UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended March 31, 2023
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File No. 001-35996
ORGANOVO HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
11555 Sorrento Valley Rd, Suite 100
San Diego, CA
(Address of principal executive offices)
27-1488943
(IRS Employer Identification No.)
92121
(Zip code)
Registrant’s telephone number, including area code: 858-224-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, par value $0.001 per share
Trading Symbol
ONVO
Name of each exchange on which registered
The Nasdaq Capital Market
Securities registered pursuant to section 12(g) of the Act: None
Indicate 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 Section 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 the registrant 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 every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the
definitions of “accelerated filer”, “large accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
☐
☒
Accelerated filer
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 to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under
Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an
error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
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 the voting and non-voting common equity held by non-affiliates based on the closing stock price as reported on the Nasdaq Capital Market on September 30,
2022, the last trading day of the registrant’s second fiscal quarter, was $16,721,329. For purposes of this computation only, shares of common stock held by each executive officer, director, and
10% or greater stockholders have been excluded in that such persons may be deemed affiliates.
The number of outstanding shares of the registrant’s common stock, as of June 1, 2023 was 8,716,953.
DOCUMENTS INCORPORATED BY REFERENCE
Certain information required for Part III of this report is incorporated herein by reference to the definitive proxy statement for the 2023 annual meeting of the registrant’s stockholders,
expected to be filed within 120 days of the end of the registrant’s fiscal year.
Auditor Firm Id:
199
Auditor Name:
Mayer Hoffman McCann P.C.
Auditor Location:
San Diego, CA
Organovo Holdings, Inc.
Annual Report on Form 10-K
For the Year Ended March 31, 2023
Table of Contents
Important Information Regarding Forward-Looking Statements
PART I
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
PART II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
PART III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Consolidated Financial Statements
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Item 15.
Exhibits and Financial Statement Schedules
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Important Information Regarding Forward-Looking Statements
Portions of this Annual Report on Form 10-K (including information incorporated by reference) (“Annual Report”) include “forward-looking statements”
within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, based on our current beliefs,
expectations and projections regarding any strategic transaction process; the ability to advance our research and development activities and pursue
development of any of our pipeline products; our technology; our product and service development opportunities and timelines; our business strategies;
customer acceptance and the market potential of our technology; products and services; our future capital requirements; our future financial performance;
and other matters. This includes, in particular, Item 1. “Business” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” of this Annual Report, as well as other portions of this Annual Report. The words “believe,” “expect,” “anticipate,” “project,” “could,”
“would,” and similar expressions, among others, generally identify “forward-looking statements,” which speak only as of the date the statements were
made. The matters discussed in these forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results to
differ materially from those projected, anticipated or implied in the forward-looking statements. As a result, you should not place undue reliance on any
forward-looking statements. The most significant of these risks, uncertainties and other factors are described in Item 1A. “Risk Factors” of this Annual
Report. Except to the limited extent required by applicable law, we undertake no obligation to update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise.
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Item 1. Business.
Overview
PART I
Organovo Holdings, Inc. (“Organovo Holdings,” “we,” “us,” “our,” the “Company” and “our Company”) is a biotechnology company that focuses on
building high fidelity, 3D tissues that recapitulate key aspects of human disease. We use these models to identify gene targets responsible for driving the
disease and intend to initiate drug discovery programs around these validated targets. We are initially focusing on the intestine and have ongoing 3D tissue
development efforts in ulcerative colitis (“UC”) and Crohn’s disease (“CD”). We intend to add additional tissues/diseases/targets to our portfolio over time.
In line with these plans, we are building upon both our external and in-house scientific expertise, which will be essential to our drug development effort.
We use our proprietary technology to build functional 3D human tissues that mimic key aspects of native human tissue composition, architecture, function
and disease. Our advances include cell type-specific compartments, prevalent intercellular tight junctions, and the formation of microvascular structures.
We believe these attributes can enable critical complex, multicellular disease models that can be used to develop clinically effective drugs across multiple
therapeutic areas.
Our NovoGen Bioprinters® are automated devices that enable the fabrication of 3D living tissues comprised of mammalian cells. We believe that the use of
our bioprinting platform as well as complementary 3D technologies will allow us to develop an understanding of disease biology that leads to validated
novel drug targets and therapeutics to those targets to treat disease.
The majority of our current focus is on inflammatory bowel disease (“IBD”), including CD and UC. We are creating high fidelity disease models,
leveraging our prior work including the work found in our peer-reviewed publication on bioprinted intestinal tissues (Madden et al. Bioprinted 3D Primary
Human Intestinal Tissues Model Aspects of Native Physiology and ADME/Tox Functions. iScience. 2018 Apr 27;2:156-167. doi:
10.1016/j.isci.2018.03.015.) Our current understanding of intestinal tissue models and IBD disease models leads us to believe that we can create models
that provide greater insight into the biology of these diseases than are generally currently available. Using these disease models, we intend to identify and
validate novel therapeutic targets. After finding therapeutic drug targets, we will focus on developing novel small molecule, antibody, or other therapeutic
drug candidates to treat the disease, and advance these drug candidates towards an Investigational New Drug (“IND”) filing and potential future clinical
trials. We may also form partnerships around the development of targets or therapeutics for the treatment of IBD.
In March of 2023, we entered into and closed an asset purchase agreement with Metacrine, Inc to acquire their farnesoid X receptor ("FXR") program.
FXR is a mediator of gastrointestinal ("GI") and liver diseases. FXR agonism has been tested in a variety of preclinical models of IBD. The acquired
program contains two clinically tested compounds and over 2,000 discovery or preclinical compounds.
We expect to broaden our work into additional therapeutic areas over time and are currently exploring specific tissues for development. In our work to
identify the areas of interest, we evaluate areas that might be better served with 3D disease models than currently available models as well as the
commercial opportunity.
We hold a large and diverse patent portfolio related to our bioprinting platform and complementary 3D technologies. The strength of this patent portfolio,
the fact that it was created early in the bioprinting revolution and growth in the bioprinting industry have made for an attractive business opportunity for us.
We are now beginning to invest resources to explore and expand business and revenue opportunities from the leveraging of our patent portfolio.
Our Platform Technology
Our 3D human tissue platform is multifaceted. We approach each tissue agnostic to specific technologies, and intend to apply the best 3D technology to a
given disease. We are developing novel disease models using high throughput systems, bioprinted and flow/stretch capable 3D systems as appropriate. Our
proprietary NovoGen Bioprinters® and related technologies for preparing bio-inks and bioprinting multicellular tissues with complex architecture are
grounded in over a decade of peer-reviewed scientific publications, deriving originally from research led by Dr. Gabor Forgacs, one of our founders and a
former George H. Vineyard Professor of Biological Physics at the University of Missouri-Columbia (“MU”). We have a broad portfolio of intellectual
property rights covering the principles, enabling instrumentation, applications, tissue constructs and methods of cell-based printing, including exclusive
licenses to certain patented and patent pending technologies from MU and Clemson University. We own or exclusively license more than 160 patents and
pending applications worldwide covering specific tissue designs, uses, and methods of manufacture.
The NovoGen Bioprinter® Platform
Our NovoGen Bioprinters® are automated devices that enable the fabrication of 3D living tissues comprised of mammalian cells. A custom graphic user
interface (“GUI”) facilitates the 3D design and execution of scripts that direct precision movement of multiple
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dispensing heads to deposit defined cellular building blocks called bio-ink. Bio-ink can be formulated as a 100% cellular composition or as a mixture of
cells and other matter (hydrogels, particles). Our NovoGen Bioprinters® can also dispense pure hydrogel formulations, provided the physical properties of
the hydrogel are compatible with the dispensing parameters. Most typically, hydrogels are deployed to create void spaces within specific locations in a 3D
tissue or to aid in the deposition of specific cell types. We are able to employ a wide variety of proprietary cell- and hydrogel-based bio-inks in the
fabrication of tissues. Our NovoGen Bioprinters® also serve as important components of our tissue prototyping and manufacturing platform, as they are
able to rapidly and precisely fabricate intricate small-scale tissue models for in vitro use as well as larger-scale tissues suitable for in vivo use.
Generation of bio-ink comprising human cells is the first step in our standard bioprinting. A wide variety of cells and cell-laden hydrogels can be
formulated into bio-ink and bioprinted tissues, including cell lines, primary cells, and stem/progenitor cells. The majority of tissue designs employ two or
more distinct varieties of bio-ink, usually comprised of cells that represent distinct compartments within a target tissue. For example, a 3D liver tissue
might consist of two to three distinct bio-inks that are each made from a single cell type, a combination of cell types, and/or a combination of primary cells
and one or more bio-inert hydrogels that serve as physical supports for the bioprinted tissue during its maturation period, or to transiently occupy negative
spaces in a tissue design.
Research Collaborations
We continue to collaborate with several academic institutions by providing them with access to our NovoGen Bioprinters® for research purposes, including:
Yale School of Medicine, Knight Cancer Institute at Oregon Health & Science University, and the University of Virginia. We believe that the use of our
bioprinting platform by major research institutions may help to advance the capabilities of the platform and generate new applications for bioprinted
tissues. In prior instances, an academic institution or other third party provided funding to support the academic collaborator’s access to our technology
platform. This funding was typically reflected as collaboration revenues in our financial statements. Our academic research collaborations typically involve
both parties contributing resources directly to projects. We are not currently generating any revenues from these collaborations.
Intellectual Property
We rely on a combination of patents, trademarks, trade secrets, confidential know-how, copyrights and a variety of contractual mechanisms such as
confidentiality, material transfer, licenses, research collaboration, limited technology access, and invention assignment agreements, to protect our
intellectual property. Our intellectual property portfolio for our core technology was initially built through licenses from MU and the Medical University of
South Carolina. We subsequently expanded our intellectual property portfolio by filing our own patent and trademark applications worldwide and
negotiating additional licenses and purchases.
On an ongoing basis we review and analyze our full intellectual property portfolio to align it with our current business needs, strategies and objectives.
Based on that ongoing review, selected patents and patent applications in various countries are or will be abandoned or allowed to lapse. The numbers
provided herein are reflective of those changes.
We solely own or hold exclusive licenses to 32 issued U.S. patents and more than 115 issued international patents in foreign jurisdictions including
Australia, Canada, China, Denmark, France, Great Britain, Germany, Ireland, Japan, South Korea, Sweden, the Netherlands and Switzerland. We solely or
jointly own or hold exclusive licenses to 17 pending U.S. patent applications and more than 5 pending international applications in foreign jurisdictions
including Australia, Canada, China, the European Patent Office, Japan and South Korea. These patent families relate to our bioprinting technology and our
engineered tissue products and services, including our various uses in areas of tissue creation, in vitro testing, utilization in drug discovery, and in vivo
therapeutics.
In connection with the recent acquisition of the FXR program from Metacrine, we acquired the related patent portfolio by way of assignment. This
includes filings on the lead candidate, FXR314, and selected filings on the prior candidate (no longer in development), FXR125. With respect to this FXR
portfolio, we solely own 6 issued patents and 14 international patents in jurisdictions, including Australia, China, Eurasia, India, Israel, Mexico, Japan and
South Africa. We solely own 8 pending U.S. patent applications and more than 50 pending international applications in foreign jurisdictions, including
Argentina, Australia, Brazil, Chile, Canada, Eurasia, Europe, Israel, India, Japan, South Korea, Mexico, Philippines, Singapore, South Africa, Hong Kong
and Taiwan. These patent families relate to FXR125 and FXR314, including generic coverage, species coverage, methods of use, formulations and
polymorph crystals.
In-Licensed Intellectual Property
In 2009 and 2010, we obtained world-wide exclusive licenses to intellectual property owned by MU and the Medical University of South Carolina, which
now includes 7 issued U.S. patents, 2 pending U.S. applications and 16 issued international patents. Dr. Gabor Forgacs, one of our founders and a former
George H. Vineyard Professor of Biophysics at MU, was one of the co-inventors of all of these works (collectively, the “Forgacs Intellectual Property”).
The Forgacs Intellectual Property provides us with intellectual property rights relating to cellular aggregates, the use of cellular aggregates to create
engineered tissues, and the use of cellular aggregates to
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create engineered tissue with no scaffold present. The intellectual property rights derived from the Forgacs Intellectual Property also enables us to utilize
our NovoGen Bioprinter® to create engineered tissues.
In 2011, we obtained an exclusive license to a U.S. patent (U.S. Patent No. 7,051,654) owned by the Clemson University Research Foundation that
provides us with intellectual property rights relating to methods of using ink-jet printer technology to dispense cells and relating to the creation of matrices
of bioprinted cells on gel materials.
In connection with the acquisition of the FXR program from Metacrine in 2023, we were assigned and assumed a license agreement with the Salk Institute
for Biological Studies requiring milestone and royalty payments based on the development and commercialization of FXR314.
The patent rights we obtained through these exclusive licenses are not only foundational within the field of 3D bioprinting and FXR agonist therapies but
provide us with favorable priority dates. We are required to make ongoing royalty payments under these exclusive licenses based on net sales of products
and services that rely on the intellectual property we in-licensed. For additional information regarding our royalty obligations see “Note 5. Collaborative
Research, Development, and License Agreements” in the Notes to the Consolidated Financial Statements included in this Annual Report.
Company Owned Intellectual Property
In addition to the intellectual property we have in-licensed, we have historically innovated and grown our intellectual property portfolio.
With respect to our bioprinting platform, we have 8 issued U.S. patents and 14 issued foreign patents directed to our NovoGen Bioprinter® and methods of
bioprinting: U.S. Patent Nos. 8,931,880; 9,149,952; 9,227,339; 9,315,043; 9,499,779; 9,855,369; 10,174,276, 10,967,560, 11,577,450, 11,577,451 and
11,413,805 ; Australia Patent Nos. 2011318437, 2015202836, 2016253591, 2013249569, and 2014296246; Canada Patent No. 2,812,766; China Patent
Nos. ZL201180050831.4 and ZL201480054148.1; European Patent Nos. 2838985, 2629975, and 3028042; Japan Patent Nos. 6333231, 6566426 and
6842918, and Russian Patent No. 2560393. These issued patents and pending patent applications carry remaining patent terms ranging from over 12 years
to just over 6 years. We have additional U.S. continuation applications pending in these families as well foreign counterpart applications in multiple
countries.
Our ExVive™ Human Liver Tissue is protected by U.S. Patent Nos. 9,222,932, 9,442,105, 10,400,219 and 11,127,774; Australia Patent Nos. 2014236780
and 2017200691; and Canada Patent No. 2,903,844. Our ExVive™ Human Kidney Tissue is protected by U.S. Patent Nos. 9,481,868, 10,094,821 and
10,962,526; Australian Patent No. 2015328173, Canadian Patent No. 2,962,778, European Patent No. 3204488 and Japan Patent No. 7021177. These
issued patents and pending patent applications carry remaining patent terms ranging from over 14 years to just over 11 years. We have additional U.S.
patent applications pending in these families, as well as foreign counterpart applications in multiple countries. We currently have pending numerous patent
applications in the U.S. and globally that are directed to additional features on bioprinters, additional tissue types, their methods of fabrication, and specific
applications.
Our U.S. Patent Nos. 9,855,369 and 9,149,952, which relate to our bioprinter technology, were the subject of IPR proceedings filed by Cellink AB and its
subsidiaries (collectively, “BICO Group AB”), one of our competitors. Likewise, U.S. Patent Nos. 9,149,952, 9,855,369, 8,931,880, 9,227,339, 9,315,043
and 10,967,560 (all assigned to Organovo, Inc.) and U.S. Patent Nos. 7,051,654, 8,241,905, 8,852,932 and 9,752,116 (assigned to Clemson University and
the University of Missouri, respectively) were implicated in a declaratory judgment complaint filed against Organovo, Inc., our wholly owned subsidiary,
by BICO Group AB and certain of its subsidiaries in the United States District Court for the District of Delaware. All of these matters have since been
settled in a favorable manner for the Company. Specifically, on February 23, 2022, we announced an agreement of a non-exclusive license for BICO Group
AB and its affiliate companies to Organovo’s foundational patent portfolio in 3D bioprinting. For more information regarding these proceedings, see the
section titled Part I, Item 3 of this Annual Report on Form 10-K.
With respect to our FXR agonist program covering FXR314 and FXR125, we have 6 issued U.S. patents and 14 issued foreign patents directed to
composition of matter protection (generic and specific) for FXR314 and FXR125, as well claims directed to methods of treatment of GI diseases,
formulations of FXR314 and polymorphs of the FXR314 molecule including United States Patent Nos.11,214,538, 10,705,712, 10,927,082, 10,961,198,
11,136,071 and 11,084,817, granted Australian Patent Nos. 2016323992 and 2018236275, Chinese Patent Nos. 201680066917 and 269065, Eurasian Patent
Nos. 040003 and 040704, Israeli Patent Nos. 258011, 296068 and 296065, Indian Patent No. 380510, Japanese Patent Nos. 6905530 and 717709, Mexican
Patent Nos. 386,752 and 397265 and South African Patent No. 2018/01750. In addition, we have 8 pending U.S. patent applications and over 50 pending
foreign patent applications, including U.S. Patent Application Nos. 18/156,069, 17/532,618, 18/174,393, 17/349,757, 17/276,787, 17/906,580, 17/906,582
and 17/906,585 and over 50 pending international patent applications in a number of countries including, Australia, Brazil, Canada, Chile, China, the
Eurasian Patent Office, the European Patent Office, Israel, India, Japan, South Korea, Mexico, Singapore,
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Philippines and Hong Kong. These issued patents and pending patent applications carry remaining patent terms ranging from over 18 years to just over 15
years.
Employees and Human Capital
As of June 1, 2023, we had 24 employees, of which 15 are full-time. We have also retained some of our former employees as consultants, in addition to a
number of expert consultants in specific scientific and operational areas. Our employees are not represented by labor unions or covered under any
collective bargaining agreements. We consider our relationship with our employees to be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional
employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the
granting of equity-based compensation awards.
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Corporate Information
We are operating the business of our subsidiaries, including Organovo, Inc., our wholly-owned subsidiary, which we acquired in February 2012. Organovo,
Inc. was incorporated in Delaware in April 2007. Our common stock has traded on The Nasdaq Stock Market LLC under the symbol “ONVO” since
August 8, 2016 and our common stock currently trades on the Nasdaq Capital Market. Prior to that time, it traded on the NYSE MKT under the symbol
“ONVO” and prior to that was quoted on the OTC Market.
Our principal executive offices are located at 11555 Sorrento Valley Rd, Suite 100, San Diego CA 92121 and our phone number is (858) 224-1000. Our
Internet website can be found at http://www.organovo.com. The content of our website is not intended to be incorporated by reference into this Annual
Report or in any other report or document that we file.
Available Information
Our investor relations website is located at http://ir.organovo.com. We are subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). Reports filed with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act, including annual
and quarterly reports, and other reports we file, are available free of charge, through our website. The content of our website is not intended to be
incorporated by reference into this Annual Report or in any other report or document that we file. We make them available on our website as soon as
reasonably possible after we file them with the SEC. The reports we file with the SEC are also available on the SEC’s website (http://www.sec.gov).
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Item 1A. Risk Factors.
Investment in our common stock involves a substantial degree of risk and should be regarded as speculative. As a result, the purchase of our common stock
should be considered only by persons who can reasonably afford to lose their entire investment. Before you elect to purchase our common stock, you should
carefully consider the risk and uncertainties described below in addition to the other information incorporated herein by reference. Additional risks and
uncertainties of which we are unaware or which we currently believe are immaterial could also materially adversely affect our business, financial
condition or results of operations. If any of the risks or uncertainties discussed in this Annual Report occur, our business, prospects, liquidity, financial
condition and results of operations could be materially and adversely affected, in which case the trading price of our common stock could decline, and you
could lose all or part of your investment.
Risk Factor Summary
Below is a summary of the principal factors that make an investment in our common stock speculative or risky. This summary does not address all of the
risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below and should
be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities and Exchange
Commission before making investment decisions regarding our common stock.
• We will incur substantial additional operating losses over the next several years as our research and development activities increase.
•
•
Using our platform technology to develop human tissues and disease models for drug discovery and development is new and unproven.
As we pursue drug development through 3D tissues and disease models, we will require access to a constant, steady, reliable supply of human
cells to support our development activities.
• We may require substantial additional funding. Raising additional capital would cause dilution to our existing stockholders and may restrict
our operations or require us to relinquish rights to our technologies or to a product candidate.
•
•
•
Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and results of earlier
studies and trials may not be predictive of future results.
The near and long-term viability of our drug discovery and development efforts will depend on our ability to successfully establish strategic
relationships.
Current and future legislation may increase the difficulty and cost of commercializing our drug candidates and may affect the prices we may
obtain if our drug candidates are approved for commercialization.
• Management has performed an analysis and concluded that substantial doubt exists about our ability to continue as a going concern.
Separately, our independent registered public accounting firm has included in its opinion for the year ended March 31, 2023 an explanatory
paragraph expressing substantial doubt in our ability to continue as a going concern, which may hinder our ability to obtain future
financing.
•
Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to
us on a timely basis, we may be required to curtail or cease our operations.
• We have a history of operating losses and expect to incur significant additional operating losses.
•
There is no assurance that an active market in our common stock will continue at present levels or increase in the future.
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•
•
The price of our common stock may continue to be volatile, which could lead to losses by investors and costly securities litigation.
Patents covering our products could be found invalid or unenforceable if challenged in court or before administrative bodies in the United
States or abroad.
• We may be involved in lawsuits or other proceedings to protect or enforce our patents or the patents of our licensors, which could be
expensive, time-consuming and unsuccessful.
Risks Related to our Business
We are a biotechnology company focusing on 3D bioprinting technology to develop human tissues and disease models for drug discovery and
development, which is an unproven business strategy that may never achieve profitability.
We are focusing our efforts on utilizing our 3D bioprinting technology to develop human tissues and disease models for drug discovery and development.
Our success will depend upon the viability of our platform technology and any disease models we develop, as well as on our ability to determine which
drug candidates we should pursue. Our success will also depend on our ability to select an appropriate development strategy for any drug candidates we
identify, including internal development or partnering or licensing arrangements with pharmaceutical companies. We may not be able to partner or license
our drug candidates. We may never achieve profitability, or even if we achieve profitability, we may not be able to maintain or increase our profitability.
We will incur substantial additional operating losses over the next several years as our research and development activities increase.
We will incur substantial additional operating losses over the next several years as our research and development activities increase. The amount of future
losses and when, if ever, we will achieve profitability are uncertain. Our ability to generate revenue and achieve profitability will depend on, among other
things:
•
•
•
•
•
successfully developing human tissues and disease models for drug discovery and development that enable us to identify drug candidates;
successfully outsourcing certain portions of our development efforts;
entering into partnering or licensing arrangements with pharmaceutical companies to further develop and conduct clinical trials for any drug
candidates we identify;
obtaining any necessary regulatory approval for any drug candidates we identify; and
raising sufficient funds to finance our activities and long-term business plan.
We might not succeed at any of these undertakings. If we are unsuccessful at one or more of these undertakings, our business, prospects, and results of
operations will be materially adversely affected.
Using our platform technology to develop human tissues and disease models for drug discovery and development is new and unproven.
Utilizing our 3D bioprinting platform technology to develop human tissues and disease models for drug discovery and development will involve new and
unproven technologies, disease models and approaches, each of which is subject to the risk associated with new and evolving technologies. To date, we
have not identified or developed any drug candidates utilizing our new business model. Our future success will depend on our ability to utilize our 3D
bioprinting platform to develop human tissues and disease models that will enable us to identify and develop viable drug candidates. We may experience
unforeseen technical complications, unrecognized defects and limitations in our technology or our ability to develop disease models or identify viable drug
candidates. These complications could materially delay or substantially increase the anticipated costs and time to identify and develop viable drug
candidates, which would have a material adverse effect on our business and financial condition and our ability to continue operations.
We will face intense competition in our drug discovery efforts.
The biotechnology and pharmaceutical industry is subject to intense competition and rapid and significant technological change. There are many potential
competitors for the disease indications we may pursue, including major drug companies, specialized biotechnology firms, academic institutions,
government agencies and private and public research institutions. Many of these competitors have significantly greater financial and technical resources,
experience and expertise in the following areas than we have, including:
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research and technology development;
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development of or access to disease models;
identification and development of drug candidates;
regulatory processes and approvals; and
identifying and entering into agreements with potential collaborators.
Principal competitive factors in our industry include: the quality, scientific and technical support, management and the execution of drug development and
regulatory approval strategies; skill and experience of employees, including the ability to recruit and retain skilled, experienced employees; intellectual
property portfolio; range of capabilities, including drug identification, development and regulatory approval; and the availability of substantial capital
resources to fund these activities.
In order to effectively compete, we may need to make substantial investments in our research and technology development, drug candidate identification
and development, testing and regulatory approval and licensing and business development activities. There is no assurance that we will be successful in
discovering effective drug candidates using our 3D bioprinted tissues or disease models. Our technologies and drug development plans also may be
rendered obsolete or noncompetitive as a result of drugs, intellectual property, technologies, products and services introduced by competitors. Any of these
risks may prevent us from building a successful drug discovery business or entering into a strategic partnership or collaboration related to, any drug
candidates we identify on favorable terms, or at all.
As we pursue drug development through 3D tissues and disease models, we will require access to a constant, steady, reliable supply of human cells to
support our development activities.
As we pursue drug development through 3D tissues and disease models, we will require access to a constant, steady, reliable supply of human cells to
support our 3D tissue development activities. We purchase human cells from selected third-party suppliers based on quality assurance, cost effectiveness,
and regulatory requirements. We need to continue to identify additional sources of qualified human cells and there can be no guarantee that we will be able
to access the quantity and quality of raw materials needed at a cost-effective price. Any failure to obtain a reliable supply of sufficient human cells or a
supply at cost effective prices would harm our business and our results of operations and could cause us to be unable to support our drug development
efforts.
Our business will be adversely impacted if we are unable to successfully attract, hire and integrate key additional employees or contractors.
Our future success depends in part on our ability to successfully attract and then retain key additional executive officers and other key employees and
contractors to support our drug discovery plans. Recruiting and retaining qualified scientific and clinical personnel is critical to our success. Competition to
hire qualified personnel in our industry is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the
competition among numerous pharmaceutical and biotechnology companies for similar personnel. If we are unable to attract and retain high quality
personnel, our ability to pursue our drug discovery business will be limited, and our business, prospects, financial condition and results of operations may
be adversely affected.
We may require substantial additional funding. Raising additional capital would cause dilution to our existing stockholders and may restrict our
operations or require us to relinquish rights to our technologies or to a product candidate.
We currently do not have any committed external source of funds and do not expect to generate any meaningful revenue in the foreseeable future. Our
existing cash, cash equivalents and interest thereon is expected to be sufficient to fund our projected operating requirements for at least the next 12 months.
We have based these estimates on assumptions that may prove to be wrong, and we may use our available capital resources sooner than we currently expect
if our operating plans change. If our board of directors decides that we should pursue further research and development activities than already proposed, we
will require substantial additional funding to operate our proposed business, including expanding our facilities and hiring additional qualified personnel,
and we would expect to finance these cash needs through a combination of equity offerings, debt financings, government or other third-party funding and
licensing or collaboration arrangements.
To the extent that we raise additional capital through the sale of equity or convertible debt, the ownership interests of our stockholders will be diluted. In
addition, the terms of any equity or convertible debt we agree to issue may include liquidation or other preferences that adversely affect the rights of our
stockholders. Convertible debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital expenditures, and declaring dividends, and may impose limitations on our ability to acquire, sell
or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. Moreover, we have
the ability to sell up to $28.3 million of additional shares of our common stock to the public through an “at the market” offering pursuant to a Sales
Agreement that
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we entered into with H.C. Wainwright & Co., LLC and Jones Trading Institutional Services LLC on March 16, 2018 (the "Sales Agreement"). Any shares
of common stock issued in the at-the-market offering will result in dilution to our existing stockholders.
We currently have an effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (the “SEC”), which we may
use to offer from time to time any combination of debt securities, common and preferred stock and warrants. On March 16, 2018, we entered into the Sales
Agreement pursuant to which we have the ability to sell up to $28.3 million of additional shares of our common stock to the public through an “at the
market” offering. In the event that the aggregate market value of our common stock held by non-affiliates (“public float”) is less than $75.0 million, the
amount we can raise through primary public offerings of securities, including sales under the Sales Agreement, in any twelve-month period using shelf
registration statements is limited to an aggregate of one-third of our public float. As of June 1, 2023, our public float was less than $75.0 million, and
therefore we are limited to an aggregate of one-third of our public float in the amount we could raise through primary public offerings of securities in any
twelve-month period using shelf registration statements. Although we would still maintain the ability to raise funds through other means, such as through
the filing of a registration statement on Form S-1 or in private placements, the rules and regulations of the SEC or any other regulatory agencies may
restrict our ability to conduct certain types of financing activities, or may affect the timing of and amounts we can raise by undertaking such activities.
Further, additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a
timely basis, we may be required to curtail or cease our operations. Raising additional funding through debt or equity financing is likely to be difficult or
unavailable altogether given the early stage of our technology and any drug candidates we identify. Furthermore, the issuance of additional securities,
whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline further and existing
stockholders may not agree with our financing plans or the terms of such financings.
Clinical drug development involves a lengthy and expensive process with uncertain timelines and uncertain outcomes, and results of earlier studies and
trials may not be predictive of future results.
Before obtaining marketing approval from regulatory authorities for the sale of any drug candidates we identify, any such drug candidates must undergo
extensive clinical trials to demonstrate the safety and efficacy of the drug candidates in humans. Human clinical testing is expensive and can take many
years to complete, and we cannot be certain that any clinical trials will be conducted as planned or completed on schedule, if at all. We may elect to
complete this testing, or some portion thereof, internally or enter into a partnering or development agreement with a pharmaceutical company to complete
these trials. Our inability, or the inability of any third party with whom we enter into a partnering or development agreement, to successfully complete
preclinical and clinical development could result in additional costs to us and negatively impact our ability to generate revenues or receive development or
milestone payments. Our future success is dependent on our ability, or the ability of any pharmaceutical company with whom we enter into a partnering or
development agreement, to successfully develop, obtain regulatory approval for, and then successfully commercialize any drug candidates we identify.
Any drug candidates we identify will require additional clinical development, management of clinical, preclinical and manufacturing activities, regulatory
approval in applicable jurisdictions, achieving and maintaining commercial-scale supply, building of a commercial organization, substantial investment and
significant marketing efforts. We are not permitted to market or promote any of our drug candidates before we receive regulatory approval from the U.S.
Food and Drug Administration (“FDA”) or comparable foreign regulatory authorities, and we may never receive such regulatory approval for any of our
drug candidates.
We, or any third party with whom we enter into a partnering or development agreement, may experience numerous unforeseen events during, or as a result
of, clinical trials that could delay or prevent our ability to earn development or milestone payments or for any drug candidates to obtain regulatory
approval, including:
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delays in or failure to reach agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical sites, the
terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;
failure to obtain sufficient enrollment in clinical trials or participants may fail to complete clinical trials;
clinical trials of our drug candidates that may produce negative or inconclusive results, and as a result we, or any pharmaceutical company with
who we enter into a partnering or development agreement, may decide, or regulators may require, additional clinical trials;
suspension or termination of clinical research, either by us, any third party with whom we enter into a partnering or development agreement,
regulators or institutional review boards, for various reasons, including noncompliance with regulatory requirements or a finding that the
participants are being exposed to unacceptable health risks;
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additional or unanticipated clinical trials required by regulators or institutional review boards to obtain approval or any drug candidates may be
subject to additional post-marketing testing requirements to maintain regulatory approval;
regulators may revise the requirements for approving any drug candidates, or such requirements may not be as anticipated;
the cost of clinical trials for any drug candidates may be greater than anticipated;
the supply or quality of any drug candidates or other materials necessary to conduct clinical trials of our drug candidates may be insufficient or
inadequate or may be delayed; and
regulatory authorities may suspend or withdraw their approval of a product or impose restrictions on its distribution;
If we, or any third party with whom we enter into a partnering or development agreement, experience delays in the completion of, or termination of, any
clinical trial of any drug candidates that we develop, or are unable to achieve clinical endpoints due to unforeseen events, the commercial prospects of our
drug candidates will be harmed, and our ability to develop milestones, development fees or product revenues from any of these drug candidates will be
delayed.
We will rely upon third-party contractors and service providers for the execution of critical aspects of any future development programs. Failure of
these collaborators to provide services of a suitable quality and within acceptable timeframes may cause the delay or failure of any future development
programs.
We plan to outsource certain functions, tests and services to CROs, medical institutions and collaborators as well as outsource manufacturing to
collaborators and/or contract manufacturers, and we will rely on third parties for quality assurance, clinical monitoring, clinical data management and
regulatory expertise. We may elect, in the future, to engage a CRO to run all aspects of a clinical trial on our behalf. There is no assurance that such
individuals or organizations will be able to provide the functions, tests, biologic supply or services as agreed upon or in a quality fashion and we could
suffer significant delays in the development of our drug candidates or development programs.
In some cases, there may be only one or few providers of such services, including clinical data management or manufacturing services. In addition, the cost
of such services could be significantly increased over time. We may rely on third parties and collaborators to enroll qualified patients and conduct,
supervise and monitor our clinical trials. Our reliance on these third parties and collaborators for clinical development activities reduces our control over
these activities. Our reliance on these parties, however, does not relieve us of our regulatory responsibilities, including ensuring that our clinical trials are
conducted in accordance with Good Clinical Practice (“GCP”) regulations and the investigational plan and protocols contained in the regulatory agency
applications. In addition, these third parties may not complete activities on schedule or may not manufacture under Current Good Manufacturing Practice
(“cGMP”) conditions. Preclinical or clinical studies may not be performed or completed in accordance with Good Laboratory Practices (“GLP”) regulatory
requirements or our trial design. If these third parties or collaborators do not successfully carry out their contractual duties or meet expected deadlines,
obtaining regulatory approval for manufacturing and commercialization of our drug candidates may be delayed or prevented. We may rely substantially on
third-party data managers for our clinical trial data. There is no assurance that these third parties will not make errors in the design, management or
retention of our data or data systems. There is no assurance these third parties will pass FDA or regulatory audits, which could delay or prohibit regulatory
approval.
In addition, we will exercise limited control over our third-party partners and vendors, which makes us vulnerable to any errors, interruptions or delays in
their operations. If these third parties experience any service disruptions, financial distress or other business disruption, or difficulties meeting our
requirements or standards, it could make it difficult for us to operate some aspects of our business.
The near and long-term viability of our drug discovery and development efforts will depend on our ability to successfully establish strategic
relationships.
The near and long-term viability of our drug discovery and development efforts depend in part on our ability to successfully establish new strategic
partnering, collaboration and licensing arrangements with biotechnology companies, pharmaceutical companies, universities, hospitals, insurance
companies and or government agencies. Establishing strategic relationships is difficult and time-consuming. Potential partners and collaborators may not
enter into relationships with us based upon their assessment of our technology or drug candidates or our financial, regulatory or intellectual property
position. If we fail to establish a sufficient number of strategic relationships on acceptable terms, we may not be able to develop and obtain regulatory
approval for our drug candidates or generate sufficient revenue to fund further research and development efforts. Even if we establish new strategic
relationships, these relationships may never result in the successful development or regulatory approval for any drug candidates we identify for a number of
reasons both within and outside of our control.
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Investors’ expectations of our performance relating to environmental, social and governance factors may impose additional costs and expose us to new
risks.
There is an increasing focus from certain investors, employees, regulators and other stakeholders concerning corporate responsibility, specifically related to
environmental, social and governance (“ESG”) factors. Some investors and investor advocacy groups may use these factors to guide investment strategies
and, in some cases, investors may choose not to invest in our company if they believe our policies relating to corporate responsibility are inadequate. Third-
party providers of corporate responsibility ratings and reports on companies have increased to meet growing investor demand for measurement of corporate
responsibility performance, and a variety of organizations currently measure the performance of companies on such ESG topics, and the results of these
assessments are widely publicized. Investors, particularly institutional investors, use these ratings to benchmark companies against their peers and if we are
perceived as lagging with respect to ESG initiatives, certain investors may engage with us to improve ESG disclosures or performance and may also make
voting decisions, or take other actions, to hold us and our board of directors accountable. In addition, the criteria by which our corporate responsibility
practices are assessed may change, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.
If we elect not to or are unable to satisfy such new criteria, investors may conclude that our policies with respect to corporate responsibility are inadequate.
We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various
constituencies.
We may face reputational damage in the event our corporate responsibility initiatives or objectives do not meet the standards set by our investors,
stockholders, lawmakers, listing exchanges or other constituencies, or if we are unable to achieve an acceptable ESG or sustainability rating from third-
party rating services. A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from
consideration by certain investors who may elect to invest with our competition instead. Ongoing focus on corporate responsibility matters by investors and
other parties as described above may impose additional costs or expose us to new risks. Any failure or perceived failure by us in this regard could have a
material adverse effect on our reputation and on our business, share price, financial condition, or results of operations, including the sustainability of our
business over time.
Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and share price.
As widely reported, in the past several years, global credit and financial markets have experienced volatility and disruptions, including, for example,
severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and
uncertainty about economic stability. There can be no assurances that further deterioration in credit and financial markets and confidence in economic
conditions will not occur. Our general business strategy may be adversely affected by any such economic downturn, volatile business environment or
continued unpredictable and unstable market conditions. If the current equity and credit markets deteriorate, it may make any necessary debt or equity
financing more difficult, more costly and more dilutive. Failure to secure any necessary financing in a timely manner and on favorable terms could have a
material adverse effect on our growth strategy, financial performance and share price and could require us to delay or abandon clinical development plans.
The impact of the Russian invasion of Ukraine on the global economy, energy supplies and raw materials is uncertain, but may prove to negatively
impact our business and operations.
The short and long-term implications of Russia’s invasion of Ukraine are difficult to predict at this time. We continue to monitor any adverse impact that
the outbreak of war in Ukraine and the subsequent institution of sanctions against Russia by the United States and several European and Asian countries
may have on the global economy in general, on our business and operations and on the businesses and operations of our suppliers and other third parties
with which we conduct business. For example, the continuing conflict has resulted and may continue to result in increased inflation, escalating energy
prices and constrained availability, and thus increasing costs, of raw materials. We will continue to monitor this fluid situation and develop contingency
plans as necessary to address any disruptions to our business operations as they develop. To the extent the war in Ukraine may adversely affect our business
as discussed above, it may also have the effect of heightening many of the other risks described herein. Such risks include, but are not limited to, adverse
effects on macroeconomic conditions, including inflation; disruptions to our technology infrastructure, including through cyberattack, ransom attack, or
cyber-intrusion; adverse changes in international trade policies and relations; disruptions in global supply chains; and constraints, volatility, or disruption in
the capital markets, any of which could negatively affect our business and financial condition.
Risks Related to Government Regulation
In the past, we have used hazardous chemicals, biological materials and infectious agents in our business. Any claims relating to improper handling,
storage or disposal of these materials could be time consuming and costly.
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Our product manufacturing, research and development, and testing activities have involved the controlled use of hazardous materials, including chemicals,
biological materials and infectious disease agents. We cannot eliminate the risks of accidental contamination or the accidental spread or discharge of these
materials, or any resulting injury from such an event. We may be sued for any injury or contamination that results from our use or the use by third parties of
these materials, and our liability may exceed our insurance coverage and our total assets. Federal, state and local laws and regulations govern the use,
manufacture, storage, handling and disposal of these hazardous materials and specified waste products, as well as the discharge of pollutants into the
environment and human health and safety matters. We were also subject to various laws and regulations relating to safe working conditions, laboratory and
manufacturing practices, and the experimental use of animals. Our operations may have required that environmental permits and approvals be issued by
applicable government agencies. If we failed to comply with these requirements, we could incur substantial costs, including civil or criminal fines and
penalties, clean-up costs or capital expenditures for control equipment or operational changes necessary to achieve and maintain compliance.
If we fail to obtain and sustain an adequate level of reimbursement for our potential products by third-party payors, potential future sales would be
materially adversely affected.
There will be no viable commercial market for our drug candidates, if approved, without reimbursement from third-party payors. Reimbursement policies
may be affected by future healthcare reform measures. We cannot be certain that reimbursement will be available for our current drug candidates or any
other drug candidate we may develop. Additionally, even if there is a viable commercial market, if the level of reimbursement is below our expectations,
our anticipated revenue and gross margins will be adversely affected.
Third-party payors, such as government or private healthcare insurers, carefully review and increasingly question and challenge the coverage of and the
prices charged for drugs. Reimbursement rates from private health insurance companies vary depending on the Company, the insurance plan and other
factors. Reimbursement rates may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for
other services. There is a current trend in the U.S. healthcare industry toward cost containment.
Large public and private payors, managed care organizations, group purchasing organizations and similar organizations are exerting increasing influence on
decisions regarding the use of, and reimbursement levels for, particular treatments. Such third-party payors, including Medicare, may question the coverage
of, and challenge the prices charged for, medical products and services, and many third-party payors limit coverage of or reimbursement for newly
approved healthcare products. In particular, third-party payors may limit the covered indications. Cost-control initiatives could decrease the price we might
establish for products, which could result in product revenues being lower than anticipated. We believe our drugs will be priced significantly higher than
existing generic drugs and consistent with current branded drugs. If we are unable to show a significant benefit relative to existing generic drugs, Medicare,
Medicaid and private payors may not be willing to provide reimbursement for our drugs, which would significantly reduce the likelihood of our products
gaining market acceptance.
We expect that private insurers will consider the efficacy, cost-effectiveness, safety and tolerability of our potential products in determining whether to
approve reimbursement for such products and at what level. Obtaining these approvals can be a time consuming and expensive process. Our business,
financial condition and results of operations would be materially adversely affected if we do not receive approval for reimbursement of our potential
products from private insurers on a timely or satisfactory basis. Limitations on coverage could also be imposed at the local Medicare carrier level or by
fiscal intermediaries. Medicare Part D, which provides a pharmacy benefit to Medicare patients as discussed below, does not require participating
prescription drug plans to cover all drugs within a class of products. Our business, financial condition and results of operations could be materially
adversely affected if Part D prescription drug plans were to limit access to, or deny or limit reimbursement of, our drug candidates or other potential
products.
Reimbursement systems in international markets vary significantly by country and by region, and reimbursement approvals must be obtained on a country-
by-country basis. In many countries, the product cannot be commercially launched until reimbursement is approved. In some foreign markets, prescription
pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. The negotiation process in some countries
can exceed 12 months. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the
cost-effectiveness of our products to other available therapies.
If the prices for our potential products are reduced or if governmental and other third-party payors do not provide adequate coverage and reimbursement of
our drugs, our future revenue, cash flows and prospects for profitability will suffer.
Current and future legislation may increase the difficulty and cost of commercializing our drug candidates and may affect the prices we may obtain if
our drug candidates are approved for commercialization.
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In the U.S. and some foreign jurisdictions, there have been a number of adopted and proposed legislative and regulatory changes regarding the healthcare
system that could prevent or delay regulatory approval of our drug candidates, restrict or regulate post-marketing activities and affect our ability to
profitably sell any of our drug candidates for which we obtain regulatory approval.
In the U.S., the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) changed the way Medicare covers and pays for
pharmaceutical products. Cost reduction initiatives and other provisions of this legislation could limit the coverage and reimbursement rate that we receive
for any of our approved products. While the MMA only applies to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage
policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from the MMA may result
in a similar reduction in payments from private payors.
In addition, on August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022, which, among other things, includes policies that are
designed to have a direct impact on drug prices and reduce drug spending by the federal government, which shall take effect in 2023. Under the Inflation
Reduction Act of 2022, Congress authorized Medicare beginning in 2026 to negotiate lower prices for certain costly single-source drug and biologic
products that do not have competing generics or biosimilars. This provision is limited in terms of the number of pharmaceuticals whose prices can be
negotiated in any given year and it only applies to drug products that have been approved for at least 9 years and biologics that have been licensed for 13
years. Drugs and biologics that have been approved for a single rare disease or condition are categorically excluded from price negotiation. Further, the
new legislation provides that if pharmaceutical companies raise prices in Medicare faster than the rate of inflation, they must pay rebates back to the
government for the difference. The new law also caps Medicare out-of-pocket drug costs at an estimated $4,000 a year in 2024 and, thereafter beginning in
2025, at $2,000 a year.
In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively the
“PPACA”), was enacted. The PPACA was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance
remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees
on the health industry and impose additional health policy reforms. The PPACA increased manufacturers’ rebate liability under the Medicaid Drug Rebate
Program by increasing the minimum rebate amount for both branded and generic drugs and revised the definition of “average manufacturer price”, which
may also increase the amount of Medicaid drug rebates manufacturers are required to pay to states. The legislation also expanded Medicaid drug rebates
and created an alternative rebate formula for certain new formulations of certain existing products that is intended to increase the rebates due on those
drugs. The Centers for Medicare & Medicaid Services (“CMS”), which administers the Medicaid Drug Rebate Program, also has proposed to expand
Medicaid rebates to the utilization that occurs in the territories of the U.S., such as Puerto Rico and the Virgin Islands. Further, beginning in 2011, the
PPACA imposed a significant annual fee on companies that manufacture or import branded prescription drug products and required manufacturers to
provide a 50% discount off the negotiated price of prescriptions filled by beneficiaries in the Medicare Part D coverage gap, referred to as the “donut hole.”
Legislative and regulatory proposals have been introduced at both the state and federal level to expand post-approval requirements and restrict sales and
promotional activities for pharmaceutical products.
There have been public announcements by members of the U.S. Congress, regarding plans to repeal and replace the PPACA and Medicare. For example, on
December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act of 2017, which, among other things, eliminated the individual mandate
requiring most Americans (other than those who qualify for a hardship exemption) to carry a minimum level of health coverage, effective January 1, 2019.
