KalVista Pharmaceuticals, Inc.
Annual Report 2017

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K (Mark One)☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended April 30, 2017OR☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIODFROM TO Commission File Number 001-36830 KalVista Pharmaceuticals, Inc.(Exact name of Registrant as specified in its Charter) Delaware 20-0915291( State or other jurisdiction ofincorporation or organization) (I.R.S. EmployerIdentification No.) One Kendall SquareBuilding 200, Suite 2203Cambridge, Massachusetts 02139(Address of principal executive offices) (Zip Code)Registrant’s telephone number, including area code: (857) 999-0075 Title of Each Class Name of Exchange on Which RegisteredCommon Stock, $0.001 par value per share The NASDAQ Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: NoneIndicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ☐ NO ☒Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. YES ☐NO ☒Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that theRegistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). YES ☒ NO ☐Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,”“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ☐ Accelerated filer☐Non-accelerated filer☒(Do not check if a smaller reporting company)Smaller reporting company ☐Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant toSection 13(a) of the Exchange Act. ☒Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒The aggregate market value of common stock held by non-affiliates of the registrant calculated based on the closing price of $7.34 (as adjusted to reflect the 1 for 14 reverse split that occurred on November 21, 2016) of theregistrant’s common stock as reported on The NASDAQ Global Market on October 31, 2016, the last business day of the registrant’s most recently completed second quarter, was $11,607,447.The number of shares of Registrant’s Common Stock outstanding as of July 1, 2017 was 9,713,042.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s Definitive Proxy Statement for its 2017 Annual Meeting of Stockholders (“Proxy Statement”), to be filed within 120 days of the Registrant’s fiscal year ended April 30, 2017, is incorporated byreference into Part III of this Annual Report on Form 10-K. Table of Contents PagePART I Item 1.Business 1Item 1A.Risk Factors 17Item 1B.Unresolved Staff Comments 41Item 2.Properties 41Item 3.Legal Proceedings 41Item 4.Mine Safety Disclosures 41 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 42Item 6.Selected Financial Data 44Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations 46Item 7A.Quantitative and Qualitative Disclosures About Market Risk 54Item 8.Financial Statements and Supplementary Data 54Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 54Item 9A.Controls and Procedures 54Item 9B.Other Information 55 PART III Item 10.Directors, Executive Officers and Corporate Governance 56Item 11.Executive Compensation 56Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 56Item 13.Certain Relationships and Related Transactions, and Director Independence 56Item 14.Principal Accounting Fees and Services 56 PART IV Item 15.Exhibits, Financial Statement Schedules 57Item 16.Form 10-K Summary 57Signatures 58 Index to Consolidated Financial Statements F-1 iPART ISPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Annual Report on Form 10-K contains forward-looking statements. All statements other than statements of historical fact are “forward-lookingstatements” for purposes of this Annual Report on Form 10-K. These forward-looking statements may include, but are not limited to, statements regarding ourfuture results of operations and financial position, business strategy, market size, potential growth opportunities, timing and results of preclinical and clinicaldevelopment activities, and potential regulatory approval and commercialization of product candidates. In some cases, forward looking-statements may beidentified by terminology such as “believe,” “may,” “will,” “should,” “predict,” “goal,” “strategy,” “potentially,” “estimate,” “continue,” “anticipate,”“intend,” “could,” “would,” “project,” “plan,” “expect,” “seek” and similar expressions and variations thereof. We have based these forward-lookingstatements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results ofoperations, business strategy, short-term and long-term business operations and objectives and financial needs. These forward-looking statements are subjectto a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section and elsewhere in this Annual Report on Form 10-K. Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible for ourmanagement to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, maycause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties andassumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adverselyfrom those anticipated or implied in the forward-looking statements.You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in theforward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected inthe forward-looking statements will be achieved or occur. We undertake no obligation to update publicly any forward-looking statements for any reason afterthe date of this report to conform these statements to actual results or to changes in our expectations, except as required by law.As used in this Annual Report on Form 10-K, the terms “KalVista,” “the Company,” “we,” “us,” and “our” refer to KalVista Pharmaceuticals, Inc. and,where appropriate, its consolidated subsidiary, unless the context indicates otherwise.Item 1. Business.OverviewWe are a clinical stage pharmaceutical company focused on the discovery, development and commercialization of small molecule proteaseinhibitors. Our first product candidates are inhibitors of plasma kallikrein being developed for two indications: hereditary angioedema (“HAE”) and diabeticmacular edema (“DME”). We apply our insights into the chemistry of proteases and, with our current programs, the biology of the plasma kallikrein system,to develop molecules with properties such as selectivity, potency and bioavailability that we believe will make them successful treatments for disease.There is good evidence that inhibition of plasma kallikrein is able to treat HAE. Currently marketed therapies are all administered by injection andwe anticipate considerable potential for orally delivered, small molecule treatments. In the case of DME, we are initially developing a plasma kallikreininhibitor which is administered directly into the eye but anticipate ultimate development of orally delivered drugs. To achieve these aims we are advancingseveral proprietary product candidates into clinical trials. We began a first-in-human clinical trial of our first oral HAE candidate, KVD818, in the thirdcalendar quarter of 2016 and plan to advance our lead DME candidate for intravitreal injection, KVD001, to Phase 2 trials later this year. We are currentlyprogressing additional oral HAE candidates through preclinical studies and plan to take at least one of those into the clinic in 2017 and an additionalprogram in 2018, in keeping with our strategy of developing a portfolio of molecules to yield a best-in-class therapy.1HAE is a rare and potentially life-threatening condition with symptoms that include episodes of debilitating and often painful swelling in the skin,gastrointestinal tract or airways. Prior clinical studies, including those for another currently marketed therapy have shown that inhibition of plasma kallikreinis a proven target in the treatment of HAE. A conveniently administered oral product could provide an opportunity to capture a significant portion of thecurrent market and expand it to patients with less frequent HAE attacks. We believe that HAE is a clinical indication and market that can be served by a focused commercial organization because there are a limited numberof primary prescribers and active patient-focused disease organizations for this rare disease, which has a prevalence of between approximately 1 in 50,000and 1 in 65,000 people. We intend to develop a portfolio of orally-delivered molecules, with the goal of providing a best-in-class therapeutic for thisindication. For this reason, we anticipate advancing multiple molecules to early stage clinical trials, only selecting those that will be advanced further oncewe have sufficient data to allow comparisons of the molecules based upon a matrix of key criteria that we believe best reflect the unmet needs of patients withthis disease.DME is the leading cause of moderate vision loss in most developed countries and diabetes, the underlying cause of DME, is the leading cause ofblindness among adults aged 20 to 74 years old, according to 2014 statistics published by the Center for Disease and Prevention. Our DME program isinitially focused on the development of an intravitreally administered small molecule plasma kallikrein inhibitor. We believe intravitreal plasma kallikreininhibitors may be an effective complementary therapy to vascular endothelial growth factor (“VEGF“) inhibitors and further improve visual acuity anddecrease macular thickening. Preclinical pharmacokinetic studies have shown that direct injection into the eye delivers a high drug concentration at thedesired site of action. The drug concentration is maintained for a prolonged period with a low systemic exposure, potentially supporting an extended dosingschedule. With our most advanced compound, KVD001, we have successfully completed a first-in-human trial in patients with DME and are planning for amultiple injection Phase 2 trial that we intend to commence later in 2017. In addition to KVD001, we also plan to develop an oral plasma kallikrein inhibitorto treat DME. An oral treatment may provide the opportunity to reduce treatment burden, treat patients earlier in disease development, and provide aconvenient and readily accessible treatment option for DME.StrategyKey elements of our strategy include: •Apply our deep scientific expertise in the area of serine proteases to develop novel oral therapies for indications with high unmet need. Ourcore scientific team has decades of experience working on protease inhibitors and developing compounds with high potency, selectivity andbioavailability. We have assembled a team of chemists and biologists who have demonstrated the ability to design and formulate multipledrug candidate programs from a broad variety of chemical classes, as indicated by our extensive intellectual property portfolio. Our initialfocus is specifically on development of plasma kallikrein inhibitors for HAE and DME; however, we believe our scientific capabilities alsocan be applied to other proteases to develop therapies for diseases with high unmet need and orphan indications. •Advance multiple HAE product candidates into clinical development. We intend to develop a best-in-class oral therapy for HAE and, toaccomplish that goal, we plan to bring multiple drug candidates into clinical trials and compare their performance before determining whichprogram, or programs, to advance to late stage development. Our first oral candidate, KVD818, is currently in Phase 1 clinical trials. We areconducting preclinical development of multiple additional drug candidates and plan to continue to advance those that meet our strictinternal development criteria. We anticipate bringing one additional candidate into clinical development this year and at least oneadditional candidate in 2018. •Continue to advance our intravitreal DME program and develop an oral therapy. KVD001, our first product candidate to treat DME, hasalready been advanced into clinical trials and is anticipated to begin a Phase 2 trial later in 2017. We also intend to develop an oral therapyfor this indication, which we believe could dramatically improve the standard of care for patients, since all current therapies are currentlydelivered by injection into the eye.2 •Grow our capabilities internally as well as through strategic partnerships. We intend to retain ownership and control of our pipelineprograms to key milestones. For certain indications that can be addressed by a focused organization, such as HAE, we may determine to keepall program rights and develop capabilities such as sales and marketing capabilities. For programs that address larger markets or requiregreater infrastructure or resources, such as DME, we may seek a partner that can provide those capabilities. Decisions on whether, and when,to engage in partnerships or collaborations will be based upon our evaluations of the relative risks and rewards of those collaborations ateach point in the development cycle. Plasma Kallikrein in HAE and DMEPlasma kallikrein is a serine protease enzyme that is a key early mediator of inflammation and edema or swelling. The body modulates theinflammatory effects of plasma kallikrein through a circulating inhibitor protein called C1-esterase inhibitor (“C1-INH”). Patients with HAE have geneticmutations that lead to either a deficiency or non-functioning of C1-INH, which results in an inability to control activated plasma kallikrein in affectedtissues. This excessive activation leads to inflammation, edema, and pain.Published laboratory work has shown that the eye is also a site of increased plasma kallikrein in DME. In diabetic patients, the retina is one of a fewtissues in which edema develops. Under normal circumstances the eye is protected from the diffusion of plasma proteins by an effective barrier. In diabetesthis barrier becomes less effective and allows plasma kallikrein to enter the eye. While C1-INH will also be able to enter by the same route, animal models ofDME have shown that the concentration of C1-INH in the vitreous fluid is insufficient to fully suppress the effects of plasma kallikrein on retinal edema. Overtime, this edema leads to retinal damage that causes blindness.Hereditary AngioedemaDisease OverviewHAE is a rare and potentially life-threatening genetic condition that occurs in between about 1 in 50,000 to 1 in 65,000 people, according tomultiple population-based epidemiological investigations. Excessive plasma kallikrein activation not sufficiently controlled by C1 inhibition leads to thetypical HAE attack. HAE attacks include episodes of intense swelling or edema usually in the skin, gastrointestinal tract or airways. They often lead totemporary disfiguration of various body parts including the hands, feet, face, body trunk, and genitals. In addition, patients often have bouts of excruciatingabdominal pain, nausea and vomiting that is caused by swelling in the intestinal wall. Airway swelling is particularly dangerous and can lead to death byasphyxiation.Most attacks occur spontaneously, with no apparent reason. However, anxiety, stress, minor trauma, surgery, or illnesses such as colds are often citedas prodromal events. Trauma to the oral cavity caused by dental procedures makes HAE patients particularly vulnerable to airway attacks. The frequency ofHAE attacks is highly variable, with some patients having attacks several times per week and others very infrequently. Although life-threatening airwayswelling is rare, at least half of HAE patients have experienced at least one such attack and airway attacks remain a major cause of mortality in HAE patients.The severity of attacks is unpredictable and not related to their underlying frequency. A patient with only one attack per year can nevertheless be at risk ofsuffering a laryngeal attack.HAE is caused primarily by genetic defects or mutations in the gene that regulates C1inhibition and is an autosomal dominant disease meaning that adefect in only one copy of the gene leads to symptoms and that it occurs at similar rates in both males and females. While HAE can result through inheritanceof a defective C1-INH gene from a parent, a number of cases also arise from novel mutations.C1-INH is a natural plasma-borne peptide that functions as an inhibitor of multiple serine proteases in both the complement and kallikrein kininsystems. C1-INH is the predominant physiological inhibitor of plasma kallikrein, and thereby suppresses the generation of bradykinin, a potent hormoneproduced by plasma kallikrein, that activates its receptors on blood vessels to increase vascular leakage. Uncontrolled plasma kallikrein activity leads to thetissue inflammation and edema that are the hallmarks of HAE. As such, plasma kallikrein is a clinically validated target for HAE and previous studies havedemonstrated that plasma kallikrein inhibition can both treat and prevent HAE attacks.3Current Treatments and Market opportunitiesThere are a number of marketed therapeutics for HAE which provide evidence that inhibition of plasma kallikrein activity will give therapeuticbenefit in HAE. Most relevant is ecallantide (Kalbitor®) which is a small protein inhibitor of plasma kallikrein that is approved for acute attacks of HAE.While effective, ecallantide has been associated with cases of anaphylaxis and its approval by the U.S. Food and Drug Administration (“FDA”) includes ablack box warning limiting its administration to healthcare professionals. Other therapies employ C1-INH replacement to control plasma kallikrein levels.Cinryze® and Berinert® are purified from human plasma, whereas Ruconest® is a recombinant product. Icatibant (Firazyr®) is a synthetic peptide-basedantagonist that blocks the activity of bradykinin. All of these products are administered by injection, which is typically less convenient for patients and hasthe potential to reduce to compliance. We believe that a safe and effective oral agent has the potential to transform treatment for this disease. We also believethat opportunities exist for both acute and prophylaxis treatments, and intend to consider all of our programs as potential therapies in both segments of themarket. For this reason, we plan to evaluate multiple formulations and profiles of our programs as part of our clinical development strategy.Our Portfolio of HAE ProgramsKVD818 is the first of our portfolio of orally available plasma kallikrein inhibitors to progress to clinical testing. In common with other candidates itis a potent and selective inhibitor of human plasma kallikrein that displays properties which we believe support its investigation in early clinical trials toassess its suitability to progress to trials in HAE patients. We are currently studying KVD818 in a first-in-human study in the UK that has explored multipledoses and formulations. To date, we have demonstrated that KVD818 achieves exposures in subjects and has been generally well-tolerated. We plan tocontinue to explore the properties of KVD818 to support decisions on further development as well as to enhance our knowledge of HAE therapy and informour portfolio strategy.We are developing additional program candidates in order to expand the universe of properties and increase the likelihood of delivery of a best-in-class treatment for HAE. The first of these additional product candidates is KVD900. Consistent with our strategy of progressing multiple candidates, we arepreparing this molecule for clinical testing and plan to have enabled the first-in-human study before the end of the year. KVD900 is a potent inhibitor ofplasma kallikrein displaying 50% inhibition with a concentration of 6nM, and shows very high selectivity against related proteases as shown in Table 1below. Of particular note is that it is >6000 fold selective against tissue kallikrein (also called tissue kallikrein 1 or KLK1). This enzyme shares the samesubstrate as plasma kallikren and has been linked to effects on cardiac safety, making selectivity against it an important element of our design process. Enzyme (Human) Fold selectivityTissue Kallikrein >6000Factor XIa >6000Factor XIIa >6000Plasmin >6000Thrombin >6000Trypsin >6000 Table 1: Selectivity of KVD900 against human proteases related to plasma kallikrein.In ongoing preclinical safety studies, KVD900 is rapidly and highly absorbed. In rats, plasma concentrations up to 30,000-fold IC50 have beenobtained within one hour following dosing and maintained well above IC50 for at least 24 hours. In addition, in non-animal safety studies to date, KVD900has shown a profile consistent with progression to clinical studies. For example, the potential for a compound to affect, or be affected by, the dosing ofanother drug (drug-drug interaction), can be investigated by looking at its impact on the enzymes responsible for metabolizing drugs. In these assays againstcytochrome P450 enzymes, KVD900 is >1000 fold less potent than it is against plasma kallikrein.4Manufacture of KVD900 has been completed at the multi-kilogram scale to support preclinical and clinical testing and multiple formulations havebeen developed, manufactured and dosed to primates establishing the feasibility of manufacture of clinically acceptable dose forms. These dose forms aredesigned to enable variable dosing regimens.In parallel with progression of KVD900, we are not only focused on expansion of our proprietary compound portfolio but also our profilingtechniques to enable a collection of molecules differentiated by both chemical structure and properties, maximizing the chance of discovering andprogressing best-in-class treatments for HAE. Our scientific team has demonstrated the ability to consistently generate new candidate molecules, enabling arigorous selection process that only advances programs that meet strict internal criteria. As part of this effort, we have developed assays that provideproprietary insights into inhibition of plasma kallikrein, supporting selection of product candidates at an earlier stage that may have a higher likelihood ofdemonstrating clinical success. A number of these earlier candidates are being profiled for progression to scale-up manufacture and entry into formal safetystudies.Diabetic Macular EdemaDisease OverviewDME occurs as a result of diabetes and is caused by the breakdown of the endothelial barrier function in the retina, resulting in the accumulation offluid in the macula. This leads to edematous thickening of the macula region of the retina and loss of visual acuity, potentially leading to blindness. DME isa major complication associated with diabetes, affecting an estimated 26% of type 1 diabetic patients after 14 years of the disease, and an estimated 29%within their lifetime; 17% of type 1 diabetic patients were estimated to develop clinically significant macular edema within their lifetime. Approximately900,000 patients in the United States have active DME and are at serious risk of vision loss, according to a study published in 2015.The current standard of care for DME in the United States is therapy directed against VEGF, a hypoxia-induced protein that stimulates the growth ofblood vessels in the retina. FDA approved anti-VEGF therapies for DME are ranibizumab (Lucentis®) and aflibercept (Eylea®). Both of these products areadministered via intravitreal injection at roughly monthly intervals. In addition to these two products, a large fraction of patients is treated with bevacizumab(Avastin®), another therapy that works through the same mechanism of binding to VEGF but has not been approved for ophthalmic use. Bevacizumab ispriced based on its application in oncology and off-label use by retinal specialists typically results in treatment at a fraction of the cost seen with bothranibizumab and aflibercept. Patients are also treated with laser therapy in some circumstances.A number of other drug therapies are used to treat DME, including corticosteroid anti-inflammatories such as triamcinolone acetonide, fluocinolone,and dexamethasone. These drugs also are administered via intravitreal injection. Sustained release versions of fluocinolone (Illuvien®) and dexamethasone(Ozurdex®) have recently been approved for use in DME, substantially reducing the number of injections required to obtain and maintain clinical responses.These novel corticosteroid formulations led to 15-letter improvements in visual acuity in approximately 20-30% of patients. Corticosteroid treatment,however, is associated with a dramatic increase in cataract formation and a rise in intraocular pressure, reducing the attractiveness of these agents as potentialtherapies in many patients.In a recent large, multi-center clinical trial in DME patients, anti-VEGF therapy led to approximately 20% of patients improving their visual acuityby 15 letters or more after a median of 9 or 10 intravitreal injections, leaving a significant portion of the patients with inadequate control of their disease.Further, in one study conducted for an approved VEGF inhibitor, 40% of patients displayed no visual improvement following anti-VEGF therapy aftermonths of treatment. Unfortunately, even for those patients that do initially respond well to anti-VEGF therapy, their disease recurs within several months oftreatment cessation, thus requiring extended rounds of intravitreal injections to achieve and maintain a clinical response.Research into the biology underlying DME led by our scientific team has identified plasma kallikrein as a potential novel target for this indication.They found that plasma kallikrein levels were higher in vitreous fluid from DME patients compared to patients without diabetic retinopathy. They furtherfound that targeted disruption of the gene for plasma prekallikrein or the administration of a small molecule plasma kallikrein inhibitor led to decreases5in retinal thickening in animal retinopathy models. We believe that inhibition of plasma kallikrein provides an opportunity to address DME through a novelmechanism that is independent of the current pathways targeted by anti-VEGF and steroid therapies.Our DME Development ActivitiesOur first potential DME therapy is KVD001. KVD001 is a potent inhibitor of human plasma kallikrein with an IC50 of approximately 10nM and ahigh degree of selectivity against a broad range of other proteases. We have developed KVD001 for intravitreal injection because trials using this deliverymodality will provide a relatively early and direct proof of concept for its product candidate since the molecule is delivered directly to the site of edema.Since other products such as anti-VEGF therapies are also delivered intravitreally, we believe this will be accepted by both physicians and patients and willnot lead to any competitive disadvantages. Another inherent advantage of intravitreal administration is that there is very limited systemic exposure, thusreducing potential systemic safety concerns.We have completed an open-label single ascending dose Phase 1 trial of KVD001 in 14 DME patients, all of whom had previously received anti-VEGF treatment. This trial investigated three doses of KVD001: 1, 3, and 10 µg/eye. While this trial was not powered to show statistically significantimprovements in visual acuity, a pooled analysis of all patients and all doses demonstrates a trend toward improvement over time, with the mean change invisual acuity following a single dose of KDV001 of approximately four letters at 84 days following treatment. No adverse events were considered related tostudy drug at the low (n=3 patients) or high (n=8 patients) doses. At the mid-dose (n=3 patients) two adverse events were considered related to the study drugalthough both events were also considered related to study procedures. Those study procedures consist of intravitreal injection, which includes inherent riskssuch as intraocular inflammation, sterile and culture positive endophthalmitis, corneal decomposition, retinal detachment, and retinal tear. The first of theseadverse events was a case of eye inflammation considered of mild intensity and possibly related to study drug and study procedure. The second was a case ofincreased intraocular pressure considered of severe intensity and related to study procedure and probably related to study drug. These results represent thefirst investigation of clinical application of plasma kallikrein inhibitors in DME and are an encouraging sign of the potential of KVD001, and plasmakallikrein inhibitors in general, in this indication.Following this study, we conducted further preclinical testing to enable multiple monthly injections of KVD001, as well as allow concurrenttreatment with both KVD001 and anti-VEGF therapies. We believe the ability to provide patients with multiple injections and longer duration of treatmentmay further enhance efficacy beyond that observed in the single dose Phase 1 trial. We are currently planning a Phase 2 trial of KVD001 administered byintravitreal injection in DME patients that will consist of four injections over a period of three months, and will include a control group. We intend to selectpatients who have previously been treated with anti-VEGF therapies but have experienced insufficient response. The primary outcome will be an increase invisual acuity following the final injection. We anticipate this trial will last approximately 12 months and currently plan to launch the trial later in 2017.Potential for Systemic DeliveryIn parallel with the clinical development of its intravitreal product candidate KVD001, we intend to identify and advance plasma kallikreininhibitors as oral therapies for DME. We believe that a safe and effective oral therapy has the potential to transform the treatment of DME which to-date hasbeen dominated by drug therapies that must be injected intravitreally. Future trials in DME with oral kallikrein inhibitors may focus on the treatment ofearlier stage disease, a stage at which intravitreal injections are not a desirable solution due to their inherently invasive nature and consequent risk of adversereactions.CompetitionIn HAE, we expect to face competition from several FDA-approved therapeutics, including Cinryze, marketed by Shire in the United States andEurope for the prevention of angioedema attacks in adults and adolescents; Firazyr, marketed by Shire in the United States, Europe and certain othergeographic territories for the treatment of acute angioedema attacks in adult patients; Kalbitor, an injectable plasma kallikrein inhibitor marketed by Shire forthe resolution of acute attacks in adolescent and adult HAE patients; Berinert and Haegarda, marketed by CSL Behring6for the prophylaxis and treatment of acute abdominal, facial or laryngeal attacks of HAE in adults and adolescents; and Ruconest, marketed by PharmingGroup for the treatment of acute angioedema attacks in adult patients. We are also aware of companies that are engaged in the clinical development of otherproduct candidates, including a plasma kallikrein monoclonal antibody (SHP643, from Shire) and an oral plasma kallikrein inhibitor (BCX7353, fromBiocryst Pharmaceuticals ) for the treatment of HAE patients.In DME, we expect to face competition from several FDA-approved therapeutics, including anti-VEGF therapies Lucentis, marketed by Roche andNovartis, Eylea, marketed by Regeneron, and off label use of Avastin from Roche. We also face competition from various corticoid steroids includingextended release formulations lluvien, marketed by Alimera, and Ozurdex, marketed by Allergan. We further expect to compete with generic corticosteroidssuch as acetonide, fluocinolone, and dexamethasone and we are aware of a number of other companies that have product candidates in early clinical trials,including Novartis, GlaxoSmithKline, Boehringer Ingelheim, Roche, Regeneron, Ohr Pharmaceutical, Aerpio Therapeutics, Verseon, Thrombogenics andAllegro Ophthalmics. Verseon and Thrombogenics are also developing plasma kallikrein inhibitors for the treatment of DME by either topical administration(Verseon) or intravitreal injection (Thrombogenics).Intellectual PropertyOur success substantially depends on our ability to obtain and maintain patents and other forms of intellectual property rights for our productcandidates, methods used to manufacture our product candidates and methods for treating patients using our product candidates, as well as our ability topreserve our trade secrets, to prevent third parties from infringing upon our proprietary rights and to operate without infringing upon the proprietary rights ofothers. As of April 30, 2017, we are the owner of five U.S. patents expiring between 2023 and 2034, absent any extensions, as well as four pending U.S. patentapplications and five pending U.S. provisional applications. Any patents issuing from the foregoing owned or licensed U.S. applications are expected toexpire in 2034, absent any adjustments or extensions. As of April 30, 2017, we owned a total of 89 pending foreign applications and 89 patents in multiplejurisdictions. Any issued patents, or those issuing from these foreign patent applications, are expected to expire between 2023 and 2037, absent anyadjustments or extensions. As of April 30, 2017, we also controlled three pending international applications that, if issued, are expected to expire in 2035,absent any adjustments or extensions. The chemical structures of KVD001 and KVD818 are included in composition of matter applications.KVD001 is covered by U.S. patents and patent applications covering composition of matter, methods of treatment, solid form and clinicalformulations. The anticipated expiration dates of these patents, or patents arising from applications, range from 2032 to 2034, absent any adjustments orextensions.Our portfolio of oral plasma kallikrein inhibitors, including KVD818 and KVD900, is covered by U.S. patent applications and pending internationalapplications covering composition of matter and methods of treatment and any patents arising from those applications are expected to expire between 2034to 2035, absent any adjustments or extensions. New U.S. provisional applications directed to solid forms and further compositions of matter were filed in2016 and 2017.In addition, we own a portfolio of patents and patent applications not related to the former Carbylan Therapeutics product candidates following theshare purchase transaction with KalVista Pharmaceuticals Limited. As of April 30, 2017, this included seven granted U.S. patents expiring between 2028 and2032, as well as three pending U.S. patent applications which would be expected to expire between 2030 and 2034. Also as of April 30, 2017, this portfolioincluded 22 pending foreign applications and 31 foreign granted patents.Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in various countries where patentprotection is obtained. The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, the scope of itscoverage and the availability of legal remedies in the country.We also use other forms of protection, such as trademark, copyright and trade secret protection for our intellectual property, particularly where we donot believe patent protection is appropriate or obtainable. We require our employees, consultants, contractors and other advisors to execute nondisclosureand assignment of invention7agreements upon commencement of their respective employment or engagement. In addition, we also require confidentiality or service agreements from thirdparties that receive confidential information or materials.Government Regulation and Product ApprovalGovernment authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the UnitedKingdom and European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval,packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and exportof pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along withsubsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financialresources.FDA approval processIn the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, and otherfederal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval,labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDArefusal to approve pending new drug applications (“NDA”), warning or untitled letters, product recalls, product seizures, total or partial suspension ofproduction or distribution, injunctions, fines, civil penalties, and criminal prosecution.Pharmaceutical product development for a new product or certain changes to an approved product in the United States typically involves preclinicallaboratory and animal tests, the submission to the FDA of an Investigational New Drug (“IND”), which must become effective before clinical testing maycommence in the United States, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication forwhich FDA approval is sought. Satisfaction of FDA approval requirements prior to marketing a pharmaceutical product typically takes many years and theactual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.Preclinical studies include evaluation of product chemistry, formulation and manufacturing process, as well as toxicity studies in animals to assessthe characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations andrequirements, including good laboratory practices and good manufacturing practice (“cGMP”). The results of preclinical testing are submitted to the FDA aspart of an IND along with the information on product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long term preclinicaltests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the initial IND is “opened” (i.e. effective). For the initial INDsubmission, a 30-day waiting period after the submission of the IND is required prior to the commencement of the clinical trial in humans. If the FDA hasneither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. For subsequent clinical trialprotocols submitted to the IND, there is no mandated review time for FDA. Clinical trials involve the administration of the investigational drug to healthyvolunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) incompliance with good clinical practice (“GCP”), an international standard designed to protect the rights, safety and well-being of trial subjects and to ensurethe integrity of the clinical trial data generated; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoringsafety, and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must besubmitted to the FDA as part of the IND.The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions if it believes that theclinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The trialprotocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board (“IRB”), for approval prior tothe start of the clinical trial. An IRB may also order the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with theIRB’s requirements, or may impose other conditions.8Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, theinitial introduction of the drug into healthy human subjects or patients, the product is tested to assess metabolism, pharmacokinetics, pharmacologicalactions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in a limited patientpopulation to determine the effectiveness of the drug for a particular indication, optimization of the dose, and to identify common adverse effects and safetyrisks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtainthe additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permitthe FDA to evaluate the overall benefit risk relationship of the drug and to provide adequate information for the labeling of the product. In most cases, theFDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 trial with other confirmatoryevidence may be sufficient in rare instances where the trial is a large multicenter trial demonstrating internal consistency and a statistically persuasive findingof a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of theresult in a second trial would be practically or ethically impossible.After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required beforemarketing of the product may begin in the United States. The NDA must include the results of all preclinical and clinical data, including pharmacology andtoxicology results, and the results of other testing and a compilation of data relating to the product’s chemistry, manufacture, and controls. The cost ofpreparing and submitting a NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee, and once approved,the NDA is also subject to annual product and establishment user fees. These fees are typically increased annually. The FDA has 60 days from its receipt of anNDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permitsubstantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in thereview of NDAs. Most such applications for standard review drug products are reviewed within ten months of the date the FDA files the NDA; mostapplications for priority review drugs are reviewed within six months of the date the FDA files the NDA. Priority review can be applied to a drug that the FDAdetermines has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectivenesscompared to available therapies. The review process for both standard and priority review may be extended by the FDA for three additional months toconsider certain late-submitted information, or information intended to clarify information already provided in the submission.After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A completeresponse letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA toreconsider the application. If, or when, those deficiencies have been addressed to the FDA’s satisfaction, the FDA will issue an approval letter. The FDA hascommitted to reviewing such additional data in two or six months depending on the type of information included. An approval letter authorizes commercialmarketing of the drug with specific prescribing information for the indication being supported. As a condition of NDA approval, the FDA may require a riskevaluation and mitigation strategy (“REMS”) if it is considered that additional measures are needed to ensure that the benefits of the drug outweigh thepotential risks. REMS can include the use of medication guides and communication plans for healthcare professionals, and elements to assure safe use(“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certaincircumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability ofthe product. Moreover, a condition of the NDA approval may require substantial post-approval testing and surveillance to monitor the product’s safety orefficacy.Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified followinginitial marketing. Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturingprocesses or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplementfor a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewingNDA supplements as it does in reviewing NDAs.9Foreign clinical studies to support an NDAThe FDA will accept as support for marketing approval of a product (NDA) well-designed, well-conducted, clinical studies conducted outside of theUnited States if the studies have been conducted in accordance with the exact same standards of GCP, as required in the United States, and the protocol wassubmitted to the IND. FDA may validate the data from the study through an onsite inspection, if necessary. Clinical studies conducted outside the UnitedStates are subject to the same rigorous regulatory controls as the United States (see “— Europe / rest of world government regulation” below).A sponsor or applicant who wishes to rely on a non-IND foreign clinical study to support an IND must submit the following supporting informationto the FDA to demonstrate that the study conformed to GCP: •the investigator’s qualifications; •a description of the research facilities; •a detailed summary of the protocol and study results and, if requested, case records or additional background data; •a description of the drug substance and drug product, including the components, formulation, specifications, and, if available, thebioavailability of the drug product; •information showing that the study is adequate and well controlled; •the name and address of the independent ethics committee that reviewed the study and a statement that the independent ethics committeemeets the required definition; •a summary of the independent ethics committee’s decision to approve or modify and approve the study, or to provide a favorable opinion; •a description of how informed consent was obtained; •a description of what incentives, if any, were provided to subjects to participate; •a description of how the sponsors monitored the study and ensured that the study was consistent with the protocol; •a description of how investigators were trained to comply with GCP and to conduct the study in accordance with the study protocol; and •a statement on whether written commitments by investigators to comply with GCP and the protocol were obtained.Orphan drug designationUnder the Orphan Drug Act, the FDA may grant orphan drug designation to drug products intended to treat a rare disease or condition. This is definedas a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States,there is no reasonable expectation that the cost of developing and making a product available in the United States for such disease or condition will berecovered from sales of the product.A request for orphan drug designation must be submitted and approved prior to submitting an NDA. After the FDA grants orphan drug designation,the generic identity of the drug product and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation does not convey anyadvantage in, or shorten the duration of, the regulatory review and approval process of an NDA. The first NDA applicant to receive FDA approval for a drugproduct containing a particular active moiety to treat a particular disease with FDA orphan drug designation is entitled to a seven-year exclusive marketingperiod in the United States for that product for that indication. During the seven-year exclusivity period, the FDA may not approve any other applications tomarket a drug product containing the same active moiety for the same disease, except in limited circumstances, such as a showing of clinical superiority tothe product with orphan drug exclusivity. A product is clinically superior if it is safer, more effective or makes a major contribution to patient care. Orphandrug exclusivity does not prevent the FDA from10approving a drug product containing a different active moiety for the same disease or condition, or the same drug product for a different disease or condition.Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the NDA user fee.Disclosure of clinical trial informationSponsors of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information.Information related to the product, patient population, phase of investigation, trial sites and investigators, and other aspects of the clinical trial is then madepublic as part of the registration. Disclosure of the results of these trials can be delayed until the new product or new indication being studied has beenapproved. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.Pediatric informationUnder the Pediatric Research Equity Act (“PREA”) NDAs or supplements to NDAs must contain data to assess the safety and effectiveness of the drugfor the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which thedrug product is safe and effective. A Pediatric Submission Plan (“PSP”) must be submitted to FDA for review at the latest 60 days following the End of Phase2 meeting. The PSP will include a full pediatric clinical development plan, or a request for full or partial waiver, or a deferral, for conducting pediatric clinicaltrial data. The FDA reviews and approves the PSP, or will request amendments to the plan. Unless otherwise required by regulation, PREA does not apply toany drug product for an indication for which orphan designation has been granted.Post-approval requirementsOnce an NDA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approvalmarketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientificand educational activities and promotional activities involving the internet. Drugs may be marketed only for the approved indications and in accordancewith the provisions of the approved labeling.Adverse event reporting and submission of periodic reports is required following FDA approval of an NDA. The FDA also may require post-marketingtesting, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approvalthat could restrict the distribution or use of the product. In addition, quality control, drug product manufacture, packaging, and labeling procedures mustcontinue to conform to cGMPs after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with theFDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agencyinspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money, and effort in the areasof production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if acompany fails to comply with regulatory standards, if we encounter problems following initial marketing, or if previously unrecognized problems aresubsequently discovered.Other U.S. healthcare laws and compliance requirementsIn the United States, our activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA,including but not limited to, the Centers for Medicare and Medicaid Services (“CMS”), other divisions of the U.S. Department of Health and Human Services(such as the Office of Inspector General), the U.S. Department of Justice (“DOJ”), and individual U.S. Attorney offices within the DOJ, and state and localgovernments. For example, sales, marketing and scientific/educational grant programs may have to comply with the anti-fraud and abuse provisions of theSocial Security Act, the false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act (“HIPAA”), andsimilar state laws, each as amended, as applicable.11The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting orreceiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arrangingfor the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. The term remuneration hasbeen interpreted broadly to include anything of value. The Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceuticalmanufacturers on one hand and prescribers, purchasers, and formulary managers on the other. There are a number of statutory exceptions and regulatory safeharbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remunerationthat may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception orsafe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per seillegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of allof its facts and circumstances. Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor.Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, (“ACA”), to astricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committeda violation. In addition, the ACA codified case law that a claim including items or services resulting from a violation of the federal Anti- Kickback Statuteconstitutes a false or fraudulent claim for purposes of the federal False Claims Act (discussed below).The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is determined to have presented orcaused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed oris false or fraudulent.Federal false claims and false statement laws, including the federal False Claims Act, prohibit, among other things, any person or entity fromknowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal healthcare programs, includingMedicare and Medicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to thefederal government. As a result of a modification made by the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” formoney or property presented to the U.S. government. Recently, several pharmaceutical and other healthcare companies have been prosecuted under theselaws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companieshave been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, and thus generally non-reimbursable, uses.HIPAA created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, ascheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the controlor custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, andknowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious orfraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the Anti-Kickback Statute, the ACAamended the intent standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of thestatute or specific intent to violate it in order to have committed a violation.Also, many states have similar fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other stateprograms, or, in several states, apply regardless of the payor. Additionally, to the extent that any of our products are sold in a foreign country, we may besubject to similar foreign laws.We may be subject to data privacy and security regulations by both the federal government and the states in which it conducts business. HIPAA, asamended by the Health Information Technology for Economic and Clinical Health Act, (“HITECH”), and its implementing regulations, imposes requirementsrelating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy andsecurity standards directly applicable to business associates, independent contractors or agents of12covered entities that receive or obtain protected health information in connection with providing a service on behalf of a covered entity. HITECH alsocreated four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to business associates, and gavestate attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costsassociated with pursuing federal civil actions. In addition, many state laws govern the privacy and security of health information in specified circumstances,many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.Additionally, the federal Physician Payments Sunshine Act within the ACA, and its implementing regulations, require that certain manufacturers ofdrugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (withcertain exceptions) report annually to CMS information related to certain payments or other transfers of value made or distributed to physicians and teachinghospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually certainownership and investment interests held by physicians and their immediate family members. Moreover, the Drug Supply Chain Security Act imposes newobligations on manufacturers of pharmaceutical products related to product tracking and tracing. Legislative and regulatory proposals have been made toexpand post-approval requirements and restrict sales and promotional activities for pharmaceutical products.In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributorsof drug products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers ordistributors have no place of business within the state. Some states also impose requirements on manufacturers and distributors to establish the pedigree ofproduct in the chain of distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracingproduct as it moves through the distribution chain. Several states have enacted legislation requiring pharmaceutical and biotechnology companies toestablish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials andother activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physicianprescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.All of our activities are potentially subject to federal and state consumer protection and unfair competition laws.If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other governmental regulationsthat apply to us, we may be subject to penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement,exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individualwhistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm,administrative burdens, diminished profits and future earnings, and the curtailment or restructuring of our operations, any of which could adversely affect ourability to operate our business and our results of operations.Coverage, pricing and reimbursementSignificant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we obtain regulatory approval. In theUnited States and markets in other countries, sales of any products for which it receives regulatory approval for commercial sale will depend, in part, on theextent to which third-party payors provide coverage, and establish adequate reimbursement levels for such products. In the United States, third-party payorsinclude federal and state healthcare programs, private managed care providers, health insurers and other organizations. The process for determining whether athird-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursementrate that such a payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary,which might not include all of the FDA-approved products for a particular indication. Third-party payors are increasingly challenging the price, examiningthe medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy.We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of its products, inaddition to the costs required to obtain the FDA approvals. Our product candidates13may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a product does not imply that an adequatereimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also providecoverage for the product. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriatereturn on its investment in product development.Different pricing and reimbursement schemes exist in other countries. In the EU, governments influence the price of pharmaceutical products throughtheir pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Somejurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtainreimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particularproduct candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and controlcompany profits. The downward pressure on health care costs has become intense. As a result, increasingly high barriers are being erected to the entry of newproducts. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.The marketability of any product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and it expectswill continue to increase the pressure on healthcare pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorablecoverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies andreimbursement rates may be implemented in the future.Healthcare reformIn March 2010, President Obama enacted the ACA, which has the potential to substantially change healthcare financing and delivery by bothgovernmental and private insurers, and significantly impact the pharmaceutical and biotechnology industry.Among the ACA provisions of importance to the pharmaceutical industries, in addition to those otherwise described above, are the following: •an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs apportioned amongthese entities according to their market share in some government healthcare programs that began in 2011; •an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program, retroactive to January 1,2010, to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively and capped the total rebateamount for innovator drugs at 100% of the Average Manufacturer Price; •a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts offnegotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’outpatient drugs to be covered under Medicare Part D; •extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed careorganizations; •expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additionalindividuals beginning in 2014 and by adding new mandatory eligibility categories for individuals with income at or below 133% of thefederal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability; •expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;14 •a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectivenessresearch, along with funding for such research; •expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigativepowers, and enhanced penalties for noncompliance; •a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that areinhaled, infused, instilled, implanted, or injected; •requirements to report certain financial arrangements with physicians and teaching hospitals; and •a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians.Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of theACA. In addition, the current administration and Congress will likely continue to seek legislative and regulatory changes, including repeal and replacementof certain provisions of the ACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilitiesunder the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatoryburden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In March 2017, following thepassage of the budget resolution for fiscal year 2017, the U.S. House of Representatives passed legislation known as the American Health Care Act, which, ifenacted, would have amended or repealed significant portions of the ACA. We believe the U.S. Senate is unlikely to adopt the American Health Care Act aspassed by the U.S. House of Representatives. However, the U.S. Senate could adopt the American Health Care Act as passed by the U.S. House ofRepresentatives or other legislation to amend or replace elements of the ACA. It is uncertain whether the American Health Care Act will become law. Wecontinue to evaluate the effect that the ACA and its possible repeal and replacement has on our business.In addition, other legislative changes have been proposed and adopted in the United States since the ACA was enacted. For example, in August 2011,the President signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction torecommend to Congress proposals in spending reductions. The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of atleast $1.2 trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs. This includesaggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013 and will stay in effectthrough 2025 unless additional Congressional action is taken. Additionally, in January 2013, the American Taxpayer Relief Act of 2012 was signed into law,which, among other things, reduced Medicare payments to several providers, including hospitals and imaging centers. These new laws may result inadditional reductions in Medicare and other healthcare funding, which could have a material adverse effect on customers for our products, if approved, and,accordingly, our financial operations.The Foreign Corrupt Practices ActThe Foreign Corrupt Practices Act (“FCPA”) prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering ofanything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreignentity in order to assist the individual or business in obtaining or retaining business. The FCPA also obligates companies whose securities are listed in theUnited States to comply with accounting provisions requiring us to maintain books and records that accurately and fairly reflect all transactions of thecorporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.Additional regulationIn addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safetyand Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern the use,handling and disposal of15various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of theenvironment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that we are in materialcompliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannotpredict, however, how changes in these laws may affect our future operations.Europe / rest of world government regulationIn addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among other things,clinical trials and any commercial sales and distribution of its products. Whether or not we obtain FDA approval of a product, we must obtain the requisiteapprovals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certaincountries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to thecommencement of human clinical trials. In the European Union (“EU”), for example, a clinical trial application must be submitted to each country’s nationalhealth authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the clinical trial application is approved inaccordance with a country’s requirements, clinical trial development may proceed. The requirements and process governing the conduct of clinical trials,product licensing, pricing and reimbursement vary from country to country. In all cases, the clinical trials are conducted in accordance with GCP and theapplicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.To obtain regulatory approval of an investigational drug product under EU regulatory systems, we must submit a marketing authorizationapplication. The application used to file the NDA in the United States is similar to that required in the EU, with the exception of, among other things,country-specific document requirements. For other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirementsgoverning the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials areconducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.If we or our potential collaborators fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines,suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.Other regulationsWe are subject to numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmentalprotection, fire hazard control, and disposal of hazardous or potentially hazardous substances. We may incur significant costs to comply with such laws andregulations now or in the future.EmployeesAs of April 30, 2017, we had a total of 28 full-time employees, of whom 10 were located in the United States and 18 were located in the UnitedKingdom. