, APN has discovered molecules with potential to be developed as alpha-synuclein PET imaging tracers for alpha-synuclein-related diseases, including Parkinson’s Disease (“APN Compounds”); |
B. | WHEREAS, Lundbeck and AbbVie desire to collaborate with APN to develop the APN Compounds; and |
C. | WHEREAS, the Parties wish to collaborate in Stage 1 of a project as set forth in Appendix I for the evaluation and development of the APN Compounds (“Project”) on the terms and conditions as set out in this Agreement. |
D. | WHEREAS, the Parties have the option to enter into a further collaboration, described in Appendix III as Stage 2 of the Project, for the further development of a Clinical Candidate. |
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the Parties agree as follows:
1. | Project. |
1.1
Principle Investigator or PI
The Project will be conducted under the direction of individual principal investigators (individually a “PI” and collectively the “Pls”) at each Party, [***] as described in the work plan attached as Appendix I (“Work Plan”) and incorporated into this Agreement by reference.
1.2
Diligence
Each Party, under the direction of its PI, shall exercise reasonable efforts to carry out and complete the Project.
1.3
Project Fees
In support of the Project, the Parties agree that each Party will be responsible for using commercially reasonable efforts to carry out its activities as specified in Appendix I at its own cost.
2. | Material Transfer. |
2.1
During the course of the Project, APN will transfer to AbbVie and Lundbeck their selected [***] APN Compounds as standards and precursors and as set forth in Appendix II in such amounts as are necessary to conduct the Project.
2.2
Lundbeck and AbbVie agree to use the APN Compounds and the Compound Information, as defined in Appendix I, solely for the purpose of conducting the Project.
2.3
Lundbeck and AbbVie agree to not reverse engineer the APN Compounds or undertake any additional analyses thereof, chemical or biological, including, without limitation, any attempt to determine the composition, formula, structure or properties of APN Compounds, without the express written permission of APN, except as required for a Party to fulfill its obligations under this Agreement.
2.4
Except as set forth under Section 6.4 of this Agreement, Lundbeck and AbbVie agree to not further give, transfer, or distribute the APN Compounds and the Compound Information to any third party without APN’s prior written consent. Subject to the provisions set forth in Section 10 hereto, the Party engaging a subcontractor shall be permitted to share the APN Compounds solely for the purpose of performing the Work Plan.
2.5
In the event that a Party’s work under the Project does not proceed to Stage 2, pursuant to Section 5.6, and upon completion of the Project or termination of this Agreement pursuant to Section 7.1, whichever is sooner, Lundbeck and AbbVie shall discontinue the use of APN Compounds and shall destroy or return to APN, at APN’s sole discretion and costs, all the remaining APN Compounds. Upon APN’s request, Lundbeck and AbbVie shall provide written documentation of such destruction of all applicable APN Compounds to APN.
2.6
The APN Compounds delivered pursuant to the Project are understood to be experimental in nature and may have hazardous properties. As of the Effective Date of this Agreement, APN has no knowledge of any such hazardous effects. APN shall supply to Lundbeck and AbbVie pertinent records, safety data and information in its possession regarding the APN Compounds. The Parties will handle the APN Compounds accordingly and will inform each other in writing, pursuant to Section 15 (“Notices”), of any adverse effects experienced by persons handling the APN Compounds.
2.7
Except as set forth in Section 18 (“Indemnification”), Lundbeck and AbbVie each assume all liability for damages which may arise from their respective use, storage or disposal of APN Compounds. Except as set forth in Section 18 (“Indemnification”), APN will not be liable for any loss, claim, or demand made by Lundbeck or AbbVie, or made against Lundbeck or AbbVie by any third party, due to or arising from the use of APN Compounds by Lundbeck or AbbVie, except to the extent permitted by law when caused by the gross negligence or willful misconduct of APN.
3. | Governance. |
3.1
Within [***] days of the Effective Date, the Parties will form a Joint Research Committee (“JRC”) comprising one (1) representative of each Party. Each Party may at any time appoint different representatives by written notice to the other Parties.
3.2
The JRC will be responsible for:
3.2.1 | overseeing activities pursuant to the Project; |
3.2.2 | monitoring progress of the Project; |
3.2.3 | approving amendments to the Work Plan; |
3.2.4 | creating forum for discussion of the Results; |
3.2.5 | reviewing of Reports; |
3.2.6 | addressing initial disputes between the Parties; and |
3.2.7 | reviewing of publications and presentations. |
3.3
The JRC will be chaired by an APN representative during the Term (“Chair”). The Chair will be responsible for data sharing, communication, preparing and circulating an agenda in advance of each meeting, overseeing meetings, and issuing meeting minutes and may have other responsibilities as the JRC determines in writing.
3.4
Decisions of the JRC will require unanimous consent to be binding. No decision of the JRC may impose an obligation on either Party that is inconsistent with the obligations of this Agreement. In the event of any disagreement to reach unanimous consent among the representatives of the JRC relating to any matter under discussion, APN shall retain final decision-making authority, except for those decisions that may increase the resourcing or budgeting responsibilities of a Party, for which such Party will retain final decision-making authority.
3.5
The JRC will meet a minimum of [***] times a year on an approximately quarterly basis but may meet more frequently if it so wishes. Meetings of the JRC need not to be in person but may occur by telephone or video conference or other means. Should the JRC meet in person, each Party will bear its own travel and lodging expenses.
3.6
The JRC will keep accurate written minutes of its deliberations which will include a record of all matters discussed before the JRC and the action the JRC takes with respect to each of them. Within [***] days after each meeting, the Chair will distribute the meeting minutes to the Parties.