On December 14, 2018, a U.S. District Court Judge in the Northern District of Texas, or the Texas District Court Judge, ruled that the individual mandate is
a critical and inseverable feature of the PPACA, and therefore, because it was repealed as part of the Tax Cuts and Jobs Act of 2017, the remaining
provisions of the PPACA are invalid as well. On December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit upheld the District Court’s ruling with
respect to the individual mandate but remanded the case to the District Court to consider whether other parts of the law can remain in effect. While the
Texas District Court Judge has stated that the ruling will have no immediate effect, it is unclear how this decision, subsequent appeals, and other efforts to
repeal and replace the PPACA will impact the law and our business. We are not sure whether additional legislative changes will be enacted, or whether the
FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing approvals of our drug 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 more stringent product labeling and post-marketing approval testing and other requirements.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new
payment and delivery models, such as bundled payment models. In addition, there has been heightened governmental scrutiny over the manner in which
manufacturers set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and state
legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under government payor
programs, and review the relationship between pricing and manufacturer patient programs. The U.S. Department of Health and Human Services has started
soliciting feedback on some of these measures and, at the same time, is implementing others under its existing authority. For example, in May
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2019, CMS issued a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020. This final
rule codified CMS’s policy change that was effective January 1, 2019. While any proposed measures will require authorization through additional
legislation to become effective, Congress has indicated that it will continue to seek new legislative and/or administrative measures to control drug costs. We
expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal
government will pay for healthcare products and services, which could result in reduced demand for our drug candidates, if approved for
commercialization.
In Europe, the United Kingdom formally withdrew from the European Union on January 31, 2020, and entered into a transition period that ended on
December 31, 2020. A significant portion of the regulatory framework in the United Kingdom is derived from the regulations of the European Union. We
cannot predict what consequences the recent withdrawal of the United Kingdom from the European Union will have on the regulatory frameworks of the
United Kingdom or the European Union, or on our future operations, if any, in these jurisdictions, and the United Kingdom is in the process of negotiating
trade deals with other countries. Additionally, the United Kingdom’s withdrawal from the European Union may increase the possibility that other countries
may decide to leave the European Union again.
Risks Related to Our Capital Requirements, Finances and Operations
Management has performed an analysis and concluded that substantial doubt exists about our ability to continue as a going concern. Separately, our
independent registered public accounting firm has included in its opinion for the year ended March 31, 2023 an explanatory paragraph expressing
substantial doubt in our ability to continue as a going concern, which may hinder our ability to obtain future financing.
Our financial statements as of March 31, 2023 have been prepared under the assumption that we will continue as a going concern for the next twelve
months. Management has performed an analysis and concluded that substantial doubt exists about our ability to continue as a going concern. Separately,
our independent registered public accounting firm included in its opinion for the year ended March 31, 2023 an explanatory paragraph referring to our
recurring losses from operations and expressing substantial doubt in our ability to continue as a going concern without additional capital becoming
available. Our ability to continue as a going concern is dependent upon our ability to obtain additional equity or debt financing, obtain government grants,
reduce expenditures and generate significant revenue. Our financial statements as of March 31, 2023 do not include any adjustments that might result from
the outcome of this uncertainty. The reaction of investors to the inclusion of a going concern statement by management and our auditors, and our potential
inability to continue as a going concern, in future years could materially adversely affect our share price and our ability to raise new capital or enter into
strategic alliances.
Additional funds may not be available when we need them on terms that are acceptable to us, or at all. If adequate funds are not available to us on a
timely basis, we may be required to curtail or cease our operations.
There can be no assurance that we will be able to raise sufficient additional capital on acceptable terms or at all. Raising additional funding through debt or
equity financing is likely to be difficult or unavailable altogether given the early stage of our therapeutic candidates. If such additional financing is not
available on satisfactory terms, or is not available in sufficient amounts, we may be required to delay, limit or eliminate the development of business
opportunities and our ability to achieve our business objectives, our competitiveness, and our business, financial condition and results of operations will be
materially adversely affected. If we raise additional funds through the issuance of additional debt or equity securities, it could result in dilution to our
existing stockholders, increased fixed payment obligations and the existence of securities with rights that may be senior to those of our common stock. If
we incur indebtedness, we could become subject to covenants that would restrict our operations and potentially impair our competitiveness, such as
limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to
conduct our business. Any of these events could significantly harm our business, financial condition and prospects. Furthermore, the issuance of additional
securities, whether equity or debt, by us, or the possibility of such issuance, may cause the market price of our common stock to decline further and
existing stockholders may not agree with our financing plans or the terms of such financings. In addition, if we seek funds through arrangements with
collaborative partners, these arrangements may require us to relinquish rights to our technology or potential future product candidates or otherwise agree to
terms unfavorable to us.
We have a history of operating losses and expect to incur significant additional operating losses.
We have generated operating losses each year since we began operations, including $17.7 million and $11.5 million for the years ended March 31, 2023
and 2022, respectively. As of March 31, 2023, we had an accumulated deficit of $325.0 million. We expect to incur substantial additional operating losses
over the next several years as our research and development activities increase.
The amount of future losses and when, if ever, we will achieve profitability are uncertain. Our ability to generate revenue and achieve profitability will
depend on, among other things:
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successfully developing human tissues and disease models for drug discovery and development that enable us to identify drug candidates;
successfully outsourcing certain portions of our development efforts;
entering into collaboration or licensing arrangements with pharmaceutical companies to further develop and conduct clinical trials for any drug
candidates we identify;
obtaining any necessary regulatory approvals for any drug candidates we identify; and
raising sufficient funds to finance our activities and long-term business plan.
We might not succeed at any of these undertakings. If we are unsuccessful at one or more of these undertakings, our business, prospects, and results of
operations will be materially adversely affected. We may never generate significant revenue, and even if we do generate significant revenue, we may never
achieve profitability.
Our quarterly operating results may vary, which could negatively affect the market price of our common stock.
Our results of operations in any quarter may vary from quarter to quarter and are influenced by such factors as expenses related to:
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evaluating and implementing strategic alternatives, technology licensing opportunities, potential collaborations, and other strategic transactions;
litigation;
research and development expenditures, including commencement of preclinical studies and clinical trials;
the timing of the hiring of new employees, which may require payments of signing, retention or similar bonuses; and
changes in costs related to the general global economy.
We believe that operating results for any particular quarter are not necessarily a meaningful indication of future results. Nonetheless, fluctuations in our
quarterly operating results could negatively affect the market price of our common stock.
We may identify material weaknesses in the future that may cause us to fail to meet our reporting obligations or result in material misstatements of our
financial statements.
Our management team is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in
accordance with U.S. generally accepted accounting principles. A material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be
prevented or detected on a timely basis.
We cannot assure you that we will not have material weaknesses or significant deficiencies in our internal control over financial reporting. If we identify
any material weaknesses or significant deficiencies that may exist, the accuracy and timing of our financial reporting may be adversely affected, we may be
unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing
requirements, and our stock price may decline materially as a result.
Future strategic investments could negatively affect our business, financial condition and results of operations if we fail to achieve the desired returns
on our investment.
Our ability to benefit from future external strategic investments depends on our ability to successfully conduct due diligence, evaluate prospective
opportunities, and buy the equity of our target investments at acceptable market prices. Our failure in any of these tasks could result in unforeseen loses
associated with the strategic investments.
We may also discover deficiencies in internal controls, data adequacy and integrity, product quality, regulatory compliance, product liabilities or other
undisclosed liabilities that we did not uncover prior to our investment, which could result in us becoming subject asset impairments, including potential
loss of our investment capital. In addition, if we do not achieve the anticipated benefits of an external investment as rapidly as expected, or at all, investors
or analysts may downgrade our stock.
We also expect to continue to carry out strategic investments that we believe are necessary to expand our business. There are no assurances that such
initiatives will yield favorable results for us. Accordingly, if these initiatives are not successful, our business, financial condition and results of operations
could be adversely affected. If these risks materialize, our stock price could be materially
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adversely affected. Any difficulties in such investments could have a material adverse effect on our business, financial condition and results of operations.
Our business could be adversely impacted if we are unable to retain our executive officers and other key personnel.
Our future success will depend to a significant degree upon the continued contributions of our key personnel, especially our executive officers. We do not
currently have long-term employment agreements with our executive officers or our other key personnel, and there is no guarantee that our executive
officers or key personnel will remain employed with us. Moreover, we have not obtained key man life insurance that would provide us with proceeds in the
event of the death, disability or incapacity of any of our executive officers or other key personnel. Further, the process of attracting and retaining suitable
replacements for any executive officers and other key personnel we lose in the future would result in transition costs and would divert the attention of other
members of our senior management from our existing operations. Additionally, such a loss could be negatively perceived in the capital markets. Finally,
certain of our executives also provide services to Viscient Biosciences, Inc. (“Viscient”). Executives that provide services to us and Viscient do not dedicate
all of their time to us, as disclosed in our filings, and we may therefore compete with Viscient for the time commitments of our executive officers from time
to time.
We may be subject to security breaches or other cybersecurity incidents that could compromise our information and expose us to liability.
We routinely collect and store sensitive data (such as intellectual property, proprietary business information and personally identifiable information) for
ourselves, our employees and our suppliers and customers. We make significant efforts to maintain the security and integrity of our computer systems and
networks and to protect this information. However, like other companies in our industry, our networks and infrastructure may be vulnerable to cyber-attacks
or intrusions, including by computer hackers, foreign governments, foreign companies or competitors, or may be breached by employee error, malfeasance
or other disruption. Any such breach could result in unauthorized access to (or disclosure of) sensitive, proprietary or confidential information of ours, our
employees or our suppliers or customers, and/or loss or damage to our data. Any such unauthorized access, disclosure, or loss of information could cause
competitive harm, result in legal claims or proceedings, liability under laws that protect the privacy of personal information, and/or cause reputational
harm.
Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and
process data globally, and the failure to comply with such requirements could subject us to significant fines and penalties, which may have a material
adverse effect on our business, financial condition and results of operations.
The regulatory framework for the collection, use, safeguarding, sharing, transfer, and other processing of information worldwide is rapidly evolving and is
likely to remain uncertain for the foreseeable future. Globally, virtually every jurisdiction in which we operate has established its own data security and
privacy frameworks with which we must comply. For example, the collection, use, disclosure, transfer, or other processing of personal data regarding
individuals in the European Union, including personal health data, is subject to the EU General Data Protection Regulation (the “GDPR”), which took
effect across all member states of the European Economic Area (the “EEA”) in May 2018. The GDPR is wide-ranging in scope and imposes numerous
requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of
the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to
protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party
processors. The GDPR increases our obligations with respect to clinical trials conducted in the EEA by expanding the definition of personal data to include
coded data and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In addition, the GDPR
imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States, and, as a result, increases the
scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an
adequate level of data protection, such as the United States. The GDPR also permits data protection authorities to require destruction of improperly
gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues or 20
million Euros, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with
supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In addition, the GDPR
provides that European Union member states may make their own further laws and regulations limiting the processing of personal data, including genetic,
biometric or health data.
Further, Brexit has led and could also lead to legislative and regulatory changes and may increase our compliance costs. As of January 1, 2021 and the
expiry of transitional arrangements agreed to between the United Kingdom and the European Union, data processing in the United Kingdom is governed by
a United Kingdom version of the GDPR (combining the GDPR and the Data Protection Act 2018), exposing us to two parallel regimes, each of which
authorizes similar fines and other potentially divergent enforcement actions for certain violations. On June 28, 2021, the European Commission adopted an
Adequacy Decision for the United Kingdom, allowing for the relatively free exchange of personal information between the European Union and the United
Kingdom, however, the European Commission may suspend the Adequacy Decision if it considers that the United Kingdom no longer provides for an
adequate level of data protection. Other jurisdictions outside the European Union are similarly introducing or enhancing privacy and data security laws,
rules and regulations.
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Similar actions are either in place or under way in the United States. There are a broad variety of data protection laws that are applicable to our activities,
and a wide range of enforcement agencies at both the state and federal levels that can review companies for privacy and data security concerns based on
general consumer protection laws. The Federal Trade Commission and state Attorneys General all are aggressive in reviewing privacy and data security
protections for consumers. New laws also are being considered at both the state and federal levels. For example, the California Consumer Privacy Act —
which went into effect on January 1, 2020 — is creating similar risks and obligations as those created by the GDPR, though the California Consumer
Privacy Act does exempt certain information collected as part of a clinical trial subject to the Federal Policy for the Protection of Human Subjects (the
Common Rule). As of January 1, 2023, the California Consumer Privacy Act (as amended by the California Privacy Rights Act) is in full effect, with
enforcement by California’s dedicated privacy enforcement agency expected to start later in 2023. While California was first among the states in adopting
comprehensive data privacy legislation similar to the GDPR, many other states are following suit. For example, four other states have adopted such laws,
taking effect from January 1, 2023 (in Virginia) and throughout the next year in Utah, Colorado, and Connecticut. Many other states are considering similar
legislation. A broad range of legislative measures also have been introduced at the federal level. Accordingly, failure to comply with federal and state laws
(both those currently in effect and future legislation) regarding privacy and security of personal information could expose us to fines and penalties under
such laws. There also is the threat of consumer class actions related to these laws and the overall protection of personal data. This is particularly true with
respect to data security incidents, and sensitive personal information, including health and biometric data. Even if we are not determined to have violated
these laws, government investigations into these issues typically require the expenditure of significant resources and generate negative publicity, which
could harm our reputation and business.
Given the breadth and depth of changes in data protection obligations, preparing for and complying with these requirements is rigorous and time intensive
and requires significant resources and a review of our technologies, systems and practices, as well as those of any third-party collaborators, service
providers, contractors or consultants that process or transfer personal data collected in the European Union. The GDPR, new state privacy laws and other
changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal
information from our clinical trials, could require us to change our business practices and put in place additional compliance mechanisms, may interrupt or
delay our development, regulatory and commercialization activities and increase our cost of doing business, and could lead to government enforcement
actions, private litigation and significant fines and penalties against us and could have a material adverse effect on our business, financial condition and
results of operations.
We and our partners may be subject to stringent privacy laws, information security laws, regulations, policies and contractual obligations related to
data privacy and security, and changes in such laws, regulations, policies or how they are interpreted or changes in contractual obligations could
adversely affect our business.
There are numerous U.S. federal and state data privacy and protection laws and regulations that apply to the collection, transmission, processing, storage
and use of personally-identifying information, which among other things, impose certain requirements relating to the privacy, security and transmission of
personal information. The legislative and regulatory landscape for privacy and data protection continues to evolve in jurisdictions worldwide, and there has
been an increasing focus on privacy and data protection issues with the potential to affect our business. Failure to comply with any of these laws and
regulations could result in enforcement action against us, including fines, imprisonment of company officials and public censure, claims for damages by
affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition,
results of operations or prospects.
If we are unable to properly protect the privacy and security of health-related information or other sensitive or confidential information in our possession,
we could be found to have breached our contracts. Further, if we fail to comply with applicable privacy laws, including applicable HIPAA privacy and
security standards, we could face significant administrative, civil and criminal penalties. Enforcement activity can also result in financial liability and
reputational harm, and responses to such enforcement activity can consume significant internal resources. In addition, state attorneys general are authorized
to bring civil actions seeking either injunctions or damages in response to violations that threaten the privacy of state residents.
We may experience conflicts of interest with Viscient Biosciences, Inc. with respect to business opportunities and other matters.
Keith Murphy, our Executive Chairman, is the Chief Executive Officer, Chairman and principal stockholder of Viscient, a private company that he founded
in 2017 that is focused on drug discovery and development utilizing 3D tissue technology and multi-omics (genomics, transcriptomics, metabolomics).
Jeffrey N. Miner and our Chief Scientific Officer, is a co-founder, the Chief Scientific Officer and a significant stockholder of Viscient. In addition, Adam
Stern, Douglas Jay Cohen and David Gobel (through the Methuselah Foundation and the Methuselah Fund), members of our Board, have invested funds
through a convertible promissory note in Viscient, but do not serve as an employee, officer or director of Viscient. Additional members of our Research and
Development organization also work at Viscient, and we expect that additional employees or consultants of ours will also be employees of or consultants to
Viscient. We use certain Viscient-owned facilities and equipment and allow Viscient to use certain of our facilities and equipment. During fiscal 2023, we
provided services to Viscient, and we expect to continue to provide services to Viscient and enter into additional agreements with Viscient in the future.
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In addition, we license, as well as cross-license, certain intellectual property to and from Viscient and expect to continue to do so in the future. In particular,
pursuant to an Asset Purchase and Non-Exclusive Patent License Agreement with Viscient, dated November 6, 2019, as amended, we have provided a paid
up, worldwide, irrevocable, perpetual, non-exclusive license to Viscient under certain of our patents and know-how to (a) make, have made, use, sell offer
to sell, import and otherwise exploit the inventions and subject matter covered by certain patents regarding certain bioprinter devices and bioprinting
methods, engineered liver tissues, engineered renal tissues, engineered intestinal tissue and engineered tissue for in vitro research use, (b) to use and
internally repair the bioprinters, and (c) to make additional bioprinters for internal use only in connection with drug discovery and development research,
target identification and validation, compound screening, preclinical safety, absorption, distribution, metabolism, excretion and toxicology (ADMET)
studies, and in vitro research to complement clinical development of a therapeutic compound. Although we have entered, and expect to enter, into
agreements and arrangements that we believe appropriately govern the ownership of intellectual property created by joint employees or consultants of
Viscient and/or using our or Viscient’s facilities or equipment, it is possible that we may disagree with Viscient as to the ownership of intellectual property
created by shared employees or consultants, or using shared equipment or facilities.
On December 28, 2020, we entered into an intercompany agreement with Viscient and Organovo, Inc., our wholly-owned subsidiary (the “Intercompany
Agreement”). Pursuant to the Intercompany Agreement, we agreed to provide Viscient certain services related to 3D bioprinting technology, which
includes, but is not limited to, histology services, cell isolation, and proliferation of cells, and Viscient agreed to provide us certain services related to 3D
bioprinting technology, including bioprinter training, bioprinting services, and qPCR assays, in each case on payment terms specified in the Intercompany
Agreement and as may be further determined by the parties. In addition, Viscient and we each agreed to share certain facilities and equipment and, subject
to further agreement, to each make certain employees available for specified projects to the other party at prices to be determined in good faith by the
parties. Under the Intercompany Agreement, each party will retain its own prior intellectual property and will obtain new intellectual property rights within
their respectively defined fields of use.
Due to the interrelated nature of Viscient with us, conflicts of interest may arise with respect to transactions involving business dealings between us and
Viscient, potential acquisitions of businesses or products, the development and ownership of technologies and products, the sale of products, markets and
other matters in which our best interests and the best interests of our stockholders may conflict with the best interests of the stockholders of Viscient. In
addition, we and Viscient may disagree regarding the interpretation of certain terms of the arrangements we previously entered into with Viscient or may
enter into in the future. We cannot guarantee that any conflict of interest will be resolved in our favor, or that, with respect to our transactions with Viscient,
we will negotiate terms that are as favorable to us as if such transactions were with another third-party. In addition, executives that provide services to us
and Viscient may not dedicate all of their time to us and we may therefore compete with Viscient for the time commitments of our executive officers from
time to time.
Risks Related to Our Common Stock and Liquidity Risks
We could fail to maintain the listing of our common stock on the Nasdaq Capital Market, which could seriously harm the liquidity of our stock and our
ability to raise capital or complete a strategic transaction.
The Nasdaq Stock Market LLC (“Nasdaq”) has established continued listing requirements, including a requirement to maintain a minimum closing bid
price of at least $1 per share. If a company trades for 30 consecutive business days below such minimum closing bid price, it will receive a deficiency
notice from Nasdaq. Assuming it is in compliance with the other continued listing requirements, Nasdaq would provide such company a period of 180
calendar days in which to regain compliance by maintaining a closing bid price at least $1 per share for a minimum of ten consecutive business days. There
can be no assurance that we will continue to maintain compliance with the minimum bid price requirement or other listing requirements necessary for us to
maintain the listing of our common stock on the Nasdaq Capital Market.
A delisting from the Nasdaq Capital Market and commencement of trading on the Over-the-Counter Bulletin Board would likely result in a reduction in
some or all of the following, each of which could have a material adverse effect on stockholders:
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the liquidity of our common stock;
the market price of our common stock (and the accompanying valuation of our Company);
our ability to obtain financing or complete a strategic transaction;
the number of institutional and other investors that will consider investing in shares of our common stock;
the number of market markers or broker-dealers for our common stock; and
the availability of information concerning the trading prices and volume of shares of our common stock.
There is no assurance that an active market in our common stock will continue at present levels or increase in the future.
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Our common stock is currently traded on the Nasdaq Capital Market, but there is no assurance that an active market in our common stock will continue at
present levels or increase in the future. As a result, an investor may find it difficult to dispose of our common stock on the timeline and at the volumes they
desire. This factor limits the liquidity of our common stock and may have a material adverse effect on the market price of our common stock and on our
ability to raise additional capital.
The price of our common stock may continue to be volatile, which could lead to losses by investors and costly securities litigation.
The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as:
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announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
our ability to execute on our new strategic plan;
reduced government funding for research and development activities;
actual or anticipated variations in our operating results;
adoption of new accounting standards affecting our industry;
additions or departures of key personnel;
sales of our common stock or other securities in the open market;
degree of coverage of securities analysts and reports and recommendations issued by securities analysts regarding our business;
volume fluctuations in the trading of our common stock; and
other events or factors, many of which are beyond our control.
The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s
securities, securities class action litigation has often been initiated against such a company. Litigation initiated against us, whether or not successful, could
result in substantial costs and diversion of our management’s attention and resources, which could harm our business and financial condition.
Investors may experience dilution of their ownership interests because of the future issuance of additional shares of our capital stock.
We are authorized to issue 200,000,000 shares of common stock and 25,000,000 shares of preferred stock. As of March 31, 2023, there were an aggregate
of 11,426,737 shares of our common stock issued and outstanding and available for issuance on a fully diluted basis and no shares of preferred stock
outstanding. That total for our common stock includes 2,650,405 shares of our common stock that may be issued upon the vesting of restricted stock units,
the exercise of outstanding stock options, or is available for issuance under our equity incentive plans, and 58,426 shares of common stock that may be
issued through our Employee Stock Purchase Plan (“ESPP”).
In the future, we may issue additional authorized but previously unissued equity securities to raise funds to support our continued operations and to
implement our business plan. We may also issue additional shares of our capital stock or other securities that are convertible into or exercisable for our
capital stock in connection with hiring or retaining employees, future acquisitions, or for other business purposes. If we raise additional funds from the
issuance of equity securities, substantial dilution to our existing stockholders may result. In addition, the future issuance of any such additional shares of
capital stock may create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue
additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise
prices) below the price at which shares of our common stock is currently traded on the Nasdaq Capital Market. Moreover, depending on market conditions,
we cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to us or to our
stockholders.
We do not intend to pay dividends for the foreseeable future.
We have paid no dividends on our common stock to date and it is not anticipated that any dividends will be paid to holders of our common stock in the
foreseeable future. While our future dividend policy will be based on the operating results and capital needs of our business, it is currently anticipated that
any earnings will be retained to finance our future expansion and for the implementation of our business plan. As an investor, you should take note of the
fact that a lack of a dividend can further affect the market value of our stock and could significantly affect the value of any investment.
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Anti-takeover provisions in our organizational documents and Delaware law may discourage or prevent a change of control, even if an acquisition
would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our
current management.
Our Certificate of Incorporation, as amended (“Certificate of Incorporation”), and Amended and Restated Bylaws, as amended (“Bylaws”) contain
provisions that could delay or prevent a change of control of our company or changes in our board of directors that our stockholders might consider
favorable. Some of these provisions:
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authorize the issuance of preferred stock which can be created and issued by our board of directors without prior stockholder approval, with
rights senior to those of the common stock;
provide for a classified board of directors, with each director serving a staggered three-year term;
provide that each director may be removed by the stockholders only for cause;
prohibit our stockholders from filling board vacancies, calling special stockholder meetings, or taking action by written consent; and
require advance written notice of stockholder proposals and director nominations.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations
with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our Certificate of Incorporation, Bylaws and
Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our board of directors or initiate actions that are
opposed by our then-current board of directors, including delaying or impeding a merger, tender offer, or proxy contest involving our company. Any delay
or prevention of a change of control transaction or changes in our board of directors could cause the market price of our common stock to decline.
Risks Related to Our Intellectual Property
If we are not able to adequately protect our proprietary rights, our business could be harmed.
Our success will depend to a significant extent on our ability to obtain patents and maintain adequate protection for our technologies, intellectual property
and products and service offerings in the United States and other countries. If we do not protect our intellectual property adequately, competitors may be
able to use our technologies and gain a competitive advantage.
To protect our products and technologies, we, and our collaborators and licensors, must prosecute and maintain existing patents, obtain new patents and
pursue other intellectual property protection. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from
using our technologies or from developing competing products and technologies. Moreover, the patent positions of many biotechnology and
pharmaceutical companies are highly uncertain, involve complex legal and factual questions and have in recent years been the subject of much litigation.
As a result, we cannot guarantee that:
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any patent applications filed by us will issue as patents;
third parties will not challenge our proprietary rights, and if challenged that a court or an administrative board of a patent office will hold that our
patents are valid and enforceable;
third parties will not independently develop similar or alternative technologies or duplicate any of our technologies by inventing around our
claims;
any patents issued to us will cover our technology and products as ultimately developed;
we will develop additional proprietary technologies that are patentable;
the patents of others will not have an adverse effect on our business; or
as issued patents expire, we will not lose some competitive advantage.
As previously disclosed, we have recommenced certain historical operations and are now focusing our future efforts on developing highly customized 3D
human tissues as living, dynamic models for healthy and diseased human biology for drug development. Previously, we focused our efforts on developing
our in vivo liver tissues to treat end-stage liver disease and a select group of life-threatening, orphan diseases, for which there were limited treatment
options other than organ transplant. We also explored the development of other potential pipeline in vivo tissue constructs. As we focus our business on
developing highly customized 3D human tissues, we may sell, discontinue, adjust or abandon certain patents and patent applications relating to our
historical operations. There can be no assurance that we will be successful at such efforts or sell or otherwise monetize such assets on acceptable terms, if at
all. There is also no guarantee that our remaining patents will be sufficiently broad to prevent others from using our technologies or from developing
competing products and technologies.
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We may not be able to protect our intellectual property rights throughout the world.
Certain foreign jurisdictions have an absolute requirement of novelty that renders any public disclosure of an invention immediately fatal to patentability in
such jurisdictions. Therefore, there is a risk that we may not be able to protect some of our intellectual property in the United States or abroad due to
disclosures, which we may not be aware of, by our collaborators or licensors. Some foreign jurisdictions prohibit certain types of patent claims, such as
“method-of-treatment/use-type” claims; thus, the scope of protection available to us in such jurisdictions is limited.
Moreover, filing, prosecuting and defending patents on all of our potential products and technologies throughout the world would be prohibitively
expensive. Competitors may use our technologies in jurisdictions where we have not sought or obtained patent protection to develop their own products
and further, may export otherwise infringing products to territories where we have patent protection, but where enforcement is not as strong as that in the
United States. These products may compete with our future products in jurisdictions where we do not have any issued patents and our patent claims or
other intellectual property rights may not be effective or sufficient to prevent them from competing.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems
of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly
those relating to biopharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in
violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial cost and divert our
efforts and attention from other aspects of our business.
Patents covering our products could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or
abroad.
The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or patent
offices in the United States and abroad. We may be subject to a third-party preissuance submission of prior art to the U.S. Patent and Trademark Office (the
“USPTO”), or become involved in opposition, derivation, revocation, reexamination, post-grant and inter partes review (“IPR”), or interference
proceedings or other similar proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could
reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our technology or products and compete
directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights.
Moreover, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention or in post-grant challenge
proceedings, such as oppositions in a foreign patent office, that challenge our priority of invention or other features of patentability with respect to our
patents and patent applications. Such challenges may result in loss of patent rights, in loss of exclusivity or in patent claims being narrowed, invalidated or
held unenforceable, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the
duration of the patent protection of our technology or products. Such proceedings also may result in substantial cost and require significant time from our
scientists and management, even if the eventual outcome is favorable to us.
For example, our U.S. Patent Nos. 9,855,369 and 9,149,952, which relate to our bioprinter technology, were the subject of IPR proceedings filed by Cellink
AB and its subsidiaries (collectively, “BICO Group AB”), one of our competitors. Likewise, U.S. Patent Nos. 9,149,952, 9,855,369, 8,931,880, 9,227,339,
9,315,043 and 10,967,560 (all assigned to Organovo, Inc.) and U.S. Patent Nos. 7,051,654, 8,241,905, 8,852,932 and 9,752,116 (assigned to Clemson
University and the University of Missouri, respectively) were implicated in a declaratory judgment complaint filed against Organovo, Inc., our wholly
owned subsidiary, by BICO Group AB and certain of its subsidiaries in the United States District Court for the District of Delaware. All of these matters
were eventually settled in February 2022.
Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their substantially
greater financial resources. Patent litigation and other proceedings may also absorb significant management time. Uncertainties resulting from the initiation
and continuation of patent litigation or other proceedings could impair our ability to compete in the marketplace. The occurrence of any of the foregoing
could have a material adverse effect on our business, financial condition or results of operations. We may become involved in lawsuits to protect or enforce
our inventions, patents or other intellectual property or the patents of our licensors, which could be expensive and time consuming.
In addition, if we initiate legal proceedings against a third party to enforce a patent covering our products, the defendant could counterclaim that such
patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are
commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty,
obviousness, or non-enablement. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent
withheld relevant information from the USPTO or made a misleading statement during prosecution. Third parties may also raise claims challenging the
validity or enforceability of our patents before administrative bodies in the United States or abroad, even outside the context of litigation, including through
re-examination, post-grant review, IPR, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions (e.g.,
22
opposition proceedings). Such proceedings could result in the revocation of, cancellation of or amendment to our patents in such a way that they no longer
cover our products. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for
example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner were unaware during prosecution. If a third party
were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our products.
Such a loss of patent protection would have a material adverse effect on our business, financial condition, and results of operations.
We may be involved in lawsuits or other proceedings to protect or enforce our patents or the patents of our licensors, which could be expensive, time-
consuming and unsuccessful.
Competitors may infringe our patents or the patents of our collaborators or licensors or our licensors may breach or otherwise prematurely terminate the
provisions of our license agreements with them. To counter infringement or unauthorized use, we may be required to file infringement claims or lawsuits,
which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that a patent of ours or our collaborators or
licensors is not valid or is unenforceable or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not
cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being
invalidated, held unenforceable, or interpreted narrowly and could put our other patent applications at risk of not issuing. Additionally, our licensors may
continue to retain certain rights to use technologies licensed by us for research purposes. Patent disputes can take years to resolve, can be very costly and
can result in loss of rights, injunctions or substantial penalties. Moreover, patent disputes and related proceedings can distract management’s attention and
interfere with running our business.
Furthermore, because of the potential for substantial discovery in connection with intellectual property litigation, there is a risk that some of our
confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results
of hearings, motions or other interim proceedings or developments which could harm our business.
As more companies file patents relating to bioprinters and bioprinted tissues, it is possible that patent claims relating to bioprinters or bioprinted human
tissue may be asserted against us. In addition, the drug candidates we pursue may also be pursued by other companies, and it is possible that patent claims
relating to such drug candidates may also be asserted against us. Any patent claims asserted against us could harm our business. Moreover, we may face
claims from non-practicing entities, which have no relevant product revenue and against whom our own patent portfolio may have no deterrent effect. Any
such claims, with or without merit, could be time-consuming to defend, result in costly litigation and diversion of resources, cause product shipment or
delays or require us to enter into royalty or license agreements. These licenses may not be available on acceptable terms, or at all. Even if we are successful
in defending such claims, infringement and other intellectual property litigation can be expensive and time-consuming to litigate and divert management’s
attention from our core business. Any of these events could harm our business significantly.
Our current and future research, development and commercialization activities also must satisfy the obligations under our license agreements. Any disputes
arising under our license agreements could be costly and distract our management from the conduct of our business. Moreover, premature termination of a
license agreement could have an adverse impact on our business.
In addition to infringement claims against us, if third parties have prepared and filed patent applications in the United States that also claim technology to
which we have rights, we may have to participate in interference proceedings in the United States Patent and Trademark Office (“PTO”) to determine the
priority of invention and opposition proceedings outside of the United States. An unfavorable outcome could require us to cease using the related
technology or to attempt to license rights to it from the prevailing party.
Third parties may also attempt to initiate reexamination, post grant review or inter partes review of our patents or those of our collaborators or licensors in
the PTO. We may also become involved in similar opposition proceedings in the European Patent Office or similar offices in other jurisdictions regarding
our intellectual property rights with respect to our products and technology.
We depend on license agreements with University of Missouri, Clemson University and the Salk Institute for Biological Studies for rights to use certain
patents, pending applications, and know how. Failure to comply with or maintain obligations under these agreements and any related or other
termination of these agreements could materially harm our business and prevent us from developing or commercializing new product candidates.
We are party to license agreements with University of Missouri, Clemson University and the Salk Institute for Biological Studies under which we were
granted exclusive rights to patents and patent applications that are important to our business and to our ability to develop and commercialize our 3D tissue
products fabricated using our NovoGen Bioprinters and our FXR314 agonist in gastrointestinal disease. Our rights to use these patents and patent
applications and employ the inventions claimed in these licensed patents are subject to the continuation of and our compliance with the terms of our license
agreements. If we were to breach the terms of these license agreements and the agreements were terminated as a result, our ability to continue to develop
and commercialize our NovoGen Bioprinters, 3D tissue products and the FXR314 agonist and to operate our business could be adversely impacted.
23
We may be unable to adequately prevent disclosure of trade secrets and other proprietary information.
In order to protect our proprietary and licensed technology and processes, we rely in part on confidentiality agreements with our corporate partners,
employees, consultants, manufacturers, outside scientific collaborators and sponsored researchers and other advisors. These agreements may not effectively
prevent disclosure of our confidential information and may not provide an adequate remedy in the event of unauthorized disclosure of confidential
information. In addition, others may independently discover our trade secrets and proprietary information. Failure to obtain or maintain trade secret
protection could adversely affect our competitive business position.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of
third parties.
We employ or engage individuals who were previously employed at other biopharmaceutical companies. Although we have no knowledge of any such
claims against us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or
disclosed confidential information of our employees’ former employers or other third parties. Litigation may be necessary to defend against these claims.
There is no guarantee of success in defending these claims, and even if we are successful, litigation could result in substantial cost and be a distraction to
our management and other employees. To date, none of our employees have been subject to such claims.
General Risk Factors
Compliance with the reporting requirements of federal securities laws can be expensive.
We are a public reporting company in the United States, and accordingly, subject to the information and reporting requirements of the Exchange Act and
other federal securities laws, including the compliance obligations of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley Act”). The costs of complying with
the reporting requirements of the federal securities laws, including preparing and filing annual and quarterly reports and other information with the
Securities and Exchange Commission (the “SEC”) and furnishing audited reports to stockholders, can be substantial.
If we fail to comply with the rules of Section 404 of the Sarbanes-Oxley Act related to accounting controls and procedures, or, if we discover material
weaknesses and deficiencies in our internal control and accounting procedures, we may be subject to sanctions by regulatory authorities and our stock
price could decline.
Section 404 of the Sarbanes-Oxley Act (“Section 404”) requires that we evaluate and determine the effectiveness of our internal control over financial
reporting. We believe our system and process evaluation and testing comply with the management certification requirements of Section 404. We cannot be
certain, however, that we will be able to satisfy the requirements in Section 404 in all future periods. If we are not able to continue to meet the requirements
of Section 404 in a timely manner or with adequate compliance, we may be subject to sanctions or investigation by regulatory authorities, such as the SEC
or Nasdaq. Any such action could adversely affect our financial results or investors’ confidence in us and could cause our stock price to fall. Moreover, if
we are not able to comply with the requirements of Section 404 in a timely manner, or if we identify deficiencies in our internal controls that are deemed to
be material weaknesses, we may be required to incur significant additional financial and management resources to achieve compliance.
24
Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
In November 2020, we entered into a sixty-two month lease agreement for our long term permanent premises, consisting of approximately 8,051 square
feet of lab and office space. In November 2021, we amended the permanent lease agreement to add an additional 2,892 square of office space in the same
building. In December 2021, we took occupancy of our permanent lab and office space, located at 11555 Sorrento Valley Road, San Diego, CA 92121. See
“Note 7. Leases” of the Notes to the Consolidated Financial Statements contained within this Annual Report for a further discussion of properties.
Item 3. Legal Proceedings.
In addition to commitments and obligations in the ordinary course of business, the Company may be subject, from time to time, to various claims
and pending and potential legal actions arising out of the normal conduct of its business.
The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements.
Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing litigation contingencies is subjective and requires
judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors,
including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of
information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible
outcomes, and as such are not meaningful indicators of its potential liability.
We are not involved in any material legal proceedings or legal matters at this time. See “Note 8. Commitments and Contingencies” of the Notes to the
Consolidated Financial Statements contained within this Annual Report for a further discussion of potential commitments and contingencies related to legal
proceedings.
Item 4. Mine Safety Disclosures.
Not applicable.
25
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information for Common Stock
Our common stock is traded on the Nasdaq Capital Market under the symbol “ONVO.”
PART II
Holders of Record
As of March 31, 2023, we had 8,716,906 outstanding shares of common stock and approximately 81 holders of record of our common stock. The number
of beneficial owners is substantially greater than the number of record holders because a large portion of our common stock is held of record through
brokerage firms in “street name.”
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We currently intend to retain all future earnings, if any, for use in our business
and do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Recent Sales of Unregistered Securities
None.
Issuer Purchases of Equity Securities
We satisfy certain U.S. federal and state tax withholding obligations due upon the vesting of restricted stock unit awards by automatically withholding from
the shares being issued in connection with such award a number of shares of our common stock with an aggregate fair market value on the date of vesting
equal to the minimum tax withholding obligations. The following table sets forth information with respect to shares of our common stock repurchased by
us to satisfy certain tax withholding obligations during the three months ended March 31, 2023:
January 1, 2023 - January 31, 2023
February 1, 2023 - February 28, 2023
March 1, 2023 - March 31, 2023
Total
(a) Total Number of Shares
(or Units) Purchased
(b) Average Price Paid Per Share
(or Unit)
—
$
34 (1) $
$
—
$
34
—
2.64
—
2.64
(1) Represents shares of our common stock withheld from employees for the payment of taxes.
Performance Graph
This performance graph is furnished and shall not be deemed “filed” with the SEC or subject to Section 18 of the Exchange Act, nor shall it be deemed
incorporated by reference in any of our filings under the Securities Act of 1933, as amended.
The graph set forth below compares the cumulative total stockholder return data on our common stock with the cumulative return data of (i) the Nasdaq
Stock Market Composite Index, and (ii) the Nasdaq Biotechnology Index over the five-year period ending March 31, 2023. This graph assumes the
investment of $100 on March 31, 2018 in our common stock and each of the comparative indices and assumes the reinvestment of dividends. No cash
dividends have been declared or paid on our common stock.
The comparisons in the graph and related information is not intended to forecast or be indicative of possible future performance of our common stock, and
we do not make or endorse any predictions as to future stockholder returns.
26
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Organovo Holdings, Inc.,
the Nasdaq Composite Index, and the Nasdaq Biotechnology Index
*
$100 invested on March 31, 2018 in stock or index, including reinvestment of dividends.
Securities Authorized for Issuance under Equity Compensation Plans
Information about securities authorized for issuance under equity compensation plans is set forth in Part III, Item 12. “Security Ownership of Certain
Beneficial Owners and Management and Related Stockholder Matters” of this Annual Report.
Item 6. [Reserved]
27
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our historical
consolidated financial statements and the related notes. This management’s discussion and analysis contains forward-looking statements that involve risks
and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are
forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause our actual results or events to differ
materially from those expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are
not limited to, those identified below and those discussed in section Item 1A. “Risk Factors” in this Annual Report. Except as required by applicable law
we do not undertake any obligation to update our forward-looking statements to reflect events or circumstances occurring after the date of this Annual
Report.
Overview
We are a biotechnology company that is focusing on building high fidelity, 3D tissues that recapitulate key aspects of human disease. We use these models
to identify gene targets responsible for driving the disease and intend to initiate drug discovery programs around these validated targets. We are initially
focusing on the intestine and have ongoing 3D tissue development efforts in ulcerative colitis (“UC”) and Crohn’s disease (“CD”). We intend to add
additional tissues/diseases/targets to our portfolio over time. In line with these plans, we are building upon both our external and in-house scientific
expertise, which will be essential to our drug development effort.
We use our proprietary technology to build functional 3D human tissues that mimic key aspects of native human tissue composition, architecture, function
and disease. Our advances include cell type-specific compartments, prevalent intercellular tight junctions, and the formation of microvascular structures.
Management believes these attributes can enable critical complex, multicellular disease models that can be used to develop clinically effective drugs across
multiple therapeutic areas.
Our NovoGen Bioprinters® are automated devices that enable the fabrication of 3D living tissues comprised of mammalian cells. We believe that the use of
our bioprinting platform as well as complementary 3D technologies will allow us to develop an understanding of disease biology that leads to validated
novel drug targets, and therapeutics to those targets to treat disease.
The majority of our current focus is on inflammatory bowel disease (“IBD”), including CD and UC. We are creating high fidelity disease models,
leveraging our prior work including the work found in our peer-reviewed publication on bioprinted intestinal tissues (Madden et al. Bioprinted 3D Primary
Human Intestinal Tissues Model Aspects of Native Physiology and ADME/Tox Functions. iScience. 2018 Apr 27;2:156-167. doi:
10.1016/j.isci.2018.03.015.) Our current understanding of intestinal tissue models and IBD models leads us to believe that we can create models that
provide greater insight into the biology of these diseases than are generally currently available. Using these disease models, we intend to identify and
validate novel therapeutic targets. After finding therapeutic drug targets, we will focus on developing novel small molecule, antibody, or other therapeutic
drug candidates to treat the disease, and advance these drug candidates towards an Investigational New Drug (“IND”) filing and potential future clinical
trials. We may also form partnerships around the development of targets or therapeutics for the treatment of IBD.
In March of 2023, we entered into and closed an asset purchase agreement with Metacrine, Inc to acquire their farnesoid X receptor ("FXR") program.
FXR is a mediator of GI and liver diseases. FXR agonism has been tested in a variety of preclinical models of IBD. The acquired program contains two
clinically tested compounds and over 2,000 discovery or preclinical compounds.
We expect to broaden our work into additional therapeutic areas over time and are currently exploring specific tissues for development. In our work to
identify the areas of interest, we evaluate areas that might be better served with 3D disease models than currently available models as well as the
commercial opportunity.
We hold a large and diverse patent portfolio related to our bioprinting platform and complementary 3D technologies. The strength of this patent portfolio,
the fact that it was created early in the bioprinting revolution and growth in the bioprinting industry have made for an attractive business opportunity for us.
We are now beginning to invest resources to explore and expand business and revenue opportunities from the leveraging of our patent portfolio.
Critical Accounting Policies, Estimates, and Judgments
Our financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Any reference in this annual report to
applicable guidance is meant to refer to the authoritative accounting principles generally accepted in the United States as found in the Accounting Standards
Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). The preparation of these
financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We continually
evaluate our estimates and judgments used in preparing our financial statements and related disclosures, none of which are considered critical. All estimates
affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. These
28
estimates and judgments are also based on historical experience and other factors that are believed to be reasonable under the circumstances. Materially
different results can occur as circumstances change and additional information becomes known.
Our significant accounting policies are set forth in “Note 1. Description of Business and Summary of Significant Accounting Policies” in the Notes to
Consolidated Financial Statements contained within this Annual Report. Of those policies, we believe that the policies discussed below may involve a
higher degree of judgment and may be more critical to an accurate reflection of our financial condition and results of operations. Accounting policies
regarding stock-based compensation are considered critical, as they require significant assumptions. If there is a difference between the assumptions used in
determining our stock-based compensation expense and the actual factors that become known over time, specifically with respect to anticipated forfeitures,
we may change the input factors used in determining stock-based compensation costs for future grants. These changes, if any, may materially impact our
results of operations in the period such changes are made.
Stock-based compensation
For purposes of calculating stock-based compensation, we estimate the fair value of stock options and shares acquirable under our 2022 Equity Incentive
Plan ("2022 Plan"), Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan”), our 2016 Employee Stock Purchase Plan (the “ESPP”) or our
2021 Inducement Equity Plan (the “Inducement Plan”) using a Black-Scholes option-pricing model. The determination of the fair value of share-based
payment awards utilizing the Black-Scholes model is affected by our stock price and a number of assumptions, including expected volatility, expected life,
risk-free interest rate and expected dividends. Expected volatility is based on the Company-specific historical volatility rate. For certain options granted
with vesting criteria contingent on market conditions, we engage with valuation specialists to calculate fair value and requisite service periods using Monte
Carlo simulations. For certain options granted with vesting criteria contingent on pre-defined Company performance criteria, we periodically assess and
adjust the expense based on the probability of achievement of such performance criteria. For shares acquirable under our ESPP, we use our Company-
specific volatility rate. The expected life of the stock options is based on historical and other economic data trended into the future. The risk-free interest
rate assumption is based on observed interest rates appropriate for the expected terms of our stock options. The dividend yield assumption is based on our
history and expectation of no dividend payouts. If factors change and we employ different assumptions, our stock-based compensation expense may differ
significantly from what we have recorded in the past.
For purposes of calculating stock-based compensation, we estimate the fair value of restricted stock units (“RSUs”) with pre-defined performance criteria,
based on the closing stock price on the date of grant. No exercise price or other monetary payment is required for receipt of the shares issued in settlement
of the respective award; instead, consideration is furnished in the form of the participant’s service to us.
If there is a difference between the assumptions used in determining our stock-based compensation expense and the actual factors that become known over
time, we may change the input factors used in determining stock-based compensation costs for future grants. These changes, if any, may materially impact
our results of operations in the period such changes are made.
Revenue
We assess whether our license agreements are considered a contract with a customer under ASC Topic 606, Revenue from Contracts with Customers
(“Topic 606”) or an arrangement with a collaborator subject to guidance under ASC Topic 808, Collaborative Arrangements (“Topic 808”). These
agreements can include one or more of the following: (i) non-refundable upfront fees and (ii) royalties based on specified percentages of net product sales.
At contract inception, we assess the goods or services agreed upon within each contract and assess whether each good or service is distinct and determine
those that are performance obligations. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance
obligation when (or as) the performance obligation is satisfied.