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We have not experienced any workstoppages, and consider our relations with employees to be good.Corporate InformationWe were incorporated in the State of Delaware on March 26, 2004 as Sentrx Surgical, Inc. We changed our name to Carbylan Biosurgery, Inc. onDecember 14, 2005 and to Carbylan Therapeutics, Inc. on March 7, 2014. In June 2016, we entered into a definitive share purchase agreement, with KalVistaPharmaceuticals Ltd. (“KalVista Limited”), a private company limited by shares incorporated and registered in England and Wales and the shareholders ofKalVista Limited, pursuant to which the shareholders of KalVista Limited became the majority owners of the company. We changed our name to KalVistaPharmaceuticals, Inc. on November 21, 2016 in connection with the completion of the share purchase transaction. Our principal executive offices are locatedat One16Kendall Square, Bld 200, Ste 2203, Cambridge, MA 02139, and our telephone number is (857) 999-0075. Our website address is www.kalvista.com. Theinformation contained on, or that can be accessed through, our website is not a part of this report. We have included our website address in this report solelyas an inactive textual reference.Financial InformationWe manage our operations and allocate resources as a single reporting segment. Financial information regarding our operations, assets and liabilities,including our net loss for the years ended April 30, 2017, 2016 and 2015 and our total assets as of April 30, 2017 and 2016, is included in our ConsolidatedFinancial Statements in Item 8 of this Annual Report.Available InformationWe file annual, quarterly, and current reports, proxy statements, and other documents with the Securities and Exchange Commission (“SEC”) underthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), which are available on our corporate website at www.kalvista.com. The public mayread and copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public mayobtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an Internet website thatcontains reports, proxy and information statements, and other information regarding issuers, including us, that file electronically with the SEC. The publiccan obtain any documents that we file with the SEC at www.sec.gov. The information posted on or accessible through these websites are not incorporatedinto this filing.Item 1A. Risk FactorsInvesting in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, togetherwith all of the other information in this Annual Report on Form 10-K, including the consolidated financial statements, the notes thereto and the sectionentitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this Annual Report on Form 10-K before deciding whether to invest in shares of our common stock. The risks and uncertainties described below are not the only ones we face. Additionalrisks and uncertainties that we are unaware of or that we deem immaterial may also become important factors that adversely affect our business. If any ofthe following risks actually occur, our business, financial condition, results of operations and future prospects could be materially and adversely affected.In that event, the market price of our stock could decline, and you could lose part or all of your investment.We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintainprofitability. Since inception, we have incurred significant operating losses as we focused on our discovery efforts and developing our product candidates. Wehave recently initiated clinical development of our lead product candidates, KVD818, for the treatment of HAE, and KVD001, for the treatment of DME, andexpect that it will be many years, if ever, before we have a product candidate ready for commercialization. To date, we have financed our operations primarilythrough private placements of our preferred stock and through the share purchase transaction with Carbylan Therapeutics. We expect to continue to incursignificant expenses and increasing operating losses for the foreseeable future. We anticipate that our expenses will increase substantially if and as we: •continue clinical development of our product candidates; •seek to identify additional product candidates; •acquire or in-license other products and technologies or enter into collaboration arrangements with regards to product discovery; •initiate clinical trials for our product candidates; •seek marketing approvals for our product candidates that successfully complete clinical trials;17 •establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval; •maintain, expand and protect our intellectual property portfolio; •hire additional personnel; •add operational, financial and management information systems and personnel, including personnel to support our product development andplanned future commercialization efforts; and •incur increased costs as a result of operating as a public company. To become and remain profitable, we must develop and eventually commercialize a product or products with significant market potential. This willrequire us to be successful in a range of challenging activities, including completing clinical trials of our product candidates, obtaining marketing approvalfor these product candidates and manufacturing, marketing and selling those products for which we may obtain marketing approval. We may never succeedin these activities and, even if we do, we may never generate revenues that are significant or large enough to achieve profitability. If we do achieveprofitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to become and remain profitable woulddecrease the value of our business and could impair our ability to raise capital, maintain our discovery and preclinical development efforts, expand ourbusiness or continue our operations and may require us to raise additional capital that may dilute the ownership interest of common stockholders. A declinein the value of our business could also cause stockholders to lose all or part of their investment.Our short operating history may make it difficult to evaluate the success of our business to date and to assess our future viability.We are an early stage clinical development company and our operations to date have been limited to organizing and staffing, business planning,raising capital, acquiring and developing the technology, identifying potential product candidates, undertaking preclinical studies and early stage clinicalstudies of our most advanced product candidates, KVD001, which we are planning to advance into Phase 2 clinical trials, and KVD818, for which weinitiated a Phase 1 clinical trial in 2016. We have not yet demonstrated our ability to successfully complete large-scale, pivotal clinical trials, obtainmarketing approvals, manufacture a commercial scale product or arrange for a third party to do so on our behalf, or conduct sales and marketing activitiesnecessary for successful product commercialization. It takes an average of about 10 to 15 years to develop one new medicine from the time it is discovered towhen it is available for treating patients. Consequently, any predictions made about our future success or viability based on our short operating history todate may not be as accurate as they could be if we had a longer operating history. In addition, as a new business, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. Wewill need to transition from a company with a research focus to a company capable of supporting commercial activities. We may not be successful in such atransition.We will need substantial additional funding. If we are unable to raise capital when needed, we may need to delay, reduce or eliminate our productdevelopment programs or commercialization efforts.We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical developmentcollaborations to identify new clinical candidates and initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, if weobtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing,manufacturing and distribution. Accordingly, we will need to obtain substantial additional funding for our continuing operations. If we are unable to raisecapital when needed or on attractive terms, we may be forced to delay, reduce or eliminate our discovery and preclinical development programs or any futurecommercialization efforts. 18Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or productcandidates. Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of equityofferings and debt financings. We do not have any committed external source of funds. To the extent that we raise additional capital through the sale ofequity or convertible debt securities, the ownership interest of common stockholders will be diluted, and the terms of these securities may include liquidationor other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involveagreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expendituresor declaring dividends. We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional funds when needed,we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts. Risks Related to the Discovery and Development of Our Product Candidates We are very early in our development efforts and have only two drug candidates, KVD001 and KVD818, in clinical development. If we or our collaboratorsare unable to successfully develop and commercialize KVD001 or KVD818, or one of our related compounds, or if we experience significant delays indoing so, the business will be materially harmed. We currently do not have any products that have gained regulatory approval. We have invested substantially all of our efforts and financial resourcesin identifying potential drug candidates and funding our preclinical and clinical studies. Our ability to generate product revenues, which we do not expectwill occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of KVD001, KVD818 and additionalsimilar product candidates. As a result, the business is substantially dependent on our ability to complete the development of and obtain regulatory approvalfor KVD001 and KVD818.We have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in newand rapidly evolving fields, particularly in the biopharmaceutical area. For example, to execute our business plan, we will need to successfully: •execute KVD001 and KVD818 development activities; •move other product candidates into development; •obtain required regulatory approvals for the development and commercialization of KVD001, KVD818 or other product candidates; •maintain, leverage and expand our intellectual property portfolio; •build and maintain robust sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners; •gain market acceptance for KVD001, KVD818 and other product candidates; •develop and maintain any strategic relationships we elect to enter into; and •manage our spending as costs and expenses increase due to drug discovery, preclinical development, clinical trials, regulatory approvals andcommercialization. If we are unsuccessful in accomplishing these objectives, we may not be able to successfully develop and commercialize KVD001, KVD818 or otherproduct candidates, and our business will suffer.19Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur additional costs or experience delays incompleting, or ultimately be unable to complete, the development and commercialization of our product candidates. We have only recently commenced clinical development of our lead product candidates KVD001 and KVD818 and the risk of failure for all of ourproduct candidates is high. Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must completepreclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of its product candidates in humans. Clinical testingis expensive, difficult to design and implement and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any timeduring the clinical trial process. Further, the results of preclinical studies and early clinical trials of its product candidates may not be predictive of the resultsof later-stage clinical trials, and interim results of a clinical trial do not necessarily predict final results. Moreover, preclinical and clinical data are oftensusceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in preclinicalstudies and clinical trials have nonetheless failed to obtain marketing approval of their products. It is impossible to predict when or if any of our productcandidates will prove effective or safe in humans or will receive regulatory approval. We may experience delays in our clinical trials and we do not know whether planned clinical trials will begin or enroll subjects on time, need to beredesigned or be completed on schedule, if at all. There can be no assurance that the Medicines & Healthcare products Regulatory Agency (the “MHRA”), theU.K. regulatory authority, or U.S. Food and Drug Administration (the “FDA”) will not put any of our product candidates on clinical hold in the future. Wemay experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to receive marketing approval orcommercialize our product candidates. Clinical trials may be delayed, suspended or prematurely terminated for a variety of reasons, such as: •delay or failure in reaching agreement with the MHRA, FDA or a comparable foreign regulatory authority on a trial design that we want toexecute; •delay or failure in obtaining authorization to commence a trial or inability to comply with conditions imposed by a regulatory authorityregarding the scope or design of a clinical study; •delays in reaching, or failure to reach, agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites; •inability, delay, or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in otherclinical programs; •delay or failure in recruiting and enrolling suitable subjects to participate in a trial; •delay or failure in having subjects complete a trial or return for post-treatment follow-up; •clinical sites and investigators deviating from trial protocol, failing to conduct the trial in accordance with regulatory requirements, ordropping out of a trial; •lack of adequate funding to continue the clinical trial, including the incurrence of unforeseen costs due to enrollment delays, requirements toconduct additional clinical studies and increased expenses associated with the services of its clinical research organizations (“CROs”) andother third parties; •clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us toconduct 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 clinicaltrials may be slower than we anticipate or participants may drop out of these clinical trials at a higher rate than we anticipate; •we may experience delays or difficulties in the enrollment of patients that our product candidates are designed to target; •our third party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, orat all; 20 •we may have difficulty partnering with experienced CROs that can identify patients that our product candidates are designed to target andrun our clinical trials effectively; •regulators or institutional review boards (“IRBs”) may require that we or our investigators suspend or terminate clinical research for variousreasons, including noncompliance with regulatory requirements or a finding that the participants are being exposed to unacceptable healthrisks; •the cost of clinical trials of our product candidates may be greater than we anticipate; •the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may beinsufficient or inadequate; or •there may be changes in governmental regulations or administrative actions. If we are required to conduct additional clinical trials or other testing of our product candidates beyond those that we currently contemplate, if we areunable to successfully complete clinical trials of our product candidates or other testing, if the results of these trials or tests are not positive or are onlymodestly positive or if there are safety concerns, we may: •be delayed in obtaining marketing approval for our product candidates; •not obtain marketing approval at all; •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 safety warnings that would reduce the potentialmarket for our products or inhibit our ability to successfully commercialize our products; •be subject to additional post-marketing restrictions and/or testing requirements; or •have the product removed from the market after obtaining marketing approval.Our product development costs will also increase if we experience delays in testing or marketing approvals. We do not know whether any of ourpreclinical studies or clinical trials will need to be restructured or will be completed on schedule, or at all. Significant preclinical or clinical trial delays alsocould shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring productsto market before we do and impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.If we experience delays or difficulties in the enrollment of patients in clinical trials, our receipt of necessary regulatory approvals could be delayed orprevented and expenses for development of our product candidates could increase.We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number ofeligible patients to participate in these trials to demonstrate safety and efficacy. We have initiated clinical trials of KVD001 and KVD818, and we do notknow whether planned or ongoing clinical trials will enroll subjects in a timely fashion, require redesign of essential trial elements or be completed on ourprojected schedule. In particular, because we are focused on patients with HAE, which is a rare disease, our ability to enroll eligible patients in trials may belimited or may result in slower enrollment than we anticipate. In addition, competitors have ongoing clinical trials for product candidates that treat the sameindications as our product candidates, and patients who would otherwise be eligible for our clinical trials may instead enroll in clinical trials of ourcompetitors’ product candidates. Our inability to enroll a sufficient number of patients for our clinical trials would result in significant delays and couldrequire us to abandon one or more clinical trials altogether. Patient enrollment is affected by other factors including: •the eligibility criteria for the study in question; •the perceived risks and benefits of the product candidate under study; 21 •the efforts to facilitate timely enrollment in clinical trials; •the inability to identify and maintain a sufficient number of trial sites, many of which may already be engaged in other clinical trialprograms, including some that may be for the same disease indication; •the patient referral practices of physicians; •the proximity and availability of clinical trial sites for prospective patients; •ambiguous or negative interim results of our clinical trials, or results that are inconsistent with earlier results; •feedback from the MHRA, FDA, IRBs, data safety monitoring boards, or a comparable foreign regulatory authority, or results from earlierstage or concurrent preclinical and clinical studies, that might require modifications to the protocol; •decisions by the MHRA, FDA, IRBs, a comparable foreign regulatory authority or us, or recommendations by data safety monitoring boards,to suspend or terminate clinical trials at any time for safety issues or for any other reason; and •unacceptable risk-benefit profile or unforeseen safety issues or adverse effects. Enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of thecompany to decline and limit our ability to obtain additional financing.If serious adverse events or unacceptable side effects are identified during the development of our product candidates, we may need to abandon or limit thedevelopment of some of our product candidates. If our product candidates are associated with undesirable effects in preclinical or clinical trials or have characteristics that are unexpected, we mayneed to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects orother characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective. There are risks inherent in the intravitreal administrationof drugs like KVD001 which can cause injury to the eye and other complications. For example, two drug-related adverse events were reported in the Phase 1clinical trial of KVD001 and both events were also considered related to study procedures. The first of these was a case of eye inflammation considered ofmild intensity and possibly related to study drug and study procedure. The second was a case of increased intraocular pressure considered of severe intensityand related to study procedure and probably related to study drug. However, additional or more severe side effects may be identified through further clinicalstudies. These or other drug-related side effects could affect patient recruitment or the ability of enrolled subjects to complete the trial or result in potentialproduct liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.Risks Related to Regulatory Approval of Our Product Candidates and Other Legal Compliance Matters If we are not able to obtain, or if there are delays in obtaining required regulatory approvals, we will not be able to commercialize our product candidates,and our ability to generate revenue will be materially impaired. Our product candidates must be approved by the FDA pursuant to a new drug application (“NDA”) in the United States and by the EuropeanMedicines Agency (the “EMA”) and similar regulatory authorities outside the United States prior to commercialization. The process of obtaining marketingapprovals, both in the United States and abroad, is expensive and takes many years, if approval is obtained at all, and can vary substantially based upon avariety of factors, including the type, complexity and novelty of the product candidates involved. Failure to obtain marketing approval for a productcandidate will prevent us from commercializing the product candidate. We have not received approval to market any of our product candidates fromregulatory authorities in any jurisdiction. We have no experience in filing and supporting the applications necessary to gain marketing approvals and expectto rely on third party CROs to assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical data andsupporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketingapproval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities22by, the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable orunintended side effects, toxicities or other characteristics that may preclude us from obtaining marketing approval or prevent or limit commercial use.Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data areinsufficient for approval and require additional preclinical, clinical or other studies. In addition, varying interpretations of the data obtained from preclinicaland clinical testing could delay, limit or prevent marketing approval of a product candidate. Changes in marketing approval policies during the developmentperiod, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may alsocause delays in or prevent the approval of an application. Any marketing approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render the approvedproduct not commercially viable. If we experience delays in obtaining approval or if we fail to obtain approval of our product candidates, the commercial prospects for our productcandidates may be harmed and our ability to generate revenues will be materially impaired.We may seek orphan drug exclusivity for some of our product candidates, and we may be unsuccessful. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations asorphan drugs. Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition,which is generally defined as a disease with a patient population of fewer than 200,000 individuals in the United States. Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has suchdesignation, the product is entitled to a period of marketing exclusivity, which precludes the EMA or the FDA from approving another marketing applicationfor the same drug for the same indication during the period of exclusivity. The applicable period is seven years in the United States and ten years in Europe.The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficientlyprofitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or EMA determines that the request fordesignation was materially defective, if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare diseaseor condition. Even if we obtain orphan drug exclusivity for a product candidate, that exclusivity may not effectively protect the product candidate fromcompetition because different drugs can be approved for the same condition. Even after an orphan drug is approved, the FDA can subsequently approve adifferent drug for the same condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes amajor contribution to patient care.A fast track designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatory review orapproval process and does not increase the likelihood that our product candidates will receive marketing approval. We do not currently have fast track designation for any of our product candidates but may seek such designation. If a drug is intended for thetreatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drugsponsor may apply for FDA fast track designation. The FDA has broad discretion whether or not to grant this designation. Even if we believe a particularproduct candidate is eligible for this designation, we cannot assure that the FDA would decide to grant it. Even if it does receive fast track designation, wemay not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw fast trackdesignation if it believes that the designation is no longer supported by data from our clinical development program. Many drugs that have received fasttrack designation have failed to obtain drug approval.23A breakthrough therapy designation by the FDA, even if granted for any of our product candidates, may not lead to a faster development or regulatoryreview or approval process, and does not increase the likelihood that our product candidates will receive marketing approval. We do not currently have breakthrough therapy designation for any of our product candidates but may seek such designation. A breakthroughtherapy is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition,and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinicallysignificant endpoints, such as substantial treatment effects observed early in clinical development. For drugs that have been designated as breakthroughtherapies, interaction and communication between the FDA and the sponsor can help to identify the most efficient path for development. Designation as a breakthrough therapy is within the discretion of the FDA. Accordingly, even if we believe, after completing early clinical trials, thatone of our product candidates meets the criteria for designation as a breakthrough therapy, the FDA may disagree and instead determine not to make suchdesignation. In any event, the receipt of a breakthrough therapy designation for a product candidate may not result in a faster development process, review orapproval compared to drugs considered for approval under conventional FDA procedures and does not assure ultimate approval by the FDA. In addition,even if one or more of our product candidates qualify as breakthrough therapies, the FDA may later decide that such product candidates no longer meet theconditions for qualification.Failure to obtain marketing approval in international jurisdictions would prevent our product candidates from being marketed abroad. In order to market and sell our products in the European Union and many other jurisdictions, we or our third party collaborators must obtain separatemarketing approvals and comply with numerous and varying regulatory requirements. The approval procedure varies among countries and can involveadditional testing. The time required to obtain approval may differ substantially from that required to obtain MHRA or FDA approval. The regulatoryapproval process outside the United Kingdom and United States generally includes all of the risks associated with obtaining, respectively, MHRA or FDAapproval. In addition, in many countries outside the United States, it is required that the product be approved for reimbursement before the product can beapproved for sale in that country. We, or these third parties, may not obtain approvals from regulatory authorities outside the United States on a timely basis,if at all. Approval by the MHRA or FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatoryauthority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or by the FDA. We may not be ableto file for marketing approvals and may not receive necessary approvals to commercialize our products in any market.Any product candidate for which we obtain marketing approval will be subject to extensive post-marketing regulatory requirements and could be subjectto post-marketing restrictions or withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if weexperience unanticipated problems with our products, when and if any of them are approved. Our product candidates and the activities associated with their development and commercialization, including their testing, manufacture,recordkeeping, labeling, storage, approval, advertising, promotion, sale and distribution, are subject to comprehensive regulation by the MHRA, FDA andother regulatory authorities. In the United States, these requirements include submissions of safety and other post-marketing information and reports,registration and listing requirements, current good manufacturing practices (“cGMP”) requirements relating to manufacturing, quality control, qualityassurance and corresponding maintenance of records and documents, including periodic inspections by the FDA and other regulatory authority, requirementsregarding the distribution of samples to physicians and recordkeeping. The FDA, or other regulatory authorities, may also impose requirements for costly post-marketing studies or clinical trials and surveillance to monitorthe safety or efficacy of the product. The FDA closely regulates the post-approval marketing and promotion of drugs to ensure drugs are marketed only for theapproved indications and in accordance with the provisions of the approved labeling. The FDA imposes stringent restrictions on manufacturers’communications regarding use of their products and if we promote our products beyond their approved indications,24we may be subject to enforcement action for off-label promotion. Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion ofprescription drugs may lead to investigations alleging violations of federal and state health care fraud and abuse laws, as well as state consumer protectionlaws. In addition, later discovery of previously unknown adverse events or other problems with our products, manufacturers or manufacturing processes, orfailure to comply with regulatory requirements, may yield various results, including: •restrictions on such products, manufacturers or manufacturing processes; •restrictions on the labeling or marketing of a product; •restrictions on product distribution or use; •requirements to conduct post-marketing studies or clinical trials; •warning or untitled letters; •withdrawal of the 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 revenues; •suspension or withdrawal of marketing approvals; •refusal to permit the import or export of our products; •product seizure; or •injunctions or the imposition of civil or criminal penalties. Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance, and with requirements related to thedevelopment of products for the pediatric population, can also result in significant financial penalties. Similarly, failure to comply with the EuropeanUnion’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize our productcandidates and affect the prices we may obtain. In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regardingthe healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect ourability to profitably sell any product candidates for which we obtain marketing approval. For example, in 2010, President Obama signed into law the Patient Protection and Affordable Care Act, as amended by the Health Care andEducation Affordability Reconciliation Act, (collectively, the “ACA”). Among the provisions of the ACA of importance to its potential product candidatesare the following: •an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents; •an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program; •expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute, new government investigativepowers, and enhanced penalties for noncompliance; •a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts offnegotiated prices; 25 •extension of manufacturers’ Medicaid rebate liability; •expansion of eligibility criteria for Medicaid programs; •expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program; •new requirements to report financial arrangements with physicians and teaching hospitals; •a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and •a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectivenessresearch, along with funding for such research. Some of the provisions of the ACA have yet to be implemented, and there have been judicial and Congressional challenges to certain aspects of theACA. In addition, the current administration and Congress will likely continue to seek legislative and regulatory changes, including repeal and replacementof certain provisions of the ACA. In January 2017, President Trump signed an Executive Order directing federal agencies with authorities and responsibilitiesunder the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatoryburden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In March 2017, following thepassage of the budget resolution for fiscal year 2017, the U.S. House of Representatives passed legislation known as the American Health Care Act, which, ifenacted, would have amended or repealed significant portions of the ACA. It is uncertain whether the American Health Care Act will become law. Wecontinue to evaluate the effect that the ACA and its possible repeal and replacement has on our business. We anticipate that the ACA will result in additionaldownward pressure on coverage and the pricing of approved products, and could seriously harm our business. The implementation of cost containmentmeasures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Such reformscould have an adverse effect on anticipated revenues from product candidates that we may successfully develop and for which we may obtain regulatoryapproval and may affect our overall financial condition and ability to develop product candidates. In addition, it is possible that there will be furtherlegislation or regulation that could harm our business, financial condition and results of operations.In addition, other legislative changes have been proposed and adopted since the ACA was enacted. These changes included aggregate reductions toMedicare payments to providers of up to 2% per fiscal year, starting in 2013. In January 2013, President Obama signed into law the American TaxpayerRelief Act of 2012, which, among other things, reduced Medicare payments to several providers, and increased the statute of limitations period for thegovernment to recover overpayments to providers from three to five years. These new laws may result in additional reductions in Medicare and otherhealthcare funding. We expect that the ACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteriaand in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or othergovernment programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or otherhealthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products. Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities forpharmaceutical products. We cannot be sure whether additional legislative changes will be enacted, or whether the FDA regulations, guidance orinterpretations will be changed, or what the impact of such changes on the marketing approvals of our product candidates, if any, may be. In addition,increased scrutiny by the U.S. Congress of the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to morestringent product labeling and post-marketing testing and other requirements.26Governments outside the United States tend to impose strict price controls, which may adversely affect our revenues, if any. In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. Inthese countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. Toobtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our productcandidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactorylevels, our business could be materially harmed.If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that couldharm our business. We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and thehandling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials,including chemicals and biological materials. Our operations also produce hazardous waste products. We generally contract with third parties for the disposalof these materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of contamination or injury resultingfrom its use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed its resources. We also could incursignificant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations. Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resultingfrom the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance forenvironmental liability or toxic tort claims that may be asserted against us in connection with the storage or disposal of biological, hazardous or radioactivematerials. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Thesecurrent or future laws and regulations may impair our discovery, preclinical development or production efforts. Our failure to comply with these laws andregulations also may result in substantial fines, penalties or other sanctions.Risks Related to the Commercialization of Our Product Candidates Even if any of our product candidates receives marketing approval, we may fail to achieve the degree of market acceptance by physicians, patients, thirdparty payors and others in the medical community necessary for commercial success. If any of our product candidates receives marketing approval, we may nonetheless fail to gain sufficient market acceptance by physicians, patients,third party payors and others in the medical community. In addition, physicians, patients and third party payors may prefer other novel products to ours. Ifour product candidates do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable.The degree of market acceptance of our product candidates, if approved for commercial sale, will depend on a number of factors, including: •the efficacy and safety and potential advantages and disadvantages compared to alternative treatments; •the ability to offer our products for sale at competitive prices; •the convenience and ease of administration compared to alternative treatments; •the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; •the strength of our marketing and distribution support; •the availability of third party coverage and adequate reimbursement, including patient cost-sharing programs such as copays anddeductibles; 27 •the ability to develop or partner with third-party collaborators to develop companion diagnostics; •the prevalence and severity of any side effects; and •any restrictions on the use of our products together with other medications.We currently have no marketing and sales force. If we are unable to establish effective marketing and sales capabilities or enter into agreements with thirdparties to market and sell our product candidates, we may not be able to effectively market and sell our product candidates, if approved, or generateproduct revenues.We currently do not have a marketing or sales team for the marketing, sales and distribution of any of our product candidates that are able to obtainregulatory approval. In order to commercialize any product candidates, we must build marketing, sales, distribution, managerial and other non-technicalcapabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. If our product candidates receiveregulatory approval, we intend to establish an internal sales and marketing team with technical expertise and supporting distribution capabilities tocommercialize our product candidates, which will be expensive and time consuming and will require significant attention of our executive officers tomanage. Any failure or delay in the development of internal sales, marketing and distribution capabilities would adversely impact the commercialization ofany of our products that we obtain approval to market. With respect to the commercialization of all or certain of our product candidates, we may choose tocollaborate, either globally or on a territory-by-territory basis, with third parties that have direct sales forces and established distribution systems, either toaugment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. If we are unable to enter into sucharrangements when needed on acceptable terms or at all, we may not be able to successfully commercialize any of our product candidates that receiveregulatory approval or any such commercialization may experience delays or limitations. If we are not successful in commercializing our product candidates,either on our own or through collaborations with one or more third parties, our future product revenue will suffer and we may incur significant additionallosses.We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfullythan we do.The development and commercialization of new drug products is highly competitive. We face competition with respect to our current productcandidates, and will face competition with respect to any product candidates that we may seek to develop or commercialize in the future, from majorpharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. There are a number of large pharmaceutical andbiotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications forwhich we are developing our product candidates. Some of these competitive products and therapies are based on scientific approaches that are the same as orsimilar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agenciesand other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements for research,development, manufacturing and commercialization. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective,have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. In addition, our ability to competemay be affected in many cases by insurers or other third party payors seeking to encourage the use of generic products. Generic products are expected tobecome available over the coming years, potentially creating pricing pressure. If our product candidates achieve marketing approval, we expect that they willbe priced at a significant premium over competitive generic products. Many of the companies against which we are competing against which we may compete in the future have significantly greater financial resourcesand expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketingapproved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources beingconcentrated among a smaller number of our competitors. Smaller and other early stage companies may also28prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete withus in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as wellas in acquiring technologies complementary to, or necessary for, our programs. The insurance coverage and reimbursement status of newly-approved products is uncertain. Failure to obtain or maintain adequate coverage andreimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue. The availability and extent of reimbursement by governmental and private payors is essential for most patients to be able to afford expensivetreatments. Sales of our product candidates will depend substantially, both domestically and abroad, on the extent to which the costs of our productcandidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed bygovernment health administration authorities, private health coverage insurers and other third-party payors. If reimbursement is not available, or is availableonly to limited levels, we may not be able to successfully commercialize our product candidates. Even if coverage is provided, the approved reimbursementamount may not be high enough to allow us to establish or maintain pricing sufficient to realize a sufficient return on our investment. There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products. In the United States, the principaldecisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S.Department of Health and Human Services, as CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare.Private payors tend to follow CMS to a substantial degree. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentallynovel products such as ours, as there is no body of established practices and precedents for these new products. Reimbursement agencies in Europe may bemore conservative than CMS. Outside the United States, international operations are generally subject to extensive governmental price controls and othermarket regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe, Canada, and other countries has and will continue toput pressure on the pricing and usage of our product candidates. In many countries, the prices of medical products are subject to varying price controlmechanisms as part of national health systems. In general, the prices of medicines under such systems are substantially lower than in the United States. Othercountries allow companies to fix their own prices for medicines, but monitor and control company profits. Additional foreign price controls or other changesin pricing regulation could restrict the amount that we are able to charge for our product candidates. Accordingly, in markets outside the United States, thereimbursement for our products may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenues andprofits. Moreover, increasing efforts by governmental and third-party payors, in the United States and abroad, to cap or reduce healthcare costs may causesuch organizations to limit both coverage and level of reimbursement for new products approved and, as a result, they may not cover or provide adequatepayment for our product candidates. We expect to experience pricing pressures in connection with the sale of any of our product candidates, due to the trendtoward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes. The downward pressure onhealthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense. As a result, increasinglyhigh barriers are being erected to the entry of new products into the healthcare market. In addition, many private payors contract with commercial vendors who sell software that provide guidelines that attempt to limit utilization of, andtherefore reimbursement for, certain products deemed to provide limited benefit to existing alternatives. Such organizations may set guidelines that limitreimbursement or utilization of our products. Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of any products that we may develop. We face an inherent risk of product liability exposure related to the testing of our product candidates in human clinical trials and will face an evengreater risk if we commercially sell any products that we may develop. If we29cannot successfully defend against claims that our product candidates or products caused injuries, we will incur substantial liabilities. Regardless of merit oreventual outcome, liability claims may result in: •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; •significant costs to defend the related litigation; •substantial monetary awards to trial participants or patients; •loss of revenue; •reduced resources of our management to pursue our business strategy; and •the inability to commercialize any products that we may develop. We currently hold $8,000,000 in product liability insurance coverage in the aggregate, with a per incident limit of $8,000,000, which may not beadequate to cover all liabilities that we may incur. We may need to increase our insurance coverage as we expand our clinical trials or if we commencecommercialization of our product candidates. Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at areasonable cost or in an amount adequate to satisfy any liability that may arise. Risks Related to Our Dependence on Third Parties Future discovery and development collaborations may be important to us. If we are unable to maintain these collaborations, or if these collaborations arenot successful, our business could be adversely affected. For some of our product candidates, we may in the future determine to collaborate with pharmaceutical and biotechnology companies fordevelopment of products. We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement for anycollaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposedcollaboration and the proposed collaborator’s evaluation of a number of factors. If we are unable to reach agreements with suitable collaborators on a timelybasis, on acceptable terms, or at all, we may have to curtail the development of a product candidate, reduce or delay our development program or one or moreof our other development programs, delay our potential development schedule or reduce the scope of research activities, or increase our expenditures andundertake discovery or preclinical development activities at our own expense. If we fail to enter into collaborations and do not have sufficient funds orexpertise to undertake the necessary development activities, we may not be able to further develop our product candidates or continue to develop ourproduct candidates and our business may be materially and adversely affected. Future collaborations we may enter into may involve the following risks: •collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations; •collaborators may not perform their obligations as expected; •changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, may divert resources or createcompeting priorities; •collaborators may delay discovery and preclinical development, provide insufficient funding for product development of targets selected byus, stop or abandon discovery and preclinical development for a product candidate, repeat or conduct new discovery and preclinicaldevelopment for a product candidate; •collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products orproduct candidates if the collaborators believe that competitive products are more likely to be successfully developed than our products; 30 •product candidates discovered in collaboration with us may be viewed by our collaborators as competitive with their own product candidatesor products, which may cause collaborators to cease to devote resources to the development of its product candidates; •disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course ofdevelopment, might cause delays or termination of the discovery, preclinical development or commercialization of product candidates,might lead to additional responsibilities for us with respect to product candidates, or might result in litigation or arbitration, any of whichwould be time-consuming and expensive; •collaborators may not properly maintain or defend its intellectual property rights or intellectual property rights licensed to us or may use itsproprietary information in such a way as to invite litigation that could jeopardize or invalidate its intellectual property or proprietaryinformation or expose us to potential litigation; •collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and •collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be required to raise additional capitalto pursue further development or commercialization of the applicable product candidates. Additionally, subject to its contractual obligations to us, if a collaborator is involved in a business combination, the collaborator might deemphasizeor terminate the development of any of our product candidates. If one of our collaborators terminates its agreement with us, they may find it more difficult toattract new collaborators and the perception of us in the business and financial communities could be adversely affected. If our collaborations do not result in the successful development of products or product candidates, product candidates could be delayed and we mayneed additional resources to develop product candidates. All of the risks relating to product development, regulatory approval and commercializationdescribed in this proxy statement also apply to the activities of our collaborators. We contract with third parties for the manufacture of our product candidates for preclinical and clinical testing and we expect to continue to do so forcommercialization. This reliance on third parties increases the risk that we will not have sufficient quantities of our product candidates or products at anacceptable cost and quality, which could delay, prevent or impair our development or commercialization efforts. We do not own or operate facilities for the manufacture of our product candidates, and we do not have any manufacturing personnel. We currentlyhave no plans to build our own clinical or commercial scale manufacturing capabilities. We rely, and expect to continue to rely, on third parties for themanufacture of our product candidates for preclinical and clinical testing. We will rely on third parties as well for commercial manufacture if any of ourproduct candidates receive marketing approval. We review the manufacturing process for each of our candidates and assess the risk to supply and, asappropriate, establish multiple manufacturers and/or establish stock levels to support future activities and do not believe we are currently substantiallydependent on any one third party. Despite the drug substance and product risk management, this reliance on third parties presents a risk that we will not havesufficient quantities of our product candidates or products or such quantities at an acceptable cost or quality, which could delay, prevent or impair ourdevelopment or commercialization efforts. Any performance failure on the part of our existing or future manufacturers of drug substance or drug products could delay clinical development ormarketing approval. We do not currently have arrangements in place for redundant supply. If current suppliers cannot supply us with our Phase 2requirements as agreed, we may be required to identify alternative manufacturers, which would lead us to incur added costs and delays in identifying andqualifying any such replacement. The formulation used in early studies frequently is not a final formulation for commercialization. Additional changes may be required by the FDA orother regulatory authorities on specifications and storage conditions. These may require additional studies, and may delay our clinical trials. 31We expect to rely on third party manufacturers or third party collaborators for the manufacture of commercial supply of any other product candidatesfor which our collaborators or we obtain, marketing approval. We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any performance failure on the part of ourdistributors could delay clinical development or marketing approval of our product candidates or commercialization of our products, producing additionallosses and depriving us of potential product revenue. We may be unable to establish any agreements with third party manufacturers or to do so on acceptable terms. Even if we are able to establishagreements with third party manufacturers, reliance on third party manufacturers entails additional risks, including: •reliance on the third party for regulatory compliance and quality assurance; •the possible breach of the manufacturing agreement by the third party; •the possible misappropriation of our proprietary information, including trade secrets and know-how; and •the possible termination or nonrenewal of the agreement by the third party at a time that is costly or inconvenient for us. Third party manufacturers may not be able to comply with cGMP, regulations or similar regulatory requirements outside the United States. Ourfailure, or the failure of our third party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinicalholds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates orproducts, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect supplies of our products. Our product candidates and any products that we may develop may compete with other product candidates and products for access to manufacturingfacilities. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us. Our current and anticipated future dependence upon others for the manufacture of our product candidates or products may adversely affect our futureprofit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis. Risks Related to Our Intellectual Property If we are unable to obtain and maintain intellectual property protection for our technology and products or if the scope of the intellectual propertyprotection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, andour ability to successfully commercialize our technology and products may be impaired. Our success depends in large part on our ability to obtain and maintain patent protection in the European Union, the United States and othercountries with respect to our proprietary technology and products. We seek to protect our proprietary position by filing patent applications in the UnitedStates and abroad related to our novel technologies and product candidates. This patent portfolio includes issued patents and pending patent applicationscovering compositions of matter and methods of use. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patentapplications at a reasonable cost or in a timely manner. We may choose not to seek patent protection for certain innovations and may choose not to pursuepatent protection in certain jurisdictions, and under the laws of certain jurisdictions, patents or other intellectual property rights may be unavailable orlimited in scope. It is also possible that we will fail to identify patentable aspects of our discovery and preclinical development output before it is too late toobtain patent protection. Moreover, in some circumstances, we may not have the right to control the preparation, filing and prosecution of patentapplications, or to maintain the32patents, covering technology that we license from third parties. Therefore, these patents and applications may not be prosecuted and enforced in a mannerconsistent with the best interests of our business. The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions,and has in recent years been the subject of much litigation. In addition, the laws of foreign countries may not protect our rights to the same extent as the lawsof the United States. For example, India and China do not allow patents for methods of treating the human body. Publications of discoveries in the scientificliterature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18months after filing, or in some cases not at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in ourowned or licensed patents or pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the issuance,scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result inpatents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitivetechnologies and products. Changes in either the patent laws or interpretation of the patent laws in the European Union, the United States and other countriesmay diminish the value of our patents or narrow the scope of our patent protection. Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent applications and theenforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), was signed into law.The Leahy-Smith Act includes a number of significant changes to United States patent law. These include provisions that affect the way patent applicationsare prosecuted and may also affect patent litigation. The USPTO developed new regulations and procedures to govern administration of the Leahy-Smith Act,and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first to file provisions, only became effective in2013. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and theenforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition. Moreover, we may be subject to a third party preissuance submission of prior art to the USPTO, or become involved in opposition, derivation,reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adversedetermination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties tocommercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercializeproducts without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications isthreatened, we could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates. Even if our owned and licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection,prevent competitors from competing with it or otherwise provide us with any competitive advantage. Our competitors may be able to circumvent our ownedor licensed patents by developing similar or alternative technologies or products in a non-infringing manner. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our owned and licensed patents may bechallenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or freedom to operate or in patentclaims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializingsimilar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time requiredfor the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after suchcandidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others fromcommercializing products similar or identical to ours. The risks described elsewhere pertaining to our patents and other intellectual property rights also apply to the intellectual property rights that welicense, and any failure to obtain, maintain and enforce these rights could have a material adverse effect on our business. In some cases we may not havecontrol over the prosecution, maintenance or enforcement of the patents that we license, and our licensors may fail to take the steps that we believe are33necessary or desirable in order to obtain, maintain and enforce the licensed patents. Any inability on our part to protect adequately our intellectual propertymay have a material adverse effect on our business, operating results and financial position. Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and otherrequirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with theserequirements. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on patents and/or applications will be due to be paid to theUSPTO and various governmental patent agencies outside of the United States in several stages over the lifetime of the patents and/or applications. We havesystems in place to remind us to pay these fees, and we employ an outside firm and rely on our outside counsel to pay these fees due to non-U.S. patentagencies. The USPTO and various non-U.S. governmental patent agencies require compliance with a number of procedural, documentary, fee payment andother similar provisions during the patent application process. We employ reputable law firms and other professionals to help us comply, and in many cases,an inadvertent lapse can be cured by payment of a late fee or by other means in accordance with the applicable rules. However, there are situations in whichnon-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevantjurisdiction. In such an event, our competitors might be able to enter the market and this circumstance would have a material adverse effect on our business. We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could be expensive, time consuming andunsuccessful. Because competition in our industry is intense, competitors may infringe or otherwise violate our issued patents, patents of our licensors or otherintellectual property. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and timeconsuming. Any claims we assert against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringed theirpatents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or unenforceable, in whole or in part, construe thepatent’s claims narrowly or refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology inquestion. An adverse result in any litigation proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly. We mayalso elect to enter into license agreements in order to settle patent infringement claims or to resolve disputes prior to litigation, and any such licenseagreements may require us to pay royalties and other fees that could be significant. Furthermore, because of the substantial amount of discovery required inconnection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure. We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commerciallyreasonable terms. A third party may hold intellectual property, including patent rights that are important or necessary to the development of our products. It may benecessary for us to use the patented or proprietary technology of third parties to commercialize our products, in which case we would be required to obtain alicense from these third parties on commercially reasonable terms, or our business could be harmed, possibly materially. Although we believe that licenses tothese patents are available from these third parties on commercially reasonable terms, if we were not able to obtain a license, or were not able to obtain alicense on commercially reasonable terms, our business could be harmed, possibly materially. Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain andcould have a material adverse effect on the success of our business. Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture, market and sell our productcandidates and use our proprietary technologies without infringing the proprietary rights of third parties. There is considerable intellectual property litigationin the biotechnology and pharmaceutical industries. We may become party to, or threatened with, future adversarial proceedings or litigation regardingintellectual property rights with respect to our products and technology, including interference or34derivation proceedings before the USPTO. Third parties may assert infringement claims against us based on existing patents or patents that may be granted inthe future. If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continuedeveloping and marketing our products and technology. However, we may not be able to obtain any required license on commercially reasonable terms or atall. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. Wecould be forced, including by court order, to cease commercializing the infringing technology or product. In addition, we could be found liable for monetarydamages, including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement could prevent us fromcommercializing our product candidates or force us to cease some of our business operations, which could materially harm our business. Claims that we havemisappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business. If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed. In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets, including unpatented know-how,technology and other proprietary information, to maintain our competitive position. We seek to protect these trade secrets, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, corporate collaborators, outside scientificcollaborators, contract manufacturers, consultants, advisors and other third parties. We seek to protect our confidential proprietary information, in part, byentering into confidentiality and invention or patent assignment agreements with our employees and consultants, however, we cannot be certain that suchagreements have been entered into with all relevant parties. Moreover, to the extent we enter into such agreements, any of these parties may breach theagreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome isunpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secretswere to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicatethem, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by acompetitor, our competitive position would be harmed. Risks Related to Employee Matters, Facilities, Managing Growth and Macroeconomic Conditions Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified personnel. We are highly dependent on the research and development, clinical and business development expertise of the principal members of ourmanagement, scientific and clinical team. Although we have entered into employment letter agreements with our executive officers, each of them mayterminate their employment with us at any time. We do not maintain “key person” insurance for any of our executives or other employees. Recruiting and retaining qualified scientific, clinical, manufacturing, sales and marketing personnel will also be critical to our success. The loss ofthe services of our executive officers or other key employees could impede the achievement of our research, development and commercialization objectivesand seriously harm our ability to successfully implement our business strategy. Furthermore, replacing executive officers and key employees may be difficultand may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required tosuccessfully develop, gain regulatory approval of and commercialize products. Competition to hire from this limited pool is intense, and we may be unable tohire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companiesfor similar personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research institutions. Inaddition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our discovery and preclinicaldevelopment and commercialization strategy. Our consultants and advisors may be employed by employers other than us and may35have commitments under consulting or advisory contracts with other entities that may limit their availability to provide services to us. If we are unable tocontinue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited. We may face operational disruptions due to lack of adequate facilities.We are highly dependent upon our U.K. facilities to conduct our scientific research, and we may face disruptions due to our expiring lease on thosefacilities. We currently operate our U.K. operations in spaces upon which the lease expires in November 2017. We are negotiating for new spaces that weexpect to occupy early in 2018. However, we have not executed a lease for those spaces and though we anticipate we will be able to continue to operate inour existing spaces until the move, we currently have no legal right to occupancy beyond the lease expiration date. If we are forced to vacate our currentspaces in advance of our move to a new facility, or if we are unable to obtain a new facility, it could cause a severe disruption to our scientific activities thatcould materially endanger our business and future prospects. We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as aresult, we may encounter difficulties in managing our growth, which could disrupt our operations. We expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drugdevelopment, regulatory affairs and, if any of our product candidates receive marketing approval, sales, marketing and distribution. To manage ouranticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continueto recruit and train additional qualified personnel. Due to our limited financial resources and the limited experience of our management team in managing acompany with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualifiedpersonnel. The expansion of our operations may lead to significant costs and may divert our management and business development resources. Any inabilityto manage growth could delay the execution of our business plans or disrupt our operations. Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations. Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. A severe orprolonged economic downturn, such as the recent global financial crisis, could result in a variety of risks to our business, including, our ability to raiseadditional capital when needed on acceptable terms, if at all. This is particularly true in Europe, where the United Kingdom’s vote to leave the EuropeanUnion has created additional economic uncertainty that could last for years. The majority of our scientific operations are based in the United Kingdom andwe have received significant funding through U.K. government sources and tax credits. We cannot anticipate all of the ways in which any changes in theeconomic climate and financial market conditions could adversely impact our business. Our business and operations would suffer in the event of system failures. Our internal computer systems and those of our CROs, collaborators and third-parties on whom we rely are vulnerable to damage from computerviruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. Furthermore, we have little or no control over thesecurity measures and computer systems of our third-party collaborators. While we and, to our knowledge, our third party collaborators have not experiencedany such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations or our third partycollaborators, it could result in a material disruption of our drug development programs. For example, the loss of research data could delay development ofour product candidates and the loss of clinical trial data from completed or ongoing or planned clinical trials could result in delays in our regulatory approvalefforts and we may incur substantial costs to attempt to recover or reproduce the data. If any disruption or security breach resulted in a loss of or damage toour data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and/or the further development of ourproduct candidates could be delayed.36Risks Related to Ownership of Our Common StockOur stock price is volatile and our stockholders may not be able to resell shares of our common stock at or above the price they paid.The trading price of our common stock is highly volatile and could be subject to wide fluctuations in response to various factors, many of which arebeyond our control. These factors include those discussed in this “Risk Factors” section of this Annual Report on Form 10-K and others such as: •announcement of a strategic transaction, including the acquisition of our company or its assets; •our decision to initiate a clinical trial or not to initiate a clinical trial; •announcements of significant changes in our business or operations, including the decision not to pursue drug development programs; •additions or departures of key personnel; •adverse results or delays in clinical trials; •changes in reimbursement or third-party coverage of treatments for HAE or DME, or changes to treatment recommendations or guidelinesapplicable to the treatment of HAE or DME; •announcements relating to collaboration partnerships or other strategic transactions undertaken by us; •announcements of therapeutic innovations or new products by us or our competitors; •adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; •changes or developments in laws or regulations applicable to any of our product candidates; •any adverse changes to our relationship with any manufacturers or suppliers; •the success of our testing and clinical trials; •the success of our efforts to acquire or license or discover additional product candidates; •any intellectual property infringement actions in which we may become involved; •announcements concerning our competitors or the pharmaceutical industry in general; •achievement of expected product sales and profitability; •manufacture, supply or distribution shortages; •actual or anticipated fluctuations in our operating results; •FDA or other regulatory actions affecting us or our industry or other healthcare reform measures in the United States or the United Kingdom; •changes in financial estimates or recommendations by securities analysts; •trading volume of our common stock; •sales of our common stock by us, our executive officers and directors or our stockholders in the future; and •general economic and market conditions and overall fluctuations in the United States equity markets.In addition, the stock markets in general, and the markets for pharmaceutical, biopharmaceutical and biotechnology stocks in particular, haveexperienced extreme volatility that may have been unrelated to the operating performance of the issuer. These broad market fluctuations may adversely affectthe trading price or liquidity of our common stock. In the past, when the market price of a stock has been volatile, holders of that stock have sometimesinstituted securities class action litigation against the issuer. If any of our stockholders were to bring such a lawsuit against us, we could incur substantialcosts defending the lawsuit and the attention of our37management would be diverted from the operation of our business, which could seriously harm our financial position. Any adverse determination inlitigation could also subject us to significant liabilities.If securities or industry analysts do not publish research or reports about our business, or if they issue an adverse opinion regarding our stock, our stockprice and trading volume could decline.The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or ourbusiness. If any analysts who cover us issue an adverse regarding us, our business model, our intellectual property or our stock performance, or if our clinicaltrials and operating results fail to meet the expectations of analysts, our stock price would likely decline. If any of these analysts cease coverage of us or failto publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.We incur significant costs as a result of operating as a public company, and our management devotes substantial time to compliance initiatives. We mayfail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, which could result in sanctions orother penalties that would harm our business.We incur significant legal, accounting and other expenses as a public company, including costs resulting from public company reporting obligationsunder the Securities Exchange Act of 1934, as amended, or the Exchange Act, and regulations regarding corporate governance practices. The listingrequirements of The NASDAQ Global Market require that we satisfy certain corporate governance requirements relating to director independence,distributing annual and interim reports, stockholder meetings, approvals and voting, soliciting proxies, conflicts of interest and a code of conduct. Ourmanagement and other personnel will need to devote a substantial amount of time to ensure that we comply with all of these requirements, and we will likelyneed to hire additional accounting and financial staff with appropriate public company reporting experience and technical accounting knowledge. Moreover,the reporting requirements, rules and regulations increase our legal and financial compliance costs and make some activities more time consuming andcostly. Any changes we make to comply with these obligations may not be sufficient to allow us to satisfy our obligations as a public company on a timelybasis, or at all. These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a publiccompany, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve asexecutive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.We are subject to Section 404 of The Sarbanes-Oxley Act of 2002, or Section 404, and the related rules of the SEC which generally require ourmanagement and independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting. Beginning withthe annual report that we will be required to file with the SEC for the year ending April 30, 2018, Section 404 requires an annual management assessment ofthe effectiveness of our internal control over financial reporting. However, for so long as we remain an emerging growth company as defined in the JumpstartOur Business Startups Act of 2012, or JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable topublic companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestationrequirements of Section 404.To date, we have never conducted a review of our internal control for the purpose of providing the reports required by these rules. During the courseof our review and testing, we may identify deficiencies and be unable to remediate them before we must provide the required reports. Furthermore, if we havea material weakness in our internal control over financial reporting, we may not detect errors on a timely basis and our financial statements may be materiallymisstated. We or our independent registered public accounting firm may not be able to conclude on an ongoing basis that we have effective internal controlover financial reporting, which could harm our operating results, cause investors to lose confidence in our reported financial information and cause thetrading price of our stock to fall. In addition, as a public company we are required to file accurate and timely quarterly and annual reports with the SEC underthe Exchange Act. Any failure to report our financial results on an accurate and timely basis could result in sanctions, lawsuits, delisting of our shares fromThe NASDAQ Global Market or other adverse consequences that would materially harm our business.38If we fail to establish or maintain proper internal controls, our ability to produce accurate financial statements or comply with applicable regulationscould be impaired.Pursuant to Section 404 of the Sarbanes-Oxley Act, beginning in the year ending April 30, 2018, our management will be required annually todeliver a report that assesses the effectiveness of our internal control over financial reporting and, subject to exemptions allowed as an “emerging growthcompany,” our independent registered public accounting firm will be required annually to deliver an attestation report on the effectiveness of our internalcontrol over financial reporting. If we are unable to maintain effective internal control over financial reporting, we may not be able to produce accuratefinancial statements, and investors may therefore lose confidence in our operating results, our stock price could decline and we may be subject to litigation orregulatory enforcement actions.Provisions in our charter documents and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead toentrenchment of management.Our amended and restated certificate of incorporation and amended and restated bylaws contain provisions that could significantly reduce the valueof our shares to a potential acquirer or delay or prevent changes in control or changes in our management without the consent of our board of directors. Theprovisions in our charter documents include the following: •a classified board of directors with three-year staggered terms, which may delay the ability of stockholders to change the membership of amajority of our board of directors; •no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; •the exclusive right of our board of directors to elect a director to fill a vacancy created by the expansion of the board of directors or theresignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors; •the required approval of at least 66 2/3% of the shares entitled to vote to remove a director for cause, and the prohibition on removal ofdirectors without cause; •the ability of our board of directors to authorize the issuance of shares of preferred stock and to determine the price and other terms of thoseshares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of ahostile acquirer; •the ability of our board of directors to alter our bylaws without obtaining stockholder approval; •the required approval of at least 66 2/3% of the shares entitled to vote at an election of directors to adopt, amend or repeal certain provisionsof our bylaws and our amended and restated certificate of incorporation regarding the election and removal of directors; •a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of ourstockholders; •the requirement that a special meeting of stockholders may be called only by or at the direction of our board of directors pursuant to aresolution adopted by a majority of the total number of directors that our board of directors would have if there were no vacancies, whichmay delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors; and •advance notice procedures that stockholders must comply with in order to nominate candidates to our board of directors or to proposematters to be acted upon at a stockholders’ meeting, which may discourage or deter a potential acquirer from conducting a solicitation ofproxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us. In addition, these provisions would applyeven if we were to receive an offer that some stockholders may consider beneficial.We are also subject to the anti-takeover provisions contained in Section 203 of the Delaware General Corporation Law. Under Section 203, acorporation may not, in general, engage in a business combination with any39holder of 15% or more of its capital stock unless the holder has held the stock for three years or, among other exceptions, the board of directors has approvedthe transaction.Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reducethe amount of money available to us.Our amended and restated certificate of incorporation and amended and restated bylaws provide that we will indemnify our directors and officers, ineach case to the fullest extent permitted by Delaware law.In addition, as permitted by Section 145 of the Delaware General Corporation Law, our amended and restated bylaws and our indemnificationagreements that we have entered into with our directors and officers provide that: •We will indemnify our directors and officers for serving us in those capacities or for serving other business enterprises at our request, to thefullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted in goodfaith and in a manner such person reasonably believed to be in or not opposed to the best interests of the registrant and, with respect to anycriminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful. •We may, in our discretion, indemnify employees and agents in those circumstances where indemnification is permitted by applicable law. •We are required to advance expenses, as incurred, to our directors and officers in connection with defending a proceeding, except that suchdirectors or officers shall undertake to repay such advances if it is ultimately determined that such person is not entitled to indemnification. •We will not be obligated pursuant to our amended and restated bylaws to indemnify a person with respect to proceedings initiated by thatperson against us or our other indemnitees, except with respect to proceedings authorized by our board of directors or brought to enforce aright to indemnification. •The rights conferred in our amended and restated bylaws are not exclusive, and we are authorized to enter into indemnification agreementswith our directors, officers, employees and agents and to obtain insurance to indemnify such persons. •We may not retroactively amend our amended and restated bylaw provisions to reduce our indemnification obligations to directors, officers,employees and agents.Our ability to use our net operating losses to offset future taxable income, if any, may be subject to certain limitations.In general, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, a corporation that undergoes an “ownership change”(generally defined as a greater than 50-percentage-point cumulative change (by value) in the equity ownership of certain stockholders over a rolling three-year period) is subject to limitations on its ability to utilize its pre-change net operating losses, or NOLs, to offset future taxable income. We experienced anownership change in November 2016 that substantially limited our use of the NOLs available to us for U.S. federal income tax purposes. If we undergoadditional ownership changes (some of which changes may be outside our control), our ability to utilize our NOLs could be further limited by Section 382 ofthe Code. Our NOLs may also be impaired under state law. Accordingly, we may not be able to utilize a material portion of our NOLs. Furthermore, our abilityto utilize our NOLs is conditioned upon our attaining profitability and generating U.S. federal taxable income. We have incurred net losses since ourinception and anticipate that we will continue to incur significant losses for the foreseeable future; thus, we do not know whether or when we will generatethe U.S. federal taxable income necessary to utilize our NOLs. See the risk factors described above under “-Risks Related to Our Limited Operating History,Financial Condition and Capital Requirements.”We do not currently intend to pay dividends on our common stock, and, consequently, our stockholders’ ability to achieve a return on their investment willdepend on appreciation in the price of our common stock.We do not currently intend to pay any cash dividends on our common stock for the foreseeable future. We currently intend to invest our futureearnings, if any, to fund our growth. Therefore, our stockholders are not likely40to receive any dividends on their common stock for the foreseeable future. Since we do not intend to pay dividends, our stockholders’ ability to receive areturn on their investment will depend on any future appreciation in the market value of our common stock. There is no guarantee that our common stock willappreciate or even maintain the price at which our holders have purchased it.Item 1B. Unresolved Staff Comments.NoneItem 2. Properties.Our corporate headquarters are located in Cambridge, Massachusetts where we occupy approximately 2,000 square feet of office and laboratory spaceunder a lease which is currently running on a month by month basis. We also maintain approximately 4,500 square feet of office and research laboratoryspace in Porton Down, United Kingdom, under a lease that expires in November 2017.In May 2017, we entered into a lease for approximately 2,700 square feet of office space in Cambridge, Massachusetts, that we anticipate occupyingin late 2017. We are currently in negotiations for new office and research laboratory space in the United Kingdom that we anticipate we will move to in early2018. While we believe we will be able to continue to operate in our current U.K. spaces until we move to our new location, we currently have no assurancethat this will be the case.We believe that our current and planned facilities are adequate to meet our needs for the immediate future, and that, should it be needed, suitableadditional space will be available to accommodate any such expansion of our operations.Item 3. Legal Proceedings.From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. We arecurrently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition oroperating results. Item 4. Mine Safety Disclosures.Not Applicable.41PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Price Range of Common StockOur common stock is traded on the NASDAQ stock market under the symbol “KALV” as of November 21, 2016, the date after the share purchasetransaction with KalVista Pharmaceuticals Ltd. Prior to November 21, 2016, our common stock was traded on the NASDAQ stock market under the symbol“CBYL” since April 9, 2015. The following table sets forth the quarterly high and low sales prices per share of our common stock. The per share prices belowreflect a 14 for 1 reverse stock split effected on November 21, 2016: High Low Year ended April 30, 2017 First Fiscal Quarter $20.02 $7.56 Second Fiscal Quarter $9.10 $6.16 Third Fiscal Quarter $10.65 $6.09 Fourth Fiscal Quarter $8.74 $6.20 Year ended April 30, 2016 First Fiscal Quarter $129.11 $70.84 Second Fiscal Quarter $99.12 $44.80 Third Fiscal Quarter $67.48 $28.00 Fourth Fiscal Quarter $34.72 $7.28 As of April 30, 2017, there were 59 holders of record of our common stock. The last reported sale price of the common stock on April 30, 2017 was$7.49 per share.DividendsWe have never declared or paid cash dividends on our capital stock. We do not expect to pay dividends on our common stock for the foreseeablefuture. Instead, we anticipate that all of our earnings, if any, will be used for the operation and growth of our business. Any future determination to declarecash dividends would be subject to the discretion of our board of directors and would depend upon various factors, including our results of operations,financial condition and capital requirements, restrictions that may be imposed by applicable law and our contracts and other factors deemed relevant by ourboard of directors.42Securities Authorized for Issuance under Equity Compensation PlansThe following table provides information as of April 30, 2017, with respect to the shares of our common stock that may be issued under our existingequity compensation plans. Number ofSecurities tobe IssueduponExercise ofOutstandingOptions,Warrantsand Rights Weighted-averageExercisePrice ofOutstandingOptions,Warrantsand Rights Number ofSecuritiesRemainingAvailable forFutureIssuanceUnder EquityCompensationPlans(excludingsecuritiesreflected incolumn (a)) Plan Category (a) (b) (c) Equity compensation plans approved by stockholders (1)(2) 452,713 $4.13 1,043,554 Equity compensation plans not approved by stockholders (3) 85,055 $8.45 — Total 537,768 1,043,554 (1)Includes 169,148 shares subject to options issued pursuant to the Carbylan 2015 Incentive Plan, 211,565 shares subject to options issuedpursuant to the Enterprise Management Incentives Plan and 72,000 shares subject to options issued pursuant to the 2017 Equity IncentivePlan. The 2017 Equity Incentive Plan contains provisions that provide for automatic increases to the authorized number of shares as ofJanuary 1st each year, of up to 4% of the outstanding shares of stock on the last day of the immediately preceding calendar year, or a lessernumber of shares as approved by our board of directors. There are 100,000 shares of common stock available for issuance under the 2017Employee Stock Purchase Plan. As of April 30, 2017, no purchase periods under the 2017 Employee Stock Purchase Plan have beenauthorized by the board of directors. (2)Shares reserved for issuance under the 2017 Equity Incentive Plan may be granted as restricted stock, restricted share units and other equityawards, as well as for grants of stock options and stock appreciation rights. (3)Consists of options issued pursuant to inducement grants.43Stock Price Performance GraphThe graph below matches KalVista Pharmaceuticals, Inc.'s cumulative 25-month total shareholder return on common stock with the cumulative totalreturns of the NASDAQ Composite index and the NASDAQ Biotechnology index. The graph tracks the performance of a $100 investment in our commonstock and in each index (with the reinvestment of all dividends) from April 9, 2015, the date our common stock became publicly traded, to April 30, 2017. 4/9/154/157/1510/151/164/167/1610/161/174/17 KalVista Pharmaceuticals, Inc.100.0090.65124.2864.7543.7113.179.739.439.039.62NASDAQ Composite100.00101.02105.12103.5894.7998.43106.43106.93115.78125.15NASDAQ Biotechnology100.0097.54110.0495.5579.0580.2184.8175.1780.7985.79 Recent Sales of Unregistered SecuritiesNoneItem 6. Selected Financial Data.The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition andResults of Operations,” the financial statements and related notes and other financial information included in this Annual Report on Form 10-K.44We derived the financial data for the years ended April 30, 2017, 2016 and 2015 and the balance sheet data as of April 30, 2017 and 2016 from ouraudited consolidated financial statements, which are included elsewhere in this Annual Report on Form 10-K. Historical results are not necessarily indicativeof the results to be expected in future periods. For the Years Ended April 30, 2017 2016 2015 (in thousands, except per share data) Consolidated Statement of Operations Data: Grant income $1,504 $2,133 $1,804 Operating expenses Research and development 12,666 14,661 8,285 General and administrative 11,177 2,653 1,608 Total operating expenses 23,843 17,314 9,893 Operating loss (22,339) (15,181) (8,089)Other income, net 3,736 3,745 863 Net loss $(18,603) $(11,436) $(7,226)Net loss per share attributable to common stockholders, basic anddiluted $(4.47) $(26.17) $(34.94)Weighted average common shares outstanding, basic and diluted 4,646,764 591,298 263,358 April 30, 2017 2016 2015 (in thousands) Consolidated Balance Sheet Data: Cash and cash equivalents $30,950 $21,764 $2,526 Property and equipment, net 97 74 100 Working capital 31,230 21,422 1,950 Total assets 34,345 24,745 3,890 Total liabilities 3,018 3,249 1,840 Stockholders' equity (deficit) 31,327 (37,112) (23,554) 45Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and the related notes thatappear elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements reflecting our current expectations that involverisks and uncertainties. Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, includingthose set forth in the section entitled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. For further information regarding forward-lookingstatements, please refer to the “Special Note Regarding Forward-Looking Statements” at the beginning of Part I of this Annual Report on Form 10-K.Management OverviewWe are a clinical-stage pharmaceutical company focused on the discovery, development and commercialization of small molecule serine proteaseinhibitors as new treatments for diseases with significant unmet need. Our initial focus is on developing a portfolio of oral inhibitors of plasma kallikrein fortwo indications: hereditary angioedema, or HAE, and diabetic macular edema or DME. Our first oral HAE program, KVD818, is currently in Phase 1 clinicaltesting and additional programs are in preclinical development. We also have developed KVD001, an intravitreally administered plasma kallikrein inhibitorfor DME that has completed a Phase 1 clinical trial and is anticipated to commence Phase 2 testing later in 2017. Our headquarters is located in Cambridge,Massachusetts, with substantial research activities located in Porton Down, United Kingdom.We have devoted substantially all of our efforts to research and development, including clinical trials of our product candidates. We have notcompleted the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by us, require approvals fromthe U.S. Food and Drug Administration (“FDA”) or foreign regulatory agencies prior to commercial sales. There can be no assurance that any productcandidates will receive the necessary approvals and any failure to receive approval or delay in approval may have a material adverse impact on our businessand financial results. We have never been profitable and are subject to a number of risks and uncertainties similar to those of other life science companiesdeveloping new products, including, among others, the risks related to the necessity to obtain adequate additional financing, to successfully develop productcandidates, to obtain regulatory approval of product candidates, to comply with government regulations, to successfully commercialize our potentialproducts, to the protection of proprietary technology and to the dependence on key individuals.We have funded operations primarily through the issuance of preferred stock and grant income. As of April 30, 2017, we had an accumulated deficitof $55.9 million and $31.0 million of cash and cash equivalents. Our working capital, including cash obtained through the share purchase transaction withKalVista Limited, is anticipated to fund our operations for at least the next twelve months from the date the audited consolidated financial statements areissued. Accordingly, the audited consolidated financial statements have been prepared on a going concern basis.Recent DevelopmentsOn November 21, 2016, KalVista Pharmaceuticals Ltd. (“KalVista Limited”) completed a share purchase transaction with Carbylan Therapeutics Inc.(“Carbylan”) whereby, immediately following the transaction, Carbylan’s equity holders owned 19% and KalVista Limited’s equity holders owned 81% ofthe combined company, respectively (see Note 6 to the audited consolidated financial statements). As a result, Carbylan issued approximately 7.8 millionshares of common stock to the stockholders of KalVista Limited in exchange for their common shares of KalVista Limited. Approximately 1.9 million sharesof common stock were retained by the Carbylan stockholders. The combined company was renamed KalVista Pharmaceuticals, Inc. following the transaction.For accounting purposes, KalVista Limited is considered to be acquiring Carbylan in the share purchase transaction, which was determined based upon theterms of the Share Purchase Agreement and other factors including: (i) KalVista Limited security holders own approximately 81% of the voting interests ofthe combined company immediately following the closing of the transaction; (ii) directors appointed by KalVista Limited hold a majority of board seats inthe combined company; and (iii) KalVista Limited management hold all of the key positions in the management of the combined company. As theaccounting acquirer, KalVista Limited’s assets and liabilities were recorded at their pre-combination carrying amounts and the historical operations that arereflected in46the financial statements are those of KalVista Limited. Our consolidated financial statements reflect Carbylan’s results of operations beginning afterNovember 21, 2016. Carbylan has no ongoing operations, so the impact of the share purchase transaction on us is not significant except for the equity issuedand the cash acquired in the transaction. Following the completion of the transaction, the business being conducted by us became primarily the businessconducted by KalVista Limited, which is a clinical-stage pharmaceutical company focused on the discovery and development of small molecule proteaseinhibitors.Financial OverviewGrant IncomeWe have received grant income to support our research and development activities from two main sources; JDRF, a charitable organization based inNew York and the Technology Strategy Board (“TSB”), the U.K. Government’s Biomedical Catalyst funding initiative. JDRF has provided $2.2 million inmilestone-based financial support to advance the intravitreal drug program but this program has concluded and no further receipts are expected. Under theterms of a grant approved in the second calendar quarter of 2015, the TSB will provide a total amount of $7.3 million over the lifetime of the agreementsbetween us and the TSB, to accelerate the development of the oral drug program, of which $5.9 million was received or was due to be received as of April 30,2017.Research and Development ExpensesResearch and development expenses primarily consist of costs associated with our research activities such as salaries and related employee costs aswell the costs associated with the preclinical and clinical development of product candidates. We contract with clinical research organizations to manage ourclinical trials under agreed upon budgets for each study, with oversight by our clinical program managers. All research and development costs are expensedas incurred.We expect to continue to incur substantial expenses related to development activities for the foreseeable future as we conduct clinical development,manufacturing and toxicology studies. Product candidates in later stages of clinical development generally have higher development costs than those inearlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials, additional drug manufacturingrequirements, and later stage toxicology studies such as carcinogenicity studies. The process of conducting preclinical studies and clinical trials necessary toobtain regulatory approval is costly and time consuming. The probability of success for each product candidate is affected by numerous factors, includingpreclinical data, clinical data, competition, manufacturing capability and commercial viability. Accordingly, we may never succeed in achieving marketingapproval for any of our product candidates.Completion dates and costs for clinical development programs as well as our research program can vary significantly for each current and futureproduct candidate and are difficult to predict. As a result, we cannot estimate with any degree of certainty the total project costs associated with developmentof our product candidates at this point in time. We anticipate making determinations as to which programs and product candidates to pursue and how muchfunding to direct to each program and product candidate on an ongoing basis in response to the scientific success of early research programs, results ofongoing and future clinical trials, our ability to enter into collaborative agreements with respect to programs or potential product candidates, as well asongoing assessments as to each current or future product candidate’s commercial potential.General and Administrative ExpensesGeneral and administrative expenses consist primarily of the costs associated with general management, obtaining and maintaining our patentportfolio, professional fees for accounting, auditing, consulting and legal services, and general overhead expenses.We expect ongoing general and administrative expenses to increase in the future as we expand our operating activities, maintain and expand thepatent portfolio and incur additional costs associated with the management of a public company and maintaining compliance with exchange listing and SECrequirements. These potential increases47will likely include management costs, legal fees, accounting fees, directors’ and officers’ liability insurance premiums and expenses associated with investorrelations.Other Income, NetOther income consists of bank interest, research and development tax credits from the U.K. government’s tax incentive programs set up to encourageresearch and development in the U. K. and realized and unrealized exchange rate gains/losses related to accounts denominated in foreign currencies.Income TaxesWe historically have incurred net losses and have no corporation tax liabilities. We file U.S. Federal tax returns as well as certain state returns. Wealso file returns in the U.K. Under the U.K. government’s research and development tax incentive scheme, we have surrendered a portion of our tax losses inexchange for research and development tax credits in accordance with the relevant tax legislation. The research and development tax credits are paid out tous in cash and reported as other income.Critical Accounting Policies and Significant Judgments and EstimatesOur management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which we haveprepared in accordance with generally accepted accounting principles in the United States, (“GAAP”). The preparation of our financial statements requires usto make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date ofour financial statements and the reported revenue and expenses during the reported periods. We evaluate these estimates and judgments, including thosedescribed below, on an ongoing basis. We base our estimates on historical experience, known trends and events, contractual milestones and various otherfactors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assetsand liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Seealso Note 2, “Summary of Significant Accounting Policies” to our Consolidated Financial Statements included in Item 8 of this report, which discusses thesignificant assumptions used in applying our accounting policies. Those accounting policies and estimates that we deem to be critical are as follows:Preclinical and Clinical Trial AccrualsWe base our accrued expenses related to clinical trials on estimates of patient enrollment and related expenses at clinical investigator sites as well asestimates for services received and efforts expended pursuant to contracts with multiple research institutions and contract research organizations that conductand manage clinical trials on our behalf. We make estimates of our accrued expenses as of each balance sheet date in our financial statements based on factsand circumstances known to us and based on contracted amounts applied to the level of patient enrollment and activity according to the clinical trialprotocol. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we modify our estimates ofaccrued expenses accordingly on a prospective basis.If we do not identify costs that we have begun to incur, or if we underestimate or overestimate the level of services performed or the costs of theseservices, our actual expenses could differ from our estimates. At April 30, 2017 there were no significant accruals recognized given that our significantclinical trials have yet to commence.Income TaxesWe account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on thedifference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences areexpected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.Given our history of losses, we currently provide a full valuation allowance on our net deferred tax assets.48We account for uncertain tax positions in accordance with ASC 740-10, Accounting for Uncertainty in Income Taxes. We assess all material positionstaken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevanttaxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largestamount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain taxpositions are reassessed, and we determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognizedtax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition andmeasurement of a tax benefit might change as new information becomes available.Results of OperationsYear Ended April 30, 2017 Compared to Year Ended April 30, 2016The following table sets forth the key components of our results of operations for the years ended April 30, 2017 and 2016: Years Ended April 30, Increase 2017 2016 (Decrease) (in thousands) Income Grant income $1,504 $2,133 $(629)Operating Expenses Research and development expenses 12,666 14,661 (1,995)General and administrative expenses 11,177 2,653 8,524 Other income Interest, exchange rate gain and other income 3,736 3,745 (9)Grant Income. Grant income was $1.5 million in the year ended April 30, 2017 compared to $2.1 million in the prior year. In the year ended April 30,2017, $1.2 million was received from the principal TSB grant and the remaining $0.3 million balance from other grant sources. The decrease was due to thecompletion of some grant programs during the year as well as a slight decrease in amounts earned on the TSB grant during the year. Under the terms of agrant approved in May 2015, the TSB will provide a total amount of $7.3 million over the lifetime of the agreements between us and the TSB, to acceleratethe development of the oral drug program, of which $5.9 million was received or was due to be received as of April 30, 2017.Research and Development Expenses. Research and development expenses were $12.7 million in the year ended April 30, 2017 compared to$14.7 million in the prior year, primarily due to a decrease in spending on the Intravitreal and Oral programs, which was somewhat offset by an increase inspending on our additional earlier stage oral programs and expenses related to early stage research activities. The reduction in expense also reflects a declinein the exchange rate of the British Pound Sterling (“GBP”), which is the currency in which most of our research and development expense is currentlyincurred. Approximately $2.0 million of the overall decline in research and development expense was due to the decline in exchange rates.Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2017 2016 (Decrease) (in thousands) Intravitreal $571 $3,583 $(3,012) -84% Oral 2,785 4,264 (1,479) -35% Additional oral programs 2,552 2,262 290 13% Early stage research activities 6,758 4,552 2,206 48% Total $12,666 $14,661 $(1,995) -14%49Expenses for the intravitreal program declined in the year ended April 30, 2017 compared to the prior year due to completion of toxicology studiesthat were required to support further clinical development. Expenses for the oral program decreased in the year ended April 30, 2017 compared to the prioryear as a result of the completion of toxicology studies in the prior year. The additional oral programs expenses in the year ended April 30, 2017 increased to $2.6 million from $2.3 million in the prior year due to expensesincurred in connection with the progression of multiple candidates through discovery characterization, initial scale-up manufacture and entry into earlytoxicology assessment. Early stage research expenses for the year ended April 30, 2017 increased to $6.8 million compared to $4.6 million in the prior yeardue to an increase in headcount and expansion of early stage discovery activities. We anticipate that research and development spending will continue toincrease as clinical trials ramp up and multiple candidates are assessed in discovery and early development.General and Administrative Expenses. General and administrative expenses were $11.2 million for the year ended April 30, 2017 which was anincrease of $8.5 million compared to $2.7 million in the prior year. The increase in general and administrative expenses for the year ended April 30, 2017 wassubstantially due to $5.6 million of professional fees and regulatory costs the majority of which were associated with the share purchase transactioncompleted in November 2016 as well as $0.8 million of severance costs and $2.1 million of payroll related, facilities and other administrative expenses as weexpanded the management team and other key positions, and incurred costs associated with operations as a public company. We anticipate that ongoinggeneral and administrative expenses should be lower than the current period, though they will increase over time compared to the prior year as we increaseour headcount and operating activities and incur expenses associated with being a public company.Other Income. Other income was $3.7 million for the year ended April 30, 2017 compared to $3.7 million for the prior year. A $0.3 million decreasein foreign currency exchange rate gains from accounts denominated in foreign currency was offset by a $0.3 million increase in income from research anddevelopment tax credits. Year Ended April 30, 2016 Compared to Year Ended April 30, 2015The following table sets forth the key components of our results of operations for the years ended April 30, 2016 and 2015: Years Ended April 30, Increase 2016 2015 (Decrease) (in thousands) Income Grant income $2,133 $1,804 $329 Operating Expenses Research and development expenses 14,661 8,285 6,376 General and administrative expenses 2,653 1,608 1,045 Other income Interest, exchange rate gain and other income 3,745 863 2,882Grant Income. Grant income was $2.1 million in the year ended April 30, 2016 compared to $1.8 million in the prior year. In the year ended April 30,2016, $1.6 million was received from the principal TSB grant and the balance from other grant sources.Research and Development Expenses. Research and development expenses were $14.7 million in the year ended April 30, 2016 compared to$8.3 million in the prior year, primarily due to an overall increase in spending on all of our programs.50Research and development expenses by major programs or categories were as follows: Years Ended April 30, Increase 2016 2015 (Decrease) (in thousands) Intravitreal $3,583 $2,201 $1,382 63% Oral 4,264 $2,967 1,297 44% Additional oral programs 2,262 — 2,262 — Early stage research activities 4,552 3,117 1,435 46% Total $14,661 $8,285 $6,376 77%Expenses for the intravitreal program increased in the year ended April 30, 2016 compared to the prior year due to toxicology studies that wererequired to support further clinical development. Additional expenses were incurred for manufacturing of clinical supplies for the next clinical study.Expenses for the oral program increased in the year ended April 30, 2016 compared to the prior year as a result of increased expenditure onmanufacturing of drug substance and drug product and toxicology studies to support the clinical program. The additional oral programs incurred expenses in the year ended April 30, 2016 of $2.3 million compared to no expense in the prior year due to newcandidates moving through discovery characterization, initial scale-up manufacture and entry into early toxicology assessment. Early stage researchexpenses for the year ended April 30, 2016 increased to $4.6 million compared to $3.1 million in the prior year due to an increase in early stage discoveryactivities. We anticipate that research and development spending will continue at or near the current rate as multiple candidates are assessed in discovery andearly development.General and Administrative Expenses. General and administrative expenses were $2.7 million for the year ended April 30, 2016 which was anincrease of $1.1 million compared to $1.6 million in the prior year. The increase in general and administrative expenses for the year ended April 30, 2016 wassubstantially due to $0.5 million of employee related expenses due to the expansion of management and other key positions and $0.6 million of legal andpatent expenses.Other Income. Other income was $3.7 million for the year ended April 30, 2016 compared to $0.9 million for the prior year. The increase in the yearended April 30, 2016 was primarily due to an increase in foreign currency exchange rate gains from cash held in USD accounts in our U.K. entity.Liquidity and Capital ResourcesWe have incurred losses since inception and cash outflows from operating activities for the years ended April 30, 2017 and 2016. We have receivedequity funding totaling $58.6 million, grant income of $8.5 million and have an accumulated deficit of $55.9 million. We anticipate that we will continue toincur net losses for the foreseeable future as we continue the research and development efforts on our product candidates, hire additional staff, includingclinical, scientific, operational, financial and management personnel, and incur additional costs associated with being a public company.We plan to continue to fund our operations with cash and cash equivalents at April 30, 2017 along with future issuances of debt and/or equitysecurities and potential collaborations or strategic partnerships with other entities. Capital raises from issuances of convertible debt and equity securitiescould result in additional dilution to stockholders. Incurrence of debt could result in debt service obligations and operating and financing covenants thatmay restrict operations. We can provide no assurance that financing will be available in the amounts anticipated to be required or on acceptable terms, if atall. If we are not able to secure adequate additional working capital when it becomes needed, we may be required to make reductions in spending, extendpayment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned research programs. Any of these actions could materiallyharm our business and prospects.51Cash FlowsThe following table shows a summary of the net cash flow activity for the years ended April 30, 2017 and 2016: Years Ended April 30, 2017 2016 (in thousands) Cash flows used in operating activities $(23,722) $(13,156)Cash flows provided by (used in) investing activities 34,065 (11)Cash flows provided by financing activities 2 33,003 Effect of exchange rate changes on cash (1,159) (598)Net increase in cash and cash equivalents $9,186 $19,239Net cash used in operating activitiesNet cash used in operating activities of $23.7 million for the year ended April 30, 2017 consisted primarily of a net loss of $18.6 million, adverseworking capital movements of $4.2 million and the impact of foreign currency re-measurement gains of $1.4 million. Included in the net cash used foroperating activities was $5.6 million of expenses related to the share purchase transaction. Compared to the prior year, the increase in cash flows used inoperating activities was due to expenses related to the share purchase transaction as well as employee related costs as we added key positions to ourmanagement team. Cash used in operating activities of $13.2 million for the year ended April 30, 2016 consisted of a net loss of $11.4 million, an increase inthe research and development tax credit receivable of $1.1 million, a foreign currency re-measurement gain of $1.7 million offset by favorable net workingcapital movements in receivables and payables and other accrued and prepaid expenses of $0.9 million.Net cash provided by investing activitiesNet cash provided by investing activities for the year ended April 30, 2017 consisted of the net cash acquired in the Carbylan transaction of $34.1million.Net cash provided by financing activitiesNet cash provided by financing activities for the year ended April 30, 2017 consisted of proceeds from the exercise of stock options. Net cashprovided by financing activities for the year ended April 30, 2016 consisted of net proceeds from the issuance of $33.0 million of Series B preferred stock. Operating Capital RequirementsTo date, we have not generated any revenues from the sale of products and we do not have any products that have been approved forcommercialization. We do not expect to generate significant product revenue unless and until we obtain regulatory approval for, and commercialize, one ofour current or future product candidates. We anticipate that we will continue to incur losses for the foreseeable future, and we expect the losses to increase aswe continue the development of, and seek regulatory approvals for, product candidates, and begin to commercialize any approved products. We are subjectto all of the risks inherent in the development of new therapeutic products, and we may encounter unforeseen expenses, difficulties, complications, delaysand other unknown factors that may adversely affect our business. As a result of the completion of the share purchase transaction in November 2016, weexpect to incur additional costs associated with operating as a public company. We currently anticipate that, based upon our operating plans, existing capitalresources and the additional funding secured through the transaction, we have sufficient funding to operate for at least the next twelve months.Until such time, if ever, as we can generate substantial revenues, we expect to finance our cash needs through a combination of equity or debtfinancings, collaborations, strategic partnerships or licensing arrangements. To the extent that additional capital is raised through the sale of stock orconvertible debt securities, the ownership interest of existing stockholders will be diluted, and the terms of these newly issued securities may includeliquidation or52other preferences that adversely affect the rights of common stockholders. Debt financing, if available, may involve agreements that include increased fixedpayment obligations and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures,declaring dividends, selling or licensing intellectual property rights and other operating restrictions that could adversely impact our ability to conductbusiness. Additional fundraising through collaborations, strategic partnerships or licensing arrangements with third parties may require us to relinquishvaluable rights to product candidates, including its other technologies, future revenue streams or research programs, or grant licenses on terms that may notbe favorable. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate product development or futurecommercialization efforts or grant rights to develop and commercialize its other product candidates even if we would otherwise prefer to develop andcommercialize such product candidates internally.Contractual Obligations and CommitmentsWe enter into contracts in the normal course of business with contract research organizations and clinical trial sites for the conduct of clinical trials,preclinical and clinical studies, professional consultants and other vendors for clinical supply manufacturing or other services. These contracts generallyprovide for termination on notice, and therefore are cancelable contracts and not included in the table of contractual obligations and commitments in Note 10to the consolidated financial statements. There are no long term debt payments or long term operating lease obligations as of April 30, 2017.In May 2017, we entered into a lease for approximately 2,700 square feet of office space in Cambridge, MA, that we anticipate occupying in late2017. The lease has a term of 5 years and annual rent expense will range from approximately $220,000 to $232,000.In June 2017, we entered into a lease agreement for laboratory equipment to be used in the U.K. research facility. We made a down payment ofapproximately $200,000 and the remaining payments of approximately $18,000 per month will be made over a two year term.The table below summarizes the abovementioned non-cancelable lease commitments: Payments Due by Period (In thousands) Contractual ObligationsTotal Less Than 1Year 1-3 Years 3-5 Years More Than 5Years Operating lease obligations$1,758 $506 $697 $459 $96As a result of the terms of grant income received in prior years, upon successful regulatory approval and following the first commercial sale of certainproducts, we will be required to pay royalty fees of up to £1 million within 90 days of the first commercial sale of the product subject to certain caps andfollow on payments depending upon commercial success and type of product. Given the stage of development of the current pipeline of products it is notpossible to predict with certainty the amount or timing of any such liability.Off-Balance Sheet ArrangementsWe do not have any off-balance sheet arrangements as defined in the rules and regulations of the SEC.Recent Accounting PronouncementsFor information regarding recent accounting pronouncements, please refer to Note 2, Summary of Significant Accounting Policies within ourconsolidated financial statements.53Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Interest Rate RiskWe have exposure to market risk in interest income sensitivity, which is affected by changes in the general level of interest rates. However, because ofthe short-term nature of the bank deposit arrangements and the very low interest rates prevailing in the United Kingdom and the United States, a suddenchange in market interest rates would not be expected to have a material impact on our financial condition and/or results of operations. We do not believethat our cash or cash equivalents have significant risk of default or illiquidity.Foreign Exchange Rate RiskWe maintain cash balances primarily in both USD and GBP to fund ongoing operations and manage foreign exchange risk. Cash and cashequivalents as of April 30, 2017 was $31.0 million and consisted of readily available checking and bank deposit accounts held primarily in both USD andGBP. As of April 30, 2017, 95% of cash and cash equivalents were held in USD and 5% in GBP. We currently incur significant expense primarily in GBP andconvert USD as needed to fund those expenses. We do not currently engage in exchange rate hedging or other similar activities to address our exchange raterisk. A 10% change in the exchange rate would result in a net gain or loss of approximately $0.2 million.Effects of InflationWe do not believe that inflation and changing prices had a significant impact on the results of operations for any periods presented herein.Item 8. Financial Statements and Supplementary Data.The financial statements and related financial statement schedules required to be filed are listed in Item 15 and incorporated herein by reference.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A. Controls and Procedures.Evaluation of Disclosure Controls and ProceduresAs required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, under the supervisionand with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of ourdisclosure controls and procedures as of April 30, 2017. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under theExchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in thereports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rulesand forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to bedisclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management,including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure. Managementrecognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectivesand management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation ofour disclosure controls and procedures as of April 30, 2017 our Chief Executive Officer and Chief Financial Officer have concluded that, as of April 30, 2017,our disclosure controls and procedures were effective at the reasonable assurance level.54Management’s Annual Report on Internal Control Over Financial ReportingThis Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or anattestation report of our independent registered public accounting firm due to our determination that the company is currently similarly situated to a newlypublic company due to the relatively recent closing of the reverse merger transaction with Carbylan. In making this determination, we have considered thetiming and effects of such reverse merger transaction, which closed in November 2016 and after which, substantially all of the business of the company wasthat of KalVista Limited. We further considered the integration between the two businesses, which involved substantial changes to the board andmanagement. We will file our first assessment regarding internal control in the Annual Report on Form 10-K for the year ending April 30, 2018.Changes in Internal Controls over Financial ReportingDuring the quarter ended April 30, 2017, management continued to implement additional controls to enhance the operating effectiveness of internalcontrol over financial reporting. In addition to the controls discussed below, the Company hired additional accounting personnel to supplement existingstaff. The new accounting personnel provided additional oversight and monitoring of the financial close and reporting process. As previously reported, two material weaknesses were identified as of April 30, 2016. A material weakness is a deficiency, or a combination ofdeficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interimfinancial statements will not be prevented or detected on a timely basis. A description of the material weaknesses and the remediation efforts that wereimplemented and determined to be effective as of April 30, 2017 were as follows: •A deficiency was identified related to ineffective design of controls over the measurement of fair value of equity-based awards,specifically the measurement of the fair value of the common stock underlying such awards. At April 30, 2016, there was no activemarket for our common stock. Upon completion of the Carbylan transaction on November 21, 2016, our common stock is publiclytraded and the valuation of the stock underlying new awards is readily determinable from the quoted price of our common stock. Inaddition, we implemented a software tool to improve tracking of equity awards. The new software, which was fully implementedduring the quarter ended April 30, 2017, allows for more effective controls over processing and oversight of the measurement andrecording of stock-based compensation. •Deficiencies were identified related to ineffective design and operation of controls to ensure that operating expenses were recordedin the correct period. During the quarter ended January 31, 2017, management implemented additional controls related to approvalof expenditures and ensuring that the goods and services that were received at or near the end of the period were properly identifiedand recorded. During the quarter ended April 30, 2017, there was sufficient evidence to demonstrate that the newly implementedcontrols were effective at April 30, 2017.The implementation of these controls, as well as the additional personnel, have materially affected our internal control over financial reportingduring the quarter ended April 30, 2017 and have been designed and implemented to effectively remediate the material weaknesses previously identified.Item 9B. Other Information.None.55PART IIIItem 10. Directors, Executive Officers and Corporate Governance.The information required by this Item is set forth in our 2017 Proxy Statement to be filed with the SEC within 120 days of April 30, 2017, and isincorporated by reference into this Annual Report on Form 10-K by reference.Item 11. Executive Compensation.The information required by this Item is set forth in our 2017 Proxy Statement to be filed with the SEC within 120 days of April 30, 2017, and isincorporated by reference into this Annual Report on Form 10-K by reference.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.The information required by this Item is set forth in our 2017 Proxy Statement to be filed with the SEC within 120 days of April 30, 2017, and isincorporated by reference into this Annual Report on Form 10-K by reference.Item 13. Certain Relationships and Related Transactions, and Director Independence.The information required by this Item is set forth in our 2017 Proxy Statement to be filed with the SEC within 120 days of April 30, 2017, and isincorporated by reference into this Annual Report on Form 10-K by reference.Item 14. Principal Accounting Fees and Services.The information required by this Item is set forth in our 2017 Proxy Statement to be filed with the SEC within 120 days of April 30, 2017, and isincorporated by reference into this Annual Report on Form 10-K by reference.56PART IVItem 15. Exhibits, Financial Statement Schedules. (a)The following documents are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K: (1)Consolidated Financial Statements. See Index to Financial Statements under Item 8 of this Annual Report on Form 10-K. (2)Financial Statement Schedules. All schedules have been omitted because the information required to be presented in them is notapplicable or is shown in the financial statements or related notes. (3)Exhibits. We have filed, or incorporated into this Annual Report on Form 10-K by reference, the exhibits listed on the accompanyingExhibit Index immediately following the financial statements in this Annual Report on Form 10-K. (b)Exhibits. See Item 15(a)(3) above. (c)Financial Statement Schedules. See Item 15(a)(2) above.Item 16. Form 10-K Summary.None.57SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report tobe signed on its behalf by the undersigned, thereunto duly authorized. KalVista Pharmaceuticals, Inc. Date: July 27, 2017 By:/s/ Thomas Andrew Crockett Thomas Andrew Crockett Chief Executive Officer POWER OF ATTORNEYEach person whose individual signature appears below hereby authorizes and appoints Thomas Andrew Crockett and Benjamin L. Palleiko, and eachof them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent toact in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to fileany and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, withthe Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform eachand every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfullydo or cause to be done by virtue thereof.Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons onbehalf of the Registrant in the capacities and on the dates indicated. Name Title Date /s/ Thomas Andrew Crockett Chief Executive Officer and Director July 27, 2017Thomas Andrew Crockett (Principal Executive Officer) /s/ Benjamin L Palleiko Chief Financial Officer July 27, 2017Benjamin L. Palleiko (Principal Financial and Accounting Officer) /s/ Richard Aldrich Director and Chairman July 27, 2017Richard Aldrich /s/ Albert Cha Director July 27, 2017Albert Cha, M.D., Ph.D. /s/ Arnold Oronsky Director July 27, 2017Arnold L. Oronsky, Ph.D. /s/ Joshua Resnick Director July 27, 2017Joshua Resnick, M.D. /s/ Rajeev Shah Director July 27, 2017Rajeev Shah /s/ Edward W Unkart Director July 27, 2017Edward W. Unkart 58KALVISTA PHARMACEUTICALS, INC.INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Report of Independent Registered Public Accounting FirmF-2Consolidated Balance SheetsF-4Consolidated Statements of Operations and Comprehensive LossF-5Consolidated Statements of Changes in Convertible Preferred Shares and Stockholders’ Equity (Deficit)F-6Consolidated Statements of Cash FlowsF-8Notes to Consolidated Financial StatementsF-9 F-1Report of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders ofKalVista Pharmaceuticals, Inc.Cambridge, MassachusettsWe have audited the accompanying consolidated balance sheet of KalVista Pharmaceuticals, Inc. (the “Company”) as of April 30, 2017, and the relatedconsolidated statements of operations and comprehensive loss, changes in convertible preferred shares and stockholders’ equity (deficit), and cash flows forthe year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal controlover financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forour opinion.In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of KalVista Pharmaceuticals, Inc. and itssubsidiary as of April 30, 2017, and the results of their operations and their cash flows for the year then ended, in conformity with accounting principlesgenerally accepted in the United States of America./s/ Deloitte & Touche LLPBoston, MassachusettsJuly 27, 2017 F-2Report of Independent Registered Public Accounting FirmTo the Board of Directors and Stockholders of KalVista Pharmaceuticals LimitedKalVista Pharmaceuticals LimitedUnited KingdomWe have audited the accompanying balance sheet of KalVista Pharmaceuticals Limited (the “Company”) at April 30, 2016 and the related statements ofoperations and comprehensive loss, changes in convertible preferred shares and shareholders’ deficit, and cash flows for each of the years ended April 30,2016 and 2015. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on thesefinancial statements based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is notrequired to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internalcontrol over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.In our opinion, such financial statements present fairly, in all material respects, the financial position of the Company at April 30, 2016, and the results of itsoperations and its cash flows for each of the years ended April 30, 2016 and 2015, in conformity with accounting principles generally accepted in the UnitedStates of America.As discussed in Note 2 to the financial statements, the accompanying financial statements have been restated to correct a misstatement./s/ Deloitte LLPReading, United KingdomAugust 22, 2016(July 27, 2017 as to the effects of the adjustment of net loss per share arising from theCarbylan transaction discussed in Note 2 and the misstatement of other comprehensiveloss discussed in Note 2) F-3KALVISTA PHARMACEUTICALS, INC.Consolidated Balance SheetsApril 30, 2017 and 2016(in thousands except share and per share amounts) 2017 2016 Assets Current assets: Cash and cash equivalents $30,950 $21,764 Research and development tax credit receivable 2,250 1,883 Grants receivable 297 356 Prepaid expenses and other current assets 751 668 Total current assets 34,248 24,671 Property and equipment, net 97 74 Total assets $34,345 $24,745 Liabilities and Stockholders’ Equity (Deficit) Current liabilities: Accounts payable $1,153 $1,008 Accrued expenses 1,865 2,114 Due to related parties — 127 Total current liabilities 3,018 3,249 Commitments and contingencies (Note 10) Series B Convertible Preferred Stock, $0.0016 par value Shares issued and outstanding: None at April 30, 2017 and 8,422,898 at April 30, 2016 — 33,002 Series A Convertible Preferred Stock, $0.0016 par value Shares issued and outstanding: None at April 30, 2017 and 15,900,000 at April 30, 2016 — 25,606 Total preferred stock — 58,608 Stockholders’ equity (deficit): Ordinary Shares, $0.0016 par value Shares issued and outstanding: None at April 30, 2017 and 2,167,367 at April 30, 2016 — 3 Common stock, $0.001 par value Shares authorized: 100,000,000 at April 30, 2017 Shares issued and outstanding: 9,713,042 at April 30, 2017 and none at April 30, 2016 10 — Additional paid-in capital 89,815 212 Accumulated deficit (55,855) (37,252)Accumulated other comprehensive loss (2,643) (75)Total stockholders’ equity (deficit) 31,327 (37,112)Total liabilities and stockholders’ equity (deficit) $34,345 $24,745 See notes to consolidated financial statements. F-4KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Operations and Comprehensive LossYears Ended April 30, 2017, 2016 and 2015(in thousands, except share and per share amounts) 2017 2016 2015 Grant income $1,504 $2,133 $1,804 Operating expenses: Research and development expenses 12,666 14,661 8,285 General and administrative expenses 11,177 2,653 1,608 Total operating expenses 23,843 17,314 9,893 Operating loss (22,339) (15,181) (8,089)Other income: Interest income 36 50 19 Foreign currency exchange rate gain 1,371 1,661 — Other income 2,329 2,034 844 Total other income 3,736 3,745 863 Net loss (18,603) (11,436) (7,226) Other comprehensive income (loss): Foreign currency translation adjustments (2,568) (2,240) (156)Comprehensive loss $(21,171) $(13,676) $(7,382)Net loss per share attributable to common stockholders, basic and diluted $(4.47) $(26.17) $(34.94)Weighted average common shares outstanding, basic and diluted 4,646,764 591,298 263,358 See notes to consolidated financial statements. F-5KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Changes in Convertible Preferred Shares and Stockholders’ Equity (Deficit)Years Ended April 30, 2017, 2016 and 2015(in thousands, except share and per share amounts) Series BPreferred Stock Series APreferred Stock Total Preferred Stock Number ofShares Amount Number ofShares Amount Shares Amount Balance, May 1, 2014 — — 10,500,000 $16,913 10,500,000 $16,913 Issuance of Series A convertible preferred stock net of issuance costs of approximately $6 5,400,000 8,693 5,400,000 8,693 Issuance of ordinary shares — — — — — — Stock-based compensation expense — — — — — — Net loss — — — — — — Foreign currency translation — — — — — — Balance, April 30, 2015 — — 15,900,000 25,606 15,900,000 25,606 Issuance of Series B convertible preferred stocknet of issuance costs of approximately $186 8,422,898 33,002 — — 8,422,898 33,002 Issuance of ordinary shares — — — — — Stock-based compensation expense — — — — — Net loss — — — — — Foreign currency translation — — — — — Balance, April 30, 2016 8,422,898 33,002 15,900,000 25,606 24,322,898 58,608 Issuance of ordinary shares — — — Carbylan transaction (8,422,898) (33,002) (15,900,000) (25,606) (24,322,898) (58,608)Stock-based compensation expense — — — — — Net loss — — — — — Foreign currency translation — — — — — Balance, April 30, 2017 — $— — $— $— F-6 Accumulated Additional Other Total Ordinary Shares Common Stock Paid-in- Accumulated Comprehensive Stockholders’ Shares Amount Shares Amount Capital Deficit Income (Loss) Equity(Deficit) Balance, May 1, 2014 526,050 $1 — $— $58 $(18,590) $2,321 $(16,210)Issuance of Series A convertiblepreferred stock net of issuance costs of approximately $6 — — — — — — — — Issuance of ordinary shares 776,317 1 — — — — — 1 Stock-based compensation expense — — 36 — — 36 Net loss — — — (7,226) — (7,226)Foreign currency translation — — — — (156) (156)Balance, April 30, 2015 1,302,367 2 — — 94 (25,816) 2,165 (23,555)Issuance of Series B convertiblepreferred stock net of issuance costs of approximately $186 — — — — — — Issuance of ordinary shares 865,000 1 — — — 1 Stock-based compensation expense — — 118 — — 118 Net loss — — — (11,436) — (11,436)Foreign currency translation — — — — (2,240) (2,240)Balance, April 30, 2016 2,167,367 3 — — 212 (37,252) (75) (37,112)Issuance of ordinary shares 396,719 2 — — — — — 2 Carbylan transaction (2,564,086) (5) 9,713,042 10 89,209 — — 89,214 Stock-based compensation expense — — — — 394 — — 394 Net loss — — — — — (18,603) — (18,603)Foreign currency translation — — — — — — (2,568) (2,568)Balance, April 30, 2017 — $— 9,713,042 $10 $89,815 $(55,855) $(2,643) $31,327 See notes to consolidated financial statements. F-7KALVISTA PHARMACEUTICALS, INC.Consolidated Statements of Cash FlowsYears Ended April 30, 2017, 2016 and 2015(in thousands) 2017 2016 2015 Cash flows from operating activities: Net loss $(18,603) $(11,436) $(7,226)Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 40 33 38 Share-based compensation expense 394 118 36 Foreign currency exchange rate gain (1,371) (1,661) — Changes in operating assets and liabilities, net of changes from business acquired: Research and development tax credit receivable (600) (1,148) (94)Grants receivable 29 (137) 65 Prepaid expenses and other current assets (81) (475) 210 Accounts payable (1,599) 374 167 Accrued expenses (1,931) 1,176 436 Net cash used in operating activities (23,722) (13,156) (6,368)Cash flows from investing activities: Cash acquired in Carbylan transaction 34,139 — — Purchases of property and equipment (74) (11) (125)Net cash provided by (used in) investing activities 34,065 (11) (125)Cash flows from financing activities: Proceeds from issuance of common stock 2 1 1 Proceeds from issuance of Series A Preferred Stock, net of issuance costs — — 8,661 Proceeds from issuance of Series B Preferred Stock, net of issuance costs — 33,002 — Net cash provided by financing activities 2 33,003 8,662 Effect of exchange rate changes on cash (1,159) (598) (124)Net increase in cash and cash equivalents 9,186 19,238 2,045 Cash and cash equivalents, beginning year 21,764 2,526 481 Cash and cash equivalents, end of year $30,950 $21,764 $2,526 Supplemental disclosures of cash flow information: Conversion of preferred stock and ordinary shares to common stock $58,613 $— $— Cash paid for taxes $— $— $— See notes to consolidated financial statements. F-8KALVISTA PHARMACEUTICALS, INC.Notes to Consolidated Financial StatementsNote 1. Description of Business, Basis of Presentation and Going ConcernKalVista Pharmaceuticals, Inc. (the “Company” or “KalVista”) is a clinical-stage pharmaceutical company focused on the discovery, developmentand commercialization of small molecule serine protease inhibitors as new treatments for diseases with significant unmet need. The Company’s initial focusis on developing a portfolio of oral inhibitors of plasma kallikrein for two indications: hereditary angioedema, or HAE, and diabetic macular edema or DME.The first oral program, KVD818, is currently in Phase 1 clinical testing and additional programs are in preclinical development. KalVista also has developedan intravitreally administered plasma kallikrein inhibitor for DME that has completed a Phase 1 clinical trial and is anticipated to commence Phase 2 testinglater in 2017. The Company’s headquarters is located in Cambridge, Massachusetts, and the Company operates a research facility in the United Kingdom.On November 21, 2016 KalVista Pharmaceuticals Limited (“KalVista Limited”) completed a share purchase transaction with Carbylan TherapeuticsInc. (“Carbylan”) in an all-stock transaction whereby immediately following the transaction Carbylan’s equity holders owned 19% and KalVista Limited’sequity holders owned 81% of the combined company, respectively (see Note 6). As a result, Carbylan issued approximately 7.8 million shares of commonstock to the stockholders of KalVista Limited in exchange for their common shares of KalVista Limited. Approximately 1.9 million shares were retained bythe Carbylan stockholders. The combined company was renamed KalVista Pharmaceuticals, Inc. following the transaction. Following the completion of thetransaction, the business being conducted by the Company became primarily the business conducted by KalVista Limited. As discussed in Note 6, KalVistaLimited was identified as the acquirer for accounting purposes. The Company’s financial statement presentation reflects the business of KalVista Limited forperiods prior to November 21, 2016 and the combined results of operations of KalVista Limited and Carbylan for the periods thereafter. The results ofoperations of the Carbylan business in the periods subsequent to acquisition date are not material.The Company has devoted substantially all of its efforts to research and development, including clinical trials of its product candidates. TheCompany has not completed the development of any product candidates. Pharmaceutical drug product candidates, like those being developed by theCompany, require approvals from the U.S. Food and Drug Administration (“FDA”) or foreign regulatory agencies prior to commercial sales. There can be noassurance that any product candidates will receive the necessary approvals and any failure to receive approval or delay in approval may have a materialadverse impact on the business and financial statements of the Company. The Company has never been profitable and has not yet commenced commercialoperations. KalVista is subject to a number of risks and uncertainties similar to those of other life science companies developing new products, including,among others, the risks related to the necessity to obtain adequate additional financing, to successfully develop product candidates, to obtain regulatoryapproval of product candidates, to comply with government regulations, to successfully commercialize its potential products, to the protection of proprietarytechnology and to the dependence on key individuals.The Company has funded its operations primarily through the issuance of preferred stock and grant income. As of April 30, 2017, the Company hadan accumulated deficit of $55.9 million and cash and cash equivalents totaling $31.0 million. Management believes that the cash and cash equivalents atApril 30, 2017 will be able to fund operations for at least 12 months beyond the date of issuance of the consolidated financial statements.The Company will need to expend substantial resources for research and development, including costs associated with the clinical testing of itsproduct candidates and will need to obtain additional financing to fund its operations and to conduct trials for its product candidates. The Company willseek to finance future cash needs through equity offerings, future grants, corporate partnerships and product sales.The Company has never been profitable and has incurred significant operating losses in each year since inception. Cash requirements may varymaterially from those now planned because of changes in the Company’s focus and direction of its research and development programs, competitive andtechnical advances, patent developments, regulatory changes or other developments. Additional financing will be required to continue operations after theCompany exhausts its current cash resources and to continue its long-term plans for clinicalF-9trials and new product development. There can be no assurance that any such financing can be obtained by the Company, or if obtained, what the termsthereof may be, or that any amount that the Company is able to raise will be adequate to support the Company’s working capital requirements until itachieves profitable operations. If adequate additional working capital is not secured when it becomes needed, the Company may be required to makereductions in spending, extend payment terms with suppliers, liquidate assets where possible and/or suspend or curtail planned research programs. Any ofthese actions could materially harm the business and prospects. Note 2. Summary of Significant Accounting PoliciesPrinciples of consolidation: The accompanying consolidated financial statements include the accounts of the Company and its wholly ownedsubsidiaries. All intercompany balances and transactions have been eliminated in consolidation.Use of estimates: The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the consolidatedfinancial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.Foreign currency: The functional currency of the Company’s foreign subsidiary is the Great Britain Pound Sterling. Assets and liabilities of theforeign subsidiary are translated using the exchange rate existing on each respective balance sheet date. Revenues and expenses are translated using averageexchange rates prevailing throughout the year. The translation adjustments resulting from this process are included as the only component of theaccumulated other comprehensive loss. In addition, the Company’s foreign subsidiary engages in transactions denominated and settled in currencies otherthan the functional currency, and transaction gains or losses are recorded in the consolidated statement of operations.Segment Reporting: The Chief Operating Decision Maker, the CEO, manages the Company’s operations as a single operating segment for thepurposes of assessing performance and making operating decisions.Cash and cash equivalents: Cash and cash equivalents consist of bank deposits and money market accounts. Cash equivalents are carried at costwhich approximates fair value due to their short-term nature. The Company considers all highly liquid investments with an original maturity of 90 days orless to be cash equivalents.The Company maintains its cash and cash equivalent balances with financial institutions that management believes are of high credit quality. TheCompany’s cash and cash equivalent accounts at times may exceed federally insured limits. The Company has not experienced any losses in such accounts.The Company believes it is not exposed to any significant credit risk of cash and cash equivalents.Research and development tax credit receivable: The research and development tax credit receivable consists of research and developmentexpenses that have been claimed as research and development tax credits in accordance with the relevant U.K. tax legislation. These tax credits are payable tothe Company in cash and are carried on the consolidated balance sheet at the amount claimed and expected to be received from the U.K. government.F-10Property and equipment: Property and equipment are stated at cost less accumulated depreciation. Expenditures for repairs and maintenance arecharged to expense as incurred. Upon retirement or sale, the costs of the assets disposed of and the related accumulated depreciation are eliminated from theaccounts and any resulting gain or loss is reflected in the statement of operations. Depreciation is provided using the straight-line method over the estimateduseful lives of the assets, which are as follows: Asset Classification Estimated Useful LifeMachinery and equipment 1-5 YearsComputer equipment 3-4 YearsMotor vehicles 4 YearsLeasehold improvements 5 Years or term of lease, if shorter The Company assesses the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying value of suchassets, or asset groups, may not be recoverable. Whenever events or changes in circumstances suggest that the carrying amount of long-lived assets may notbe recoverable, the future undiscounted cash flows expected to be generated by the asset, or asset groups, from its use or eventual disposition is estimated. Ifthe sum of the expected future undiscounted cash flows is less than the carrying amount of those assets, or asset groups, an impairment loss is recognizedbased on the excess of the carrying amount over the fair value of the assets, or asset groups.Revenue recognition: The Company has primarily generated grant income for the development and commercialization of product candidatesthrough sponsored research arrangements with non-profit organizations and from federal research and development grant programs. The Company recognizesrevenue when amounts are realized or realizable and earned. Revenue is considered realizable and earned when the following criteria are met: (1) persuasiveevidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the price is fixed or determinable; and (4) collection of theamounts due are reasonably assured. See Note 8.Research and development: Research and development costs are expensed as incurred and include, but are not limited to: •Employee-related expenses including salaries, benefits, travel, and share-based compensation expense for research and developmentpersonnel; •Costs associated with preclinical and development activities; •Costs associated with regulatory operations.Income taxes: The Company uses the asset and liability method for accounting for income taxes. Under this method, deferred tax assets andliabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets andliabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable incomein the years in which those temporary differences are expected to be recovered or settled. The Company evaluates the realizability of its deferred tax assetsand establishes a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. The Company hasprovided a full valuation allowance on its deferred tax assets.Relative to accounting for uncertainties in tax positions, the Company recognizes the tax benefit of tax positions to the extent that the benefit willmore likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits ofthe tax position as well as consideration of the available facts and circumstances. For those tax positions where it is more likely than not that a tax benefitwill be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with ataxing authority having full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit willbe sustained, the Company does not recognize a tax benefit in the financial statements. F-11The Company recognizes interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. As the Company hasno uncertain tax positions, there were no interest or penalties charges recognized in the statement of operations for both years.Stock based compensation: The Company accounts for stock based compensation arrangements at fair value. The fair value is recognized over theperiod during which the recipient is required to provide services (usually the vesting period), on a straight-line basis.Net Loss per Share Attributable to Common Shareholders: Basic and diluted net loss per share is presented in conformity with the two-classmethod required for participating securities. Under the two-class method, basic net loss per share is computed by dividing the net loss attributable to commonstockholders by the weighted-average number of common shares outstanding during the period. Net loss attributable to common stockholders is determinedby allocating undistributed earnings between holders of common and convertible preferred shares, based on the contractual dividend rights contained in thepreferred share agreement. Where there is an undistributed loss, no amount is allocated to the convertible preferred shares. Diluted net loss per share iscomputed by dividing net loss by the sum of the weighted average number of common stock and the number of dilutive potential common stock equivalentsoutstanding during the period. Potential dilutive common share equivalents consist of the incremental common shares issuable upon the exercise of vestedshare options or the conversion of preferred stock.Potential dilutive common share equivalents consist of: April 30, 2017 2016 2015 Preferred stock — 24,322,898 24,322,898 Stock options 148,469 76,643 62,424 In computing diluted earnings per share, common stock equivalents are not considered in periods in which a net loss is reported, as the inclusion ofthe common stock equivalents would be anti-dilutive. As a result, there is no difference between the Company’s basic and diluted loss per share in theperiods presented (in thousands, except share and per share amounts). Basic and diluted net loss per share April 30, 2017 2016 2015 Net loss $(18,603) $(11,436) $(7,226)Less: dividend on Series A (935) (1,918) (1,977)Less: dividend on Series B (1,237) (2,121) — Loss available to common stockholders (20,775) (15,475) (9,203)Weighted average common shares, basic and diluted 4,646,764 591,298 263,358 Net loss per share, basic and diluted $(4.47) $(26.17) $(34.94) The weighted average shares outstanding, reported loss per share and potential dilutive common share equivalents for the periods prior to November21, 2016, the date of the Carbylan transaction, have been retrospectively adjusted to reflect historical weighted-average number of common sharesoutstanding multiplied by the exchange ratio established in the share purchase agreement. Fair value measurement: The Company classifies fair value measurements using a three-level hierarchy that prioritizes the inputs used to measurefair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputsused to measure fair value are as follows: Level 1, quoted market prices in active markets for identical assets or liabilities; Level 2, observable inputs otherthan quoted market prices included in Level 1, such as quoted market prices for markets that are not active or other inputs that are observable or can becorroborated by observable market data; and Level 3, unobservable inputs that are supported by little or no market activity and that are significant to the fairvalue of the assets or liabilities, including certain pricing models, discounted cash flow methodologies and similar techniques that use significantunobservable inputs.F-12The Company’s financial instruments as of April 30, 2017 and 2016 consisted primarily of cash and cash equivalents, grants receivable and accountspayable. The carrying amount of these assets and liabilities approximate fair value given the short term maturity of these instruments.Correction: The statements of operations and comprehensive loss for the years ended April 30, 2016 and 2015 have been restated to correct errors inthe foreign currency translation adjustments which were reported as a gain rather than a loss and to correct the resulting summation of comprehensive loss. Asa result of the correction of these errors, the total comprehensive loss for the year ended April 30, 2016 increased from a loss of $9,196,000 to a loss of$13,676,000, and the total comprehensive loss for the year ended April 30, 2015 increased from a loss of $7,070,000 to a loss of $7,382,000. There is noimpact on the Company’s previously reported net loss, the balance sheet, the statement of changes in convertible preferred shares and stockholders’ equity(deficit) or the statement of cash flows for any period. Recently issued accounting pronouncements not yet adopted: In May 2014, the Financial Accounting Standards Board (“FASB”) issuedAccounting Standards update (“ASU”) 2014-09, “Revenue from Contracts with Customers,” requiring an entity to recognize the amount of revenue to whichit expects to be entitled for the transfer of promised goods or services to customers. The updated standard will replace most existing revenue recognitionguidance in US GAAP when it becomes effective and permits the use of either the retrospective or cumulative effect transition method. In July 2015, theFASB voted to defer the effective date for annual reporting periods beginning after December 15, 2017 (including interim reporting periods within thoseperiods) and permitted early adoption of the standard, but not before the original effective date of December 15, 2016. The Company expects to adopt theupdated standard in the first quarter of fiscal 2019 using the modified retrospective method of adoption. The Company is assessing the impact that adoptionof this new guidance will have on the consolidated financial statements.In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, “Leases” (Topic 842). Under the new guidance, lessees willbe required to recognize for all leases (with the exception of short-term leases) at the commencement date: (1) a lease liability, which is a lessee’s obligationto make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right touse, or control the use of, a specified asset for the lease term. The new lease guidance is effective for fiscal years beginning after December 15, 2018,including interim periods within those fiscal years. Early application is permitted, however, the Company does not intend to early adopt. The Company isassessing the impact that adoption of this new guidance will have on the consolidated financial statements.In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation” (“ASU 2016-09”) to require changes to several areas ofemployee share-based payment accounting in an effort to simplify share-based reporting. The update revises requirements in the following areas: minimumstatutory withholding, accounting for income taxes and forfeitures. ASU 2016-09 is effective for annual reporting periods beginning after December 15,2016. The Company is currently evaluating the impact that the adoption of this guidance may have on the consolidated financial statements.In November 2016 the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230), Restricted Cash” (“ASU 2016-18”). The new standardrequires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described asrestricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be includedwith cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. Thestandard is effective for annual periods beginning after December 15, 2017, and interim periods within those annual reporting periods. Early adoption ispermitted. The Company is currently evaluating the impact of this update on the consolidated financial statements.In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and CashPayments” (“ASU 2016-15”). The amendments in this update clarify how entities should classify certain cash receipts and cash payments on theConsolidated Statements of Cash Flows. The new guidance also clarifies how the predominance principle should be applied when cash receipts and cashpayments have aspects of more than one class of cash flows. ASU 2016-15 will be effective for annual periods beginning afterF-13December 15, 2017, including interim periods within those annual reporting periods, but early adoption is permitted. The Company is currently evaluatingthe impact of this update on the consolidated financial statements.Recently adopted accounting pronouncementsIn August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements—Going Concern,” on disclosure of uncertainties about anentity’s ability to continue as a going concern. This guidance addresses management’s responsibility in evaluating whether there is substantial doubt about acompany’s ability to continue as a going concern and to provide related footnote disclosures. The Company adopted this standard in its fiscal year endedApril 30, 2017.Note 3. Property and EquipmentAt April 30, 2017 and 2016, property and equipment consisted of (in thousands): 2017 2016 Laboratory equipment $373 $358 Office equipment 31 58 Furniture & Fixtures 6 2 410 418 Less accumulated depreciation (313) (344) $97 $74 For the years ended April 30, 2017, 2016 and 2015, depreciation expense was $40,000, $33,000 and $38,000, respectively.Note 4. Accrued ExpensesAt April 30, 2017 and 2016, accrued expenses consisted of (in thousands): 2017 2016 Accrued research expense $348 $1,059 Accrued compensation 1,300 966 Accrued professional fees 146 60 Other accrued expenses 71 29 $1,865 $2,114 Note 5. Related Party Transactions On May 23, 2011, the Company entered into a sale and purchase agreement with Vantia Limited whereby, in return for a consideration of 500,000Series A Preferred Shares in the Company at a subscription price of $1.61 per share, Vantia Limited transferred certain intellectual property and other businessassets to the Company. Certain employees of Vantia Limited were also transferred to the Company as part of this transaction and the two entities sharedcommon directors.On May 23, 2011, the Company entered into an agreement with Vantia Limited. The Company continued to pay Vantia for management fees andrelated expenses, which consist primarily of the cost of two Vantia employees who perform services for the Company and other administrative expenses.During the years ended April 30, 2017, 2016 and 2015, the Company expensed $0.4 million, $1.0 million and $1.2 million for services performed by VantiaLimited. As of April 30, 2016, the Company had recorded $127,000 within current liabilities for amounts due to Vantia Limited. Following the Carbylantransaction Vantia Limited ceased being a related party.F-14Note 6. Carbylan TransactionOn November 21, 2016, KalVista Pharmaceuticals Limited (“KalVista Limited”) completed a share purchase transaction with Carbylan TherapeuticsInc. (“Carbylan”) whereby immediately following the transaction Carbylan’s equity holders owned 19% and KalVista Limited’s equity holders owned 81%of the combined company, respectively. As a result, Carbylan issued approximately 7.8 million shares of common stock to the stockholders of KalVistaLimited in exchange for all shares of KalVista Limited. Approximately 1.9 million shares were retained by the Carbylan stockholders. The combinedcompany was renamed KalVista Pharmaceuticals, Inc. following the transaction. For accounting purposes, KalVista Limited is considered to be acquiringCarbylan in the transaction, which was determined based upon the terms of the share purchase agreement and other factors including: (i) KalVista Limitedsecurity holders own approximately 81% of the voting interests of the combined company immediately following the closing of the transaction; (ii) directorsappointed by KalVista Limited hold a majority of board seats in the combined company; and (iii) KalVista Limited management hold all of the key positionsin the management of the combined company. As the accounting acquirer, KalVista Limited’s assets and liabilities were recorded at their pre-combinationcarrying amounts and the historical operations that are reflected in the financial statements are those of KalVista Limited. The Company incurred $5.6million of nonrecurring expenses for the year ended April 30, 2017, related to severance, legal and other professional services in connection with thetransaction.The Company’s consolidated financial statements reflect Carbylan’s results of operations beginning after November 21, 2016. The results ofoperations subsequent to November 21, 2016 have not been significant.KalVista has concluded that the transaction represents a business combination. Under the acquisition method of accounting, the total purchase priceis allocated to the acquired tangible and intangible assets and assumed liabilities of Carbylan based on estimated fair values as of the transaction closingdate. Carbylan had no significant commercial operations and its only significant pre-combination net assets were cash and cash equivalents, accountspayable and accrued expenses which were already recognized at fair value. The Company is still evaluating the potential use or disposition of the Carbylanintellectual property. Pursuant to this reverse acquisition, the Company recorded the shares of common stock held by Carbylan shareholders at the fair valueof Carbylan’s net monetary assets received at November 21, 2016 as these values were considered a more reliable indicator of fair value than the tradingvalue of the shares. No goodwill or intangible assets were recorded in the transaction.The preliminary allocation of the total purchase price to the acquired assets and liabilities assumed of Carbylan based on the fair values as ofNovember 21, 2016 is as follows (in thousands): Cash and cash equivalents $34,139 Prepaid expenses and other current assets 70 Accounts payable, accrued expenses and other liabilities (3,631)Net assets acquired $30,578 In connection with the share purchase transaction, the Company replaced the options previously granted to purchase shares of KalVista Limited withoptions to purchase shares of KalVista Pharmaceuticals, Inc. The Company assessed the replacement awards and determined there was no compensationexpense to record related to the modification.Note 7. Stockholders’ EquityPrior to the Carbylan transaction, the Company had three classes of shares: Series B Convertible Preferred, Series A Convertible Preferred, andOrdinary, all of which had a par value of $0.0016. Per the terms of the Share Purchase Agreement, the three classes of stock were converted into commonshares with a par value of $0.001. In March 2017, the Company established the 2017 Employee Stock Purchase Plan. There are 100,000 shares of common stock available for issuanceunder the plan.F-15Note 8. Grant IncomeGrant income is recognized through two agreements. The first agreement is with the Technology Strategy Board (TSB), a United Kingdomgovernment organization. The Company recognizes revenue for reimbursements of qualifying research and development costs as the services are performed.The Company records these reimbursements as revenue and not as a reduction of research and development expenses, as the Company has the risks andrewards as the principal in the research and development activities. Any services performed and not yet collected upon are shown as a receivable. During theyears ended April 30, 2017, 2016 and 2015, revenue recognized through the TSB grant amounted to $1.2 million, $1.8 million and $1.5 million,respectively. The TSB has authorized a total amount of $7.3 million over the lifetime of the agreements between us and the TSB, to accelerate thedevelopment of the oral drug program, of which $5.9 million was received or was due to be received as of April 30, 2017.The second agreement is with the JDRF, a non-profit organization. The Company applies the milestone method of accounting to recognize revenuefrom milestone payments when earned, as evidenced by written acknowledgement from the grantor and other persuasive evidence that the milestone has beenachieved and the payment is non-refundable, provided that the milestone event is substantive. A milestone event is defined as an event (i) that can only beachieved based in whole or in part on either the Company’s performance or on the occurrence of a specific outcome resulting from the Company’sperformance; (ii) for which there is substantive uncertainty at the inception of the arrangement that the event will be achieved; and (iii) that would result inadditional payments being due to the Company. Events for which the occurrence is either contingent solely upon the passage of time or the result of acounterparty’s performance are not considered to be milestone events. A milestone event is substantive if all of the following conditions are met: (i) theconsideration is commensurate with either the Company’s performance to achieve the milestone, or the enhancement of the value to the delivered item(s) as aresult of a specific outcome resulting from the Company’s performance to achieve the milestone; (ii) the consideration relates solely to past performance; and(iii) the consideration is reasonable relative to all the deliverables and payment terms (including other potential milestone consideration) within thearrangement.The Company assesses whether a milestone is substantive at the inception of the arrangement. If a milestone is deemed non-substantive, theCompany accounts for that milestone payment in accordance with the multiple element arrangements guidance and recognizes revenue consistent with therelated units of accounting for the arrangement over the related performance period.The Company had a contract in process with JDRF that was accounted for under the milestone method. Milestones included, for example, thesuccessful completions of clinical trials, development of certain reports, and different review/approval processes. All milestones under the contract in processwere deemed substantive based on the fact that the payments are commensurate with the Company’s efforts to achieve the milestone event and the milestonesare related to past performance and are non-refundable. During the years ended April 30, 2017, 2016 and 2015, revenue recognized through the achievementof multiple milestones amounted to $0.2 million, $0.3 million and $0.3 million, respectively. The last milestone in the JDRF contract was met in May 2016and no additional revenue is due from this contract. There are no performance, cancellation, termination or refund provisions in the arrangement that containmaterial financial consequences to the Company.The Company evaluates the terms of sponsored research agreement grants and federal grants to assess the Company’s obligations and if theCompany’s obligations are satisfied by the passage of time, revenue is recognized as described above. For grants with refund provisions, the Companyreviews the grant to determine the likelihood of repayment. If the likelihood of repayment of the grant is determined to be remote, the grant is recognized asrevenue. If the probability of repayment is determined to be more than remote, the Company records the grant as a deferred revenue liability, until such timethat the grant requirements have been satisfied.Note 9. Stock-Based CompensationThe Company has three plans that provide for equity-based compensation. There are two legacy plan that were maintained by Carbylan and KalVistaLimited and for which no further grants are to be made. Under the 2017 Equity Incentive Plan, 1,000,000 shares of KalVista’s Common Stock are reserved forissuance upon exercise ofF-16stock options. During the year ended April 30, 2017, 85,055 stock options were granted outside of equity incentive plans as inducement stock options tonew employees.New hire grants generally vest 25% after one year and then ratably on a monthly basis over the next three years. Recurring grants typically vest on amonthly basis over four years. Stock option grants expire after ten years.The Company recognizes stock-based compensation expense over the requisite service period based on the grant date fair value of the award. TheCompany has elected to use the Black-Scholes option pricing model to determine the fair value of awards granted. The determination of the fair value ofstock-based awards utilizing the Black-Scholes model is affected by the share price and a number of assumptions, including expected volatility, expectedlife, risk-free interest rate and expected dividends. Due to insufficient history of the Company’s stock price, the stock-price volatility assumption is based onthe historical volatility of a peer group of publicly traded companies. The expected life of the awards is estimated based on the simplified method. The risk-free interest rate assumption is based on observed interest rates appropriate for the terms of the awards. The dividend yield assumption is based on history andexpectation of paying no dividends. Forfeitures have not been material in the periods presented.The fair value of the share-based awards was measured with the following weighted-average assumptions for the fiscal years ended April 30: 2017 2016 2015Risk-free interest rate 2.08% 1.38% 1.84%Expected life of the options 6.25 years 6.25 years 6.25 yearsExpected volatility of the underlying stock 82.3% 80.9% 85.1%Expected dividend rate 0% 0% 0% For the years ended April 30, 2017, 2016 and 2015, the Company recognized share-based compensation expense of $394,000, $118,000 and$36,000, respectively. Stock-based compensation was reflected in the Company’s consolidated statement of operations and comprehensive loss as follows (inthousands): Year ended April 30, 2017 2016 2015 Research and development $143 $118 $36 General and administrative 251 — — Total stock-based compensation expense $394 $118 $36A summary of option activity for the year endeed April 30, 2017 and changes during the years then ended is presented below: Shares WeightedAverageExercisePrice WeightedAverageRemainingContractualLife AggregateIntrinsicValue Outstanding at May 1, 2016 855,790 $0.004 8.68 $— Exercised (126,948) .003 Effect of Carbylan transaction (516,680) Granted 326,203 7.94 Cancelled (597) .004 Outstanding at April 30, 2017 537,768 $4.82 9.05 $1,631 Exercisable at April 30, 2017 148,469 $1.66 7.88 $890 Vested and expected to vest at April 30, 2017 537,768 $4.82 9.05 $1,631 The weighted-average grant date fair value of stock options granted during the years ended April 30, 2017, 2016 and 2015 was $5.68, $1.41 and$1.44, respectively.F-17As of April 30, 2017, there was $1.6 million of unrecognized compensation expense related to unvested awards, which is expected to be recognizedover a weighted-average period of 2.94 yearsNote 10. Commitments and ContingenciesLease commitments: The Company is party to several operating leases for office and laboratory space as well as certain lab equipment. Rent expensewas $0.5 million, $0.1 million and $0.1 million for the years ended April 30, 2017, 2016 and 2015, respectively, and is reflected in general andadministrative expenses and research and development expenses as determined by the underlying activities.Future minimum payments under these leases as of April 30, 2017 are as follows (in thousands): Year ended April 30: 2018 $506 2019 435 2020 261 2021 228 2022 and thereafter 328 Total $1,758Indemnification: In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations andwarranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves future claims that maybe made against the Company but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to itsindemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. No amounts associatedwith such indemnifications have been recorded to date.Contingencies: From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. TheCompany accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.There have been no contingent liabilities requiring accrual at April 30, 2017 and 2016.As a result of the terms of grant income received in prior years, upon successful regulatory approval and following the first commercial sale of certainproducts, the Company will be required to pay royalty fees of up to £1 million within 90 days of the first commercial sale of the product subject to certaincaps and follow on payments depending upon commercial success and type of product. Given the stage of development of the current pipeline of products itis not possible to predict with certainty the amount or timing of any such liability.Note 11. Income TaxesThe Company has incurred net losses since inception and, consequently, has not recorded any U.S. Federal and state income tax expense or benefitfor the years presented. In 2017, $2.1 million of the Company’s pre-tax loss was domestic and $16.5 million was foreign. The pre-tax losses in fiscal years2016 and 2015 were all from the Company’s U.K. operations. The Company files tax returns in the United Kingdom as well as U.S. Federal and various Statetax returns. Tax years 2017 and 2016 in the U.K. subsidiary remain open to examination by the Her Majesty’s Revenue and Customs (“HMRC”). Further,HMRC will be able to open an inquiry under the ‘discovery assessment’ for the 2014 tax year until April 30, 2018 if HMRC discovers facts which were notdisclosed or readily inferable from the tax returns or accounts. The U.S. returns are open for all tax years since inception. The Company is not currently underexamination in any jurisdiction for any tax years.F-18A reconciliation between the effective tax rates and statutory rates for the years ended April 30, is as follows: 2017 2016 2015 Income tax benefit at U.S. federal statutory rate 34.00% 34.00% 34.00%Foreign rate differential (11.72)% (14.00)% (13.08)%Nondeductible expenses (9.16)% (6.85)% (5.24)%Other (1.29)% — — Valuation allowance (11.83)% (13.15)% (15.68)% 0.00% 0.00% 0.00% The Company has net operating loss carry forwards available to offset future taxable income for federal and state income tax purposes. The ability toutilize the Company’s domestic net operating losses is limited due to changes in ownership as defined by Section 382 of the Internal Revenue Code (the“Code”). Under the provisions of Sections 382 and 383 of the Code, a change of control, as defined in the Code, imposes an annual limitation on the amountof the Company’s net operating loss and tax credit carryforwards, and other tax attributes that can be used to reduce future tax liabilities. The Companydetermined that an ownership change occurred as a result of the Company’s transaction in November 2016. As a result of this ownership change, theCompany’s U.S. federal and California NOL’s may be limited to the extent of recognizing any previously unrecognized built-in gains of Carbylan as ofNovember 2016. The tax effect of significant temporary differences representing deferred tax assets and liabilities as of April 30, 2017 and 2016 is as follows (inthousands): 2017 2016 Net operating loss (“NOL”) carryforwards $5,602 $2,756 Other 282 90 Valuation allowance (5,884) (2,846)Net deferred tax asset $— $— Management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets, which arecomprised principally of NOL carryforwards. As a result of the fact that the Company has incurred tax losses from inception, management has determined thatit is more likely than not that the Company will not recognize the benefits of net deferred tax assets and, as a result, a full valuation allowance has beenestablished against its net deferred tax assets as of April 30, 2017 and 2016. During the years ended April 30, 2017, 2016 and 2015, the valuation allowancechanged by $3.0 million, $0.4 million and $0.5 million, respectively. Realization of deferred tax assets is dependent upon the generation of future taxableincome. As of April 30, 2017, the Company had NOL carryforwards for federal income tax purposes of approximately $1.3 million that begin to expire in2024 through 2037, NOL carryforwards for state income taxes of $1.3 million that begin to expire in 2026 through 2037 and NOL carryforwards for U.K.income taxes of $26.7 million that do not expire.The Company recognizes the financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, thatthe position will be sustained upon examination. The Company has no unrecognized tax benefits as of April 30, 2017 and April 30, 2016, respectively. TheCompany does not expect any material changes in the next 12 months in unrecognized tax benefits. The Company has not recognized interest and penaltiesrelated to uncertain tax positions. Note 12. Defined Contribution PlansParticipation in a personal pension plan is available to all U.K. based employees of the Company upon commencement of their employment.Employer contributions are made in accordance with the terms and conditions of the employment contract. Employees may contribute in accordance with theprevailing statutory limitations. Full-time employees of the U.S. parent company are eligible to participate in the Company's 401(k) Plan. The CompanyF-19will match up to 4% of employee contributions to the Plan. Total employer contributions to both plans for the years ended April 30, 2017, 2016 and 2015were $90,000, $70,000 and $66,000 respectively.Note 13. Other IncomeAs of April 30, 2017 and 2016, the Company had research and development tax credits totaling $2.2 million and $1.9 million, respectively. This taxcredit is related to a tax scheme for small and medium enterprises in the United Kingdom as well as the R&D expenditure credit system. The Company is ableto file a claim for cash credit in proportion to the Company’s R&D expenditure for the year. This amount was included in other income, as it is a refundablecredit that does not depend on the Company’s ongoing tax status or position. The Company recognized $2.3 million, $2.0 million and $0.8 million related tothese programs in the years ended April 30, 2017, 2016 and 2015, respectively.Note 14. Subsequent EventsIn May 2017, the Company entered into a lease for approximately 2,700 square feet of office space in Cambridge, MA, that the Company anticipatesto occupy in late 2017. The lease has a term of 5 years and annual rent expense will range from approximately $220,000 to $232,000.In June 2017, the Company entered into a lease agreement for laboratory equipment to be used in the U.K. research facility. This lease requires aprepayment of approximately $200,000 and the remaining payments of approximately $18,000 per month will be made over a two year term. Note 15. Unaudited Quarterly Financial Information (in thousands): Quarter endedJuly 31,2016 Quarter endedOctober 31, 2016 Quarter endedJanuary 31, 2017 Quarter endedApril 30,2017 Grant income$975 $197 $248 $114 Operating expenses 6,095 4,223 8,365 5,200 Net loss (3,436) (3,297) (7,644) (4,202)Net loss per share$(6.66) $(5.98) $(1.03) $(0.43) Quarter endedJuly 31,2015 Quarter endedOctober 31, 2015 Quarter endedJanuary 31, 2016 Quarter endedApril 30,2016 Grant income$839 $667 $348 $314 Operating expenses 3,302 4,192 4,163 5,400 Net loss (1,716) (2,599) (1,952) (4,869)Net loss per share$(5.23) $(5.95) $(4.85) $(9.37) F-20 Exhibit Index Incorporated by reference ExhibitNumber Description of Document Form FileNo. Exhibit Filing Date FiledHerewith2.1** Share Purchase Agreement, dated as of June 15, 2016,by and among Carbylan Therapeutics, Inc., KalVistaPharmaceuticals Ltd, and the shareholders of KalVistaPharmaceuticals Ltd., and solely for the purposes ofbeing bound by certain provisions therein and solely insuch person’s capacity as the Seller Representative,Andrew Crockett 8-K 001-36830 2.1 June 15, 2016 2.2 Support Agreement, dated as of June 15, 2016, by andamong KalVista Pharmaceuticals Ltd and certainstockholders and option holders of CarbylanTherapeutics, Inc. 8-K 001-36830 2.1 June 15, 2016 2.3 Form of Lock-up Agreement entered into by CarbylanTherapeutics, Inc. and certain stockholders andoptionholders of KalVista Pharmaceuticals Ltd. 8-K 001-36830 2.1 June 15, 2016 3.1 Amended and Restated Certificate of Incorporation. S-1/A 333-201278 3.2 January 23, 2015 3.2 Certificate of Amendment of Amended and RestatedCertificate 8-K 001-36830 3.1 November 23,2016 3.3 Certificate of Amendment of Amended and RestatedCertificate 8-K 001-36830 3.2 November 23,2016 3.4 Amended and Restated Bylaws. 8-K 001-36830 3.2 April 16, 2015 4.1 Form of Common Stock Certificate. S-1/A 333-201278 4.2 January 23, 2015 4.2 Registration Rights Agreement, dated June 15, 2016, byand among the Registrant and the Sellers. 8-K 001-36930 10.1 November 21,2016 10.1# Form of Indemnification Agreement. S-1 333-201278 10.14 December 29, 2014 10.2# Carbylan’s 2015 Incentive Plan and forms of awardagreements. S-1/A 333-201278 10.3 January 23, 2015 10.3# 2017 Equity Incentive Plan. DEF 14A 001-36830 Appendix A March 2, 2017 10.4# 2017 Employee Stock Purchase Plan. DEF 14A 001-36830 Appendix B March 2, 2017 10.5# Employment Agreement between the Registrant and T.Andrew Crockett, dated March 14, 2017. 10-Q 001-36830 10.1 March 16, 2017 10.6# Employment Agreement between the Registrant andBenjamin L. Palleiko, dated March 14, 2017. 10-Q 001-36830 10.2 March 16, 2017 10.7 Executive Employment Agreement, dated May 30,2013, by and between the Registrant and David Renzi S-1 333-201278 10.7 December 29, 2015 10.8 Separation Agreement, dated November 22, 2016 byand between the Registrant and David Renzi. X  Incorporated by reference ExhibitNumber Description of Document Form FileNo. Exhibit Filing Date FiledHerewith10.9 Amended and Restated Employment Agreement Letterdated July 21, 2014, by and between the Registrant andMarcee M. Maroney. S-1 333-201278 10.10 December 29, 2015 10.10 Separation Agreement, dated November 22, 2016 byand between the Registrant and Marcee Maroney. X10.11 Amended and Restated Employment Agreementbetween the Registrant and John McKune dated April15, 2016, as amended November 21, 2016. X10.12 Office Lease Agreement by and between the Registrantand 55 Cambridge Parkway, LLC, dated May 30, 2017. X21.1 Subsidiary of the Registrant. X23.1 Consent of Deloitte LLP X23.2 Consent of Deloitte & Touche LLP X24.1 Power of Attorney. (See signature page hereto.) X31.1 Certification of Principal Executive Officer, pursuant toRule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 2002. X31.2 Certification of Principal Financial Officer, pursuant toRule 13a-14(a)/15d-14(a), as adopted pursuant toSection 302 of the Sarbanes-Oxley Act of 2002. X32.1* Certification of Chief Executive Officer, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. X32.2* Certification of Chief Financial Officer, pursuant to 18U.S.C. Section 1350, as adopted pursuant to Section906 of the Sarbanes-Oxley Act of 2002. X101.INS XBRL Instance Document. X101.SCH XBRL Taxonomy Extension Schema Document. X101.CAL XBRL Taxonomy Extension Calculation LinkbaseDocument. X101.DEF XBRL Taxonomy Extension Definition LinkbaseDocument. X101.LAB XBRL Taxonomy Extension Labels LinkbaseDocument. X101.PRE XBRL Taxonomy Extension Presentation LinkbaseDocument. X #Management contract or compensatory plan or arrangement.*This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it bedeemed incorporated by reference into any filing under the Securities Act or the Exchange Act.  **All schedules and exhibits to the Share Purchase Agreement have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omittedschedule and/or exhibit will be furnished to the Securities and Exchange Commission upon request.  Exhibit 10.8 SEPARATION AGREEMENTThis Separation Agreement (the “Agreement”) by and between Mr. David M. Renzi (“Executive”) and KalVistaPharmaceuticals, Inc., formerly known as Carbylan Therapeutics, Inc., (the “Company”) is made effective eight (8) days afterExecutive’s signature hereto (the “Effective Date”), unless Executive revokes his or her acceptance of this Agreement as provided inSection S(c) below. Any reference to the Company throughout this Agreement shall include the Company, its subsidiaries and anysuccessors thereto.A. The Company anticipates closing those certain transactions (the “Transactions”) with KalVista Pharmaceuticals Ltd.