3.7
The rights and responsibilities of each Party will be governed by this Agreement, including the Appendices hereto, and the JRC will not have any power to amend, modify or waive compliance with this Agreement.
4. | Results and Reports. |
4.1
Each Party will conduct the Project as described in the Work Plan, using each Party’s selected APN Compounds.
4.2
“Results” shall include, but are not limited to, data including raw data, information, analysis, documents, reports, know-how, discoveries, inventions, and improvements generated by the Parties during the Term through conduct of the Project, except for Arising IP as described in Section 5.
4.3
Each Party shall provide the JRC with a written report(s) summarizing the Results as specified in Appendix I to the satisfaction of the JRC (“Report”). In the event of dissatisfaction, the Party generating the Report shall endeavor to make reasonable additions or modifications, as appropriate, to correct any such deficiencies noted by the JRC. Reports shall be provided from each Party in confidence and in writing to the JRC, and updated from time to time, as appropriate.
4.4
Each Party shall own all Results and Reports generated solely by the Party. Each Party therefore grants to the other Parties a worldwide, perpetual, non-exclusive, paid-up license to use the Party’s Results and Reports for any purpose.
5. | Intellectual Property Rights, License, and Option. |
5.1
Each Party shall reserve and retain full title and rights to any of its respective pre-existing intellectual property. No other rights are granted except those explicitly set forth in this Agreement.
5.2
Subject to the terms and conditions of this Agreement, APN grants to Lundbeck and AbbVie and their respective Affiliates, during the Term, a paid-up, non-exclusive, worldwide, non-transferable right to use APN Compounds and APN’s pre-existing intellectual property solely to perform the activities under the Project.
“Affiliate” shall mean, with respect to a specified entity, an entity that directly or indirectly through one or more intermediaries, is controlled by a Party, in each case where the term “control” means possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of an entity, whether through ownership of more than fifty percent (50%) of the equity, by contract interest or otherwise.
5.3
“Arising Intellectual Property or Arising IP” means any discoveries, inventions, improvements, know-how, and further development which solely relates to any of the APN Compounds used by any Party under this Agreement, whether or not patentable, conceived or reduced to practice under the performance of the Project using APN Compounds during the Term.
5.4
All Arising IP shall be owned solely by APN.
5.5
Lundbeck and AbbVie shall promptly and confidentially disclose any Arising IP to APN in writing.
5.6
Upon completion of Stage 1 as set out in Appendices I and III, APN hereby grants Lundbeck and AbbVie an option to continue the collaboration into Stage 2. In the event that Lundbeck and/or AbbVie exercise its option to continue to Stage 2, APN and such Party electing to continue to Stage 2 shall enter into good faith negotiations to enter into an agreement governing the conduct of such Stage 2 activities.
6. | Confidentiality and Publication. |
6.1
“Confidential Information” means all scientific, technical, trade or business information (including personal data about Party’s employees) provided by the disclosing Party to the receiving Party under this Agreement, whether tangible or intangible, and in whatever form or medium provided, as well as all information subsequently generated or received, by the receiving Party or by its representatives, officers, directors, partners, employees, agents, supervisors, employers, regents or fellows, that contains, reflects or is derived from the Confidential Information provided.
6.2
During the Term and for the [***] years thereafter each Party will not disclose or use any Confidential Information unless allowed to do so under this Agreement. Each Party will promptly notify the other on discovering any unauthorized disclosure or use of Confidential Information.
6.3
The obligations of non-disclosure and non-use contained in this section will not apply to the extent that the Party receiving the Confidential Information can establish that
a) the information is publicly known, or becomes publicly known through no breach of this Agreement;
b) the Party knew the information before receiving it from the disclosing Party as evidenced by written records;
c) the Party received the information from a third party not bound to the disclosing Party by any obligation of non-disclosure;
d) the Party independently develops the information without using any Confidential Information as evidenced by written records; or
e) the Party is required to disclose the information by law, provided that Party i) as soon as practical before the disclosure, notifies the other Party; ii) identifies the Confidential Information required to be disclosed and the circumstances surrounding the requirement; iii) furnishes only such portions of the Confidential Information as are legally required to be disclosed; and iv) cooperate with the disclosing Party in its efforts, if any, to narrow the disclosure.
6.4
The receiving Party may to the extent required for the conduct of the respective Project disclose Confidential Information to Third Parties, provided that such Third Parties are obligated under the terms of a written agreement to hold the Confidential Information confidential at least to the same extent to which the receiving Party is obligated hereunder.
6.5
This Agreement and its terms will be considered Confidential Information, provided however, the Parties and their Affiliates will each be permitted to disclose this Agreement to the extent reasonably necessary (a) to such Party’s or Affiliate’s attorneys, accountants and other professional advisors; and (b) to any person who proposes to purchase or otherwise succeed (by merger, operation of law or otherwise) to all of such Party’s or Affiliate’s rights under this Agreement, provided, in both cases (a) and (b), that such persons agree to be bound by an obligation of confidentiality that is no less than the Party’s obligations of confidentiality under this Agreement.
6.6
APN will lead all publications of any research relating to this Agreement, any Party who wishes to publish shall submit a copy of the proposed publication to the JRC at least [***] days before submitting the publication to a journal or other forum or otherwise disclosing it. Within a review period of [***] business days (“Review Period”), the Chair may require modifications to the publication (including the deletion of the Confidential Information) or a [***] days delay in disclosing it. The proposed publication shall be considered approved if the Chair has not replied to the relevant Party within the Review Period.
6.7
No Party will make any other public announcement relating to the existence of this Agreement or its terms, without prior written consent of the other Parties, such consent not to be unreasonably withheld.