For the year ended March 31, 2023, the performance obligations assessed were sales-based royalties on a quarterly basis. We evaluate the performance
obligation to determine if it can be satisfied at a point in time or over time. For agreements that include sales-based royalties, we estimate and recognize
revenue in the period the underlying sales occur. Key factors considered in the estimate include sales of products that include the underlying licensed IP and
the location of customers related to the jurisdictions of the licensed IP. In addition, variable consideration must be evaluated to determine if it is constrained
and, therefore, excluded from the transaction price.
29
Differences in the allocation of the transaction price between delivered and undelivered performance obligations can impact the timing of revenue
recognition but do not change the total revenue recognized under any agreement.
Results of Operations
Comparison of the Years Ended March 31, 2023 and 2022
The following table summarizes our results of operations for the years ended March 31, 2023 and 2022 (in thousands, except percentages):
Revenues
Research and development
Selling, general and administrative
Other income
Revenues
Year Ended March 31,
2023
2022
Increase (decrease)
$
%
$
$
$
$
370 $
8,885 $
9,216 $
474 $
1,500 $
3,320 $
9,659 $
33 $
(1,130 )
5,565
(443 )
441
(75 %)
168 %
(5 %)
1,336 %
We had $0.4 million of royalty revenue for the year ended March 31, 2023, compared to $1.5 million revenue for the year ended March 31, 2022. The $1.5
million of royalty revenue for the year ended March 31, 2022 was an upfront payment related to the licensing of certain intellectual property (“IP”). The
$0.4 million of royalty revenue for the year ended March 31, 2023, was related to the sales-based royalty revenue earned from the aforementioned licensing
of IP.
Research and Development Expenses
The following table summarizes our research and development expenses for the years ended March 31, 2023 and 2022 (in thousands, except percentages):
Research and development
Non-cash stock-based compensation
Depreciation and amortization
Total research and development expenses
Year Ended March 31,
2023
2022
Increase (decrease)
$
%
$
$
8,247 $
473
165
8,885 $
2,787 $
419
114
3,320 $
5,460
54
51
5,565
196 %
13 %
45 %
168 %
Research and development expenses increased by $5.6 million, or 168%, from approximately $3.3 million for the year ended March 31, 2022 to
approximately $8.9 million for the year ended March 31, 2023, as we significantly increased research and development activities. Our full-time research
and development staff increased from an average of nine employees for the year ended March 31, 2022 to an average of fifteen employees for the year
ended March 31, 2023. Research and development activities consisted of $2.4 million in personnel related costs, $5.2 million in lab and research expenses,
$1.0 million in facility costs, and $0.3 million in consulting fees, depreciation, and other miscellaneous expenses. Of the $5.2 million in lab and research
expenses, $4.0 million relates to acquired in-process research and development ("IPR&D") of Metacrine's FXR program, related research data, and IP.
Selling, General and Administrative Expenses
The following table summarizes our selling, general and administrative expenses for the years ended March 31, 2023 and 2022 (in thousands, except
percentages):
Selling, general and administrative
Non-cash stock-based compensation
Depreciation and amortization
Total selling, general and administrative
expenses
Year Ended March 31,
2023
2022
Increase (decrease)
$
%
$
$
7,184 $
1,904
128
7,794 $
1,837
28
9,216 $
9,659 $
(610 )
67
100
(443 )
(8 %)
4 %
357 %
(5 %)
Selling, general and administrative expenses decreased approximately $0.4 million, or 5%, from $9.7 million for the year ended March 31, 2022 to
approximately $9.2 million for the year ended March 31, 2023. Overall, the decrease year over year is due to a significant decrease in general corporate
costs, most notably legal costs, as we were involved in litigation in fiscal 2022 which was resolved by the end of fiscal 2022. For the year ended March 31,
2022, we had an average of four full-time employees, which
30
increased to an average of five full-time employees for the year ended March 31, 2023. Year over year, we had an increase in personnel related costs of
approximately $0.4 million, an increase in consulting costs of approximately $0.3 million, an increase in depreciation and amortization of approximately
$0.1 million. These increases were offset by a $1.2 million decrease in general corporate costs, mostly attributable to a decrease in legal costs related to
litigation regarding patent enforcement that occurred and ended in fiscal 2022.
Other Income (Expense)
Other income was $0.5 million and less than $0.1 million for the years ended March 31, 2023 and March 31, 2022, respectively. For the year ended March
31, 2023, interest income was approximately $0.5 million, due to higher interest rates compared to prior years. For the year ended March 31, 2022, other
income consisted of a sale of a bioprinter asset to an academic research institution as well as interest income.
Financial Condition, Liquidity and Capital Resources
Going forward, we intend to leverage our proprietary technology platform to develop therapeutic drugs. Our initial plan is to focus on IBD, including CD
and UC with a goal of broadening our work into additional therapeutic areas over time.
The accompanying consolidated financial statements have been prepared on the basis that we are a going concern, which contemplates, among other things,
the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2023, we had cash and cash equivalents of
approximately $15.3 million and an accumulated deficit of $325.0 million. As of March 31, 2022, we had cash and cash equivalents of $28.7 million and an
accumulated deficit of $307.7 million. We had negative cash flows from operations of $12.4 million and $8.5 million for the years ended March 31, 2023
and 2022, respectively.
As of March 31, 2023, we had total current assets of approximately $17.0 million and current liabilities of approximately $3.7 million, resulting in working
capital of $13.3 million. At March 31, 2022, we had total current assets of approximately $29.5 million and current liabilities of approximately $1.4
million, resulting in working capital of $28.1 million.
The following table sets forth a summary of the primary sources and uses of cash for the years ended March 31, 2023 and 2022 (in thousands):
Net cash (used in) provided by:
Operating activities
Investing activities
Financing activities
Net decrease in cash, cash equivalents, and restricted cash
Operating activities
Year Ended March 31,
2023
2022
$
$
$
(12,408 )
(966 )
—
(13,374 )
$
(8,453 )
(409 )
205
(8,657 )
Net cash used in operating activities was approximately $12.4 million and $8.5 million for the years ended March 31, 2023 and 2022, respectively. The
$3.8 million increase in operating cash usage, for the year ended March 31, 2023, can be attributed primarily to an increase in our research and
development activities. Operating cash usage includes $2.0 million of cash outflows for acquired IPR&D of Metacrine's FXR drug compound, related
research data, and IP.
Investing activities
Net cash used in investing activities was $1.0 million and $0.4 million for the years ended March 31, 2023 and 2022, respectively. The net cash used in
investing activities for the year ended March 31, 2023 was attributed to $0.4 million of fixed asset purchases, $0.7 million of purchases of equity securities,
net of sales, which was slightly offset by $0.1 million of investment income. The net cash used in investing activities for the year ended March 31, 2022
was related to the purchase of fixed assets.
Financing activities
Net cash provided by financing activities was zero and $0.2 million for the years ended March 31, 2023 and 2022, respectively. The net cash provided for
the year ended March 31, 2022, was primarily driven by at-the-market ("ATM") share offerings. Refer to “Operations funding requirements” below for
further information regarding financing activities.
31
Operations funding requirements
Through March 31, 2023, we have financed our operations primarily through the sale of common stock through public and ATM offerings, the private
placement of equity securities, from revenue derived from the licensing of intellectual property, products and research-based services, grants, and
collaborative research agreements, and from the sale of convertible notes.
Our ongoing cash requirements include research and development expenses, compensation for personnel, consulting fees, legal and accounting support,
insurance premiums, facilities, maintenance of our intellectual property portfolio, license and collaboration agreements, listing on the Nasdaq Capital
Market, and other miscellaneous fees to support our operations. We expect our total operating expense for the fiscal year ending March 31, 2024 to be
between $12.0 million and $14.0 million. Based on our current operating plan and available cash resources, we will need substantial additional funding to
support future operating activities. We have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt about
our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying consolidated
financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern.
We previously had an effective shelf registration statement on Form S-3 (File No. 333-222929) (the “2018 Shelf”) that registered $100.0 million of
common stock, preferred stock, warrants and units, or any combination of the foregoing, that was set to expire on February 22, 2021. On January 19, 2021,
we filed a shelf registration statement on Form S-3 (File No. 333-252224) to register $150.0 million of common stock, preferred stock, debt securities,
warrants and units, or any combination of the foregoing (the “2021 Shelf”) and a related prospectus. The 2021 Shelf registration statement was declared
effective by the SEC on January 29, 2021 and replaced the 2018 Shelf at that time.
On March 16, 2018, we entered into a Sales Agreement (“Sales Agreement”) with H.C. Wainwright & Co., LLC and Jones Trading Institutional Services
LLC (each an “Agent” and together, the “Agents”). On January 29, 2021, we filed a prospectus supplement to the 2021 Shelf (the “ATM Prospectus
Supplement”), pursuant to which we could offer and sell, from time to time through the Agents, shares of our common stock in ATM sales transactions
having an aggregate offering price of up to $50.0 million. Any shares offered and sold are issued pursuant to our 2021 Shelf.
During the year ended March 31, 2023, we sold no shares of common stock in ATM offerings. As of March 31, 2023, we have sold an aggregate of
1,580,862 shares of common stock in ATM offerings under the ATM Prospectus Supplement, for gross proceeds of approximately $21.7 million. As of
March 31, 2023, there was approximately $100.0 million available in future offerings under the 2021 Shelf, and approximately $28.3 million available for
future offerings through our ATM program under the ATM Prospectus Supplement.
Having insufficient funds may require us to relinquish rights to our technology on less favorable terms than we would otherwise choose. Failure to obtain
adequate financing could adversely affect our operations. If we raise additional funds from the issuance of equity securities, substantial dilution to our
existing stockholders would likely result. If we raise additional funds by incurring debt financing, the terms of the debt may involve significant cash
payment obligations as well as covenants and specific financial ratios that may restrict our ability to operate our business. We cannot be sure that additional
financing will be available if and when needed, or that, if available, we can obtain financing on terms favorable to our stockholders. Any failure to obtain
financing when required will have a material adverse effect on our business, operating results, and financial condition.
As of March 31, 2023, we had 8,716,906 total issued and outstanding shares of common stock.
On October 12, 2022, our stockholders and the Board of Directors ("Board") approved the 2022 Plan, and it became effective on that date. The 2022 Plan
replaced the 2012 Plan on the effective date. Upon the effective date, we ceased granting awards under the 2012 Plan and any shares remaining available
for future issuance under the 2012 Plan were cancelled and are no longer available for future issuance. The 2012 Plan continues to govern awards
previously granted under it. At the time the Board approved the 2022 Plan, an aggregate of 1,363,000 shares of our common stock was initially reserved for
issuance under the 2022 Plan. We committed to reducing the new 2022 Plan share reserve by the number of shares that were granted under the 2012 Plan
and the Inducement Plan between July 25, 2022 and October 12, 2022. From July 25, 2022 to October 12, 2022, we issued 126,262 shares of common
stock under the 2012 Plan. As a result, the number of shares reserved for future issuance under the 2022 Plan is 1,236,738 shares of common stock as of
March 31, 2023. We also committed to reducing the aggregate number of shares of common stock issuable pursuant to the Inducement Plan from 750,000
shares to 51,000 shares (which includes 50,000 shares of its common stock issuable pursuant to an outstanding option to purchase common stock with an
exercise price of $2.75 per share, leaving only 1,000 shares available for future issuance under the Inducement Plan) and the share reserve was reduced
effective October 12, 2022.
The 2022 Plan provides for the issuance of up to 1,236,738 shares of our common stock, of which 1,071,471 shares remain available for issuance as of
March 31, 2023, to executive officers, directors, advisory board members, employees and consultants. The 2012 Plan, as amended, provided for the
issuance of up to 2,327,699 shares of our common stock, of which no shares remain available for issuance as of March 31, 2023. Additionally, 75,000
shares of common stock have been reserved for issuance under the ESPP, of which 58,426 shares remain available for future issuance as of March 31,
2023. Finally, 51,000 shares of common stock have been reserved for issuances under our Inducement Plan, of which 1,000 remain available for future
issuance as of March 31, 2023. In
32
aggregate, issued and outstanding common stock and shares issuable under outstanding equity awards or reserved for future issuance under the 2022 Plan,
the 2012 Plan, the Inducement Plan, and the ESPP total 11,426,737 shares of common stock as of March 31, 2023.
Effect of Inflation and Changes in Prices
Management does not believe that inflation and changes in price will have a material effect on our operations.
Recent Accounting Pronouncements
For information regarding recently adopted and issued accounting pronouncements, see “Note 13. Recent Accounting Pronouncements” in the Notes to the
Consolidated Financial Statements contained in this Annual Report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We invest our excess cash in short term, high quality interest bearing securities including US government and US government agency securities and high-
grade corporate commercial paper. The primary objective of our investment activities is to preserve our capital for the purpose of funding our operations.
To achieve these objectives, our investment policy allows us to maintain a portfolio of cash, cash equivalents, and short-term investments in a variety of
securities, including money market funds. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general
level of U.S. interest rates, particularly because the majority of our investments are comprised of cash and cash equivalents. We currently do not hedge
interest rate exposure. Due to the nature of our short-term investments, we believe that we are not subject to any material market risk exposure. We have
limited foreign currency risk exposure as our business operates primarily in U.S. dollars. We do not have significant foreign currency nor any other
derivative financial instruments.
33
Item 8. Consolidated Financial Statements.
Organovo Holdings, Inc.
Index to Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of March 31, 2023 and 2022
Consolidated Statements of Operations and Other Comprehensive Loss for the years ended March 31, 2023 and 2022
Consolidated Statements of Stockholders’ Equity for the years ended March 31, 2023 and 2022
Consolidated Statements of Cash Flows for the years ended March 31, 2023 and 2022
Notes to Consolidated Financial Statements
Page
Number
F-2
F-3
F-4
F-5
F-6
F-7
F-1
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of:
Organovo Holdings, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Organovo Holdings, Inc. (“Company”) as of March 31, 2023 and 2022, and the related
consolidated statements of operations and other comprehensive loss, stockholders’ equity, and cash flows for each of the two years in the period ended
March 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all
material respects, the financial position of the Company as of March 31, 2023 and 2022, and the results of its operations and its cash flows for each of the
two years in the period ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has incurred recurring losses and negative cash flows from operations and is dependent on additional financing to fund
operations. These conditions raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also
described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules
and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor
were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of
internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and
performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as
evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated
to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially
challenging, subjective, or complex judgments. We determined that there were no critical audit matters.
/s/ Mayer Hoffman McCann P.C.
We have served as the Company's auditor since 2011.
San Diego, California
July 13, 2023
F-2
ORGANOVO HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands except for share and per share data)
March 31, 2023
March 31, 2022
Assets
Current Assets
Cash and cash equivalents
Accounts receivable
Investment in equity securities
Prepaid expenses and other current assets
Total current assets
Fixed assets, net
Restricted cash
Operating lease right-of-use assets
Prepaid expenses and other assets, net
Total assets
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable
Accrued expenses
Operating lease liability, current portion
Total current liabilities
Operating lease liability, net of current portion
Total liabilities
Commitments and Contingencies
Stockholders' Equity
Common stock, $0.001 par value; 200,000,000 shares authorized,
8,716,906 and 8,710,627 shares issued and outstanding at
March 31, 2023 and 2022, respectively
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income
Treasury stock, 46 shares at cost
Total stockholders' equity
Total Liabilities and Stockholders' Equity
$
$
$
$
15,301
152
706
889
17,048
902
143
1,705
515
20,313
331
2,848
492
3,671
1,313
4,984
9
340,317
(324,998 )
2
(1 )
15,329
20,313
$
$
$
$
28,675
—
—
858
29,533
662
143
2,153
805
33,296
415
489
479
1,383
1,704
3,087
9
337,940
(307,739 )
—
(1 )
30,209
33,296
The accompanying notes are an integral part of these consolidated financial statements.
F-3
ORGANOVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE LOSS
(in thousands except for share and per share data)
Revenues
Royalty revenue
Total Revenues
Research and development expenses
Selling, general, and administrative expenses
Total costs and expenses
Loss from Operations
Other Income (Expense)
Loss on fixed asset disposals
Gain on investment in equity securities
Interest income
Other income
Total Other Income
Income Tax Expense
Net Loss
Other comprehensive income:
Unrealized gain on available-for-sale debt securities
Comprehensive loss
Net loss per common share—basic and diluted
Weighted average shares used in computing net loss per common share—basic
and diluted
Year Ended
March 31,
2023
Year Ended
March 31,
2022
$
$
$
$
370
370
8,885
9,216
18,101
(17,731 )
(9 )
29
454
—
474
(2 )
(17,259 )
2
(17,257 )
(1.98 )
$
$
$
$
1,500
1,500
3,320
9,659
12,979
(11,479 )
—
—
8
25
33
(2 )
(11,448 )
—
(11,448 )
(1.32 )
8,713,032
8,703,596
The accompanying notes are an integral part of these consolidated financial statements.
F-4
ORGANOVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands)
Common Stock
Treasury Stock
Shares
Amoun
t
Additional
Paid-in Capital
Shares
Amou
nt
Accumulated
Deficit
(1 ) $ (296,291 )
Accumulated
Other
Comprehensi
ve Income
Balance at March 31, 2021
8,671 $
9 $
335,479 — $
Issuance of common stock under employee and
director stock option, RSU and purchase plans
Stock-based compensation expense
Issuance of common stock from public offering,
net
Net loss
Balance at March 31, 2022
Issuance of common stock under employee and
director stock option, RSU and purchase plans
Stock-based compensation expense
Net loss
Unrealized gain on available-for-sale debt
securities
Balance at March 31, 2023
13 —
— —
(46 ) — —
2,256 — —
—
—
27 —
— —
9 $
8,711 $
251 — —
— — —
—
(11,448 )
(1 ) $ (307,739 )
337,940 — $
6 —
— —
— —
— — —
2,377 — —
— — —
—
—
(17,259 )
— —
9 $
8,717 $
— — —
—
(1 ) $ (324,998 ) $
340,317 — $
The accompanying notes are an integral part of these consolidated financial statements.
F-5
Total
39,196
(46 )
2,256
— $
—
—
—
—
— $
251
(11,448 )
30,209
—
—
—
—
2,377
(17,259 )
2
2 $
2
15,329
ORGANOVO HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Cash Flows From Operating Activities
Net loss
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on investment in equity securities
Loss on disposal of fixed assets
Accretion on investments
Depreciation and amortization
Stock-based compensation
Increase (decrease) in cash resulting from changes in:
Accounts receivable
Prepaid expenses and other assets
Accounts payable
Accrued expenses
Operating right-of-use asset and lease liability, net
Net cash used in operating activities
Cash Flows From Investing Activities
Purchases of fixed assets
Purchases of investments
Maturities of investments
Purchases of equity securities
Proceeds from sales of equity securities
Net cash used in investing activities
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net
Employee taxes paid related to net share settlement of equity awards
Net cash provided by financing activities
Net Decrease in Cash, Cash Equivalents, and Restricted Cash
Cash, cash equivalents, and restricted cash at beginning of period
Cash, cash equivalents, and restricted cash at end of period
Reconciliation of cash, cash equivalents, and restricted cash to the
consolidated balance sheets
Cash and cash equivalents
Restricted cash
Total cash, cash equivalents and restricted cash
Supplemental Disclosure of Cash Flow Information:
Income taxes paid
Operating lease liabilities arising from obtaining right-of-use assets
Purchases of fixed assets in accounts payable
Year Ended
March 31, 2023
Year Ended
March 31, 2022
$
(17,259 ) $
(11,448 )
(29 )
9
(105 )
293
2,377
(152 )
177
(148 )
2,359
70
(12,408 )
(396 )
(9,893 )
10,000
(1,061 )
384
(966 )
—
—
—
(13,374 )
28,818
15,444
$
15,301
143
15,444
$
$
2
—
64
$
$
$
—
—
—
142
2,256
—
384
134
49
30
(8,453 )
(409 )
—
—
—
—
(409 )
251
(46 )
205
(8,657 )
37,475
28,818
28,675
143
28,818
2
2,301
—
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
F-6
Organovo Holdings, Inc.
Notes to Consolidated Financial Statements
Note 1. Description of Business and Summary of Significant Accounting Policies
Nature of operations and basis of presentation
Organovo Holdings, Inc. (“Organovo Holdings,” “Organovo,” and the “Company”) is a biotechnology company that focuses on building high fidelity, 3D
tissues that recapitulate key aspects of human disease. The Company uses these models to identify gene targets responsible for driving the disease and
intends to initiate drug discovery programs around these validated targets. The Company is initially focusing on the intestine and has ongoing 3D tissue
development efforts in ulcerative colitis (“UC”) and Crohn’s disease (“CD”). The Company intends to add additional tissues/diseases/targets to its portfolio
over time. In line with these plans, the Company is building upon both its external and in house scientific expertise, which will be essential to its drug
development effort.
The Company uses its proprietary technology to build functional 3D human tissues that mimic key aspects of native human tissue composition,
architecture, function and disease. Organovo’s advances include cell type-specific compartments, prevalent intercellular tight junctions, and the formation
of microvascular structures. Management believes these attributes can enable critical complex, multicellular disease models that can be used to develop
clinically effective drugs across multiple therapeutic areas.
The Company’s NovoGen Bioprinters® are automated devices that enable the fabrication of 3D living tissues comprised of mammalian cells. The Company
believes that the use of its bioprinting platform as well as complementary 3D technologies will allow it to develop an understanding of disease biology that
leads to validated novel drug targets and therapeutics to those targets to treat disease.
The majority of the Company’s current focus is in inflammatory bowel disease (“IBD”), including CD and UC. The Company is creating high fidelity
disease models, leveraging its prior work including the work found in its peer-reviewed publication on bioprinted intestinal tissues (Madden et al.
Bioprinted 3D Primary Human Intestinal Tissues Model Aspects of Native Physiology and ADME/Tox Functions. iScience. 2018 Apr 27;2:156-167. doi:
10.1016/j.isci.2018.03.015.) The Company’s current understanding of intestinal tissue models and IBD disease models leads it to believe that it can create
models that provide greater insight into the biology of these diseases than are generally currently available. Using these disease models, the Company
intends to identify and validate novel therapeutic targets. After finding therapeutic drug targets, the Company intends to focus on developing novel small
molecule, antibody, or other therapeutic drug candidates to treat the disease, and advance these novel drug candidates towards an Investigational New Drug
(“IND”) filing and potential future clinical trials.
In March of 2023, the Company entered into and closed an asset purchase agreement with Metacrine, Inc to acquire their farnesoid X receptor ("FXR")
program. FXR is a mediator of gastrointestinal ("GI") and liver diseases. FXR agonism has been tested in a variety of preclinical models of IBD. The
acquired program contains two clinically tested compounds and over 2,000 discovery or preclinical compounds.
The Company expects to broaden its work into additional therapeutic areas over time and is currently exploring specific tissues for development. In the
Company’s work to identify the areas of interest, it evaluates areas that might be better served with 3D disease models than currently available models as
well as the potential commercial opportunity.
Except where specifically noted or the context otherwise requires, references to “Organovo Holdings”, “the Company”, and “Organovo” in these notes to
the consolidated financial statements refers to Organovo Holdings, Inc. and its wholly owned subsidiaries, Organovo, Inc., and Opal Merger Sub, Inc.
Liquidity and Going Concern
The accompanying consolidated financial statements have been prepared on the basis that we are a going concern, which contemplates, among other things,
the realization of assets and satisfaction of liabilities in the normal course of business. As of March 31, 2023, the Company had cash and cash equivalents
of approximately $15.3 million, restricted cash of approximately $0.1 million and an accumulated deficit of approximately $325.0 million. The restricted
cash was pledged as collateral for a letter of credit that the Company is required to maintain as a security deposit under the terms of the lease agreements
for its facilities. The Company also had negative cash flows from operations of approximately $12.4 million during the year ended March 31, 2023.
Through March 31, 2023, the Company has financed its operations primarily through the sale of common stock through public and at-the-market (“ATM”)
offerings, the private placement of equity securities, from revenue derived from the licensing of intellectual property, products and research-based services,
grants, and collaborative research agreements, and from the sale of convertible notes. During the year ended March 31, 2023, the Company issued zero
shares of its common stock through its ATM facility.
Based on our current operating plan and available cash resources, we will need substantial additional funding to support future operating activities. We
have concluded that the prevailing conditions and ongoing liquidity risks faced by us raise substantial doubt
F-7
about our ability to continue as a going concern for at least one year following the date these financial statements are issued. The accompanying
consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. As the
Company continues its operations and is focusing its efforts on drug discovery and development, the Company will need to raise additional capital to
implement this business plan. The Company cannot predict with certainty the exact amount or timing for any future capital raises. The Company will seek
to raise additional capital through debt or equity financings, or through some other financing arrangement. However, the Company cannot be sure that
additional financing will be available if and when needed, or that, if available, it can obtain financing on terms favorable to its stockholders. Any failure to
obtain financing when required will have a material adverse effect on the Company’s business, operating results, and financial condition.
Use of estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make
estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. On an
ongoing basis, management reviews these estimates and assumptions.
Investments
Investments consist of investments in debt securities and investments in equity securities.
Investments in debt securities consist of investments in U.S. Treasury bills. As of March 31, 2023, all investments that have original maturities of three
months or less are classified as cash equivalents on the Consolidated Balance Sheets. Prior to March 31, 2023, the Company classified certain investments
as held-to-maturity. All investments previously classified as held-to-maturity matured prior to March 31, 2023. As of March 31, 2023, all investments are
classified as available-for-sale, as the sale of such investments may be required prior to maturity to implement management strategies. Available-for-sale
debt securities are recorded at fair value. Any unrealized gains and losses are included in accumulated other comprehensive income as a component of
stockholders' equity until realized. As U.S. Treasury bills are risk-free, any declines in fair value are considered temporary.
Investments in equity securities consist of investments in the common stock of entities traded in active markets. The Company does not have the ability to
exercise significant influence over any entities. Therefore, initial investments are recorded at cost, and are remeasured at fair value as of the balance sheet
date. Any gains or losses resulting from the change in fair value are recorded in net income. The investments in equity securities are classified as current
assets.
Fair value measurement
Financial assets and liabilities are measured at fair value, which is defined as the exchange price that would be received for an asset or paid to transfer a
liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the
measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable
inputs. The following is a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable,
that may be used to measure fair value:
•
•
•
Level 1 — Quoted prices in active markets for identical assets or liabilities.
Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities;
quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for
substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or
liabilities.
Financial instruments
For certain of the Company’s financial instruments, including cash and cash equivalents, prepaid expenses and other assets, accounts payable, accrued
expenses, the carrying amounts are generally considered to be representative of their respective fair values because of the short-term nature of those
instruments.
Cash and cash equivalents
The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.
F-8
Restricted cash
As of March 31, 2023 and 2022, the Company had approximately $0.1 million of restricted cash, respectively, deposited with a financial institution. The
entire amount was held in certificates of deposit to support a letter of credit agreement related to the Company’s facility leases entered into in November
2020 and amended in November 2021.
Fixed assets and depreciation
Fixed assets are carried at cost. Expenditures that extend the life of the asset are capitalized and depreciated. Depreciation and amortization are provided
using the straight-line method over the estimated useful lives of the related assets or, in the case of leasehold improvements, over the lesser of the useful
life of the related asset or the remaining lease term. The estimated useful lives of the fixed assets range between one and seven years.
Impairment of long-lived assets
In accordance with authoritative guidance, the Company reviews its long-lived assets, including fixed assets and other assets, for impairment whenever
events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. To determine recoverability of its long-
lived assets, the Company evaluates whether future undiscounted net cash flows will be less than the carrying amount of the assets and adjusts the carrying
amount of its assets to fair value. Management has determined that no impairment of long-lived assets occurred as of March 31, 2023 and 2022.
Research and development
Research and development expenses, including direct and allocated expenses, consist of independent research and development costs, as well as costs
associated with sponsored research and development. Research and development costs are expensed as incurred.
Acquired in-process research and development
The Company has acquired drug candidates in development. The costs to acquire a drug candidate are immediately expensed as acquired in-process
research and development, provided that the drug candidate has no alternative future use. Acquired in-process research and development expenses are
included in total research and development expenses on the Consolidated Statements of Operations and Other Comprehensive Loss.
FXR Program
In March 2023, the Company acquired Metacrine's FXR program for $4.0 million. The FXR program was determined to have no alternative future use, and
therefore was considered acquired in-process research and development and fully expensed. For the year ended March 31, 2023, the Company paid a $2.0
million upfront payment, and the remaining $2.0 million will be paid in the next fiscal year (see detail in "Note 4. Accrued Expenses") upon final transfer
of the drug compounds, related data, and IP.
Income taxes
Deferred income taxes are recognized for the tax consequences in future years for differences between the tax basis of assets and liabilities and their
financial reporting amounts at each year end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are
expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
Income tax expense is the combination of the tax payable for the year and the change during the year in deferred tax assets and liabilities. The Company’s
policy regarding uncertainty in income taxes is pursuant to ASC 740-10. Interest and penalties that would be assessed in relation to the settlement value of
unrecognized tax benefits is recognized as a component of income tax expense.
Revenue recognition
The Company has generated revenues from payments received from licensing intellectual property.
The Company has entered into a license agreement with a company that includes the following: (i) non-refundable upfront fees and (ii) royalties based on
specified percentages of net product sales, if any. At the initiation of the agreement, the Company has analyzed whether it results in a contract with a
customer under Topic 606.
The Company has considered a variety of factors in determining the appropriate estimates and assumptions under these arrangements, such as whether the
Company is a principal vs. agent, whether the elements are distinct performance obligations, whether there are determinable stand-alone prices, and
whether any licenses are functional or symbolic. The Company has evaluated each performance obligation to determine if it can be satisfied and recognized
as revenue at a point in time or over time. Typically, non-refundable
F-9
upfront fees have been considered fixed, while sales-based royalty payments have been identified as variable consideration which must be evaluated to
determine if it has been constrained and, therefore, excluded from the transaction price. Please refer to “Note 5: Collaborative Research, Development, and
License Agreements” for further information.
Stock-based compensation
The Company accounts for stock-based compensation in accordance with the ASC Topic 718, Compensation — Stock Compensation, which establishes
accounting for equity instruments exchanged for employee and non-employee services. Under such provisions, stock-based compensation cost is measured
at the grant date, based on the calculated fair value of the award (determined using either the Black-Scholes or Monte Carlo option-pricing models,
depending on the complexity of the equity grant), and is recognized as an expense, under the straight-line method, over the employee’s requisite service
period (generally the vesting period of the equity grant).
Comprehensive income (loss)
Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner
sources. The Company is required to record all components of comprehensive income (loss) in the financial statements in the period in which they are
recognized. Net income (loss) and other comprehensive income (loss), including unrealized gains and losses on investments, are reported, net of their
related tax effect, to arrive at comprehensive income (loss).
Net loss per share
Basic and diluted net loss per share has been computed using the weighted-average number of shares of common stock outstanding during the period. The
weighted-average number of shares used to compute diluted loss per share excludes any assumed exercise of stock options and warrants, shares reserved
for purchase under the Company’s 2016 Employee Stock Purchase Plan (“ESPP”), the assumed release of restriction of restricted stock units (“RSUs”), and
shares subject to repurchase as the effect would be anti-dilutive. No dilutive effect was calculated for the years ended March 31, 2023 and 2022 as the
Company reported a net loss for each respective period and the effect would have been anti-dilutive.
Common stock equivalents excluded from computing diluted net loss per share were approximately 1.6 million shares and 1.2 million shares for the years
ended March 31, 2023 and 2022, respectively.
Note 2. Investments and fair value measurement
Investments in debt securities
As of March 31, 2023, the Company held $4.9 million of investments in debt securities (which are included in the $15.3 million of cash and cash
equivalents). For the year ended March 31, 2023, there was $0.3 million of interest income related to the investments in debt securities. There were less
than $0.1 million of unrealized gains recorded on investments in debt securities for the year ended March 31, 2023. As the investments in debt securities
consist of U.S. Treasury bills from active markets, the fair value is measured using level 1 inputs.
The following table summarizes the Company's investments in debt securities that are measured at fair value as of March 31, 2023 (in thousands):
As of March 31, 2023
Investment in debt securities
Investments in equity securities
Amortized costs basis
Gross unrealized gains
Gross unrealized losses
Fair value
$
4,943
$
2
$
—
$
4,945
For the year ended March 31, 2023, there was $1.1 million of equity securities purchased, and $0.4 million of equity securities sold. As of March 31, 2023,
the fair value of investment in equity securities was $0.7 million, resulting in less than a $0.1 million
F-10
unrealized gain on investment in equity securities. As the investments in equity securities consist of common stock from active markets, the fair value is
measured using level 1 inputs.
The following table presents the activity for investments in equity securities measured at fair value for the year ended March 31, 2023 (in thousands):
Balance at March 31, 2022
Purchases at cost
Sales
Gain on investment in equity securities
Balance at March 31, 2023
Note 3. Fixed Assets
Fixed assets consisted of the following (in thousands):
Laboratory equipment
Furniture and fixtures
Computer software and equipment
Fixed Assets, gross
Less accumulated depreciation
Fixed Assets, net
Investment in Equity Securities
(in thousands)
$
$
March 31,
2023
March 31,
2022
$
$
1,575
66
537
2,178
(1,276 )
902
$
$
—
1,061
(384 )
29
706
1,171
38
524
1,733
(1,071 )
662
As of March 31, 2023 and 2022, all of the Company’s fixed assets were active and in use. Depreciation expense for the years ended March 31, 2023 and
2022 was approximately $211,000 and $128,000, respectively.
Note 4. Accrued Expenses
Accrued expenses consisted of the following (in thousands):
Accrued compensation
Accrued legal and professional fees
Acquired in-process research and development
Other accrued expenses
March 31,
2023
March 31,
2022
$
$
609
193
2,000
46
2,848
$
$
434
27
—
28
489
Note 5. Collaborative Research, Development, and License Agreements
License Agreements
From June 2021 to February 2022, certain patents owned or sublicensed by the Company became the subject of IPR proceedings filed by Cellink AB and
its subsidiaries (collectively, “BICO Group AB”). The Company and BICO Group AB were also engaged in litigation regarding patent infringement during
the same time period. On February 22, 2022, the Company and BICO Group AB signed a settlement and patent license agreement (“License Agreement”)
to close all matters noted above. In addition to closing all legal matters and patent disputes noted above, as part of the agreement, the Company agreed to
grant a non-exclusive license to BICO Group AB to use the Company’s aforementioned patents for its business operations of manufacturing and selling
bioprinters as well as bioinks. The Company concluded that the nature of the license granted represents functional intellectual property.
As part of the License Agreement, BICO Group AB agreed to pay the Company a one time, nonrefundable upfront fee of $1,500,000. Based on Topic 606,
the Company concluded that the performance obligation related to this upfront fee consisted of the Company
F-11
filing stipulations of dismissal of all legal matters noted above, as well as the Company granting the non-exclusive license of the aforementioned patents
within five days of receiving the upfront payment. The conditions of the performance obligation were satisfied, and therefore the Company recognized
revenue of $1,500,000 on February 22, 2022, the executed date of the License Agreement.
Additionally, as part of the License Agreement, BICO Group AB agreed to pay the Company ongoing sales-based royalties (based on percentages of BICO
Group AB’s net sales) for the use of the granted license. The sales-based royalties became effective beginning on February 22, 2022, the effective date of
the License Agreement, and continue until the expiration of the last surviving licensed patent. As the sales-based royalties are required to be paid 45 days
after the end of every quarter, there is variable consideration that must be estimated to determine royalty revenue within a given reporting period. Sales-
based royalties that occurred prior to fiscal 2023 were recognized as revenue on a one quarter lag due to constraints on the estimates of variable
consideration. During fiscal 2023, the Company began to estimate sales-based royalties earned each quarter. For the year ended March 31, 2023, the
Company recorded $370,000 of royalty revenue based on sales-based royalties from the License Agreement. This recognized revenue is related to sales-
based royalties earned from February 22, 2022 through March 31, 2023.
Also as part of the License Agreement, certain patents involved in the agreement are sublicensed by the Company from the University of Missouri and
Clemson University. See below for further information.
University of Missouri
In March 2009, the Company entered into a license agreement with the Curators of the University of Missouri to in-license certain technology and
intellectual property relating to self-assembling cell aggregates and to intermediate cellular units. The Company received the exclusive worldwide rights to
commercialize products comprising this technology for all fields of use. The Company is required to pay the University of Missouri royalties ranging from
1% to 3% of net sales of covered tissue products, and of the fair market value of covered tissues transferred internally for use in the Company’s commercial
service business, depending on the level of net sales achieved by the Company each year. The Company paid the minimum annual royalty of $25,000 in
January 2022 for its respective calendar year, which is credited against royalties due during the subsequent twelve months. No payments have been made in
excess of the minimum annual royalties in the years ended March 31, 2023 and 2022.
The license agreement with the University of Missouri also includes an additional sales royalty of 3% of all revenue received from a sublicensee, when
such sublicense is entered pursuant to settlement of litigation. Such revenue shall include, but not be limited to, all option fees, license issue fees (upfront
payments), license maintenance fees, equity, and all royalty payments. Such revenue shall not include research funding provided to licensee by sublicensee.
However, per the agreement, in the event that the Company defends the technology by litigation, it can offset any royalties due by legal expenses incurred.
As of March 31, 2023, the Company’s legal expenses exceeded royalties owed from the upfront payment and sales-based royalties related to the License
Agreement. Therefore, no royalty expense to the University of Missouri was recorded for the year ended March 31, 2023. No royalty expense related to
sales-based royalties has been recorded to date.
On December 5, 2022, the Company amended the license agreement with the University of Missouri, whereas the Company agreed to pay a single, upfront
payment of $50,000 to the University of Missouri in exchange for the aforementioned licensed intellectual property to be fully paid up by the Company. As
a result, the Company will continue to have rights to the licensed intellectual property until its expiration, but will no longer owe minimum annual royalty
payments, royalty payments based on net sales, or any other payments (other than patent annuities and any prosecution costs) in the future.
Clemson University
In May 2011, the Company entered into a license agreement with Clemson University Research Foundation to in-license certain technology and intellectual
property relating to ink-jet printing of viable cells. The Company received the exclusive worldwide rights to commercialize products comprising this
technology for all fields of use. The Company is required to pay the university royalties ranging from 1.5% to 3% of net sales of covered tissue products
and the fair market value of covered tissues transferred internally for use in the Company’s commercial service business, depending on the level of net sales
reached each year. The license agreement terminates upon expiration of the patents licensed, which are expected to expire in May 2024, and is subject to
certain conditions as defined in the license agreement. Minimum annual royalty payments of $20,000 were due for each of the two years beginning with
calendar 2014, and $40,000 per year beginning with calendar 2016. Royalty payments of $40,000 were made in each of the years ended March 31, 2023
and 2022. The annual minimum royalty is creditable against royalties owed during the same calendar year.
In addition to the annual royalties noted above, the University is owed 40% of all payments including but not limited to, upfront payments, license fees,
issue fees, maintenance fees, and milestone payments received from third parties, including sublicensees, in consideration for sublicensing rights to
licensed products. However, per the agreement, in the event that the Company defends the technology by litigation, it can offset any royalties due by legal
expenses incurred. As of March 31, 2023, the Company’s legal
F-12
expenses exceeded royalties owed from the upfront payment and sales-based royalties related to the License Agreement. Therefore, no royalty expense to
Clemson University was recorded for the year ended March 31, 2023. No royalty expense related to sales-based royalties has been recorded to date.
Capitalized License Fees
Capitalized license fees consisted of the following (in thousands):
License fees
Less accumulated amortization
License fees, net
March 31,
2023
March 31,
2022
$
$
114
(101 )
13
$
$
218
(124 )
94
The above license fees, net of accumulated amortization, are included in Other Assets in the accompanying consolidated balance sheets and are being
amortized over the life of the related patents. Amortization expense of licenses was approximately $82,000 and $14,000 for the years ended March 31,
2023 and 2022, respectively. At March 31, 2023, the weighted average remaining amortization period for all licenses was approximately 2 years. The
annual amortization expense of licenses for the next five years is estimated to be approximately $3,000 per year.
The Salk Institute for Biological Studies
In March 2023, the Company acquired the FXR Agonist program from Metacrine. All patent rights related to this program have been assigned to the
Company in connection with the acquisition. In addition, the Company assumed and was assigned a license agreement with the Salk Institute for
Biological Studies (hereafter “Salk”) that provides certain payments to Salk upon the successful development and commercialization of the lead compound,
FXR314. The Company is required to pay Salk royalties ranging from 1% to 1.125% of net sales of therapeutics based on FXR314. In addition, the
Company is required to make certain milestone payments based on the successful initiation and/or completion of certain development milestones, including
$500,000 within 45 days of the dosing of the first patient in a phase III clinical trial, $1,000,000 within 45 days of FDA approval of the first Licensed
Product and $1,500,000 within 45 days of the first commercial sale of a Licensed Product in the Territory. There are also reduced milestone payments
application to a second or third licensed product, if any. Should the company sublicense the a licensed product to a third party, then it must pay a 3.5% of
sublicensing revenue attributable to such a sublicense.
Note 6. Stockholders’ Equity
Preferred stock
The Company is authorized to issue 25,000,000 shares of preferred stock. There are no shares of preferred stock currently outstanding, and the Company
has no present plans to issue shares of preferred stock.
Common stock
In January 2012, the Board approved the 2012 Plan. The 2012 Plan authorized the issuance of up to 327,699 shares of common stock for awards of
incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares, and other
stock or cash awards. The Board and stockholders of the Company approved an amendment to the 2012 Plan in August 2013 to increase the number of
shares of common stock that may be issued under the 2012 Plan by 250,000 shares. In August 2015, the Board and stockholders of the Company approved
an amendment to the 2012 Plan to further increase the number of shares of common stock that may be issued under the 2012 Plan by 300,000 shares. In
July 2018, the Board and stockholders of the Company approved an amendment to the 2012 Plan to further increase the number of shares of common stock
that may be issued under the 2012 Plan by 550,000 shares. In October 2021, the Board and stockholders of the Company approved an amendment to the
2012 Plan to further increase the number of shares of common stock that may be issued under the 2012 Plan by 900,000, bringing the aggregate shares
issuable under the 2012 Plan to 2,327,699. The 2012 Plan as amended and restated became effective on July 26, 2018 and terminates ten years after such
date.
In March 2021, the Board approved the Inducement Plan. The Inducement Plan authorized the issuance of up to 750,000 shares of common stock for
awards of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock, RSUs, performance units, performance shares,
and other stock or cash awards. In February 2022, 50,000 incentive stock options were issued under the Inducement Plan.
F-13
On October 12, 2022, the Company's stockholders and the Board approved the 2022 Plan, and it became effective on that date. The 2022 Plan replaced the
2012 Plan on the effective date. Upon the effective date, the Company ceased granting awards under the 2012 Plan and any shares remaining available for
future issuance under the 2012 Plan were cancelled and are no longer available for future issuance. The 2012 Plan continues to govern awards previously
granted under it. At the time the Board approved the 2022 Plan, an aggregate of 1,363,000 shares of the Company’s common stock was initially reserved
for issuance under the 2022 Plan. The Company committed to reducing the new 2022 Plan share reserve by the number of shares that were granted under
the 2012 Plan and the Inducement Plan between July 25, 2022 and October 12, 2022. From July 25, 2022 to October 12, 2022, the Company issued
126,262 shares of its common stock under the 2012 Plan. As a result, the number of shares reserved for future issuance under the 2022 Plan is 1,236,738
shares of common stock. The Company also committed to reducing the aggregate number of shares of its common stock issuable pursuant to the
Inducement Plan from 750,000 shares to 51,000 shares (which includes 50,000 shares of its common stock issuable pursuant to an outstanding option to
purchase common stock with an exercise price of $2.75 per share, leaving only 1,000 shares available for future issuance under the Inducement Plan) and
the share reserve was reduced effective October 12, 2022.
The Company previously had an effective shelf registration statement on Form S-3 (File No. 333-222929) and the related prospectus previously declared
effective by the SEC on February 22, 2018 (the “2018 Shelf”), which registered $100.0 million of common stock, preferred stock, warrants and units, or
any combination of the foregoing, that was set to expire on February 22, 2021. On January 19, 2021, the Company filed a shelf registration statement on
Form S-3 (File No. 333-252224) to register $150.0 million of the Company’s common stock, preferred stock, debt securities, warrants and units, or any
combination of the foregoing (the “2021 Shelf”) and a related prospectus. The 2021 Shelf was declared effective by the SEC on January 29, 2021 and
replaced the 2018 Shelf at that time.
On March 16, 2018, the Company entered into a Sales Agreement (“Sales Agreement”) with H.C. Wainwright & Co., LLC and Jones Trading Institutional
Services LLC (each an “Agent” and together, the “Agents”). On January 29, 2021, the Company filed a prospectus supplement to the 2021 Shelf (the
“ATM Prospectus Supplement”), pursuant to which the Company may offer and sell, from time to time through the Agents, shares of its common stock in
ATM sales transactions having an aggregate offering price of up to $50.0 million. Any shares offered and sold will be issued pursuant to the 2021 Shelf.
During the year ended March 31, 2023, the Company issued zero shares of common stock in ATM offerings under the ATM Prospectus Supplement. As of
March 31, 2023, the Company has sold an aggregate of 1,580,862 shares of common stock in ATM offerings under the ATM Prospectus Supplement, with
gross proceeds of approximately $21.7 million. As of March 31, 2023, there was approximately $100.0 million available for future offerings under the 2021
Shelf (excluding amounts available but not yet issued under the ATM Prospectus Supplement), and approximately $28.3 million available for future
offerings through the Company’s ATM program under the ATM Prospectus Supplement.
Restricted stock units
The following table summarizes the Company’s RSUs activity for the year ended March 31, 2023:
Unvested at March 31, 2022
Granted
Vested
Cancelled / forfeited
Unvested at March 31, 2023
Stock options
Number of
Shares
Weighted
Average Price
15,500
117,642
(5,425 )
—
127,717
$
$
$
$
$
10.58
1.53
11.02
—
2.22
During the year ended March 31, 2023 under both the 2022 Plan and 2012 Plan, 255,474 stock options were granted at various exercise prices, respectively.