(“KalVista”) contemplated by that certain Share Purchase Agreement (the “Share Purchase Agreement”) dated as of June 15, 2016, byand between the Company, KalVista, the shareholders of KalVista and, solely for the purposes of being bound by certain provisionstherein and solely in such person’s capacity as the Seller Representative, Andrew Crockett.B. Executive’s employment with the Company and status as an officer, director and employee of the Company and eachof its affiliates will end effective upon the Termination Date (as defined below).C. Executive and the Company want to end their relationship amicably and also to establish the obligations of the partiesincluding, without limitation, all amounts due and owing to Executive.D. The payments and benefits being made available to Executive pursuant to this Agreement are intended to satisfy alloutstanding obligations under that certain employment letter agreement by between Executive and the Company, dated as of May 30,2013 (the “Employment Agreement”).NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree asfollows:1.Termination Date. Executive acknowledges and agrees that Executive’s status as an officer, director and employeeof the Company and as an officer and/or director of the Company’s subsidiaries will end effective as of the close of business on theclosing of the Transactions (the “Termination Date”). Executive hereby agrees to execute such further document(s) as shall bedetermined by the Company as necessary or desirable to give effect to the termination of Executive’s status as an officer and, ifapplicable, director of the Company and each of its subsidiaries: provided that such documents shall not be inconsistent with any of theterms of this Agreement. If the Transactions do not close and the Share Purchase Agreement is terminated, this Agreement will be nulland void, and Executive’s relationship with the Company will continue under those agreements that pre-date this Agreement as if thisAgreement has never existed.2.Final Paycheck: Payment of Accrued Wages and Expenses.(a)Final Paycheck. As required by law, the Company will pay Executive all accrued but unpaid base salaryand all accrued and unused vacation earned through the Termination  Date, subject to standard payroll deductions and withholdings. Executive is entitled to these payments regard less of whether Executiveexecutes this Agreement.(b)Business Expenses. Executive agrees that Executive has submitted Executive’s final documentedexpense reimbursement statement reflecting all business expenses Executive incurred through the Termination Date, if any, for whichExecutive seeks reimbursement. The Company will reimburse Executive for these expenses, if any, pursuant to its regular businesspractice.(c)Equity Awards: Pursuant to, and subject to the terms and conditions of the Share Purchase Agreement,the vesting of each option to purchase Company com mon stock held by Executive shall accelerate in full as of immediately prior to theclosing of the Transactions, and at the time of closing (i) if the option(s) is “in-the-money”, it will be net exercised such that Executivewill automatically receive Company common stock (subject to an offset for withholding obligations) and (ii) if the option(s) is not “in-the-money” it will be terminated for no consideration. An option will be considered “in-the-money” if it has an exercise price per shareless than the volume weighted average closing trading price of a share of Company com mon stock on The NASDAQ Global Marketfor the ten trading days ending the trading day immediately prior to the date upon which the Transaction becomes effective.3.Separation Payments and Benefits. Without admission of any liability, fact or claim, the Company hereby agrees,subject to Executive’s execution and non-revocation of this Agreement and Executive’s performance of his or her continuingobligation s pursuant to this Agreement, the Employment Agreement and that certain Confidential Information and InventionAssignment Agreement entered into between Executive and the Company (the “Confidentiality Agreement”), to provide Executive theseverance benefits set forth below. Specifically, the Company and Executive agree as follows:(a)Severance. The Company shall continue to pay to Executive his or her base salary at the rate in effect asof immediately prior to the Termination Date for the period of time commencing on the Termination Date and ending on the twelve(12) month anniversary of the Termination Date (such period, the “Severance Period” and such payment s, the“Cash Severance”). Such Cash Severance payments shall be made in accordance with the Company’s standard payroll practices, lessapplicable withholdings and deductions, with each payment deemed to be a separate payment for purposes of Section 409A of theCode. The first such Cash Severance payment shall commence on the first payroll date following the Effective Date, which shallinclude amounts otherwise due and payable under this Section 3(a) on or before such date. In the event of Executive’s death duringthe Severance Period, the remaining Cash Severance shall be pa id to Executive’s estate.(b)Retention Bonus. The Company will pay to Executive $144,102 less applicable withholdings anddeductions, which represents the cash bonus Executive is entitled to under the Company’s 2016 Retention Bonus Plan. Such retentionbonus shall be paid to Executive on the first payroll date following the Effective Date.(c)Healthcare Continuation Coverage. If Executive elects to receive continued healthcare coveragepursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Companyshall directly pay, or reimburse Executive for, the premium for Executive and Executive’s covered dependents through the earlier of (i)the end of the2  Severance Period or (ii) the date Executive and Executive’s covered dependents, if any, become eligible for healthcare coverage underanother employer’s plan(s); provided that, if the Company determines that it cannot provide such continued health benefits withoutpotentially violating applicable law or incurring additional expense for non-compliance under applicable law (including, withoutlimitation, Section 2716 of the Public Health Service Act), the Company will provide to Employee in lieu thereof a lump-sum paymentin an amount equal to the then-remaining premiums for the remainder of the Severance Period of such continued health benefits, whichpayment will be made regardless of whether Employee elects COBRA continuation coverage. After the Company ceases to paypremiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’s expensein accordance with the provisions of COBRA. Executive acknowledges that Executive shall be solely responsible for all mattersrelating to Executive’s continuation of coverage pursuant to COBRA, including, without limitation, Executive’s election of suchcoverage and Executive’s timely payment of premiums.(d)Taxes. Executive understands and agrees that all payments under this Section 3 will be subject toappropriate tax withholding and other deductions. To the extent any taxes may be payable by Executive for the benefits provided toExecutive by this Section 3 beyond those withheld by the Company, Executive agrees to pay them himself or herself and to indemnifyand hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees andcosts, resulting from any failure by him or her to make required payments. To the extent that any reimbursements payable pursuant tothis Agreement are subject to the provisions of Section 409A of the Code, such reimbursements shall be paid to Executive no later thanDecember 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shallnot affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreementwill not be subject to liquidation or exchange for another benefit.(e)SEC Reporting. Executive acknowledges that to the extent required by the Securities Exchange Act of1934, as amended (the “Exchange Act”), Executive will have continuing obligations under Section 16(a) and 16(b) of the ExchangeAct to report his or her transactions in Company common stock for six (6) months following the Termination Date. Executive herebyagrees not to undertake, directly or indirectly, any reportable transactions which include, but are not limited to, buying, selling orotherwise disposing of any common stock of the Company held by Executive until the end of such six (6) month period.(f)Sole Separation Benefit. Executive agrees that the payments provided by this Section 3 are not requiredunder the Company’s normal policies and procedures and are provided as a severance solely in connection with this Agreement andthe Employment Agreement. Thus, for any Company sponsored employee benefits not referenced in this Agreement, Executive willbe treated as a terminated employee effective on the Termination Date. This includes but is not limited to the Company’s 401(k) planand Company sponsored life insurance and long-term disability insurance. Executive acknowledges and agrees that the paymentsreferenced in this Section 3 constitute adequate and valuable consideration, in and of themselves, for the promises contained in thisAgreement.4.Full Payment. Executive acknowledges that the payment and arrangements herein shall constitute full and completesatisfaction of any and all amounts properly due and owing to Executive as a result of Executive’s employment with the Company andthe termination thereof. Executive3  further acknowledges that, other than the Confidentiality Agreement and Section 9 (NonSolicitation) of the Employment Agreement,this Agreement shall supersede each agreement entered into between Executive and the Company regarding Executive’s employment,including, without limitation, the Employment Agreement (except Section 9), and each such agreement shall be deemed terminated andof no further effect as of the Termination Date.5.Executive’s Release of the Company. Executive understands that by agreeing to the release provided by thisSection 5, Executive is agreeing not to sue, or otherwise fi le any claim against, the Company or any of its employees or other agentsfor any reason whatsoever based on anything that has occurred as of the date Executive signs this Agreement.(a)On behalf of Executive and Executive’s heirs and assigns, Executive hereby releases and foreverdischarges the “Releasees” hereunder, consisting of the Company, KalVista, and their respective parent and subsidiary entities, andtheir respective directors, officers, employees, shareholders, stockholders, partners, agents, attorneys, predecessors, successors,insurers, employee benefit plans, affiliates and assigns, of and from any and all claims, liabilities and obligations, both known andunknown, arising out of or in any way related to events, acts, conduct, or omissions occurring at any time prior to or at the time thatExecutive signs this Agreement (collectively the “Released Claims”). The Released Claims include, but are not limited to: (1) allclaims arising out of or in any way related to Executive’s employment with the Company (or its successor) or the termination of thatemployment; (2) all claims related to Executive’s compensation or benefits, including salary, bonuses, commissions, vacation pay,expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership or equity interests in theCompany; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing(including, but not limited to, any claims based on or arising from this Agreement or the Employment Agreement); (4) all tort claims,including claims for fraud, defamation, emotional distress, and discharge in violation of public pol icy; and (5) all federal, state, andlocal statutory claims, including claims for discrimination, harassment, retaliation, attorneys• fees, or other claims arising under thefederal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination inEmployment Act (as amended) (“ADEA”.), the federal Family and Medical Leave Act (as amended) (“FM LA”), the CaliforniaFamily Rights Act, the California Labor Code (as amended), and the California Fair Employment and Housing Act (as amended).(b)Notwithstanding the generality of the foregoing, Executive does not release the following claims:(i)Executive’s rights under this Agreement:(ii)any payments Executive is entitled to under the Share Purchase Agreement;(iii)any rights or claims for unemployment compensation or any state disability insurance benefitspursuant to the terms of applicable state law:(iv)any rights or claims for workers’ compensation insurance benefits under the terms of anyworker‘s compensation insurance policy or fund of the Company;4  (v)any rights or claims to continued participation in certain of the Company’s group benefit planspursuant to the terms and conditions of COBRA.(vi)any rights or claims to any rights and benefits under this Agreement or benefit entitlementsvested as of the date of Executive’s employment termination, pursuant to written terms of any Company employee benefitplan, including, without limitation, the terms of any Company equity compensation plan and/or any equity compensationagreement between Executive and the Company;(vii)any rights or claims for indemnification Executive may have pursuant to any writtenindemnification agreement with the Company to which Executive a party, the charter, bylaws, or operating agreements of theCompany, applicable law, California Labor Code Section 2802, or applicable directors and officer’s liability insurance:(viii)any other rights or claims that cannot be released as a matter of law; and(ix)Executive’s right to bring to the attention of the Equal Employment Opportunity Commissionclaims of discrimination; provided, however, that Executive does release Executive’s right to secure any damages for allegeddiscriminatory treatment.(c)In accordance with the Older Workers Benefit Protection Act of 1990, Executive has been advised of thefollowing: Executive acknowledges that Executive is knowingly and voluntarily waiving and releasing any rights Executive may haveunder the ADEA. Executive also acknowledges that the consideration given for the waiver and release herein is in addition to anythingof value to which Executive was already entitled. Executive further acknowledges that Executive has been advised by this writing, asrequired by the ADEA, that: (i) Executive’s waiver and release do not apply to any rights or claims that may arise after the executiondate of this Agreement; (ii) Executive has been advised hereby that Executive has the right to consult with an attorney prior toexecuting this Agreement; (iii) Executive has forty-five (45) days from the date of this Agreement to execute this Agreement (althoughExecutive may choose to voluntarily execute this Agreement earlier); (iv) Executive has seven (7) days following the execution of thisAgreement by Executive to revoke the Agreement, and Executive will not receive the benefits provided by Section 3 of the Agreementunless and until such seven (7) day period has expired; (v) this Agreement will not be effective until the date upon which therevocation period has expired, which will be the eighth (8th) day after this Agreement is executed by Executive, provided that theCompany has also executed this Agreement by that date; (vi) Executive has received with this Agreement a detailed list of the job titlesand ages of all employees who were terminated in this group termination and the ages of all employees of the Company in the samejob classification or organizational unit who were not terminated, attached hereto as Exhibit A; and (vii) this Agreement does notaffect Executive’s ability to test the knowing and voluntary nature of this Agreement. If Executive wishes to revoke this Agreement,Executive must deliver notice of Executive’s revocation in writing, no later than 5:00 p.m. Pacific Time on the 7th day followingExecutive’s execution of this Agreement to Ben Palleiko, Chief Financial Officer. KalVista, at blp@kalvista.com (via hardcopy or viaelectronic copy to blp@kalvista.com).5  (d)EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED OF AND ISFAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVI DES ASFOLLOWS:“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOWOR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IFKNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLELMENT WITHTHE DEBTOR.”BEING AWARE OF SAID CODE SECTION. EXECUTIVE HEREBY EXPRESSLY WAIVES ANY RIGHTSEXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAWPRINCIPLES OF SIMILAR EFFECT.6.Mutual Non-Disparagement Transition. Transfer of Company Property; and Job References.(a)Mutual Non-Disparagement. Executive agrees that Executive will not make statements orrepresentations to any person, entity or firm which could reasonably be expected to cast the Company, KalVista or any entity oremployee affiliated with the Company or KalVista in an unfavorable light or which could reasonably be anticipated to adversely affectthe name or reputation of the Company. KalVista or any entity affiliated with the Company or KalVista, or the name or reputation ofany officer, agent or employee of the Company, KalVista or of any entity affiliated with the Company or KalVista; provided thatExecutive will respond accurately and fully to any question, inquiry or request for information when required by legal process. TheCompany and Kalvista agree to, and the agree to use their best efforts to cause the officers, directors, and managing agents of theCompany and KalVista to, refrain from discussing or making any derogatory or disparaging remarks or statements, oral or written. toany third parties concerning Executive in any manner which could reasonably be expected to be harmful to Executive• s businessreputation or personal reputation; provided that the Company and KalVista officers, directors, and managing agents will respondaccurately and fully to any quest ion, inquiry or request for information when required by legal process. Notwithstanding theforegoing, nothing in this Section 6(a) shall prevent Executive, the Company or KalVista from making any truthful statement to theextent (i) necessary to rebut any untrue public statements made about him, her or it; (ii) necessary with respect to any litigation,arbitration or mediation involving this Agreement and the enforcement thereof; or (iii) required by law or by any court, arbitrator,mediator or administrative or legislative body (including any committee d1ereof) with jurisdiction over such person. In addition,nothing in this Agreement shall be construed to prohibit Executive, the Company or KalVista from engaging in any lawfully protectedactivity or conduct, including reporting possible violations of law or regulation to any governmental agency or regulatory body(including but not limited to the Equal Employment Opportunity Commission, the Department of Justice. the Securities and ExchangeCommission, the Congress, any agency Inspector General, or making other disclosures that are protected under the whistleblowerprovisions of federal law or regulation), filing a charge with or participating in any investigation or proceeding conducted by anygovernmental agency or regulatory body, or making other disclosures that are protected under any law or regulation. Executive, theCompany nor KalVista need the prior authorization of the Company to engage in any such lawfully protected activity, nor isExecutive, the Company or Kalvista required to notify the other that he, she or it has done so.6  (b)Transition. Each of the Company and Executive shall use their respective reasonable efforts tocooperate with each other in good faith to facilitate a smooth transition of Executive’s duties to other executive(s) of the Company.(c)Transfer of Company Property. On or before the Termination Date, Executive shall tum over to theCompany all files, memoranda, records, and other documents, and any other physical or personal property which are the property ofthe Company and which Executive had in his or her possession, custody or control at the time Executive signed this Agreement. Byexecuting and returning this Agreement, Executive is certifying that Executive has complied with Executive’s obligation herein toimmediately return all Company documents and information regardless of where Executive has maintained such Company property.Executive’s compliance with the terms of this Section 6(c) is a condition precedent to Executive’s eligibility to receive the paymentsand benefits described in Section 3 above.(d)Job References. Executive should direct any job reference inquiries to the Company’s HumanResources. Pursuant to Company policy, in response to any such inquiries, the Company will provide only the position Executive heldand the dates of employment. The Company will confirm Executive’s salary in response to any such inquiry only if Executive submitsa signed request to the Company to disclose such information.7.Executive Representations. Executive warrants and represents that (a) Executive has not filed or authorized thefiling of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency orcourt, and that if, unbeknownst to Executive, such a complaint, charge or lawsuit has been tiled on Executive’s behalf, Executive willimmediately cause it to be withdrawn and dismissed, (b) Executive has reported all hours worked as of the date of this Agreement andhas been paid all compensation, wages, bonuses, commissions, and/or benefits to which Executive may be entitled and no othercompensation, wages, bonuses, commissions and/or benefits are due to Executive, except as provided in this Agreement, (c) Executivehas no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requestedunder the FMLA or any similar state law, (d) the execution, delivery and performance of this Agreement by Executive does not andwill not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party orany judgment, order or decree to which Executive is subject, and (e) upon the execution and delivery of this Agreement by theCompany and Executive, this Agreement will be a valid and binding obligation of Executive, enforceable in accordance with its terms.8.No Assignment by Executive. Executive warrants and represents that no portion of any of the matters releasedherein, and no portion of any recovery or settlement to which Executive might be entitled, has been assigned or transferred to any otherperson, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law orotherwise. If any claim, action, demand or suit should be made or instituted against the Company or any other Releasee because ofany actual assignment, subrogation or transfer by Executive, Executive agrees to indemnify and hold harmless the Company and allother Releasees against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs. Inthe event of Executive’s death, this Agreement shall inure to the benefit of Executive and Executive’s executors, administrators, heirs,distributees, devisees, and legatees. None of Executive’s rights or obligations may be assigned or7  transferred by Executive, other than Executive’s rights to payments hereunder, which may be transferred only upon Executive’s deathby will or operation of law.9.Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the partiesshall be governed by, the laws of the State of California or, where applicable, United States federal law, in each case, without regard toany conflicts of laws provisions or those of any state other than California.10.Miscellaneous. This Agreement, together with the Confidentiality Agreement. comprise the entire agreementbetween the parties with regard to the subject matter hereof and supersedes, in their entirety, any other agreements between Executiveand the Company with regard to the subject matter hereof, including, without limitation, the Employment Agreement (except forSection 9 of the Employment Agreement) and the Company‘s 2016 Retention Bonus Plan. The Company and Executiveacknowledge that the termination of the Executive’s employment with the Company is intended to constitute an involuntary separationfrom service for the purposes of Section 409A of the Code, and the related Department of Treasury regulations. Executiveacknowledges that there are no other agreements, written, oral or implied, and that Executive may not rely on any prior negotiations,discussions, representations or agreements. This Agreement may be modified only in writing, and such writing must be signed by bothparties and recited that it is intended to modify this Agreement. This Agreement may be executed in separate counterparts, each ofwhich is deemed to be an original and all of which taken together constitute one and the same agreement.11.Company Assignment and Successors. The Company shall assign its rights and obligations under this Agreementto any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shallbe binding upon and inure to the benefit of the Company and its successors, assigns, personnel and legal representatives.12.Maintaining Confidential Information. Executive reaffirms his or her obligations under the ConfidentialityAgreement. Executive reaffirms his or her obligations under the Section 9 (Non-Solicitation) of the EmploymentAgreement. Executive acknowledges and agrees that the payments provided in Section 3 above shall be subject to Executive’scontinued compliance with Executive’s obligations under the Confidentiality Agreement and under Section 9 (Non-Solicitation) of theEmployment Agreement.13.Executive’s Cooperation. After the Termination Date, Executive shall cooperate with the Company and itsaffiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicialproceeding involving matters within the scope of Executive’s duties and responsibilities to the Company or its affiliates during his orher employment with the Company (including, without limitation, Executive being available to the Company upon reasonable noticefor interviews and factual investigations, appearing at the Company’s reasonable request to give testimony without requiring service ofa subpoena or other legal process, and turning over to the Company all relevant Company documents which are or may have comeinto Executive’s possession during his or her employment); provided, however, that any such request by the Company shall not beunduly burdensome or interfere with Executive’s personal schedule or ability to engage in gainful employment.(Signature page(s) follow) 8  IN WITNESS WHEREOF, the undersigned have caused this Separation Agreement to be duly executed and delivered as ofthe date indicated next to their respective signatures below. DATED:November 22 , 2016/s/ David M. Renzi David M. Renzi DATED: November 22, , 2016KALVISTA PHARMACEUTICALS, INC. By:/s/ Benjamin L. Palleiko Benjamin L. Palleiko Chief Financial Officer  EXHIBIT ADISCLOSURE CONCERNING SEVERANCE OFFERCLASS, UNIT OR GROUP COVERED BY SEVERANCE OFFERAll employees of KalVista Pharmaceuticals, Inc. (the “Company”) who are executive officers immediately prior to theclosing the Transactions (as defined in the Separation Agreement (the “Agreement”) to which this Disclosure is Appendix A)are covered by this severance offer.ELIG1BILITY FACTORS FOR THE PROGRAMEmployees who are covered by the severance offer are eligible to receive the benefits of the offer if they: •Are provided with the Agreement; •Timely sign and deliver the Agreement to the Company: •Do not revoke the Agreement as permitted by the Agreement; and •Comply with the terms and conditions of the Agreement.TIME LIMITS APPLICABLE TO THE PROGRAMThe following time limits apply to the program: •Employees age 40 and over must sign and deliver the Agreement no later than the forty-fifth (45th) day afterthat employee’s receipt of the Agreement. •Employees age 40 and over may revoke their acceptance of the Agreement for a period of seven (7) days aftersigning it.JOB TITLES AND AGES OF EMPLOYEES SELECTED FOR AND NOT SELECTED FOR THE PROGRAMTITLEAGEJOB ELIMINATED?ELIGIBLE FORSEPARATION BENEFITS?Chief Executive Officer58YesYesVice President, Clinical Affairs46YesYesVice President, Finance41NoNo  Exhibit 10.10SEPARATION AGREEMENTThis Separation Agreement (the “Agreement”) by and between Ms. Marcee Maroney (“Executive”) and KalVistaPharmaceuticals, Inc., formerly known as Carbylan Therapeutics, Inc., (the “Company”) is made effective eight (8) days afterExecutive’s signature hereto (the “Effective Date”), unless Executive revokes his or her acceptance of this Agreement as provided inSection 5(c) below. Any reference to the Company throughout this Agreement shall include the Company, its subsidiaries and anysuccessors thereto.A.The Company anticipates closing those certain transactions (the “Transactions”) with KalVista PharmaceuticalsLtd. (“KalVista”) contemplated by that certain Share Purchase Agreement (the “Share Purchase Agreement”) dated as of June 15,2016, by and between the Company, KalVista, the shareholders of KalVista and, solely for the purposes of being bound by certainprovisions therein and solely in such person’s capacity as the Seller Representative, Andrew Crockett.B.Executive’s employment with the Company and status as an officer, director and employee of the Company andeach of its affiliates will end effective upon the Termination Date (as defined below).C.Executive and the Company want to end their relationship amicably and also to establish the obligations of theparties including, without limitation, all amounts due and owing to Executive.D.The payments and benefits being made available to Executive pursuant to this Agreement are intended to satisfyall outstanding obligations under that certain employment letter agreement by between Executive and the Company, dated as of July21, 2014 (the “Employment Agreement”).NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the parties agree asfollows:1.Termination Date. Executive acknowledges and agrees that Executive’s status as an officer, director and employeeof the Company and as an officer and/or director of the Company’s subsidiaries will end effective as of the close of business on theclosing of the Transactions (the “Termination Date”). Executive hereby agrees to execute such further document(s) as shall bedetermined by the Company as necessary or desirable to give effect to the termination of Executive’s status as an officer and, ifapplicable, director of the Company and each of its subsidiaries; provided that such documents shall not be inconsistent with any of theterms of this Agreement. If the Transactions do not close and the Share Purchase Agreement is terminated, this Agreement will be nulland void, and Executive’s relationship with the Company will continue under those agreements that pre-date this Agreement as if thisAgreement has never existed.  2.Final Paycheck; Payment of Accrued Wages and Expenses.(a)Final Paycheck. As required by law, the Company will pay Executive all accrued but unpaidbase salary and all accrued and unused vacation earned through the Termination Date, subject to standard payroll deductionsand withholdings. Executive is entitled to these payments regardless of whether Executive executes this Agreement.(b)Business Expenses. Executive agrees that Executive has submitted Executive’s finaldocumented expense reimbursement statement reflecting all business expenses Executive incurred through the TerminationDate, if any, for which Executive seeks reimbursement. The Company will reimburse Executive for these expenses, if any,pursuant to its regular business practice.(c)Equity Awards: Pursuant to, and subject to the terms and conditions of, the Share PurchaseAgreement, the vesting of each option to purchase Company common stock held by Executive shall accelerate in full as ofimmediately prior to the closing of the Transactions, and at the time of closing (i) if the option(s) is “in-the-money”, it will benet exercised such that Executive will automatically receive Company common stock (subject to an offset for withholdingobligations) and (ii) if the option(s) is not “in-the-money” it will be terminated for no consideration. An option will beconsidered “in-the-money” if it has an exercise price per share less than the volume weighted average closing trading priceof a share of Company common stock on The NASDAQ Global Market for the ten trading days ending the trading dayimmediately prior to the date upon which the Transaction becomes effective.3.Separation Payments and Benefits. Without admission of any liability, fact or claim, the Company hereby agrees,subject to Executive’s execution and non-revocation of this Agreement and Executive’s performance of his or her continuingobligations pursuant to this Agreement, the Employment Agreement and that certain Confidential Information and InventionAssignment Agreement entered into between Executive and the Company (the “Confidentiality Agreement”), to provide Executive theseverance benefits set forth below. Specifically, the Company and Executive agree as follows:(a)Severance. The Company shall continue to pay to Executive his or her base salary at the ratein effect as of immediately prior to the Termination Date for the period of time commencing on the Termination Date andending on the six (6)-month anniversary of the Termination Date (such period, the “Severance Period” and such payments,the “Cash Severance”). Such Cash Severance payments shall be made in accordance with the Company’s standard payrollpractices, less applicable withholdings and deductions, with each payment deemed to be a separate payment for purposes ofSection 409A of the Code. The first such Cash Severance payment shall commence on the first payroll date following theEffective Date, which shall include amounts otherwise due and payable under this Section 3(a) on or before such date. Inthe event of Executive’s death during the Severance Period, the remaining Cash Severance shall be paid to Executive’sestate. 2  (b)Retention Bonus. The Company will pay to Executive $100,003, less applicablewithholdings and deductions, which represents the cash bonus Executive is entitled to under the Company’s 2016 RetentionBonus Plan. Such retention bonus shall be paid to Executive on the first payroll date following the Effective Date.(c)Healthcare Continuation Coverage. If Executive elects to receive continued healthcarecoverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended(“COBRA”), the Company shall directly pay, or reimburse Executive for, the premium for Executive and Executive’scovered dependents through the earlier of (i) the end of the Severance Period or (ii) the date Executive and Executive’scovered dependents, if any, become eligible for healthcare coverage under another employer’s plan(s); provided that, if theCompany determines that it cannot provide such continued health benefits without potentially violating applicable law orincurring additional expense for non-compliance under applicable law (including, without limitation, Section 2716 of thePublic Health Service Act), the Company will provide to Employee in lieu thereof a lump-sum payment in an amount equalto the then-remaining premiums for the remainder of the Severance Period of such continued health benefits, which paymentwill be made regardless of whether Employee elects COBRA continuation coverage. After the Company ceases to paypremiums pursuant to the preceding sentence, Executive may, if eligible, elect to continue healthcare coverage at Executive’sexpense in accordance with the provisions of COBRA. Executive acknowledges that Executive shall be solely responsiblefor all matters relating to Executive’s continuation of coverage pursuant to COBRA, including, without limitation,Executive’s election of such coverage and Executive’s timely payment of premiums.(d)Taxes. Executive understands and agrees that all payments under this Section 3 will besubject to appropriate tax withholding and other deductions. To the extent any taxes may be payable by Executive for thebenefits provided to Executive by this Section 3 beyond those withheld by the Company, Executive agrees to pay themhimself or herself and to indemnify and hold the Company and the other entities released herein harmless for any tax claimsor penalties, and associated attorneys’ fees and costs, resulting from any failure by him or her to make requiredpayments. To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions ofSection 409A of the Code, such reimbursements shall be paid to Executive no later than December 31 of the year followingthe year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amounteligible for reimbursement in any subsequent year, and Executive’s right to reimbursement under this Agreement will not besubject to liquidation or exchange for another benefit.(e)SEC Reporting. Executive acknowledges that to the extent required by the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”), Executive will have continuing obligations under Section 16(a)and 16(b) of the Exchange Act to report his or her transactions in Company common stock for six (6) months following theTermination Date. Executive hereby agrees not to undertake, directly or indirectly, any reportable transactions whichinclude, but are not limited to, 3  buying, selling or otherwise disposing of any common stock of the Company held by Executive until the end of such six (6)month period.(f)Sole Separation Benefit. Executive agrees that the payments provided by this Section 3 arenot required under the Company’s normal policies and procedures and are provided as a severance solely in connection withthis Agreement and the Employment Agreement. Thus, for any Company sponsored employee benefits not referenced inthis Agreement, Executive will be treated as a terminated employee effective on the Termination Date. This includes but isnot limited to the Company’s 40l(k) plan and Company sponsored life insurance and long-term disabilityinsurance. Executive acknowledges and agrees that the payments referenced in this Section 3 constitute adequate andvaluable consideration, in and of themselves, for the promises contained in this Agreement.4.Full Payment. Executive acknowledges that the payment and arrangements herein shall constitute full andcomplete satisfaction of any and all amounts properly due and owing to Executive as a result of Executive’s employment with theCompany and the termination thereof. Executive further acknowledges that, other than the Confidentiality Agreement, this Agreementshall supersede each agreement entered into between Executive and the Company regarding Executive’s employment, including,without limitation, the Employment Agreement, and each such agreement shall be deemed terminated and of no further effect as of theTermination Date.5.Executive’s Release of the Company. Executive understands that by agreeing to the release provided by thisSection 5, Executive is agreeing not to sue, or otherwise file any claim against, the Company or any of its employees or other agentsfor any reason whatsoever based on anything that has occurred as of the date Executive signs this Agreement.(a)On behalf of Executive and Executive’s heirs and assigns, Executive hereby releases andforever discharges the “Releasees” hereunder, consisting of the Company, KalVista, and their respective parent andsubsidiary entities, and their respective directors, officers, employees, shareholders, stockholders, partners, agents, attorneys,predecessors , successors, insurers, employee benefit plans, affiliates and assigns, of and from any and all claims, liabilitiesand obligations, both known and unknown, arising out of or in any way related to events, acts, conduct, or omissionsoccurring at any time prior to or at the time that Executive signs this Agreement (collectively, the “Released Claims”). TheReleased Claims include, but are not limited to: (1) all claims arising out of or in any way related to Executive’s employmentwith the Company (or its successor) or the termination of that employment; (2) all claims related to Executive’scompensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay,fringe benefits, stock, stock options, or any other ownership or equity interests in the Company; (3) all claims for breach ofcontract, wrongful termination, and breach of the implied covenant of good faith and fair dealing (including, but not limitedto, any claims based on or arising from this Agreement or the Employment Agreement); (4) all tort claims, including claimsfor fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and localstatutory claims, including claims for discrimination , 4  harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), thefederal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act (as amended)(“ADEA”), the federal Family and Medical Leave Act (as amended) (“FMLA”), the California Family Rights Act, theCalifornia Labor Code (as amended), and the California Fair Employment and Housing Act (as amended).(b)Notwithstanding the generality of the foregoing, Executive does not release the followingclaims:(i)Executive’s rights under this Agreement;(ii)any payments Executive is entitled to under the Share Purchase Agreement;(iii)any rights or claims for unemployment compensation or any state disability insurancebenefits pursuant to the terms of applicable state law;(iv)any rights or claims for workers’ compensation insurance benefits under the terms of anyworker’s compensation insurance policy or fund of the Company;(v)any rights or claims to continued participation in certain of the Company’s group benefitplans pursuant to the terms and conditions of COBRA;(vi)any rights or claims to any rights and benefits under this Agreement or benefit entitlementsvested as of the date of Executive’s employment termination, pursuant to written terms of any Company employeebenefit plan, including, without limitation, the terms of any Company equity compensation plan and/or any equitycompensation agreement between Executive and the Company;(vii)any rights or claims for indemnification Executive may have pursuant to any writtenindemnification agreement with the Company to which Executive a party, the charter, bylaws, or operating agreementsof the Company, applicable law, California Labor Code Section 2802, or applicable directors and officers liabilityinsurance;(viii)any other rights or claims that cannot be released as a matter of law; and(ix)Executive’s right to bring to the attention of the Equal Employment OpportunityCommission claims of discrimination; provided, however, that Executive does release Executive’s right to secure anydamages for alleged discriminatory treatment.(c)In accordance with the Older Workers Benefit Protection Act of 1990, Executive has beenadvised of the following: Executive acknowledges that Executive is knowingly and voluntarily waiving and releasing anyrights Executive may 5  have under the ADEA. Executive also acknowledges that the consideration given for the waiver and release herein is inaddition to anything of value to which Executive was already entitled. Executive further acknowledges that Executive hasbeen advised by this writing, as required by the ADEA, that: (i) Executive’s waiver and release do not apply to any rights orclaims that may arise after the execution date of this Agreement; (ii) Executive has been advised hereby that Executive hasthe right to consult with an attorney prior to executing this Agreement; (iii) Executive has forty-five (45) days from the dateof this Agreement to execute this Agreement (although Executive may choose to voluntarily execute this Agreement earlier);(iv) Executive has seven (7) days following the execution of this Agreement by Executive to revoke the Agreement , andExecutive will not receive the benefits provided by Section 3 of the Agreement unless and until such seven (7) day periodhas expired; (v) this Agreement will not be effective until the date upon which the revocation period has expired, which willbe the eighth (8th) day after this Agreement is executed by Executive, provided that the Company has also executed thisAgreement by that date; (vi) Executive has received with this Agreement a detailed list of the job titles and ages of allemployees who were terminated in this group termination and the ages of all employees of the Company in the same jobclassification or organizational unit who were not terminated, attached hereto as Exhibit A; and (vii) this Agreement doesnot affect Executive’s ability to test the knowing and voluntary nature of this Agreement. If Executive wishes to revoke thisAgreement , Executive must deliver notice of Executive’s revocation in writing, no later than 5:00 p.m. Pacific Time on the7th day following Executive’s execution of this Agreement to Ben Palleiko, Chief Financial Officer, KalVista, atblp@kalvista.com (via hardcopy or via electronic copy to blp@kalvista.com).(d)EXECUTIVE ACKNOWLEDGES THAT EXECUTIVE HAS BEEN ADVISED OFAND IS FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICHPROVIDES AS FOLLOWS:“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITORDOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTINGTHE RELEASE, WHICH, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS ORHER SETTLEMENT WITH THE DEBTOR.”BEING AWARE OF SAID CODE SECTION, EXECUTIVE HEREBY EXPRESSLY WAIVESANY RIGHTS EXECUTIVE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES ORCOMMON LAW PRINCIPLES OF SIMILAR EFFECT.6.Mutual Non-Disparagement, Transition, Transfer of Company Property; and Job References.(a)Mutual Non-Disparagement. Executive agrees that Executive will not make statements orrepresentations to any person, entity or firm which could reasonably be expected to cast the Company, KalVista or anyentity or employee affiliated with the Company or KalVista in an unfavorable light or which could 6  reasonably be anticipated to adversely affect the name or reputation of the Company, KalVista or any entity affiliated withthe Company or KalVista, or the name or reputation of any officer, agent or employee of the Company, KalVista or of anyentity affiliated with the Company or KalVista; provided that Executive will respond accurately and fully to any question,inquiry or request for information when required by legal process. The Company and Kalvista agree to, and the agree to usetheir best efforts to cause the officers, directors, and managing agents of the Company and KalVista to, refrain fromdiscussing or making any derogatory or disparaging remarks or statements, oral or written, to any third parties concerningExecutive in any manner which could reasonably be expected to be harmful to Executive’s business reputation or personalreputation; provided that the Company and KalVista officers, directors, and managing agents will respond accurately andfully to any question, inquiry or request for information when required by legal process. Notwithstanding the foregoing,nothing in this Section 6(a) shall prevent Executive, the Company or KalVista from making any truthful statement to theextent (i) necessary to rebut any untrue public statements made about him, her or it; (ii) necessary with respect to anylitigation, arbitration or mediation involving this Agreement and the enforcement thereof; or (iii) required by law or by anycourt, arbitrator, mediator or administrative or legislative body (including any committee thereof) with jurisdiction over suchperson. In addition, nothing in this Agreement shall be construed to prohibit Executive, the Company or KalVista fromengaging in any lawfully protected activity or conduct, including reporting possible violations of law or regulation to anygovernmental agency or regulatory body (including but not limited to the Equal Employment Opportunity Commission, theDepartment of Justice, the Securities and Exchange Commission, the Congress, any agency Inspector General, or makingother disclosures that are protected under the whistleblower provisions of federal law or regulation), filing a charge with orparticipating in any investigation or proceeding conducted by any governmental agency or regulatory body, or making otherdisclosures that are protected under any law or regulation. Executive, the Company nor KalVista need the priorauthorization of the Company to engage in any such lawfully protected activity, nor is Executive, the Company or Kalvistarequired to notify the other that he, she or it has done so.(b)Transition. Each of the Company and Executive shall use their respective reasonable effortsto cooperate with each other in good faith to facilitate a smooth transition of Executive’s duties to other executive(s) of theCompany.(c)Transfer of Company Property. On or before the Termination Date, Executive shall turnover to the Company all files, memoranda, records, and other documents, and any other physical or personal property whichare the property of the Company and which Executive had in his or her possession, custody or control at the time Executivesigned this Agreement. By executing and returning this Agreement, Executive is certifying that Executive has compliedwith Executive’s obligation herein to immediately return all Company documents and information regardless of whereExecutive has maintained such Company property. Executive’s compliance with the terms of this Section 6(c) is a conditionprecedent to Executive’s eligibility to receive the payments and benefits described in Section 3 above. 7  (d)Job References. Executive should direct any job reference inquiries to the Company’sHuman Resources. Pursuant to Company policy, in response to any such inquiries, the Company will provide only theposition Executive held and the dates of employment. The Company will confirm Executive’s salary in response to anysuch inquiry only if Executive submits a signed request to the Company to disclose such information.7.Executive Representations. Executive warrants and represents that (a) Executive has not filed or authorized thefiling of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency orcourt, and that if, unbeknownst to Executive, such a complaint, charge or lawsuit has been filed on Executive’s behalf, Executive willimmediately cause it to be withdrawn and dismissed, (b) Executive has reported all hours worked as of the date of this Agreement andhas been paid all compensation, wages, bonuses, commissions, and/or benefits to which Executive may be entitled and no othercompensation, wages, bonuses, commissions and/or benefits are due to Executive, except as provided in this Agreement, (c) Executivehas no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requestedunder the FMLA or any similar state law, (d) the execution, delivery and performance of this Agreement by Executive does not andwill not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Executive is a party orany judgment , order or decree to which Executive is subject, and (e) upon the execution and delivery of this Agreement by theCompany and Executive, this Agreement will be a valid and binding obligation of Executive, enforceable in accordance with its terms.8.No Assignment by Executive. Executive warrants and represents that no portion of any of the matters releasedherein, and no portion of any recovery or settlement to which Executive might be entitled, has been assigned or transferred to any otherperson, firm or corporation not a party to this Agreement , in any manner, including by way of subrogation or operation of law orotherwise. If any claim, action, demand or suit should be made or instituted against the Company or any other Releasee because ofany actual assignment, subrogation or transfer by Executive, Executive agrees to indemnify and hold harmless the Company and allother Releasees against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs. Inthe event of Executive’s death, this Agreement shall inure to the benefit of Executive and Executive’s executors, administrators, heirs,distributees, devisees, and legatees. None of Executive’s rights or obligations may be assigned or transferred by Executive, other thanExecutive’s rights to payments hereunder, which may be transferred only upon Executive’s death by will or operation of law.9.Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the partiesshall be governed by, the laws of the State of California or, where applicable, United States federal law, in each case, without regard toany conflicts of laws provisions or those of any state other than California.10.Miscellaneous. This Agreement, together with the Confidentiality Agreement, comprise the entire agreementbetween the parties with regard to the subject matter hereof and supersedes, in their entirety, any other agreements between Executiveand the Company with regard to the subject matter hereof, including, without limitation, the Employment Agreement 8  and the Company’s 2016 Retention Bonus Plan. The Company and Executive acknowledge that the termination of the Executive’semployment with the Company is intended to constitute an involuntary separation from service for the purposes of Section 409A of theCode, and the related Department of Treasury regulations. Executive acknowledges that there are no other agreements, written, oral orimplied, and that Executive may not rely on any prior negotiations, discussions, representations or agreements. This Agreement maybe modified only in writing, and such writing must be signed by both parties and recited that it is intended to modify thisAgreement. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of whichtaken together constitute one and the same agreement.11.Company Assignment and Successors. The Company shall assign its rights and obligations under this Agreementto any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise). This Agreement shallbe binding upon and inure to the benefit of the Company and its successors, assigns, personnel and legal representatives.12.Maintaining Confidential Information. Executive reaffirms his or her obligations under the ConfidentialityAgreement. Executive acknowledges and agrees that the payments provided in Section 3 above shall be subject to Executive’scontinued compliance with Executive’s obligations under the Confidentiality Agreement.13.Executive’s Cooperation. After the Termination Date, Executive shall cooperate with the Company and itsaffiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicialproceeding involving matters within the scope of Executive’s duties and responsibilities to the Company or its affiliates during his orher employment with the Company (including, without limitation, Executive being available to the Company upon reasonable noticefor interviews and factual investigations, appearing at the Company’s reasonable request to give testimony without requiring service ofa subpoena or other legal process, and turning over to the Company all relevant Company documents which are or may have comeinto Executive’s possession during his or her employment); provided, however, that any such request by the Company shall not beunduly burdensome or interfere with Executive’s personal schedule or ability to engage in gainful employment.(Signature page(s) follow) 9  IN WITNESS WHEREOF, the undersigned have caused this Separation Agreement to be duly executed and delivered as ofthe date indicated next to their respective signatures below. DATED: 22 Nov , 2016 /s/ Marcee Maroney Ms. Marcee Maroney DATED: November 22, 2016 KALVISTA PHARMACEUTICALS, INC. By:/s/ Benjamin L. Palleiko Benjamin L. Palleiko Chief Financial Officer  EXHIBIT ADISCLOSURE CONCERNING SEVERANCE OFFERCLASS, UNIT OR GROUP COVERED BY SEVERANCE OFFERAll employees of KaIVista Pharmaceuticals, Inc. (the “Company”) who are executive officers immediately prior to theclosing the Transactions (as defined in the Separation Agreement (the “Agreement”) to which this Disclosure is Appendix A) arecovered by this severance offer.ELIGIBILITY FACTORS FOR THE PROGRAMEmployees who are covered by the severance offer are eligible to receive the benefits of the offer if they: •Are provided with the Agreement; •Timely sign and deliver the Agreement to the Company; •Do not revoke the Agreement, as permitted by the Agreement; and •Comply with the terms and conditions of the Agreement.TIME LIMITS APPLICABLE TO THE PROGRAMThe following time limits apply to the program: •Employees age 40 and over must sign and deliver the Agreement no later than the forty-fifth (45th) day after thatemployee’s receipt of the Agreement. •Employees age 40 and over may revoke their acceptance of the Agreement for a period of seven (7) days aftersigning it.JOB TITLES AND AGES OF EMPLOYEES SELECTED FOR AND NOT SELECTED FOR THE PROGRAMTITLEAGEJOB ELIMINATEDELIGIBLE FORSEPARATION BENEFITS?Chief Executive Officer58YesYesVice President, Clinical Affairs46YesYesVice President, Finance41NoNo Exhibit 10.11 April 15, 2016Mr. John McKune Re:Amended and Restated Employment AgreementDear John:This letter (the “Agreement”) contains the revised terms of your employment with Carbylan Therapeutics, Inc. (the “Company”),effective as of April 15, 2016 (the “Effective Date”). This Agreement amends and restates in its entirety that certain employmentagreement between you and the Company dated as of July 27, 2015 (the “Prior Agreement”).1.Position. a.As of the Effective Date, you will fill the position of Vice President, Finance, with an assigned work location ofthe Company’s corporate headquarters. You will continue to report to the Company’s President and ChiefExecutive Officer until a Chief Financial Officer is hired at which time you will report to him or her. Thiscontinues to be a full-time position, and you agree to the best of your ability and experience that you will at alltimes loyally and conscientiously perform all of the duties and obligations required of and from you pursuant tothe express and implicit terms hereof, and to the satisfaction of the Company. During the term of youremployment, you further agree that you will devote your full business time and best professional effortsexclusively to the performance of your duties and responsibilities for the Company, and you will not directly orindirectly engage or participate in any business that is competitive in any manner with the business of theCompany. The Company retains the discretion to modify your position, duties, reporting relationship, and worklocation from time to time.2.Compensation. a.Base Salary. You will continue to be paid a base salary at the annual rate of $213,726, subject to payrollwithholdings and deductions. Your base salary will continue to be paid in two equal payments per month inaccordance with the Company’s regular payroll practices. As an exempt salaried employee, you will be expectedto work the Company’s standard business hours, and such additional hours as required by the nature of your workassignments and job responsibilities, and you will not be eligible for overtime compensation. The Company retainsthe discretion to modify your compensation terms (including the bonus program) from time to time. b.Bonus. You will continue to be eligible for consideration by the Company’s Board of Directors (the “Board”) foran annual bonus of up to twenty five percent  (25%) of your annual base salary, with the bonus determination to be made by the Board within its sole discretion.Payment of the bonus will be based on the level of achievement of the applicable objectives and milestones, assuch objectives and milestones are set by the Board in its sole discretion, and as such achievement is evaluated bythe Board in its sole discretion, and the bonus is not guaranteed. As a condition precedent to earning and receivingany bonus, you must remain an active employee with the Company through the date the bonus otherwise isscheduled to be paid; and if your employment has been terminated for any reason, regardless of whether thetermination is by you or the Company, you will not earn or be entitled to receive any bonus which has not beenpaid prior to the termination date.3.Benefits. a.Insurance Benefits. You will continue to be eligible to participate in the Company’s standard medical and dentalinsurance benefits, subject to the terms and conditions of these benefit plans, as in effect from time to time. b.Paid Time Off. You will continue to be eligible to accrue paid vacation, and be eligible for paid sick time and paidholidays, under the terms of the Company’s applicable policies, as in effect from time to time.You will continue to be eligible to participate in any other benefits offered by the Company generally to its employees from time totime, subject to the terms and conditions of these benefit plans and the Company’s policies, as in effect from time to time. TheCompany reserves the right to add to, change, or terminate any or all of its benefit programs and related policies in its sole discretion.4.Compliance with Company Policies and Confidential Information and Invention Assignment Agreement.As a condition of your continued employment with the Company, you will be required to continue to abide by the Company’s policiesand procedures, including but not limited to the policies contained in the Company’s Employee Handbook, as may be in effect fromtime to time. In addition, you shall continue to abide by and be bound by the terms of that certain Employee Proprietary Informationand Invention Agreement between you and the Company (the “Confidentiality Agreement”).5.Prior Confidentiality Obligations.In your work for the Company, you will be expected not to use or disclose any confidential information, including trade secrets, of anyformer employer or other person to whom you have an obligation of confidentiality. Rather, you will be expected to use only thatinformation which is generally known and used by persons with training and experience comparable to your own, which is commonknowledge in the industry or otherwise legally in the public domain, or which2 is otherwise provided or developed by the Company. You agree that you will not bring onto Company premises, any unpublisheddocuments or property belonging to any former employer or other person to whom you have an obligation of confidentiality. Youhereby represent that you have disclosed to the Company any contract you have signed that may restrict your activities on behalf of theCompany.6.At-Will Employment.Your employment with the Company will continue to be on an “at will” basis, meaning that either you or the Company mayterminate your employment at any time, with or without cause, and with or without advance notice. In addition, the Company may alsochange any term or condition of your employment with or without cause. This “at will” relationship can only be changed by anagreement in writing signed by an expressly authorized officer of the Company.7.Severance Benefits for Qualifying Terminations. a.General Severance Benefits. You shall be entitled to receive the General Severance Benefits (as defined below),as your sole severance benefits, if your employment is terminated by the Company without Cause (as definedbelow) and if: (i) such termination of employment is not due to your death or disability; (ii) your terminationconstitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h)); and (iii)within the timing required by the Company, you sign, date and return to the Company a general release of allknown and unknown claims (the “Release”) substantially in the form attached hereto as Exhibit A, and suchRelease becomes effective in accordance with its terms, including through the expiration of any applicablerevocation period.For purposes of this Section 7(a), the “General Severance Benefits” shall consist of the following: (i) continued payment of your finalbase monthly salary for a period of six (6) months following the termination date; (ii) accelerated vesting of any outstanding stockoptions such that the additional number of shares that would have vested if your employment had continued for six (6) additionalmonths following the termination date will become vested and exercisable effective as of the termination date; and (iii) if you timelyelect continued group health insurance coverage pursuant to federal COBRA law or, if applicable, state insurance laws (collectively,“COBRA”), the Company will pay your COBRA premiums to continue your group health insurance coverage (including the cost ofdependent coverage) through the earliest of (A) six (6) months following the termination date, (B) the date that you become eligible forgroup health insurance coverage through a new employer, or (C) the date you cease to be eligible for COBRA coverage.Notwithstanding the foregoing, the General Severance Benefit set forth in (i), above (continued base salary payment) will immediatelyexpire in the event that you obtain new full-time employment (or full-time consulting or similar arrangement) within six (6) monthsafter the termination date, provided, however, that the Company will thereafter continue to pay you, through the six-month severancepayment period, the excess, if any, of your Company base salary on the date of termination over the base salary for your newemployment relationship. You3 agree to notify the Company of your acceptance of any employment within the six-month severance payment period. In the event ofyour death during the six (6) month severance period, the remaining General Severance Benefits shall be paid to your estate. Anyseverance payments made under this Agreement will be made in the form of salary continuation, and will begin on the next regularCompany payday which is at least five (5) business days following the later of the effective date of the Release or the date on whichthe Release, signed by you, is received by the Company. The first payment, however, will be retroactive to the next business dayfollowing the