7. | Term and Termination. |
7.1
Term and Termination. This Agreement shall enter into force as of the Effective Date and shall thereafter remain in full force and effect until the earlier of (a) completion of the Project or (b) one (1) year from the Effective Date or (c) termination of this Agreement by one Party on [***] days prior written notice to the other Parties (“Term”).
7.2
Effect of Termination.
7.2.1 Termination of this Agreement shall obligate each Party to use its commercially reasonable efforts to wind-up all research in accordance with its responsibilities under this Agreement and applicable law and regulation, unless the completion of the respective Project is not feasible. Within [***] days after the completion of wind-up of the Project, each Party shall provide the other Parties with delivery of any and all information, data or results specified in the Work Plan and generated up to the date of completion of the wind-up, including any and all final Results and Reports.
7.2.2 Upon the written request of a disclosing Party, the receiving Parties shall return or destroy all Confidential Information and copies thereof, provided however, that the receiving Parties may retain one copy of such Information in its confidential files for archival purposes. Notwithstanding the foregoing, each Party may retain all Results and Reports arising from the Work Plan, and the obligation to return or destroy Confidential Information does not include Confidential Information that is maintained on routine computer system backup tapes, disks, or other backup storage devices as long as such backup Confidential Information is not used, disclosed, or otherwise recovered from such backup devices. For the avoidance of doubt, the maintenance of Confidential Information on computer system backup tapes, disks, or other backup storage devices shall not otherwise alter or affect the confidential nature of the Confidential Information.
7.2.3 The termination of this Agreement will not affect any rights or obligations of the Parties that have accrued or matured prior to termination.
7.3
Except for any research, investigations and other work contemplated by the Agreement that has not yet been performed as of the effective date of termination, and any payments or like remuneration for such work due hereunder, all provisions hereof shall survive the expiration or termination of this Agreement for any reason.
8. | Data Protection. |
8.1
The Parties shall not collect, retain, process or disclose information identifying or, in combination with other information, identifiable to a living individual, including information relating to individuals from whom any Project related materials have been obtained, or from any other relevant individual participating in or associated with the Project, in performing its obligations under this Agreement.
8.2
The Parties agree that they shall not disclose to one another any Protected Health Information, as such term is defined in the Health Insurance Portability and Accountability Act of 1996, as well as the implementing of privacy and security regulations (collectively, “HIPAA”). Any data or information related to a human tissue or sera samples shall be de-identified in accordance with the requirements set forth in 45 C.F.R. § 164.514(a) prior to disclosure to one another.
8.3
The Parties agree that they shall not disclose to one another any Personal Data as defined in the Regulation (EU) 2016/679 of 27 April 2016 (the General Data Protection Regulation) (“GDPR”). Any data or information related to a human tissue or sera samples shall be anonymized in accordance with the requirements set forth in GDPR, Recital 26 prior to disclosure to one another.
8.4
Compliance with Law. Each Party shall conduct the Project, in compliance with all applicable federal, state, and local laws, regulations and guidelines including all health and health care, safety, and environmental standards and requirements, the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b, and similar state laws, the Controlled Substances Act, as amended, and regulations promulgated thereunder, including the U.S. Drug Enforcement Agency (DEA) regulations at 21 C.F.R. § 1300 et seq., and similar state laws, and the Federal Food, Drug, and Cosmetic Act (the “Act”), as amended, and regulations promulgated thereunder and applicable guidance documents of the U.S. Food and Drug Administration (FDA), including “In Vitro Diagnostic Device Studies - Frequently Asked Questions and Informed Consent for In Vitro Diagnostic Device Studies Using Leftover Human Specimens that are Not Individually Identifiable”.
8.5
The Parties will as part of their contractual relationship and to perform their respective obligations under the Agreement share personal data about certain employees engaged by the Parties, as applicable, who are working to fulfil the Agreement (hereinafter “Employees”). Without otherwise limiting the Parties’ rights and obligations related to personal data set out in this Agreement, each Party acknowledges and agrees that it will on behalf of the other Party provide its own Employees with information about the other Party’s collection and processing of the Employees’ personal data. Such information must comply with applicable data protection laws, including – to the extent applicable - Article 13 and 14 of the GDPR.
9. | Representations, Warranties and Covenants. |
9.1
APN represents and warrants that it has the legal right to provide the APN Compounds to AbbVie and Lundbeck, that it is the sole owner of the APN Compounds, and that no third party, including any United States governmental body, has any claim or right to the APN Compounds. Further, APN represents and warrants that it has the right to provide the APN Compounds to AbbVie and Lundbeck, including that if necessary it has obtained all permissions, consents or authorizations as required by law in order to do so.