On March 8, 2021, the Company granted 120,000 and 25,000 stock options, respectively, to its Executive Chairman and its Chief Scientific Officer under
the 2012 Plan. On October 7, 2021, the Company granted an additional 120,000 and 25,000 stock options, respectively, to the aforementioned officers.
These stock options have unique vesting criteria based on market conditions, more specifically the Company’s stock price. As these market condition based
stock options require significant estimates and assumptions to calculate their fair value, the Company engaged with valuation specialists to calculate the
fair value and requisite service periods using Monte Carlo simulations. The stock options will be expensed over their determined requisite service periods.
As of March 31, 2023, half of the aforementioned stock options were fully expensed over their requisite service periods. However, to date, none of the
stock options have vested.
F-14
On October 7, 2021, the Company granted 60,000 and 15,000 stock options, respectively, to its Executive Chairman and its Chief Scientific Officer under
the 2012 Plan. These stock options have unique vesting criteria based on specific Company performance conditions. The vesting criteria for half of these
options was relating to the Company recognizing $1.5 million of revenue per year based on three quarters of results, which was achieved on February 22,
2022 (refer to “Note 4. Collaborative Research, Development, and License Agreements” for more information). The remaining unvested options have
vesting criteria relating to the Company closing a seven-figure cash up front deal with a major pharmaceutical company. As of March 31, 2023,
management estimated there was a 0% probability of achievement, and therefore no expense has been recorded to date.
The following table summarizes stock option activity for the year ended March 31, 2023:
Outstanding at March 31, 2022
Options granted
Options canceled
Options exercised
Outstanding at March 31, 2023
Vested and Exercisable at March 31, 2023
Options
Outstanding
Weighted-
Average
Exercise Price
Aggregate
Intrinsic
Value
1,203,671
255,474
(7,928 )
—
1,451,217
559,685
$
$
$
$
$
$
7.36
2.34
5.66
—
6.49
7.07
$
$
$
$
$
$
71,650
—
—
—
38,327
472
The weighted-average remaining contractual term of stock options exercisable and outstanding at March 31, 2023 was approximately 8.00 years.
During the years ended March 31, 2023 and 2022, the Company issued zero shares of common stock upon exercise of stock options.
Employee Stock Purchase Plan
In June 2016, the Board, and in August 2016, its stockholders subsequently approved, the ESPP. The Company reserved 75,000 shares of common stock for
issuance thereunder. The ESPP permits employees after five months of service to purchase common stock through payroll deductions, limited to 15 percent
of each employee’s compensation up to $25,000 per employee per year. Shares under the ESPP are purchased at 85 percent of the fair market value at the
lower of (i) the closing price on the first trading day of the six-month purchase period or (ii) the closing price on the last trading day of the six-month
purchase period. The initial offering period commenced in September 2016. During the year ended March 31, 2023, 1,009 shares were issued under the
ESPP. At March 31, 2023, there were 58,426 shares remaining available for the purchase under the ESPP.
Common stock reserved for future issuance
Common stock reserved for future issuance consisted of the following at March 31, 2023:
Common stock issuable pursuant to options outstanding and reserved under the 2012 Plan
Common stock reserved under the 2012 Plan
Common stock issuable pursuant to options outstanding and reserved under the 2022 Plan
Common stock reserved under the 2022 Plan
Common stock reserved under the ESPP
Common stock reserved under the 2021 Inducement Equity Plan
Common stock issuable pursuant to restricted stock units outstanding under the 2012 Plan
Common stock issuable pursuant to restricted stock units outstanding under the 2022 Plan
Common stock issuable pursuant to options outstanding and reserved under the Inducement Plan
Total at March 31, 2023
F-15
1,345,664
—
55,553
1,071,471
58,426
1,000
10,075
117,642
50,000
2,709,831
Stock-based compensation expense and valuation information
Stock-based awards include stock options and RSUs under the Company's 2022 Equity Incentive Plan ("2022 Plan"), Amended and Restated 2012 Equity
Incentive Plan (“2012 Plan”), inducement awards, performance-based RSUs under an Incentive Award Performance-Based Restricted Stock Unit
Agreement, the 2021 Inducement Equity Incentive Plan (“Inducement Plan”), and rights to purchase stock under the ESPP. The Company calculates the
grant date fair value of all stock-based awards in determining the stock-based compensation expense.
Stock-based compensation expense for all stock-based awards consists of the following (in thousands):
Research and development
General and administrative
Total
Year Ended
March 31, 2023
Year Ended
March 31, 2022
$
$
473
1,904
2,377
$
$
419
1,837
2,256
The total unrecognized compensation cost related to unvested stock option grants as of March 31, 2023 was approximately $2,492,000 and the weighted
average period over which these grants are expected to vest is 2.05 years.
The total unrecognized stock-based compensation cost related to unvested RSUs (not including performance-based RSUs) as of March 31, 2023 was
approximately $210,000, which will be recognized over a weighted average period of 1.24 years.
As of March 31, 2023, there are no participants enrolled into the ESPP for the current purchase period, beginning March 1, 2023.
The Company uses either the Black-Scholes or Monte Carlo option-pricing models to calculate the fair value of stock options, depending on the complexity
of the equity grants. Stock-based compensation expense is recognized over the vesting period using the straight-line method. The assumed dividend yield
was based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses its Company-specific historical volatility
rate. The risk-free interest rate assumption was based on U.S. Treasury rates. The weighted average expected life of options was estimated using the
average of the contractual term and the weighted average vesting term of the options. The fair value of stock options was estimated at the grant date using
the following weighted average assumptions:
Dividend yield
Volatility
Risk-free interest rate
Expected life of options
Weighted average grant date fair value
Year Ended
March 31, 2023
Year Ended
March 31, 2022
—
95.53 %
3.32 %
6.00 years
1.83
$
—
95.65 %
1.30 %
5.75 years
4.73
$
The fair value of each RSU is recognized as stock-based compensation expense over the vesting term of the award. The fair value is based on the closing
stock price on the date of the grant.
The Company uses the Black-Scholes valuation model to calculate the fair value of shares issued pursuant to the ESPP. Stock-based compensation expense
is recognized over the purchase period using the straight-line method. The fair value of ESPP shares was estimated at the purchase period commencement
date using the following assumptions:
Dividend yield
Volatility
Risk-free interest rate
Expected term
Grant date fair value
Year Ended
March 31, 2023
Year Ended
March 31, 2022*
—
86.58 %
3.34 %
6 months
0.82
$
$
—
0.00 %
0.00 %
—
—
*There were no participants in the ESPP for the purchase periods March 1, 2021 – August 31, 2022 nor any participants in the ESPP for the current
purchase period (beginning March 1, 2023).
F-16
The assumed dividend yield was based on the Company’s expectation of not paying dividends in the foreseeable future. The Company uses the Company-
specific historical volatility rate as the indicator of expected volatility. The risk-free interest rate assumption was based on U.S. Treasury rates. The
expected life is the 6-month purchase period.
Note 7. Leases
After the initial adoption of ASC 842, on an on-going basis, the Company evaluates all contracts upon inception and determines whether the contract
contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of identified asset in exchange
for consideration over a period of time. If a lease is identified, the Company will apply the guidance from ASC 842 to properly account for the lease.
Operating Leases
From October 2019 to July 2021, the Company rented office space in Solana Beach, California. This agreement was a month-to-month contract and could
be terminated at-will by either party at any time. As such, the Company concluded that this agreement did not contain a lease and was expensed as incurred
(referred to as “rent expense”). Monthly rental payments were approximately $4,000 per month.
On November 23, 2020, the Company entered into two lease agreements, pursuant to which the Company temporarily leased approximately 3,212 square
feet of lab and office space (the “Temporary Lease”) in San Diego and permanently leased approximately 8,051 square feet of office space (the “Permanent
Lease”) in San Diego once certain tenant improvements for the Company’s permanent premises were completed by the landlord and the premises were
ready for occupancy. Additionally, on November 17, 2021, the Permanent Lease was amended to add an additional 2,892 square feet of office space in the
same building. The Temporary Lease commenced on November 27, 2020 and served as temporary premises until the Permanent Lease was ready for
occupancy. The Permanent Lease commenced on December 17, 2021 and is intended to serve as the Company’s permanent premises for approximately
sixty-two months. Monthly rental payments are approximately $40,900 with 3% annual escalators.
The Company determined that the Temporary Lease is considered a short term lease under ASC 842 and therefore elected an accounting policy for short
term leases to recognize lease payments as an expense on a straight-line basis over the lease term (referred to as “short term lease expense”). Variable lease
expenses related to the short term lease, such as payments for additional monthly fees to cover the Company’s share of certain facility expenses (common
area maintenance, or CAM) are expensed as incurred.
The Company determined that the Permanent Lease is considered an operating lease under ASC 842, and therefore upon the lease commencement date of
December 17, 2021, recognized lease liabilities and corresponding right-of-use assets of $2.3 million. The Company aggregates all lease and non-lease
components for each class of underlying assets into a single lease component. As the Permanent Lease did not have a discount rate implicit in the lease, the
Company estimated its incremental borrowing rate to discount the lease payments based on information available at the lease commencement. The
Company records operating lease expense on a straight-line basis over the life of the lease (referred to as “operating lease expense”). Variable lease
expenses associated with the Company’s leases, such as payments for additional monthly fees to cover the Company’s share of certain facility expenses
(common area maintenance, or CAM) are expensed as incurred.
F-17
The table below summarizes the Company’s lease liabilities and corresponding right-of-use assets as of March 31, 2023 (in thousands):
ASSETS
Operating lease right-of-use assets
Total lease right-of-use assets
LIABILITIES
Current
Operating lease liability
Noncurrent
Operating lease liability, net of current portion
Total lease liabilities
Weighted average remaining lease term:
Weighted average discount rate:
$
$
$
$
$
March 31, 2023
1,705
1,705
492
1,313
1,805
3.83 years
6 %
The Company recorded rent expense of approximately zero and $18,000 for the years ended March 31, 2023 and 2022, respectively. Variable lease expense
was approximately $146,000 and $59,000 for the years ended March 31, 2023 and 2022, respectively. Short term lease expense was approximately zero
and $117,000 for the years ended March 31, 2023 and 2022, respectively. Lastly, operating lease expense was approximately $499,000 and $172,000 for
the years ended March 31, 2023 and 2022, respectively.
Cash outflows associated with the Company’s operating lease for the years ended March 31, 2023 and 2022 were $430,000 and $183,000, respectively.
Future lease payments relating to the Company’s operating lease liabilities as of March, 31, 2023 are as follows (in thousands):
Fiscal year ending March 31, 2024
Fiscal year ending March 31, 2025
Fiscal year ending March 31, 2026
Fiscal year ending March 31, 2027
Thereafter
Total future lease payments
Less: Imputed Interest
Total lease obligations
Less: Current obligations
Noncurrent lease obligations
Note 8. Commitments and Contingencies
Legal matters
$
$
508
523
538
460
—
2,029
(224 )
1,805
(492 )
1,313
In addition to commitments and obligations in the ordinary course of business, the Company may be subject, from time to time, to various claims and
pending and potential legal actions arising out of the normal conduct of its business.
The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual in its financial statements.
Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing litigation contingencies is subjective and requires
judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors,
including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of
information important to the matters. In addition, damage amounts claimed in litigation against it may be unsupported, exaggerated or unrelated to possible
outcomes, and as such are not meaningful indicators of its potential liability.
The Company regularly reviews contingencies to determine the adequacy of its accruals and related disclosures. During the period presented, the Company
has not recorded any accrual for loss contingencies associated with any claims or legal proceedings; determined that an unfavorable outcome is probable or
reasonably possible; or determined that the amount or range of any possible loss is reasonably estimable. However, the outcome of legal proceedings and
claims brought against the Company is subject to
F-18
significant uncertainty. Therefore, although management considers the likelihood of such an outcome to be remote, if one or more legal matters were
resolved against the Company in a reporting period, the Company’s consolidated financial statements for that reporting period could be materially
adversely affected.
Note 9. Income Taxes
A reconciliation of the statutory federal rate and the effective rate, for operations, is as follows for the years ended March 31, 2023 and 2022 (in thousands,
except percentages):
Tax computed at federal statutory rate
State income tax, net of federal benefit
Stock-based compensation
Research credits
Change in tax rate
Removal of net operating losses and research development credits
Other
Valuation allowance
Provision (benefit) for income taxes
March 31,
2023
March 31,
2022
$
$
(3,624 )
(44 )
167
60
157
1,410
1
1,873
—
21% $
0.2%
-1%
-0.4%
-0.9%
-8.2%
0%
-10.7%
0.0% $
(2,404 )
(6 )
1,857
(249 )
454
2,269
20
(1,941 )
—
21%
0%
-16.2%
2.1%
-4.0%
-19.8%
-0.1%
16.9%
0.0%
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred tax assets are as follows as of March 31,
2023 and 2022 (in thousands, except percentages):
Deferred tax assets:
Amortization
Section 174 R&D capitalization
Accrued expenses and reserves
Operating lease liability
Stock-based compensation
Inventory
Other, net
Total deferred tax assets
Valuation allowance
Net deferred tax assets
Deferred tax liabilities:
Operating lease right-of-use assets
Depreciation
Investment in equity securities
Total deferred tax liabilities
March 31,
2023
March 31,
2022
$
$
$
$
598
855
116
384
755
251
3
2,962
(2,458 )
504
(363 )
(135 )
(6 )
(504 )
—
$
$
$
$
—
—
110
611
554
—
3
1,278
(583 )
695
(603 )
(92 )
—
(695 )
—
A full valuation allowance has been established to offset the deferred tax assets as management cannot conclude that realization of such assets is more
likely than not. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research tax credit
carryforwards to offset taxable income may be limited based on cumulative changes in ownership. The Company has not completed an analysis to
determine whether any such limitations have been triggered as of March 31, 2023. Until this analysis is completed, the Company has removed the deferred
tax assets related to net operating losses from its deferred tax asset schedule. Further, until a study is completed and any limitation known, approximately
$1.6 million and $1.5 million for the years ended March 31, 2023 and 2022, respectively, would be considered as an uncertain tax position if netted against
the deferred tax asset. Due to the existence of the valuation allowance, future changes in the Company’s unrecognized tax benefits will not impact its
effective tax rate. Any carryforwards that will expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a
corresponding reduction of the valuation allowance. The valuation allowance increased by approximately $1,875,000 and decreased by approximately
$1,941,000 for the years ended March 31, 2023 and 2022, respectively.
The Company had federal and state net operating loss carryforwards of approximately $210.5 million and $40.9 million, respectively, as of March 31,
2023. Federal net operating loss carryforwards of approximately $66.8 million will carryforward indefinitely and be available to offset up to 80% of future
taxable income each year subject to revisions made by the Coronavirus Aid, Relief, and
F-19
Economic Security Act (the “CARES Act”). The remaining federal net operating losses will begin to expire in 2028, unless previously utilized. The state
net operating loss carryforwards (“NOLs”) will begin to expire in 2028, unless previously utilized.
The Company had federal and state research tax credit carryforwards of approximately $4.7 million and $4.3 million at March 31, 2023, respectively. The
federal research tax credit carryforwards begin expiring in 2028. The state research tax credit carryforwards do not expire.
The Company did not record any accruals for income tax accounting uncertainties for the year ended March 31, 2023.
The Company did not accrue either interest or penalties from inception through March 31, 2023.
The Company does not expect its unrecognized tax benefits to significantly increase or decrease within the next 12 months.
The Company is subject to tax in the United States and in California. As of March 31, 2023, the Company’s tax years from inception are subject to
examination by the tax authorities due to the generation of net operating losses. The Company is not currently under examination by any jurisdiction.
Note 10. Concentrations
Credit risk and significant customers
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company
maintains cash balances at various financial institutions located within the United States. Accounts at these institutions are secured by the Federal Deposit
Insurance Corporation. Balances may exceed federally insured limits. The Company is also potentially subject to concentrations of credit risk in its
revenues and accounts receivable. However, the Company only receives royalty revenue from one licensee and has not historically experienced any
accounts receivable write-downs.
Note 11. Related Parties
From time to time, the Company will enter into an agreement with a related party in the ordinary course of its business. These agreements are ratified by
the Board or a committee thereof pursuant to its related party transaction policy.
Viscient Biosciences (“Viscient”) is an entity for which Keith Murphy, the Company’s Executive Chairman, serves as the Chief Executive Officer and
President. Dr. Jeffrey Miner, the Company’s Chief Scientific Officer, is also the Chief Scientific Officer of Viscient, and Thomas Jurgensen, the Company’s
General Counsel, previously served as outside legal counsel to Viscient through his law firm, Optima Law Group, APC.
On December 28, 2020, the Company entered into an intercompany agreement (the “Intercompany Agreement”) with Viscient and Organovo, Inc., the
Company’s wholly-owned subsidiary, which included an asset purchase agreement for certain lab equipment. Pursuant to the Intercompany Agreement, the
Company agreed to provide Viscient certain services related to 3D bioprinting technology, which includes, but is not limited to, histology services, cell
isolation, and proliferation of cells and Viscient agreed to provide the Company certain services related to 3D bioprinting technology, including bioprinter
training, bioprinting services, and qPCR assays, in each case on payment terms specified in the Intercompany Agreement and as may be further determined
by the parties. In addition, the Company and Viscient each agreed to share certain facilities and equipment and, subject to further agreement, to each make
certain employees available for specified projects for the other party at prices to be determined in good faith by the parties. The Company evaluated the
accounting for the Intercompany Agreement and concluded that any services provided by Viscient to the Company will be expensed as incurred, and any
compensation for services provided by the Company to Viscient will be considered a reduction of personnel related expenses. Any services provided to
Viscient do not fall under Topic 606 as the Intercompany Agreement is not a contract with a customer. For the years ended March 31, 2023 and 2022, the
Company incurred approximately zero and $47,000 in consulting expenses from Viscient, respectively. Additionally, for the years ended March 31, 2023
and 2022, the Company provided approximately $59,000 and $48,000 of histology services to Viscient, respectively.
Note 12. Defined Contribution Plan
The Company has a defined contribution 401(k) plan covering substantially all employees. During the year ended March 31, 2015, the 401(k) plan was
amended (the “Amended Plan”) to include an employer matching provision. Under the terms of the Amended Plan, the Company will make matching
contributions on up to the first 6% of compensation contributed by its employees. Amounts expensed under the Company’s 401(k) plan for the years ended
March 31, 2023 and 2022 were approximately $10,000 and $25,000, respectively.
F-20
Note 13. Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies.
Unless otherwise stated, the Company believes that the impact of the recently issued accounting pronouncements that are not yet effective will not have a
material impact on its consolidated financial position or results of operations upon adoption.
F-21
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the
Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to our management, including our executive chairman and our principal financial and accounting officer, as appropriate, to
allow timely decisions regarding required disclosure.
Under the supervision of our Executive Chairman and our Chief Financial Officer, and with the participation of all members of management, we conducted
an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act. Based on this
evaluation, our executive chairman and our principal financial officer concluded that our disclosure controls and procedures were designed and operating
effectively as of the end of the period covered by this Annual Report.
Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-
15(f) and 15d-15(f). Our management’s annual report on internal control over financial reporting is set forth below.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our system of internal control over
financial reporting is designed to provide reasonable assurance to our management and the Board regarding the preparation and fair presentation of our
consolidated financial statements for external purposes in accordance with generally accepted accounting principles.
Our management, under the supervision of our Executive Chairman and our Chief Financial Officer, assessed the effectiveness of our internal control over
financial reporting as of March 31, 2023. In making this assessment, we used the framework included in Internal Control — Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control
— Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of March 31, 2023.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during
the fourth quarter of the fiscal year ended March 31, 2023, to which this report relates that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Executive Chairman and our Chief Financial Officer, do not expect that our disclosure controls or our internal control over
financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud,
if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur
because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by
management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of
controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in
the degree of compliance with policies or procedures.
Item 9B. Other Information.
On July 12, 2023, the Board approved and adopted an amendment and restatement of our amended bylaws (as so amended and restated, the “Amended and
Restated Bylaws”), effective as of such date.
The amendments effected by the Amended and Restated Bylaws address the universal proxy rules promulgated by the U.S. Securities and Exchange
Commission, as set forth in Rule 14a-19 of the Securities Exchange Act of 1934, as amended (the “1934 Act”). The amendments require any stockholder
providing advance notice of director nominations to comply with Rule 14a-19 of the 1934 Act,
31
including applicable notice and solicitation requirements. We will disregard such nominations if the stockholder fails to timely provide reasonable evidence
of its compliance with Rule 14a-19 of the 1934 Act.
The amendments also enhance disclosure requirements and procedural mechanics in connection with director nominations and business proposals by
stockholders (other than proposals to be included in our proxy statement pursuant to Rule 14a-8 of the 1934 Act). The amendments require, among other
information, additional background information and disclosures regarding proposing stockholders, proposed nominees and business, and other persons
related to a stockholder’s solicitation of proxies. Further, a stockholder may not nominate a greater number of director candidates than there are director
seats subject to election by stockholders at an annual meeting, and the Board may require any nominee to submit to interviews with the Board. In addition,
any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, with the white proxy card
being reserved for exclusive use by the Board.
The amendments also eliminate the requirement that we make a stockholder list available during a meeting of stockholders, consistent with recent
amendments to the General Corporation Law of the State of Delaware, and make various other conforming, technical and non-substantive changes.
The foregoing description of the amendments effected by the Amended and Restated Bylaws does not purport to be complete and is qualified in its entirety
by reference to the complete text of the Amended and Restated Bylaws, which is attached hereto as Exhibit 3.4 and incorporated herein by reference.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
32
Item 10. Directors, Executive Officers and Corporate Governance.
PART III
Information relating to our directors, executive officers and corporate governance, including our Code of Business Conduct, will be included in the proxy
statement for the 2023 annual meeting of the Company’s stockholders, expected to be filed within 120 days of the end of our most recently completed
fiscal year, which is incorporated herein by reference. The full text of our Code of Business Conduct, which is the code of ethics that applies to all of our
officers, directors and employees, can be found in the “Investors” section of our website accessible to the public at www.organovo.com.
Item 11. Executive Compensation.
Information relating to executive compensation will be included in the proxy statement for the 2023 annual meeting of the Company’s stockholders,
expected to be filed within 120 days of the end of our most recently completed fiscal year, which is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The following table summarizes information about the Company’s equity compensation plans by type as of March 31, 2023:
Plan category
(A)
Number of
securities to be
issued upon
exercise/vesting
of outstanding
options, warrants,
units and rights
(B)
Weighted-average
exercise price
of outstanding
options, warrants,
units and rights
(C)
Number of
securities available
for future issuance
under Equity
Compensation Plans
(excluding securities
reflected in
column (A))
Equity compensation plans approved by security holders (1)
Equity compensation plans not approved by security holders (4)
1,528,934 (2)
50,000 (5)
$
$
6.62
2.75
1,129,897 (3)
1,000 (6)
(1)
(2)
(3)
(4)
(5)
(6)
Includes the 2008 Plan, the 2012 Plan, the 2022 Plan, and the ESPP.
Includes stock options to purchase 1,401,217 shares of common stock with a per share weighted-average exercise price of $6.62. Also includes
127,717 restricted stock units with no exercise price.
Includes 58,426 shares of common stock available for purchase under the ESPP as of March 31, 2023.
Includes the Inducement Award Agreements and the Inducement Plan
Includes 50,000 stock options with a per share exercise price of $2.75 granted pursuant to the Inducement Plan
Includes 1,000 shares of common stock reserved for issuance pursuant to the Inducement Plan.
Information relating to the beneficial ownership of our common stock will be included in the proxy statement for the 2023 annual meeting of the
Company’s stockholders, expected to be filed within 120 days of the end of our most recently completed fiscal year, which is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Information relating to certain relationships and related transactions and director independence will be included in the proxy statement for the 2023 annual
meeting of the Company’s stockholders, expected to be filed within 120 days of the end of our most recently completed fiscal year, which is incorporated
herein by reference.
Item 14. Principal Accountant Fees and Services.
Information relating to principal accountant fees and services will be included in the proxy statement for the 2023 annual meeting of the Company’s
stockholders, expected to be filed within 120 days of the end of our most recently completed fiscal year, which is incorporated herein by reference.
33
Item 15. Exhibits, Financial Statement Schedules.
(a)
The following documents have been filed as part of this Annual Report:
PART IV
1. Consolidated Financial Statements: The information required by this item is included in Item 8 of Part II of this annual report.
2.
Financial Statement Schedules: Financial statement schedules required under the related instructions are not applicable for the years ended
March 31, 2023 and 2022 and have therefore been omitted.
3.
Exhibits: The exhibits listed in the Exhibit Index attached to this report are filed or incorporated by reference as part of this annual report.
(b)
The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual Report.
34
Exhibit No.
2.1
2.2
3.1
3.2
3.3
3.4*
4.1*
10.1+
10.2+
10.3+
10.4+
10.5†
10.6†
10.7†
EXHIBIT INDEX
Description
Agreement and Plan of Merger and Reorganization, dated as of December 13, 2019, by and among the Company, Opal Merger Sub, Inc.
and Tarveda Therapeutics, Inc. (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with
the SEC on December 16, 2019).
First Amendment to Merger Agreement, dated as of January 26, 2020, by and among the Company, Opal Merger Sub, Inc. and Tarveda
Therapeutics, Inc. (incorporated by reference from Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on
January 29, 2020).
Certificate of Incorporation of Organovo Holdings, Inc. (Delaware) (incorporated by reference from Exhibit 3.1 to the Company’s Current
Report on Form 8-K, as filed with the SEC on February 3, 2012).
Certificate of Amendment of Certificate of Incorporation of Organovo Holdings, Inc. (incorporated by reference from Exhibit 3.1 to the
Company’s Current Report on Form 8-K, as filed with the SEC on July 27, 2018).
Certificate of Second Amendment of Certificate of Incorporation of Organovo Holdings, Inc. (incorporated by reference from Exhibit 3.1
to the Company’s Current Report on Form 8-K as filed with the SEC on August 17, 2020).
Amended and Restated Bylaws of Organovo Holdings, Inc., effective as of July 12, 2023.
Description of Securities.
Organovo, Inc. 2008 Equity Incentive Plan (incorporated by reference from Exhibit 10.14 to the Company’s Current Report on Form 8-K,
as filed with the SEC on February 13, 2012).
Organovo Holdings, Inc. Amended and Restated 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the
Company’s Current Report on Form 8-K, as filed with the SEC on October 6, 2021).
Form of Stock Option Award Agreement under the 2012 Equity Incentive Plan (incorporated by reference from Exhibit 10.16 to the
Company’s Current Report on Form 8-K, as filed with the SEC on February 13, 2012).
Form of Indemnification Agreement (incorporated by reference from Exhibit 10.17 to the Company’s Current Report on Form 8-K, as filed
with the SEC on February 13, 2012).
License Agreement dated as of March 24, 2009, by and between Organovo, Inc. and the Curators of the University of Missouri
(incorporated by reference from Exhibit 10.23 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 11, 2012).
License Agreement dated as of March 12, 2010 by and between the Company and the Curators of the University of Missouri (incorporated
by reference from Exhibit 10.24 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 11, 2012).
License Agreement dated as of May 2, 2011, by and between the Company and Clemson University Research Foundation (incorporated by
reference from Exhibit 10.25 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 11, 2012).
10.8+
Form of Non-Employee Director Stock Option Award Agreement under the 2012 Equity Incentive Plan (incorporated by reference to
Exhibit 10.35 to the Company’s Annual Report on Form 10-K, as filed with the SEC on June 9, 2015).
10.9+
Form of Executive Stock Option Award Agreement under the 2012 Equity Incentive Plan (incorporated by reference to Exhibit 10.36 to the
Company’s Annual Report on Form 10-K, as filed with the SEC on June 9, 2015).
10.10+
Organovo Holdings, Inc. Severance and Change in Control Plan (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q, as filed with the SEC on November 9, 2015).
10.11+
Amendment to the Organovo Holdings, Inc. Severance and Change in Control Plan, dated May 19, 2020 (incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 20, 2020).
10.12+
Form of Organovo Holdings, Inc. Severance and Change in Control Plan Participation Agreement (incorporated by reference to Exhibit
10.3 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 9, 2015).
35
Exhibit No.
10.13+
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement (Retention Form) under the 2012 Equity Incentive Plan
(incorporated by reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on August 4, 2016).
Description
10.14+
Form of Employee Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the 2012 Equity Incentive Plan
(incorporated by reference from Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on August 4, 2016).
10.15+
Form of Non-Employee Director Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement under the 2012 Equity
Incentive Plan (incorporated by reference from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on
August 4, 2016).
10.16+
Organovo Holdings, Inc. 2016 Employee Stock Purchase Plan (incorporated by reference from Exhibit 10.1 to the Company’s Current
Report on Form 8-K, as filed with the SEC on August 18, 2016).
10.17+
Organovo Holdings, Inc. Inducement Award Stock Option Agreement, dated April 24, 2017 (incorporated by reference from Exhibit 99.1
to the Company’s Registration Statement on Form S-8 (File No. 333-217437), as filed with the SEC on April 24, 2017).
10.18+
Organovo Holdings, Inc. Inducement Award Performance-Based Restricted Stock Unit Agreement, dated April 24, 2017 (incorporated by
reference from Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (File No. 333-217437), as filed with the SEC on April
24, 2017).
10.19+
Organovo Holdings, Inc. Inducement Award Stock Option Agreement, dated August 14, 2018 (incorporated by reference from Exhibit 99.1
to the Company’s Registration Statement on Form S-8 (File No. 333-226837), as filed with the SEC on August 14, 2018).
10.20+
Organovo Holdings, Inc. Inducement Award Restricted Stock Unit Agreement, dated August 14, 2018 (incorporated by reference from
Exhibit 99.2 to the Company’s Registration Statement on Form S-8 (File No. 333-226837), as filed with the SEC on August 14, 2018).
10.21+
Consulting Agreement, dated September 15, 2020, by and between Organovo and Multi Dimensional Bio Insight LLC. (incorporated by
reference from Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2020).
10.22+
Consulting Agreement, dated August 25, 2020, by and between Organovo and Danforth Advisors (incorporated by reference from Exhibit
10.2 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2020).
10.23+
Amendment No. 5 dated October 4, 2021 to Consulting Agreement dated August 25, 2021 by and between Company and Danforth
Advisors LLC (incorporated by reference from Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on
October 6, 2021).
10.24+
Offer Letter, dated September 15, 2020, between the Company and Jeffrey N. Miner (incorporated by reference from Exhibit 10.3 to the
Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2020).
10.25+
Engagement Agreement, dated July 23, 2020, by and between Organovo and Optima Law Group of San Diego (incorporated by reference
from Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, as filed with the SEC on November 5, 2020).
10.26
Lease Agreement dated November 23, 2020, between Organovo Holdings, Inc. and San Diego Inspire 1, LLC (Permanent Lease
Agreement 176640186.8) (incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed with the
SEC on November 25, 2020).
10.27
Amended and Restated Lease Agreement dated November 23, 2020, between Organovo, Inc., as Tenant, and San Diego Inspire 2, LLC, as
Landlord, as amended by First Amendment to Amended & Restated Lease, dated November 17, 2021, between San Diego Inspire 2, LLC,
as Landlord, and Organovo, Inc., as Tenant (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K,
as filed with the SEC on November 19, 2021).
10.28#
Intercompany Agreement, dated December 28, 2020, by and among Organovo Holdings, Inc., Organovo, Inc. and Viscient Biosciences,
Inc. (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on December 31,
2020).
36
Exhibit No.
Description
10.29+
Offer Letter, dated December 28, 2020, between the Company and Tom Jurgensen (incorporated by reference from Exhibit 10.1 to the
Company’s Quarterly Report on Form 10-Q, as filed with the SEC on February 8, 2021).
10.30
Sales Agreement, dated March 16, 2018, by and among Organovo Holdings, Inc., H.C. Wainwright & Co., LLC and Jones Trading
Institutional Services LLC. (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the
SEC on March 16, 2018).
10.31+
Organovo Holdings, Inc. 2021 Inducement Equity Incentive Plan (incorporated by reference from Exhibit 10.2 to the Company’s Current
Report on Form 8-K, as filed with the SEC on March 10, 2021).
10.32+
Form of Stock Option Agreement under the Organovo Holdings, Inc. 2021 Inducement Equity Incentive Plan (incorporated by reference
from Exhibit 4.2 to the Company’s Registration Statement on Form S-8 (File No. 333-254714), as filed with the SEC on March 25, 2021).
10.33+
Form of Restricted Stock Unit Agreement under the Organovo Holdings, Inc. 2021 Inducement Equity Incentive Plan (incorporated by
reference from Exhibit 4.3 to the Company’s Registration Statement on Form S-8 (File No. 333-254714), as filed with the SEC on March
25, 2021).
10.34
10.35+
10.36+
10.37+
Settlement and Patent License Agreement, dated February 22, 2022, by and between Organovo Holdings, Inc. and BICO Group AB.
Organovo Holdings, Inc. 2022 Equity Incentive Plan (incorporated by reference from Exhibit 10.1 to the Company’s Current Report on
Form 8-K, as filed with the SEC on October 14, 2022)
Form of Global Stock Option Award Agreement under the Organovo Holdings, Inc. 2022 Equity Incentive Plan (incorporated by reference
from Exhibit 4.2 to the Company's Registration Statement on Form S-8 (No. 333-268001), filed with the SEC on October 25, 2022).
Form of Global Restricted Stock Unit Award Agreement under the Organovo Holdings, Inc. 2022 Equity Incentive Plan (incorporate3 by
reference from Exhibit 4.2 to the Company's Registration Statement on Form S-8 (No. 333-268001), filed with the SEC on October 25,
2022).
10.38*
Purchase Agreement, dated March 10, 2023, by and between Organovo Holdings, Inc. and Metacrine, Inc.
21.1*
Subsidiaries of Organovo Holdings, Inc.
23.1*
24.1*
31.1*
Consent of Independent Registered Public Accounting Firm.
Power of Attorney (included on signature page hereto).
Certification of Chief Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as
amended.
31.2*
Certification of Chief Financial Officer a Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as
amended.
32.1*
Certifications Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and to 18 U.S.C. Section 1350.
101.INS*
Inline XBRL Instance Document
101.SCH*
Inline XBRL Taxonomy Extension Schema
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase
104
Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed herewith.
+ Designates management contracts and compensation plans.
† This Exhibit has been filed separately with the Secretary of the Securities and Exchange Commission without the redaction pursuant to a Confidential
Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
37
# Certain identified information has been omitted pursuant to Item 601(b)(10) of Regulation S-K because such information is both (i) not material and (ii)
would likely cause competitive harm to the Registrant if publicly disclosed. The Registrant hereby undertakes to furnish supplemental copies of the
unredacted exhibit upon request by the Securities and Exchange Commission.
38
Pursuant to the requirements of the Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
ORGANOVO HOLDINGS, INC.
By:
/s/ Keith Murphy
Keith Murphy
Executive Chairman
Date: July 13, 2023
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Keith Murphy and Thomas
Jurgensen, and each of them individually, as the undersigned’s true and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the undersigned and in the undersigned’s name, place, and stead, in any and all capacities, to sign any and all amendments to this Report,
and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be
done in connection therewith, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming that all
said attorneys-in-fact and agents, or any of them or their respective substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates
indicated.
/s/ Keith Murphy
Keith Murphy
/s/ Thomas Hess
Thomas Hess
/s/ Adam Stern
Adam Stern
/s/ Douglas Cohen
Douglas Cohen
/s/ David Gobel
David Gobel
/s/ Vaidehi Joshi
Vaidehi Joshi
/s/ Alison Milhous
Alison Milhous
Signature
Title
Executive Chairman
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial and Principal Accounting Officer)
Director
Director
Director
Director
Director
39
Date
July 13, 2023
July 13, 2023
July 13, 2023
July 13, 2023
July 13, 2023
July 13, 2023
July 13, 2023
AMENDED AND RESTATED BYLAWS OF
ORGANOVO HOLDINGS, INC.
Exhibit 3.4
TABLE OF CONTENTS
ARTICLE I - CORPORATE OFFICES
1.1
1.2
REGISTERED OFFICE
OTHER OFFICES
ARTICLE II - MEETINGS OF STOCKHOLDERS
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
2.10
2.11
2.12
2.13
2.14
PLACE OF MEETINGS
ANNUAL MEETING
SPECIAL MEETING
ADVANCE NOTICE PROCEDURES
NOTICE OF STOCKHOLDERS’ MEETINGS
QUORUM
ADJOURNED MEETING; NOTICE
CONDUCT OF BUSINESS
VOTING
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
RECORD DATES
PROXIES
LIST OF STOCKHOLDERS ENTITLED TO VOTE
INSPECTORS OF ELECTION
ARTICLE III - DIRECTORS
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
POWERS
NUMBER OF DIRECTORS
ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
RESIGNATION AND VACANCIES
PLACE OF MEETINGS; MEETINGS BY TELEPHONE
REGULAR MEETINGS
SPECIAL MEETINGS; NOTICE
QUORUM; VOTING
BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
FEES AND COMPENSATION OF DIRECTORS
REMOVAL OF DIRECTORS
ARTICLE IV - COMMITTEES
4.1
4.2
4.3
4.4
COMMITTEES OF DIRECTORS
COMMITTEE MINUTES
MEETINGS AND ACTION OF COMMITTEES
SUBCOMMITTEES
ARTICLE V - OFFICERS
5.1
5.2
5.3
5.4
5.5
5.6
5.7
OFFICERS
APPOINTMENT OF OFFICERS
SUBORDINATE OFFICERS
REMOVAL AND RESIGNATION OF OFFICERS
VACANCIES IN OFFICES
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
AUTHORITY AND DUTIES OF OFFICERS
ARTICLE VI - STOCK
6.1
6.2
6.3
6.4
6.5
6.6
6.7
STOCK CERTIFICATES; PARTLY PAID SHARES
SPECIAL DESIGNATION ON CERTIFICATES
LOST CERTIFICATES
DIVIDENDS
TRANSFER OF STOCK
STOCK TRANSFER AGREEMENTS
REGISTERED STOCKHOLDERS
ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
7.1
7.2
7.3
NOTICE OF STOCKHOLDERS’ MEETINGS
NOTICE BY ELECTRONIC TRANSMISSION
NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
i
Page
1
1
1
1
1
1
1
1
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7
7
8
8
8
8
9
9
9
10
10
10
10
10
11
11
11
12
12
12
12
13
13
13
13
14
14
14
14
14
14
14
15
15
15
15
15
16
16
16
16
16
17
17
17
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7.4
7.5
NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
WAIVER OF NOTICE
ARTICLE VIII - INDEMNIFICATION
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10
8.11
8.12
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS
INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
SUCCESSFUL DEFENSE
INDEMNIFICATION OF OTHERS
ADVANCE PAYMENT OF EXPENSES
LIMITATION ON INDEMNIFICATION
DETERMINATION; CLAIM
NON-EXCLUSIVITY OF RIGHTS
INSURANCE
SURVIVAL
EFFECT OF REPEAL OR MODIFICATION
CERTAIN DEFINITIONS
ARTICLE IX - GENERAL MATTERS
9.1
9.2
9.3
9.4
EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
FISCAL YEAR
SEAL
CONSTRUCTION; DEFINITIONS
ARTICLE X - AMENDMENTS
ARTICLE XI - EXCLUSIVE FORUM
ii
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18
18
18
18
19
19
19
20
20
20
20
21
21
21
21
21
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BYLAWS OF ORGANOVO HOLDINGS, INC.
__________________________
ARTICLE I - CORPORATE OFFICES
1.1 REGISTERED OFFICE
The registered office of Organovo Holdings, Inc. shall be fixed in the corporation’s certificate of incorporation, as the same may be amended
from time to time.
1.2 OTHER OFFICES
The corporation’s board of directors may at any time establish other offices at any place or places where the corporation is qualified to do
business.
2.1 PLACE OF MEETINGS
ARTICLE II - MEETINGS OF STOCKHOLDERS
Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the board of directors. The board of
directors may, in its sole discretion, determine that a meeting of stockholders shall not be held at any place, but may instead be held solely by means of
remote communication as authorized by Section 211(a)(2) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”). In the
absence of any such designation or determination, stockholders’ meetings shall be held at the corporation’s then-principal executive office.
2.2 ANNUAL MEETING
The annual meeting of stockholders shall be held each year. The board of directors shall designate the date and time of the annual meeting. In
the absence of such designation the annual meeting of stockholders shall be held on the second Tuesday of May of each year at 10:00 a.m. However, if
such day falls on a legal holiday, then the meeting shall be held at the same time and place on the next succeeding business day. At the annual meeting,
directors shall be elected and any other proper business, brought in accordance with Section 2.4 of these bylaws, may be transacted.
2.3 SPECIAL MEETING
(i) A special meeting of the stockholders, other than those required by statute, may be called at any time by the board of directors,
chairperson of the board of directors, chief executive officer or president (in the absence of a chief executive officer), but a special meeting may not be
called by any other person or persons. The board of directors may cancel, postpone or reschedule any previously scheduled special meeting at any time,
before or after the notice for such meeting has been sent to the stockholders.
(ii) The notice of a special meeting shall include the purpose for which the meeting is called. Only such business shall be conducted
at a special meeting of stockholders as shall have been brought before the meeting by or at the direction of the board of directors, chairperson of the board
of directors, chief executive officer or president (in the absence of a chief executive officer). Nothing contained in this Section 2.3(ii) shall be construed as
limiting, fixing or affecting the time when a meeting of stockholders called by action of the board of directors may be held.
2.4 ADVANCE NOTICE PROCEDURES
conducted as shall have been properly brought before the meeting. To be
(i) Advance Notice of Stockholder Business at Annual Meeting. At an annual meeting of the stockholders, only such business shall be
1
properly brought before an annual meeting, business must be brought: (A) pursuant to the corporation’s proxy materials with respect to such meeting, (B)
by or at the direction of the board of directors, or (C) by a stockholder of the corporation who (1) is a stockholder of record at the time of the giving of the
notice required by this Section 2.4(i) and on the record date for the determination of stockholders entitled to vote at the annual meeting and (2) has timely
complied in proper written form with the notice procedures set forth in this Section 2.4(i). In addition, for business to be properly brought before an annual
meeting by a stockholder, such business must be a proper matter for stockholder action pursuant to these bylaws and applicable law. Except for proposals
properly made in accordance with Rule 14a‐8 under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (as so
amended and inclusive of such rules and regulations, the “1934 Act”), clause (C) above shall be the exclusive means for a stockholder to bring business
before an annual meeting of stockholders.
(a) To comply with clause (C) of Section 2.4(i) above, a stockholder’s notice must set forth all information required under
this Section 2.4(i) and must be timely received by the secretary of the corporation. To be timely, a stockholder’s notice must be received by the secretary at
the principal executive offices of the corporation not later than 5:00 p.m. Pacific Time on the forty-fifth (45th) day nor earlier than 9:00 a.m. Pacific Time
on the seventy-fifth (75th) day before the one-year anniversary of the date on which the corporation first mailed its proxy materials or a notice of
availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting; provided, however, that in the event that no annual meeting
was held in the previous year or if the date of the annual meeting is advanced by more than thirty (30) days prior to or delayed by more than sixty (60) days
after the one (1)-year anniversary of the date of the previous year’s annual meeting, then, for notice by the stockholder to be timely, it must be so received
by the secretary not earlier than 5:00 p.m. Pacific Time on the one hundred twentieth (120th) day prior to such annual meeting and not later than 5:00 p.m.
Pacific Time on the later of (i) the ninetieth (90th) day prior to such annual meeting, or (ii) the tenth (10th) day following the day on which Public
Announcement (as defined below) of the date of such annual meeting is first made. In no event shall any adjournment or postponement of an annual
meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice as described in this Section 2.4(i)(a). “Public
Announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service
or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
(b) To be in proper written form, a stockholder’s notice to the secretary must set forth as to each matter of business the
stockholder intends to bring before the annual meeting: (1) a brief description of the business intended to be brought before the annual meeting and the
reasons for conducting such business at the annual meeting, (2) the name and address, as they appear on the corporation’s books, of the stockholder
proposing such business and any Stockholder Associated Person (as defined below), (3) the class, series and number of shares of stock and debt instruments
of the corporation that are, directly or indirectly, held of record or are beneficially owned by the stockholder or any Stockholder Associated Person and any
derivative positions held or beneficially held by the stockholder or any Stockholder Associated Person as of the date of delivery of such notice, (4) any (i)
agreement, arrangement or understanding (including, without limitation and regardless of the form of settlement, any derivative, long or short positions,
profit interests, forwards, futures, swaps, options, warrants convertible securities, stock appreciation or similar rights, hedging or other transaction or series
of transactions and borrowed or loaned shares of stock) that has been entered into by or on behalf of such stockholder or any Stockholder Associated
Person with respect to any securities of the corporation (any of the foregoing, a “Derivative Instrument”), including the full notional amount of any
securities that, directly or indirectly, underlie any Derivative Instrument and (ii) other agreement, arrangement or understanding the effect or intent of
which is to create or mitigate loss to, or to manage the risk or benefit from share price changes for, or to increase or decrease the voting power of, such
stockholder or any Stockholder Associated Person with respect to any securities of the corporation, (5) any right to dividends on the corporation’s securities
beneficially owned by the stockholder or any Stockholder Associated Person that are separated or separable from the underlying security, (6) any material
interest of the stockholder or a Stockholder Associated Person in such business, (7) a representation and undertaking that the stockholder is a holder of
record of stock of the corporation as of the date of delivery of such notice and intends to appear in person or by proxy at the annual meeting to bring such
business before the annual meeting, (8) any other information relating to the stockholder or any Stockholder Associated Person or others acting in concert
with them, or the proposed business that, in each case, would be required to be disclosed in a proxy statement or other filings required to be made in
connection with the solicitation of proxies in support of such proposal pursuant to Section 14 of the 1934 Act and (9) a statement whether either such
stockholder or any Stockholder Associated Person will deliver a proxy statement and form of proxy to holders of at least the percentage of the voting power
of the corporation’s voting shares required under applicable law
2
to carry the proposal (such information provided and statements made as required by clauses (1) through (9), a “Business Solicitation Statement”). In
addition, to be in proper written form, a stockholder’s notice to the secretary must be supplemented not later than ten (10) days following the record date
for the determination of stockholders entitled to notice of the meeting, and ten (10) days following the record date for the determination of stockholders
entitled to vote at the meeting (if that record date is different than the record date for the determination of stockholders entitled to notice of the meeting), to
disclose the information contained in clauses (3) and (4) above as of the applicable record date. For purposes of this Section 2.4, a “Stockholder
Associated Person” of any stockholder shall mean (i) any person controlling, directly or indirectly, or acting in concert with, such stockholder, (ii) any
beneficial owner of shares of stock of the corporation owned of record or beneficially by such stockholder and on whose behalf the proposal or nomination,
as the case may be, is being made or (iii) any person controlling, controlled by or under common control with such person referred to in the preceding
clauses (i) and (ii).