termination date. b.Change of Control Severance Benefits. You shall be entitled to receive the Change of Control Severance Benefits(as defined below), as your sole severance benefits, if, on or within twelve (12) months after a Change of Control(as defined below), your employment is terminated by the Company without Cause or you voluntarily terminateyour employment for Good Reason (as defined below) and if; (i) such termination of employment is not due toyour death or disability; (ii) your termination constitutes a “separation from service” (as defined under TreasuryRegulation Section 1.409A-1(h)); and (iii) within the timing required by the Company, you sign, date and returnto the Company the Release substantially in the form attached hereto as Exhibit A, and such Release becomeseffective in accordance with its terms, including through the expiration of any applicable revocation period.For the purposes of Section 7(b), the “Change of Control Severance Benefits” shall consist of the following: (i) you shall receive theGeneral Severance Benefits as provided above, except that the continued salary payments will not be terminated or reduced in theevent that you obtain new employment during the six-month severance payment period; (ii) you will also be eligible to receive aprorated bonus payment for the year in which your employment terminates (notwithstanding that you otherwise would not be eligiblefor payment of such bonus due to termination of employment prior to the bonus payment date), with such prorated bonus amount to bebased on the achievement of the bonus objectives prior to such termination or resignation (provided that, no prorated bonus will beowed if the Board determines that there has been no achievement of such bonus objectives), and (iii) you will be eligible for the FullAcceleration as provided in Section 8 hereof. c.For purposes of this Agreement, “Cause” for termination of employment shall mean: (i) your failure tosubstantially perform the principal duties and obligations of your position with the Company; (ii) any act ofpersonal dishonesty, fraud or misrepresentation by you which was intended to or does result in your substantialgain or personal enrichment at the expense of the Company; (iii) your violation of a federal or state law orregulation applicable to the Company’s business or any of the Company’s policies, which violation was or isreasonably likely to be injurious to the Company or its business or reputation; (iv) your conviction of a felony or aplea of nolo contendere under the laws of the United States or any State; or (v) your material breach of the termsof any agreement or contract4 between you and the Company. The determination that a termination is for Cause shall be made in good faith bythe Board in its sole discretion. d.You may voluntarily terminate your employment for “Good Reason” under Section 7(b) of this Agreement bynotifying the Company in writing, within thirty (30) days after the first occurrence of one of the following eventstaken without your consent, that you intend to terminate your employment for Good Reason on a date not laterthan the ninetieth (90th) day following such event, if the Company has not cured that event within thirty (30) daysafter its receipt of your written notice. The events that may give rise to a Good Reason termination are: (i) amaterial and substantial reduction in the scope of your duties and responsibilities (provided, however, that achange in job position (including a change in title) shall not be deemed a “material reduction” unless your newduties are substantially reduced from your prior duties); (ii) relocation of your principal office that results in a one-way increase in your commute distance of more than 30 miles; or (iii) a reduction in your base salary by more thantwenty (20%) percent (provided that an across-the-board reduction in the salary level of all Vice Presidents of theCompany by the same (or a greater) percentage amount shall not constitute Good Reason).8.Change of Control.For purposes of this Agreement, “Change of Control” shall mean the consummation of a transaction or series of transactions thatresults in: (i) any sale or other disposition of all or substantially all of the assets of the Company. that occurs over a period of not morethan twelve (12) months; or (ii) any person, or more than one person acting as a group, acquiring ownership of stock of the Company,that together with the stock held by such person or group, constitutes more than fifty percent (50%) of the total fair market value ortotal voting power of the stock of such corporation. However, a Change of Control shall not include (x) any consolidation or mergereffected exclusively to change the domicile of the Company, or (y) any transaction or series of transactions principally for bona fideequity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled orconverted or a combination thereof. This definition of Change of Control is intended to conform to the definitions of “change inownership of a corporation” and “change in ownership of a substantial portion of a corporations assets” provided in TreasuryRegulation Sections 1.409A-3(i)(5)(v) and (vii).In the event that, on or within twelve (12) months after the consummation of a Change of Control of the Company, your employmentwith the Company (or its successor, as applicable) is terminated by the Company (or its successor, as applicable) without Cause or youterminate your employment for Good Reason, 100% of the shares subject to any outstanding stock options held by you will beimmediately vested and exercisable in full effect as of the employment termination date (the “Full Acceleration”). Notwithstanding theforegoing, as a pre-condition of the Full Acceleration, within the timing required by the Company, you must sign, date and return5 to the Company the Release substantially in the form attached hereto as Exhibit A, and such Release becomes effective in accordancewith its terms, including through the expiration of any applicable revocation period.9.Deferred Compensation.It is intended that (i) each installment of any amounts or benefits payable under Section 10 of this Agreement be regarded as a separate“payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2)(i) (and each such installment is hereby designated as separatefor such purpose), (ii) all payments of any such amounts or benefits satisfy, to the greatest extent possible, the exemptions from theapplication of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidancethereunder and any state law of similar effect (collectively “Section 409A”), as provided under Treasury Regulations Sections 1.409A-1(b)(4) and 1.409A-1(b)(9)(iii); and (iii) any such amounts or benefits consisting of premiums payable under COBRA also satisfy, tothe greatest extent possible, the exemption from the application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(9)(v). However, if any such amounts or benefits constitute “deferred compensation” under Section 409A and if you are a“specified employee” of the Company, as such term is defined in Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoidthe imposition of the adverse personal tax consequences under Section 409A, the timing of any such benefit payments as to which youare entitled shall be delayed as follows: on the earlier to occur of (a) the date that is six (6) months and one (1) day after your separationfrom service and (b) the date of your death (such applicable date, the “Delayed Initial Payment Date”), the Company shall (1) payyou a lump sum amount equal to the sum of the benefit payments that you would otherwise have received through the Delayed InitialPayment Date if the commencement of the payment of the benefits had not been delayed pursuant to this Section 12 and (2) commencepaying the balance, if any, of the benefits in accordance with the applicable payment schedule.This Agreement, together with the Confidentiality Agreement, sets for the entire agreement and understanding between you and theCompany relating to your employment and supersedes all prior agreements, understandings and discussions between you and theCompany, including, without limitation, the Prior Agreement. This letter may not be modified or amended except by a writtenagreement, signed by the Chief Executive Officer of the Company, although the Company reserves the right to modify unilaterallyyour compensation, benefits, job title and duties, reporting relationships and other terms of your employment.Sincerely,/s/ David M. RenziDavid M. RenziPresident and CEO 6 UNDERSTOOD, ACCEPTED AND AGREED:John McKune /s/ John McKuneSignature April 15, 2016Date  EXHIBIT ARELEASE AGREEMENTIn exchange for the General Severance Benefits, the Change of Control Severance Benefits, and/or the Full Acceleration, asapplicable, to be provided to me pursuant to the Amended and Restated Employment Agreement dated April 15, 2016 (the“Agreement”) between me and Carbylan Therapeutics, Inc. (the “Company”), I hereby provide the following release of claims (the“Release”).In exchange for the severance pay and benefits provided to me under the Agreement, to which I acknowledge I would not otherwisebe entitled, and for other good and valuable consideration, the receipt and sufficiency of which I hereby acknowledge, I herebygenerally and completely release the Company, its parent and subsidiary entities, and their respective directors, officers, employees,shareholders, stockholders, partners, agents, attorneys, predecessors, successors, insurers, employee benefit plans, affiliates, and assigns(collectively, the “Released Parties”) of and from any and all claims, liabilities and obligations, both known and unknown, arising outof or in any way related to events, acts, conduct, or omissions occurring at any time prior to or at the time that I sign this Release(collectively, the “Released Claims”). The Released Claims include, but are not limited to: (1) all claims arising out of or in any wayrelated to my employment with the Company (or its successor) or the termination of that employment; (2) all claims related to mycompensation or benefits, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringebenefits, stock, stock options, or any other ownership or equity interests in the Company; (3) all claims for breach of contract, wrongfultermination, and breach of the implied covenant of good faith and fair dealing (including, but not limited to, any claims based on orarising from the Agreement); (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation ofpublic policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of1990, the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Family and Medical Leave Act (asamended) (“FMLA”), the California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the California FairEmployment and Housing Act (as amended).Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights orclaims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, thecharter, bylaws, or operating agreements of the Company, applicable law, or applicable directors and officers liability insurance; (2)any rights or claims which are not waivable as a matter of law; and (3) any claims for breach of the Agreement arising after the datethat I sign this Release. In addition, nothing in this Release prevents me from filing, cooperating with, or participating in anyproceeding before the Equal Employment Opportunity Commission, the Department of Labor, the California Department of FairEmployment and Housing, or any other government agency, except that I acknowledge and agree that I am hereby waiving my right toany monetary benefits in connection with any such claim, charge or proceeding. I represent that I have no lawsuits, claims or actions pending in my name, oron behalf of any other person or entity, against any of the Released Parties.The following paragraph shall apply to me only if I am forty (40) years old or older as of the date that I sign this Release: Iacknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that theconsideration given for the waiver and release in the preceding paragraph is in addition to anything of value to which I am alreadyentitled. I further acknowledge that I have been advised by this writing that: (1) my waiver and release do not apply to any rights orclaims that may arise after the date I sign this Release; (2) I have been advised to consult with an attorney prior to signing this Release(although I may choose voluntarily not to do so) and I have had sufficient opportunity to do so; (3) I have twenty-one (21) days toconsider this Release (although I may choose voluntarily to sign it earlier); (4) I have seven (7) days following the date I sign thisRelease to revoke it by providing written notice of revocation to the Company’s Board of Directors; and (5) this Release will not beeffective until the date upon which the revocation period has expired, which will be the eighth calendar day after the date I sign it if Ido not revoke it (such date, the “Effective Date”).The following paragraph shall apply to me only if I am less than forty (40) years old as of the date that I sign this Release: Iunderstand that I have fourteen (14) days to consider this Release (although I may choose voluntarily to sign it earlier), the Release willbecome effective as of the date that I sign it (such date, the “Effective Date”), and I do not have the right to revoke this Release aftersigning it.I UNDERSTAND THAT THIS RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWNCLAIMS. I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “Ageneral release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time ofexecuting the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Ihereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in anyjurisdiction with respect to my release of claims herein, including but not limited to the release of unknown and unsuspected claims.I hereby represent that I have been paid all compensation owed and for all time worked, I have received all the leave and leave benefitsand protections for which I am eligible, pursuant to FMLA, CFRA, any Company policy or applicable law, and I have not sufferedany on-the-job injury or illness for which I have not already filed a workers’ compensation claim.I further agree: (1) not to disparage the Company, or any of the other Released Parties, in any manner likely to be harmful to its or theirbusiness, business reputation, or personal reputation (although I may respond accurately and fully to any question, inquiry or requestfor information as required by legal process); (2) not to voluntarily (except in response to legal compulsion) assist any third party inbringing or pursuing any proposed or pending litigation, arbitration, administrative claim or other formal proceeding against the Company, its parent or subsidiary entities, affiliates, officers, directors,employees or agents; and (3) to cooperate fully with the Company, by voluntarily (without legal compulsion) providing accurate andcomplete information, in connection with the Company’s actual or contemplated defense, prosecution, or investigation of any claims ordemands by or against third parties, or other matters, arising from events, acts, or failures to act that occurred during the period of myemployment by the Company or any successor thereto.I understand that, upon the Effective Date, this Release will take effect as a legally binding agreement between me and the Company.This Release sets for the entire agreement and understanding between the Company and me relating to the matters set forth herein andsupersedes all prior and contemporaneous agreements, understandings and discussions concerning such matters, whether express orimplied. This Release may not be modified or amended except by a written agreement, signed by the Chief Executive Officer of theCompany and me. By: [Name] Date:  AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AGREEMENT This Amendment (“Amendment”) to the Amended and Restated Employment Agreement, dated April 15, 2016, by andbetween Carbylan Therapeutics, Inc. (“Carbylan”) and Executive (the “Agreement”), is made and entered into as of November 21,2016, by and among John McKune (“Executive”) and KalVista Pharmaceuticals Inc., the successor of Carbylan (the “Company”),which will be assuming the obligations set forth in the Agreement, as modified by this Amendment, upon the close of the sharepurchase transaction between Carbylan and KalVista Pharmaceuticals Ltd (“KalVista”). A copy of the Agreement with all of itsexhibits is attached hereto as Exhibit 1. Capitalized terms used but not defined herein shall have the meanings ascribed to them in theAgreement. RECITALS A.WHEREAS, KalVista plans to merge with Carbylan (“Merger”) at which Executive is currently the VicePresident, Finance. B.WHEREAS, the Company and Executive wish to continue Executive’s service in the role of Vice President,Finance, of the Company, during the transition period following the Merger; and C.WHEREAS, the Company intends to assume the obligations under the Agreement following the Merger, subjectto the amendments herein. AMENDMENT NOW THEREFORE, in consideration of the foregoing recitals and the mutual promises and covenants herein contained,and for other good and valuable consideration, and further conditioned upon the successful closing of the merger between Carbylanand KalVista, the parties, intending to be legally bound, agree as follows: 1.Amendment to Section 2(a) of the Agreement. The base salary set forth in Section 2(a) of the Agreement shallbe amended to reflect an increase from the annual rate of $213,726 to $250,000, subject to payroll withholdings and deductions(“Increased Base Salary”), with such increase to take effect as of the date the Merger is completed and Executive’s title changes fromthe Vice President, Finance, of Carbylan to the Vice President, Finance, of the Company (“Merger Closing”). 2.Cash Bonus. In addition to the compensation set forth in Section 2 of the Agreement, as amended herein, theCompany agrees to pay Executive a cash bonus up to an aggregate gross amount of $124,997.50, less applicable withholdings anddeductions (the “Cash Bonus”), paid in installments in accordance with the following Payout Schedule (each, an “Installment”),provided that Executive is actively employed with the Company as of each Installment payment date.  Cash Bonus Payout Schedule: •First Installment – $62,500.00 (25% of the Increased Base Salary) – to be paid the first payroll date three monthsfollowing the Merger Closing; •Second Installment - $20,832.50 (8.333% of the Increased Base Salary) – to be paid the first payroll date fourmonths following the Merger Closing; •Third Installment - $20,832.50 (8.333% of the Increased Base Salary) – to be paid the first payroll date fivemonths following the Merger Closing; and •Fourth Installment - $20,832.50 (8.333% of the Increased Base Salary) – to be paid the first payroll date sixmonths following the Merger Closing. Notwithstanding the foregoing, in the event the Company terminates Executive’s employment without Cause on a date thatfalls in between the Installment payment dates, the Company will pay Executive, within thirty (30) days following the termination date,the prorated amount of the next Installment payment based on the number of full weeks of Executive’s active employment in betweenthe last paid Installment and the date of termination. For the avoidance of doubt, in the event the Company terminates Executive’semployment without Cause prior to first Installment payment date, then the Company will pay Executive, within thirty (30) daysfollowing the termination date, the prorated amount of the first Installment payment based on the number of full weeks of Executive’sactive employment in between the Merger Closing and the date of termination. 3.No Effect on Carbylan 2016 Retention Bonus. The Company and Executive agree that Executive’semployment with the Company following the Merger Closing will not qualify as Comparable Employment as defined in Section 2.6 ofthe Carbylan 2016 Retention Bonus Plan (“Bonus Plan”), attached hereto as Exhibit 2, to render Executive ineligible for receipt of aRetention Bonus under the terms of the Bonus Plan. In addition, the Company and Executive agree that the Executive’s RetentionBonus, as defined in the Bonus Plan, is calculated based on his salary in effect prior to the increase provided for in Section 1 above. Inaccordance with and pursuant to the Bonus Plan, subject to Executive’s execution of a general release of claims attached as Exhibit 3(the “Release”) that becomes effective and irrevocable within sixty (60) days following the Merger Closing, the Company shall pay toExecutive $71,242, less applicable withholdings and deductions, which represents Executive’s Retention Bonus, on the first payrollperiod after the date the Release becomes effective and irrevocable. 4.Stock Options. Subject to approval of the Compensation Committee of the Company (the “CompensationCommittee”), the Company will grant you an option to purchase an amount of the post- Merger Closing, post-reverse split shares of theCompany’s common stock with an exercise price equal to the fair market value per share of the common stock on the date of the grant,as determined by the Compensation Committee (the “Option”). The Option will vest over six (6) months, in equal monthlyinstallments as long as Executive remains actively employed with and in continuous service to the Company, with vesting tocommence on the first day following the Merger Closing. Subject to the approval of the Compensation Committee, the Companyfurther agrees that the post-employment exercise period for the Option shall continue until the twelve (12) month anniversary of thedate of Executive’s termination from the Company. 5  5.Severance Benefits for Qualifying Termination. In the event Executive’s employment is terminated by theCompany, without Cause or Executive voluntarily terminates his employment for Good Reason, the Company agrees that Executivewill be eligible for the Change of Control Severance Benefits and not the General Severance Benefits under the Agreement, subject tothe additional conditions as set forth in Section 7(b) of the Agreement. 6.Entire Agreement. Once accepted, this Amendment, together with Exhibits 1-3 and the Option, constitutes theentire agreement between Executive and the Company relating to subject matter hereof and supersedes all prior agreements,negotiations and understandings with respect to such matters, and Executive and the Company acknowledge they have made noagreements, representations or warranties relating to the subject matter hereof which are not set forth herein. 7.Modification. It is expressly agreed that the terms of this Amendment may not be altered, amended, modified, orotherwise changed in any respect except by another written agreement that specifically refers to this Amendment, executed by bothExecutive and the CEO of the Company. 8.No other Amendments. Except as expressly set forth above, all of the terms and conditions of the Agreementshall remain unchanged and continue in full force and effect to apply to Executive’s employment with Carbylan, prior to the MergerClosing, and Executive’s employment with the Company, on and after the Merger Closing. 9.Counterparts. This Amendment may be executed in any number of counterparts, each of which when soexecuted and delivered will be deemed an original, and all of which together constitute one and the same instrument. Execution of afacsimile or PDF copy shall have the same force and effect as execution of an original. KALVISTA PHARMACEUTICALS, INC. /s/ T. Andrew Crockett Date:November 21, 2016T. Andrew Crockett I have read and understood this Amendment and hereby acknowledge, accept and agree to the terms as set forth above and furtheracknowledge that no other commitments were made to me as part of this Amendment except as specifically set forth herein. EXECUTIVE /s/ John McKune Date:November 21, 2016John McKune 6  Exhibit 3RELEASE AGREEMENT In exchange for the Retention Bonus to be provided to me pursuant to the Carbylan Therapeutics, Inc. (“Carbylan”) 2016 RetentionBonus Plan (the “Bonus Plan”), I hereby provide the following release of claims (the “Release”). In exchange for the Retention Bonus provided to me under the Bonus Plan, to which I acknowledge I would not otherwise be entitled,and for other good and valuable consideration, the receipt and sufficiency of which I hereby acknowledge, I hereby generally andcompletely release Carbylan, KalVista Pharmaceuticals, Inc. (the “Company”), KalVista Pharmaceuticals Ltd., their respective parentand subsidiary entities, and their respective directors, officers, employees, shareholders, stockholders, partners, agents, attorneys,predecessors, successors, insurers, employee benefit plans, affiliates, and assigns (collectively, the “Released Parties”) of and fromany and all claims, liabilities and obligations, both known and unknown, arising out of or in any way related to events, acts, conduct,or omissions occurring at any time prior to or at the time that I sign this Release (collectively, the “Released Claims”). The ReleasedClaims include, but are not limited to: (1) all claims arising out of or in any way related to my employment with Carbylan or theCompany (or its successor); (2) all claims related to my compensation or benefits, including salary, bonuses, commissions, vacationpay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership or equity interests inCarbylan or the Company; (3) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faithand fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of publicpolicy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees,or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990,the federal Age Discrimination in Employment Act (as amended) (“ADEA”), the federal Family and Medical Leave Act (as amended)(“FMLA”), the California Family Rights Act (“CFRA”), the California Labor Code (as amended), and the California FairEmployment and Housing Act (as amended). Notwithstanding the foregoing, the following are not included in the Released Claims (the “Excluded Claims”): (1) any rights orclaims for indemnification I may have pursuant to any written indemnification agreement with the Company to which I am a party, thecharter, bylaws, or operating agreements of the Company, applicable law, or applicable directors and officers liability insurance;(2) any rights or claims which are not waivable as a matter of law; (3) my rights under that certain Amended and Restated EmploymentAgreement by and between Carbylan and me dated April 15, 2016, as amended by that certain letter amendment by and between theCompany and me dated as of November 21, 2016; (4) any payments I am entitled to under that certain Share Purchase Agreementdated as of June 15, 2016, by and between the Company, Carbylan, the shareholders of the Company and, solely for the purposes ofbeing bound by certain provisions therein and solely in such person’s capacity as the Seller Representative, Andrew Crockett; (5)claims to continued participation in certain of Carbylan’s or the Company’s benefit plans pursuant to the terms and conditions thereof;and (5) any claims for breach of the Bonus Plan arising after the date that I sign this Release. In addition, nothing in this Releaseprevents me from filing, cooperating with, or participating in any proceeding before the Equal Employment Opportunity Commission,the Department of Labor, the California  Department of Fair Employment and Housing, or any other government agency, except that I acknowledge and agree that I am herebywaiving my right to any monetary benefits in connection with any such claim, charge or proceeding. I represent that I have nolawsuits, claims or actions pending in my name, or on behalf of any other person or entity, against any of the Released Parties. I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA, and that theconsideration given for the waiver and release in the preceding paragraph is in addition to anything of value to which I am alreadyentitled. I further acknowledge that I have been advised by this writing that: (1) my waiver and release do not apply to any rights orclaims that may arise after the date I sign this Release; (2) I have been advised to consult with an attorney prior to signing this Release(although I may choose voluntarily not to do so) and I have had sufficient opportunity to do so; (3) I have twenty-one (21) days toconsider this Release (although I may choose voluntarily to sign it earlier); (4) I have seven (7) days following the date I sign thisRelease to revoke it by providing written notice of revocation to Ben Palleiko, Chief Financial Officer of the Company, atblp@kalvista.com (via hardcopy or via electronic copy to blp@kalvista.com); and (5) this Release will not be effective until the dateupon which the revocation period has expired, which will be the eighth calendar day after the date I sign it if I do not revoke it (suchdate, the “Effective Date”). I UNDERSTAND THAT THIS RELEASE AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWNCLAIMS. I acknowledge that I have read and understand Section 1542 of the California Civil Code which reads as follows: “Ageneral release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time ofexecuting the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Ihereby expressly waive and relinquish all rights and benefits under that section and any law or legal principle of similar effect in anyjurisdiction with respect to my release of claims herein, including but not limited to the release of unknown and unsuspected claims. I hereby represent that I have been paid all compensation owed and for all time worked up until the date I sign this Agreement, I havereceived all the leave and leave benefits and protections for which I am eligible through the date of this Agreement, pursuant to FMLA,CFRA, any Company policy or applicable law, and I have not suffered any on-the-job injury or illness for which I have not alreadyfiled a workers’ compensation claim through the date of this Agreement.  I understand that, upon the Effective Date, this Release will take effect as a legally binding agreement between me and the Company.This Release sets for the entire agreement and understanding between the Company and me relating to the matters set forth herein andsupersedes all prior and contemporaneous agreements, understandings and discussions concerning such matters, whether express orimplied. This Release may not be modified or amended except by a written agreement, signed by the Chief Executive Officer of theCompany and me. By:/s/ John McKune John McKune Date:November 21, 2016 Exhibit 10.12OFFICE LEASE AGREEMENT___________________________________________55 CAMBRIDGE PARKWAYCAMBRIDGE, MABY AND BETWEEN55 CAMBRIDGE PARKWAY, LLC,a Delaware limited liability company, as LandlordandKALVISTA PHARMACEUTICALS, INC.,a Delaware Corporation, as Tenant___________________________________________  TABLE OF CONTENTS Page Article 1.SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS1 Article 2.PREMISES/RIGHT TO USE COMMON AREAS3 Article 3.TERM4 Article 4.MINIMUM MONTIILY RENT5 Article 5.ADDITIONAL RENT/EXPENSE STOP/TAX STOP5 Article 6.PARKING7 Article 7.PERSONAL PROPERTY TAXES7 Article 8.PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONS7 Article 9.SECURITY DEPOSIT7 Article 10.CONSTRUCTION OF THE PREMISES9 Article 11.ALTERATIONS9 Article 12.PERSONAL PROPERTY/SURRENDER OF PREMISES11 Article 13.LIENS11 Article 14.USE OF PREMISES/RULES AND REGULATIONS11 Article 15.RIGHTS RESERVED BY LANDLORD13 Article 16.QUIET ENJOYMENT14 Article 17.MAINTENANCE AND REPAIR14 Article 18.UTILITIES AND JANITORIAL SERVICES15 Article 19.ENTRY AND INSPECTION17 Article 20.INSURANCE18 Article 21.DAMAGE AND DESTRUCTION OF PREMISES20 Article 22.EMINENT DOMAIN21 Article 23.ASSIGNMENT AND SUBLETTING22 Article 24.SALE OF PREMISES BY LANDLORD23 Article 25.SUBORDINATION/ATIORNMENT/MODIFICATION/ASSIGNMENT23 Article 26.LANDLORD’S DEFAULT AND RIGHT TO CURE24 Article 27.ESTOPPEL CERTIFICATES24 Article 28.TENANT’S DEFAULT AND LANDLORD’ S REMEDIES24 Article 29.TENANT’S RECOURSE27 Article 30.HOLDING OVER28 Article 31.GENERAL PROVISIONS28 Article 32.NOTICES30 Article 33.BROKER’S COMMISSIONS30 Article 34.INDEMNIFICATION/WAIVER OF SUBROGATION31 Article 35.WAIVER OF TRIAL BY JURY31 i EXHIBITS (A)PREMISES(B)RULESAND REGULATIONS(C)PARKING RULES AND REGULATIONS(D)TENANT IMPROVEMENTS(D-1)CONTRACTOR RULES AND REGULATIONS(D-2)ENERGY AND SUSTAINABILITY CONSTRUCTION GUIDELINES AND REQUIREMENTS(E)CONFIRMATION OF COMMENCEMENT DATE(F)MOISTURE AND MOLD CONTROL INSTRUCTIONS(G)LANDLORD'S SERVICES(H)LIST OF ISSUING BANKS FOR LETTER OF CREDIT ii OFFICE LEASE AGREEMENT55 CAMBRIDGE PARKWAY, CAMBRIDGE, MATHIS OFFICE LEASE AGREEMENT, dated as of May 30, 2017, is made and entered into by 55 Cambridge Parkway,LLC, a Delaware limited liability company (the “Landlord”) and Kalvista Pharmaceuticals, Inc. a Delaware corporation (the“Tenant”). In consideration of the mutual promises and representations set forth in this Lease, Landlord and Tenant agree as follows:ARTICLE 1. SUMMARY AND DEFINITION OF CERTAIN LEASE PROVISIONS AND EXHIBITS1.1The following terms and provisions of this Lease, as modified by other terms and provisions hereof, are included in thisSection 1.1 for summary and definitional purposes only. If there is any conflict or inconsistency between any term or provision in thisSection 1.1 and any other terms or provision of this Lease, the other term or provision or this Lease shall control:(a) Landlord: 55 Cambridge Parkway, LLC, a Delaware limited liability company (b) Address of Landlord for Notices: c/o Lincoln Property CompanyWith aInvesco Real Estate55 Cambridge Parkwaycopy to:1166 Avenue of the AmericasCambridge, MA 02142 New York, NY 10036Attention: Baron Hanley Attention:Asset ManagerTelephone: (617) 494-9197 55 Cambridge ParkwayTelecopy: (617) 494-5459 Cambridge, MA 02142 Telephone:(212) 278-9224 Telecopy:(212) 278-9624 (c) Tenant: Kalvista Pharmaceuticals, Inc., a Delaware corporation(d) Address of Tenant for Notices:Kalvista Pharmaceuticals, Inc.(Include Main/Hdq. Address)55 Cambridge Parkway Cambridge, MA 02142 Attn: Ben Palleiko (e) Lease Term: A period commencing on the Commencement Date (as hereinafter defined), and expiring on the day beforethe fifth (5th ) anniversary of the Commencement Date (provided that if such fifth (5th ) anniversary is not the first day of a month, theLease Term shall expire on the last day of the month in which such fifth (5th ) anniversary occurs). As used in this Lease, the“Commencement Date” shall mean the earlier of (i) the date on which Landlord substantially completes the Tenant Improvements (asdefined in, and determined in accordance with, Exhibit D attached hereto), or (ii) Tenant’s occupancy of the Premises for businesspurposes. (f)Building: The office building located at 55 Cambridge Parkway, Cambridge, MA (the “Building”).(g)Premises: A portion of the ninth (9th) floor of the East Wing of the Building, as shown on Exhibit A, consisting ofapproximately 2,762 Rentable Square Feet, subject to re-measurement by Landlord after completion of the Tenant Improvementspursuant to the terms and provisions in Exhibit D attached hereto. The Minimum Annual Rent set forth herein shall be adjusted up ordown to account for any changes that result from the re-measurement of the Premises.(h)Minimum Annual Rent (subject to adjustment following re-measurement of the Premises): Lease YearRSF RuleAnnual AmountMonthly Amount Lease Year 1:$80.00/RSF$220,960.00$18,413.33 per monthLease Year 2:$81.00/RSF$223,722.00$18,643.50 per monthLease Year 3:$82.00/RSF$226,484.00$18,873.67 per monthLease Year 4:$83.00/RSF$229,246.00$19,103.83 per monthLease Year 5:$84.00/RSF$232,008.00$19,334 00 per monthAs used above, the term “Lease Year” shall mean the one year period beginning on the Commencement Date and eachconsecutive one year period thereafter, except that if the Commencement Date shall not occur on the first day of acalendar month, then Lease Year 1 shall also include the partial calendar month during which the first (1st) anniversaryoccurs (i.e., the period of such calendar month after such first anniversary). The monthly component of MinimumAnnual Rent shall be referred to herein as “Minimum Monthly Rent”.(i)Tenant’s Base Operating Share: (see Article 5).(j)Tenant’s Base Tax Share: (see Article 5).(k)Expense Stop: An amount equal to the Operating Costs for the calendar year ending December 31, 2017 dividedby the Rentable Square Footage of the Building.(l)Tax Stop: An amount equal to the Taxes for the tax fiscal year ending June 30, 2018 divided by the RentableSquare Footage of the Building.(m)Security Deposit: A Security Deposit of $92,066.65 is required and shall be deposited with Landlord at the timethis Lease is signed by Tenant.(n)Parking: (see Article 6.)(o)Building Business Hours: 8 a.m. to 6 p.m. Monday through Friday; 8 a.m. to 1 p.m. Saturday. Closed Sundaysand all legal holidays.(p)Sustainability Initiative: (see Section 14.4).21.2The following exhibits (the “Exhibits”) and addenda are attached hereto and incorporated herein by this reference:Exhibit APremisesExhibit BRules and RegulationsExhibit CParking Rules and RegulationsExhibit DTenant ImprovementsExhibit D-1Contractor Rules and RegulationsExhibit D-2Energy and Sustainability Construction Guidelines and RequirementsExhibit EConfirmation of Commencement DateExhibit FMoisture and Mold Control InstructionsExhibit GLandlord’s ServicesExhibit HList of Issuing Banks for Letter of CreditThe Office Lease Agreement and the Exhibits are collectively referred to herein as the “Lease.”ARTICLE 2. PREMISES/RIGHT TO USE COMMON AREAS2.1Landlord leases to Tenant and Tenant leases from Landlord the Premises, for and subject to the terms and provisions setforth in this Lease. This Lease is subject to all liens, encumbrances, parking and access easements, restrictions, covenants, and all othermatters of record, the Rules and Regulations described in Article 14 and the Parking Rules and Regulations described inArticle 6. Tenant and Tenant’s agents, contractors, customers, directors, employees, invitees, officers, and patrons (collectively, the“Tenant’s Permittees”) have a non-exclusive privilege and license, during the Lease Term, to use the non-restricted Common Areas incommon with all other authorized users thereof.2.2For purposes of this Lease, the following terms have the definitions set forth below:(a)“Automobile Parking Areas” means all areas designated for automobile parking upon the Land. AutomobileParking Areas are Common Areas, but certain parking areas are restricted. (See Parking Rules & Regulations).(b)“Common Areas” means those areas within the Building and Land not leased to any tenant and which areintended by Landlord to be available for the use, benefit, and enjoyment of all occupants of the Building.(c)“Interior Common Facilities” means lobbies, corridors, hallways, elevator foyers, restrooms, mail rooms,mechanical and electrical rooms, janitor closets, and other similar facilities used by tenants or for the benefit of tenants on a non-exclusive basis. Access to certain Interior Common Facilities is restricted.(d)“Project” means the building and land located at 55 Cambridge Parkway, Cambridge, MA.3(e)“Load Factor” means the quotient of the Rentable Square Footage of the Building divided by the aggregateUsable Square Footage of all premises and occupiable space in the Building, and is subject to change from time to time.(f)“Rentable Square Footage” means (1) with respect to the Building, the sum of the total area of all floors in theBuilding (including Interior Common Facilities but excluding stairs, elevator shafts, vertical shafts, parking areas and exteriorbalconies), computed by measuring to the exterior surface of permanent outside walls; and (2) with respect to the Premises, the UsableSquare Footage of the Premises multiplied by the Load Factor.(g)“Usable Square Footage” means the area of the Premises (or other space occupiable by tenants as the case maybe) computed by measuring to the exterior surface of permanent outside walls, to the midpoint of corridor and demising walls and tothe Tenant side of permanent interior walls and Interior Common Facilities walls (other than corridor walls).ARTICLE 3. TERMThe term of this Lease and the Commencement Date shall be as specified in Section 1.1. Subject to the terms and provisionshereof, Landlord shall use reasonable efforts to provide the Premises with the Tenant Improvements substantially complete (as suchterm is defined in Exhibit D) on or before the date that is one hundred fifty (150) days after Plan Approval (as defined in Exhibit D)(the “Estimated Delivery Date”) to the extent reasonably practicable. If the Premises are not substantially complete by the EstimatedDelivery Date (as extended by periods of force majeure or delays caused by Tenant), Landlord shall not be deemed in default of thisLease, nor shall Landlord be liable to Tenant for failing to deliver the Premises to Tenant by any particular date, and except asexpressly set forth herein, Tenant shall not have the right to terminate this Lease for Landlord’s failure to timely deliver the Premises byany particular date. If the Premises are not substantially complete enough that Tenant can reasonably take occupancy of them withinninety (90) days after the Estimated Delivery Date (as extended by periods of force majeure or delays caused by Tenant), Tenant’s soleremedies shall be to either enter into a mutually acceptable revision of the appropriate terms of this Lease with Landlord, or to cancelthis Lease with ten (10) days written notice to Landlord. Notwithstanding the foregoing, if said delays are caused by Tenant, then thisLease, and all of the obligations herein, shall commence on the date that the Commencement Date would have occurred but for suchTenant delays. By occupying the Premises, Tenant shall be deemed to have accepted the Premises in their condition as of the date ofsuch occupancy, subject to the performance of punch-list items that remain to be performed by Landlord, if any. Prior to occupyingthe Premises, Tenant shall execute and deliver to Landlord a letter substantially in the form of Exhibit E hereto confirming: (1) theCommencement Date (as defined in the Basic Lease Information) and the expiration date of the Lease Term (as defined in the BasicLease Information); (2) that Tenant has accepted the Premises; and (3) that Landlord has performed all of its obligations with respect tothe Premises (except for punch-list items specified in such letter); however, the failure of the parties to execute such letter shall notdefer the Commencement Date or otherwise invalidate this Lease. Tenant’s failure to execute such document within ten (10) days ofreceipt thereof from Landlord shall be a default by Tenant under this Lease and shall be deemed to constitute Tenant’s agreement to thecontents of such document. Occupancy of the Premises by Tenant prior to the Commencement Date (“Early Occupancy”) shall besubject to all of the provisions of this Lease, including the4payment of Minimum Monthly Rent prorated on a per diem basis for each day of Early Occupancy.ARTICLE 4. MINIMUM MONTIILY RENTCommencing on the Commencement Date, Tenant shall pay to Landlord, without deduction, setoff, prior notice, or demand,the Minimum Monthly Rent, payable in advance on the first day of each calendar month during the Lease Term. If theCommencement Date occurs on a date other than the first day of a calendar month, the Minimum Monthly Rent for that month shall beprorated on a per diem basis and be paid to Landlord on or before the Commencement Date.ARTICLE 5. ADDITIONAL RENT/EXPENSE STOP/TAX STOPTenant shall pay as additional rent each year the amount, if any, by which the Tenant’s Share of Operating Costs duringeach Operating Year of the Lease Term (or portion thereof) exceeds the Base Operating Share. For purposes of this Lease, “BaseOperating Share” means an amount equal to the product of the Rentable Square Footage of the Premises multiplied by the ExpenseStop, and “Tenant’s Share of Operating Costs” means an amount equal to the product of the Rentable Square Footage of the Premisesmultiplied by the actual per square foot Operating Costs for the Project during the applicable Operating Year of the Lease Term. If theLease Term begins or ends anytime other than the first or last day of an Operating Year, Operating Costs and the Tenant’s Share ofOperating Costs thereof shall be prorated. Prior to the end of each Operating Year, Landlord shall provide Tenant with a writtenstatement of Landlord’s estimate of Operating Costs and Tenant’s Estimated Share of Operating Costs for the next succeedingOperating Year. If the Estimated Share of Operating Costs exceeds the Base Operating Share, Tenant shall pay Landlord,concurrently with each payment of the Minimum Monthly Rent for the next Operating Year, an amount equal to one-twelfth (1/12) ofthe amount by which the Estimated Share of Operating Costs exceeds the Base Operating Share. Landlord may, at any time, revise theEstimated Share of Operating Costs and adjust the required monthly payment accordingly. Within ninety (90) days after the end ofeach Operating Year, or as soon thereafter as reasonably possible, Landlord shall provide Tenant with a statement showing Landlord’sactual Operating Costs and Tenant’s Share of the actual Operating Costs for the preceding Operating Year (the “Actual Share”). If theActual Share exceeds the Estimated Share paid by Tenant during that Operating Year, Tenant shall pay the excess at the time the nextsucceeding payment of Minimum Monthly Rent is payable (or within ten (10) days if the Lease Term has expired or beenTerminated). If the Actual Share is less than the Estimated Share of Operating Costs paid by Tenant, Landlord shall apply such excessto payments next falling due under this paragraph (or, at Tenant’s option, refund the same to Tenant or credit amounts due from Tenantif the Lease Term has expired or been terminated). In the event the Building is not fully occupied during any Operating Year, anadjustment shall be made by Landlord in calculating the Operating Costs for such Operating Year so that the Operating Costs shall beadjusted to the amount that would have been incurred had the Building been fully occupied during such Operating Year. For purposesof this Lease (a) “Operating Costs” means and includes all costs of management, maintenance, and operation of the Project notattributable to any other tenant, including but not limited to the costs of cleaning, repairs, utilities, air conditioning, heating, plumbing,elevator, parking, landscaping, insurance, and all other costs which can properly be5considered operating expenses but excluding costs of property additions, alterations for tenants, leasing commissions, advertising,income taxes and administrative costs not specifically incurred in the management, maintenance and operation of the Project; and(b) “Operating Year” means a year beginning January 1 and ending December 31. Tenants with leases expiring or Terminating priorto the end of the Operating Year shall be responsible for their portion of Operating Costs above the Base Operating Share based onLandlord’s estimate of Operating Costs.Tenant shall also pay as additional rent each year the amount, if any, by which the Tenant’s Share of Taxes during eachOperating Year of the Lease Term (or portion thereof) exceeds the Base Tax Share. For purposes of this Lease, “Base Tax Share”means an amount equal to the product of the Rentable Square Footage of the Premises multiplied by the Tax Stop, and “Tenant’sShare of Taxes” means an amount equal to the product of the Rentable Square Footage of the Premises multiplied by the actual persquare foot Taxes during the applicable Operating Year of the Lease Term. If the Lease Term begins or ends anytime other than thefirst or last day of an Operating Year, Taxes and the Tenant’s Share of Taxes shall be prorated. Prior to the end of each OperatingYear, Landlord shall provide Tenant with a written statement of Landlord’s estimate of Taxes and Tenant’s Estimated Share of Taxesfor the next succeeding Operating Year. If the Estimated Share of Taxes exceeds the Base Tax Share, Tenant shall pay Landlord,concurrently with each payment of the Minimum Monthly Rent for the next Operating Year, an amount equal to one-twelfth (1/12) ofthe amount by which the Estimated Share of Taxes exceeds the Base Tax Share. Landlord may, at any time, revise the EstimatedShare of Taxes and adjust the required monthly payment accordingly. Within ninety (90) days after the end of each Operating Year, oras soon thereafter as reasonably possible, Landlord shall provide Tenant with a statement showing Landlord’s actual Taxes andTenant’s Share of the actual Taxes for the preceding Operating Year (the “Actual Tax Share”). If the Actual Tax Share exceeds theEstimated Share of Taxes paid by Tenant during that Operating Year, Tenant shall pay the excess at the time the next succeedingpayment of Minimum Monthly Rent is payable (or within ten (10) days if the Lease Term has expired or been Terminated). If theActual Tax Share is less than the Estimated Share of Taxes paid by Tenant, Landlord shall apply such excess to payments next fallingdue under this Article (or refund the same to Tenant or credit amounts due from Tenant if the Lease Term has expired or beenTerminated). Taxes means all real estate taxes and assessments (including, without limitation, assessments for public improvements orbenefits and water and sewer use charges), and other charges or fees in the nature of taxes for municipal services which at any timeduring or in respect of the Lease Term may be assessed, levied, confirmed or imposed on or in respect of, or be a hen upon, theProject, or any part thereof, or any rent therefrom or any estate, right, or interest therein, or any occupancy, use, or possession of suchproperty or any part thereof, and ad valorem taxes for any personal property used in connection with the Project. Without limiting theforegoing, Taxes shall also include any payments made by Landlord in lieu of taxes and all business improvement districtpayments. Landlord agrees that Tenant’s share of any special assessment shall be determined (whether or not Landlord avails itself ofthe privilege so to do) as if Landlord had elected to pay the same in installments over the longest period of time permitted by applicablelaw and Tenant shall be responsible only for those installments (including interest accruing and payable thereon) or parts of installmentthat are attributable to periods within the Lease Term.6ARTICLE 6. PARKINGSo long as Tenant shall not be in default under this Lease beyond the expiration of applicable notice and cure periods,Tenant shall have the right to use three (3) parking spaces in the Automobile Parking Areas on an unreserved, unassigned basis, incommon with other tenants of the Building. Tenant shall pay to Landlord each month with the payment of Minimum Annual Rent thethen monthly parking charge (currently $250 per space per month) set by Landlord, regardless of whether Tenant or any invitees,employees or contractors of Tenant actually use such spaces, for each of the three (3) parking spaces (the “Parking Charges”). Suchrate shall be subject to change by Landlord during the Lease Term. Tenant shall be responsible for causing its visitors to park only inspaces or areas marked “Visitor parking” and Tenant and its employees shall not park in spaces or areas marked “Visitor-Parking” or‘‘No parking”. Landlord reserves the right to tow any cars parked in “Visitor Parking” or ‘‘No Parking” areas at the sole expense ofthe owner of the improperly parked car. Landlord reserves the right to designate reserved parking spaces for the Building’stenants. Nothing contained herein shall be deemed to create liability upon Landlord for any damage to motor vehicles of Tenant’sPermittees, or from loss of property from within such motor vehicles while parked in the Automobile Parking Areas. Landlord has theright to enforce against all users of the Automobile Parking Areas the rules and regulations set forth on Exhibit C (the “Parking Rulesand Regulations”), as the same may be amended by Landlord from time to time.ARTICLE 7. PERSONAL PROPERTY TAXESTenant shall pay, prior to delinquency, all taxes levied upon fixtures, furnishings, equipment, and personal property placedon the Premises by Tenant.ARTICLE 8. PAYMENT OF RENT/LATE CHARGES/INTEREST ON PAST-DUE OBLIGATIONSTenant shall pay the rent and all other charges specified in this Lease to Landlord at the address set forth on Section 1.1 ofthis Lease, or to another person and at another address as Landlord from time to time designates in writing. All monetary obligationsof Tenant, including Minimum Monthly Rent, additional rent, or other charges payable by Tenant to Landlord under the Terms of thisLease shall be deemed “Rent”, and any Rent not received within ten (10) days after the due date (the “Delinquency Date”) thereofshall automatically (and without notice) incur a late charge of five percent (5%) of the delinquent amount. Except as otherwiseprovided herein, any Rent due to Landlord not paid when due shall bear interest, from the date due, at the maximum rate thenallowable by law or judgments. Any such late charge and interest shall be payable as additional rent under this Lease, shall not beconsidered a waiver by Landlord of any default by Tenant hereunder, and shall be payable immediately on demand; provided,however, that interest shall not be payable on late charges incurred by Tenant.ARTICLE 9. SECURITY DEPOSITTenant shall, upon execution of this Lease, deposit with Landlord the Security Deposit, as security for the performance ofterms and provisions of this Lease by Tenant, which shall be returned to Tenant within thirty (30) days following the date on whichthis Lease expires or7Terminates so long as Tenant is not in default under this Lease. No interest shall accrue on the Security Deposit, and same shall not beheld in a segregated account, unless required by applicable law. The Security Deposit shall not be used to pay the last month’s leasepayment.At Tenant’s election, the Security Deposit may be provided to Landlord in the form of a clean, irrevocable, non-documentary and unconditional letter of credit (the “Letter of Credit”) issued by and drawable upon any commercial bank satisfactoryto Landlord, trust company, national banking association or savings and loan association (the “Issuing Bank”). A current list of IssuingBanks satisfactory to Landlord is attached to this Lease as Exhibit H. Landlord reserves the right to amend from time to time the list ofissuing Banks that are satisfactory to Landlord. Such Letter of Credit shall (a) name Landlord as beneficiary, (b) be in the amount ofthe Security Deposit, (c) have a Term of not less than one year, (d) permit multiple drawings, (e) be fully transferable by Landlordwithout the payment of any fees or charges by Landlord, and (f) otherwise be in form and content reasonably satisfactory toLandlord. If upon any transfer of the Letter of Credit, any fees or charges shall be so imposed, then such fees or charges shall bepayable solely by Tenant. The Letter of Credit shall provide that it shall be deemed automatically renewed, without amendment, forconsecutive periods of one year each thereafter during the Term unless the Issuing Bank sends a notice (the “Non-Renewal Notice”) toLandlord by certified mail, return receipt requested, not less than forty-five (45) days next preceding the then expiration date of theLetter of Credit stating that the Issuing Bank has elected not to renew the Letter of Credit. Landlord shall have the right, upon receiptof the Non Renewal Notice, to draw the full amount of the Letter of Credit, by sight draft on the Issuing Bank, and shall thereafter holdor apply the cash proceeds of the Letter of Credit pursuant to the Terms of this Article 9 until Tenant provides a suitable substituteLetter of Credit. The Issuing Bank shall agree with all drawers, endorsers and bona fide holders that drafts drawn under and incompliance with the Terms of the Letter of Credit will be duly honored upon presentation to the Issuing Bank at an office location inBoston or New York or another location acceptable to Landlord. The Letter of Credit shall be subject in all respects to the UniformCustoms and Practice for Documentary Credits (1993 revision), International Chamber of Commerce Publication No. 500.While an Event of Default is continuing, Landlord may notify the Issuing Bank and thereupon receive all or a portion of theSecurity Deposit represented by the Letter of Credit and use, apply, or retain the whole or any part of such proceeds, as the case maybe, to the extent required for the payment of any rent or any other sums as to which there is an Event of Default by Tenant including(a) any sum which Landlord may expend or may be required to expend by reason of an Event of Default by Tenant, and/or (b) anydamages or deficiency to which Landlord is entitled pursuant to this Lease or applicable legal requirements, whether such damages ordeficiency accrues before or after summary proceedings or other reentry by Landlord. If Landlord applies or retains any part of theSecurity Deposit as provided above, Tenant, upon demand, shall deposit with Landlord the amount so applied or retained so thatLandlord shall have the full Security Deposit on hand at all times during the Term.Upon a sale of the Project or any financing of Landlord’s interest therein, Landlord shall transfer the Letter of Credit to thevendee or lender (if required by such lender). With respect to the Letter of Credit, within seven (7) business days after notice of suchsale or financing, Tenant, at its sole cost (except as otherwise provided above), shall arrange for the transfer of the Letter of8Credit to the new landlord or the lender (if required by such lender), as designated by Landlord in the foregoing notice or have theLetter of Credit reissued in the name of the new landlord or the lender upon receipt from Landlord of the original Letter ofCredit. Provided that such Letter of Credit is transferred to the new landlord or lender, Tenant shall look solely to the new landlord orlender for the return of such Letter of Credit and the provisions hereof shall apply to every transfer or assignment made of the SecurityDeposit to a new landlord. Tenant shall not assign or encumber or attempt to assign or encumber the Letter of Credit and neitherLandlord nor its successors or assigns shall be bound by any such action or attempted assignment or encumbrance.Provided that (a) Tenant’s Total Stockholder’s equity shown on its then most recent 10-Q filing shall be at least$34,849,000.00 on the effective date of such reduction and (b) there have been no Event of Default under the Lease through theeffective date of such reduction, Tenant may reduce the Letter of Credit, effective as of the first day of the nineteenth (19th) fullcalendar month of the Lease Term, to $73,365.32 by providing to Landlord an amendment to the Letter of Credit or a replacementLetter of Credit meeting the provisions of this Article 9 and reflecting such $73,365.32 amount on or before the first day of the twenty-first (21st) full calendar month of the Lease Term.Provided that (a) the Letter of Credit shall have been previously reduced under the prior paragraph, (b) Total Stockholder’sequity shown on its then most 10-Q filing shall be at least $34,849,000.00 on the effective date of such reduction and (c) there havebeen no Event of Default under the Lease through the effective date of such reduction, Tenant may reduce the Letter of Credit,effective as of the first day of the thirty-seventh (37th) full calendar month of the Lease Term, to $55,239.99 by providing to Landlordan amendment to the Letter of Credit or a replacement Letter of Credit meeting the provisions of this Article 9 and reflecting such$55,239.99 amount on or before the first day of the thirty-ninth (39th) full calendar month of the Lease Term.ARTICLE 10. CONSTRUCTION OF THE PREMISESLandlord shall construct the Tenant Improvements in accordance with Exhibit D attached hereto. Except for the TenantImprovements, Tenant accepts the Premises in their “as is” condition on the date that this Lease is executed. Prior to theCommencement Date, any work performed by Tenant or any fixtures or personal property moved onto the Premises shall be atTenant’s own risk, Tenant’s entry onto the Premises shall be subject to all provisions of this Lease (other than the payment ofMinimum Monthly Rent and additional rent) and neither Landlord nor Landlord’s agents or contractors shall be responsible to Tenantfor damage or destruction of Tenant’s property.ARTICLE 11. ALTERATIONSAfter completion of Landlord’s performance of the Tenant Improvements pursuant to Exhibit D, Tenant shall not make orcause to be made any further additions, alterations, improvements, Utility Installations or repairs in, on or about the Premises, theBuilding or the Project without the prior written consent of Landlord. As used in this Article, the term “Utility Installation” shall meancarpeting, window and wall coverings, power panels, electrical9distribution systems, lighting fixtures, air conditioning, plumbing, and telephone and telecommunication wiring and equipment. At theexpiration of the term, Landlord may require the removal of any and all of said additions, alterations, improvements or UtilityInstallations, and the restoration of the Premises, Building and Project to their prior condition, at Tenant’s expense. Should Landlordpermit Tenant to make its own additions, alterations, improvements or Utility Installations, Tenant may only use such contractor as hasbeen expressly approved by Landlord, and Landlord may require Tenant to provide Landlord, at Tenant’s sole cost and expense, a lienand completion bond in an amount equal to one and one-half times the estimated cost of such improvements, to insure Landlord againstany liability for mechanic’s and materialmen’s liens and to insure completion of the work. Should Tenant make any additions,alterations, improvements or Utility Installations without the prior approval of Landlord, or use a contractor not expressly approved byLandlord, Landlord may, at any time during the Lease Term, require that Tenant remove any part or all of the same. All additions,alterations, improvements and Utility Installations (whether or not such Utility Installations constitute trade fixtures of Tenant), whichmay be made to the Premises by Tenant, including but not limited to, floor coverings, panelings, doors, drapes, built-ins, moldings,sound attenuation, and lighting and telephone or communication systems, conduit, wiring and outlets, shall be made and done in agood and workmanlike manner, in compliance with the Contractor Rules and Regulations set forth in Exhibit D-1 and the Energy andSustainability Construction Guidelines and Requirements set forth in Exhibit D-2, and of good and sufficient quality and materials andshall be the property of Landlord and remain upon and be surrendered with the Premises at the expiration of the Lease Term, unlessLandlord requires their removal as described above. Provided Tenant is not in default, notwithstanding the provisions of this Article,Tenant’s personal property and equipment, other than that which is affixed to the Premises so that it cannot be removed withoutmaterial damage to the Premises or Building or Project, and other than Utility Installations, shall remain the property of Tenant andmay be removed by Tenant as provided herein. Tenant shall provide Landlord with as-built plans and specifications for any additions,alterations, improvements or Utility Installations. All voice, data, video, audio and other low voltage control transport system cablingand/or cable bundles installed in the Building by Tenant or its contractor shall be (A) plenum rated and/or have a composition makeupsuited for its environmental use in accordance with NFPA 70/National Electrical Code (B) labeled every 3 meters with the Tenant’sname and origination and destination points; (C) installed in accordance with all EIA/TIA standards and the National Electric Code;and (D) installed and routed in accordance with a routing plan showing “as built” or “as installed” configurations of cable pathways,outlet identification numbers, locations of all wall, ceiling and floor penetrations, riser cable routing and conduit routing (if applicable),and such other information as Landlord may request. The routing plan shall be available to Landlord and its agents at the Buildingupon request. Notwithstanding anything set forth herein to the contrary, subject