9.2
The Parties represent, warrant and covenant that:
9.2.1 the terms of this Agreement are (a) valid and binding obligations to each Party; (b) not inconsistent with any other contractual or legal obligations the Parties may have; and (c) not inconsistent with any of the Parties’ policies and procedures or the policies and procedures of any institution or company with which each Party is associated, including those relating to conflicts of interest;
9.2.3 each employee or agent of a Party who is an HCP (where an “HCP” is a person in a position to purchase, prescribe, dispense or recommend or arrange for the purchase, use, sale or formulary placement of pharmaceutical or medical device products for human use and performing work in relation to this Agreement (if any)): (a) has a current and valid medical or other health care license; (b) such license has never been revoked, restricted or suspended by a medical board or other licensing agency; (c) his/her privileges or ability to practice have never been revoked, restricted or suspended by a health care institution or other provider of health care services; and (d) to the best of a Party’s knowledge and each such said employee or agent conducting the Project under this Agreement (if any), is not under an investigation that could lead to a revocation, restriction or suspension of his or her medical or other health care license or privileges or ability to practice at a health care institution or other provider of health care services; in the event that any of the foregoing changes during the Term, an affected Party shall immediately notify the other Parties, and the unaffected Parties shall have the right to immediately terminate this Agreement;
9.2.3 this Agreement is in exchange for any explicit or implicit agreement or understanding that Parties purchase, lease, order, prescribe, recommend or otherwise arrange for, or provide formulary or other preferential or qualifying status for the use of any of the other Parties’ products; and
9.2.4 each Party’s Institutional Animal Care and Use Committee (IACUC) or other appropriate oversight body monitors the care and use of any animals utilized in the Project and has reviewed and approved the conduct of the Project. Each Party shall also ensure that such third parties (“Third Parties”) comply with this Agreement and that it has an adequate procedure in place to audit, assess and approve such Third Parties. Each Party will be responsible and for the acts or omissions of such Third Parties’ activities as if such activities had been performed by such Party.
10. | Subcontracting. |
10.1
The Parties have the right to subcontract their rights and obligations to its Affiliates, professional consultants/advisors and collaboration partners (“Third Parties”) without the prior written consent of the other Parties. Wherever in this Agreement responsibility is delegated to a Third Party, the delegating party (“Delegating Party”) undertakes to cause and ensure that such Third Party does not make decisions inconsistent with this Agreement, amend the terms of this Agreement or act contrary to its terms in any way. No such subcontracting shall relieve the Delegating Party of any obligations under this Agreement, and the Delegating Party shall remain liable towards the other Parties for the performance of all of its obligations under this Agreement, including the performance by its Third Parties.
11. | No Warranties. |
Each Party acknowledges that the APN Compounds, Compound Information, and the Confidential Information are experimental in nature. EACH PARTY EXPRESSLY DISCLAIMS ANY IMPLIED OR EXPRESS WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE OF THE APN COMPOUNDS, except for such representations or warranties explicitly set forth in this Agreement.
12. | Relationship of the Parties. |
No agency or partnership relationship is created by this Agreement, and it is understood that neither Party has any obligation to enter into any further agreements with the others.
13. | Severability. |
If any provision of this Agreement is found to be illegal, invalid, or unenforceable, (a) that provision will be deemed amended to the extent necessary to achieve an effect that is as near as possible to that provided by the original provision, and (b) the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected thereby.
14. | Use of Name. |
Neither Party will use the name, trademarks, logos, physical likeness, or other symbol of the other Parties or the names of any of its employees, agents or representatives, for any purpose, including without limitation any marketing, advertising, or public relations purpose, without the prior written consent of such other Parties.
15. | Notices. |
Any notice given under this Agreement must be in writing and delivered to the respective Party as follows:
(a)
If to APN:
|
[***] |
(a)
If to Lundbeck:
|
[***] |
with a copy to: | [***] |
(b)
If to AbbVie:
|
[***] |
with a copy to: | [***] |
or to such other addresses and phone numbers of which the Parties may from time to time be notified in writing. Any notice will be deemed given upon receipt by the addressee.
16. | Assignment. |
This Agreement is not assignable or otherwise transferable by any Party without prior written consent of the others, except that a Party may, without such consent, assign this Agreement to any purchaser of all or substantially all of the assets of the business, to any successor corporation that results from reincorporation, merger, or consolidation of such Party with or into such purchaser or such corporation, or to that Party’s Affiliates. Upon assignment, the rights and obligations under this Agreement will be binding upon and inure to the benefit of said purchaser or successor in interest. Notwithstanding the foregoing, a Party may satisfy any obligation or fulfill any right through any of its Affiliates. Any assignee shall assume all obligations of the assignor Party under this Agreement.
17. | Debarment. |
Each Party represents, warrants and covenants that (a) the Party and each employee or agent of the Party performing work in relation to this Agreement is not currently, has never been, and, to the best of the Party’s knowledge, is not the subject of a proceeding that could lead to the Party or such employee or agent becoming, as applicable, (i) debarred by the FDA under 21 U.S.C. § 335a, (ii) excluded, debarred, suspended, or otherwise ineligible to participate in the Federal health care programs or in Federal procurement or nonprocurement programs, (iii) listed on the FDA’s Disqualified and Restricted Lists for clinical investigators, or (iv) convicted of a criminal offense that falls within the scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded, debarred, suspended, or otherwise declared ineligible; and (b) the Party shall not engage, directly or indirectly, any person to perform services under this Agreement if that person has ever been, is currently, or, to the best of the Party’s knowledge, is the subject of a proceeding that could lead to that person becoming, as applicable, any of (i)-(iv) above. In the event that the Party receives notice of, or otherwise becomes aware of, the debarment, proposed debarment or such other exclusion, suspension, restriction or sanction of itself or any person providing services in connection with the performance of this Agreement, the Party shall notify the other Parties immediately and the other Parties shall have the right to immediately terminate this Agreement.
18. | Indemnification. |
18.1
To the extent permitted by law, each Party (each an “Indemnifying Party”) agrees to indemnify and hold harmless the other Parties (each an “Indemnified Party”) from and against any and all liability, losses and expenses (including reasonable attorneys’ fees), arising out of third party claims resulting from or arising out of (i) any use of the radiolabeled materials by the Indemnifying Party for activities other than as set forth in the Work Plan; (ii) any negligent, reckless or willful misconduct of the Indemnifying Party in relation to the performance of its obligations under this Agreement; or (iii) any other noncompliance or breach of this Agreement on the part of the Indemnifying Party.
