☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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31-1103425
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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1035 Cambridge Street, Suite 18A, Cambridge, MA
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02141
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common Stock, $0.005 par value
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ERNA
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Nasdaq Capital Market
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Large accelerated filer ☐
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Accelerated filer ☐
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Non-accelerated filer ☒
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Smaller reporting company ☒
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Emerging growth company ☐ |
Item
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Page
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Part I
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1.
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1
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1A.
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14
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1B.
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36
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1C.
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36
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2.
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37
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3.
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37
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4.
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37
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Part II
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5.
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38
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6.
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38
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7.
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38
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7A.
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47
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8.
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47
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9.
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47
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9A.
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47
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9B.
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48
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9C.
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48
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Part III
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10.
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49
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11.
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51
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12.
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59
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13.
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63
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14.
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63
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Part IV
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15.
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65
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16.
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67
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68
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F-1
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• |
We will require substantial additional capital to fund our operations, and if we fail to obtain the necessary financing, we may not be able to continue as a going concern.
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We have a limited operating history, have incurred significant losses since our inception and expect to continue to incur losses for the foreseeable future, which, together with our limited financial resources and substantial capital
requirements, make it difficult to assess our prospects.
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We depend substantially, and expect in the future to continue to depend, on in-licensed intellectual property, and in particular on intellectual property we in-license from Factor Limited.
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Our intellectual property rights may not adequately protect our business.
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We or our licensors may be subject to claims challenging the inventorship or ownership of the patents and other intellectual property that we own or license now or in the future.
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We have identified a material weakness in our internal control over financial reporting, which may adversely affect investor confidence in us, result in litigation and materially and adversely affect our business and operating results.
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Our business and operations would suffer in the event of system failures, cyber-attacks or a deficiency in our cyber-security.
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If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
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Because gene-editing and cell therapy product candidates that may be developed using our mRNA technology platform are based on novel technologies, we cannot assure that such products will be successful.
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We face intense competition and rapid technological change and the possibility that our competitors may develop therapies that are more advanced, safer or more effective than any therapy we may develop in the future, which may adversely
affect our financial condition and our ability to successfully develop and commercialize our products.
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Negative public opinion and increased regulatory scrutiny of gene therapy and genetic research may damage public perception of product candidates that may be developed using our mRNA technology platform or adversely affect our ability to
conduct our business.
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A substantial number of shares may be issued upon the exercise and/or conversion of outstanding securities, which would result in substantial dilution to the interests of our existing stockholders.
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The terms of our outstanding convertible notes could limit our growth and our ability to finance our operations, fund our capital needs, respond to changing conditions and engage in other business activities that may be in our best
interests.
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The requirement that we redeem our outstanding convertible notes in cash could adversely affect our business plan, liquidity, financial condition, and results of operations.
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Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock.
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Anti-takeover provisions of Delaware law and provisions in our charter and bylaws could make a third-party acquisition of us difficult.
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The regulatory approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable. If potential strategic partners are ultimately unable to obtain regulatory approval for
their product candidates, our business will be substantially harmed.
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Healthcare legislative reform measures may have a material and adverse effect on our business, financial condition, results of operations, and prospects.
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If we are unable to obtain and maintain patent and other intellectual property protection, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our business, financial condition,
results of operations, and/or prospects may be materially and adversely effected.
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We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue, or that our issued patents or patents that issue in the future will not be challenged and rendered invalid
and/or unenforceable.
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Issued patents covering future products and product candidates that our strategic partners or collaborators may develop could be found invalid or unenforceable if challenged in court or in administrative proceedings.
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Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or
eliminated for non-compliance with these requirements.
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If we do not obtain patent term extension for future products that our strategic partners or collaborators may successfully develop, our business may be materially harmed.
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Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect future products and product candidates that we or our strategic partners or
collaborators may develop.
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We may not be able to protect our intellectual property rights throughout the world.
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We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, and our business, financial condition, results of operations, and/or prospects may be materially
and adversely effected.
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We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property or claiming ownership of what we regard as our own intellectual property.
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We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.
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We may become involved in lawsuits to protect or enforce our patents and other intellectual property rights, which could be expensive, time-consuming and unsuccessful.