(c) Without exception, no business shall be conducted at any annual meeting except in accordance with the provisions set
forth in this Section 2.4(i) and, if applicable, Section 2.4(ii) hereof. In addition, business proposed to be brought by a stockholder may not be brought
before the annual meeting if such stockholder or a Stockholder Associated Person, as applicable, takes action contrary to the representations made in the
Business Solicitation Statement applicable to such business or if the Business Solicitation Statement applicable to such business contains an untrue
statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. The chairperson of the annual meeting
shall, if the facts warrant, determine and declare at the annual meeting that business was not properly brought before the annual meeting and in accordance
with the provisions of this Section 2.4(i), and, if the chairperson should so determine, he or she shall so declare at the annual meeting that any such business
not properly brought before the annual meeting shall not be conducted.
(ii) Advance Notice of Director Nominations at Annual Meetings. Notwithstanding anything in these bylaws to the contrary, only
persons who are nominated in accordance with the procedures set forth in this Section 2.4(ii) shall be eligible for election or re-election as directors at an
annual meeting of stockholders. Nominations of persons for election or re-election to the board of directors of the corporation shall be made at an annual
meeting of stockholders only (A) by or at the direction of the board of directors or (B) by a stockholder of the corporation who (1) was a stockholder of
record at the time of the giving of the notice required by this Section 2.4(ii), on the record date for the determination of stockholders entitled to notice of the
annual meeting and on the record date for the determination of stockholders entitled to vote at the annual meeting and (2) has complied with the notice
procedures set forth in this Section 2.4(ii). In addition to any other applicable requirements, for a nomination to be made by a stockholder, the stockholder
must have given timely notice thereof in proper written form to the secretary of the corporation.
(a) To comply with clause (B) of Section 2.4(ii) above, (1) a nomination to be made by a stockholder must set forth all
information required under this Section 2.4(ii) and must be received by the secretary of the corporation at the then-principal executive offices of the
corporation at the time set forth in, and in accordance with, the final three sentences of Section 2.4(i)(a) above, (2) the stockholder must have compiled in
all respects with the requirements of Section 14 of the 1934 Act, including, without limitation, the requirements of Rule 14a-19 under the 1934 Act (“Rule
14a-19”) (as such rule and regulations thereunder may be amended from time to time by the Securities and Exchange Commission (the “SEC”), including
any SEC Staff interpretations relating thereto) and (3) the board of directors or an executive officer designated thereby shall have determined that the
stockholder has satisfied the requirements of this clause (2) of Section 2.4(ii)(a), including without limitation the satisfaction of any undertaking delivered
under Section 2.4(ii)(b) below. In no event may a stockholder provide notice with respect to a greater number of director candidates than there are director
seats subject to election by stockholders at the annual meeting.
(b) To be in proper written form, such stockholder’s notice to the secretary must set forth:
(1) as to each person (a “nominee”) whom the stockholder proposes to nominate for election or re-election as a
director: (A) the name, age, business address and residence address of the nominee, (B) the principal occupation or employment of the nominee, (C) the
class, series and number of shares of the corporation that are held of record or are beneficially owned by the nominee and any Derivative Instruments held
or beneficially held by the nominee, including the full notional amount of any securities that, directly or indirectly, underlie any such Derivative
Instruments, (D) any other agreement, arrangement or understanding that has been made
3
the effect or intent of which is to create or mitigate loss to, or to manage the risk or benefit of share price changes for, or to increase or decrease the voting
power of the nominee with respect to the corporation’s securities, (E) a description of all compensatory, payment, indemnification or other arrangements or
understandings between or among the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which
the nominations are to be made by the stockholder or concerning the nominee’s potential service on the board of directors (such arrangement or
understanding, a “Third-Party Compensation Arrangement”), (F) a description of any agreement, arrangement or understanding between the nominating
stockholder or the Stockholder Associated Person, on the one hand, and the nominee, on the other hand, related to any subject matter that will be material
in such nominating stockholder’s solicitation of stockholders (including, without limitation, matters of social, labor, environmental and governance policy),
regardless of whether such agreement, arrangement or understanding relates specifically to the corporation, (G) a description of any direct or indirect
material interest in any material contract or agreement between or among any nominating stockholder or Stockholder Associated Person, on the one hand,
and each nominee or his or her respective associates or any other participants in such solicitation, on the other hand, including, without limitation, all
information that would be required to be disclosed pursuant to Item 404 under Regulation S-K if such nominating stockholder or Stockholder Associated
Person were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (H) a completed and signed
questionnaire, representation and agreement as provided in Section 2.4(ii)(c) and (I) any other information relating to the nominee that would be required to
be disclosed about such nominee if proxies were being solicited for the election or re-election of the nominee as a director, or that is otherwise required, in
each case pursuant to Section 14 under the 1934 Act; and
(2) as to such stockholder giving notice, (A) the information required to be provided pursuant to clauses (2)
through (8) of Section 2.4(i)(b) above, and the supplement referenced in the second sentence of Section 2.4(i)(b) above (except that the references to
“business” in such clauses shall instead refer to nominations of directors for purposes of this paragraph), (B) a written representation to the corporation that
such stockholder has complied in all respects with the requirements of Section 14 of the 1934 Act, including, without limitation, the requirements of Rule
14a-19 (as such rule and regulations thereunder may be amended from time to time by the SEC, including any SEC Staff interpretations relating thereto),
(C) a written undertaking by such stockholder giving notice or, if the notice is given on behalf of a beneficial owner on whose behalf the nomination is
made, by such beneficial owner, that such stockholder or beneficial owner will deliver to beneficial owners of shares representing at least 67% of the voting
power of the stock entitled to vote generally in the election of directors either (x) at least 20 calendar days before the annual meeting, a copy of its
definitive proxy statement for the solicitation of proxies for its nominee or (y) at least 40 calendar days before the annual meeting, a Notice of Internet
Availability of Proxy Materials that would satisfy the requirements of Rule 14a-16(d) of the 1934 Act, (D) a description of any agreement, arrangement or
understanding (whether oral or written) between any nominating stockholder, on the one hand, and a Stockholder Associated Person, on the other hand,
related to any subject matter that will be material in the nominating stockholder’s solicitation of stockholders (including, without limitation, matters of
social, labor, environmental and governance policy), regardless of whether such agreement, arrangement or undertaking relates specifically to the
corporation, (E) with respect to each Stockholder Associated Person, the information that would be disclosed with respect to them under Item 5(b) of
Schedule 14A under the 1934 Act, assuming that each such person was deemed a “participant” as defined in paragraphs (a)(ii), (iii), (iv), (v) and (vi) of
Instruction 3 to Item 4 of Schedule 14A and (F) such other information as may be reasonably requested by the corporation to facilitate disclosure to
stockholders of all material facts that, in the reasonable discretion of the corporation, are relevant for stockholders to make an informed decision on the
director election proposal, including information regarding any Stockholder Associated Person (such information provided and statements made as required
by clauses (A) to (F) above, a “Nominee Solicitation Statement”).
(c) To be eligible to be a nominee of any stockholder for election or re-election as a director of the corporation, the nominee
must provide to the secretary, in accordance with the applicable time periods prescribed for delivery of notice under Section 2.4(ii)(a) above or Section
2.4(iii) below: (1) a signed and completed written questionnaire (in the form provided by the secretary at the written request of the nominating stockholder,
which form will be provided by the secretary within ten (10) days of receiving such request) containing information regarding such nominee’s background,
qualifications, stock ownership, independence and such other information as may reasonably be required by the corporation to determine the eligibility of
such nominee to serve as a director of the corporation or to serve as an independent director of the corporation and (2) a written representation and
undertaking executed by the nominee (in the form provided by the secretary at the written request of the nominating
4
stockholder, which form will be provided by the secretary within ten (10) days of receiving such request) whereby the nominee (i) consents to being named
as a nominee of such stockholder, (ii) consents to serving as a director of the corporation if elected and intends to serve a full term on the board of directors,
(iii) agrees to be named in any proxy materials, including the associated proxy cards, relating to the corporation’s next annual meeting or special meeting,
as applicable, pursuant to Rule 14a-19, (iv) acknowledges that as a director of the corporation, the nominee will owe fiduciary duties under Delaware law
with respect to the corporation and its stockholders, (v) unless previously disclosed to the corporation, a statement that such nominee is not, and will not
become, a party to any voting agreement, arrangement, commitment, assurance or understanding with any person or entity as to how such nominee, if
elected as a director, will vote on any issue (a “Voting Commitment”) or any Voting Commitment that could limit or interfere with such nominee’s ability
to comply, if elected as a director of the corporation, with such nominee’s fiduciary duties under applicable law; (vi) unless previously disclosed to the
corporation, a statement that such nominee is not, and will not become, a party to any Third-Party Compensation Arrangement; (vii) a statement that if such
nominee is elected as a director, such nominee would be in compliance, and will continue to comply, with all applicable rules of any securities exchanges
upon which the corporation’s securities are listed, the corporation’s corporate governance, conflict of interest, confidentiality, stock ownership and trading
guidelines, and other policies and guidelines applicable to directors and in effect during such person’s term in office as a director (and, if requested by any
nominee, the secretary will provide to such nominee all such policies and guidelines then in effect) and (viii) a statement that such nominee will provide
facts, statements and other information in all communications with the corporation and its stockholders that are or will be true and correct in all material
respects and that do not and will not omit to state any fact necessary in order to make the statements made, in light of the circumstances under which they
are made, not misleading in any material respect.
(d) At the request of the board of directors, any person nominated by a stockholder for election or re-election as a director
must furnish to the secretary of the corporation (1) such information required to be set forth in the stockholder’s notice of nomination of such person as a
director as of a date subsequent to the date on which the notice of such person’s nomination was given, (2) such other information as may reasonably be
required by the corporation to determine the eligibility of such proposed nominee to serve as an independent director or audit committee financial expert of
the corporation under applicable law, securities exchange rule or regulation, or any publicly disclosed corporate governance guideline or committee charter
of the corporation and (3) such other information that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of
such nominee. If requested by the corporation, any supplemental information required under this paragraph shall be provided by such stockholder within
ten (10) days after it has been requested by the corporation. In addition, the board of directors may require any nominee to submit to interviews with the
board of directors or any committee thereof, and such nominee shall make himself or herself available for any such interviews within ten (10) days
following any reasonable request therefor from the board of directors or any committee thereof. In the absence of the furnishing of any such information of
the kind specified in this Section 2.4(ii)(d) if requested, such stockholder’s nomination shall not be considered in proper form pursuant to this Section
2.4(ii).
(e) Without exception, no person shall be eligible for election or re-election as a director of the corporation at an annual
meeting of stockholders unless nominated in accordance with the provisions set forth in this Section 2.4(ii). In addition, no later than five (5) business days
prior to the annual meeting or any adjournment, rescheduling, postponement or other delay thereof, a stockholder nominating individuals for election or re-
election as a director will provide the corporation with reasonable evidence that such stockholder has met the requirements of Rule 14a-19.
Notwithstanding anything to the contrary in these bylaws, unless otherwise required by law, if any stockholder (x) provides notice pursuant to Rule 14a-19
and (y) subsequently (1) notifies the corporation that such stockholder no longer intends to solicit proxies in support of director nominees other than the
corporation’s director nominees in accordance with Rule 14a-19, (2) fails to comply with the requirements of Rule 14a-19 or (3) fails to timely provide
such reasonable evidence, update, supplement or additional information sufficient to satisfy the corporation that such requirements have been met, such
stockholder’s nomination(s) shall be deemed null and void and the corporation shall disregard any proxies or votes solicited for any nominee proposed by
such stockholder, notwithstanding that such proxies may have been received by the corporation and counted for the purposes of determining quorum. A
nominee shall not be eligible for election or re-election if a stockholder or Stockholder Associated Person, as applicable, takes action contrary to the
representations made in the Nominee Solicitation Statement applicable to such nominee or if the Nominee Solicitation Statement applicable to such
nominee or any other information provided to the corporation by or on behalf of such nominee contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein not misleading. The chairperson
5
of the annual meeting shall, if the facts warrant, determine and declare at the annual meeting that a nomination was not made in accordance with the
provisions prescribed by these bylaws, and if the chairperson should so determine, he or she shall so declare at the annual meeting, and the defective
nomination shall be disregarded.
(iii) Advance Notice of Director Nominations for Special Meetings.
(a) For a special meeting of stockholders at which directors are to be elected or re-elected pursuant to Section 2.3 hereof,
nominations of persons for election to the board of directors shall be made only (1) by or at the direction of the board of directors or (2) by any stockholder
of the corporation who (A) is a stockholder of record at the time of the giving of the notice required by this Section 2.4(iii), on the record date for the
determination of stockholders entitled to notice of the special meeting and on the record date for the determination of stockholders entitled to vote at the
special meeting and (B) delivers a timely written notice of the nomination to the secretary of the corporation that includes the information set forth in
Sections 2.4(ii)(b) and (ii)(c) above. To be timely, such notice must be received by the secretary at the then-principal executive offices of the corporation
not later than 5:00 p.m. Pacific Time on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which
Public Announcement is first made of the date of the special meeting and of the nominees proposed by the board of directors to be elected or re-elected at
such meeting. A person shall not be eligible for election or re-election as a director at a special meeting unless the person is nominated (i) by or at the
direction of the board of directors or (ii) by a stockholder in accordance with the notice procedures set forth in this Section 2.4(iii). In addition, a nominee
shall not be eligible for election or re-election if a stockholder or Stockholder Associated Person, as applicable, takes action contrary to the representations
made in the Nominee Solicitation Statement applicable to such nominee or if the Nominee Solicitation Statement applicable to such nominee contains an
untrue statement of a material fact or omits to state a material fact necessary to make the statements therein not misleading. Any person nominated in
accordance with this Section 2.4(iii) is subject to, and must comply with, the provisions of Section 2.4(ii)(c).
(b) The chairperson of the special meeting shall, if the facts warrant, determine and declare at the meeting that a nomination
or business was not made in accordance with the procedures prescribed by these bylaws, and if the chairperson should so determine, he or she shall so
declare at the meeting, and the defective nomination or business shall be disregarded.
(iv) Other Requirements and Rights.
(a) A stockholder shall update and supplement its notice to the corporation of its intent to propose business at an annual
meeting, and a nominee shall further update and supplement the materials delivered pursuant to this Section 2.4, if necessary, so that the information
provided or required to be provided in such notice pursuant to this Section 2.4 shall be true and correct as of the record date for stockholders entitled to
notice of the meeting and as of the date that is ten (10) business days prior to the meeting or any adjournment or postponement thereof, and such update and
supplement shall be delivered to, or mailed and received by, the secretary at the principal executive offices of the corporation not later than five (5) business
days after the record date for stockholders entitled to notice of the meeting (in the case of the update and supplement required to be made as of such record
date), and not later than eight (8) business days prior to the date of the meeting and, if practical, any adjournment or postponement thereof (and, if not
practical, on the first practicable date prior to the date to which the meeting has been adjourned or postponed) (in the case of the update and supplement
required to be made as of ten (10) business days prior to the meeting or any adjournment or postponement thereof).
(b) For the avoidance of doubt, the obligation to update and supplement, or provide additional information or evidence, as
set forth in these bylaws shall not limit the corporation’s rights with respect to any deficiencies in any notice provided by a stockholder, extend any
applicable deadlines pursuant to these bylaws or enable or be deemed to permit a stockholder who has previously submitted notice pursuant to these bylaws
to amend or update any nomination or to submit any new nomination. No disclosure pursuant to these bylaws will be required with respect to the ordinary
course business activities of any broker, dealer, commercial bank, trust company or other nominee who is the stockholder submitting a notice pursuant to
this Section 2.4 solely because such broker, dealer, commercial bank, trust company or other nominee has been directed to prepare and submit the notice
required by these bylaws on behalf of a beneficial owner.
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(c) Notwithstanding anything to the contrary in this Section 2.4, unless otherwise required by law, if the stockholder (or a
qualified representative of the stockholder) does not appear in person at the applicable meeting to present a nomination or other proposed business, such
nomination will be disregarded or such proposed business will not be transacted, as the case may be, notwithstanding that proxies in respect of such
nomination or business may have been received by the corporation and counted for purposes of determining a quorum. For purposes of this Section
2.4(iv), to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or
must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as
proxy at the applicable meeting, and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or
electronic transmission, at the applicable meeting.
(d) In addition to the foregoing provisions of this Section 2.4, a stockholder must also comply with all applicable
requirements of state law and of the 1934 Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.4, including,
with respect to business such stockholder intends to bring before the annual meeting that involves a proposal that such stockholder requests to be included
in the corporation’s proxy statement, the requirements of Rule 14a-8 (or any successor provision) under the 1934 Act. Nothing in this Section 2.4 shall be
deemed to affect any right of: (1) a stockholder to request inclusion of proposals in the corporation’s proxy statement pursuant to Rule 14a-8 (or any
successor provision) under the 1934 Act or (2) the corporation to omit a proposal from the corporation’s proxy statement pursuant to Rule 14a-8 (or any
successor provision) under the 1934 Act.
2.5 NOTICE OF STOCKHOLDERS’ MEETINGS
Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state
the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be
present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting, if such date is different from the
record date for determining stockholders entitled to notice of the meeting, and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Except as otherwise provided in the DGCL, the certificate of incorporation or these bylaws, the written notice of any meeting of
stockholders shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such
meeting as of the record date for determining the stockholders entitled to notice of the meeting.
2.6 QUORUM
The holders of one-third of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at all meetings of the stockholders. Where a separate vote by a class or series or classes or series is required, one-
third of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to
take action with respect to that vote on that matter, except as otherwise provided by law, the certificate of incorporation or these bylaws.
If, however, such quorum is not present or represented at any meeting of the stockholders, then either (i) the chairperson of the meeting, or (ii)
the stockholders entitled to vote at the meeting, present in person or represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is present or represented. At such adjourned meeting at which a quorum is present
or represented, any business may be transacted that might have been transacted at the meeting as originally noticed.
2.7 ADJOURNED MEETING; NOTICE
When a meeting is adjourned to another time or place, unless these bylaws otherwise require, notice need not be given of the adjourned meeting
if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present
in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the corporation
may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, a notice of the
adjourned meeting shall be given to each stockholder of record entitled to vote at the
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meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the board of directors shall fix a
new record date for notice of such adjourned meeting in accordance with Section 213(a) of the DGCL and Section 2.11 of these bylaws, and shall give
notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such
adjourned meeting.
2.8 CONDUCT OF BUSINESS
The chairperson of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation
of the manner of voting and the conduct of business.
2.9 VOTING
The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.11 of these
bylaws, subject to Section 217 (relating to voting rights of fiduciaries, pledgors and joint owners of stock) and Section 218 (relating to voting trusts and
other voting agreements) of the DGCL.
Except as may be otherwise provided in the certificate of incorporation or these bylaws, each stockholder shall be entitled to one vote for each
share of capital stock held by such stockholder.
Except as otherwise required by law, the certificate of incorporation or the bylaws, (i) shareholder action (except for bylaw amendments, which
will require a majority of shares entitled to vote, and election of directors) will be based on the affirmative vote of a majority of the votes cast and (ii)
broker non-votes and abstentions will be considered for purposes of establishing a quorum but will not be considered as votes cast for or against a proposal
or director nominee.
Except as otherwise required by law, the certificate of incorporation or these bylaws, directors shall be elected by a plurality of the voting power
of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Where a separate vote by a class or
series or classes or series is required, in all matters other than the election of directors, the affirmative vote of the majority of shares of such class or series
or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series, except as otherwise
provided by law, the certificate of incorporation or these bylaws.
2.10
STOCKHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Subject to the rights of the holders of any series of preferred stock, any action required or permitted to be taken by the stockholders of the
Corporation must be effected at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in
writing by such stockholders; provided, however, that stockholders may take action by written consent if the action to be effected by written consent and
the taking of such action by written consent are approved in advance by resolution of the board of directors.
2.11
RECORD DATES
In order that the corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the
board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the
board of directors and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the board of
directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the board of
directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such
determination.
If no record date is fixed by the board of directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of
stockholders shall be at 5:00 p.m. Pacific Time on the day next preceding the day on which notice is given, or, if notice is waived, at 5:00 p.m. Pacific Time
on the day next preceding the day on which the meeting is held.
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A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record date for determination of stockholders entitled to vote at the adjourned
meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that
fixed for determination of stockholders entitled to vote in accordance with the provisions of Section 213 of the DGCL and this Section 2.11 at the
adjourned meeting.
In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any
rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful
action, the board of directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted,
and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at 5:00 p.m. Pacific Time on the day on which the board of directors adopts the resolution relating thereto.
2.12
PROXIES
Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy
authorized by an instrument in writing or by a transmission permitted by law filed in accordance with the procedure established for the meeting, but no
such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of Section 212 of the DGCL.
A written proxy may be in the form of a telegram, cablegram, or other means of electronic transmission which sets forth or is submitted with
information from which it can be determined that the telegram, cablegram, or other means of electronic transmission was authorized by the stockholder.
Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for
exclusive use by the board of directors.
2.13
LIST OF STOCKHOLDERS ENTITLED TO VOTE
The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the meeting; provided, however, if the record date for determining the stockholders
entitled to vote is less than ten (10) days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth (10th) day before the
meeting date, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each
stockholder. The corporation shall not be required to include electronic mail addresses or other electronic contact information on such list. Such list shall
be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a
reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii)
during ordinary business hours, at the corporation’s principal place of business. In the event that the corporation determines to make the list available on an
electronic network, the corporation may take reasonable steps to ensure that such information is available only to stockholders of the corporation. Such list
shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.
2.14
INSPECTORS OF ELECTION
Before any meeting of stockholders, the board of directors shall appoint an inspector or inspectors of election to act at the meeting or its
adjournment. The number of inspectors shall be either one (1) or three (3). If any person appointed as inspector fails to appear or fails or refuses to act,
then the chairperson of the meeting may, and upon the request of any stockholder or a stockholder’s proxy shall, appoint a person to fill that vacancy.
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Such inspectors shall:
existence of a quorum, and the authenticity, validity and effect of proxies;
(i) determine the number of shares outstanding and the voting power of each, the number of shares represented at the meeting, the
(ii) receive votes, ballots or consents;
(iii) hear and determine all challenges and questions in any way arising in connection with the right to vote;
(iv) count and tabulate all votes or consents;
(v) determine when the polls shall close;
(vi) determine the result; and
(vii)
do any other acts that may be proper to conduct the election or vote with fairness to all stockholders.
The inspectors of election shall perform their duties impartially, in good faith, to the best of their ability and as expeditiously as is practical. If
there are three (3) inspectors of election, the decision, act or certificate of a majority is effective in all respects as the decision, act or certificate of all. Any
report or certificate made by the inspectors of election is prima facie evidence of the facts stated therein.
3.1 POWERS
ARTICLE III - DIRECTORS
The business and affairs of the corporation shall be managed by or under the direction of the board of directors, except as may be otherwise
provided in the DGCL or the certificate of incorporation.
3.2 NUMBER OF DIRECTORS
The board of directors shall consist of one or more members, each of whom shall be a natural person. Unless the certificate of incorporation
fixes the number of directors, the number of directors shall be determined from time to time by resolution of the board of directors. No reduction of the
authorized number of directors shall have the effect of removing any director before that director’s term of office expires.
3.3 ELECTION, QUALIFICATION AND TERM OF OFFICE OF DIRECTORS
Except as provided in Section 3.4 of these bylaws, each director, including a director elected to fill a vacancy, shall hold office until the
expiration of the term for which elected and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or
removal. Directors need not be stockholders unless so required by the certificate of incorporation or these bylaws. The certificate of incorporation or these
bylaws may prescribe other qualifications for directors.
If so provided in the certificate of incorporation, the directors of the corporation shall be divided into three classes.
3.4 RESIGNATION AND VACANCIES
Any director may resign at any time upon notice given in writing or by electronic transmission to the corporation. A resignation is effective
when the resignation is delivered unless the resignation specifies a later effective date or an effective date determined upon the happening of an event or
events. A resignation which is conditioned upon the director failing to receive a specified vote for reelection as a director may provide that it is
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irrevocable. Unless otherwise provided in the certificate of incorporation or these bylaws, when one or more directors resign from the board of directors,
effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or
vacancies, the vote thereon to take effect when such resignation or resignations shall become effective.
Unless otherwise provided in the certificate of incorporation or these bylaws, vacancies and newly created directorships resulting from any
increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining director. If the directors are divided into classes, a person so elected by the
directors then in office to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have
been chosen and until his or her successor shall have been duly elected and qualified.
If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any
stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like responsibility for the person or estate of
a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these bylaws, or may apply
to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the DGCL.
If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole
board of directors (as constituted immediately prior to any such increase), the Court of Chancery may, upon application of any stockholder or stockholders
holding at least 10% of the voting stock at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any
such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be
governed by the provisions of Section 211 of the DGCL as far as applicable.
3.5 PLACE OF MEETINGS; MEETINGS BY TELEPHONE
The board of directors may hold meetings, both regular and special, either within or outside the State of Delaware.
Unless otherwise restricted by the certificate of incorporation or these bylaws, members of the board of directors, or any committee designated
by the board of directors, may participate in a meeting of the board of directors, or any committee, by means of conference telephone or other
communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
3.6 REGULAR MEETINGS
Regular meetings of the board of directors may be held without notice at such time and at such place as shall from time to time be determined by
the board of directors.
3.7 SPECIAL MEETINGS; NOTICE
Special meetings of the board of directors for any purpose or purposes may be called at any time by the chairperson of the board of directors, the
chief executive officer, the president, the secretary or a majority of the authorized number of directors.
Notice of the time and place of special meetings shall be:
(i) delivered personally by hand, by courier or by telephone;
(ii) sent by United States first-class mail, postage prepaid;
(iii) sent by facsimile; or
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(iv) sent by electronic mail,
directed to each director at that director’s address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the
corporation’s records.
If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic mail, it shall be
delivered or sent at least 24 hours before the time of the holding of the meeting. If the notice is sent by United States mail, it shall be deposited in the
United States mail at least four (4) days before the time of the holding of the meeting. Any oral notice may be communicated to the director. The notice
need not specify the place of the meeting (if the meeting is to be held at the corporation’s principal executive office) nor the purpose of the meeting.
3.8 QUORUM; VOTING
At all meetings of the board of directors, a majority of the total authorized number of directors shall constitute a quorum for the transaction of
business. If a quorum is not present at any meeting of the board of directors, then the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum is present. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.
The vote of a majority of the directors present at any meeting at which a quorum is present shall be the act of the board of directors, except as
may be otherwise specifically provided by statute, the certificate of incorporation or these bylaws.
If the certificate of incorporation provides that one or more directors shall have more or less than one vote per director on any matter, every
reference in these bylaws to a majority or other proportion of the directors shall refer to a majority or other proportion of the votes of the directors.
3.9 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING
Unless otherwise restricted by the certificate of incorporation or these bylaws, any action required or permitted to be taken at any meeting of the
board of directors, or of any committee thereof, may be taken without a meeting if all members of the board of directors or committee, as the case may be,
consent thereto in writing or by electronic transmission and the writing or writings or electronic transmission or transmissions are filed with the minutes of
proceedings of the board of directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic
form if the minutes are maintained in electronic form.
3.10
FEES AND COMPENSATION OF DIRECTORS
Unless otherwise restricted by the certificate of incorporation or these bylaws, the board of directors shall have the authority to fix the
compensation of directors.
3.11
REMOVAL OF DIRECTORS
Any director may be removed from office by the stockholders of the corporation only for cause.
No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term
of office.
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4.1 COMMITTEES OF DIRECTORS
ARTICLE IV - COMMITTEES
The board of directors may, by resolution passed by a majority of the authorized number of directors, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The board of directors may designate one or more directors as alternate members of
any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the board of directors to act at the meeting in the place of any such absent or disqualified member.
Any such committee, to the extent provided in the resolution of the board of directors or in these bylaws, shall have and may exercise all the powers and
authority of the board of directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be
affixed to all papers that may require it; but no such committee shall have the power or authority to (i) approve or adopt, or recommend to the stockholders,
any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii)
adopt, amend or repeal any bylaw of the corporation.
4.2 COMMITTEE MINUTES
Each committee shall keep regular minutes of its meetings and report the same to the board of directors when required.
4.3 MEETINGS AND ACTION OF COMMITTEES
Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of:
(i) Section 3.5 (place of meetings and meetings by telephone);
(ii) Section 3.6 (regular meetings);
(iii) Section 3.7 (special meetings and notice);
(iv) Section 3.8 (quorum; voting);
(v) Section 7.5 (waiver of notice); and
(vi) Section 3.9 (action without a meeting)
with such changes in the context of those bylaws as are necessary to substitute the committee and its members for the board of directors and its members.
However:
committee;
(i)
the time of regular meetings of committees may be determined either by resolution of the board of directors or by resolution of the
(ii) special meetings of committees may also be called by resolution of the board of directors; and
(iii) notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the governance of any committee not inconsistent with the provisions of these
bylaws.
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Any provision in the certificate of incorporation providing that one or more directors shall have more or less than one vote per director on any
matter shall apply to voting in any committee or subcommittee, unless otherwise provided in the certificate of incorporation or these bylaws.
4.4 SUBCOMMITTEES
Unless otherwise provided in the certificate of incorporation, these bylaws or the resolutions of the board of directors designating the committee,
a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a
subcommittee any or all of the powers and authority of the committee.
5.1 OFFICERS
ARTICLE V - OFFICERS
The officers of the corporation shall be a president and a secretary. The corporation may also have, at the discretion of the board of directors, a
chairperson of the board of directors, a vice chairperson of the board of directors, a chief executive officer, a chief financial officer or treasurer, one or more
vice presidents, one or more assistant vice presidents, one or more assistant treasurers, one or more assistant secretaries, and any such other officers as may
be appointed in accordance with the provisions of these bylaws. Any number of offices may be held by the same person.
5.2 APPOINTMENT OF OFFICERS
The board of directors shall appoint the officers of the corporation, except such officers as may be appointed in accordance with the provisions of
Section 5.3 of these bylaws, subject to the rights, if any, of an officer under any contract of employment.
5.3 SUBORDINATE OFFICERS
The board of directors may appoint, or empower the chief executive officer or, in the absence of a chief executive officer, the president, to
appoint, such other officers and agents as the business of the corporation may require. Each of such officers and agents shall hold office for such period,
have such authority, and perform such duties as are provided in these bylaws or as the board of directors may from time to time determine.
5.4 REMOVAL AND RESIGNATION OF OFFICERS
Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an
affirmative vote of the majority of the board of directors at any regular or special meeting of the board of directors or, except in the case of an officer
chosen by the board of directors, by any officer upon whom such power of removal may be conferred by the board of directors.
Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that
notice or at any later time specified in that notice. Unless otherwise specified in the notice of resignation, the acceptance of the resignation shall not be
necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a
party.
5.5 VACANCIES IN OFFICES
Any vacancy occurring in any office of the corporation shall be filled by the board of directors or as provided in Section 5.3 hereof.
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5.6 REPRESENTATION OF SHARES OF OTHER CORPORATIONS
The chairperson of the board of directors, the president, any vice president, the treasurer, the secretary or assistant secretary of this corporation,
or any other person authorized by the board of directors or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this
corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted
herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by such
person having the authority.
5.7 AUTHORITY AND DUTIES OF OFFICERS
All officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the
corporation as may be designated from time to time by the board of directors or the stockholders and, to the extent not so provided, as generally pertain to
their respective offices, subject to the control of the board of directors.
6.1 STOCK CERTIFICATES; PARTLY PAID SHARES
ARTICLE VI - STOCK
The shares of the corporation shall be represented by certificates, provided that the board of directors may provide by resolution or resolutions
that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the corporation. Every holder of stock represented by certificates shall be entitled to have a certificate
signed by, or in the name of the corporation by the chairperson of the board of directors or vice-chairperson of the board of directors, or the president or a
vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of the corporation representing the number of shares
registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. The
corporation shall not have power to issue a certificate in bearer form.
The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid
therefor. Upon the face or back of each stock certificate issued to represent any such partly-paid shares, or upon the books and records of the corporation in
the case of uncertificated partly-paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the
declaration of any dividend on fully-paid shares, the corporation shall declare a dividend upon partly-paid shares of the same class, but only upon the basis
of the percentage of the consideration actually paid thereon.
6.2 SPECIAL DESIGNATION ON CERTIFICATES
If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the
preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to
represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the DGCL, in lieu of the foregoing
requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock, a
statement that the corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences
and/or rights. Within a reasonable time after the issuance or transfer of uncertificated stock, the corporation shall send to the registered owner thereof a
written notice containing the information required to be set forth or stated on certificates pursuant to this Section 6.2 or Sections 156, 202(a) or 218(a) of
the DGCL or with respect to this Section 6.2 a statement that the corporation will furnish without charge to each stockholder who so requests the powers,
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designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights. Except as otherwise expressly provided by law, the rights and obligations of the holders of
uncertificated stock and the rights and obligations of the holders of certificates representing stock of the same class and series shall be identical.
6.3 LOST CERTIFICATES
Except as provided in this Section 6.3, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is
surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of
any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or
destroyed certificate, or such owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made
against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
6.4 DIVIDENDS
The board of directors, subject to any restrictions contained in the certificate of incorporation or applicable law, may declare and pay dividends
upon the shares of the corporation’s capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock, subject to the
provisions of the certificate of incorporation.
The board of directors may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper
purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of
the corporation, and meeting contingencies.
6.5 TRANSFER OF STOCK
Transfers of record of shares of stock of the corporation shall be made only upon its books by the holders thereof, in person or by an attorney
duly authorized, and, if such stock is certificated, upon the surrender of a certificate or certificates for a like number of shares, properly endorsed or
accompanied by proper evidence of succession, assignation or authority to transfer.
6.6 STOCK TRANSFER AGREEMENTS
The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock
of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not
prohibited by the DGCL.
6.7 REGISTERED STOCKHOLDERS
The corporation:
to vote as such owner;
(i) shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and
(ii) shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares; and
whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
(iii) shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person,
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ARTICLE VII - MANNER OF GIVING NOTICE AND WAIVER
7.1 NOTICE OF STOCKHOLDERS’ MEETINGS
Notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder
at such stockholder’s address as it appears on the corporation’s records. An affidavit of the secretary or an assistant secretary of the corporation or of the
transfer agent or other agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated
therein.
7.2 NOTICE BY ELECTRONIC TRANSMISSION
Without limiting the manner by which notice otherwise may be given effectively to stockholders pursuant to the DGCL, the certificate of
incorporation or these bylaws, any notice to stockholders given by the corporation under any provision of the DGCL, the certificate of incorporation or
these bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder to whom the notice is given. Any such consent
shall be revocable by the stockholder by written notice to the corporation. Any such consent shall be deemed revoked if:
such consent; and
(i)
the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with
responsible for the giving of notice.
(ii) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent, or other person
However, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action.
Any notice given pursuant to the preceding paragraph shall be deemed given:
(i)
(ii)
(iii)
if by facsimile telecommunication, when directed to a number at which the stockholder has consented to receive notice;
if by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice;
if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the
later of (A) such posting and (B) the giving of such separate notice; and
(iv)
if by any other form of electronic transmission, when directed to the stockholder.
An affidavit of the secretary or an assistant secretary or of the transfer agent or other agent of the corporation that the notice has been given by a
form of electronic transmission shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
An “electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record
that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an
automated process.
Notice by a form of electronic transmission shall not apply to Section 164, 296, 311, 312 or 324 of the DGCL.
7.3 NOTICE TO STOCKHOLDERS SHARING AN ADDRESS
Except as otherwise prohibited under the DGCL, without limiting the manner by which notice otherwise may be given effectively to
stockholders, any notice to stockholders given by the corporation under the provisions of the DGCL, the certificate of incorporation or these bylaws shall
be effective if given by a single written notice to
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stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Any such consent shall be revocable
by the stockholder by written notice to the corporation. Any stockholder who fails to object in writing to the corporation, within sixty (60) days of having
been given written notice by the corporation of its intention to send the single notice, shall be deemed to have consented to receiving such single written
notice.
7.4 NOTICE TO PERSON WITH WHOM COMMUNICATION IS UNLAWFUL
Whenever notice is required to be given, under the DGCL, the certificate of incorporation or these bylaws, to any person with whom
communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority
or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person
with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the
corporation is such as to require the filing of a certificate under the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice
was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
7.5 WAIVER OF NOTICE
Whenever notice is required to be given under any provision of the DGCL, the certificate of incorporation or these bylaws, a written waiver,
signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time of the event
for which notice is to be given, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the
stockholders need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the certificate of
incorporation or these bylaws.
8.1 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN THIRD PARTY PROCEEDINGS
ARTICLE VIII - INDEMNIFICATION
Subject to the other provisions of this Article VIII, the corporation shall indemnify, to the fullest extent permitted by the DGCL or any other
applicable laws, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director or officer of the corporation, or is or was a director or officer of the corporation
serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection
with such Proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. The
termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which such person reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that such person’s conduct was unlawful.
8.2 INDEMNIFICATION OF DIRECTORS AND OFFICERS IN ACTIONS BY OR IN THE RIGHT OF THE CORPORATION
Subject to the other provisions of this Article VIII, the corporation shall indemnify, to the fullest extent permitted by the DGCL or any other
applicable laws, as now or hereinafter in effect, any person who was or is a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the
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corporation to procure a judgment in its favor by reason of the fact that such person is or was a director or officer of the corporation, or is or was a director
or officer of the corporation serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation; except that no indemnification shall be made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
8.3 SUCCESSFUL DEFENSE
To the extent that a present or former director or officer of the corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding described in Section 8.1 or 8.2 hereof, or in defense of any claim, issue or matter therein, such person shall be indemnified
against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection therewith.
8.4 INDEMNIFICATION OF OTHERS
Subject to the other provisions of this Article VIII, the corporation shall have power to indemnify its employees and agents to the fullest extent
not prohibited by the DGCL or any other applicable laws. The board of directors shall have the power to delegate to such person or persons the
determination of whether employees or agents shall be indemnified.
8.5 ADVANCE PAYMENT OF EXPENSES
Expenses (including attorneys’ fees) incurred by an officer or director of the corporation in defending any Proceeding shall be paid by the
corporation in advance of the final disposition of such Proceeding upon receipt of a written request therefor (together with documentation reasonably
evidencing such expenses) and an undertaking by or on behalf of the person to repay such amounts if it shall ultimately be determined that the person is not
entitled to be indemnified under this Article VIII or the DGCL. Such expenses (including attorneys’ fees) incurred by former directors and officers or other
employees and agents of the corporation or by persons serving at the request of the corporation as directors, officers, employees or agents of another
corporation, partnership, joint venture, trust or other enterprise may be so paid upon such terms and conditions, if any, as the corporation deems
appropriate. The right to advancement of expenses shall not apply to any claim for which indemnity is excluded pursuant to these bylaws, but shall apply
to any Proceeding referenced in Section 8.6(ii) or 8.6(iii) hereof prior to a determination that the person is not entitled to be indemnified by the corporation.
Notwithstanding the foregoing, unless otherwise determined pursuant to Section 8.8 hereof, no advance shall be made by the corporation to an
officer of the corporation (except by reason of the fact that such officer is or was a director of the corporation, in which event this paragraph shall not
apply) in any Proceeding if a determination is reasonably and promptly made (i) by a majority vote of the directors who are not parties to such Proceeding,
even though less than a quorum, (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (iii)
if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, that facts known to the decision-making party
at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the corporation.
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8.6 LIMITATION ON INDEMNIFICATION
Subject to the requirements in Section 8.3 hereof and the DGCL, the corporation shall not be obligated to indemnify any person pursuant to this
Article VIII in connection with any Proceeding (or any part of any Proceeding):
vote or otherwise, except with respect to any excess beyond the amount paid;
(i)
for which payment has actually been made to or on behalf of such person under any statute, insurance policy, indemnity provision,
local statutory law or common law, if such person is held liable therefor (including pursuant to any settlement arrangements);
(ii) for an accounting or disgorgement of profits pursuant to Section 16(b) of the 1934 Act, or similar provisions of federal, state or
(iii) for any reimbursement of the corporation by such person of any bonus or other incentive-based or equity-based compensation or
of any profits realized by such person from the sale of securities of the corporation, as required in each case under the 1934 Act (including any such
reimbursements that arise from an accounting restatement of the corporation pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-
Oxley Act”), or the payment to the corporation of profits arising from the purchase and sale by such person of securities in violation of Section 306 of the
Sarbanes-Oxley Act), if such person is held liable therefor (including pursuant to any settlement arrangements);
(iv) initiated by such person, including any Proceeding (or any part of any Proceeding) initiated by such person against the corporation
or its directors, officers, employees, agents or other indemnitees, unless (a) the board of directors authorized the Proceeding (or the relevant part of the
Proceeding) prior to its initiation, (b) the corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in the corporation
under applicable law, (c) otherwise required to be made under Section 8.7 hereof or (d) otherwise required by applicable law; or
(v) if prohibited by applicable law.
8.7 DETERMINATION; CLAIM
If a claim for indemnification or advancement of expenses under this Article VIII is not paid in full within ninety (90) days after receipt by the
corporation of the written request therefor, the claimant shall be entitled to an adjudication by a court of competent jurisdiction of his or her entitlement to
such indemnification or advancement of expenses. The corporation shall indemnify such person against any and all expenses that are incurred by such
person in connection with any action for indemnification or advancement of expenses from the corporation under this Article VIII, to the extent such person
is successful in such action, and to the extent not prohibited by law. In any such suit, the corporation shall, to the fullest extent not prohibited by law, have
the burden of proving that the claimant is not entitled to the requested indemnification or advancement of expenses.
8.8 NON-EXCLUSIVITY OF RIGHTS
The indemnification and advancement of expenses provided by, or granted pursuant to, this Article VIII shall not be deemed exclusive of any
other rights to which those seeking indemnification or advancement of expenses may be entitled under the certificate of incorporation or any statute, bylaw,
agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another
capacity while holding such office. The corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers,
employees or agents respecting indemnification and advancement of expenses, to the fullest extent not prohibited by the DGCL or other applicable law.
8.9 INSURANCE
The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against any liability
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asserted against such person and incurred by such person in any such capacity, or arising out of such person’s status as such, whether or not the corporation
would have the power to indemnify such person against such liability under the provisions of the DGCL.
8.10
SURVIVAL
The rights to indemnification and advancement of expenses conferred by this Article VIII shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
8.11
EFFECT OF REPEAL OR MODIFICATION
A right to indemnification or to advancement of expenses arising under a provision of the certificate of incorporation or a bylaw shall not be
eliminated or impaired by an amendment to the certificate of incorporation or these bylaws after the occurrence of the act or omission that is the subject of
the civil, criminal, administrative or investigative action, suit or proceeding for which indemnification or advancement of expenses is sought, unless the
provision in effect at the time of such act or omission explicitly authorizes such elimination or impairment after such action or omission has occurred.
8.12
CERTAIN DEFINITIONS
For purposes of this Article VIII, references to the “corporation” shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, employees or agents, so that any person who is or was a director, officer, employee or agent of
such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Article VIII with respect to the
resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. For
purposes of this Article VIII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes
assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the corporation” shall include any service as a
director, officer, employee or agent of the corporation which imposes duties on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed
to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best
interests of the corporation” as referred to in this Article VIII.
9.1 EXECUTION OF CORPORATE CONTRACTS AND INSTRUMENTS
ARTICLE IX - GENERAL MATTERS
Except as otherwise provided by law, the certificate of incorporation or these bylaws, the board of directors may authorize any officer or officers,
or agent or agents, to enter into any contract or execute any document or instrument in the name of and on behalf of the corporation; such authority may be
general or confined to specific instances. Unless so authorized or ratified by the board of directors or within the agency power of an officer, no officer,
agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for
any purpose or for any amount.
9.2 FISCAL YEAR
The fiscal year of the corporation shall be fixed by resolution of the board of directors and may be changed by the board of directors.
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9.3 SEAL
The corporation may adopt a corporate seal, which shall be adopted and which may be altered by the board of directors. The corporation may
use the corporate seal by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced.
9.4 CONSTRUCTION; DEFINITIONS
Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the DGCL shall govern the construction of
these bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the
term “person” includes both a corporation and a natural person.
ARTICLE X - AMENDMENTS
These bylaws may be adopted, amended or repealed by the stockholders entitled to vote. However, the corporation may, in its certificate of
incorporation, confer the power to adopt, amend or repeal bylaws upon the directors. The fact that such power has been so conferred upon the directors
shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal bylaws.
A bylaw amendment adopted by stockholders which specifies the votes that shall be necessary for the election of directors shall not be further
amended or repealed by the board of directors.
ARTICLE XI - EXCLUSIVE FORUM
Unless the corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, if the
Court of Chancery does not have jurisdiction, another state or federal court located in the State of Delaware) shall, to the fullest extent permitted by law, be
the sole and exclusive forum for (1) any derivative action or proceeding brought on behalf of the corporation, (2) any action asserting a claim of breach of a
fiduciary duty owed by any director or officer or stockholder of the corporation to the corporation or the corporation’s stockholders, (3) any action arising
pursuant to any provision of the DGCL, or these Bylaws or the corporation’s certificate of incorporation (as either may be amended from time to time), or
(4) any action asserting a claim governed by the internal affairs doctrine. Any person or entity purchasing or otherwise acquiring or holding any interest in
shares of capital stock of the corporation shall be deemed to have notice of and consented to the provisions of this Article XI. Notwithstanding anything
otherwise to the contrary herein, the provisions of this Article XI will not apply to suits brought to enforce a duty or liability created by the federal
securities laws or any other claim for which the federal courts have exclusive jurisdiction.