18.2
The indemnity provided by each Party for any claim or lawsuit shall not extend beyond that indemnity which the Party is permitted by applicable law to provide for such claim or lawsuit. The indemnifying party shall not be liable to the extent claims result from or arise out of the negligence, recklessness or willful misconduct of the indemnified party.
18.3
AbbVie’s and Lundbeck’s indemnity is conditioned upon the Indemnified Party’s obligation to: (i) advise [***], as the case may be, of any claim or lawsuit, in writing within [***] days after the Indemnified Party has received notice of said claim or lawsuit; (ii) assist AbbVie or Lundbeck and its representatives in the investigation and defense of any claim or lawsuit for which indemnification is provided; and (iii) not compromise or otherwise settle any such claim or lawsuit without AbbVie’s or Lundbeck’s prior written consent.
19. | No Waivers. |
Failure of either Party to enforce any of the provisions of this Agreement will in no way be considered a waiver of such provisions or in any way affect the validity of this Agreement. The failure by either Party hereto to enforce any of such provisions will not prejudice such Party from later enforcing or exercising the same or any other provisions or rights that it may have under this Agreement.
20. | Force Majeure. |
No failure, omission, or delay by either Party in the performance of any obligation under this Agreement will be deemed a breach of this Agreement or create any liability if the same arises from any cause or causes beyond the control of the non-performing or delayed Party, provided the non-performing or delayed Party provides to the other Parties written notice of the existence of and the reason for such nonperformance or delay.
21. | Governing Law. |
The Parties agree to be silent in regards to governing law.
22. | Entire Agreement. |
This Agreement constitutes the entire understanding between the Parties with respect to the subject matter hereof.
23. | Headings. |
The descriptive headings of the articles and sections of this Agreement are inserted for convenience only and are intended to have no force or effect in construing or interpreting any of the provisions of this Agreement.
24. | Modifications. |
No amendment, modification, or alteration of any of the terms or provisions of this Agreement will be valid unless in writing and signed by the Parties hereto.
25. | Counterparts. |
This Agreement may be executed and delivered in counterparts, or facsimile versions, each of which will be deemed an original, and both of which together will be deemed one and the same Agreement. Each party acknowledges that an original signature or a copy thereof transmitted by facsimile or by PDF will constitute an original signature for purposes of this Agreement.
26. | Antitrust. |
The Parties acknowledge that any activities carried out under this Agreement must be carried out in full compliance with all applicable laws, including without limitation, antitrust and competition law. Should it become apparent that this Agreement, any provision of this Agreement, or any activity or decision of the JRC, can have a potentially restrictive effect on open and fair competition, in breach of any statutory provision, each Party to this Agreement shall take immediate steps to remedy that situation. The JRC includes participants that may be competitors, as well as suppliers and customers. It is the intention of the Parties that the JRC operates in strict compliance with antitrust laws. Nothing in this Agreement is intended to result in an agreement on price, exclude suppliers from any market, or otherwise restrain competition. The Parties agree to avoid discussions which are prohibited by applicable antitrust laws, including discussion of competitively sensitive subject matter, such as costs, prices, sales, product marketing, and other confidential information with respect to their own products and operations. Each Party shall comply with its own internal antitrust policies and advice of its own antitrust counsel as applicable. Nothing in this Agreement is intended to restrict any Party from protesting or otherwise taking corrective action to prevent any perceived antitrust violation.
[Remainder of page blank]
IN WITNESS WHEREOF the Parties have executed and delivered this Agreement by their duly authorized representatives as of the Effective Date.
APRINOIA Therapeutics Inc. | H. Lundbeck A/S | |
/s/ Ming-Kuei Jang
|
/s/ Klaus Simonsen | |
Signature | Signature | |
Ming-Kuei Jang
|
Klaus Simonsen | |
Print name | Print name | |
CEO | Klaus Baek Simonsen | |
Print title | Print title | |
31-Dec-2018 | 21-Dec-2018 | |
Date | Date | |
AbbVie Inc. | ||
/s/ Michelle Parks | ||
Signature | ||
Michelle Parks | ||
Print name | ||
Head, Technology Licensing | ||
Print title | ||
21-Dec-2018 | ||
Date |
Appendix I
[***]
[***]
[***]
Appendix II
APN Compound Information.
[***]
[***]
20 of 20
Exhibit 10.15
FIRST AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This First Amendment (the “First Amendment”), effective as February 20, 2019, to that certain Research Collaboration Agreement (the “Agreement” and incorporated herein by reference) effective December 20, 2018, among APRINOIA Therapeutics Inc. (“APN”), a company having an office at 17F, No.3, Park St., Nangang District, Taipei City 11503, Taiwan, and H. Lundbeck A/S (“Lundbeck’’), having an office at OttiIiavej 9, Valby, 2500, Denmark, and AbbVic Inc. (“AbbVic”), a company having an office at 1 N Waukegan Rd, North Chicago. IL, USA (each a “Party” and collectively, “Parties”).
Subject to the full execution of this First Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1. | Following compounds are added to Appendix II: |
[***]
2. | This First Amendment shall form an integral part of the Agreement and shall be regarded incorporated into the Agreement in every respect. |
3. | Except as specifically amended hereby, all provisions of the Agreement shall remain in full force and effect. |
IN WITNESS WHEREOF the Parties have executed and delivered this Agreement by their duly authorized representatives as of the Effective Date.