to Tenant’s adherence to the above provisions of thisArticle 11 and Section 17.4, Tenant shall be permitted to make cosmetic, non-structural alterations to the Premises in an amount of$20,000 or less per Lease Year without having to obtain Landlord’s prior approval or submit plans to Landlord.10ARTICLE 12. PERSONAL PROPERTY/SURRENDER OF PREMISESAll personal property located in the Premises shall remain the property of Tenant and may be removed by Tenant not laterthan the expiration or the earlier termination of the Lease Term. Tenant shall promptly repair, at its own expense, any damage resultingfrom such removal. All cabinetry, built-in appliances, wall coverings, floor coverings, window coverings, electrical fixtures, plumbingfixtures, conduits, lighting, and other special fixtures that may be placed upon, installed in, or attached to the Premises by Tenant shall,at the termination of this Lease be the property of Landlord unless Landlord requires its removal as set forth in Article 11. At theexpiration or upon the earlier termination of this Lease Term, Tenant shall surrender the Premises in good condition, reasonable wearand tear excepted, and shall deliver all keys to Landlord.ARTICLE 13. LIENSTenant shall keep the Premises, Building, and the Project free from any liens arising out of work performed, materialfurnished, or obligations incurred due to the actions of Tenant or Tenant’s Permittees or the failure of Tenant to comply with anylaw. In the event any such lien does attach against the Premises, Building, or Project, and Tenant does not discharge the lien or postbond (which under law would prevent foreclosure or execution under the lien) within ten (10) days after demand by Landlord, suchevent shall be a default by Tenant under this Lease and, in addition to Landlord’s other rights and remedies, Landlord may take anyaction necessary to discharge the lien at Tenant’s expense.ARTICLE 14. USE OF PREMISES/RULES AND REGULATIONS14.1Without the prior approval of Landlord, Tenant shall not use the Premises for any use other than for general business officepurposes (the “Permitted Use”) and Tenant agrees that it will use the Premises in such manner as to not interfere with or infringe on therights of other tenants in the Building or Project. Tenant agrees to comply with all applicable laws, ordinances and regulations inconnection with its use of the Premises, agrees to keep the Premises in a clean and sanitary condition, and agrees not to perform any actin the Building which would increase any insurance premiums related to the Building or Project or would cause the cancellation of anyinsurance policies related to the Building or Project. Tenant shall not use, generate, manufacture, store, or dispose of, in, under, orabout the Premises, the Building, the or the Project or transport to or from the Premises, the Building, the or the Project, any HazardousMaterials. For purposes of this Lease, “Hazardous Materials” includes, but is not limited to: (i) flammable, explosive, or radioactivematerials, hazardous wastes, toxic substances, or related materials; (ii) all substances defined as “hazardous substances,”“hazardous materials,” “toxic substances,” or “hazardous chemical substances or mixtures” in the Comprehensive EnvironmentalResponse Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq., as amended by Superfund Amendmentsand Re-authorization Act of 1986; the Hazardous Materials Transportation Act, 49 U.S.C. § 1901, et seq.; the Resource Conservationand Recovery Act, 42 U.S.C. § 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.; (iii) those substanceslisted in the United States Department of Transportation Table (49 CFR 172.10 and amendments thereto) or by the EnvironmentalProtection Agency (or any successor agent) as hazardous substances (40 CFR Part 302 and amendments thereto); (iv) any material,waste, or substance which is11(A) petroleum, (B) asbestos, (C) polychlorinated biphenyl’s, (D) designated as a “hazardous substance” pursuant to § 311 of the CleanWater Act, 33 U.S.C. § 1251 et seq. (33 U.S.C. § 1321) or listed pursuant to the Clean Water Act (33 U.S.C. § 1317); (E) flammableexplosives; or (F) radioactive materials; and (v) all substances defined as “hazardous wastes” in the statutes of the state in which thePremises are located (the “State”).14.2Tenant shall comply with the rules and regulations of the Building which are attached hereto as Exhibit B. Landlord may,from time to time, change such rules and regulations for the safety, care, or cleanliness of the Building and related facilities, providedthat such changes are communicated to Tenant in writing, are applicable to all tenants of the Building, will not unreasonably interferewith Tenant’s use of the Premises and are enforced by Landlord in a non-discriminatory manner. Tenant shall be responsible for thecompliance with such rules and regulations by any assignees claiming by, through, or under Tenant; any subtenants claiming by,through, or under Tenant; and any of their respective agents, contractors, employees, and invitees. Tenant shall not use or operate thePremises in any manner that will cause the Building or any part thereof not to conform with Landlord’s Sustainability Initiative orcertification of the Building in accordance with the Green Certification, as may be determined by Landlord. Tenant agrees to complywith and cooperate with Landlord ‘s efforts to comply with energy efficiency, green building and/or carbon reduction laws, includingwithout limitation occupant, water, energy and transportation surveys within the city, country, state or any other jurisdiction. In theevent of a conflict between the Terms of this Lease and any rules or regulations adopted by Landlord (including, but not limited to,those set forth in Exhibit B, the Terms of this Lease shall prevail.14.3Tenant covenants and agrees, at its sole cost and expense: (i) to comply with all present and future laws, orders andregulations of the Federal, State, county, municipal or other governing authorities, departments, commissions, agencies and boardsregarding the collection, sorting, separation, and recycling of garbage, trash, rubbish and other refuse (collectively, “trash”); (ii) tocomply with Landlord’s recycling policy as part of Landlord’s Sustainability Initiative (defined below) where it may be more stringentthan applicable Law; (iii) to sort and separate its trash and recycling into such categories as are provided by Law or Landlord’sSustainability Initiative; (iv) that each separately sorted category of trash and recycling sha11 be placed in separate receptacles asdirected by Landlord; (v) that Landlord reserves the right to refuse to collect or accept from Tenant any waste that is not separated andsorted as required by Law, and to require Tenant to arrange for such collection at Tenant’s sole cost and expense, utilizing a contractorsatisfactory to Landlord; and (vi) that Tenant shall pay all costs, expenses, fines, penalties or damages that may be imposed onLandlord or Tenant by reason of Tenant’s failure to comply with the provisions of this Section. Tenant shall provide Landlord asreasonably requested and no less than annually with copy of waste manifests for all waste that leaves the Building that is withinTenant’s direct control, including but not limited to off-site paper shredding and electronic waste.14.4Tenant acknowledges that Landlord may elect, in Landlord’s sole discretion, to implement energy efficient andenvironmentally sustainable practices (collectively, the “Sustainability Initiative”) and, in furtherance of same may pursue anenvironmental sustainability monitoring and certification program such as Energy Star, Green Globes-CIEB, LEED, or similarprograms (“Green Certification”). Tenant acknowledges that in12order to further its Sustainability Initiative or pursue Green Certification, Landlord may be required to provide information, including acopy of this Lease (redacted if necessary to remove confidential information) and historical and current data regarding energy use,materials, procedures and systems operation within the Project, Building and/or Premises to the Green Building Certification Institute(“GBCI”) or to another certification body or agency, in order to demonstrate compliance with various program requirements. Tenantagrees that throughout the Lease Term: (i) Landlord may furnish a copy of this Lease (redacted as necessary) and other informationprovided from Tenant to Landlord as reasonably necessary to comply with Green Certification requirements; (ii) Tenant shallcooperate in good faith to maintain and provide Landlord with historical and current data regarding energy use, materials, proceduresand systems operation by Tenant or within the Premises as Landlord shall reasonably require in order to meet the SustainabilityInitiative, including without limitation documentation Tenant (or its consultant or contractor) has or may submit to obtain a “GreenCertification” for the Premises; and (iii) Tenant shall cooperate with Landlord and comply with the Sustainability standards including,without limitation, all monitoring and data collection, maintenance, access, documentation and reporting requirements set forththerein. Tenant will make available to Landlord, upon Landlord’s request, any information in Tenant’s possession or controlconcerning matters necessary or desirable in its efforts to obtain or maintain Green Certification. Landlord’s Sustainability Initiativemay include, without limitation, matters addressing operations and maintenance, including, without limiting: chemical use; indoor airquality; energy efficiency; water efficiency; recycling programs; exterior maintenance programs; and systems upgrades to meet greenbuilding energy, water, indoor air quality, and lighting performance standards. Tenant’s construction and maintenance methods andprocedures, material purchases, and disposal of waste shall be in compliance with minimum standards and specifications of Landlord’sSustainability Initiative as Landlord may establish from time to time, in addition to all applicable Laws. Tenant shall use proven energyand carbon reduction measures, including energy efficient bulbs in task lighting; use of lighting controls; daylighting measures to avoidoverlighting interior spaces; closing shades on the South side of the Building to avoid over heating the space; turning off lights andequipment at the end of the work day; and purchasing ENERGY STAR® qua1ified equipment, including but not limited to lighting,office equipment, commercial and residential quality kitchen equipment, vending and ice machines; and/or purchasing productscertified by the U.S. EPA’s Water Sense® program. Before closing and leaving the Premises at any time, Tenant shall use reasonableefforts to turn off all lights, electrical appliances and mechanical equipment that are not otherwise required to remain on. The use ofspace heaters is prohibited.ARTICLE 15. RIGHTS RESERVED BY LANDLORDIn addition to all other rights, Landlord has the following rights, exercisable without notice to Tenant and without effectingan eviction, constructive or actual, and without giving right to any claim for set off or abatement of rent: (a) to decorate and to makerepairs, alterations, additions, changes, or improvements in and about the Building during Building Business Hours (b) to approve theweight, size, and location of heavy objects in and about the Premises and the Building, and to require all such items to be moved intoand out of the Building and Premises in such manner as Landlord shall direct in writing; (c) to prohibit the placing of vendingmachines in or about the Premises without the prior written consent of Landlord; (d) to take all such reasonable measures for thesecurity of the Building and its occupants (provided13that Landlord shall have no obligation to provide any such security unless required by law); (e) to relocate the Premises to anotherlocation of substantially equivalent size in the Building provided such relocation does not increase the Minimum Monthly Rent or othercosts payable by Tenant under this Lease. If Landlord elects to move Tenant, the suite into which Tenant is re-located shall havesubstantially similar leasehold improvements as were in the original Premises and Landlord will pay Tenant’s reasonable costs ofmoving to the new location, including incidental costs such as reprinting existing stock of stationery and new signage, but Landlordwill have no other liability to Tenant with respect to relocation and (f) to temporarily block off parking spaces for maintenance orconstruction purposes.ARTICLE 16. QUIET ENJOYMENTLandlord agrees that, provided a default by Tenant has not occurred, Landlord will do nothing that will prevent Tenant fromquietly enjoying and occupying the Premises during the Lease Term. Tenant agrees this Lease is subordinate to the Rules andRegulations described in Article 14 and the Parking Rules and Regulations described in Article 6. Except in cases of emergency,scheduled Building maintenance shut-downs and subject to Landlord’s after-hours procedures, Tenant and its personnel shall haveaccess to the Premises 24 hours per day, 7 days per week and 365 days per Lease Year.ARTICLE 17. MAINTENANCE AND REPAIR17.1Landlord shall, subject to reimbursement for Operating Costs, keep and maintain in good repair and working order, subjectto reasonable wear and tear: (1) structural elements of the Building; (2) standard mechanical (including HVAC), electrical, plumbingand fire/life safety systems serving the Building generally, together with air filters provided by Landlord for the HVAC serving thePremises, if any and standard light fixtures provided by Landlord to the Premises, if any; (3) Common Areas; (4) the roof of theBuilding; (5) exterior windows of the Building; and (6) elevators serving the Building, reasonable wear and tear excepted. Tenantshall give immediate written notice of any required repairs to Landlord and Landlord shall have a reasonable time after receipt byLandlord of such written notice in which to make such repairs. LANDLORD SHALL NOT BE LIABLE TO TENANT FOR ANYINTERRUPTION OF TENANT’S BUSINESS OR INCONVENIENCE CAUSED DUE TO ANY WORK PERFORMED INTHE PREMISES OR IN THE PROJECT PURSUANT TO LANDLORD’S RIGHTS AND OBLIGATIONS UNDER THISLEASE. TO THE EXTENT ALLOWED BY LAW, TENANT WAIVES THE RIGHT TO MAKE REPAIRS ATLANDLORD’S EXPENSE. If Landlord would be required to perform any maintenance or make any repairs because of:(a) modifications to the roof, walls, foundation, and floor of the Building from that set forth in Landlord’s plans and specificationswhich are required by Tenant’s design for improvements, alterations and additions; (b) installation of Tenant’s improvements, fixtures,or equipment; (c) a negligent or wrongful act of Tenant or Tenant’s Permittees; or, (d) Tenant’s failure to perform any of Tenant’sobligations under this Lease, Landlord may perform the maintenance or repairs and Tenant shall pay Landlord the cost thereof.17.2Tenant agrees to: (a) pay Landlord’s cost of maintenance and repair, including additional janitorial costs of any non-Building standard improvements and non-Building standard materials and finishes and (b) repair or replace all ceiling and wall finishes(including painting) and floor14or window coverings which require repair or replacement during the Lease Term, at Tenant’s sole cost; (c) at Tenant’s sole cost,maintain and repair interior partitions; doors; electronic, phone and data cabling and related equipment that is installed by or for thebenefit of Tenant and located in the Premises or other portions of the Building or Project; supplemental air conditioning units, privateshowers and kitchens, including hot water heaters, plumbing, dishwashers, ice machines and similar facilities serving Tenantexclusively; phone rooms used exclusively by Tenant; alterations performed by contractors retained by or on behalf of Tenant; and allof Tenant’s furnishings, trade fixtures, equipment and inventory; and (d) Tenant shall adopt and implement the moisture and moldcontrol guidelines set forth on Exhibit F attached hereto.17.3Notwithstanding anything in this Lease to the contrary, to the extent the Terms and provisions of Article 22 conflict with,or are inconsistent with, the terms and provisions of this Article 17, the Terms and provisions of Article 22 shall control. Tenant shalltake all reasonable precautions to insure that the Premises are not subjected to excessive wear and tear, i.e. chair pads should be utilizedby Tenant to protect carpeting. Tenant shall be responsible for touch-up painting in the Premises throughout the Lease Term.17.4All alterations and repairs by Tenant shall be performed only by contractors and subcontractors approved in writing byLandlord. Tenant shall cause all contractors and subcontractors to procure and maintain insurance coverage against such risks, in suchamounts, and with such companies as Landlord may reasonably require, but in no event less than: (i) Commercial General Liabilityinsurance on an occurrence basis in amounts not less than $5,000,000 ($1,000,000 of which may be in excess umbrella coverage)naming Landlord, Landlord’s property management company and Invesco Advisers, Inc. (“Invesco”) as additional insureds;(ii) workers’ compensation insurance in amounts required by statute; and (iii) Business Automobile Liability insurance on anoccurrence basis in amounts not less than $1,000,000. Tenant shall provide Landlord with insurance certificates for such contractorsand subcontractors prior to commencement of any work. Tenant shall provide Landlord with the identities, mailing addresses andtelephone numbers of all persons performing work or supplying materials prior to beginning such construction and Landlord may poston and about the Premises notices of non-responsibility pursuant to applicable laws. All such work shall be performed in accordancewith all laws and in a good and workmanlike manner so as not to damage the Building (including the Premises, the Building’sstructure and the Building’s systems). All such work which may affect the Building’s structure or the Building’s systems, atLandlord’s election, must be performed by Landlord’s usual contractor for such work or a contractor approved by Landlord. All workaffecting the roof of the Building must be performed by Landlord’s roofing contractor or a contractor approved by Landlord and nosuch work will be permitted if it would void or reduce the warranty on the roof.ARTICLE 18. UTILITIES AND JANITORIAL SERVICESLandlord agrees to furnish through Landlord’s employees or independent contractors, the Building services listed inExhibit G. If Tenant shall require electric current, water, heating, cooling, or air which will result in excess consumption of suchutilities or services, Tenant shall first obtain the written consent of Landlord to the use thereof. If, in Landlord’s reasonable discretion,Tenant consumes any utilities or services in excess of the normal consumption of15such utilities and services for general office use, Tenant agrees to pay Landlord for the cost of such excess consumption of utilities orservices, upon receipt of a statement of such costs from Landlord, at the same time as payment of the Minimum Monthly Rent ismade. Landlord shall have the right to install separate electrical meters, at Landlord’s expense, to measure excess consumption orestablish another basis for determining the amount of excess consumption of electrical current. Further, Landlord shall have the right toinstall electronic HVAC over-time hour meters for Tenant’s convenience. These meters shall be used, in part, by Landlord todetermine Tenant’s excess HVAC consumption for purposes of billing Tenant for such excess charges. If Tenant desires HVAC at atime other than normal Building Business Hours as defined in Section 1.1: (i) Tenant shall give Landlord such prior notice as Landlordshall from time to time establish as appropriate of Tenant’s desired use; (ii) Landlord shall supply such after-hours HVAC to Tenant atsuch hourly costs to Tenant as Landlord shall from time to time establish; and (iii) Tenant shall pay such cost within ten (10) days afterbilling. Notwithstanding the foregoing, as an energy conservation measure, Landlord will not run heating and air conditioningequipment serving the Premises on Saturdays unless requested by Tenant (provided that Tenant shall not be charged for such Saturdayservice unless it is outside of Building Business Hours). The costs incurred by Landlord in providing HVAC service to Tenant at atime other than Building Business Hours, shall include costs for electricity, water, sewage, water treatment, labor, metering, filtering,and maintenance reasonably allocated by Landlord to providing such service. Landlord shall not be liable for damages nor shall rent orother charges abate in the event of any failure or interruption of any utility or service supplied to the Premises, Building or Project by aregulated utility or municipality, or any failure of a Building system supplying any such service to the Premises (provided Landlorduses diligent efforts to repair or restore the same) and no such failure or interruption shall entitle Tenant to abate rent or Terminate thisLease.Landlord shall have the right to install on-site power (i.e., solar or small wind) at the Building or Project. Tenant agrees tocooperate with Landlord in connection with the installation and on-going operation of such on-site power. Tenant shall have no rightto any renewable energy credits resulting from on-site renewable energy generation, even if Tenant uses such energy. Landlord mayretain or assign such renewable energy credits in Landlord’s sole discretion.Tenant shall within ten (10) days of request by Landlord provide consumption data in form reasonably required byLandlord: (i) for any utility billed directly to Tenant and any subtenant or licensee; and (ii) for any submetered or separately meteredutility supplied to the Premises for which Landlord is not responsible for reading. If Tenant utilizes separate services from those ofLandlord, Tenant hereby consents to Landlord obtaining the information directly from such service providers and, upon ten (10) daysprior written request, Tenant shall execute and deliver to Landlord and the service providers such written releases as the serviceproviders may request evidencing Tenant’s consent to deliver the data to Landlord. Any information provided hereunder shall be heldconfidential except for its limited use to evidence compliance with any sustainability standards. If Tenant fails to deliver any release orto provide any information requested hereunder within the ten (10) day period, then Landlord may charge Tenant the sum of $100.00per day for each day after the ten (10) day period until delivered (the “Late Reporting Fee”), in addition to any other rights or remediesafforded to Landlord for an Event of Default pursuant to Article 28 of this Lease. A Tenant Party shall not use, nor allow16any of its parent, subsidiary or affiliated entities or architects, engineers, or other consultants or advisors to use, any of suchconsumption data or other information to challenge any sustainability score, rating, certification or other approval granted by any thirdparty.Tenant may not operate a Data Center within the Premises without the express written consent of Landlord. The Term“Data Center” shall have the meaning set forth in the U.S. Environmental Protection Agency’s ENERGY STAR® program and is aspace specifically designed and equipped to meet the needs of high-density computing equipment, such as server racks, used for datastorage and processing. The space will have dedicated, uninterruptible power supplies and cooling systems. Data Center functionsmay include traditional enterprise services, on-demand enterprise services, high-performance computing, internet facilities and/orhosting facilities. A Data Center does not include space within the Premises utilized as a “server closet” or for a computer trainingarea. In conjunction with the completion and operation of the Data Center approved by Landlord, Tenant shall furnish the followinginformation to Landlord:(a)Within ten (10) days of completion, Tenant shall report to Landlord the total gross floor area (in square feet) of theData Center measured between the principal exterior surfaces of the enclosing fixed walls and including all supporting functionsdedicated for use in the Data Center, such as any raised-floor computing space, server rack aisles, storage silos, control console areas,battery rooms, mechanical rooms for cooling equipment, administrative office areas, elevator shafts, stairways, break rooms andrestrooms. If Tenant alters or modifies the area of the Data Center approved by Landlord in its sole discretion, Tenant shall furnish anupdated report to Landlord on the square footage within ten (10) days following completion of the alterations or modifications.(b)Within ten (10) days following the close of each month of operation of the Data Center, monthly IT EnergyReadings at the output of the Uninterruptible Power Supply (UPS), measured in total kWh utilized for the preceding month (asopposed to instantaneous power readings), failing which in addition to same being an Event of Default, Tenant shall be obligated topay to Landlord the Late Reporting Fee.ARTICLE 19. ENTRY AND INSPECTIONUpon providing at least 24-hours advance written notice (except in cases of emergency and except in connection with theperformance of Landlord’s cleaning and janitorial obligations), Landlord shall have the right to enter into the Premises at reasonabletimes for the purpose of inspecting the Premises and reserves the right, during the last three months of the Term of this Lease, to showthe Premises at reasonable times to prospective tenants. Except in cases of emergency and except in connection with the performanceof Landlord’s cleaning and janitorial obligations, Tenant shall have the right to have one of its personnel accompany Landlord’s agentsand any prospective tenants while on the Premises. Landlord shall be permitted to take any action under this Article without causingany abatement of rent or liability to Tenant for any loss of occupation or quiet enjoyment of the Premises, nor shall such action byLandlord be deemed an actual or constructive eviction.17ARTICLE 20. INSURANCE20.1Tenant’s Insurance. All personal property and fixtures belonging to Tenant shall be placed and remain on the Premises atTenant’s sole risk. Effective as of the earlier of: (1) the date Tenant enters or occupies the Premises; or (2) the Commencement Date,and continuing throughout the Lease Term, Tenant shall maintain the following insurance policies:(a)Commercial General Liability Insurance in amounts of no less than $5,000,000 per occurrence for bodily injuryand property damage, $5,000,000 each person or organization for personal and advertising injury, $5,000,000 general aggregate, and$5,000,000 products and completed operations aggregate covering: (A) premises/operations liability,(B) personal and advertisinginjury liability, (C) independent contractors liability, and (D) broad form contractual liability. Such policy shall: (1) be primary and noncontributory to any insurance or self insurance maintained by Tenant, Landlord, Landlord’s property management company andInvesco with respect to the use and occupancy of the Premises including all operations conducted thereon; (2) include severability ofinterests or cross liability provisions; (3) be endorsed to add Landlord, Landlord’s property management company, and InvescoAdvisers, Inc. as additional insureds using Insurance Services Office (“ISO”) form CG 20 26 1185 or a substitute equivalent formapproved in writing by Landlord; (4) include terrorism coverage up to the full per occurrence and aggregate limits available under thepolicy; and (5) insure other activities that the Landlord deems necessary, such as insurance for liquor liability. Limits can be satisfiedthrough the maintenance of a combination of primary and umbrella policies. Tenant may maintain such insurance on a multi-locationbasis provided that the aggregate limits or sublimits on each policy are dedicated to the Premises and thereby not subject to dilution byclaims occurring at other locations. Tenant’s independent contractors liability coverage under clause (C) above shall cover the interestof Tenant (and Landlord, as additional insured) but not the interests of independent contractors. Tenant shall carry product liabilityinsurance on a stand alone, claims made policy basis.(b)Automobile Liability Insurance covering the ownership, maintenance, and operations of any automobile orautomotive equipment, whether such auto is owned, hired, and non-owned. Tenant shall maintain insurance with a combined singlelimit for bodily injury and property damage of not less than the equivalent of $1,000,000 per accident. Limits can be satisfied throughthe maintenance of a combination of primary and umbrella policies. Such insurance shall cover Tenant against claims for bodilyinjury, including death resulting therefrom, and damage to the property of others caused by accident regardless of whether suchoperations are performed by Tenant, Tenant’s agents, or by any one directly or indirectly employed by any of them. Tenant’sautomobile liability insurance shall be endorsed to add Landlord, Landlord’s property management company, and Invesco as additionalinsureds.(c)Commercial Property Insurance covering at full replacement cost value the following property in thePremises: (A) inventory; (B) FF&E (unattached furniture, fixtures, and equipment); (C) alterations, improvements and bettermentsmade by the Tenant including but not necessarily limited to all permanently attached fixtures and equipment; and (D) any otherproperty in which the Tenant retains the risk of loss including electronic data processing equipment, employee personal property orother property owned or leased by Tenant. Such property insurance shall include: (1) coverage against such perils as are commonlyincluded in18the special causes of loss form, with no exclusions for wind and hail, vandalism and malicious mischief, and endorsed to add the perilsof terrorism; (2) business income coverage providing for the full recovery of loss of rents and continuing expenses on an actual losssustained basis for a period of not less than 12 months; (3) an “agreed amount” endorsement waiving any coinsurance requirements;and (4) a loss payable endorsement providing that Tenant, Landlord, and Landlord’s mortgagee shall be a loss payee on the policywith regard to the loss of rents coverage. “Full replacement value,” as used herein, means the cost of repairing, replacing, orreinstating, including demolishing, any item of property, with materials of like kind and quality in compliance with, (and without, anexclusion pertaining to application of), any law or building ordinance regulating repair or construction at the time of loss and withoutdeduction for physical, accounting, or any other depreciation, in an amount sufficient to meet the requirements of any applicable co-insurance clause and to prevent Tenant from being a co-insurer.(d)Builders’ Risk Insurance on an “all risk” form that does not exclude the perils of flood, earthquake, and terrorismcovering on a completed value basis all work incorporated in the Building and all materials and equipment in or about the Premises inconnection with construction activities where Tenant notifies Landlord of its intent to undertake a substantial rebuild of the existingstructure and Landlord determines that such coverage is necessary. Limits and terms to coverage are to be determined by Landlordupon notification by Tenant.(e)Workers Compensation Insurance covering statutory benefits in the state where the Premises is located. Thispolicy shall include “other states” insurance, so as to include all states not named on the declarations page of the insurance policy,except for the monopolistic states. Tenant is required to carry this insurance regardless of eligibility for waiver or exemption ofcoverage under any applicable state statute. Such insurance shall include an employers liability coverage part with limits that shall benot less than $1,000,000 each accident for bodily injury by accident and $1,000,000 each employee and policy limit for bodily injuryby disease.(f)Such other insurance or any changes or endorsements to the insurance required herein, including increased limitsof coverage, as Landlord, or any mortgagee or lessor of Landlord, may reasonably require from time to time.Tenant’s commercial general liability insurance, automobile liability insurance and, all other insurance policies, where suchpolicies permit coverage for Landlord as an additional insured, shall provide primary coverage to Landlord and shall not requirecontribution by any insurance maintained by Landlord, when any policy issued to Landlord provides duplicate or similar coverage, andin such circumstance Landlord’s policy will be excess over Tenant’s policy. Tenant shall furnish to Landlord certificates of suchinsurance, and where applicable with an additional insured endorsement in form CG 20 26 1185 (or other equivalent form approved inwriting by Landlord), and such other evidence satisfactory to Landlord of the maintenance of all insurance coverages requiredhereunder at least ten (10) days prior to the earlier of the Commencement Date or the date Tenant enters or occupies the Premises, andat least fifteen (15) days prior to each renewal of said insurance, and Tenant shall obtain a written obligation on the part of eachinsurance company to notify Landlord at least thirty (30) days before cancellation, non-renewal or a material change of any suchinsurance policies. All such insurance policies shall be in form, and issued by companies licensed to do business in the state where thePremises is located, rated by AM Best as having a financial strength rating of “A-” or19better and a financial size category of “IX” or greater, or otherwise reasonably satisfactory to Landlord. If Tenant fails to comply withthe foregoing insurance requirements or to deliver to Landlord the certificates or evidence of coverage required herein, Landlord, inaddition to any other remedy available pursuant to this Lease or otherwise, may, but shall not be obligated to, obtain such insuranceand Tenant shall pay to Landlord on demand the premium costs thereof, plus an administrative fee of fifteen percent (15%) of suchcost. It is expressly understood and agreed that the foregoing minimum limits of liability and coverages required of Tenant’s insuranceshall not reduce or limit the obligation of the Tenant to indemnify the Landlord as provided in this Lease. All policies required hereinshall use occurrence based forms. Any and all of the premiums, deductibles and self-insured retentions associated with the policiesproviding the insurance coverage required herein shall be assumed by, for the account of, and at the sole risk of Tenant. Deductiblesor self-insured retentions may not exceed $10,000 without the prior written approval of Landlord.20.2Landlord’s Insurance. Throughout the Lease Term, Landlord shall maintain, as a minimum, the following insurancepolicies: (1) property insurance for the Building’s replacement value (excluding property required to be insured by Tenant, it beingagreed that Landlord shall have no obligation to provide insurance for such property), less a commercially-reasonable deductible ifLandlord so chooses; and (2) commercial general liability insurance in an amount of not less than $3,000,000 per occurrence for bodilyinjury and property damage, $3,000,000 each person or organization for personal and advertising injury, $3,000,000 generalaggregate, and $3,000,000 products and completed operations aggregate. Limits can be satisfied through the maintenance of acombination of primary and umbrella policies. Landlord may, but is not obligated to, maintain such other insurance and additionalcoverages as it may deem necessary. Tenant shall pay Tenant’s Share of the cost of all insurance carried by Landlord with respect tothe Project. The foregoing insurance policies and any other insurance carried by Landlord shall be for the sole benefit of Landlord andunder Landlord’s sole control, and Tenant shall have no right or claim to any proceeds thereof or any other rights thereunder.ARTICLE 21. DAMAGE AND DESTRUCTION OF PREMISES21.1If the Premises or the Building are damaged by fire or other casualty (a “Casualty”), Landlord shall use good faith effortsto deliver to Tenant within sixty (60) days after such Casualty a good faith estimate (the “Damage Notice”) of the time needed to repairthe damage caused by such Casualty.21.2If a material portion of the Premises is damaged by Casualty such that Tenant is prevented from conducting its business inthe Premises in a manner reasonably comparable to that conducted immediately before such Casualty and Landlord estimates that thedamage caused thereby cannot be repaired within one hundred eighty (180) days after the commencement of repairs (the “RepairPeriod”), then Tenant may Terminate this Lease by delivering written notice to Landlord of its election to terminate within thirty (30)days after the Damage Notice has been delivered to Tenant; provided however, the foregoing 180-day replacement period shall bereduced to 90 days during the last two (2) years of the Term.21.3If a Casualty damages the Premises or a material portion of the Building and: (1) Landlord estimates that the damage to thePremises cannot be repaired within the Repair20Period; (2) the damage to the Premises exceeds fifty percent (50%) of the replacement cost thereof (excluding foundations andfootings), as estimated by Landlord, and such damage occurs during the last two (2) years of the Term; (3) regardless of the extent ofdamage to the Premises, Landlord makes a good faith determination that restoring the Building would be uneconomical; or(4) Landlord is required to pay any insurance proceeds arising out of the Casualty to a Landlord’s mortgagee, then Landlord mayterminate this Lease by giving written notice of its election to terminate within thirty (30) days after the Damage Notice has beendelivered to Tenant.21.4If neither party elects to terminate this Lease following a Casualty, then Landlord shall, within a reasonable time after suchCasualty, begin to repair the Premises and shall proceed with reasonable diligence to restore the Premises to substantially the samecondition as they existed immediately before such Casualty; however, other than building standard leasehold improvements Landlordshall not be required to repair or replace any Alterations or betterments within the Premises (which shall be promptly and with duediligence repaired and restored by Tenant at Tenant’s sole cost and expense) or any furniture, equipment, trade fixtures or personalproperty of Tenant or others in the Premises or the Building, and Landlord’s obligation to repair or restore the Premises shall be limitedto the extent of the insurance proceeds actually received by Landlord for the Casualty in question. If this Lease is terminated under theprovisions of this Article 21 Landlord shall be entitled to the full proceeds of the insurance policies providing coverage for allalterations, improvements and betterments in the Premises (and, if Tenant has failed to maintain insurance on such items as required bythis Lease, Tenant shall pay Landlord an amount equal to the proceeds Landlord would have received had Tenant maintainedinsurance on such items as required by this Lease).21.5If the Premises are damaged by Casualty, Rent for the portion of the Premises rendered untenantable by the damage shallbe abated on a reasonable basis from the date of damage until the substantial completion of Landlord’s repairs (or until the date oftermination of this Lease by Landlord or Tenant as provided above, as the case may be), unless Tenant or a Tenant Permittee causedsuch damage, in which case, Tenant shall continue to pay Minimum Monthly Rent and all other rent without abatement and Tenantshall be liable to Landlord for the cost and expense of the repair and restoration of the Premises or the Building caused thereby to theextent that costs and expense is not covered by insurance proceeds.ARTICLE 22. EMINENT DOMAIN22.1If the entire Building or Premises are taken by right of eminent domain or conveyed in lieu thereof (a “Taking”), this Leaseshall terminate as of the date of the Taking.22.2If any part of the Building becomes subject to a Taking and such Taking will prevent Tenant from conducting its businessin the Premises in a manner reasonably comparable to that conducted immediately before such Taking for a period of more than onehundred eighty (180) days, then Tenant may terminate this Lease as of the date of such Taking by giving written notice to Landlordwithin thirty (30) days after the Taking, and Rent shall be apportioned as of the date of such Taking. If Tenant does not terminate thisLease, then Rent shall be abated on a reasonable basis as to that portion of the Premises rendered untenantable by the Taking.2122.3If any material portion, but less than all, of the Building becomes subject to a Taking, or if Landlord is required to pay anyof the proceeds arising from a Taking to a Landlord’s mortgagee, then Landlord may terminate this Lease by delivering written noticethereof to Tenant within thirty (30) days after such Taking, and Rent shall be apportioned as of the date of such Taking. If Landlorddoes not so terminate this Lease, then this Lease will continue, but if any portion of the Premises has been taken, Rent shall abate asprovided in Section 21.5.22.4If any Taking occurs, then Landlord shall receive the entire award or other compensation for the Land, the Building, andother improvements taken; however, Tenant may separately pursue a claim (to the extent it will not reduce Landlord’s award) againstthe condemnor for the value of Tenant’s personal property which Tenant is entitled to remove under this Lease, moving costs, loss ofbusiness, and other claims it may have.ARTICLE 23. ASSIGNMENT AND SUBLETTINGTenant agrees not to assign, mortgage, or pledge this Lease, and shall not sublet the Premises without Landlord’s priorwritten consent, which shall not be unreasonably withheld if Landlord does not elect to terminate this Lease as providedherein. Without limitation, it is agreed that Landlord’s consent shall not be considered unreasonably withheld if: (1) the proposedtransferee’s financial condition does not meet the criteria Landlord uses to select Building tenants having similar leasehold obligations;(2) the proposed transferee’s use is not suitable for the Building considering the business of the other tenants and the Building’sprestige, or would result in a violation of another tenant’s rights; (3) the proposed transferee 1s a governmental agency or occupant ofthe Project; (4) Tenant is in default after the expiration of the notice and cure periods in this Lease; (5) any portion of the Premises orBuilding would likely become subject to additional or different laws as a consequence of the proposed assignment or subletting or (6)the proposed use or operation in the Premises of the proposed assignee or subtenant may or will cause the Building or any part thereofnot to conform with the environmental and green building clauses in this Lease. Tenant shall not be entitled to receive any monetarydamages based upon a claim that Landlord unreasonably withheld its consent to a proposed sublease or assignment and Tenant’s soleremedy shall be an action to enforce any provision through specific performance or declaratory judgment. Any attempted sublease orassignment in violation of this Article shall, at Landlord’s option, be void. Any assignment or subletting hereunder shall not release ordischarge Tenant of or from any liability under this Lease, and Tenant shall continue to be fully liable thereunder. As part of its requestfor Landlord’s consent to a sublease or assignment, Tenant shall provide Landlord with financial statements for the proposedtransferee, a complete copy of the proposed sublease, assignment and other contractual documents and such other information asLandlord may reasonably request. Landlord shall, by written notice to Tenant within twenty (20) days of its receipt of the requiredinformation and documentation, either: (1) consent to the sublease or assignment by the execution of a consent agreement in a formreasonably designated by Landlord or reasonably refuse to consent to the sublease or assignment in writing; or (2) if such request toassign or sublease covers forty percent (40%) or more of the Premises, exercise its right to terminate this Lease with respect to theportion of the Premises that Tenant is proposing to sublease or assign. If Landlord does exercise the recapture right set forth herein,Tenant shall have three (3) business days to rescind its request for sublease or assignment and, provided such rescission is timely made,Landlord shall not have the right to recapture the portion of the Premises that had been the22subject of such request. Provided Tenant does not timely rescind its request for sublease or assignment, any such Termination shall beeffective on the proposed effective date the sublease or assignment for which Tenant requested consent. If Tenant shall assign orsublet this Lease or request the consent of Landlord to any assignment or subletting or if Tenant shall request the consent of Landlordfor any act Tenant proposes to do, then Tenant shall pay Landlord’s reasonable out-of-pocket costs and expenses incurred inconnection therewith, including attorneys’, architects’, engineers’ or other consultants’ fees, which fee shall be no more than$3000.00. Consent by Landlord to one assignment, subletting, occupation, or use by another person shall not be deemed to be consentto any subsequent assignment, subletting, occupation, or use by another person. Tenant shall pay fifty percent (50%) of all rent andother payments which Tenant receives as a result of a sublease or assignment that is excess of the Rent payable to Landlord for theportion of the Premises and Lease Term covered by the sublease or assignment. Tenant shall pay Landlord for Landlord’s share of anyexcess within thirty (30) days after Tenant’s receipt of such excess consideration. Tenant may deduct from the excess all reasonableand customary expenses directly incurred by Tenant attributable to the sublease or assignment (other than Landlord’s costs andexpenses), including brokerage fees, legal fees and construction costs. Notwithstanding the foregoing, Tenant may assign or subleasethe Premises without Landlord’s approval (a) to an affiliate or Tenant or (b) in connection with the sale or transfer of the business orassets to which this Lease relates (whether by merger, consolidation, stock sale, asset sale or otherwise) so long as such assignee ortransferee has a tangible net worth of at least equal to the tangible net worth of Tenant either immediately before such transfer or as ofthe date of this Lease, whichever is greater; provided however that Tenant must provide Landlord with notice of such assignment orsublease pursuant to the foregoing clause (a) or clause (b) within ten (10) days after such action is taken.ARTICLE 24. SALE OF PREMISES BY LANDLORDIn the event of any sale of the Building or the property upon which the Building is located or any assignment of this Leaseby Landlord (or a successor in title), the assignee or purchaser shall be deemed, without any further agreement between the parties, tohave assumed and agreed to carry out any and all of the covenants and obligations of Landlord under this Lease, and shall besubstituted as Landlord for all purposes from and after the sale or assignment: and Landlord (or such successor) shall automatically beentirely freed and relieved of all liability under any and all of Landlord’s covenants and obligations contained in this Lease or arisingout of any act, occurrence, or omission occurring after such sale or assignment.ARTICLE 25. SUBORDINATION/ATIORNMENT/MODIFICATION/ASSIGNMENTTenant’s interest under this Lease is subordinate to all terms of and all liens and interests arising under any ground lease,deed of trust, or mortgage (each, as renewed, modified and/or extended from time to time) now or hereafter placed on the Landlord’sinterest in the Premises, the Building, or the Project. Tenant consents to an assignment of Landlord’s interest in this Lease toLandlord’s lender as required under such financing. If the Premises or the Building is sold as a result of a default under the mortgage,or pursuant to a transfer in lieu of foreclosure, Tenant shall, at the mortgagee’s, purchaser’s or ground lessor’s sole election, attorn tothe mortgagee or purchaser. This Article is self-operative. However, Tenant agrees to execute and deliver, if Landlord, any deed oftrust holder, mortgagee, or purchaser should so request, such23further instruments necessary to subordinate this Lease to a lien of any mortgage or deed of trust, to acknowledge the consent toassignment and to affirm the attornment provisions set forth herein.ARTICLE 26. LANDLORD’S DEFAULT AND RIGHT TO CURELandlord shall not be in default unless Landlord fails to perform obligations required of Landlord within a reasonable time,but in no event later than thirty (30) days after written notice by Tenant to Landlord and to the holder of any first mortgage or deed oftrust covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing, specifying whereinLandlord has failed to perform such obligation; provided, however, that if the nature of Landlord’s obligation is such that more thanthirty (30) days are required for performance then Landlord shall not be in default if Landlord commences performance within suchthirty (30) day period and thereafter diligently pursues the same to completion.ARTICLE 27. ESTOPPEL CERTIFICATESTenant agrees at any time and from time to time upon request by Landlord, to execute, acknowledge, and deliver toLandlord, within ten (10) calendar days after demand by Landlord, a statement in writing certifying (a) that this Lease is unmodifiedand in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating suchmodifications), (b) the dates to which the Minimum Monthly Rent and other rent and charges have been paid in advance, if any,(c) Tenant’s acceptance and possession of the Premises, (d) the commencement of the Lease Term, (e) the rent provided under thisLease, (f) that Landlord is not in default under this Lease (or if Tenant claims such default, the nature thereof), (g) that Tenant claimsno offsets against the rent, and (h) such other information as may be requested with respect to the provisions of this Lease or thetenancy created by this Lease. Tenant’s failure to deliver such statement within such time shall be conclusive upon Tenant (i) that thisLease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaultsin Landlord’s performance, and (iii) that not more than one month’s rent has been paid in advance.ARTICLE 28. TENANT’S DEFAULT AND LANDLORD’ S REMEDIES28.1Tenant will be in default under this Lease if any of the following occurs, and same shall be deemed an “Event of Default”:(a)If Tenant fails to pay the Minimum Monthly Rent or make any other payment required by this Lease within three(3) Business Days after Landlord sends Tenant a written notice or demand for payment.(b)If on two or more occasions in any twelve month period Landlord does not receive either Tenant’s regularmonthly payment of Minimum Monthly Rent and other regularly recurring charges on or before the first Business Day of the month orany other payment on or before the date it is due.(c)If Tenant assigns this Lease or mortgages its interest in this Lease or sublets any part of the Premises without firstobtaining Landlord’s written consent, as required by Article 23.24(d)If Tenant abandons the Premises, or ceases to operate its business on the Premises, or becomes bankrupt orinsolvent, or makes any general assignment of all or a substantial part of its property for the benefit of creditors, or if a receiver isappointed to operate Tenant’s business or to take possession of all or a substantial part of Tenant’s property.(e)If a lien attaches to this Lease or to Tenant’s interest in the Premises, and Tenant fails to post a bond or othersecurity or to have the lien released within ten (10) days of its notification thereof, or if a mortgagee institutes proceedings to forecloseits mortgage against Tenant’s leasehold interest or other property and Tenant fails to have the foreclosure proceedings dismissed withinten (10) calendar days after the entry of any judgment or order declaring the mortgage to be valid and Tenant to be in default on theobligation secured thereby, or directing enforcement of the mortgage.(f)If Tenant fails to maintain any of the insurance as required by this Lease within three (3) days after Landlord sendsit written notice of the breach.(g)If Tenant breaches any other provision of this Lease and fails to cure the breach within fifteen (15) days afterLandlord sends it written notice of the breach, or if the breach cannot be cured within fifteen (15) days, then if Tenant does not proceedwith reasonable diligence to cure the breach within such additional time as may be reasonably necessary under the circumstances, notto exceed sixty (60) days.28.2If Tenant is in default, then Landlord may take any one or more of the following actions:(a)Terminate this Lease by giving Tenant written notice thereof or by making entry thereon for the express purposeof terminating this Lease, and upon the delivery of such notice or the making of such entry this Lease shall terminate.(b)Landlord may re-enter and take possession of all or any part of the Premises without committing a trespass orbecoming liable for any loss or damage that may be occasioned thereby. Except if expressly intended by Landlord as described inSection 28.2(a), re entry and possession of the Premises will not by themselves terminate this Lease.(c)If Landlord shall have taken possession of the Premises, Landlord may remove any property, including fixtures,from the Premises and store the same at Tenant’s expense in a warehouse or any other location, or Landlord may lease the property onthe Premises pending sale or other disposition. If Landlord leaves the property on the Premises or stores it at another location owned orcontrolled by Landlord, then Landlord may charge Tenant a reasonable fee for storing and handling the property comparable to whatLandlord would have had to pay to a third party for such services. Landlord will not be liable under any circumstance to Tenant or toanyone else for any damage to the property. Landlord may proceed to sell Tenant’s property, which shall be sold in accordance withthe laws of the state ll1which the Premises are located.(d)Landlord may collect any rents or other payments that become due from any subtenant, concessionaire or licensee,and may in its own name or in Tenant’s name bring suit for such amounts, and settle any claims therefore, without approving theTerms of the sublease or Tenant’s agreement with the concessionaire or licensee and without prejudice to Landlord’s25right to Terminate the sublease or agreement without cause and remove the subtenant, concessionaire or licensee from the Premises.(e)If the Lease shall be Terminated due to Tenant’s default, Landlord shall use commercially reasonable efforts torelet the Premises but may relet the Premises at whatever rent and on whatever Terms and conditions it deems advisable. The Term ofany new lease may be shorter or longer than the remaining Term of this Lease. In reletting the Premises, Landlord may make anyalterations or repairs to the Premises it feels necessary or desirable; may subdivide the Premises into more than one unit and lease eachportion separately; may sell Tenant’s improvements, fixtures and other property located on the Premises to the new tenant, or includesuch improvements, fixtures and property as part of the Premises without additional cost; may advertise the Premises for sale or lease;and may hire brokers or other agents. Tenant will be liable to Landlord for all costs and expenses of the reletting including but notlimited to rental concessions to the new tenant, broker’s commissions and tenant improvements, and will remain liable for theMinimum Monthly Rent and all other charges arising under this Lease, less any income received from the new tenant, unless this Leaseis Terminated as set forth below. In the event an existing tenant of the project is moved into the Premises, Tenant will be liable for thedamages suffered by Landlord (as calculated herein) as the result of the vacancy of the premises occupied by the existing tenant.(f)Landlord may recover from Tenant all costs and expenses Landlord incurs as a direct or indirect consequence ofTenant’s breach, including the cost of storing and selling Tenant’s property, reletting the Premises, and bringing suit against Tenant forpossession or damages. If Landlord made or paid for any improvements to the Premises, or granted Tenant any improvementallowance or credit against the Minimum Monthly Rent or other charges due hereunder for Tenant’s improvements, then Landlordshall also be entitled to recover the unamortized portion of the cost of such improvements or the amount of such allowance or credit,determined by multiplying the total amount of such cost or allowance or credit by a fraction, the denominator of which is the totalnumber of months of the initial Lease Term and the numerator of which is the number of months of the Lease Term remaining at thetime of Tenant’s default. Also, if this Lease provides for any months for which no Minimum Monthly Rent or a reduced MinimumMonthly Rent is payable, or for any other rent concession to Tenant, then, upon default, Tenant shall become liable for the full amountof the Minimum Monthly Rent (or other rent concession), plus applicable taxes, for such months, and Landlord shall be entitled torecover as additional rent the amount that would have been payable by Tenant for such months if the Minimum Monthly Rentprovided for herein had been payable by Tenant throughout the entire Lease Term. If Landlord does Terminate this Lease, thenTenant will remain liable for all sums accrued under this Lease to the date of termination, as well as for all costs and expenses incurredby Landlord and any other damages sustained by Landlord as a consequence of Tenant’s breach. Also Landlord may elect to recoverfrom Tenant the difference between the present value at the date of termination of the Minimum Monthly Rent and other charges thatwere to have been due under this Lease from such termination date to the end of the Lease Term and the present value as of suchtermination date of the Minimum Monthly Rent and other charges Landlord could have obtained if Landlord had rented the Premisesfor the same period at its fair rental value. The present value of the amounts referred to in the preceding sentence shall be computedusing a discount rate equal to the prime rate charged by Wells Fargo Bank (or its successor) at the date of termination. Tenant shall beliable to Landlord for any difference26between the Minimum Monthly Rent and other charges called for by this Lease and the rent and other charges collected by Landlordfrom any new tenant. For any month in which Landlord collects less from a successor tenant than is payable under this Lease,Landlord may demand that Tenant immediately make up the difference, and Landlord may bring suit against Tenant if Tenant fails todo so, provided that Landlord shall give Tenant credit for any sums collected by Landlord, if any, from Tenant under the fourthsentence of this paragraph.(g)Landlord may sue Tenant for possession of the Premises, for damages for breach of this Lease, and for otherappropriate relief, either in the same or in separate actions. Landlord may recover all costs and expenses it incurs in any such suit,including reasonable attorneys’ fees.(h)Landlord may exercise any other right or remedy available at law or in equity for breach of contract, damages orother appropriate relief. The rights and remedies described herein are cumulative, and Landlord’s exercise of any one right will notpreclude the simultaneous exercise of any other right or remedy.28.3[INTENTIONALLY OMITTED]28.4If Tenant is in arrears in payment of Rent, Tenant waives its right, if any, to designate the items to which any paymentsmade by Tenant are to be credited, and Landlord may apply any payments made by Tenant to such items as Landlord sees fit,irrespective of any designation or request by Tenant as to the items to which any such payments shall be credited.28.5Tenant shall not interpose any counterclaim (other than a compulsory counterclaim) in any summary proceedingcommenced by Landlord to recover possession of the Premises and shall not seek to consolidate such proceeding with any actionwhich may have been or will be brought by Tenant or any other person or entity.ARTICLE 29. TENANT’S RECOURSETHE LIABILITY OF LANDLORD (AND ITS PARTNERS, SHAREHOLDERS OR MEMBERS) TO TENANT (ORANY PERSON OR ENTITY CLAIMING BY, THROUGH OR UNDER TENANT) FOR ANY DEFAULT BY LANDLORDUNDER THE TERMS OF THIS LEASE OR ANY MATTER RELATING TO OR ARISING OUT OF THE OCCUPANCY ORUSE OF THE PREMISES AND/OR OTHER AREAS OF THE BUILDIN’G OR PROJECT SHALL BE LIMITED TOTENANT’S ACTUAL DIRECT, BUT NOT CONSEQUENTIAL (OR OTHER SPECULATIVE), DAMAGES THEREFORAND SHALL BE RECOVERABLE ONLY FROM THE INTEREST OF LANDWRD IN’ TIIE BUILDING, ANDLANDLORD (AND ITS PARTNERS, SHAREHOLDERS OR MEMBERS) SHALL NOT BE PERSONALLY LIABLE FORANY DEFICIENCY. ADDITIONALLY, TO THE EXTENT ALLOWED BY LAW, TENANT HEREBY WAIVES ANYSTATUTORY LIEN IT MAY HAVE AGAINST LANDWRD OR ITS ASSETS, INCLUDING WITHOUT LIMITATION, THEBUILDING.27ARTICLE 30. HOLDING OVERIf Tenant holds over after the expiration of the Lease Term, (i) Tenant shall be a tenant at sufferance, the Minimum MonthlyRent shall be increased to 150% of the then current lease rate at the Building or the Tenant’s lease rate at the time this Lease expired,whichever is higher, plus any amounts due under Article 5, which shall be payable in advance on the first day of such holdover periodand on the first day of each month thereafter, and (ii) Tenant shall also be liable for any damages that Landlord incurs as a result ofsuch holdover. Notwithstanding the prior sentence, Landlord shall not be prevented from instituting eviction proceedings againstTenant in the event of such holdover.ARTICLE 31. GENERAL PROVISIONS31.1This Lease is construed in accordance with the laws of the State.31.2If Tenant is composed of more than one person or entity, then the obligations of such entities or parties are joint andseveral.31.3If any term, condition, covenant, or provision of this Lease is held by a court of competent jurisdiction to be invalid, void,or unenforceable, the remainder of the terms, conditions, covenants, and provisions hereof shall remain in full force and effect and shallin no way be affected, impaired, or invalidated.31.4The various headings and numbers herein and the grouping of the provisions of this Lease into separate articles andsections are for the purpose of convenience only and are not be considered a part hereof.31.5Time is of the essence of this Lease.31.6Other than for Tenant’s obligations under this Lease that can be performed by the payment of money (e.g., payment ofRent and maintenance of insurance, and Tenant’s obligations pursuant to Exhibit D attached hereto), whenever a period of time isherein prescribed for action to be taken by either party hereto, such party shall not be liable or responsible for, and there shall beexcluded from the computation of any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials,war (declared or undeclared), acts of terrorism, governmental laws, regulations, or restrictions, or any other causes of any kindwhatsoever which are beyond the control of such party.31.7In the event either party initiates legal proceedings or retains an attorney to enforce any right or obligation under this Leaseor to obtain relief for the breach of any covenant hereof, the party ultimately prevailing in such proceedings or the non-defaulting partyshall be entitled to recover all costs and reasonable attorneys’ fees.31.8This Lease, and any Exhibit or Addendum attached hereto, sets forth all the Terms, conditions, covenants, provisions,promises, agreements, and undertakings, either oral or written, between the Landlord and Tenant. No subsequent alteration,amendment, change, or addition to this Lease is binding upon Landlord or Tenant unless reduced to writing and signed by both parties.2831.9Subject to Article 23 the covenants herein contained shall apply to and bind the heirs, successors, executors, personalrepresentatives, legal representatives, administrators, and assigns of all the parties hereto.31.10No term, condition, covenant, or provision of this Lease shall be waived except by written waiver of Landlord, and theforbearance or indulgence by Landlord in any regard whatsoever shall not constitute a waiver of the Term, condition, covenant, orprovision to be performed by Tenant to which the same shall apply, and until complete performance by Tenant of such term, condition,covenant, or provision, Landlord shall be entitled to invoke any remedy available under this Lease or by law despite such forbearanceor indulgence. The waiver by Landlord of any breach or Term, condition, covenant, or provision hereof shall apply to and be limitedto the specific instance involved and shall not be deemed to apply to any other instance or to any subsequent breach of the same or anyother Term, condition, covenant, or provision hereof. Acceptance of rent by Landlord during a period in which Tenant is in default inany respect other than payment of rent shall not be deemed a waiver of the other default. Any payment made in arrears shall becredited to the oldest amount outstanding and no contrary application will waive this right.31.11The use of a singular Term in this Lease shall include the plural and the use of the masculine, feminine, or neuter gendersshall include all others.31.12Landlord’s submission of a copy of this Lease form to any person, including Tenant, shall not be deemed to be an offer tolease or the creation of a lease unless and until this Lease has been fully signed and delivered by Landlord.31.13Every term, condition, covenant, and provision of this Lease, having been negotiated in detail and at arm’s length by bothparties, shall be construed simply according to its fair meaning and not strictly for or against Landlord or Tenant.31.14If the time for the performance of any obligation under this Lease expires on a Saturday, Sunday, or legal holiday, thetime for performance shall be extended to the next succeeding day which is not a Saturday, Sunday, or legal holiday.31.15If requested by Landlord, Tenant shall execute written documentation with signatures acknowledged by a notary public,to evidence when and if Landlord or Tenant has met certain obligations under this Lease.31.16Within fifteen (15) days after Landlord’s request, Tenant will furnish Tenant’s most recent audited financial statements(including any notes to them) to Landlord, or, if no such audited statements have been prepared, such other financial statements (andnotes to them) as may have been prepared by an independent certified public accountant or, failing those, Tenant’s internally preparedfinancial statements.31.17Tenant represents and warrants as follows:(i)Tenant represents and warrants to, and covenants with, Landlord that neither Tenant nor any of itsrespective constituent owners or affiliates currently are, or shall be at any time during the Term hereof, in violation of any laws relatingto terrorism or money29laundering (collectively, the “Anti-Terrorism Laws”), including without limitation Executive Order No. 13224 on Terrorist Financing,effective September 24, 2001 and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten toCommit, or Support Terrorism (the “Executive Order”) and/or the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “USA Patriot Act”).