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ORGANOVO HOLDINGS, INC.
CERTIFICATE OF BYLAWS
_________________________
The undersigned hereby certifies that he or she is the duly elected, qualified, and acting Secretary or Assistant Secretary of Organovo Holdings,
Inc., a Delaware corporation and that the foregoing bylaws were adopted and ratified by the corporation’s board of directors on July 12, 2023.
IN WITNESS WHEREOF, the undersigned has hereunto set his or her hand this 12th day of July, 2023.
/s/ Thomas Jurgensen
Thomas Jurgensen
Secretary
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DESCRIPTION OF ORGANOVO HOLDINGS, INC.’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
Exhibit 4.1
The following description of the common stock, par value $0.001 per share, of Organovo Holdings, Inc. (“us,” “our,” “we,” or the “Company”),
which is the only security of the Company registered under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
summarizes certain information regarding the common stock in our certificate of incorporation, as amended, our by-laws, as amended, and applicable
provisions of Delaware general corporate law (the “DGCL”), and is qualified by reference to our certificate of incorporation, our certificate of amendment
of certificate of incorporation, our by-laws and our amendment to bylaws, which are incorporated by reference as Exhibit 3.1, 3.2, 3.3, 3.4 and 3.5,
respectively, to the Annual Report on Form 10-K for the fiscal year ending March 31, 2023.
Our authorized capital stock consists of 200,000,000 shares of common stock, par value $0.001 per share and 25,000,000 shares of preferred stock,
par value $0.001 per share.
General
As of March 31, 2023, our certificate of incorporation, as amended (the “certificate of amendment”), authorizes us to issue up to (i) 200,000,000
shares of common stock, par value $0.001 per share, and (ii) 25,000,000 shares of preferred stock, par value $0.001 per share.
On August 18, 2020, we effected a 1-for-20 reverse stock split of our outstanding common stock. As a result of the reverse stock split, every twenty
(20) shares of our pre-reverse split common stock were combined and reclassified into one (1) share of common stock. The reverse stock split had no effect
on the number of authorized shares of common or preferred stock, or on the stated par value per share of our common stock.
The following is a summary of the material provisions of the common stock and preferred stock provided for in our Certificate of Incorporation and
bylaws, as amended (the “bylaws”). For additional detail about our capital stock, please refer to our Certificate of Incorporation and bylaws.
Common Stock
Our common stock is listed on the Nasdaq Capital Market under the symbol “ONVO”.
Voting: Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote, except matters that relate
only to a series of our preferred stock.
The holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders, including the election of
directors. Generally, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the
votes entitled to be cast by all shares of common stock that are present in person or represented by proxy. Except as otherwise provided by law,
amendments to the certificate of incorporation generally must be approved by a majority of the votes entitled to be cast by all outstanding shares of
common stock. The certificate of incorporation does not provide for cumulative voting in the election of directors. The common stock holders will be
entitled to such cash dividends as may be declared from time to time by our board of directors from funds available. Upon our liquidation, dissolution or
winding up, the common stock holders will be entitled to receive pro rata all assets available for distribution to such holders.
Dividends: Subject to limitations under Delaware law and preferences that may apply to any then-outstanding shares of preferred stock, holders of
common stock are entitled to share ratably in dividends, if any, as may be declared from time to time by our board of directors in its discretion from funds
legally available therefor.
Dividends, if any, will be contingent upon our revenues and earnings, if any, and capital requirements and financial conditions. The payment of
dividends, if any, will be within the discretion of our board of directors. We presently intend to retain all earnings, if any, and accordingly our board of
directors does not anticipate declaring any dividends prior to a business combination.
Liquidation: In the event of a liquidation, dissolution or winding up, the holders of common stock are entitled to share pro rata all assets remaining
after payment in full of all liabilities and after providing for each class of stock, if any, having preference over the common stock, subject to the liquidation
preference of any then outstanding shares of preferred stock.
Miscellaneous: Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to
our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of
the holders of shares of any series of our preferred stock that we may designate and issue in the future.
Preferred Stock
Under the terms of our certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in one or more series
without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting
rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. There are no restrictions
presently on the repurchase or redemption of any shares of our preferred stock.
The issuance of preferred stock will affect, and may adversely affect, the rights of holders of common stock. It is not possible to state the actual
effect of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the specific rights
attached to that preferred stock. The effects of issuing preferred stock could include one or more of the following:
•
•
•
•
restricting dividends on the common stock;
diluting the voting power of the common stock;
impairing the liquidation rights of the common stock; or
delaying or preventing changes in control or management of our company.
We have no present plans to issue any shares of preferred stock nor are any shares of our preferred stock presently outstanding.
Effect of Certain Provisions of our Certificate of Incorporation and Bylaws
Provisions of our certificate of incorporation and our bylaws could have the effect of delaying, deferring or discouraging another party from
acquiring control of us. These provisions, which are summarized below, may have the effect of discouraging takeover bids. These provisions are also
designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefits of
increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a proposal to
acquire us because negotiation of these proposals could result in an improvement of their terms.
Classified Board. Our Certificate of Incorporation and our Bylaws provide that our board of directors is divided into three classes, consisting of two
Class I directors, two Class II directors and two Class III directors. The directors designated as Class I directors have a term expiring at our annual meeting
of stockholders in 2026. The directors designated as Class II directors have a term expiring at our annual meeting of stockholders in 2025, and the directors
designated as a Class III directors have a term expiring at our annual meeting of stockholders in 2023. Directors for each class will be elected at the annual
meeting of stockholders held in the year in which the term for that class expires and thereafter will serve for a term of three years. At any meeting of
stockholders for the election of directors at which a quorum is present, the election will be determined by a plurality of the votes cast by the stockholders
entitled to vote at the election. Under the classified board provisions, it will take at least two elections of directors for any individual or group to gain
control of our board. Accordingly, these provisions could discourage a third party from initiating a proxy contest, making a tender offer or otherwise
attempting to gain control of us.
Undesignated preferred stock. The authority of our board of directors to issue preferred stock could potentially be used to discourage attempts by
third parties to obtain control of our company through a merger, tender offer, proxy contest, or otherwise by making it more difficult or more costly to
obtain control of our company. Our board of directors may issue preferred stock with voting rights or conversion rights that, if exercised, could adversely
affect the voting power of the holders of common stock.
Advanced Notice Requirement. Stockholder nominations of individuals for election to our board of directors and stockholder proposals of other
matters to be brought before an annual meeting of our stockholders must comply with the advance notice procedures set forth in our bylaws. Generally, to
be timely, such notice must be received at our principal executive offices no later than the date specified in our proxy statement released to stockholders in
connection with the preceding year’s annual meeting of stockholders, which date shall be not earlier than the 75th day, nor later than the close of business
on the 45th day, prior to the one-year anniversary of the date on which we first mailed our proxy materials or a notice of availability of proxy materials
(whichever is earlier) for the preceding year’s annual meeting.
Special Meeting Requirements. Our bylaws provide that special meetings of our stockholders may only be called at the request of a majority of the
authorized number of members of the board of directors, chairperson of the board of directors, chief executive officer, president or secretary. Only such
business shall be considered at a special meeting as shall have been stated in the notice for such meeting.
No Stockholder Action by Written Consent Except with Prior Board Approval: Our Certificate of Incorporation and Bylaws provide that no action
shall be taken by our stockholders except at an annual or special meeting of the stockholders called in accordance with the Bylaws, and no action shall be
taken by our stockholders by written consent, except if the action to be effected by written consent and the taking of such action by written action is
approved in advance by resolution of the board of directors.
No Cumulative Voting. Our certificate of incorporation does not include a provision for cumulative voting for directors.
Removal of Directors. Our certificate of incorporation and bylaws provide that the holders of our voting stock may only remove our directors for
cause.
Authorized but Unissued Shares. Our authorized but unissued shares of common stock and preferred stock will be available for future issuance
without stockholder approval. We may use additional shares for a variety of purposes, including future public offerings to raise additional capital, to fund
acquisitions and as employee compensation. The existence of authorized but unissued shares of common stock and preferred stock could render more
difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Size of Board and Vacancies. Our bylaws provide that the number of directors on our board of directors is fixed exclusively by our board of
directors. Vacancies and newly created directorships resulting from any increase in our authorized number of directors will be filled by a majority of our
board of directors then in office, although less than a quorum, or by a sole remaining director.
Indemnification. Our certificate of incorporation and our bylaws provide that we will indemnify our officers and directors against losses as they
incur in investigations and legal proceedings resulting from their services to us, which may include service in connection with takeover defense measures.
Delaware Anti-Takeover Statute
We are subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. In general, Section 203
generally prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder for a period of three years
following the date on which the person became an interested stockholder unless:
•
•
•
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining
the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are
directors and also officers and (2) shares owned by employee stock plans in which employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and
authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662/3% of the
outstanding voting stock that is not owned by the interested stockholder.
In general, Section 203 defines business combination to include the following:
•
•
•
•
•
any merger or consolidation involving the corporation and the interested stockholder;
any sale, lease, exchange, mortgage, transfer, pledge or other disposition of 10% or more of either the assets or outstanding stock of the
corporation involving the interested stockholder;
subject to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the
interested stockholder;
any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the
corporation beneficially owned by the interested stockholder; or
the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or through
the corporation.
In general, Section 203 defines interested stockholder as an entity or person who, together with affiliates and associates, beneficially owns, or within
three years prior to the determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
The provisions of Delaware law and our certificate of incorporation and our bylaws could have the effect of discouraging others from attempting
hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual
or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in our management. It is possible that these
provisions may make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Final Form
ASSET PURCHASE AGREEMENT
ACQUISITION OF CERTAIN ASSETS OF
METACRINE, INC.
BY
ORGANOVO, INC.
DATED AS OF March 10, 2023
LEGAL_US_W # 115308022.7
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is made as of March 10, 2023 by and between ORGANOVO, INC., a Delaware corporation
(“Purchaser”), and METACRINE, INC., a Delaware corporation (“Seller”).
RECITALS:
Subject to the terms and conditions set forth herein, Seller desires to sell, convey, transfer, assign and deliver to Purchaser, and
Purchaser desires to purchase and acquire from Seller, free and clear of all Encumbrances other than the Assumed Liabilities, all of Seller’s
right, title and interest in and to all of the Purchased Assets (the “Acquisition”).
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of
which are hereby expressly acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used herein, the following terms shall have the following meanings:
“Activities to Date” shall have the meaning given to such term in Section 3.8(a).
“Acquisition” shall have the meaning given to such term in the Recitals.
“Affiliate” means with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common
control with such Person; provided, that, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlled
by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or by
contract or otherwise.
“Agreement” means this Asset Purchase Agreement.
“API” means an active pharmaceutical ingredient.
“Assignment and Assumption Agreement” shall have the meaning given to such term in Section 2.5(b).
“Assumed Liabilities” shall have the meaning given to such term in Section 2.3.
“Basket” shall have the meaning given to such term in Section 7.5(a).
“Cap” shall have the meaning given to such term in Section 7.5(b).
“Claim” shall have the meaning given to such term in Section 3.7.
“Closing” shall have the meaning given to such term in Section 2.6.
“Closing Date” shall have the meaning given to such term in Section 2.6.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Contract” means any contract or agreement, whether oral or written, between the Seller and any other Person(s).
“Control” or “Controlled,” with respect to any Information or Intellectual Property Right, possession by an entity of the ability
(whether by ownership, license or otherwise) to grant access to, to grant use of,
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or to grant a license or a sublicense of or under such Information or Intellectual Property Right without violating the terms of any agreement
or other arrangement with any third party.
“Covered Employees” shall have the meaning given to such term in Section 6.7(b).
“Delivery Date” shall have the meaning given to such term in Section 2.1(d).
“Encumbrance” shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, equity, trust,
equitable interest, claim, preference, right of possession, lease, tenancy, license, encroachment, covenant, infringement, interference, Order,
proxy, option, right of first refusal, right of first negotiation, preemptive right, community property interest, legend, defect, impediment,
exception, reservation, limitation, impairment, imperfection of title, escrow, prior assignment, condition or restriction of any nature (including
any restriction on the transfer or licensing of any asset, any restriction on the receipt of any income derived from any asset, any restriction on
the use of any asset and any restriction on the possession, exercise or transfer of any other attribute of ownership of any asset).
“Excluded Assets” shall have the meaning given to such term in Section 2.2.
“FDA” shall mean the Food and Drug Administration of the United States Department of Health and Human Services or any
successor agency thereof performing similar functions.
“Final Determination” shall have the meaning given to such term in Section 7.9.
“Governmental Authorities” means all agencies, authorities, bodies, boards, commissions, courts, instrumentalities, legislatures
and offices of any nature whatsoever of any government or political subdivision, whether foreign, federal, state, county, district, municipality,
city or otherwise.
“Information” shall mean all tangible and intangible (a) techniques, technology, practices, trade secrets, inventions (whether
patentable or not), methods, knowledge, know-how, skill, experience, test data and results (including pharmacological, toxicological and
clinical test data and results), formulations, processes, analytical and quality control data, results or descriptions, software and algorithms
and (b) compositions of matter, cells, cell lines, assays, animal models and physical, biological or chemical material.
“Intellectual Property” shall mean and include all algorithms, application programming interfaces, apparatus, assay components,
biological materials, cell lines, preclinical and clinical data, study designs, chemical compositions or structures, databases and data
collections, diagrams, formulae, gate arrays, inventions (whether or not patentable), know-how, methods, photomasks, processes,
proprietary information, protocols, sketches, designs, schematics, specifications, subroutines, test results, test vectors, user interfaces,
techniques, works of authorship, and other forms of technology (whether or not embodied in any tangible form and including all tangible
embodiments of the foregoing such as instruction manuals, laboratory notebooks, prototypes, samples, studies, and summaries); provided
that no trademarks owned or Controlled by Seller are covered by this Agreement.
“Intellectual Property Rights” shall mean and include all intellectual property and proprietary rights of any kind or nature, which
may exist or be created under the laws of any jurisdiction in the world, including: (a) rights associated with works of authorship, including
exclusive exploitation rights, copyrights, moral rights, and mask works; (b) trade secret rights; (c) patents, patent applications, and industrial
property rights; (d) other proprietary rights in Intellectual Property of every kind and nature; and (e) all registrations, renewals, extensions,
continuations, divisions, or reissues of, and applications for, any of the rights referred to in clauses (a) through (e) above; but excluding in all
cases trademark rights.
“Knowledge” shall have the meaning given to such term in Section 8.10.
“Laws” means any Federal, state, foreign or local statute, law, ordinance, regulation, rule, code, Order, other requirement or rule of
law.
“Liability” means any direct or indirect indebtedness, liability, assessment, expense, claim, loss, damage, deficiency, obligation or
responsibility, known or unknown, disputed or undisputed, joint or several, vested or unvested, executory or not, fixed or unfixed, choate or
inchoate, liquidated or unliquidated, secured or unsecured, determinable or undeterminable, accrued or unaccrued, absolute or not, actual or
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potential, contingent or otherwise (including any liability under any guarantees, letters of credit, performance credits or with respect to
insurance loss accruals).
“Losses” means any losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs and expenses
(including reasonable attorneys’ fees, costs and other out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing).
“Material Adverse Effect” means any event, change, development, effect, condition, occurrence, circumstance, state of facts or
matter which, individually or in combination with any other of the foregoing, has had or could reasonably be expected to have, a material
adverse effect on the Program, the Purchased Assets, the Assumed Liabilities, or in respect of the Seller’s operations, properties, assets,
condition (financial or otherwise), results, plans, strategies or prospects, taken as a whole, whether or not foreseeable and whether or not
durationally significant.
“Orders” shall have the meaning given to such term in Section 3.6.
“Party” means Seller or Purchaser, individually, as the context so requires, and the term “Parties” means collectively, Seller and
Purchaser.
“Patent Assignment” shall have the meaning give to such term in Section 2.5(c).
“Person” means an individual, corporation, partnership, limited partnership, limited liability company, limited liability partnership,
syndicate, person (including a “person” as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, together with the
rules and regulations promulgated thereunder), trust, association, entity or government or political subdivision, agency or instrumentality of a
government.
“Proceeding” shall mean any action, suit, litigation, arbitration, proceeding (including any civil, criminal, administrative, investigative
or appellate proceeding and any informal proceeding), prosecution, contest, hearing, inquiry, inquest, audit, examination or investigation
commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority or any arbitrator or arbitration
panel.
“Product Licenses” shall have the meaning given to such term in Section 3.8(a).
“Program” shall mean all of Seller’s activities directed to the research, development, manufacture (including synthesis, formulation,
storage, breeding, finishing or packaging), use, offer for sale, sale, import, and commercialization of the Program Therapy up to the Closing
Date.
“Program IP” shall mean all Intellectual Property Rights used, held for use, or related to the Program Therapy (other than Program
Patents) that are owned or Controlled by Seller.
“Program Therapy” shall mean therapies that target the nuclear receptor farnesoid-X-receptor (FXR): (a) omesdafexor, a small
molecule farnesoid X receptor (FXR) agonist, which is the Seller’s compound referred to as MET409, (b) a second small molecule FXR
agonist, which is Seller’s compound referred to as MET642, (c) any other of Seller’s compounds that target the nuclear receptor farnesoid-X-
receptor (FXR), and (d) any derivative or extension of the therapies described in the preceding clauses (a), (b) and (c) that target the nuclear
receptor farnesoid-X-receptor (FXR), whether existing on the Closing Date or developed, generated or synthesized by or on behalf of
Purchaser or any of its Affiliates or licensees of the Program Patents after the Closing, and all products and services related thereto.
“Program Know-How” shall mean Information which is: (a) owned or Controlled by Seller immediately prior to the Closing; and (b)
directed to the research, development, manufacture (including synthesis, formulation, storage, breeding, finishing or packaging), use, offer
for sale, sale, import, or commercialization of any Program Therapy or used in or related to any clinical trials, regulatory compliance, or any
filings, clearances, or approvals, in all cases that are for or related to the Program or the Program Therapy.
“Program Patents” shall mean:
(a)
the patents and patent applications listed on Schedule I;
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any and all divisionals, continuations and continuations-in-part of the patents and patent applications referenced in
(b)
the preceding subsection (a);
(c)
the foreign patent applications associated with the patent applications referenced in the preceding subsections (a)
and (b);
(d)
(e)
the patents issued or issuing from the patent applications referenced in the preceding subsections (a) through (c);
reissues, reexaminations, restorations (including supplemental protection certificates) and extensions of any patent
or patent application referenced in the preceding subsections (a) through (d); and
any other patents or patent applications which: (i) are owned or Controlled by Seller immediately prior to the
Closing, and (ii) claim, cover, or are directed to the research, development, manufacture (including synthesis, formulation, storage, breeding,
finishing or packaging), use, offer for sale, sale, import, or commercialization of any Program Therapy.
(f)
“Program Technology” shall mean the Program IP, Program Know-How and Program Patents.
“Purchased Assets” shall have the meaning given to such term in Section 2.1.
“Purchase Price” shall have the meaning given to such term in Section 2.5.
“Purchaser” shall have the meaning given to such term in the preamble of this Agreement.
“Purchaser Indemnified Party” means Purchaser and its Affiliates and their respective Representatives.
“Regulatory Authority” shall mean any regulatory agency, ministry, department or other governmental body having authority in any
country or region to control the development, manufacture, marketing, and sale of any pharmaceutical, therapeutic, biologic or medical
device product, including the FDA.
“Representatives” means, with respect to any Party to this Agreement, such Party’s directors, officers, members, managers,
Affiliates, attorneys, accountants, employees, consultants, representatives and other agents.
“Restricted Period” shall have the meaning given to such term in Section 6.7(b).
“Retained Liabilities” shall have the meaning given to such term in Section 2.4.
“Seller” shall mean Metacrine, Inc., together with is predecessors, successors and assigns.
“Seller-Owned Patents” shall mean Program Patents owned solely by the Seller or Seller’s joint ownership interest in Program
Patents owned jointly by the Seller and any other Person(s).
“Taxes” means: (i) any and all taxes, fees, levies, duties, tariffs, imposts and other charges of any kind, imposed by any taxing
authority, including taxes or other charges on, measured by, or with respect to income, franchise, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security, workers’ compensation, unemployment compensation or net worth;
taxes or other charges in the nature of excise, withholding, ad valorem, stamp, transfer, value-added or gains taxes; (ii) any Liability for the
payment of any amounts of the type described in (i) as a result of being a member of an affiliated, combined, consolidated or unitary group
for any taxable period; (iii) any Liability for the payment of amounts of the type described in (i) or (ii) as a result of being a transferee of, or a
successor in interest to, any Person or as a result of an express or implied obligation to indemnify any Person; and (iv) any and all interest,
penalties, additions to tax and additional amounts imposed in connection with or with respect to any amounts described in (i), (ii) or (iii).
“Tax Returns” means returns, declarations, reports, notices, forms, claims for refund, information returns or other documents
(including any related or supporting schedules, statements or information and Treasury Form TD F 90-22.1 and FinCEN Form 114) filed or
required to be filed with any Governmental Authority, or maintained by any Person, or required to be maintained by any Person, in connection
with the
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determination, assessment or collection of any Tax of any party or the administration of any Laws, regulations or administrative requirements
relating to any Tax.
“Third Party Claim” shall have the meaning given to such term in Section 7.4(a).
“Transaction Documents” means, collectively, this Agreement, the Assignment and Assumption Agreement and the Patent
Assignment.
“Transferred Agreements” shall have the meaning given to such term in Section 2.1(b).
1.2 Interpretation. Unless the context otherwise requires, the terms defined in Section 1.1 shall have the meanings herein
specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms defined herein. When a
reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise indicated.
Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words
“without limitation.”
ARTICLE II
PURCHASE & SALE OF PURCHASED ASSETS
2.1 Purchased Assets. Subject to the terms and conditions of this Agreement, at the Closing, Seller shall sell, convey, transfer,
assign and deliver to Purchaser, and Purchaser shall purchase and acquire from Seller, free and clear of all Encumbrances other than the
Assumed Liabilities, all of Seller’s right, title and interest in and to all of the following (collectively, the “Purchased Assets”):
All Program Technology and all rights to sue for or assert Proceedings or claims against and remedies against past,
present or future infringements of any or all of the Program Technology and rights of priority and protection of interests therein and to retain
any and all amounts therefrom;
(a)
(b)
All Contracts that are set forth on Schedule II (the “Transferred Agreements”);
reference standards for any Program Therapy stock on hand as set forth on Schedule III (the “Inventory”); and
(c)
Seller’s interest in and to any Program Therapy tablets, API, material, starting materials, intermediates and
(d)
All of Seller’s data (including (x) Trial Master File data and (y) research and development server data), records,
files, manuals and other documentation that embody the Program Technology or the Transferred Agreements, including: (i) studies, reports,
publications, correspondence and other similar documents and records, whether in electronic form or otherwise; (ii) all regulatory
submissions and any amendments thereto prepared in connection with any Program Therapy and all related materials and documentation
including regulatory correspondence, tracking files, meeting minutes and strategy materials; (iii) all files, documents, correspondence, and
records of attorneys or consultants of Seller relating to the prosecution of Program Patents, but excluding Seller’s data, records, files,
manuals or other documentations related to non-Program Therapies; provided that any such data, records, files, manuals or other
documentation that is in hardcopy shall be delivered to the address provided by Purchaser, at Seller’s expense, promptly following the
Closing hereof (and in any case, on or prior to the Delivery Date (defined below)); and (iv) the Inventory; provided that (A) the Inventory shall
be delivered to the address provided by Purchaser, and (B) the compounds set forth on Schedule III shall be delivered in a freezer (which
such freezer shall be a Purchased Asset) to the address provided by Purchaser, in each case at Seller’s expense promptly following the
Closing hereof (and in any case, within thirty (30) calendar days) (the date of such delivery the “Delivery Date”);
in each case, excluding the Excluded Assets. The delivery of all Purchased Assets in a physical form shall be made at such place as
designated by Purchaser.
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2.2 Excluded Assets. Notwithstanding anything to the contrary contained in Section 2.1 or elsewhere in this Agreement, the
following (collectively, the “Excluded Assets”) shall not be part of the sale and purchase contemplated hereunder, are excluded from the
Purchased Assets, and shall remain the property of Seller after the Closing:
(a)
All assets not specifically listed in Section 2.1;
(b)
All minute books and corporate seals, tax returns and similar records of Seller;
(c)
All cash, cash equivalents on hand or in bank accounts and short term investments;
(d)
Any prepayment, refund, claim, offset or other right of Seller with respect to any Tax arising or resulting from or in
connection with the ownership of the Purchased Assets or operation of the Program attributable to any Tax period ending on or prior to the
Closing Date, or, in the case of any Tax period which includes but does not end on the Closing Date, the portion of such period up to and
including the Closing Date except to the extent the prepayment was made under a Transferred Agreement;
foregoing of Seller pursuant to this Agreement;
(e)
The claims, remedies, rights, consideration (including contractual rights) or any other right related to any of the
(f)
respect to any period prior to Closing; and
All claims and counterclaims relating to Excluded Assets and all claims arising under Transferred Agreements with
(g)
under such policies.
All rights under insurance policies, including, without limitation, all claims, refunds and credits due or to become due
2.3 Assumed Liabilities. Upon and subject to the terms, conditions, representations and warranties of Seller contained herein, and
subject to Section 2.4, Purchaser hereby assumes and agrees to pay, perform, and discharge when due the following: (a) any Liabilities of
Seller under the Transferred Agreements, but only to the extent such Liabilities (i) arise after the Closing Date, (ii) do not arise from or relate
to any breach by the Seller of any provision of any of such Transferred Agreements, (iii) do not arise from or relate to any event,
circumstance or condition occurring or existing on or prior to the Closing Date that, with notice or lapse of time, would constitute or result in a
breach of any of such Transferred Agreements, and (iv) are ascertainable (in nature and amount) solely by reference to the express terms of
such Transferred Agreements; and (b) all Liabilities of Seller relating to the prosecution, ownership, operation, maintenance, sale, lease or
use of Purchased Assets by Purchaser, but only to the extent that they arise after the Closing (collectively, the “Assumed Liabilities”).
2.4 Retained Liabilities. Except for the Assumed Liabilities, Purchaser shall not assume, and shall have no Liability or
responsibility for, any Liabilities of Seller of any kind, character or description, whether accrued, absolute, contingent or otherwise, it being
understood that Purchaser is expressly disclaiming any express or implied assumption of any Liabilities other than the Assumed Liabilities
(collectively, the “Retained Liabilities”), which such Retained Liabilities shall be retained by and be the responsibility of Seller and its
applicable Affiliates.
2.5 Purchase Price; Payment of Purchase Price.
the Assumed Liabilities and US$4,000,000 to be paid as follows:
(a)
The aggregate consideration (the “Purchase Price”) for the Purchased Assets shall consist of the assumption of
(i) $2,000,000 paid at Closing; and
(ii) $2,000,000 paid within five (5) business days of the Delivery Date.
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Purchaser and Seller shall execute and deliver an Assignment and Assumption Agreement, a form of which is
attached hereto as Exhibit A (the “Assignment and Assumption Agreement”), evidencing the assignment by Seller of the Purchased
Assets and the assumption by Purchaser of the Assumed Liabilities.
(b)
Purchaser and Seller shall execute and deliver a Patent Assignment, a form of which is attached hereto as Exhibit
B (the “Patent Assignment”), evidencing the assignment by Seller of the issued patents and patent applications included in the Purchased
Assets.
(c)
2.6 Closing. The consummation of the purchase and sale of the Purchased Assets and the assumption of the Assumed Liabilities
in accordance with this Agreement (the “Closing”) shall take place at the offices of Purchaser at 11555 Sorrento Valley Road, Suite 100, San
Diego, CA 92121, Attention: General Counsel, concurrently with the execution and delivery of this Agreement by all of the Parties hereto, or
at such other time and place as may be mutually agreed by the parties. The date of the Closing shall be referred to as the “Closing Date.”
The Parties hereby agree to deliver at the Closing such documents, certificates of officers and other instruments as are set forth in ARTICLE
V hereof and as may reasonably be required to effect the transfer by Seller of the Purchased Assets pursuant to and as contemplated by this
Agreement and to consummate the Acquisition. All events which shall occur at the Closing shall be deemed to occur simultaneously.
2.7 Transfer Taxes. Seller shall be responsible for the payment of all sales taxes, transfer taxes, filing fees and similar taxes, fees
and charges arising out of or in connection with the Acquisition and shall, at its own expense, timely file all Tax Returns and other
documentation required to be filed in connection with the payment of such transfer taxes (and Seller shall be responsible for all penalties,
interest or additions related to a late filing or error in filing related to such Tax Returns).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that the statements contained in this ARTICLE III are true and correct as of the
Closing Date.
3.1 Organization and Qualification. Seller is a corporation duly qualified or licensed to do business and is in good standing in
every jurisdiction in which the conduct of its business, or the ownership or lease of its properties, require it to be so qualified or licensed,
except where the failure to be so qualified or licensed would not have a Material Adverse Effect, and has all requisite power and authority to
own, operate or lease all of the assets purported to be owned by it, including the Purchased Assets and all rights of the Seller under
Transferred Agreements, and to carry on the Program in all material respects as currently conducted.
3.2 Authority Relative to this Agreement. Seller has all requisite corporate power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, to perform its obligations hereunder and to consummate the
Acquisition. The execution, delivery and performance of this Agreement and the other Transaction Documents by Seller and the
consummation by Seller of the Acquisition have been duly and validly authorized by all necessary corporate action of the Seller, and no other
corporate action on the part of the Seller is necessary to authorize this Agreement and the other Transaction Documents or to consummate
the Acquisition. This Agreement and the other Transaction Documents have been duly executed and delivered by Seller and, assuming the
due authorization, execution and delivery by the other Parties hereto, each such agreement constitutes a legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms.
3.3 No Conflict. The execution and delivery of this Agreement and the other Transaction Documents by Seller do not, and the
performance by Seller of its obligations hereunder and the consummation of the Acquisition and the transactions contemplated by the other
Transaction Documents will not: (a) conflict with or violate any provision of the certificate of incorporation, bylaws, or similar
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constitutive documents of Seller; (b) assuming that all filings and notifications described in Section 3.4 have been made, conflict with or
violate any Law or Order applicable to Seller or by which any of the Purchased Assets or Seller is bound or affected; (c) contravene, conflict
with or result in any breach of or result in a default (or an event which with the giving of notice or lapse of time or both would become or
reasonably be expected to become a default) under, or give to others any right of termination, amendment, acceleration or cancellation or
modification of, allow for the imposition of any fees or penalties, or result in the creation of an Encumbrance on any of the Purchased Assets
or Transferred Agreements; or (d) contravene, conflict with or result in a violation of any of the terms or requirements of, or give any
Governmental Authority or Regulatory Authority the right to revoke, withdraw, suspend, cancel, terminate or modify, any filing, permit,
authorization, consent, approval, right or Order that is to be included in the Purchased Assets or is held by the Seller or any employee of the
Seller or relates to the Purchased Assets.
3.4 Required Filings and Consents. The execution and delivery of this Agreement and the other Transaction Documents by Seller
do not, and the performance by Seller of its obligations hereunder and thereunder and the consummation of the Acquisition will not, require
any consent, approval, authorization or permit of, or filing by Seller with or notification by Seller to, any Governmental Authority or Regulatory
Authority.
3.5 Intellectual Property.
Disclosure and Ownership of Program Patents. Schedule I, part A lists all of the Seller-Owned Patents, setting
forth in each case the jurisdictions in which the Seller-Owned Patents have been filed. Except as set forth on Schedule I, Seller has a valid,
legally enforceable, and exclusive right to use and license all Seller-Owned Patents.
(a)
(b)
Ownership of and Right to Use Program Know‐How and Program IP; No Encumbrances. Seller has good
and valid title to, and is the exclusive owner of, free and clear of all Encumbrances (other than the Assumed Liabilities and those arising
under the Transferred Agreements), all Program Technology owned or purported to be owned by Seller, and following consummation of this
Agreement and the transactions contemplated hereby, Purchaser will exclusively own all such Program Technology. Seller has a valid,
legally enforceable right to use and license all Program Technology not owned by Seller, and following consummation of this Agreement and
the transactions contemplated hereby, Purchaser will have a valid and legally enforceable right to use and license such Program Technology
under identical terms.
(c)
Agreements Related to Program Technology. The Transferred Agreements constitute all existing Contracts
related to the Program Technology and/or any Program Therapy other than (1) non‐disclosure agreements and (2) invention assignment
agreements with employees, consultants and contractors that assign or grant to the Seller ownership of inventions and intellectual property
developed in the course of providing services to the Seller by such employees, consultants and contractors.
(d)
No Third Party Rights in Program Technology.
(i) No Employee Ownership. No current or former officer, director, employee, consultant or independent
contractor of the Seller has any right, title or interest in, to or under any Information, Intellectual Property Rights, or Intellectual Property used,
held for use, or related to the Program or the Program Therapy that has not been either (A) irrevocably assigned or transferred to Seller or
(B) licensed (with the right to grant sublicenses) to Seller under an exclusive, irrevocable, worldwide, royalty-free, fully-paid and assignable
license.
(ii) No Challenges. The Seller has not received any written communication from any Person challenging or
threatening to challenge, nor is the Seller a party to any pending and served proceeding or, to Seller’s Knowledge, pending but not served
proceeding or threatened proceeding in which any Person is challenging, (A) the Seller’s ownership of, and right to use and license, any
Program
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Technology owned by the Seller, or (B) the Seller’s right to use and license any Program Technology that is not owned by the Seller, nor is
Seller aware of any basis for any such communication or challenge.
(iii) No Restrictions. Neither the Seller nor any Program Technology is subject to any outstanding Order or
stipulation restricting in any manner the use, transfer or licensing of the Program Technology by the Seller, the Purchaser, or any other
person.
(e)
Patents.
(i) Proper Filing. Except as set forth in Schedule I, all Seller-Owned Patents have been duly filed and
maintained, including the timely submission of all necessary filings and fees in accordance with the legal and administrative requirements of
the appropriate Governmental Authority, and have not lapsed (other than lapsed provisional applications that have been converted to
non‐provisional applications), expired or been abandoned. Except as is apparent from the information set forth in Schedule I, no loss or
expiration of any of Program Patents is pending, reasonably foreseeable or, to Seller’s Knowledge, threatened, except for patents expiring at
the end of their statutory term.
(ii) No Challenges. Except as is apparent from the information set forth in Schedule I, none of the Program
Patents are subject to any pending cancellation, opposition, interference, reissue, or reexamination proceeding, and Seller has not received
any written notice of and has no Knowledge of any basis for any inventorship challenge, interference, invalidity or unenforceability with
respect to Program Patents.
Knowledge, valid. All Seller-Owned Patents are recorded in the name of Seller.
(iii) Validity and Record Ownership. All Program Patents are subsisting and enforceable and, to the Seller’s
(f)
No Infringement of Third Party IP Rights. To the Seller’s knowledge, Seller has never infringed (directly,
contributorily, by inducement, or otherwise), misappropriated, or otherwise violated or made unlawful use of any Intellectual Property Right of
any other Person or engaged in unfair competition. To the Seller’s knowledge, no Program Technology and no method or process used in
the development, current or past manufacturing or use of any Program Therapy, nor the conduct of the Program, infringes, violates, or makes
unlawful use of any Intellectual Property Right of, or contains any Intellectual Property misappropriated from, any other Person. There is no
legitimate basis for a claim that the Seller or any Program Therapy has intentionally infringed or misappropriated any Intellectual Property
Right of another Person or engaged in unfair competition or that any Program Therapy and any method or process used in the current or
past development, manufacturing or use of any Program Therapy infringes, violates, or makes unlawful use of any Intellectual Property Right
of, or contains any Intellectual Property misappropriated from, any other Person. Without limiting the generality of the foregoing:
(i)
Infringement Claims. No infringement, misappropriation, or similar claim or Proceeding is, to the Seller’s
Knowledge, pending or threatened against the Seller or against any other Person who is or may be entitled to be indemnified, defended, held
harmless, or reimbursed by the Seller with respect to such claim or Proceeding. Seller has never received any written notice or, other
communication (in writing or otherwise) relating to any actual, alleged, or suspected infringement, misappropriation, or violation by the Seller,
any of their employees or agents, or any Program Therapy of any Intellectual Property Rights of another Person, including any letter or other
communication suggesting or offering that the Seller obtain a license to any Intellectual Property Right of another Person.
(ii) Infringement Claims Affecting In-Licensed IP. No claim or Proceeding involving any Intellectual Property
or Intellectual Property Right licensed to the Seller is pending or has been threatened, except for any such claim or Proceeding that, if
adversely determined, would not adversely affect (a) the use or exploitation of such Intellectual Property or Intellectual Property Right by the
Seller, or (b) the design, development, manufacturing, marketing, distribution, provision, licensing or sale of any Program Therapy.
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(iii) Third Party Infringement. To Seller’s Knowledge, no third party has in the past or is currently infringing,
misappropriating, or otherwise violating any of the Program Technology. Seller has not brought or threatened any claim or Proceeding
involving any Program Technology against any third party, nor is Seller aware of the basis for any such claim or Proceeding.
(g)
Employee, Consultant and Contractor Agreements. Without limiting the foregoing, to the Seller’s Knowledge,
all current and former employees, consultants and contractors of the Seller who are or were involved in, or who have contributed to, the
creation or development of any Program Technology have executed and delivered to the Seller a written agreement regarding the protection
of proprietary information and the irrevocable assignment to the Seller of any intellectual property rights in Program Technology arising from
services performed by such Persons. To the Seller’s Knowledge, no current or former employee, consultant or contractor is in violation of
any term of any such agreement.
(h)
Trade Secrets. Seller has taken commercially reasonable measures to maintain, preserve, and protect all
Program Technology and the confidentiality of all trade secrets and confidential information in the possession of Seller related to the
Program. To Seller’s Knowledge, none of the trade secrets or confidential information in the possession of Seller related to the Program
have been stolen, disclosed, destroyed, improperly accessed or otherwise compromised.
(i)
Government Funding. Except as set forth on Schedule 3.5(i), no funding, facilities or personnel of any
Governmental Authority or any university, college, research institute or other educational institution has been used in any material respect to
create, in whole or in part, any Program Technology in any manner that gives any such person or entity any ownership of, licenses to, or
other rights in such Program Technology.
3.6 Compliance with Laws. Seller is not, and since January 1, 2020 has not been, in conflict in any respect with or in default or
violation of any order, judgment, preliminary or permanent injunction, temporary restraining order, award, citation, decree, consent decree or
writ (collectively, “Orders”) of any Governmental Authority or Regulatory Authority, affecting or relating to the Purchased Assets or the
Program, or the Laws of any Governmental Authority, affecting or relating to the Purchased Assets or the Program. Seller has not received
from any Governmental Authority any notification in writing with respect to possible conflicts, defaults or violations of Laws materially affecting
or relating to the Purchased Assets or the Program.
3.7 Claims and Proceedings. There is no outstanding Order of any Governmental Authority or Regulatory Authority against or
involving the Purchased Assets, the Assumed Liabilities or any Program Therapy. There is no Proceeding, claim or counterclaim or legal,
administrative or arbitral proceeding or investigation (collectively, “Claim”) (whether or not the defense thereof or Liabilities in respect thereof
are covered by insurance), pending or, to the Knowledge of Seller, threatened, against or involving the Purchased Assets, the Assumed
Liabilities or any Program Therapy or that otherwise relates to or might affect the business of the Seller or any of the Purchased Assets
(whether or not the Seller is named as a party thereto), including in respect of the Acquisition. There is no Proceeding by Seller pending, or
which Seller has commenced preparations to initiate, against any other Person in connection with the Purchased Assets, the Assumed
Liabilities or the Program.
3.8 Regulatory Compliance.
(a) With respect to the Program Therapy, (A) the Seller has obtained all necessary and applicable approvals,
clearances, authorizations, licenses and registrations required by the United States or foreign governments or government agencies for the
conduct of its development and commercialization activities conducted to date (the “Activities to Date”) with respect to each product or
service (collectively, the “Product Licenses”), except where the failure to hold such Product Licenses has not had a Material Adverse Effect
and would not reasonably be expected to have a Material Adverse Effect; (B) the Seller is in material compliance with all terms and
conditions of each Product License and with all applicable legal requirements pertaining to the Activities to Date with respect to each product
or service which is not required
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to be the subject of a Product License; and (C) to the Seller’s Knowledge, the Seller is in compliance in all material respects with all legal
requirements regarding registration, license or certification for each site at which a product candidate is manufactured. The Seller is in
compliance in all material respects with all applicable reporting requirements for all Product Licenses or plant registrations described in the
immediately preceding sentence.
None of the Seller nor its directors, officers, employees, agents, representatives or consultants are under
investigation by the FDA or other regulatory authorities for debarment action or presently debarred pursuant to the Generic Drug
Enforcement Act of 1992, as amended, or any analogous laws.
(b)
3.9 No Finder. Neither Seller nor any Person acting on behalf of Seller has agreed to pay to any broker, finder, investment banker
or any other Person, a brokerage, finder’s or other brokerage fee or commission in connection with this Agreement or any matter related
hereto, nor has any broker, finder, investment banker or any other Person taken any action on which a Proceeding for any such payment
would be based.
3.10Transferred Agreements. True, complete and accurate copies of the Transferred Agreements, including all modifications,
amendments, and supplements thereto and waivers thereof, have previously been delivered or made available to Purchaser. Each of the
Transferred Agreements is in full force and effect, and is valid, binding and enforceable in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting the rights of creditors
generally and the availability of equitable remedies. Seller is not in breach or default, nor has any event occurred which with the giving of
notice or the passage of time or both would constitute a breach or default by Seller of, or which would give rise to any right of notice,
modification, acceleration, payment, cancellation or termination of or by another party under, or in any manner release any party thereto from
any obligation under, any Transferred Agreement and, to the Knowledge of Seller, no other party is in breach or default, and no event has
occurred which with the giving of notice or the passage of time or both would constitute a breach or default by any other party, or which would
give rise to any right of notice, modification, acceleration, payment, cancellation or termination of or by Seller under, or in any manner release
any party thereto from any obligation under, any Transferred Agreement. Seller has not received any notice or communication regarding any
violation or breach of, or default under any Transferred Agreement. Seller has not been notified in writing by any counterparty to any
Transferred Agreement that such counterparty is terminating, modifying, repudiating or rescinding, or intends to terminate, modify, repudiate
or rescind such Transferred Agreement.
3.11Taxes. (a) (i) Seller has timely and properly filed all Tax Returns required to be filed by it with respect to the Purchased Assets,
taking into account any extension of time to file granted or obtained on behalf of Seller, (ii) all such Tax Returns are accurate and complete
and (iii) Seller has timely and properly paid all Taxes required to be paid by Seller or with respect to the Purchased Assets, whether or not
shown on such Tax Returns; (b) there are no liens for Taxes upon any of the Purchased Assets; and (c) none of the Assumed Liabilities are
any amounts deferred by Seller pursuant to Internal Revenue Service Revenue Procedure 2004-34, Treasury Regulations Section 1.451-5,
Sections 451(c), 455, 456 or 460 of the Code, as a deposit or pre-paid amount, or any corresponding or similar provision of state or local Law
(irrespective of whether or not such deferral is elective).
3.12Fair Consideration; Solvency; No Fraudulent Conveyance. The transfer of the Purchased Assets to Purchaser as
contemplated by this Agreement and the Transaction Documents is made in exchange for fair and equivalent consideration. Seller is not now
insolvent, and will not be rendered insolvent by the sale, transfer and assignment of the Purchased Assets pursuant to the terms of this
Agreement or the transactions contemplated hereby. Seller has no intention to file for bankruptcy, and, to the Knowledge of Seller, no
insolvency Proceedings of any character including bankruptcy, receivership, reorganization, composition or arrangement with creditors,
voluntary or involuntary, affecting Seller or any of the Purchased Assets or Assumed Liabilities are pending or threatened. Seller is not
entering into this Agreement and the transactions contemplated hereby with the intent to defraud, delay or hinder Seller’s
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creditors and the consummation of the transactions contemplated by this Agreement and the transactions contemplated hereby will not have
any such effect. The transactions contemplated hereby do not constitute a fraudulent conveyance, or otherwise give rise to any right of any
creditor of Seller whatsoever to any of the Purchased Assets after the Closing.
3.13Title; Sufficiency of Assets. Seller has, and immediately following the Closing, Purchaser will continue to have (on the same
terms and conditions as Seller held such Purchased Assets as of immediately prior to the Closing), good and marketable title to, or a valid
right to use, all of the tangible and intangible Purchased Assets, free and clear of any and all Encumbrances. No Affiliate of Seller has any
right, title or interest in any of the Purchased Assets or Assumed Liabilities or assets or Liabilities that would be Purchased Assets or
Assumed Liabilities if owned by Seller immediately prior to the Closing.
3.14No Undisclosed Liabilities; Absence of Changes. Seller does not have any Liabilities, except (a) as and to the extent
specifically accrued for or reserved against in the balance sheet of Seller as at September 30, 2022 (the “Balance Sheet”), (b) Liabilities
which have arisen after the date of the Balance Sheet in the ordinary course of business consistent with past practice (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any breach of contract, breach of warranty, tort, infringement or violation
of Law) which are not, or could not reasonably be expected to be, individually or in the aggregate, material to Seller, or (c) executory
obligations under contracts (other than Liabilities relating to any breach, or any fact or circumstance that, with notice, lapse of time or both,
would result in a breach thereof by Seller).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that each of the following representations and warranties is true and correct as of the
Closing Date:
4.1 Organization and Qualification. Purchaser is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate or other power and authority to carry on its business as now being conducted.
4.2 Authority Relative to this Agreement. Purchaser has all necessary corporate power and authority to execute and deliver this
Agreement and the other Transaction Documents to which it is a party, to perform its obligations hereunder and to consummate the
Acquisition. The execution and delivery of this Agreement and the other Transaction Documents by Purchaser and the consummation by
Purchaser of the Acquisition have been duly and validly authorized by all necessary corporate action of the Purchaser. This Agreement and
the other Transaction Documents have been or when executed and delivered will be duly executed and delivered by Purchaser and,
assuming the due authorization, execution and delivery by the other Parties hereto, each such agreement constitutes a legal, valid and
binding obligation of Purchaser, enforceable against Purchaser in accordance with its terms.