APRINOIA Therapeutics Inc. | H. Lundbeck A/S | ||||
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen | ||
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen | ||
Title: | CEO | Title: | VP | ||
Date: | Feb 26, 2019 | Date: | 25/2/2019 |
AbbVie Inc. | |||
By: | /s/ Michelle A. Parks, J.D. | ||
Name: | Michelle A. Parks, J.D. | ||
Title: | Head Technology Licensing & Collaborations | ||
Date: | 2-23-2019 |
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.16
SECOND AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This Second Amendment (the “Second Amendment”), effective as December 1, 2019, to that certain Research Collaboration Agreement (the “Agreement” and incorporated herein by reference) effective December 20, 2018 and the First Amendment (the “First Amendment” and incorporated herein by reference) effective February 20, 2019, among APRINOIA Therapeutics Inc. (“APN”), a company having an office at 17F, No.3, Park St., Nangang District, Taipei City 11503, Taiwan, and H. Lundbeck A/S. (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA (each a “Party” and collectively, “Parties”).
Subject to the full execution of this Second Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1. | Section 7.1 in the Agreement is removed in its entirety and replaced by the following sentence: |
Term and Termination. This Agreement shall enter into force as of the Effective Date and shall thereafter remain in full force and effect until the earlier of (a) completion of the Project or (b) two (2) years from the Effective Date or (c) termination of this Agreement by one Party on [***] days prior written notice to the other Parties (“Term”).
2. | Except as specifically amended hereby, all provisions of the Agreement and the First Amendment shall remain in full force and effect. |
-----------Signature page follows-----------
IN WITNESS WHEREOF the Parties have executed and delivered this Agreement by their duly authorized representatives as of the Effective Date.
APRINOIA Therapeutics Inc. | H. Lundbeck A/S | ||||
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen | ||
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen | ||
Title: | CEO | Title: | VP | ||
Date: | 1/5/2020 | Date: | 1/5/2020 |
AbbVie Inc. | |||
By: | /s/ Michelle Parks | ||
Name: | Michelle Parks | ||
Title: | Head, Technology Licensing | ||
Date: | 21-Dec-2019 |
2
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.17
THIRD AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This Third Amendment (the “Third Amendment”), effective as November 30, 2020, to that certain Research Collaboration Agreement (the “Agreement” and incorporated herein by reference) effective December 20, 2018, the First Amendment (the “First Amendment” and incorporated herein by reference) effective February 20, 2019 and the Second Amendment (the “Second Amendment” and incorporated herein by reference) effective December 1, 2019, among APRINOIA Therapeutics Inc. (“APN”), a company having an office at 17F, No.3, Park St., Nangang District, Taipei City 11503, Taiwan, and H. Lundbeck A/S. (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA (each a “Party” and collectively, “Parties”).
Subject to the full execution of this Third Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1. | Section 7.1 in the Agreement is removed in its entirety and replaced by the following sentence: |
“Term and Termination. This Agreement shall enter into force as of the Effective Date and shall thereafter remain in full force and effect until the earlier of (a) completion of the Project or (b) four (4) years from the Effective Date or (c) termination of this Agreement by one Party on [***] days prior written notice to the other Parties (“Term”)”.
2. | Except as specifically amended hereby, all provisions of the Agreement, the First Amendment and the Second Amendment shall remain in full force and effect. |
--------- Signature page follows---------
IN WITNESS WHEREOF the Parties have executed and delivered this Agreement by their duly authorized representatives as of the Effective Date.
APRINOIA Therapeutics Inc. | H. Lundbeck A/S | ||||
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen | ||
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen | ||
Title: | CEO | Title: | VP | ||
Date: | 2020/11/16 | Date: | 2020/11/20 |
AbbVie Inc. | |||
By: | /s/ Michelle A. Parks | ||
Name: | Michelle A. Parks | ||
Title: | Head, Technology Licensing | ||
Date: | 04-Dec-2020 |
|
2
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.18
Assignment Agreement
This Assignment Agreement (“Assignment Agreement”) is made and entered into effective as of the date of last signature below (the “Assignment Date”), by and among APRINOIA Therapeutics Inc. (Taiwan) (“Assignor”) with its principal place of business being 17F., No.3, Park St., Nangang Dist., Taipei City 11503, Taiwan, APRINOIA Therapeutics Limited (Hong Kong) (“Assignee”) with its principal place of business being 31/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong, H. Lundbeck A/S. (“Lundbeck”) with its principal place of business being Ottiliavej 9, 2500 Valby, Denmark and AbbVie Inc. (“AbbVie”) with its principal place of business being 1 N Waukegan Rd, North Chicago, IL, 60064 USA.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Research Collaboration Agreement, dated as of December 20th, 2018, First Amendment to the Research Collaboration Agreement, dated as of February 20th, 2019, Second Amendment to the Research Collaboration Agreement, dated as of December 1st, 2019 and Third Amendment to the Research Collaboration Agreement, dated as of November 30th, 2020 (collectively the “Original Agreement”).