(ii)Tenant covenants with Landlord that neither Tenant nor any of its respective constituent owners oraffiliates is or shall be during the Term hereof a “Prohibited Person,’’ which is defined as follows: (A) a person or entity that is listed inthe Annex to, or is otherwise subject to, the provisions of the Executive Order; (B) a person or entity owned or controlled by, or actingfor or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order;(C) a person or entity with whom Landlord is prohibited from dealing with or otherwise engaging in any transaction by anyAntiTerrorism Law, including without limitation the Executive Order and the USA Patriot Act; (D) a person or entity who commits,threatens or conspires to commit or support “terrorism” as defined in Section 3(d) of the Executive Order; (E) a person or entity that isnamed as a “specially designated national and blocked person” on the then-most current list published by the U.S. TreasuryDepartment Office of Foreign Assets Control at its official website, http://www.treas.gov/offices/eotffc/ofac/sdn/tllsdn.pdf, or at anyreplacement website or other replacement official publication of such list; or (F) a person or entity who is affiliated with a person orentity listed in items (A) through (E), above.(iii)At any time and from time-to-time during the Term, Tenant shall deliver to Landlord, within ten (10)days after receipt of a written request therefor, a written certification or such other evidence reasonably acceptable to Landlordevidencing and confirming Tenant’s compliance with this Section 31.17.ARTICLE 32. NOTICESWherever in this Lease it is required or permitted that notice or demand be given or served by either party to or on the other,such notice or demand shall be in writing and shall be given or served and shall not be deemed to have been duly given or servedunless (a) in writing; (b) either (1) delivered personally, (2) deposited with the United States Postal Service, as registered or certifiedmail, return receipt requested, bearing adequate postage, or (3) sent by overnight express courier (including, without limitation, FederalExpress, DHL Worldwide Express, Airborne Express, United States Postal Service Express Mail) with a request that the addresseesign a receipt evidencing delivery; and (c) addressed to the party at its address in Section 1.1. Either party may change such address bywritten notice to the other. Service of any notice or demand shall be deemed completed forty-eight (48) hours after deposit thereof, ifdeposited with the United States Postal Service, or upon receipt if delivered by overnight courier or in person.ARTICLE 33. BROKER’S COMMISSIONSTenant represents and warrants that there are no claims for brokerage commissions or finder’s fees in connection with thisLease (excepting commissions or fees due to Newmark30Grubb Knight Frank and Lincoln Property Company in connection with this Lease pursuant to separate agreements approved orauthorized in writing by Landlord). Tenant shall indemnify, defend and hold Landlord harmless for, from and against all costs,expenses, attorneys’ fees, liens and other liability for commissions or other compensation claimed by any broker or agent claiming thesame by, through or under Tenant. The foregoing indemnity shall survive the expiration or earlier termination of this Lease.ARTICLE 34. INDEMNIFICATION/WAIVER OF SUBROGATION34.1Waiver of Subrogation. Notwithstanding anything to the contrary herein, to the extent permitted by law and withoutaffecting the coverage provided by insurance required to be maintained hereunder, Landlord and Tenant shall each agree to waive anyright to recover against the other party (and the other party’s agents, officers, directors and employees) on account of any and all claimsit may have against the other party (and the other party’s agents, officers, directors and employees) with respect to the insuranceactually maintained, or required to be maintained hereunder, under subparagraphs 20.1 (a) through (f) inclusive, and to the extentproceeds are realized from such insurance coverage that are applied to such claims. Each policy described in this Lease shall contain awaiver of subrogation endorsement that provides that the waiver of any right to recovery shall not invalidate the policy in any way.34.2Indemnity. Subject to Section 34.1 Tenant shall indemnify, defend and hold harmless Landlord and its property manager,Invesco, any subsidiary or affiliate of the foregoing, and their respective officers, directors, shareholders, partners, employees,managers, contractors, attorneys and agents from and against all claims, demands, liabilities, causes of action, suits, judgments,damages, and expenses (including attorneys’ fees) and all losses and damages (collectively, the “Claims”) arising from: (1) any injuryto or death of any person or the damage to or theft, destruction, loss, or loss of use of any property or inconvenience (a “Loss”) arisingfrom any occurrence in the Premises, the use of the Common Areas by any Tenant Permittee, or the installation, operation,maintenance, repair or removal of any of Tenant’s Off-Premises Equipment; or (2) Tenant’s failure to perform its obligations under thisLease, The indemnities set forth in this Section 34.2 shall survive termination or expiration of this Lease and shall not Terminate or bewaived, diminished or affected in any manner by any abatement or apportionment of Minimum Monthly Rent under any provision ofthis Lease. If any proceeding is filed for which indemnity is required hereunder, Tenant agrees, upon request therefor, to defendLandlord in such proceeding at its sole cost utilizing counsel satisfactory to Landlord in its sole discretion. The term “Tenant’s Off-Premises Equipment” means any of Tenant’s equipment or other property that may be located on or about the Project (other than insidethe Premises).ARTICLE 35. WAIVER OF TRIAL BY JURYLANDLORD AND TENANT WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDINGBASED UPON, OR RELATED TO, THE SUBJECT MATTER OF THIS LEASE OR THE USE AND OCCUPANCY OF THEPREMISES. THIS WAIYER IS KNOWINGLY, INTENTIONALLY AND VOLUNTARILY MADE BY TENANT, ANDTENANT ACKNOWLEDGES THAT NEITHER LANDLORD OR ANY PERSON ACTING ON BEHALF OF LANDLORDHAS MADE ANY REPRESENTATIONS OF FACT TO31INDUCE THIS WAIYER OF TRIAL BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. TENANTFURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED (OR HAS HAD THE OPPORTUNITY TO BEREPRESENTED) IN THE SIGNING OF THIS LEASE AND IN THE MAKING OF THIS WANER BY INDEPENDENTLEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT TENANT HAS HAD THE OPPORTUNITY TODISCUSS THIS WAIYER WITII COUNSEL. TENANT FURTHER ACKNOWLEDGES THAT IT HAS READ ANDUNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION, AS EVIDENCED BY ITSSIGNATURE BELOW.[Signature page follows] 32 IN WITNESS WHEREOF, the parties have duly executed this Lease of as the day and year first above written. LANDLORD TENANT 55 CAMBRIDGE PARKWAY, LLC KALVISTA PHARMACEUTICALS, INC.a Delaware limited liability company a Delaware corporation By:Invesco ICRE Massachusetts REIT Holdings, LLC, Its sole member By:/s/ Ben Palleiko Name: Ben Palleiko Title: CFOBy:/s/ Perry Chudnoff Execution Date:5/26/17 Name: Perry Chudnoff Title: Vice President Execution Date:5/30/17  EXHIBIT “A”PREMISESExhibit “A” is intended only to show the general outline of the Premises as of the beginning of the Lease Term. It does notin any way supersede any of Landlord’s rights set forth in the Lease with respect to arrangements and/or locations of public parts of theBuilding and changes in such arrangements and/or locations. It is not to be scaled; any measurements or distances shown should betaken as approximate. The inclusion of elevators, stairways electrical and mechanical closets, and other similar facilities for the benefitof occupants of the Building does not mean such items are part of the Premises.[See Attached Plan] A-1 A-2  EXHIBIT “B”RULES AND REGULATIONSThe following rules and regulations shall apply to the Premises, the Building, the parking garage associated therewith, andthe appurtenances thereto:l. Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall not be obstructed by tenants or used byany tenant for purposes other than ingress and egress to and from their respective leased premises and for going from one to anotherpart of the Building.2. Plumbing, fixtures and appliances shall be used only for the purposes for which designed, and no sweepings, rubbish,rags or other unsuitable material shall be thrown or deposited therein. Damage resulting to any such fixtures or appliances from misuseby a tenant or its agents, employees or invitees, shall be paid by such tenant.3. No signs, advertisements or notices (other than those that are not visible outside the Premises) shall be painted oraffixed on or to any windows or doors or other part of the Building without the prior written consent of Landlord. Landlord shallprovide Tenant, at Landlord’s sole cost and expense, with Building standard signage (a) on the main directory in the Building lobbyand (b) in the elevator lobby for the ninth (9th) floor of the Building.4. Landlord shall provide all door locks in each tenant’s leased premises, at the cost of such tenant, and no tenant shallplace any additional door locks in its leased premises without Landlord’s prior written consent. Landlord shall furnish to each tenant areasonable number of keys to such tenant’s leased premises, at such tenant’s cost, and no tenant shall make a duplicate thereof.5. If the Building is multi-tenant, movement in or out of the Building of furniture or office equipment, or dispatch orreceipt by tenants of any bulky material, merchandise or materials which require use of elevators or stairways, or movement throughthe Building entrances or lobby shall be conducted under Landlord’s supervision at such times and in such a manner as Landlord mayreasonably require. Each tenant assumes all risks of and shall be liable for all damage to articles moved and injury to persons or publicengaged or not engaged in such movement, including equipment, property and personnel of Landlord if damaged or injured as a resultof acts in connection with carrying out this service for such tenant.6. Landlord may prescribe weight limitations and determine the locations for safes and other heavy equipment or items,which shall in all cases be placed in the Building so as to distribute weight in a manner acceptable to Landlord which may include theuse of such supporting devices as Landlord may require. All damages to the Building caused by the installation or removal of anyproperty of a tenant, or done by a tenant’s property while in the Building, shall be repaired at the expense of such tenant.7. Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or thrown into the corridors, halls,elevator shafts or stairways. No birds or animals (other than seeing-eye dogs) shall be brought into or kept in, on or about any tenant’sleased premises. No B-1 portion of any tenant’s leased premises shall at any time be used or occupied as sleeping or lodging quarters.8. Tenant shall not make or permit any vibration or improper, objectionable or unpleasant noises or odors in the Buildingor otherwise interfere in any way with other tenants or persons having business with them.9. No machinery of any kind (other than normal office equipment) shall be operated by any tenant on its leased areawithout Landlord’s prior written consent, nor shall any tenant use or keep in the Building any flammable or explosive fluid orsubstance (other than typical office supplies [e.g., photocopier toner] used in compliance with all Laws).10. Landlord will not be responsible for lost or stolen personal property, money or jewelry from tenant’s leased premisesor public or common areas regardless of whether such loss occurs when the area is locked against entry or not.11. No vending or dispensing machines of any kind may be maintained in any leased premises without the prior writtenpermission of Landlord, other than those used for Tenant’s employees.12. Tenant shall not conduct any activity on or about the Premises or Building which will draw pickets, demonstrators, orthe like.13. No tenant may enter into phone rooms, electrical rooms, mechanical rooms, or other service areas of the Buildingunless accompanied by Landlord or the Building manager.14. No smoking is allowed anywhere in the Building. Smoking is allowed only in Landlord-designated smoking areasthat are at least fifty (50) feet from the Building entry or elevators, public walkways and the Building’s outdoor air intakes, outdoorlouvers, or operable windows. Tenant shall not permit its employees, invitees or guests to smoke in the Premises or Building, oranywhere within the foregoing fifty (50) foot area (including without limitation e-cigarettes).15. Canvassing, soliciting or peddling in or about the Premises or the Project is prohibited and Tenant shall cooperate toprevent same.16. The Premises shall not be used for any use that is disreputable or may draw protests.17. Tenant shall not use or permit space heaters or energy-intensive equipment unnecessary to conduct Tenant’s businesswithout written approval by Landlord. Any space conditioning equipment that is placed in the Premises by Tenant for the purpose ofincreasing comfort to occupants shall be operated on sensors or timers that limit operation of equipment to hours of occupancy in theareas immediately adjacent to the occupying personnel.18. Tenant shall operate the Premises in a manner consistent with Landlord’s Sustainability Initiative. B-2 19. Tenant shall not mark, paint, drill into, or in any way deface any part of the Building or Premises. No boring, drivingof mails, or screws, cutting or stringing of wires shall be permitted, except with the prior written consent of Landlord, and as Landlordmay direct. Tenant shall not install any resilient tile or similar floor covering the Premises. The use of cement or other similar adhesivematerial is expressly prohibited.20. Tenant shall not waste electricity or water and agrees to cooperate fully with landlord to assure the most effectiveoperation of the Building’s heating and air conditioning. Tenant shall keep corridor doors closed except when being used for access.21. The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for whichthey were constructed, and no sweepings, rubbish, rags, or other substances shall be thrown therein.22. No smoking shall be permitted in any portion of the Building (including the Premises and all common areas withinthe Building). Landlord may also limit smoking in exterior areas to such location or locations as Landlord may designate from time totime. No sale or distribution of tobacco or tobacco products shall be permitted anywhere in the Building or on the Lot or any otherfacilities operated in connection with the Building or the Lot.23. Building employees shall not be required to perform, and shall not be requested by any tenant or occupant to perform,any work outside of their regular duties, unless under specific instructions from the office of the Manager of the Building.24. Tenant may request heating and/or air conditioning during other periods in addition to normal Building BusinessHours by submitting its request in writing to the office of the Manager of the Building no later than 12:00 p.m. the preceding work day(Monday through Friday) on forms available from the office of the Manager. The request shall clearly state the start and stop hours ofthe “off-hour” service. Tenant shall submit to the Building Manager a list of personnel authorized to make such request. The Tenantshall be charged for such operation in the form of additional rent; such charges are to be determined by the Landlord.25. Tenant covenants and agrees that its use of the Premises shall not cause a discharge of more than the gallonage perfoot of rentable square feet per day of sanitary (non-industrial) sewage allowed under the sewage discharge permit for theBuilding. Discharges in excess of that amount, and any discharge of industrial sewage, shall only be permitted if Tenant, at its soleexpense, shall have obtained all necessary permits and licensees therefor, including without limitation permits from state and localauthorities having jurisdiction thereof.26. Landlord may establish reasonable rules and regulations regarding the use of the roofdeck located on the third floor ofthe Building, and provide for an orderly and reasonable method for the reservation of such space, which may include, if Landlord soelects, a reasonable charge therefor.27. Janitorial services shall be provided in accordance with Exhibit G. Tenants shall not cause unnecessary labor byreason of carelessness or indifference in the preservation of good order and cleanliness. The work of the janitor or cleaning personnelshall not be hindered by Tenant and such work may be done at any time when the offices are vacant. The windows, doors B-3 and fixtures may be cleaned at any time without interruption of purpose for which the Premises are let. Tenant shall provide adequatewaste and rubbish receptacles, cabinets, bookcases, map cases, etc. necessary to prevent unreasonable hardship to Landlord indischarging its obligation regarding cleaning service. Boxes should be broken down to fit into containers.These Building Rules and Regulations are subject to change and are not limited to what is contained herein. Landlord and the buildingmanager reserve the right to implement additional Building Rules and Regulations as may be prudent.B-2 B-4  EXHIBIT “C”PARKING RULES AND REGULATIONSThe parking rules & regulations are designed to assure our tenants and visitors safe use and enjoyment of thefacilities. Please remove or hide any personal items of value from plain sight to avoid temptation leading to vandalism ofvehicles. Please exercise added caution when using parking lot at night. Please keep vehicle locked at all times. Please reportviolations of these rules to the Landlord immediately. Please report any lights out or other possibly dangerous situations to theLandlord as soon as possible.Restrictions•Damage caused by vehicles is the responsibility of vehicle owner.•Landlord is not responsible for theft or damage to any vehicle.•Landlord is not responsible for water damage from leaks in the garage or any surface parking area.•Landlord is not responsible for damage due to height limitations of garage.•Vehicles not to exceed 2 miles per hour speed limit in the garage.•Vehicles that leak excessive fluids will be required to protect parking surface.•Mechanical repairs to vehicles are not permitted on property.•Large or oversize vehicles such as motor homes, boats or trailers are not permitted.•No parking in fire lanes, loading zones or any other areas not designated as a parking space.•Landlord, at Landlord’s sole discretion, may add or modify the parking rules.•Landlord reserves the right to relocate the location of reserved spaces from time to time.•Rental for reserved spaces shall be paid to Landlord by Tenant along with, and on the same due date as, the Minimum MonthlyRent.Violations of rules & regulations may result in towing from the Project. Towing from the Project can only be ordered by Landlord orLandlord’s property manager. Charges for towing are to be paid by vehicle owner.These Parking Rules and Regulations are subject to change and are not limited to what is contained herein. Landlord and the Buildingmanager reserve the right to implement additional Parking Rules and Regulations as may be prudent. C-1  EXHIBIT “D”TENANT IMPROVEMENTSThis Exhibit ”D” is attached to and made a part of the Office Lease Agreement (the “Lease”) by and between 55 CambridgeParkway, LLC, a Delaware limited liability company (“Landlord”), and Kalvista Pharmaceuticals, Inc., a Delaware corporation(“Tenant”), for space in the Building located at 55 Cambridge Parkway, Cambridge, Massachusetts 02142. Capitalized terms used butnot defined herein shall have the meanings given in the Lease.D.1 Existing Conditions. Subject only to Landlord’s obligation to perform the Tenant Improvements as provided below,Tenant has inspected, and is satisfied with, the existing, “as-is” condition of the Premises, including any existing improvements andbase building elements now located therein.D.2 Tenant Improvements. Landlord shall perform, at Landlord’s cost, the initial leasehold improvements (the “TenantImprovements”) depicted and described on the space plan and the scope of work attached hereto as Schedule D (the “Space Plan”),using only new materials that are consistent with Building standard for materials, quantities and finishes. The Tenant Improvementsshall be constructed by Landlord in accordance with, and subject to, the provisions of this Exhibit D and all federal state and localapplicable laws rules regulations and codes. Landlord shall use reasonable efforts to “substantially complete” (as hereinafter defined)the Tenant Improvements on or before the Estimated Commencement Date to the extent reasonably practicable. The time forcompletion of the Tenant Improvements shall be extended by (i) any delays caused by Tenant or Tenant’s agents, contractors oremployees, and (ii) the duration of any delay beyond Landlord’s reasonable control. For purposes hereof, “substantially complete” and“substantial completion” shall mean that (i) the Tenant Improvements have been completed in compliance with the Lease (including,but not limited to, the provisions of this Exhibit D), other than minor punchlist-type items, the completion of which will notunreasonably delay or interfere with Tenant’s occupancy of the Premises for the regular conduct of business, and (ii) a certificate ofoccupancy covering the Premises has been issued by the City of Cambridge.D.3 Plans. Within twenty (20) days after the execution of the Lease, Landlord’s architect shall prepare preliminary plansfor the Tenant Improvements (the “Plans”), consistent with the Space Plan, and shall submit such Plans to Tenant for its approval,which approval shall not be unreasonably withheld or delayed. In the event that Tenant disapproves of the Plans, Tenant shall providethe reasons therefor within three (3) business days, and Landlord shall revise the Plans and resubmit the same to Tenant for itsreasonable approval within five (5) business days after receipt of Tenant’s comments. Such process shall repeat as necessary until thePlans are approved by Tenant. Any failure by Tenant to timely respond to any submission or resubmission of the Plans within three(3) business days after submission or resubmission shall be deemed to be an approval thereof The date on which the Plans areapproved or deemed approved by Tenant shall be referred to herein as “Plan Approval”.D.4 Cost of the Tenant Improvements. Landlord shall perform the Tenant Improvements described on Schedule D atLandlord’s sole expense. Any change or addition to D-1 the Tenant Improvements shown on Schedule D shall constitute a Tenant Improvements Change Order under Paragraph D.5 below,and Tenant shall be responsible for all additional costs arising from any such Tenant Improvements Change Order (the “Excess TenantWork Costs”). Landlord may from time to time require Tenant to pay the estimated Excess Tenant Work Costs to Landlord beforeperforming the Tenant Improvements (as affected by such Tenant Improvements Change Order) or otherwise within ten (10) daysfollowing receipt of each of Landlord’s invoices for each such Tenant Improvements Change Order.D.5 Change Orders. Tenant may, from time to time, by written order to Landlord on a form specified by Landlord (each,a “Tenant Improvements Change Order” or “Change Order”), request a change in the Tenant Improvements shown on thePlans. Landlord shall cause the Tenant Improvements to be performed in accordance with such Tenant Improvements Change Orderafter approval thereof by Landlord. The Plans shall not be modified in any material respect except with Landlord’s prior writtenapproval; and all modifications to the Plans, whether material or not, shall be made only by Tenant Improvements Change Ordersubmitted to and approved by Landlord. Tenant shall be responsible for all additional costs arising from any Tenant ImprovementsChange Order as provided in Paragraph D.4 above and shall pay such Excess Tenant Work Costs to Landlord as provided inParagraph D.4 above.D.6 Landlord’s Performance of the Work. Following Plan Approval, Landlord shall submit the approved Plans to theapplicable governmental authorities to obtain the necessary permits for the Tenant Improvements. Upon receipt of such permits, andsubject to the provisions of this Exhibit D, Landlord shall thereafter commence and proceed to complete construction of the TenantImprovements. Landlord may require that the Plans or any Tenant Improvements Change Order be revised if, in Landlord’sreasonable judgment, (i) the requested work would delay completion of the Tenant Improvements beyond the EstimatedCommencement Date (unless Tenant acknowledges that such delay shall constitute a Tenant delay), (ii) would increase the cost ofoperating the Building or performing any other work in the Building (unless Tenant pays such additional costs), (iii) are incompatiblewith the design, quality, equipment or systems of the Building, (iv) would require unusual expense to readapt the Premises to generalpurpose office use, or (v) otherwise do not comply with the provisions of the Lease. Tenant assumes full responsibility to ensure thatthe Tenant Improvements are adequate to fully meet the needs and requirements of Tenant’s business operations within the Premisesand Tenant’s use of the Premises. Neither the approval by Landlord of the Plans, or of any other plans, specifications, drawings orother items associated with the Tenant Improvements nor Landlord’s performance, supervision or monitoring of the TenantImprovements shall constitute any warranty or covenant by Landlord to Tenant that the Plans or Tenant Improvements are adequate forany use or comply with any law.D.7 Measurement of Premises. Following completion of the Tenant Improvements, Landlord’s architect shall certify theRentable Square Feet in the Premises, as computed in accordance with BOMA Standard Methods of Measurement for OfficeBuildings. In the event the Rentable Square Feet in the Premises so certified by Landlord’s architect shall be different from theRentable Square Feet in the Premises referenced in Section 1.1(g) of the Lease, then the Minimum Annual Rent shall beproportionately adjusted based on the revised square footage of the Premises multiplied by the applicable square foot rental rate; BaseOperating Share, Tenant’s Share of Operating Costs, Base Tax Share and Tenant’s Share of Taxes, all as defined in D-2 Article 5, shall be adjusted accordingly; and Landlord and Tenant agree to promptly execute an amendment to this Lease to revise theapplicable sections of this Lease.D.8 Construction Representatives. Landlord’s and Tenant’s representatives for coordination of construction and approvalof Change Orders will be as follows, provided that either party may change its representative upon written notice to the other: Landlord’s Representative:Megan Kenny Lincoln Property Company 53 State Street, 8th Floor Boston, MA 02109 Tenant’s Representative:Ben Palleiko Chief Financial Officer KalVista Pharmaceuticals, Inc. Phone: 857.999.0075 D-3  SCHEDULE DSPACE PLAN[See Attached Scope of Work and Space Plan] D-4  D-5  EXHIBIT “D-1”CONTRACTOR RULES AND REGULATIONSAny and all improvements, alterations or additions performed by Tenant will be performed in accordance with this Exhibit D-1, andany modifications thereto by Landlord, notwithstanding any more permissive local building codes or ordinances.1.WORK APPROVALThe general contractor (“Contractor”) and all subcontractors must be approved to conduct their trades in the jurisdiction in which theBuilding is located by any and all governmental entities with such authority. Tenant or Contractor must provide Landlord with names,addresses and phone numbers for all subcontractors prior to commencement of work by the subcontractor. Construction drawingsmust be approved by Landlord prior to the start of construction. All projects shall be reviewed for potential impact to reduction targetsand environmental programs. An agent or representative of Contractor must be present on the site at all times when work is in process.2.INSURANCEPrior to commencement of work, Contractor shall provide to Landlord a certificate of insurance in the form of an ACORD certificatewith the approved limits of coverage and naming Landlord and the Building manager as additional insureds.3.PERMITSPermits and licenses necessary for the onset of all work shall be secured and paid for by Contractor and posted as required byapplicable law.4.INSPECTIONSAll inspections which must be performed by testing any or all of the life safety system, e.g., alarms, annunciator, voice activated, strobelights, etc., must be performed prior to 7:00 a.m. or after 6:00 p.m., and the on-site engineer must be present. At least 48 hours noticemust be provided to the Building manager and the on-site engineer advising that an inspection has been requested.5.ELEVATORSThe use of the freight elevator for deliveries and removals shall be scheduled in advance by Contractor with the Building engineer’soffice for the transfer of all construction materials, tools, and trash to and from the construction floor. Passenger elevators shall not beused for these purposes. The elevator walls and floor shall be protected at all times during Contractor’s use. From time to time,Contractor may be required to share the freight elevator with the cleaning crew, other tenants, etc. Large transfers of materials,whether for deliveries or removals, must be done prior to 7:00 a.m. or after 6:00 p.m. No deliveries of any kind or nature shall bebrought in through the front door of the Building at any time. D-1-1 6.NON-CONSTRUCTION AREASContractor shall take all necessary precautions to protect all walls, carpets, floors, furniture, fixtures and equipment outside of the workarea and shall repair or replace damaged property without cost to Landlord. Masonite must be placed as a walkway on the publiccorridors from the freight elevator to the construction site to protect the carpet and/or flooring. Common area carpet and flooringprotection is to be used and removed daily and the carpet and flooring vacuumed or dust mopped, whichever is appropriate, on a dailybasis.7.EROSION AND SEDIMENT CONTROLContractor agrees to provide a management plan prior to any exterior ground work being performed to prevent loss of soil duringconstruction by stormwater runoff and/or wind erosion, including protecting topsoil by stockpiling for reuse, preventing sedimentationof storm sewer or receiving streams, and preventing polluting the air with dust and particulate matter. Contractor shall log buildingoperations and maintenance activity to ensure that the plan has been followed.8.GREEN BUILDINGSContractor agrees to incorporate Sustainability Standards into the preparation of the Plans and Specifications, including, withoutlimitation, those “Energy and Sustainability Construction Guidelines & Requirements,” attached hereto as Exhibit D-2, when suchcompliance will not cause a material increase in-Construction Costs.9.WATER AND ELECTRICITYSources of water and electricity will be furnished to Contractor without cost, in reasonable quantities for use in lighting, power tools,drinking water, water for testing, etc. “Reasonable quantities” will be determined on a case-by-case basis but are generally intended tomean quantities comparable to the water and electrical demand Tenant would use upon taking occupancy. Contractor shall make allconnections, furnish any necessary extensions, and remove same upon completion of work.10.DEMOLITION AND DUSTY WORKDemolition of an area in excess of 100 square feet must be performed before 7:00 am. or after 6:00 p.m. Contractor shall notify theBuilding engineer’s office at least one full business day prior to commencement of extremely dusty work (sheet rock cutting, sanding,extensive sweeping, etc.) so arrangements can be made for additional filtering capacity on the affected HVAC equipment. Failure tomake such notification will result in Contractor incurring the costs to return the equipment to its proper condition. All lights must becovered during high dust construction due to a plenum return air system. D-1-2 11.CONSTRUCTION MANAGEMENT PLAN FOR INDOOR AIR QUALITYContractor agrees to develop and implement an Indoor Air Quality (IAQ) Management Plan for the construction and occupancyphases of the area being built out as follows:☐During construction, meet or exceed the recommended Design Approaches of the Sheet Metal and Air ConditioningNational Contractors Association (SMACNA) IAQ Guideline for Occupied Buildings Under Construction, 1995, Chapter 3.☐Protect stored on-site or installed absorptive materials from moisture damage.☐If air handlers must be used during construction, use filtration media with a Minimum Efficiency Reporting Value (MERV)of 8 at each return air grill, as determined by ASHRAE 52.2-1999.☐Replace all filtration media immediately prior to occupancy.Make every reasonable effort to minimize the off-gassing of volatile organic compounds used in construction materials within thebuilding. Efforts may include the use of no- and low-VOC products and materials, allowing products to off-gas before being broughtinto the building, and flushing out the space with outside air or air purifiers.12.WATER USE EFFICIENCYContractor agrees to comply with the following:☐Maintain maximum fixture water efficiency within the Building to reduce the burden on potable water supply andwastewater systems.☐Keep fire systems, domestic water systems, landscape irrigation systems as separate systems to be maintained and meteredseparately. Modifications to the water systems must maintain the integrity of these three systems.☐Submeter process water used directly by tenant and for the sole benefit of tenant. ☐Irrigation lines are not to be connected to domestic supply lines.13.PURCHASINGIf Landlord has a comprehensive sustainable purchasing policy as part of its Sustainability Initiative, Contractor agrees to provideinformation about all material purchases for facility improvements, additions and alterations. Landlord will supply a standard formatfor reporting purposes that will include, but not be limited to, data on cost, quantity purchased and product sustainabilityfeatures. Contractor shall timely and fully report to Landlord all such information including product specification sheets on allmaterials used in connection with the job, as Landlord may require from time to time. D-1-3 14.REMOVAL OF WASTE MATERIALSAny and all existing building materials removed and not reused in the construction shall be disposed of by Contractor as waste orunwanted materials, unless otherwise directed by the Building manager.Contractor shall comply with all laws and Landlord’s waste and recycling practices. Contractor shall at all times keep areas outside thework area free from waste material, rubbish and debris and shall remove waste materials from the Building on a daily basis.15.CLEANUPUpon construction completion, Contractor shall remove all debris and surplus material and thoroughly clean the work area and anycommon areas impacted by the work.16.HOUSEKEEPING PRACTICESContractor agrees to comply with Landlord’s cleaning and maintenance practices.17.MATERIAL SAFETY DATA SHEETS (MSDS)Contractor agrees to provide the Building manager with at least 72 hours advance notice of all chemicals to be used on site throughwritten notice and delivery of MSDS sheets.18.WORKING HOURSStandard construction hours are 6:30 a.m. - 5:00 p.m. The Building engineer must be notified at least two full business days inadvance of any work that may disrupt normal business operations, e.g., drilling or cutting of the concrete floor slab. The Buildingmanager reserves the right to determine what construction work is considered inappropriate for normal business hours. Workperformed after standard construction hours requires an on-site engineer, who shall be billed at the then overtime rate, payable byContractor.19.WORKER CONDUCTContractor and subcontractors are to use care and consideration for others in the Building when using any public areas. No abusivelanguage or actions on the part of the workers will be tolerated. It will be the responsibility of Contractor to enforce this regulation ona day-to-day basis. Contractor and subcontractors sha11 remain in the designated construction area so as not to unnecessarily interruptother tenants. No sleeveless shirts are allowed. Long pants and proper work shoes are required. All workers must wear companyidentification.20.CONSTRUCTION INSPECTIONSContractor is to perform a thorough inspection of all common areas to which it requires access prior to construction to documentexisting Building conditions. Upon completion of work, if necessary, Contractor shall return these areas to the same condition inwhich they were originally viewed. Any damage caused by Contractor shall be corrected at its sole cost. D-1-4 21.SIGNAGEContractor or subcontractor signage may not be displayed in the Building common areas or on any of the window glass.22.POSTING OF RULES AND REGULATIONSA copy of these rules and regulations must be posted on the job site in a manner allowing easy access by all workers. It is Contractor’sresponsibility to instruct all workers, including subcontractors, to familiarize themselves with these rules and regulations.23.INSURANCE REQUIREMENTSContractor will provide and maintain at its own expense the following minimum insurance:(a)Worker’s Compensation for statutory limits in compliance with applicable State and Federal laws.(b)Comprehensive General Liability with limits not less than $5,000,000 combined single limit per occurrence for BodilyInjury and Property Damage.(c)Automobile liability including owned, non-owned and hired automobiles with limits not less than:Bodily Injury$500,000 each person $500,000 each accidentProperty Damage$500,000 each accident24.CERTIFICATE OF INSURANCENAMED INSUREDS:_________________________________, OWNER, ANY BUILDINGMANAGER FOR OWNER, AND ANY MORTGAGEE AND/ORGROUND LESSOR OF THE BUILDING AND/OR THE LANDDCertificates of Insurance in the form of an ACORD 25-S certificate evidencing the required coverages and naming the additionalinsureds as stated MUST be furnished thirty (30) days prior to starting the contract work. Each certificate will contain a provision thatno cancellation or material change in the policies will be effective except upon thirty (30) days prior written notice.25.EMERGENCY PROCEDURESIn case of emergency, Contractor shall call the police/fire department and/or medical services, followed immediately by a call to theBuilding manager. D-1-5 26.DELIVERIESAt no time will the Building staff accept deliveries on beha1f of Contractor or any subcontractor.27.CHANGESTHESE CONTRACTOR RULES AND REGULATIONS ARE SUBJECT TO CHANGE AND ARE NOT LIMITED TOWHAT IS CONTAINED HEREIN. LANDLORD AND THE BUILDING MANAGER RESERVE THE RIGHT TOIMPLEMENT ADDITIONAL RULES AND REGULATIONS AS MAY BE PRUDENT BASED ON EACH INDIVIDUALPROJECT. D-1-6  EXHIBIT “D-2”ENERGY AND SUSTAINABILITYCONSTRUCTION GUIDELINES AND REQUIREMENTSAny and all improvements, alterations or additions performed by Tenant and/or its employees, Contractors, subcontractors, consultantsor agents will be performed in accordance with this Exhibit D-2, and any modifications thereto by Landlord, notwithstanding any morepermissive local building codes or ordinances.HVAC Equipment –Tenant-installed HVAC and refrigeration equipment and fire suppression systems shall not contain CFCs. –Ensure tenant-installed HVAC systems tie into the Building’s Building Automation System. –Avoid the installation of HVAC and refrigeration equipment containing HCFCs when reasonable.Appliances & EquipmentInstall only ENERGY STAR-certified appliances. Recommend the use of ENERGY STAR-certified office equipment, electronicsand commercial food service equipment in all instances where such product is available.PlumbingInstall only new plumbing fixtures that meet the following: –Lavatory faucets: [0.5] gallons per minute (GPM) tamper-proof aerators –Pantry/Kitchenette faucets: [1.5] GPM tamper-proof aerators –Water closets: [1.28] gallons per flush (GPF) –Urinals: (0.125] GPF –Showerheads: Meet the requirements of EPA WaterSense-labeled products –Commercial Pre-rinse Spray valves (for food service applications): [1.6] or less GPMLighting –Lighting loads shall not exceed ASHRAE/IES Standard 90.1- 2010. For example, the Maximum Lighting Power Density foroffice use is 0.9 watts per square foot. –At a minimum, install occupancy/vacancy sensors with manual override capability in all regularly occupied officespaces. Lighting controls shall be tested prior to occupancy to ensure that control elements are calibrated, adjusted and inproper working condition to achieve optimal energy efficiency. D-2-1  –Recommend installation of daylight-responsive controls in all regularly occupied office spaces within 15 feet of windows.Data Center within the Premises(i) Tenant may not operate a Data Center within the Premises without the express written consent of Landlord. The term“Data Center” shall have the meaning set forth in the U.S. Environmental Protection Agency’s ENERGY STAR® program and is aspace specifically designed and equipped to meet the needs of high-density computing equipment, such as server racks, used for datastorage and processing. The space will have dedicated, uninterruptible power supplies and cooling systems. Data Center functionsmay include traditional enterprise services, on-demand enterprise services, high-performance computing, internet facilities and/orhosting facilities. A Data Center does not include space within the Premises utilized as a “server closet” or for a computer trainingarea. In conjunction with the completion and operation of the Data Center, Tenant shall furnish the following information to Landlord:(l) Within ten (10) days of completion, Tenant shall report to Landlord the total gross floor area (in square feet)of the Data Center measured between the principal exterior surfaces of the enclosing fixed walls and including all supporting functionsdedicated for use in the Data Center, such as any raised-floor computing space, server rack aisles, storage silos, control console areas,battery rooms, mechanical rooms for cooling equipment, administrative office areas, elevator shafts, stairways, break rooms andrestrooms. If Tenant alters or modifies the area of the Data Center, Tenant shall furnish an updated report to Landlord on the squarefootage within ten (10) days following completion of the alterations or modifications.(2) Within ten (10) days following the close of each month of operation of the Data Center, monthly ITEnergy Readings at the output of the Uninterruptible Power Supply (UPS), measured in total kWh utilized for the preceding month (asopposed to instantaneous power readings), failing which in addition to same being an Event of Default, Tenant shall be obligated topay to Landlord the Late Reporting Fee.Building Materials –Architect and general contractor shall endeavor to specify low-VOC paints, coatings, primers, adhesives, sealants, sealantprimers, coatings, stains, finishes and the like. Suggested VOC limits are at the end of this document. –Architect and general contractor shall endeavor to specify materials that meet the following criteria: –Harvested and processed or extracted and processed within a 500-mile radius of the project site. Contain at least 10%post-consumer or 20% pre-consumer materials. –Contain material salvaged from offsite or on-site. Contain rapidly renewable material. –Made of wood-based materials, excluding movable furniture, certified as harvested from sustainable sources,specifically Forest Stewardship Council (FSC)-certified wood. D-2-2  –Carpet meeting or exceeding the requirements of the CRI Green Label Plus Testing Program and recyclable whereavailable. –Carpet cushion meeting or exceeding the requirements of the CRI Green Label Testing Program. Preferably, at least25% of the hard surface flooring (not carpet) will be FloorScore-certified. –Composite wood or agrifiber products shall contain no added urea-formaldehyde resins.Contractor Practices –General Contractor shall implement the Building’s Waste Management Plan to reuse, recycle and salvage building materialsand waste during both demolition and construction phases. –General Contractor shall implement appropriate Indoor Air Quality Protocols for construction activity.ResourcesFor actual regulations, rules and standards visit:SCAQMDBAAQMDGreen Seal D-2-3 SCAQMD VOC Limits—January 7, 2005Architectural CoatingsVOC Limit [g/Lless water] Clear Wood Finishes - Varnish350 Clear Wood Finishes - Lacquer550 Waterproofing Sealers250 Sanding Sealers275 All Other Sealers200 Shellacs - Clear730 Shellacs - Pigmented550 All Stains Architectural ApplicationsVOC Limit [g/Lless water]Specialty ApplicationsVOC Limit [g/L lesswater]Indoor Carpet Adhesives50PVC Welding510Carpet Pad Adhesives50CPVC Welding490Wood Flooring Adhesives100ABS Welding325Rubber Floor Adhesives60Plastic Cement Welding250Subfloor Adhesives50Adhesive Primer for Plastic550Ceramic Tile Adhesives65Contact Adhesive80VCT & Asphalt Adhesives50Special Purpose Contact Adhesive250Drywall & Panel Adhesives50Structural Wood Member Adhesive140Cover Base Adhesives50Sheet Applied Rubber Lining Operations850Multipurpose Construction Adhesives70Top & Trim Adhesive250Structural Glazing Adhesives100 Single-Ply Roof Membrane Adhesives250 Substrate Specific ApplicationsVOC Limit [g/Lless water]Specialty ApplicationsVOC Limit [g/L lesswater]Metal to Metal30Architectural250Plastic Foams50Nonmembrane Roof300Porous Material (except wood)50Roadway250Wood30Single-Ply Roof Membrane450Fiberglass80Other420 Sealant PrimersVOC Limit [g/Lless water] Architectural Non Porous250 Architectural Porous775 Other750 D-2-4 Green Seal Standard VOC Limits-October 19, 2000PaintsVOC Limit (g/L less water)Flat50Non-flat150Anti-corrosive/anti-rust250 Aerosol AdhesivesVOC Weight (g/L minus water)General Purpose Mist Spray65% voes by weightGeneral Purpose Mist Spray55% voes by weightSpecial Purpose Aerosol Adhesives (all types)70% voes by weight D-2-5 BAAQMD VOC Limits—August 2001ArchitecturalVOC Limit [g/Lless water]Specialty ApplicationsVOC Limit [g/L less water]Indoor Floor Covering Installation150Computer Diskette Jacket Manufacturing850Multipurpose Construction200ABS Welding400Nonmembrane Roof Installation/Repair300CPVC Welding490Outdoor Floor Covering Installation250PVC Welding510Single-Ply Roof Material Installation/Repair250Other Plastic Welding500Structural Glazing100Thin Metal Laminating780Ceramic Tile Installation130Tire Retread100Cove Base Installation150Rubber Vulcanization Bonding850Perimeter Bonded Sheet Vinyl Flooring660Waterproof Resorcinol Glue170 Immersible Product Manufacturing650 Top and Trim Installation540 Adhesive PrimersVOC Limit [g/Lless water]Contact Bond AdhesiveVOC Limit [g/L less water]Automotive Glass Primer700Contact Bond Adhesive250Pavement Marking Tape Primer150Contact Bond Adhesive - Special Substrates400Plastic Welding Primer650 Other650 Adhesive ProjectsVOC Limit [g/Lless water]SealantsVOC Limit [g/L less water]Metal30Architectural250Porous Materials120Marine Deck760Wood120Roadways250Pre-formed Rubber Products250Single-Ply Roof Materials Installation/Repair450All Other Substrates250Nonmembrane Roof Installation/Repair300 Other420 Sealant PrimersVOC Limit [g/L less water] Architectural -Nonporous250 Architectural -Porous775 Other750 D-2-6  EXHIBIT “E”CONFIRMATION OF COMMENCEMENT DATE_____________, 20__ Re:Lease Agreement (the “Lease”) dated May __, 2017, between 55 Cambridge Parkway, LLC, a Delaware limited liabilitycompany (“Landlord”), and Kalvista Pharmaceuticals, Inc., a Delaware corporation (“Tenant”). Capitalized terms usedherein but not defined shall be given the meanings assigned to them in the Lease.Ladies and Gentlemen:Landlord and Tenant agree as follows:1. Condition of Premises. Tenant has accepted’ possession of the Premises pursuant to the Lease. Any improvementsrequired by the terms of the Lease to be made by Landlord have been completed to the full and complete satisfaction of Tenant in allrespects except for the punchlist items described on Exhibit A hereto (the “Punchlist Items”), and except for such Punchlist Items,Landlord has fulfilled all of its duties under the Lease with respect to such initial tenant improvements. Furthermore, Tenantacknowledges that the Premises are suitable for the Permitted Use.2. Commencement Date. The Commencement Date of the Lease is ___________, 20__.3. Expiration Date. The Lease Term is scheduled to expire on the last day of the sixtieth (60th) full calendar month ofthe Lease Term, which date is 20_.4. Contact Person. Tenant’s contact person in the Premises is: Attention: Telephone: Telecopy: 5. Ratification. Tenant hereby ratifies and confirms its obligations under the Lease, and represents and warrants toLandlord that it has no defenses thereto. Additionally, Tenant further confirms and ratifies that, as of the date hereof, (a) the Lease isand remains in good standing and in full force and effect, and (b) Tenant has no claims, counterclaims, set-offs orE-1defenses against Landlord arising out of the Lease or in any way relating thereto or arising out of any other transaction betweenLandlord and Tenant.6. Binding Effect; Governing Law. Except as modified hereby, the Lease shall remain in full effect and this letter shallbe binding upon Landlord and Tenant and their respective successors and assigns. If any inconsistency exists or arises between theterms of this letter and the terms of the Lease, the terms of this letter shall prevail. This letter shall be governed by the laws of the statein which the Premises are located.E-2Please indicate your agreement to the above matters by signing this letter in the space indicated below and returning anexecuted original to us. Agreed and accepted: Sincerely, KALVISTA PHARMACEUTICALS, INC., 55 CAMBRIDGE PARKWAY, LLC,a Delaware corporation a Delaware limited liability company By: Invesco ICRE Massachusetts REIT Holdings, LLC, Itssole memberBy: Name: By: Title: Name: Title: E-3 EXHIBIT APUNCHLIST ITEMSPlease insert any punchlist items that remain to be performed by Landlord. If no items are listed below by Tenant, none shallbe deemed to exist. E-4 EXHIBIT ‘‘F”MOISTURE AND MOLD CONTROL INSTRUCTIONSBecause exercising proper ventilation and moisture control precautions will help maintain Tenant’s comfort and prevent mold growthin the Premises, Tenant agrees to adopt and implement the following guidelines, to avoid enveloping excessive moisture or moldgrowth:1.Report any maintenance problems involving water, moist conditions, or mold to the Property Manager promptly and conductits required activities in a manner that prevents unusual moisture conditions or mold growth.2.Do not block or inhibit the flow of return or make up air into the HVAC system. Maintain the Premises at a consistenttemperature and humidity level in accordance with the Property Manager’s instructions.3.Regularly conduct janitorial activities, especially in bathrooms, kitchens, and janitorial spaces, to remove mildew and preventor correct moist conditions.4.Maintain water in all drain taps at all times. Dated: May __, 2017 TENANT: KALVISTA PHARMACEUTICALS, INC., a Delaware corporation By: Name: Title: F-1 EXHIBIT “G”LANDLORD’S SERVICESI.CLEANINGA.Office AreaDaily: (Monday through Friday, inclusive. Legal Holidays excepted.) 1.Empty and clean all waste receptacles; wash receptacles as necessary. 2.Sweep and dust mop all uncarpeted areas using a dust-treated mop. 3.Vacuum all rugs and carpeted areas. 4.Hand dust and wipe clean with treated cloths all horizontal surfaces including furniture, office equipment, windowsills, door ledges, chair rails, and convector tops, within normal reach. 5.Wash clean all water fountains. 6.Remove and dust under all desk equipment and telephones and replace same. 7.Wipe clean all brass and other bright work. 8.Hand dust all grill work within normal reach.Weekly: 1.Dust coat racks, and the like. 2.Remove all finger marks from private entrance doors, light switches and doorways.Quarterly: 1.Clean and spray wax vinyl tile floors in tenant areas. 2.Render high dusting not reached in daily cleaning to include: a.Dusting all pictures, frames, charts, graphs, and similar wall hangings. b.Dusting all vertical surfaces, such as walls, partitions, doors, and ducts. c.Dusting all pipes, ducts, and high moldings.B.LavatoriesDaily: (Monday through Friday, inclusive. Legal Holidays excepted.) 1.Sweep and damp mop floors. 2.Clean all mirrors, powder shelves, dispensers and receptacles, bright work, flushometers and piping. 3.Wash all toilet seats. 4.Wash all basins, bowls and urinals.G-1 5.Dust and clean all powder room fixtures. 6.Empty and clean paper towel and sanitary disposal receptacles. 7.Refill tissue holders, soap dispensers, towel dispensers, vending sanitary dispensers; materials to be finished byLandlord. 8.A sanitizing solution will be used in all lavatory cleaning.Monthly:1.Machine scrub lavatory floors.2.Wash all partitions and tile walls in lavatories.C.Main Lobby, Elevators, Building Exterior and CorridorsDaily: (Monday through Friday, inclusive. Legal Holidays excepted.) 1.Sweep and wash all floors. 2.Wash all rubber mats. 3.Clean elevators, wash or vacuum floors, wipe down walls and doors. 4.Spot clean any metal work inside lobby. 5.Spot clean any metal work surrounding Building entrance doors. Monthly: All resilient tile floors in public areasto be treated equivalent to spray buffing.D.Window CleaningWindows of exterior walls will be washed quarterly.II.HEATING, VENTILATING, AND AIR CONDITIONING 1.Heating, ventilating, and air conditioning as required to provide reasonably comfortable temperatures for normalbusiness day occupancy (excepting holidays); Monday through Friday from 8:00 a.m. to 6:00 p.m. and Saturdayfrom 8:00 a.m. to 1:00 p.m., subject to the provisions of Article 18 of the Lease. 2.Maintenance of any additional or special air conditioning equipment and the associated operating cost will be atTenant’s expense.III.WATERHot water for lavatory purposes and cold water for drinking, lavatory and toilet purposes.IV.ELEVATORSElevators for the use of all tenants and the general for access to and from all floors of the Building. Programming ofelevators (including, but not limited service elevators) shall be as Landlord from time to determines best for the Building as awhole.G-2V.RELAMPING OF LIGHT FIXTURESTenant will reimburse Landlord for the cost of lamps, ballasts and starters and the cost of replacing same within thePremises.VI.CAFETERIA AND VENDING INSTALLATIONS 1.Any space to be used primarily for lunchroom or cafeteria operation shall be Tenant’s responsibility to keep cleanand sanitary, it being understood that Landlord’s approval of such use must be first obtained in writing. 2.Vending machines or refreshment service installations by Tenant must be approved by Landlord in writing andshall be restricted in use to employees and business callers. All cleaning necessitated by such installations shall beat Tenant’s expense.VII.ELECTRICITY A,Landlord, at Landlord’s expense, shall furnish electrical energy required for lighting, electrical facilities,equipment, machinery, fixtures, and appliances used in or for the benefit of the Premises in accordance with theprovisions of the Lease of which this Exhibit is a part. B.Electricity to the Premises shall be submetered or check metered to the Premises. Tenant shall pay for all chargesfor electric consumption in the Premises as reasonably determined by Landlord, but without mark-up above actualcost, within ten (10) days of Landlord’s invoice therefor, from time to time, but not more often than monthly;provided that upon written notice from Landlord, Tenant shall pay an estimate of such charges, as reasonablydetermined by Landlord from time to time, monthly at the same time and in the same manner as payments ofMinimum Annual Rent, with appropriate payment (or credit against future electric charges) to be made annuallybased upon Landlord’s revised estimates for the prior year. If at any time electric charges for the Premises arepayable to the utility therefor, because of the installation of submeters or check meters or otherwise, Tenant shallpay such charges before they become due. The foregoing shall not constitute Landlord’s consent to theinstallation of any such meters. Landlord shall have the exclusive right to designate the electric service provider toserve the Building.Tenant covenants and agrees that its use of electric current (exclusive of HVAC) shall not exceed 8.0 watts persquare foot of rentable floor area and that its total connected lighting load will not exceed the maximum load fromtime to time permitted by applicable governmental regulations. G-3 EXHIBIT “H”LIST OF ISSUING BANKS FOR LETTER OF CREDIT1.Bank of America2.BB&T Co.3.Fifth Third Bank4.Citibank5.JPMorgan Chase Bank6.National City Bank7.Northern Trust Bank8.PNC Bank9.US Bank, N.A.10.Wells Fargo Bank11.Silicon Valley Bank H-1EXHIBIT 21.1List of Subsidiaries of KalVista Pharmaceuticals, Inc.Name of SubsidiaryJurisdiction of Incorporation or Organization KalVista Pharmaceuticals Limited (UK)England and Wales EXHIBIT 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-215185 and 333-217009 each on Form S-3 and Registration Statement Nos.333-203721, 333-215184, 333-216032 and 333-217008 each on Form S-8 of our report dated July 27, 2017, relating to the consolidated financial statementsof KalVista Pharmaceuticals, Inc. appearing in this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc. for the year ended April 30, 2017. /s/ Deloitte & Touche LLP Boston, MassachusettsJuly 27, 2017 EXHIBIT 23.2CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement Nos. 333-215185 and 333-217009 each on Form S-3 and Registration Statement Nos.333-203721, 333-215184, 333-216032 and 333-217008 each on Form S-8 of our report dated August 22, 2016 (July 27, 2017 as to the effects of theadjustment of net loss per share arising from the Carbylan transaction discussed in Note 2 and the misstatement of other comprehensive loss discussed in Note2), relating to the financial statements of KalVista Pharmaceuticals Limited (which report expresses an unqualified opinion and includes an emphasis ofmatter paragraph relating to the restatement of other comprehensive loss discussed in Note 2) appearing in this Annual Report on Form 10-K of KalVistaPharmaceuticals, Inc. for the year ended April 30, 2017.. /s/ Deloitte LLP Reading, United KingdomJuly 27, 2017  Exhibit 31.1CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas Andrew Crockett, certify that: 1.I have reviewed this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rule 13a-15(e) and 15d-15(e)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is prepared; b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Date: July 27, 2017 By:/s/ Thomas Andrew Crockett Thomas Andrew Crockett Chief Executive Officer  Exhibit 31.2CERTIFICATION PURSUANT TORULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Benjamin L. Palleiko, certify that: 1.I have reviewed this Annual Report on Form 10-K of KalVista Pharmaceuticals, Inc.; 2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by thisreport; 3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rule 13a-15(e) and 15d-15(e)) for the registrant and have: a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is prepared; b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions aboutthe effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’smost recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant’s internal control over financial reporting; and 5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, tothe registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. Date: July 27, 2017 By:/s/ Benjamin L Palleiko Benjamin L. Palleiko Chief Financial Officer  Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Thomas Andrew Crockett, Chief Executive Officer of KalVista Pharmaceuticals, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: •this Annual Report on Form 10-K of the Company for the year ended April 30, 2017 (Report), as filed with the Securities and ExchangeCommission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and •the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: July 27, 2017 By:/s/ Thomas Andrew Crockett Thomas Andrew Crockett Chief Executive Officer  Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Benjamin L. Palleiko, Chief Financial Officer of KalVista Pharmaceuticals, Inc. (Company), do hereby certify, pursuant to 18 U.S.C. Section 1350, asadopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge: •this Annual Report on Form 10-K of the Company for the year ended April 30, 2017 (Report), as filed with the Securities and ExchangeCommission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and •the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: July 27, 2017 By:/s/ Benjamin L Palleiko Benjamin L. Palleiko Chief Financial Officer 

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