4.3 Required Filings and Consents. The execution and delivery of this Agreement and the Transaction Documents by Purchaser
do not, and the performance by Purchaser of its obligations hereunder and the consummation of the Acquisition will not, require any consent,
approval, authorization or permit of, or filing by Purchaser with or notification by Purchaser to, any Governmental Authority.
4.4 No Finder. Neither Purchaser nor any Person acting on behalf of Purchaser has agreed to pay to any broker, finder, investment
banker or any other Person, a brokerage, finder’s or other fee or commission in connection with this Agreement or any matter related hereto,
nor has any broker, finder, investment banker or any other Person taken any action on which a Proceeding for any such payment could be
based.
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CLOSING DELIVERABLES
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5.1 Closing Deliverables of Purchaser. At the Closing, Purchaser shall deliver to Seller the following:
Seller;
(a)
the Purchase Price set forth in Section 2.5(a)(i), paid by wire transfer pursuant to the wire instructions provided by
(b)
duly executed copies of each Transaction Document to be executed and delivered by the Purchaser; and
(c)
such other documents as are required to be delivered by Purchaser to Seller pursuant to this Agreement.
5.2 Closing Deliverables of Seller. At the Closing, Seller shall deliver to Purchaser the following:
Encumbrances (except Assumed Liabilities) reasonably satisfactory to Purchaser and its counsel;
(a)
Evidences of transfer or assignment of all of the Purchased Assets from Seller to Purchaser free and clear of all
(b)
Copies of all Transferred Agreements set forth on Schedule II;
(c)
Duly executed copies of each Transaction Document to be executed and delivered by the Seller;
(d)
An Internal Revenue Service Form W-9 duly executed by Seller; and
(e)
Such other documents as are required to be delivered by Seller to Purchaser pursuant to this Agreement.
Delivery Date Deliverables. Promptly following the Closing Date, Seller shall deliver the Inventory set forth on
Schedule III, as set forth in Section 2.1 above. As set forth in Section 2.5(a)(ii), Purchaser shall deliver the remaining Purchase Price upon
delivery of the Inventory set forth on Schedule III, paid by wire transfer pursuant to the wire instructions provided by Seller.
(f)
ARTICLE VI
ADDITIONAL COVENANTS
6.1 Further Assurances. Seller hereby agrees, without further consideration, to execute and deliver following the Closing such
other instruments of transfer and take such other action as Purchaser or its counsel may reasonably request in order to put Purchaser in
possession of, and to vest in Purchaser, good, valid and unencumbered title to the Purchased Assets in accordance with this Agreement.
Seller will cooperate with Purchaser and its counsel in the contest or defense of, and make available its personnel and provide any testimony
and access to its books and records in connection with, any proceeding involving or relating to (a) any Program Therapy or (b) any action,
activity, circumstance, condition, conduct, event, fact, failure to act, incident, occurrence, plan, practice, situation, status or transaction on or
before the Closing Date involving Seller or its business.
6.2 Expenses. Each of the Parties shall bear its own expenses incurred in connection with the preparation, execution and
performance of this Agreement and the Acquisition, including all fees and expenses of its Representatives.
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6.3 Confidentiality. Except as otherwise provided herein or in the other Transaction Documents, Seller shall, and shall cause its
Affiliates and Representatives to treat on and after the date hereof as strictly confidential all information concerning or relating to the
Program, the Purchased Assets, and the Assumed Liabilities, and Seller shall not, and shall cause its Affiliates and Representatives not to,
after the date hereof, use in any way, or divulge or convey to any third party, such information; provided, however, that Seller or its Affiliates
may furnish such portion (and only such portion) of such information as Seller or such Affiliate reasonably determines it is legally obligated to
disclose if: (i) it receives a request to disclose all or any part of such information under the terms of a subpoena, civil investigative demand or
order issued by a Governmental Authority; (ii) to the extent not inconsistent with such request, it notifies Purchaser of the existence, terms
and circumstances surrounding such request and consults with Purchaser on the advisability of taking steps available under applicable Law
to resist or narrow such request; (iii) it exercises its commercially reasonable efforts to obtain an order or other reliable assurance that
confidential treatment will be accorded to the disclosed information; and (iv) disclosure of such information is required to prevent Seller or
such Affiliate from being held in contempt or becoming subject to any other penalty under applicable Law.
6.4 Transfer of Files. With respect to data, records, files, manuals and other documentation that embody the Program Technology
or the Transferred Agreements, including: (i) studies, reports, correspondence and other similar documents and records, whether in
electronic form or otherwise; and (ii) all files, documents, correspondence, and records of attorneys or consultants of Seller relating to the
prosecution of Program Patents, constituting Purchased Assets, Seller shall transfer and deliver all of the aforementioned items, in
accordance with the instructions, specified by Purchaser. In the event that any of the abovementioned items reside in digital or electronic
format on any equipment that is not included in the Purchased Assets, then the hard drive or other medium shall be imaged and provided to
Purchaser in a reasonably accessible format.
6.5 Wrong Pocket Provisions.
(a)
If, at any time following the Closing, Seller becomes aware that any Purchased Asset which should have been
transferred to Purchaser pursuant to the terms of this Agreement and the Transaction Documents was not transferred to Purchaser as
contemplated by this Agreement or the Transaction Documents, then Seller shall promptly transfer or cause its Affiliates to transfer such
Purchased Asset to Purchaser for no additional consideration.
(b)
If, at any time following the Closing, Seller becomes aware that any Assumed Liability (whether arising prior to, at or
following the Closing) was not assumed by Purchaser as contemplated by this Agreement or the Purchased Asset, then Seller shall promptly
notify Purchaser and Purchaser and Seller shall each use reasonable efforts to resolve the ownership of such Assumed Liability by written
agreement.
If, at any time following the Closing, Purchaser becomes aware that any Excluded Asset which should have been
retained by Seller pursuant to the terms of this Agreement or the Transaction Documents was transferred to Purchaser, then Purchaser shall
promptly transfer or cause its Affiliates to transfer such Excluded Asset to Seller for no additional consideration.
(c)
If, at any time following the Closing, Purchaser becomes aware that any Retained Liability (whether arising prior to,
at or following the Closing) was assumed by Purchaser, then Purchaser shall promptly notify Seller and Purchaser and Seller shall each use
reasonable efforts to resolve the ownership of such Retained Liability by written agreement.
(d)
6.6 Tax Matters.
From and after the Closing, Seller, on the one hand, and Purchaser, on the other hand, (i) will promptly inform the
other Party in writing of any written notice that it receives of any audit, investigation, request for documents or information related to Taxes
that could affect the Tax liability of the
(a)
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other Party, (ii) will each provide the other Party, at the other Party’s expense, with such assistance as may reasonably be requested in
connection with the preparation of any Tax Return, audit or other examination by any taxing authority or judicial or administrative Proceeding
relating to liability for Taxes, will each retain and, at the other Party’s expense, provide to the other Party all records and other information
that may be relevant to any such Tax Return, audit or examination, Proceeding or determination and (iii) will each provide the other Party with
any final determination of any such audit or examination, Proceeding or determination that affects any amount required to be shown on any
Tax Return of the other Party for any period. Without limiting the generality of the foregoing, Seller and Purchaser will retain, until the
expiration of the applicable statutes of limitation (including any extensions thereof), copies of all Tax Returns, supporting work schedules and
other records relating to tax periods or portions thereof of Seller ending on or prior to the Closing Date.
(b)
Purchaser and Seller agree to allocate the Purchase Price (along with all other items of consideration for income
Tax purposes) and any adjustment thereto among the Purchased Assets in accordance with Section 1060 of the Code and the principles set
forth on Exhibit C for all U.S. federal, state and local income Tax purposes (as finally determined pursuant to this Section 6.5(b), the
“Allocation”). No later than 90 days following the Closing, Purchaser shall prepare the Allocation, which shall be binding upon the Parties for
all U.S. federal, state and local income Tax purposes. The Parties shall each timely and properly report the sale of the Purchased Assets in a
manner consistent with the Allocation, act and file in all respects and for all purposes consistent with such Allocation, including filing all
federal, state, local and tax returns, and shall not take, or permit others to take on its behalf, any position in connection with any income Tax
audit or contest that is inconsistent with the Allocation, except as otherwise required by a “determination” as set forth in Section 1313 of the
Code. In the case of any subsequent adjustment to the Purchase Price or any other relevant item of consideration requiring an amendment
to the Allocation, Purchaser shall prepare an amended Allocation in accordance with the principles set forth in this Section 6.6(b) and provide
such amended allocation to Seller (which shall become the Allocation). Seller shall timely deliver all such documents and other information
as Purchaser may reasonably request in order to prepare the Allocation.
6.7 Restrictive Covenants.
(a)
[Reserved].
(b)
Employee Non-Solicitation; No Hire. Seller agrees that, during the period beginning on the Closing Date and
ending on the second anniversary of the Closing Date (the “Restricted Period”), without the prior written consent of Purchaser, Seller and its
Affiliates shall not, directly or indirectly in any way, (i) solicit or attempt to solicit, aid, induce or attempt to induce any Persons that (A) are or
were employees or service providers of Purchaser or its Affiliates at any time during the Restricted Period or (B) are or were officers,
directors, employees or service providers of Seller or its Affiliates who work or are or were engaged in connection with the Program or the
Purchased Assets, and Persons acting under any management, service, consulting, distribution, dealer or similar contract in connection with
the Program or the Purchased Assets (collectively, “Covered Employees XE “Covered Employees” \t “Section 5.8(a)””) to leave the employ
of Purchaser or its Affiliates, or violate the terms of their contracts, or any employment or contracting or consulting arrangements, with
Purchaser or its Affiliates, as applicable, or (ii) solicit any customer, prospective customer with whom Seller has had contact prior to the
Closing, supplier, licensee, licensor, creditor or other business relation of Seller with respect to the Program or the Purchased Assets to divert
their business or services from Purchaser or its Affiliates, or in any way interfere with the relationship between any such customer,
prospective customer with whom Seller has had contact prior to the Closing, supplier, licensee, licensor, creditor, other business relation or
any Person and Purchaser or its Affiliates. Notwithstanding the foregoing, Seller shall not be prohibited from placing public advertisements or
conducting any other form of general solicitation that is not specifically targeted towards any Covered Employee.
made or condone the making of any statement, comment or other
(c)
Non-Disparagement. Seller will not, and will cause its Affiliates not to, directly or indirectly, make or cause to be
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communication, written or otherwise, that could constitute disparagement or criticism of, or that could otherwise be considered to be
derogatory or detrimental to, or otherwise reflect adversely on, harm the reputation of, or encourage any adverse action against, Purchaser
or any of its Representatives or Affiliates, or the Program.
(d)
Remedies. The Parties expressly acknowledge that they do not intend the consideration set forth in this Agreement
to act as a measure of, or a limitation on, the damages or other remedies that may otherwise be available to Purchaser in the event of a
breach of this Agreement by Seller. Seller agrees that irreparable damage would occur and Purchaser would not have an adequate remedy
at Law if any provision of this Section 6.7 is not performed in accordance with its specific terms or is otherwise breached. Accordingly, Seller
agrees that Purchaser will be entitled to (a) injunctive relief from time to time to prevent breaches of the provisions of Section 6.7 and to
enforce specifically Section 6.7 and the terms and provisions hereof without the requirement of posting any bond or other indemnity, in
addition to any other remedy to which Purchaser may be entitled, at Law or in equity, including any and all monetary damages which
Purchaser may incur as a result of such breach or threatened breach and (b) recovery of all attorney’s fees and costs incurred by Purchaser
in obtaining such relief. Seller agrees not to raise any objections to the availability of the equitable remedy of specific performance to prevent
or restrain breaches of Section 6.7, and to specifically enforce the terms of Section 6.7 to prevent breaches or threatened breaches of, or to
enforce compliance with, the covenants and obligations of Seller under Section 6.7. Purchaser may pursue any remedy available, including
declaratory relief, concurrently or consecutively in any order, and the pursuit of one such remedy at any time will not be deemed an election
of remedies or waiver of the right to pursue any other remedy.
(e)
Blue Pencil. The Parties agree that, if the final judgment of a court of competent jurisdiction or other Governmental
Authority deems the term of any provision contained in this Section 6.7 too lengthy or the scope too broad, the Parties expressly intend and
desire that the other provisions of this Section 6.7 shall nevertheless stand, and that, as applicable, the term be revised to be the longest
period permissible by Law under the circumstances and/or the scope be revised to be as broad as permissible by Law under the
circumstances, in each case, by the court or other Governmental Authority making such determination.
Tolling. In the event of the breach by Seller of this Section 6.7, the running of the period of restriction applicable
thereto shall be automatically tolled and suspended for the amount of time that such breach continues, and shall automatically recommence
when the breach is remedied so that Purchaser shall receive the full benefit of Seller’s compliance with this Section 6.7.
(f)
6.8 Public Announcements.
(a)
None of Seller, any of its Affiliates, or any of its or its Affiliates’ respective Representatives shall issue or cause the
publication of any press release or other public announcement relating to this Agreement, any Transaction Document or the transactions
contemplated hereby or thereby (whether before or after the Closing) or make publicly available this Agreement or any Transaction
Document (whether before or after the Closing) without the prior written consent of Purchaser, except as such Person believes in good faith
and based on reasonable advice of counsel is required by applicable Law or by applicable rules of any stock exchange or quotation system
on which such Person or its Affiliates lists or trades securities (in which case the disclosing Person shall (i) advise Purchaser in writing before
making such disclosure, (ii) allow Purchaser reasonable time to review and comment, and (iii) consider in good faith Purchaser’s comments).
Prior to the Closing, Purchaser shall allow Seller reasonable time to review and comment on (which comments
shall be considered in good faith) any press release or other public announcement Purchaser makes prior to the Closing in respect of this
Agreement, any Transaction Document or the transactions contemplated hereby or thereby.
(b)
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ARTICLE VII
SURVIVAL; INDEMNIFICATION
Final Form
7.1 Survival of Representations and Warranties.
The representations, warranties, covenants and agreements contained herein or in any certificate delivered by or
on behalf of any Party pursuant to this Agreement or any Transaction Document shall survive the Closing and the Delivery Date and continue
in full force and effect until 11:59 p.m. Pacific on the date that is twelve (12) months after the Delivery Date, except that:
(a)
Pacific on the second (2nd) anniversary of the Delivery Date; and
(i)
the representations and warranties set forth in Section 3.5 (Intellectual Property) shall survive until 11:59 p.m.
the Closing until expired, terminated or fully performed, in accordance with their terms.
(ii) the covenants and agreements that explicitly contemplate performance at or after the Closing shall survive
(b)
Notwithstanding anything to contrary in this Agreement, the indemnification obligations set forth in this Article VII (i)
(A) related to any claim of an inaccuracy or breach any representations and warranties made by Seller contained in this Agreement or any
Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby or (B) any breach of or failure to perform any covenant or agreement by Seller contained in this
Agreement or any Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection
with the transactions contemplated hereby or thereby (in each case which shall, for the avoidance of doubt, not require the filing of any
Proceeding and instead shall only require a notice of claim from one Party to the other) timely delivered within the relevant time period set
forth in this Section 7.1 shall survive until all such claims shall have been finally resolved and payment in respect thereof, if any, required to
be made, shall have been made; and (ii) shall, except in the case of fraud, expire and automatically terminate upon the filing by Seller of a
certificate of dissolution with the Secretary of State of the State of Delaware.
7.2 Indemnification by Seller.
(a)
From and after the Closing, Seller shall save, defend, indemnify and hold harmless Purchaser and its Affiliates and
the respective Representatives, successors and assigns of each of the foregoing from and against, and shall compensate and reimburse
each of the foregoing for, any and all Losses XE “Losses” \t “8.2” asserted against, incurred, sustained or suffered by any of the foregoing as
a result of, arising out of or relating to:
(i) any inaccuracy or breach of any representation or warranty made by Seller contained in this Agreement or
any Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby;
(ii) any breach of or failure to perform any covenant or agreement by Seller contained in this Agreement or any
Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby; and
(iii) any Excluded Asset or Retained Liability.
7.3 Indemnification by Purchaser.
From and after the Closing, Purchaser shall save, defend, indemnify and hold harmless Seller and its Affiliates and
the respective Representatives, successors and assigns of each of the foregoing from and against, and shall compensate and reimburse
each of the foregoing for, any and all
(a)
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Losses asserted against, incurred, sustained or suffered by any of the foregoing as a result of, arising out of or relating to:
Final Form
(i) any inaccuracy or breach of any representation or warranty made by Purchaser contained in this Agreement
or any Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby;
(ii) any breach of or failure to perform any covenant or agreement by Purchaser contained in this Agreement or
any Transaction Document or any schedule, certificate or other document delivered pursuant hereto or thereto or in connection with the
transactions contemplated hereby or thereby; and
(iii) any Assumed Liability.
7.4 Indemnification Procedure.
(a)
In the event that any Purchaser Indemnified Party receives notice of the assertion of any claim or of the
commencement of any Proceeding by any Person who is not a Party or an Affiliate of a Party (a “Third Party Claim XE “Third Party Claim” \t
“Section 6.3(a)” ”) against such Purchaser Indemnified Party, with respect to which Seller is or may be required to provide indemnification
under this Agreement, the Purchaser Indemnified Party shall give written notice regarding such Third Party Claim to Seller within 30 days
after learning of such Third Party Claim, provided that the failure to so notify Seller shall not relieve Seller of its obligations under this Article
VII except to the extent (and only to the extent) that Seller is materially prejudiced by reason of such failure, and will not relieve Seller from
any other obligation that it may have to a Purchaser Indemnified Party other than under this Article VII. For purposes of this Article VII, any
references to the Purchaser Indemnified Party shall, if the context so applies or if Purchaser so elects, to Purchaser on behalf of the
applicable Purchaser Indemnified Party.
(b)
Seller shall be entitled to participate in the defense of such Third Party Claim at Seller’s expense (which expenses
shall not be applied against any indemnity limitation herein). Seller at its option shall be entitled to assume the defense thereof (subject to
the limitations set forth below) by (i) delivering written notice to the Purchaser Indemnified Party of its election to assume the defense of such
Third Party Claim within 15 days of receipt of notice from the Purchaser Indemnified Party, (ii) appointing a nationally recognized and
reputable counsel reasonably acceptable to the Purchaser Indemnified Party to be the lead counsel in connection with such defense and (iii)
entering into a written agreement with the Purchaser Indemnified Party that Seller is unconditionally obligated to pay and satisfy any Losses
which may arise with respect to such Third Party Claim and provides evidence of its ability to satisfy such obligation, in each case, in form
and substance reasonably satisfactory to the Purchaser Indemnified Party. If Seller does not expressly elect to assume the defense of such
Third Party Claim within the time period and otherwise in accordance with the preceding sentence, the Purchaser Indemnified Party shall
have the sole right to assume the defense of and to settle such Third Party Claim.
(c)
If Seller has assumed the defense of a Third Party Claim in accordance with the terms hereof, the Purchaser
Indemnified Party shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose, and the
fees and expenses of such separate counsel shall be borne by the Purchaser Indemnified Party other than any fees and expenses of such
separate counsel (i) that are incurred prior to the date Seller assumes control of such defense, (ii) if the Purchaser Indemnified Party
reasonably shall have concluded (upon advice of its counsel) that there may be one or more legal defenses available to such Purchaser
Indemnified Party that are not available to Seller, or (iii) if Seller may have different, conflicting, or adverse legal positions or interests from
the Purchaser Indemnified Party with respect to such Third Party Claim.
Notwithstanding anything to the contrary contained herein, Seller shall not be entitled to control the defense of a
Third Party Claim (and the Purchaser Indemnified Party shall be entitled to maintain or assume control of the defense of such Third Party
Claim, at Seller’s sole expense) if (i) the
(d)
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Third Party Claim relates to or involves any criminal or quasi criminal Proceeding, (ii) the Third Party Claim could reasonably be expected to
materially and adversely affect the Purchaser Indemnified Party (as determined by the Purchaser Indemnified Party in good faith) other than
as solely a result of money damages, (iii) the Third Party Claim seeks an injunction or other equitable relief against the Purchaser
Indemnified Party, (iv) there exists or would, or could reasonably be expected to, exist a conflict of interest that would make it inappropriate
in the judgment of the Purchaser Indemnified Party for the same counsel to represent both the Purchaser Indemnified Party and Seller, (v)
the Purchaser Indemnified Party elects to pursue one or more defenses or counterclaims available to it that are inconsistent with one or more
of those that are being pursued by Seller in respect of such Third Party Claim or any litigation relating thereto, (vi) the Third Party Claim
relates to any Intellectual Property, or (vii) Seller fails to vigorously defend the Third Party Claim.
(e)
If Seller shall control the defense of any Third Party Claim, Seller shall obtain the prior written consent of the
Purchaser Indemnified Party before entering into any settlement of, consenting to the entry of any judgment with respect to or ceasing to
defend such Third Party Claim if (i) pursuant to or as a result of such settlement, consent or cessation, injunctive or other equitable relief will
be imposed against the Purchaser Indemnified Party, or a finding or admission of any violation of Law would be made by any Purchaser
Indemnified Party, or such settlement, consent or cessation could otherwise reasonably be expected to interfere with or adversely affect the
business, operations or assets of the Purchaser Indemnified Party, or (ii) such settlement or judgment does not expressly and unconditionally
release the Purchaser Indemnified Party from all Liabilities and obligations with respect to such Third Party Claim.
The indemnification required hereunder in respect of a Third Party Claim shall be made by prompt payment by
Seller of the amount of actual Losses in connection therewith, as and when bills are received by Seller or within 10 days following Seller’s
receipt of notice that Losses have been incurred.
(f)
(g)
Seller hereby consents to the nonexclusive jurisdiction of any court in which a Proceeding in respect of a Third
Party Claim is brought against any Purchaser Indemnified Party for purposes of any claim that a Purchaser Indemnified Party may have
under this Agreement with respect to such Proceeding or the matters alleged therein and agrees that process may be served on Seller with
respect to such claim anywhere.
Proceeding is brought or claim is made against it hereunder by the Purchaser Indemnified Party.
(h)
Seller shall not be entitled to require that any Proceeding be made or brought against any other Person before a
(i)
In the event any Purchaser Indemnified Party has a claim against Seller hereunder that does not involve a Third
Party Claim being asserted against or sought to be collected from such Purchaser Indemnified Party, the Purchaser Indemnified Party shall
deliver notice of such claim with reasonable promptness to Seller, provided that the failure to so notify Seller shall not relieve Seller of its
obligations under this Article VII except to the extent (and only to the extent) that Seller is actually and materially prejudiced by reason of
such failure, and will not relieve Seller from any other obligation that it may have to a Purchaser Indemnified Party other than under this
Article VII. If Seller does not notify the Purchaser Indemnified Party within 10 days following its receipt of such notice that Seller disputes its
Liability to the Purchaser Indemnified Party hereunder, such claim specified by the Purchaser Indemnified Party in such notice shall be
conclusively deemed a Liability of Seller hereunder and Seller shall pay the amount of such Liability to the Purchaser Indemnified Party on
demand.
If Seller agrees that it has an indemnification obligation under this Article VII but asserts that it is obligated to pay a
lesser amount than that claimed by the Purchaser Indemnified Party, Seller shall pay such lesser amount promptly to the Purchaser
Indemnified Party, without prejudice to or waiver of the Purchaser Indemnified Party’s claim for the difference.
(j)
7.5 Certain Limitations.
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Basket for Losses of the Purchaser Indemnified Parties. Seller shall not be liable under Section 7.2(a)(i) unless
the aggregate Losses incurred by the Purchaser Indemnified Parties with respect to all matters for which indemnification is to be provided
under Section 7.2(a)(i) exceed $50,000.00 (the “Basket Amount XE “Basket Amount” \t “Section 6.4(a)” ”). If and when such Basket Amount
is met, then Seller will be liable under Section 7.2(a)(i) from the first dollar thereof.
(a)
Cap on Certain Losses of the Purchaser Indemnified Parties. The aggregate amount required to be paid by
Seller under Section 7.2(a)(i) shall not exceed $400,000.00 (the “Cap XE “Cap” \t “Section 6.4(b)” ”), and (ii) the aggregate amount required
to be paid by Seller under Section 7.2(a)(i) with respect to inaccuracies in or breaches of Section 3.5 shall not exceed the Purchase Price.
(b)
(c)
Exceptions to Basket and Cap. Notwithstanding anything to the contrary in this Agreement, (i) the limitations set
forth in Section 7.5(a) and Section 7.5(b)(i) shall not apply to Losses by reason of, resulting from or arising out of, any inaccuracy or breach
of Section 3.5, (ii) the limitations set forth in Section 7.5(a) and Section 7.5(b) shall not apply to Losses by reason of, resulting from or arising
out of, any claims of fraud, and (iii) no indemnification payment made by Seller by reason of, resulting from or arising out of, any breach of
Section 3.5 shall be considered in determining whether the Basket Amount or the Cap has been exceeded.
7.6 Materiality Qualifiers. Notwithstanding anything to the contrary in this Agreement, for purposes of determining (a) whether a
breach of a representation or warranty exists for purposes of this Agreement or any certificate delivered pursuant to this Agreement, (b) the
amount of Losses arising from such a breach for which the Purchaser Indemnified Parties are entitled to indemnification under this
Agreement and (c) whether the Basket Amount has been exceeded, each such representation and warranty shall be read without giving
effect to any qualification that is based on materiality, including the words “material,” “Material Adverse Effect,” “in any material respect” and
other uses of the word “material” or words of similar meaning (and shall be treated as if such words were deleted from such representation or
warranty).
7.7 Indemnification as Sole Remedy. Following the Closing, the indemnification provided for in this Article VII shall be the sole
and exclusive remedy and recourse for any breach of this Agreement. Notwithstanding the foregoing or anything else in this Agreement to
the contrary, (a) in the case of fraud, the Purchaser Indemnified Parties, as applicable, shall have all remedies available under this
Agreement or otherwise at Law without giving effect to any of the limitations or waivers contained herein, and (b) nothing herein shall limit
any Party’s right to seek and obtain equitable remedies with respect to any covenant or agreement contained in this Agreement or any
Transaction Document.
7.8 Investigation. Purchaser expressly reserves the right to seek indemnity or other remedy for any Losses arising out of or
relating to any breach of any representation, warranty, covenant or agreement contained herein, notwithstanding (a) any investigation by,
disclosure to or knowledge of Purchaser or any of its Affiliates or the Representatives of Purchaser or any of its Affiliates in respect of any
fact or circumstances that reveals the occurrence of any such breach, whether before or after the execution and delivery hereof or (b)
Purchaser’s participation in the Closing.
7.9 Satisfaction of Indemnification Claims. The Purchaser Indemnified Parties may seek satisfaction of indemnification claims
directly from Seller. If any amount owed under this Article VII is not paid within 10 days of Seller and the Purchaser Indemnified Parties
agreeing such amount is due or upon a final adjudication determined by a court of competent jurisdiction that such amount is due (either, a
“Final Determination XE “Final Determination” \t “Section 6.8” ”), and Seller shall reimburse the Purchaser Indemnified Party for any and all
costs or expenses of any nature or kind whatsoever (including reasonable legal fees) incurred in seeking to collect such amount under this
Article VII, and no limitation in this Article VII shall apply to any such interest or reimbursement. If any amount owed under this Article VII is
not paid within 30 days of a Final Determination, Purchaser may, in its sole discretion, in addition to all other remedies it may have, recover
some or all of such amount by setting off such amount against any amounts then due and payable by Purchaser or any of its Affiliates to
Seller or any of its Affiliates under this
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Agreement, any Transaction Document or any other agreement with Seller. In each case, the exercise of such right to cancel or set off shall
not constitute a breach of any Purchaser Indemnified Party’s obligations under this Agreement, any Transaction Document or any other
agreement with Seller, and the exercise or failure to exercise such right to cancel or set off shall not constitute an election of remedies or limit
any Purchaser Indemnified Party in any manner in the enforcement of any other remedies that may be available to such Purchaser
Indemnified Party. Seller hereby irrevocably constitutes and appoints Purchaser as their true and lawful attorney-in-fact and agent with full
power of substitution to do any and all things and execute any and all documents which may be necessary to effectuate any set off in
accordance with this Section 7.9. The foregoing grant of authority is a special power of attorney coupled with an interest and is irrevocable.
7.10Waiver of Contribution. Seller hereby irrevocably waives and releases any right of contribution, subrogation or any similar
right against any Purchaser Indemnified Party in respect of matters that are or may become the subject of claims for indemnification
hereunder and any indemnification payments that Seller may, at any time, be required to make to any Purchaser Indemnified Party pursuant
to this Agreement, whether directly or indirectly.
ARTICLE VIII
GENERAL
8.1 Notices. All notices, requests, claims, demands or other communications that are required or may be given pursuant to the
terms of this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered, if delivered by hand, (b) one day
after transmitted, if transmitted by a nationally recognized overnight courier service, (c) when telecopied, if telecopied (which is confirmed),
(d) on the day transmitted by email if sent during regular business hours of the recipient, otherwise the day after transmission by email, or (e)
three days after mailing, if mailed by registered or certified mail (return receipt requested), to the parties at the following addresses (or at
such other address for a party as shall be specified in a notice given in accordance with this Section 8.1):
(a)
If to Purchaser:
ORGANOVO, INC.
11555 Sorrento Valley Road
Suite 100
San Diego, CA 92121
Attention: General Counsel
Telephone: 858-294-1605
Email: legal@organovo.com
With a simultaneous copy to:
Paul Hastings LLP
1117 S California Ave.
Palo Alto, CA 94304
E-Mail: jeffhartlin@paulhastings.com
Attention: Jeff Hartlin
If to Seller:
METACRINE, INC.
4225 Executive Square, Suite 600
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San Diego, CA 92037
Attention: Michael York, President
With a simultaneous copy to:
Cooley LLP
10265 Science Center Drive
San Diego, California 92121
Attention: Karen Deschaine
Telephone: (858) 550-6088
Fax: (858) 550-6420
Email: kdeschaine@cooley.com
8.2 Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or
provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit
the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the
parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will
achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.
8.3 Successors and Assigns; Parties In Interest.
This Agreement shall be binding upon: the Seller and its successors and assigns (if any) and the Purchaser and its
successors and assigns (if any). This Agreement shall inure to the benefit of: the Seller, the Purchaser; and the respective successors and
assigns (if any) of the foregoing.
(a)
The Purchaser may freely assign any or all of its rights under this Agreement, in whole or in part, to any other
Person without obtaining the consent or approval of any other Person. Seller shall not be permitted to assign any of its rights or delegate any
of its obligations under this Agreement without the Purchaser’s prior written consent.
(b)
(c)
None of the provisions of this Agreement is intended to provide any rights or remedies to any Person other than the
parties to this Agreement and their respective successors and assigns (if any). Without limiting the generality of the foregoing, (i) no
employee of the Seller shall have any rights under this Agreement or under any of the other Transaction Documents, and (ii) no creditor of
the Seller shall have any rights under this Agreement or any of the other Transaction Documents.
8.4 Incorporation of Exhibits. All Exhibits and Schedules attached hereto and referred to herein are hereby incorporated herein
and made a part of this Agreement for all purposes as if fully set forth herein.
8.5 Governing Law; WAIVER OF JURY TRIAL.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE
APPLICATION OF ANY LAW OTHER
(a)
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THAN THAT OF DELAWARE. COURTS WITHIN THE STATE OF DELAWARE WILL HAVE JURISDICTION OVER ALL DISPUTES
BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS ASSIGNMENT AGREEMENT AND THE AGREEMENTS,
INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES HEREBY CONSENT TO AND AGREE TO SUBMIT TO
THE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HERETO WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH
DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II) SUCH PARTY AND SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY
LEGAL PROCESS ISSUED BY SUCH COURTS OR (III) ANY LITIGATION COMMENCED IN SUCH COURTS IS BROUGHT IN AN
INCONVENIENT FORUM.
(b)
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT, STATUTE OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
ACTIONS OF SUCH PARTY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF. TO THE
FULLEST EXTENT PERMITTED BY LAW, EACH PARTY FURTHER WAIVES ANY RIGHT TO SEEK TO CONSOLIDATE ANY
PROCEEDING IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER PROCEEDING IN WHICH A JURY TRIAL CANNOT OR
HAS NOT BEEN WAIVED. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED OR WARRANTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY AND (IV) EACH PARTY
HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 8.5.
8.6 Headings; Interpretation. The descriptive headings contained in this Agreement are included for convenience of reference
only and shall not affect in any way the meaning or interpretation of this Agreement. The Parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if
drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of
any provisions of this Agreement.
8.7 Counterparts; Facsimiles. This Agreement may be executed and delivered (including by electronic or facsimile transmission)
in two or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one and the same agreement.
8.8 Entire Agreement. This Agreement (including the Schedules and Exhibits attached hereto) and the Transaction Documents
executed in connection with the consummation of the Acquisition contain the entire agreement between the Parties with respect to the
subject matter hereof and related transactions and supersede all prior agreements, written or oral, with respect thereto.
8.9 Waivers and Amendments; Non-Contractual Remedies. This Agreement may be amended, superseded, canceled, renewed
or extended only by a written instrument signed by all of the Parties. The provisions hereof may be waived only in writing signed by all of the
Parties. No delay on the part of any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any Party of any such right, power or privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other such right, power or privilege.
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8.10Knowledge. For purposes of this Agreement, a Party shall be deemed to have “Knowledge” of a particular fact or other matter
if any Representative of such Party has or would have, after reasonable investigation and due diligence, knowledge of such fact or other
matter.
8.11Time of the Essence. Time is of the essence of this Agreement.
8.12Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the Parties shall be
entitled to enforce specifically the provisions of this Agreement, including obtaining an injunction or injunctions to prevent breaches or
threatened breaches of this Agreement, in any court designated to resolve disputes concerning this Agreement (or, if such court lacks subject
matter jurisdiction, in any appropriate state or federal court), this being in addition to any other remedy to which such Party is entitled at Law
or in equity. Each Party further agrees not to assert and waives (a) any defense in any action for specific performance that a remedy at Law
would be adequate and (b) any requirement under any Law to post security or provide indemnity as a prerequisite to obtaining equitable
relief.
[Signatures appear on next page]
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IN WITNESS WHEREOF, intending to be legally bound hereby, the Parties have caused this Agreement to be signed in their
respective names by their duly authorized representatives as of the date first above written.
ORGANOVO, INC.
By: ____________________________
Name:
Title:
____________________________
____________________________
METACRINE, INC.
By: ____________________________
Name:
Title:
____________________________
____________________________
LEGAL_US_W # 115308022.7
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (“Assignment Agreement”) is made as of March 10, 2023 by and between
Metacrine, Inc., a Delaware corporation (“Seller”), and Organovo, Inc. a Delaware corporation (“Purchaser”). Capitalized terms used but not
defined herein shall have the meanings ascribed to such terms in the Agreement (as hereinafter defined).
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are parties to an Asset Purchase Agreement, dated as of even date herewith (the “Agreement”)
providing for, among other things, the sale by Seller to Purchaser of the Purchased Assets and the assumption by Purchaser of the Assumed
Liabilities; and
WHEREAS, in accordance with the terms of the Agreement, Seller and Purchaser have agreed to enter into this Assignment
Agreement, providing for (a) the assignment from Seller to Purchaser of all of Seller’s right, title and interest in and to the Purchased Assets,
including the Transferred Agreements, from and after the Closing, on and subject to the terms and conditions of the Agreement and (b) the
acceptance by Purchaser of such assignment and the assumption by Purchaser of Liabilities of Seller under the Assumed Liabilities, on the
terms and subject to the conditions of Section 2.3 of the Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows:
1.
Assignment. In accordance with and subject to the terms and conditions of the Agreement, Seller hereby sells, conveys,
transfers, assigns and delivers to Purchaser, free and clear of all Encumbrances other than the Assumed Liabilities, all of Seller’s right, title
and interest in and to all of the Purchased Assets, including the Transferred Agreements, from and after the Closing.
2. Assumption. Effective as of the Closing, Purchaser hereby assumes and agrees to pay, perform and discharge, and be bound by
the obligations, liabilities and duties of the Assumed Liabilities on the terms and subject to the conditions of Section 2.3 of the Agreement.
Except for those Liabilities expressly assumed by Purchaser pursuant to Section 2.3 of the Agreement, Purchaser shall assume no other
Liabilities of the Seller.
3.
Further Assurances. Seller and Purchaser shall each execute, acknowledge (if appropriate) and deliver, or cause the execution,
acknowledgment and delivery of, and make or cause to be done or made, such further documents and instruments, acts or things,
supplemental, confirmatory or otherwise, as may reasonably be requested by the other party hereto to implement the purposes of this
Assignment Agreement and the Agreement.
4.
Assignability. This Assignment Agreement shall be binding upon and shall inure to the benefit of the Seller and its successors
and assigns (if any) and the Purchaser and its successors and assigns (if any). The Purchaser may freely assign any or all of its rights under
this Assignment Agreement, in whole or in part, to any other Person without obtaining the consent or approval of any other Person. Seller
shall not be permitted to assign any of its rights or delegate any of its obligations under this Assignment Agreement without the Purchaser’s
prior written consent.
5. Non-contravention.
Nothing set forth in this Assignment Agreement shall limit or otherwise negate the rights and obligations of
Purchaser and Seller as set forth in the Agreement. In the event of any conflict between any term of condition of this Assignment and any
term or condition of the Agreement, the term or condition of the Agreement shall control.
1
LEGAL_US_W # 115308022.7
Final Form
6.
Counterparts. This Assignment Agreement may be executed and delivered (including by electronic or facsimile transmission) in
two or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed and delivered shall be
deemed to be an original but all of which taken together shall constitute one and the same agreement.
7.
Governing Law. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF
DIRECTING THE APPLICATION OF ANY LAW OTHER THAN THAT OF DELAWARE. COURTS WITHIN THE STATE OF DELAWARE
WILL HAVE JURISDICTION OVER ALL DISPUTES BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS
ASSIGNMENT AGREEMENT AND THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES
HEREBY CONSENT TO AND AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HERETO
WAIVES, AND AGREES NOT TO ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
CLAIM THAT (I) SUCH PARTY IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II) SUCH PARTY AND
SUCH PARTY’S PROPERTY IS IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (III) ANY LITIGATION
COMMENCED IN SUCH COURTS IS BROUGHT IN AN INCONVENIENT FORUM.
8.
Non-Assignable Contracts. Nothing in this Assignment Agreement or the Agreement shall be construed as an attempt to sell,
transfer, convey, assign or deliver any contract or agreement comprising any of the Transferred Agreements that is by its terms or at law non-
assignable without the consent of the other party thereto and as to which such consent shall not have been given as of the date hereof;
provided, however, that upon the receipt by Seller of any such consent, the contract or agreement as to which any such consent relates shall,
without any further action by Seller or Purchaser, be deemed to have been assigned by Seller to Purchaser hereunder as of the date of such
consent or notice as the case may be.
9.
Severability. Any term or provision of this Assignment Agreement that is invalid or unenforceable in any situation in any
jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares
that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the
power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or
provision, and this Assignment Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted
to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable
term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
2
LEGAL_US_W # 115308022.7
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Assignment and
Assumption Agreement to be executed and delivered as of the day and year first above written.
ORGANOVO, INC.
By: ____________________________
Name:
Title:
____________________________
____________________________
METACRINE, INC.
By: ____________________________
Name:
Title:
____________________________
____________________________
[SIGNATURE PAGE TO ASSIGNMENT AND ASSUMPTION AGREEMENT]
LEGAL_US_W # 115308022.7
EXHIBIT B
PATENT ASSIGNMENT
This PATENT ASSIGNMENT (the “Assignment”), is made and entered into as of March 10, 2023 by METACRINE, INC., a Delaware
corporation (the “Assignor”) in favor of ORGANOVO, INC., a Delaware corporation (the “Assignee”).
WHEREAS, the Assignee and Assignor are parties to that certain Asset Purchase Agreement, dated of even date herewith (the
“Purchase Agreement”), pursuant to which the Assignor has, among other things, agreed to assign, transfer, convey, and deliver to the
Assignee all of the Assignor’s right, title, and interest in and to the Assigned Patents (defined below).
NOW, THEREFORE, in consideration of the promises and covenants set forth in the Purchase Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
1.Conveyance. The Assignor hereby assigns, transfers, conveys, and delivers to the Assignee all of the Assignor’s right, title and
interest in and throughout the United States of America, its territories and all foreign countries, in, to and under all of its issued patents and
patent applications listed on Schedule A hereto, including all reissues, divisionals, continuations, continuations-in-part, revisions,
reexaminations, extensions and counterparts (whether foreign or domestic) claiming priority to or based on any of the foregoing items,
together with all patents issuing therefrom, all inventions and improvements claimed or described in any of the foregoing, all rights to collect
royalties, products and proceeds in connection with any of the foregoing (collectively, the “Assigned Patents”), and all rights to sue and
bring other claims for past, present and future infringement, misappropriation or other violation of any of the foregoing and all rights to
recover damages (including attorney’s fees and expenses) or lost profits in connection therewith.
2.Recordation. The Assignor hereby requests the United States Patent and Trademark Office Commissioner for Patents and any other
applicable governmental entity or registrar (including any applicable foreign or international office or registrar) to record the Assignee as the
assignee and owner of the Assigned Patents. The Assignor further authorizes the respective patent office or governmental agency in each
other jurisdiction to issue any and all patents or certificates of invention which may be granted upon any of the Assigned Patents in the name
of the Assignee, as the assignee to the entire interest therein, it being understood that any expense in connection with the execution of such
recordation shall be borne by the Assignee.
3.Information and Assistance.
3.1 Upon the Assignee’s reasonable request and without further compensation, the Assignor shall execute, acknowledge and deliver
all such other instruments and documents and shall take all such other actions reasonably necessary or required by law to consummate and
make fully effective the transaction contemplated by this Assignment.
3.2 If the Assignor fails to timely comply with Section 3.1 (regardless of fault) and the Assignee is therefore unable to secure the
Assignor’s signature to any document required to file, prosecute, register or memorialize the assignment of any rights under any Assigned
Patents as provided under this Assignment, the Assignor hereby irrevocably designates and appoints the Assignee and the Assignee’s duly
authorized officers and agents as the Assignor’s agents and attorneys-in-fact to act for and on the Assignor’s behalf solely for the purpose of
taking all lawfully permitted acts to further the filing, prosecution, registration, memorialization of assignment, issuance and enforcement of
rights under such Assigned Patents, all with the same legal force and effect as if executed by the Assignor. The foregoing is deemed a
power coupled with an interest and is irrevocable.
LEGAL_US_W # 115308022.7
4.Successors and Assigns. This Assignment and all the provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns and nothing herein express or implied shall give or be construed to give
to any person, other than the parties hereto and their respective successors and permitted assigns, any legal or equitable rights hereunder.
5.Counterparts. This Assignment may be executed and delivered (including by facsimile or electronic transmission) in two or more
counterparts, each of which when executed and delivered shall be deemed to be an original but all of which taken together shall constitute
one and the same agreement.
6.Section Headings. The section headings contained in this Assignment are for reference purposes only, and shall not in any way
affect the meaning or interpretation of this Assignment.
7.Purchase Agreement Controls. This Assignment is provided pursuant to the Purchase Agreement, to which reference is made for a
further statement of the rights and obligations of the Assignor and the Assignee with respect to the Assigned Patents. Nothing contained in
this Assignment shall be deemed to modify, supersede, enlarge, limit or affect the rights of any person under the Purchase Agreement. If any
provision of this Assignment is inconsistent or conflicts with the Purchase Agreement, the Purchase Agreement shall control.
8.Governing Law. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF DELAWARE OTHER THAN CONFLICT OF LAWS PRINCIPLES THEREOF DIRECTING THE
APPLICATION OF ANY LAW OTHER THAN THAT OF DELAWARE. COURTS WITHIN THE STATE OF DELAWARE WILL HAVE
JURISDICTION OVER ALL DISPUTES BETWEEN THE PARTIES HERETO ARISING OUT OF OR RELATING TO THIS ASSIGNMENT AND
THE AGREEMENTS, INSTRUMENTS AND DOCUMENTS CONTEMPLATED HEREBY. THE PARTIES HEREBY CONSENT TO AND
AGREE TO SUBMIT TO THE JURISDICTION OF SUCH COURTS. EACH OF THE PARTIES HERETO WAIVES, AND AGREES NOT TO
ASSERT IN ANY SUCH DISPUTE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY CLAIM THAT (I) SUCH PARTY IS
NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURTS, (II) SUCH PARTY AND SUCH PARTY’S PROPERTY IS
IMMUNE FROM ANY LEGAL PROCESS ISSUED BY SUCH COURTS OR (III) ANY LITIGATION COMMENCED IN SUCH COURTS IS
BROUGHT IN AN INCONVENIENT FORUM.
LEGAL_US_W # 115308022.7
[Signatures appear on next page]
IN WITNESS WHEREOF, the undersigned have caused this Patent Assignment to be executed, effective as of the date first written
above.
ASSIGNOR:
Metacrine, Inc.
By: ________________________________
Name: ________________________________
Title: ________________________________
Acknowledged and Accepted:
ASSIGNEE:
Organovo, Inc.
By: ____________________________
Name: ________________________________
Title: ________________________________
LEGAL_US_W # 115308022.7
UNITED STATES OF AMERICA
STATE OF ________
CITY/COUNTY OF
)
: ss.:
)
NOTARIAL CERTIFICATE
I,
, the undersigned Notary Public do hereby certify that ____________________________________, as
_________________________________ of _______, a ______, who signed the foregoing Assignment document, was authorized on the
_______ day of ____, to execute the foregoing Assignment document on behalf of _____, and to me acknowledged that he/she did sign the
said document.
Notary Public
LEGAL_US_W # 115308022.7
Patents
SCHEDULE A TO PATENT ASSIGNMENT
Patent No.