WHEREAS, Assignor wishes to transfer and assign to Assignee all of Assignor’s rights and interests in and to, and obligations under, the Original Agreement, and Assignee wishes to be the assignee and transferee of such rights, interests and obligations;
NOW THEREFORE, Assignor, Assignee, Lundbeck and AbbVie hereto, intending to be legally bound, do hereby agree as follows:
1. | Lundbeck and AbbVie expressly consent the assignment of Assignor’s rights, and interests in and to, and obligations under, the Original Agreement to Assignee pursuant to this Assignment Agreement. |
2. | Assignor hereby transfers and assigns to Assignee, and Assignee hereby acquires from Assignor all of Assignor’s rights, and interests in and to the Original Agreement, of whatever kind or nature, and Assignee hereby assumes and agrees to perform all obligations, duties, liabilities and commitments of Assignor under the Original Agreement, of whatever kind or nature. |
3. | The above assignment shall not relieve or release Assignor from any indemnification claims or other liabilities towards Lundbeck and AbbVie arising out of or resulting from any acts or omissions of Assignor prior to the Assignment Date. Further, if such indemnifications claim or other liability arises, Lundbeck and/or AbbVie, as the case may be, may direct their full claim against either Assignor or Assignee at their own discretion. |
4. | This Assignment Agreement shall commence from the Assignment Date. |
5. | This Assignment Agreement may be executed in one or more counterparts, including facsimile counterparts, each of which shall be deemed to be an original copy of this Assignment Agreement, and all of which, when taken together, shall be deemed to constitute one and the same agreement. Delivery of such counterparts by facsimile or electronic mail (in PDF format) shall be deemed effective as manual delivery. |
-------------------------signature page follows-------------------------
IN WITNESS WHEREOF, Assignor, Assignee, Lundbeck and AbbVie have caused this Assignment Agreement to be executed by their duly authorized representative.
Assignor: APRINOIA Therapeutics Inc. (Taiwan)
BY: | /s/ Ming-Kuei Jang | |
NAME: | Ming-Kuei Jang | |
TITLE: | CEO | |
DATE: | 14-Jul-2021 |
Assignee: APRINOIA Therapeutics Limited (Hong Kong)
BY: | /s/ Ming-Kuei Jang | |
NAME: | Ming-Kuei Jang | |
TITLE: | CEO | |
DATE: | 14-Jul-2021 |
Lundbeck: H. Lundbeck A/S
BY: | /s/ Klaus Baek Simonsen | |
NAME: | Klaus Baek Simonsen | |
TITLE: | VP | |
DATE: | 14-Jul -2021 |
AbbVie: AbbVie Inc.
BY: | /s/ Michelle A. Parks | |
NAME: | Michelle A. Parks | |
TITLE: | Head, Technology Licensing | |
DATE: | 04-Aug-2021 |
3
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.19
FOURTH AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This Fourth Amendment (the “Fourth Amendment”), dated as of January 25, 2022 (“Fourth Amendment Effective Date”), to that certain Research Collaboration Agreement (the “Agreement”) dated as of December 20, 2018, is entered into by and among APRINOIA Therapeutics Limited (“APN”) with its principal place of business being 31/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong, H. Lundbeck A/S (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA. APN, Lundbeck and AbbVie are each a “Party” and collectively, the “Parties”.
Whereas, the Agreement was originally entered into by and among Lundbeck, AbbVie and APRINOIA Therapeutics Inc. (Taiwan), a company having an office at 17F, No. 3, Park St., Nangang District, Taipei City 11503, Taiwan,
Whereas, the Agreement was amended by First Amendment (the “First Amendment”) dated as of February 20, 2019, the Second Amendment (the “Second Amendment”) dated as of December 1, 2019 and the Third Amendment (the “Third Amendment”) dated as of November 30, 2020,
Whereas, the Agreement along with the First Amendment, Second Amendment and Third Amendment was assigned to APN by APRINOIA Therapeutics Inc. (Taiwan) via an Assignment Agreement dated as of August 4, 2021, and
Whereas, APN, Lundbeck and AbbVie now desire to amend the Agreement further as set out herein.
Now, Therefore, subject to the full execution of this Fourth Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1.
Following compounds are added to Appendix II:
[***]
2. | Except as specifically amended hereby, all provisions of the Agreement, the First Amendment, the Second Amendment and the Third Amendment shall remain in full force and effect. |
Signature page follows
IN WITNESS WHEREOF the Parties have executed and delivered this Fourth Amendment by their duly authorized representatives as of the Fourth Amendment Effective Date.
APRINOIA Therapeutics Limited (Hong Kong) |
H. Lundbeck A/S |
|
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen |
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen |
Title: | CEO | Title: | VP |
Date: | 25-Jan-2022 | Date: | 25-Jan-2022 |
AbbVie Inc.
By: | /s/ Michelle A. Parks |
Name: | Michelle A. Parks |
Title: | Head, Technology Licensing |
Date: | 26-Jan-2022 |
2
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.20
FIFTH AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This Fifth Amendment (the “Fifth Amendment”), dated as of last signature on this agreement (“Fifth Amendment Effective Date”), to that certain Research Collaboration Agreement (the “Agreement”) dated as of December 20, 2018, is entered into by and among APRINOIA Therapeutics Limited (“APN”) with its principal place of business being 31/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong, H. Lundbeck A/S (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA. APN, Lundbeck and AbbVie are each a “Party” and collectively, the “Parties”.
Whereas, the Agreement was originally entered into by and among Lundbeck, AbbVie and APRINOIA Therapeutics Inc. (Taiwan), a company having an office at 17F, No. 3, Park St., Nangang District, Taipei City 11503, Taiwan;
Whereas, the Agreement was amended by First Amendment (the “First Amendment”) dated as of February 20, 2019, the Second Amendment (the “Second Amendment”) dated as of December 1, 2019 and the Third Amendment (the “Third Amendment”) dated as of November 30, 2020;
Whereas, the Agreement along with the First Amendment, Second Amendment and Third Amendment was assigned to APN by APRINOIA Therapeutics Inc. (Taiwan) via an Assignment Agreement dated as of August 4, 2021;
Whereas, the Agreement was further amended by the Fourth Amendment (the “Fourth Amendment”) dated as of January 25, 2022; and
Whereas, APN, Lundbeck and AbbVie now desire to amend the Agreement further as set out herein.