Issue Date
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
705.101
US
PRO
Expired
62/219,422
48773-
705.601
WO
ORD
30 Mo
Done
PCT/US2016/05226
8
48773-
705.611
EP
PCT
Abandone
d
16847451.8
Filing
Date
16-
Sep-
2015
16-
Sep-
2016
16-
Sep-
2016
48773-
705.831
US
PCT
To be
Abandone
d
15/758,709
08-Mar-
2018
10,626,081
21-Apr-2020
48773-
706.101
48773-
706.102
US
PRO
Expired
62/219,427
US
PRO
Expired
62/333,560
48773-
706.601
WO
ORD
30 Mo
Done
PCT/US2016/05227
4
48773-
706.611
EP
PCT
Abandone
d
16847455.9
16-
Sep-
2015
09-
May-
2016
16-
Sep-
2016
06-
Sep-
2016
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
706.761
JP
PCT
Abandone
d
2018-534464
Filing
Date
16-
Sep-
2016
Patent No.
Issue Date
48773-
706.831
US
PCT
Abandone
d
15/758,710
08-Mar-
2018
48773-
707.101
48773-
707.102
US
PRO
Expired
62/219,428
US
PRO
Expired
62/333,583
48773-
707.601
WO
ORD
30 Mo
Done
PCT/US2016/05227
5
48773-
707.611
EP
PCT
Abandone
d
16847456.7
48773-
707.761
JP
PCT
Abandone
d
2018-534465
16-
Sep-
2015
09-
May-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
48773-
707.831
US
PCT
To be
Abandone
d
15/758,712
08-Mar-
2018
10,377,717
13-Aug-2019
48773-
708.101
US
PRO
Expired
62/219,430
16-
Sep-
2015
2
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
708.301
US
CON
Issued
16/872,985
48773-
708.302
US
CON
Abandone
d
17/532,618
48773-
708.303
US
CON
To be
Abandone
d
17/811,255
48773-
708.304
48773-
708.591
US
CON
Pending
18/156,069
EA
PCT
Granted
201890725
48773-
708.601
WO
ORD
30 Mo
Done
PCT/US2016/05227
0
48773-
708.611
48773-
708.681
48773-
708.691
EP
PCT
Pending
16847452.6
AU
PCT
Granted
2016323992
BR
PCT
Pending
1120180051799
Filing
Date
12-
May-
2020
22-
Nov-
2021
07-Jul-
2022
18-Jan-
2023
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
3
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
11,214,538
04-Jan-2022
040003
08-Apr-2022
201632399
2
26-Aug-2021
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
708.701
48773-
708.711
48773-
708.731
48773-
708.741
48773-
708.761
48773-
708.771
48773-
708.781
48773-
708.801
CA
PCT
Pending
2,998,493
CN
PCT
Granted
201680066917.9
IL
PCT
Pending
258011
IN
PCT
Granted
201817010231
JP
PCT
Granted
2018-534463
KR
PCT
Pending
10-2018-7009912
MX
PCT
Granted
MX/a/2018/003388
PH
PCT
Pending
1-2018-500586
48773-
708.821
SG
PCT
Abandone
d
11201802162U
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
4
LEGAL_US_W # 115308022.7
ZL2016800
66917.9
28-Dec-2021
380510
28-Oct-2021
6905530
29-Jun-2021
386752
01-Oct-2021
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
708.821
1
48773-
708.831
48773-
708.841
48773-
708.891
48773-
710.101
SG
DIV
Pending
10202110242Y
US
PCT
Issued
15/758,707
ZA
PCT
Granted
2018/01750
HK
REP
Pending
19100126.6
US
PRO
Expired
62/471,502
Filing
Date
16-
Sep-
2016
08-Mar-
2018
16-
Sep-
2016
16-
Sep-
2016
15-Mar-
2017
48773-
710.601
WO
ORD
30 Mo
Done
PCT/US2018/02249
0
14-Mar-
2018
48773-
710.831
US
PCT
Abandone
d
16/494,257
48773-
712.101
48773-
712.102
US
PRO
Expired
62/471,511
US
PRO
Expired
62/563,488
13-
Sep-
2019
15-Mar-
2017
26-
Sep-
2017
5
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
10,703,712
07-Jul-2020
2018/01750
28-Sep-2022
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
712.601
WO
ORD
30 Mo
Done
PCT/US2018/02248
8
14-Mar-
2018
48773-
712.831
US
PCT
Abandone
d
16/494,259
48773-
713.101
48773-
713.102
48773-
713.301
US
PRO
Expired
62/471,517
US
PRO
Expired
62/563,497
US
CON
Issued
16/886,642
13-
Sep-
2019
15-Mar-
2017
26-
Sep-
2017
28-
May-
2020
48773-
713.302
US
CON
Abandone
d
17/152,548
19-Jan-
2021
48773-
713.303
US
CON
To be
Abandone
d
17/837,586
10-Jun-
2022
48773-
713.304
US
CON
Pending
18/154,421
13-Jan-
2023
48773-
713.601
WO
ORD
30 Mo
Done
PCT/US2018/02248
9
14-Mar-
2018
LEGAL_US_W # 115308022.7
6
10,927,082
23-Feb-2021
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
713.611
48773-
713.701
48773-
713.711
48773-
713.731
48773-
713.741
48773-
713.761
48773-
713.831
48773-
713.851
48773-
713.871
EP
PCT
Pending
18767094.8
CA
PCT
Pending
3,055,990
CN
PCT
Pending
201880032220.9
IL
PCT
Granted
269068
IN
PCT
Pending
201917039803
JP
PCT
Granted
2019-547662
US
PCT
Issued
16/494,264
TW
ORD
Pending
107108918
AR
ORD
Pending
20180100608
Filing
Date
14-Mar-
2018
14-Mar-
2018
15-
Nov-
2019
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
13-
Sep-
2019
15-Mar-
2018
15-Mar-
2018
7
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
269068
02-Dec-2022
7174709
09-Nov-2022
10,961,198
30-Mar-2021
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
713.891
48773-
714.101
48773-
714.102
HK
RCN
Pending
62020009477.4
US
PRO
Expired
62/471,525
US
PRO
Expired
62/563,502
Filing
Date
15-
Nov-
2019
15-Mar-
2017
26-
Sep-
2017
48773-
714.601
WO
ORD
30 Mo
Done
PCT/US2018/02249
7
14-Mar-
2018
48773-
714.831
US
PCT
Abandone
d
16/494,266
48773-
718.301
US
CON
Abandone
d
17/538,394
48773-
718.302
48773-
718.591
US
CON
Pending
17/811,276
EA
PCT
Granted
201992051
13-
Sep-
2019
30-
Nov-
2021
07-Jul-
2022
14-Mar-
2018
48773-
718.601
WO
ORD
30 Mo
Done
PCT/US2018/02251
3
14-Mar-
2018
LEGAL_US_W # 115308022.7
8
Patent No.
Issue Date
040704
19-Jul-2022
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
EP
PCT
Pending
18768017.8
Patent No.
Issue Date
Filing
Date
14-Mar-
2018
48773-
718.611
48773-
718.681
48773-
718.691
48773-
718.701
48773-
718.711
48773-
718.731
48773-
718.741
48773-
718.761
48773-
718.771
LEGAL_US_W # 115308022.7
AU
PCT
Granted
2018236275
14-Mar-
2018
201823627
5
25-Aug-2022
BR
PCT
Pending
1120190191542
CA
PCT
Pending
3,056,019
CN
PCT
Pending
201880032548.0
IL
PCT
Granted
269065
IN
PCT
Pending
201917041302
JP
PCT
Pending
2019-547663
KR
PCT
Pending
10-2019-7030348
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
9
269065
02-Dec-2022
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
718.781
48773-
718.801
48773-
718.821
48773-
718.831
48773-
718.841
48773-
718.891
48773-
722.101
MX
PCT
Granted
MX/a/2019/010907
PH
PCT
Pending
1-2019-502058
SG
PCT
Pending
11201908330P
US
PCT
Issued
16/494,272
ZA
PCT
Pending
2019/05927
HK
RCN
Pending
62020009491.5
US
PRO
Expired
62/733,000
48773-
722.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
8
48773-
724.101
US
PRO
Expired
62/733,004
Filing
Date
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
13-
Sep-
2019
14-Mar-
2018
14-Mar-
2018
18-
Sep-
2018
17-
Sep-
2019
18-
Sep-
2018
10
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
397265
08-Nov-2022
11,236,071
01-Feb-2022
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
724.102
US
PRO
Expired
62/881,564
48773-
724.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
7
48773-
724.611
EP
PCT
Pending
19863242.4
48773-
724.711
CN
PCT
48773-
724.731
IL
PCT
48773-
724.741
IN
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
201980076038.8
281474
202117011912
48773-
724.761
JP
PCT
Abandone
d
2021-513408
01-
Aug-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
48773-
724.831
US
PCT
Abandone
d
17/276,785
16-Mar-
2021
48773-
725.101
US
PRO
Expired
62/733,006
18-
Sep-
2018
11
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND METHODS
FOR
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
725.102
US
PRO
Expired
62/881,570
48773-
725.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
6
48773-
726.101
US
PRO
Expired
62/733,007
48773-
726.471
KW
PCT
To be
Abandone
d
KW/P/2021/83
48773-
726.591
EA
PCT
Abandone
d
202190663
48773-
726.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
5
48773-
726.611
EP
PCT
To be
Abandone
d
19863702.7
01-
Aug-
2019
17-
Sep-
2019
18-
Sep-
2018
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
12
LEGAL_US_W # 115308022.7
Application
Title
MAKING AND
USING
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
48773-
726.681
AU
PCT
48773-
726.691
BR
PCT
48773-
726.701
CA
PCT
48773-
726.711
CN
PCT
48773-
726.731
IL
PCT
48773-
726.741
IN
PCT
48773-
726.761
JP
PCT
LEGAL_US_W # 115308022.7
Status
Application No.
Filing
Date
Patent No.
Issue Date
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
2019344905
1120210049312
3,112,485
201980075901.8
281464
202117011911
2021-513445
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
13
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Patent No.
Issue Date
Filing
Date
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
726.771
KR
PCT
Abandone
d
10-2021-7010822
48773-
726.781
MX
PCT
48773-
726.821
SG
PCT
48773-
726.831
US
PCT
48773-
726.881
CL
PCT
48773-
726.891
48773-
726.973
1
HK
REP
SA
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
LEGAL_US_W # 115308022.7
MX/a/2021/003083
11202102586R
17/276,763
16-Mar-
2021
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
202100631
62021037191.5
521421491
14
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
726.975
1
48773-
726.987
48773-
727.101
AE
PCT
QA
PCT
To be
Abandone
d
To be
Abandone
d
P6000380/2021
QA/202103/000140
US
PRO
Expired
62/733,008
17-
Sep-
2019
17-
Sep-
2019
18-
Sep-
2018
48773-
727.301
US
CON
48773-
727.591
EA
PCT
To be
Abandone
d
To be
Abandone
d
17/836,905
09-Jun-
2022
202190661
48773-
727.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
4
LEGAL_US_W # 115308022.7
17-
Sep-
2019
17-
Sep-
2019
15
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
Docket
no.
Countr
y
Cas
e
Type
48773-
727.611
EP
PCT
48773-
727.681
AU
PCT
48773-
727.701
CA
PCT
48773-
727.711
CN
PCT
48773-
727.761
JP
PCT
Status
Application No.
Filing
Date
Patent No.
Issue Date
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
19861794.6
2019344904
3,112,414
201980076039.2
2021-513457
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
48773-
727.831
US
PCT
Abandone
d
17/276,766
16-Mar-
2021
LEGAL_US_W # 115308022.7
16
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
11,084,817
10-Aug-2021
48773-
727.891
HK
REP
To be
Abandone
d
62021037190.7
48773-
731.101
48773-
731.201
48773-
731.301
48773-
731.471
48773-
731.591
US
PRO
Expired
62/881,560
US
ORD
Issued
16/573,993
US
CON
Pending
17/349,757
KW
PCT
Pending
KW/P/2021/81
EA
PCT
Pending
202190660
48773-
731.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
3
48773-
731.611
EP
PCT
Pending
19862391.0
17-
Sep-
2019
01-
Aug-
2019
17-
Sep-
2019
16-Jun-
2021
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
731.681
48773-
731.691
48773-
731.701
48773-
731.711
48773-
731.731
48773-
731.741
48773-
731.761
48773-
731.771
48773-
731.781
AU
PCT
Pending
2019344903
BR
PCT
Pending
112021004919 3
CA
PCT
Pending
3,112,411
CN
PCT
Pending
201980075902.2
IL
PCT
Pending
281475
IN
PCT
Pending
202117011574
JP
PCT
Pending
2021-513407
KR
PCT
Pending
10-2021-7011359
MX
PCT
Pending
MX/a/2021/003110
18
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
731.801
48773-
731.821
48773-
731.841
48773-
731.851
48773-
731.871
48773-
731.881
48773-
731.891
48773-
731.973
1
48773-
731.975
1
PH
PCT
Pending
1-2021-550605
SG
PCT
Pending
11202102651S
ZA
PCT
Pending
2021/01678
TW
ORD
Pending
108133441
AR
ORD
Pending
P190102639
CL
PCT
Pending
202100632
HK
REP
Pending
62021037189.9
SA
PCT
Pending
521421486
AE
PCT
Pending
P6000381/2021
19
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
LEGAL_US_W # 115308022.7
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue Date
48773-
731.987
48773-
732.101
QA
PCT
Pending
QA/202103/000141
US
PRO
Expired
62/881,576
48773-
732.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
2
48773-
732.611
EP
PCT
48773-
732.711
CN
PCT
48773-
732.731
IL
PCT
48773-
732.741
IN
PCT
48773-
732.761
JP
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
19863701.9
201980075910.7
281471
202117011577
2021-513406
17-
Sep-
2019
01-
Aug-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
48773-
732.831
US
PCT
Abandone
d
17/276,787
16-Mar-
2021
LEGAL_US_W # 115308022.7
20
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
FARNESOID X
RECEPTOR
AGONISTS
AND USES
THEREOF
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
734.101
48773-
734.102
48773-
734.103
48773-
734.591
US
PRO
Expired
62/991,292
US
PRO
Expired
63/069,667
US
PRO
Expired
63/140,735
EA
PCT
Pending
202292638
Filing
Date
18-Mar-
2020
24-
Aug-
2020
22-Jan-
2021
17-Mar-
2021
48773-
734.601
WO
ORD
30 Mo
Done
PCT/US2021/02278
6
17-Mar-
2021
48773-
734.611
EP
PCT
Pending
21772019.2
17-Mar-
2021
21
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
734.681
48773-
734.691
48773-
734.701
48773-
734.711
48773-
734.731
48773-
734.761
AU
PCT
Pending
2021240001
BR
PCT
Pending
1120220186517
CA
PCT
Pending
3,172,205
CN
PCT
Pending
202180036461.2
IL
PCT
Pending
296539
JP
PCT
Pending
2022-555913
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
22
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
734.771
48773-
734.781
48773-
734.821
48773-
734.831
48773-
734.851
48773-
735.101
KR
PCT
Pending
10-2022-7036071
MX
PCT
Pending
MX/a/2022/011579
SG
PCT
Pending
11202253216J
US
PCT
Pending
17/906,580
TW
ORD
Pending
110109622
US
PRO
Expired
62/991,213
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
16-
Sep-
2022
17-Mar-
2021
18-Mar-
2020
23
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
735.591
EA
PCT
Pending
202292639
Filing
Date
17-Mar-
2021
Patent No.
Issue Date
48773-
735.601
WO
ORD
30 Mo
Done
PCT/US2021/02279
0
17-Mar-
2021
48773-
735.611
48773-
735.681
48773-
735.691
48773-
735.701
48773-
735.711
EP
PCT
Pending
21770893.2
AU
PCT
Pending
2021236648
BR
PCT
Pending
1120220185960
CA
PCT
Pending
3,171,987
CN
PCT
Pending
202180036362.4
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
24
LEGAL_US_W # 115308022.7
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
735.731
48773-
735.741
48773-
735.761
48773-
735.771
48773-
735.781
48773-
735.821
48773-
735.831
IL
PCT
Pending
296532
IN
PCT
Pending
202217055966
JP
PCT
Pending
2022-555915
KR
PCT
Pending
10-2022-7036019
MX
PCT
Pending
MX/a/2022/011582
SG
PCT
Pending
11202253217Y
US
PCT
Pending
17/906,582
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
16-
Sep-
2022
25
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
735.851
48773-
735.871
48773-
736.101
TW
ORD
Pending
110109624
AR
ORD
Pending
P210100667
US
PRO
Expired
62/991,216
Filing
Date
17-Mar-
2021
17-Mar-
2021
18-Mar-
2020
48773-
736.601
WO
ORD
30 Mo
Done
PCT/US2021/02279
3
17-Mar-
2021
48773-
736.611
48773-
736.681
48773-
736.691
EP
PCT
Pending
21718306.0
AU
PCT
Pending
2021239956
BR
PCT
Pending
1120220185537
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
26
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
736.711
48773-
736.761
48773-
736.771
48773-
736.831
48773-
736.851
48773-
736.871
48773-
738.101
CN
PCT
Pending
202180036385.5
JP
PCT
Pending
2022-555914
KR
PCT
Pending
10-2022-7036023
US
PCT
Pending
17/906,585
TW
ORD
Pending
110109623
AR
ORD
Pending
P210100668
US
PRO
Expired
62/991,301
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
16-
Sep-
2022
17-Mar-
2021
17-Mar-
2021
18-Mar-
2020
27
LEGAL_US_W # 115308022.7
Patent No.
Issue Date
Application
Title
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FORMULATION
S OF A
FARNESOID X
RECEPTOR
AGONIST
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
Docket
no.
Countr
y
Cas
e
Type
Status
Application No.
48773-
738.102
US
PRO
Expired
63/032,851
Filing
Date
01-Jun-
2020
Patent No.
Issue Date
48773-
738.601
WO
ORD
30 Mo
Done
PCT/US2021/02278
8
17-Mar-
2021
48773-
738.851
TW
ORD
To be
Abandone
d
110109630
17-Mar-
2021
EXHIBIT C
Allocation of Purchase Price
Application
Title
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
FARNESOID X
RECEPTOR
AGONISTS
FOR THE
TREATMENT
OF DISEASE
The Purchase Price (along with other items of consideration for United States federal income Tax purposes) and any adjustment thereto
(each as determined pursuant to Section 1060 of the Code) will be allocated for income Tax purposes (including for purposes of Section 1060
of the Code) among the Purchased Assets and the covenants of Seller in accordance with the residual method set forth in Treasury
Regulations Section 1.1060-1(c) based upon the following methodology for determining the fair market value of the Purchased Assets
included in each of the classes of assets set forth in Treasury Regulations Section 1.338-6.
Asset Class
Allocation Methodology
Class IV
Class VI
The aggregate cost of the Inventory.
Remainder.
LEGAL_US_W # 115308022.7
28
A. Patents
SCHEDULE I
PROGRAM PATENTS
Docket
no.
48773-
705.101
48773-
705.601
48773-
705.611
48773-
705.831
48773-
706.101
48773-
706.102
48773-
706.601
48773-
706.611
48773-
706.761
48773-
706.831
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
US
PRO
Expired
62/219,422
WO
ORD
30 Mo
Done
PCT/US2016/05226
8
EP
PCT
Abandone
d
16847451.8
16-
Sep-
2015
16-
Sep-
2016
16-
Sep-
2016
US
PCT
Issued
15/758,709
08-Mar-
2018
10,626,081
21-Apr-
2020
US
PRO
Expired
62/219,427
US
PRO
Expired
62/333,560
WO
ORD
30 Mo
Done
PCT/US2016/05227
4
EP
PCT
Abandone
d
16847455.9
JP
PCT
Abandone
d
2018-534464
16-
Sep-
2015
09-
May-
2016
16-
Sep-
2016
06-
Sep-
2016
16-
Sep-
2016
US
PCT
Abandone
d
15/758,710
08-Mar-
2018
29
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
48773-
707.101
48773-
707.102
48773-
707.601
48773-
707.611
48773-
707.761
48773-
707.831
48773-
708.101
48773-
708.301
48773-
708.302
48773-
708.303
48773-
708.304
48773-
708.591
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
US
PRO
Expired
62/219,428
US
PRO
Expired
62/333,583
WO
ORD
30 Mo
Done
PCT/US2016/05227
5
EP
PCT
Abandone
d
16847456.7
JP
PCT
Abandone
d
2018-534465
16-
Sep-
2015
09-
May-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
US
PCT
Issued
15/758,712
08-Mar-
2018
10,377,717
US
PRO
Expired
62/219,430
US
CON
Issued
16/872,985
US
CON
US
CON
Abandone
d
To be
Abandone
d
17/532,618
17/811,255
US
CON
Pending
18/156,069
EA
PCT
Granted
201890725
16-
Sep-
2015
12-
May-
2020
22-
Nov-
2021
07-Jul-
2022
18-Jan-
2023
16-
Sep-
2016
30
13-
Aug-
2019
04-
Jan-
2022
11,214,538
040003
08-Apr-
2022
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
48773-
708.601
48773-
708.611
48773-
708.681
48773-
708.691
48773-
708.701
48773-
708.711
48773-
708.731
48773-
708.741
48773-
708.761
48773-
708.771
48773-
708.781
48773-
708.801
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
WO
ORD
30 Mo
Done
PCT/US2016/05227
0
EP
PCT
Pending
16847452.6
AU
PCT
Granted
2016323992
BR
PCT
Pending
1120180051799
CA
PCT
Pending
2,998,493
CN
PCT
Granted
201680066917.9
IL
PCT
Pending
258011
IN
PCT
Granted
201817010231
JP
PCT
Granted
2018-534463
KR
PCT
Pending
10-2018-7009912
MX
PCT
Granted
MX/a/2018/003388
PH
PCT
Allowed
1-2018-500586
31
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
16-
Sep-
2016
2016323992
26-
Aug-
2021
ZL201680066917.
9
28-
Dec-
2021
380510
6905530
28-Oct-
2021
29-
Jun-
2021
386752
01-Oct-
2021
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
Country
Cas
e
Type
Status
Application No.
SG
PCT
Abandone
d
11201802162U
SG
DIV
Pending
10202110242Y
Patent No.
Issue
Date
Filing
Date
16-
Sep-
2016
16-
Sep-
2016
07-Jul-
2020
28-
Sep-
2022
US
PCT
Issued
15/758,707
08-Mar-
2018
10,703,712
2018/01750
ZA
PCT
Granted
2018/01750
HK
REP
Pending
19100126.6
US
PRO
Expired
62/471,502
16-
Sep-
2016
16-
Sep-
2016
15-Mar-
2017
WO
ORD
30 Mo
Done
PCT/US2018/02249
0
14-Mar-
2018
US
PCT
Abandone
d
16/494,257
US
PRO
Expired
62/471,511
US
PRO
Expired
62/563,488
13-
Sep-
2019
15-Mar-
2017
26-
Sep-
2017
WO
ORD
30 Mo
Done
PCT/US2018/02248
8
14-Mar-
2018
US
PCT
Abandone
d
16/494,259
13-
Sep-
2019
32
48773-
708.821
48773-
708.821
1
48773-
708.831
48773-
708.841
48773-
708.891
48773-
710.101
48773-
710.601
48773-
710.831
48773-
712.101
48773-
712.102
48773-
712.601
48773-
712.831
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
48773-
713.101
48773-
713.102
48773-
713.301
48773-
713.302
48773-
713.303
48773-
713.304
48773-
713.601
48773-
713.611
48773-
713.701
48773-
713.711
48773-
713.731
48773-
713.741
Country
Cas
e
Type
Status
Application No.
US
PRO
Expired
62/471,517
US
PRO
Expired
62/563,497
US
CON
Issued
16/886,642
US
CON
US
CON
Abandone
d
To be
Abandone
d
17/152,548
17/837,586
US
CON
Pending
18/154,421
Filing
Date
15-Mar-
2017
26-
Sep-
2017
28-
May-
2020
19-Jan-
2021
10-Jun-
2022
13-Jan-
2023
WO
ORD
30 Mo
Done
PCT/US2018/02248
9
14-Mar-
2018
EP
PCT
Pending
18767094.8
CA
PCT
Pending
3,055,990
CN
PCT
Pending
201880032220.9
IL
PCT
Granted
269068
IN
PCT
Pending
201917039803
14-Mar-
2018
14-Mar-
2018
15-
Nov-
2019
14-Mar-
2018
14-Mar-
2018
33
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
10,927,082
23-
Feb-
2021
269068
02-
Dec-
2022
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
Docket
no.
48773-
713.761
48773-
713.831
48773-
713.851
48773-
713.871
48773-
713.891
48773-
714.101
48773-
714.102
48773-
714.601
48773-
714.831
48773-
718.301
48773-
718.302
48773-
718.591
Country
Cas
e
Type
Status
Application No.
JP
PCT
Granted
2019-547662
US
PCT
Issued
16/494,264
TW
ORD
Pending
107108918
AR
ORD
Pending
20180100608
HK
RCN
Pending
62020009477.4
US
PRO
Expired
62/471,525
US
PRO
Expired
62/563,502
Filing
Date
14-Mar-
2018
13-
Sep-
2019
15-Mar-
2018
15-Mar-
2018
15-
Nov-
2019
15-Mar-
2017
26-
Sep-
2017
WO
ORD
30 Mo
Done
PCT/US2018/02249
7
14-Mar-
2018
US
PCT
Abandone
d
16/494,266
US
CON
Pending
17/538,394
US
CON
Pending
17/811,276
EA
PCT
Granted
201992051
13-
Sep-
2019
30-
Nov-
2021
07-Jul-
2022
14-Mar-
2018
34
LEGAL_US_W # 115308022.7
Patent No.
7174709
10,961,198
Issue
Date
09-
Nov-
2022
30-
Mar-
2021
040704
19-Jul-
2022
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
Docket
no.
48773-
718.601
48773-
718.611
48773-
718.681
48773-
718.691
48773-
718.701
48773-
718.711
48773-
718.731
48773-
718.741
48773-
718.761
48773-
718.771
48773-
718.781
48773-
718.801
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
WO
ORD
30 Mo
Done
PCT/US2018/02251
3
14-Mar-
2018
EP
PCT
Pending
18768017.8
AU
PCT
Granted
2018236275
BR
PCT
Pending
1120190191542
CA
PCT
Pending
3,056,019
CN
PCT
Pending
201880032548.0
IL
PCT
Granted
269065
IN
PCT
Pending
201917041302
JP
PCT
Pending
2019-547663
KR
PCT
Pending
10-2019-7030348
MX
PCT
Granted
MX/a/2019/010907
PH
PCT
Pending
1-2019-502058
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
14-Mar-
2018
35
2018236275
25-
Aug-
2022
269065
02-
Dec-
2022
397265
08-
Nov-
2022
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
48773-
718.821
48773-
718.831
48773-
718.841
48773-
718.891
48773-
722.101
48773-
722.601
48773-
724.101
48773-
724.102
48773-
724.601
48773-
724.611
48773-
724.711
48773-
724.731
Country
Cas
e
Type
Status
Application No.
SG
PCT
Pending
11201908330P
US
PCT
Issued
16/494,272
ZA
PCT
Pending
2019/05927
HK
RCN
Pending
62020009491.5
US
PRO
Expired
62/733,000
WO
ORD
30 Mo
Done
PCT/US2019/05160
8
US
PRO
Expired
62/733,004
US
PRO
Expired
62/881,564
WO
ORD
30 Mo
Done
PCT/US2019/05160
7
EP
PCT
Pending
19863242.4
CN
PCT
IL
PCT
To be
Abandone
d
To be
Abandone
d
201980076038.8
281474
36
Filing
Date
14-Mar-
2018
13-
Sep-
2019
14-Mar-
2018
14-Mar-
2018
18-
Sep-
2018
17-
Sep-
2019
18-
Sep-
2018
01-
Aug-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
11,236,071
01-
Feb-
2022
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
Docket
no.
48773-
724.741
Country
Cas
e
Type
IN
PCT
JP
PCT
Status
Application No.
To be
Abandone
d
Abandone
d
202117011912
2021-513408
Filing
Date
17-
Sep-
2019
17-
Sep-
2019
48773-
724.761
48773-
724.831
48773-
725.101
48773-
725.102
48773-
725.601
48773-
726.101
48773-
726.471
48773-
726.591
48773-
726.601
48773-
726.611
US
PCT
Abandone
d
17/276,785
16-Mar-
2021
US
PRO
Expired
62/733,006
US
PRO
Expired
62/881,570
WO
ORD
30 Mo
Done
PCT/US2019/05160
6
US
PRO
Expired
62/733,007
KW
PCT
EA
PCT
To be
Abandone
d
Abandone
d
KW/P/2021/83
202190663
WO
ORD
30 Mo
Done
PCT/US2019/05160
5
EP
PCT
To be
Abandone
d
19863702.7
37
18-
Sep-
2018
01-
Aug-
2019
17-
Sep-
2019
18-
Sep-
2018
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
METHODS FOR
MAKING AND USING
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
Status
Application No.
Filing
Date
Patent No.
Issue
Date
Application Title
Docket
no.
48773-
726.681
Country
Cas
e
Type
AU
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
Abandone
d
To be
Abandone
d
To be
Abandone
d
2019344905
1120210049312
3,112,485
201980075901.8
281464
202117011911
2021-513445
10-2021-7010822
MX/a/2021/003083
11202102586R
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
BR
PCT
CA
PCT
CN
PCT
IL
PCT
IN
PCT
JP
PCT
KR
PCT
MX
PCT
SG
PCT
US
PCT
Pending
17/276,763
CL
PCT
To be
Abandone
d
202100631
16-Mar-
2021
17-
Sep-
2019
38
48773-
726.691
48773-
726.701
48773-
726.711
48773-
726.731
48773-
726.741
48773-
726.761
48773-
726.771
48773-
726.781
48773-
726.821
48773-
726.831
48773-
726.881
LEGAL_US_W # 115308022.7
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
Docket
no.
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
Application Title
48773-
726.891
48773-
726.973
1
48773-
726.975
1
48773-
726.987
48773-
727.101
HK
REP
SA
PCT
AE
PCT
QA
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
62021037191.5
521421491
P6000380/2021
QA/202103/000140
US
PRO
Expired
62/733,008
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
18-
Sep-
2018
48773-
727.301
US
CON
48773-
727.591
EA
PCT
To be
Abandone
d
To be
Abandone
d
17/836,905
09-Jun-
2022
202190661
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
48773-
727.601
WO
ORD
30 Mo
Done
PCT/US2019/05160
4
48773-
727.611
EP
PCT
48773-
727.681
AU
PCT
To be
Abandone
d
To be
Abandone
d
19861794.6
2019344904
LEGAL_US_W # 115308022.7
39
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
Status
Application No.
Filing
Date
Patent No.
Issue
Date
Application Title
Docket
no.
Country
Cas
e
Type
48773-
727.701
CA
PCT
48773-
727.711
CN
PCT
48773-
727.761
JP
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
3,112,414
201980076039.2
2021-513457
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
48773-
727.831
US
PCT
Abandone
d
17/276,766
16-Mar-
2021
48773-
727.891
48773-
731.101
48773-
731.201
48773-
731.301
48773-
731.471
48773-
731.591
HK
REP
To be
Abandone
d
62021037190.7
US
PRO
Expired
62/881,560
US
ORD
Issued
16/573,993
US
CON
Pending
17/349,757
KW
PCT
Pending
KW/P/2021/81
EA
PCT
Pending
202190660
17-
Sep-
2019
01-
Aug-
2019
17-
Sep-
2019
16-Jun-
2021
17-
Sep-
2019
17-
Sep-
2019
40
LEGAL_US_W # 115308022.7
11,084,817
10-
Aug-
2021
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
Docket
no.
48773-
731.601
48773-
731.611
48773-
731.681
48773-
731.691
48773-
731.701
48773-
731.711
48773-
731.731
48773-
731.741
48773-
731.761
48773-
731.771
48773-
731.781
48773-
731.801
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
WO
ORD
30 Mo
Done
PCT/US2019/05160
3
EP
PCT
Pending
19862391.0
AU
PCT
Pending
2019344903
BR
PCT
Pending
112021004919 3
CA
PCT
Pending
3,112,411
CN
PCT
Pending
201980075902.2
IL
PCT
Pending
281475
IN
PCT
Pending
202117011574
JP
PCT
Pending
2021-513407
KR
PCT
Pending
10-2021-7011359
MX
PCT
Pending
MX/a/2021/003110
PH
PCT
Pending
1-2021-550605
41
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Docket
no.
48773-
731.821
48773-
731.841
48773-
731.851
48773-
731.871
48773-
731.881
48773-
731.891
48773-
731.973
1
48773-
731.975
1
48773-
731.987
48773-
732.101
48773-
732.601
48773-
732.611
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
SG
PCT
Pending
11202102651S
ZA
PCT
Pending
2021/01678
TW
ORD
Pending
108133441
AR
ORD
Pending
P190102639
CL
PCT
Pending
202100632
HK
REP
Pending
62021037189.9
SA
PCT
Pending
521421486
AE
PCT
Pending
P6000381/2021
QA
PCT
Pending
QA/202103/000141
US
PRO
Expired
62/881,576
WO
ORD
30 Mo
Done
PCT/US2019/05160
2
EP
PCT
To be
Abandone
d
19863701.9
42
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
01-
Aug-
2019
17-
Sep-
2019
17-
Sep-
2019
Application Title
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
LEGAL_US_W # 115308022.7
Country
Cas
e
Type
Status
Application No.
Filing
Date
Patent No.
Issue
Date
Application Title
Docket
no.
48773-
732.711
48773-
732.731
48773-
732.741
48773-
732.761
48773-
732.831
48773-
734.101
48773-
734.102
48773-
734.103
48773-
734.591
CN
PCT
Pending
201980075910.7
IL
PCT
IN
PCT
JP
PCT
US
PCT
To be
Abandone
d
To be
Abandone
d
To be
Abandone
d
Abandone
d
281471
202117011577
2021-513406
17/276,787
US
PRO
Expired
62/991,292
US
PRO
Expired
63/069,667
US
PRO
Expired
63/140,735
EA
PCT
Pending
202292638
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
17-
Sep-
2019
16-Mar-
2021
18-Mar-
2020
24-
Aug-
2020
22-Jan-
2021
17-Mar-
2021
48773-
734.601
WO
ORD
30 Mo
Done
PCT/US2021/02278
6
17-Mar-
2021
LEGAL_US_W # 115308022.7
43
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS AND
USES THEREOF
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
Docket
no.
Country
Cas
e
Type
Status
Application No.
48773-
734.611
48773-
734.681
48773-
734.691
48773-
734.701
48773-
734.711
48773-
734.731
48773-
734.761
48773-
734.771
48773-
734.781
EP
PCT
Pending
21772019.2
AU
PCT
Pending
2021240001
BR
PCT
Pending
1120220186517
CA
PCT
Pending
3,172,205
CN
PCT
Pending
202180036461.2
IL
PCT
Pending
296539
JP
PCT
Pending
2022-555913
KR
PCT
Pending
10-2022-7036071
MX
PCT
Pending
MX/a/2022/011579
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
44
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
Application Title
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
Docket
no.
Country
Cas
e
Type
Status
Application No.
SG
PCT
Pending
11202253216J
US
PCT
Pending
17/906,580
TW
ORD
Pending
110109622
US
PRO
Expired
62/991,213
EA
PCT
Pending
202292639
Filing
Date
17-Mar-
2021
16-
Sep-
2022
17-Mar-
2021
18-Mar-
2020
17-Mar-
2021
WO
ORD
30 Mo
Done
PCT/US2021/02279
0
17-Mar-
2021
EP
PCT
Pending
21770893.2
AU
PCT
Pending
2021236648
BR
PCT
Pending
1120220185960
CA
PCT
Pending
3,171,987
CN
PCT
Pending
202180036362.4
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
45
48773-
734.821
48773-
734.831
48773-
734.851
48773-
735.101
48773-
735.591
48773-
735.601
48773-
735.611
48773-
735.681
48773-
735.691
48773-
735.701
48773-
735.711
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
Application Title
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
Docket
no.
48773-
735.731
48773-
735.741
48773-
735.761
48773-
735.771
48773-
735.781
48773-
735.821
48773-
735.831
48773-
735.851
48773-
735.871
48773-
736.101
48773-
736.601
48773-
736.611
Country
Cas
e
Type
Status
Application No.
IL
PCT
Pending
296532
IN
PCT
Pending
202217055966
JP
PCT
Pending
2022-555915
KR
PCT
Pending
10-2022-7036019
MX
PCT
Pending
MX/a/2022/011582
SG
PCT
Pending
11202253217Y
US
PCT
Pending
17/906,582
TW
ORD
Pending
110109624
AR
ORD
Pending
P210100667
US
PRO
Expired
62/991,216
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
16-
Sep-
2022
17-Mar-
2021
17-Mar-
2021
18-Mar-
2020
WO
ORD
30 Mo
Done
PCT/US2021/02279
3
17-Mar-
2021
EP
PCT
Pending
21718306.0
17-Mar-
2021
46
LEGAL_US_W # 115308022.7
Patent No.
Issue
Date
Application Title
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
CRYSTALLINE
FORMS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
Docket
no.
Country
Cas
e
Type
Status
Application No.
48773-
736.681
48773-
736.691
48773-
736.711
48773-
736.761
48773-
736.771
48773-
736.831
48773-
736.851
48773-
736.871
48773-
738.101
48773-
738.102
AU
PCT
Pending
2021239956
BR
PCT
Pending
1120220185537
CN
PCT
Pending
202180036385.5
JP
PCT
Pending
2022-555914
KR
PCT
Pending
10-2022-7036023
US
PCT
Pending
17/906,585
TW
ORD
Pending
110109623
AR
ORD
Pending
P210100668
US
PRO
Expired
62/991,301
US
PRO
Expired
63/032,851
Filing
Date
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
17-Mar-
2021
16-
Sep-
2022
17-Mar-
2021
17-Mar-
2021
18-Mar-
2020
01-Jun-
2020
48773-
738.601
WO
ORD
30 Mo
Done
PCT/US2021/02278
8
17-Mar-
2021
LEGAL_US_W # 115308022.7
47
Patent No.
Issue
Date
Application Title
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FORMULATIONS OF A
FARNESOID X
RECEPTOR AGONIST
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
Docket
no.
Country
Cas
e
Type
Status
Application No.
48773-
738.851
TW
ORD
To be
Abandone
d
110109630
Filing
Date
17-Mar-
2021
Patent No.
Issue
Date
Application Title
FARNESOID X
RECEPTOR
AGONISTS FOR THE
TREATMENT OF
DISEASE
LEGAL_US_W # 115308022.7
48
SCHEDULE II
TRANSFERRED AGREEMENTS
1.
Amended and Restated Exclusive FXR License Agreement, dated November 10, 2016, by and between The Salk Institute for Biological
Studies and Metacrine, Inc., as amended by that certain First Amendment to License Agreement ID 2017-0184, dated February 4, 2017 and
that certain Second Amendment to Amended and Restated Exclusive FXR License Agreement, dated July 25, 2018 (the “FXR Agreement”).
2. Master Services Agreement, dated October 23, 2017, by and between Hovione Limited and Metacrine, Inc., including Work Order #10
dated July 25, 2019, Work Order #15 dated July 22, 2020, Work Order #18 dated January 7, 2021, and change order #1 thereto dated
January 21, 2022, and Work Order #20 dated July 20, 2021 thereto.
3. Master Services Agreement, dated June 4, 2018, by and between Fisher Clinical Services, Inc. and Metacrine, Inc., including
Executable Quote dated November 17, 2021 and Executable Quote dated February 28, 2022.
4. Master Services Agreement, dated April 1, 2019, by and between Solvias AG and Metacrine, Inc., including Quotes N22-12482, N22-
12483, N22-12485, and N22-12486 dated June 28, 2022, and Quote N18-14834, dated January 19, 2019, by and between Solvias AG and
Metacrine, Inc., as amended by Changed Order AB18-14834 dated May 9, 2019.
6. Master Services Agreement, dated July 28, 2017, by and between Johnson Matthey Pharmaceutical Materials, Inc d/b/a Johnson
Matthey Pharma Services and Metacrine, Inc., including Manufacturing Proposal Number 202004-21121 Rev 2 dated September 29, 2020
and Change Order #01 thereto dated May 10, 2021.
LEGAL_US_W # 115308022.7
MET409 API
SCHEDULE III
INVENTORY
MET409 API Package Allotments
MET409 SDI
MET409 Tablets
Product
Description
Lot #
Date of
Mfg
Expiry
50 mg
Tablet
PBO Tablet
(match 30-
80mg
active)
White, round,
uncoated
White, round,
uncoated
20MC0111.HQ00001
20MC0112.HQ00001
Nov
2021
Nov
2021
12 months –
Nov 2022
30 months –
May 2025
# bottles (#
tabs per
bottle)
629 (31-ct)
599 (31-ct)
Location
Fisher Clinical
Services
LEGAL_US_W # 115308022.7
LEGAL_US_W # 115308022.7
2
MET642 RSMs, API & SDI
Material
Lot #
Date of Mfg
Expiry Date
Quantity (kg)
Location
Compound 1
0720038
June 2020
Compound 9
0720018
07200004
April 2020
Feb 2020
BB5
BB51
SOL22425-06
CR-19-06229
SOL22439-125
Nov 2019
Sept 2020
Sept 2026
(Retested Sept-
2022)
Retest if needed
Retest if needed
Retest if needed
TBS Acid
JM Yantai Lot 0719028
March 2019
Retest if needed
MET642 API
CR-20-04211
June 2020
June 2024
MET642 SDI
19MC5301.HQ00003
Nov 2021
Nov 2023
49.2
JM Yantai China
11.3
2 x 3.14
17.5
0.5
5.7
22.5
28.2
14.4
2.0
2.0
Solvias
Solvias
Solvias
Solvias
Hovione
Hovione
MET642 SDI
80MC5302.HQ00004
(Repeat NHP tox)
June 2022
June 2024
821 g
(non-GMP)
CR – Reno, NV
LEGAL_US_W # 115308022.7
3
MET642 Tablets (28-count bottles)
Product
Description
Lot #
Date of
Mfg
Current
Expiry
Max
Expiry
#
bottle
s (#
tabs
per
bottle)
1,240
Location
Fisher Clinical
Services
PBO Tablet
(match 3, 5 and
6 mg)
5 mg Tablet
5 mg Tablet
1 mg Tablet
PBO Tablet
(match 1 mg)
White,
round,
uncoated
White,
round,
uncoated
White,
round,
uncoated
Blue, round,
coated
Blue, round,
coated
MET642 Tablets (31 count bottles)
20MC5401.HQ00001
Sept 2019
Sept 2022
Sept 2023
(48 Mo)
20MC5403.HQ00002
Oct 2019
Oct 2022
Oct 2023
(48 Mo)
31
20MC5403.HQ00003
May 2020
May 2023
20MC5408.HQ00001
May 2020
May 2023
20MC5407.HQ00001
Oct 2020
Oct 2023
May 2024
(48 Mo)
May 2024
(48 Mo)
Oct 2025
(60 Mo)
3,665
1,941
2,593
Product
Description
Lot #
Date of Mfg
Current
Expiry Date
Max
Expiry
#
bottles
Location
PBO Tablet
(match 3, 5 and
6 mg)
3 mg Tablet
6 mg Tablet
3 mg Tablet
6 mg Tablet
White,
round,
uncoated
White,
round,
uncoated
White,
round,
uncoated
White,
round,
uncoated
White,
round,
uncoated
20MC5409.HQ0000
1
Sept 2021
Sept 2024
Sept 2026
(60 Mo)
1,303
3,999
PPD-Ireland*
Fisher Clinical
20MC5410.HQ0000
1
May 2020
May 2023
20MC5411.HQ00001
May 2020
May 2023
20MC5410.HQ0000
2
Nov 2021
Nov 2024
20MC5411.HQ00002
Nov 2021
Nov 2024
May 2024
(48 Mo)
May 2024
(48 Mo)
Nov 2026
(60 Mo)
Nov 2026
(60 Mo)
1,235
PPD Ireland*
1,247
PPD Ireland*
Fisher Clinical
Service
3,167
3,406
* to be destroyed – will not be transferred under this agreement
LEGAL_US_W # 115308022.7
4
SCHEDULE 3.5(i)
GOVERNMENT FUNDING
Reference is made to the FXR Agreement.
LEGAL_US_W # 115308022.7
Subsidiaries of Organovo Holdings, Inc.
Exhibit 21.1
I.
Organovo, Inc., a Delaware corporation
II. Opal Merger Sub, Inc., a Delaware corporation
Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
We consent to the incorporation by reference in Registration Statements Nos. 333-268001, 333-260910, 333-254714, 333-226839, 333-226837, 333-
217437, 333-213345, 333-209395, 333-192248 and 333-181324 on Form S-8 and Registration Statements No. 333-252224 on Form S-3, of our report
dated July 13, 2023, relating to the consolidated financial statements of Organovo Holdings, Inc. as of March 31, 2023 and 2022, and for each of the two
years in the period ended March 31, 2023, included in this Annual Report on Form 10-K for the year ended March 31, 2023.
/s/ Mayer Hoffman McCann P.C.
San Diego, California
July 13, 2023
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.1
I, Keith Murphy, Executive Chairman of Organovo Holdings, Inc., certify that:
1. I have reviewed this annual report on Form 10-K of Organovo Holdings, 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 the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Dated: July 13, 2023
/s/ Keith Murphy
Keith Murphy
Executive Chairman
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 31.2
I, Thomas Hess, Chief Financial Officer of Organovo Holdings, Inc., certify that:
1. I have reviewed this annual report on Form 10-K of Organovo Holdings, 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 the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for
the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the
registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control
over financial reporting.
Dated: July 13, 2023
/s/ Thomas Hess
Thomas Hess
Chief
(Principal
Financial Officer
Financial Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report on Form 10-K of Organovo Holdings, Inc. (the “Company”) for the year ended March 31, 2023, as filed with
the Securities and Exchange Commission (the “Report”), Keith Murphy, Executive Chairman of the Company, and Thomas Hess, Chief Financial Officer
of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
•
•
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: July 13, 2023
/s/ Keith Murphy
Keith Murphy
Executive Chairman (Principal Executive Officer)
/s/ Thomas Hess
Thomas Hess
Chief Financial Officer (Principal Financial Officer)
A signed original of this written statement required by Section 906 has been provided to Organovo Holdings, Inc. and will be retained by Organovo
Holdings, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.
This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission, and is not to be
incorporated by reference into any filing of Organovo Holdings, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.