Now, Therefore, subject to the full execution of this Fifth Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1. | To extend the expiration date of the Agreement through the Effective Date of this Fifth Amendment. The parties agree that the terms and conditions of the Agreement will apply to the entirety of the period between December 19, 2022 and the Effective Date, notwithstanding any expiration or termination prior to the date of this Amendment. Parties represent, certify, and agree that they have not taken any action during the expiration period that are in conflict with AbbVie’s rights or Parties’ responsibilities under the terms and conditions of the Agreement. |
2. | Section 7.1 in the Agreement is removed in its entirety and replaced by the following sentence: |
“Term and Termination. This Agreement shall enter into force as of the Effective Date and shall thereafter remain in full force and effect until the earlier of (a) completion of the Project or (b) December 31, 2024 or (c) termination of this Agreement by one Party on [***] days prior written notice to the other Parties (“Term”).”
3. | Except as specifically amended hereby, all provisions of the Agreement, the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment shall remain in full force and effect. |
Signature page will follow:
IN WITNESS WHEREOF the Parties have executed and delivered this Fifth Amendment by their duly authorized representatives as of the Fifth Amendment Effective Date.
APRINOIA Therapeutics Limited (Hong Kong) |
H. Lundbeck A/S |
|
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen |
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen | ||
Title: | CEO | Title: | Vice President | ||
Date: | 25-Jan-2023 | Date: | 25-Jan-2023 |
AbbVie Inc.
By: | /s/ Michelle A. Parks |
Name: | Michelle A. Parks J.D. |
Title: | Head, Technology Licensing |
Date: | 13-Jan-2023 |
3
Certain confidential information contained in this document, marked by [***], has been omitted because such information is both not material and is the type that the Company customarily and actually treats that as private or confidential.
Exhibit 10.21
SIXTH AMENDMENT TO THE
RESEARCH COLLABORATION AGREEMENT
This Sixth Amendment (the “Sixth Amendment”), dated as of last signature on this agreement (“Sixth Amendment Effective Date”), to that certain Research Collaboration Agreement (the “Agreement”) dated as of December 20, 2018, is entered into by and among APRINOIA Therapeutics Limited (“APN”) with its principal place of business being 31/F, Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong Kong, H. Lundbeck A/S (“Lundbeck”), having an office at Ottiliavej 9, Valby, 2500, Denmark, and AbbVie Inc. (“AbbVie”), a company having an office at 1 N Waukegan Rd, North Chicago, IL, USA. APN, Lundbeck and AbbVie are each a “Party” and collectively, the “Parties”.
Whereas, the Agreement was originally entered into by and among Lundbeck, AbbVie and APRINOIA Therapeutics Inc. (Taiwan), a company having an office at 17F, No. 3, Park St., Nangang District, Taipei City 11503, Taiwan;
Whereas, the Agreement was amended by First Amendment (the “First Amendment”) dated as of February 20, 2019, the Second Amendment (the “Second Amendment”) dated as of December 1, 2019, and the Third Amendment (the “Third Amendment”) dated as of November 30, 2020;
Whereas, the Agreement along with the First Amendment, Second Amendment and Third Amendment was assigned to APN by APRINOIA Therapeutics Inc. (Taiwan) via an Assignment Agreement dated as of August 4, 2021;
Whereas, the Agreement was further amended by the Fourth Amendment (the “Fourth Amendment”) dated as of January 25, 2022; and the Fifth Amendment (the “Fifth Amendment”) dated as of January 5, 2023; and
Whereas, APN, Lundbeck and AbbVie now desire to amend the Agreement further as set out herein.
Now, Therefore, subject to the full execution of this Sixth Amendment, APN, Lundbeck and AbbVie hereby agree to the following amendments:
1. | Parties wish to delete Appendix II in its entirety and replace it with Appendix II of this Sixth Amendment. |
2. | Except as specifically amended hereby, all provisions of the Agreement, the First Amendment, the Second Amendment, the Third Amendment, the Fourth Amendment and the Fifth Amendment shall remain in full force and effect. |
Signature page will follow:
IN WITNESS WHEREOF the Parties have executed and delivered this Sixth Amendment by their duly authorized representatives as of the Sixth Amendment Effective Date.
APRINOIA Therapeutics Limited (Hong Kong) |
H. Lundbeck A/S |
|
By: | /s/ Ming-Kuei Jang | By: | /s/ Klaus Baek Simonsen |
Name: | Ming-Kuei Jang | Name: | Klaus Baek Simonsen | ||
Title: | CEO | Title: | VP | ||
Date: | 19-Sep-2023 | Date: | 20-Sep-2023 |
AbbVie Inc. |
By: | /s/ Michelle A. Parks J.D. |
Name: | Michelle A. Parks J.D. |
Title: | Head, Technology Licensing |
Date: | 12-Sep-2023 |
APPENDIX II
APN Compound Information
[***]
4
Security Type
|
Security Class Title
|
Fee Calculation
Rule
|
Amount
Registered (1)
|
Proposed Maximum Offering Price Per Share
|
Maximum
Aggregate
Offering Price (2)
|
Fee Rate
|
Amount of Registration Fee (2)
|
Equity
|
Ordinary shares, par value $0.4 per share
|
Rule 457(a)
|
2,300,000
|
$14.00
|
$32,200,000
|
0.00014760
|
$4,753
|
Total Offering Amounts
|
—
|
$32,200,000
|
—
|
$4,753
|
|||
Total Fees Previously Paid
|
—
|
—
|
—
|
$7,380
|
|||
Total Fee Offsets
|
—
|
—
|
—
|
—
|
|||
Net Fee Due
|
—
|
—
|
—
|
—
|
(1)
|
Includes 300,000 ordinary shares that the underwriters have the option to purchase
|
(2)
|
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of
1933, as amended
|
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