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ITEM 1. |
Business
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Family Number and Title
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United States or Foreign
Jurisdiction
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Earliest Effective Date
of Patent Application
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FAB-001: “Methods and Products for Transfecting Cells”
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Granted: US (Nos. 9,422,577, 9,605,277, 9,605,278, 10,472,611, 10,662,410, 10,829,738, 10,982,229, ,11,466,293, 11,692,203 and 11,708,586), EP (CH, DE, FR, GB, IE), EP (BE,
CH, DE, DK, FR, GB, IE, NL), AU (6X), CA, CN (4X), HK (5X), JP (2X), KR (2X), MX(2X), RU
Nationalized PCT: (1X)
Pending: US (4X), AU, BR (4X), CA, CN, EP, HK (2X), KR, MX (3X), RU
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12/05/2011
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FAB-003: “Methods and Products for Transfection”
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Granted: US (Nos. 8,497,124, 9,127,248, 9,399,761, 9,562,218, 9,695,401, 9,879,228, 9,969,983, 10,131,882, 10,301,599, 10,443,045, 11,492,600)
Pending: US
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5/07/2012
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FAB-005: “Methods and Products for Expressing Proteins in Cells”
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Granted: US (Nos. 9,447,395, 9,376,669, 9,464,285, 9,487,768, 9,657,282, 9,758,797, 10,415,060, 10,590,437, 11,339,409, 10,752,917, 11,339,410 ,10,724,053, 11,332,758,
10,767,195, 11,332,759, 10,752,918 and 10,752,919
), EP (CH, DE, FR, GB, IE), AU (2X), BR (3X), CA, HK, JP (3X), KR (3X), MX, RU
Nationalized PCT: (1X)
Allowed: BR, JP, MX and US
Pending: AU, CA, CN, EU, HK, KR and US
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11/01/2012
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FAB-008: “Methods and Products for Nucleic Acid Production and Delivery”
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Granted: US (Nos. 9,770,489 and 10,124,042), EP (DE, FR, GB, CH, ES, IE), EP (BE; DK; FI; FR; DE; IE; NL; NO; ES; SE; CH; GB), AU, HK, JP, KR, MX, RU
Nationalized PCT: (1X)
Pending: AU, BR, CA, CN, EP, JP, KR, MX and US (2X)
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08/18/2014
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FAB-009: “Nucleic Acid Products and Methods of Administration Thereof”
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Granted: US (No. 11,241,505), AU, JP
Nationalized PCT: (1X)
Pending: AU, CA, CN, EP, HK (2X), JP, NZ and US
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02/16/2016
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FAB-010: “Nucleic Acid Products and Methods of Administration Thereof”
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Granted: US (Nos. 10,576,167, 10,137,206, 10,350,304, 10,363,321, 10,369,233, 10,888,627, and 10,894,092), AU, CN
Nationalized PCT: (1X)
Issue Fees Paid: US
Pending: US (3X), AU, CN, EP, HK, IL (2X), JP (2X), NZ (2X)
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08/17/2017
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FAB-011: “Nucleic Acid-Based Therapeutics”
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Nationalized PCT: (1X)
Pending: US, AU, CA, EP and HK
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03/27/2019
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FAB-012: “Cationic Lipids and Transfection Methods”
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Granted: US (Nos. 10,501,404, 10,556,855, 10,611,722, 10,752,576, 11,242,311 and 11,814,333)
Nationalized PCT: (1X)
Pending: US (2X), AU, CA, CN, EP, HK, JP, KR, MX, NZ
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US: 07/30/2019
Foreign: 07/03/2019
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FAB-013: “Engineered Gene-Editing Proteins”
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Pending: US, EP
Nationalized PCT: (1X)
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05/12/2021
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FAB-016: “Mesenchymal Stem Cell Therapies”
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Nationalized PCT: (1X)
Pending: US, AU, CN, EP, HK and JP
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04/28/2021
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FAB-017: “Engineered Immune Cell Therapies”
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Nationalized PCT: (1X)
Pending: US, AU, CA, CN, EP and JP
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03/04/2022
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FAB-018: “Circular RNA”
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Nationalized PCT: (1X)
Pending: US, AU, CA, CN, EP and JP
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04/27/2022
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FAB-019: “Methods for reprogramming and gene editing cells”
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Pre-nationalization PCT: (1X)
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01/05/2022
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US – United States of America
EP – European Patent Convention
PCT – Patent Cooperation Treaty
AU – Australia
BE – Belgium
BR – Brazil
CA – Canada
CH – Switzerland
CN – Peoples’ Republic of China
DE – Germany
DK – Denmark
ES – Spain
FI – Finland
FR – France
GB – Great Britain
HK – Hong Kong
IE – Ireland
IL – Israel
IN – India
JP – Japan
KR – Republic of Korea (South Korea)
MX – Mexico
NL – Netherlands
NO – Norway
NZ – New Zealand
RU – Russian Federation
SE – Sweden
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FAB-001: “Methods and Products for Transfecting Cells” - The present invention relates in part to nucleic acids encoding proteins, nucleic acids containing non-canonical nucleotides, therapeutics comprising nucleic acids, methods, kits,
and devices for inducing cells to express proteins, methods, kits, and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms, and therapeutics produced using these methods, kits, and devices. Methods for
inducing cells to express proteins and for reprogramming and gene-editing cells using RNA are disclosed. Methods for producing cells from patient samples, cells produced using these methods, and therapeutics comprising cells produced using
these methods are also disclosed.
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FAB-003: “Methods and Products for Transfection” - The present invention relates in part to methods for producing tissue-specific cells from patient samples, and to tissue-specific cells produced using these methods. Methods for
reprogramming cells using RNA are disclosed. Therapeutics comprising cells produced using these methods are also disclosed.
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FAB-005: “Methods and Products for Expressing Proteins in Cells” - The present invention relates in part to nucleic acids encoding proteins, therapeutics comprising nucleic acids encoding proteins, methods for inducing cells to express
proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms, and therapeutics produced using these methods, kits, and devices. Methods and products for altering the
DNA sequence of a cell are described, as are methods and products for inducing cells to express proteins using synthetic RNA molecules. Therapeutics comprising nucleic acids encoding gene-editing proteins are also described.
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FAB-008: “Methods and Products for Nucleic Acid Production and Delivery” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics comprising nucleic acids, methods
for delivering nucleic acids to cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells,
organisms, therapeutics, and cosmetics produced using these methods, kits, and devices. Methods and products for altering the DNA sequence of a cell are described, as are methods and products for inducing cells to express proteins using
synthetic RNA molecules, including cells present in vivo. Therapeutics comprising nucleic acids encoding gene-editing proteins are also described.
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FAB-009: “Nucleic Acid Products and Methods of Administration Thereof” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics comprising nucleic acids, methods for
delivering nucleic acids to cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms,
therapeutics, and cosmetics produced using these methods, kits, and devices.
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FAB-010: “Nucleic Acid Products and Methods of Administration Thereof” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics comprising nucleic acids, methods for
delivering nucleic acids to cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms,
therapeutics, and cosmetics produced using these methods, kits, and devices.
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FAB-011: “Nucleic Acid-Based Therapeutics” - The present invention relates in part to nucleic acids, including nucleic acids encoding proteins, therapeutics and cosmetics comprising nucleic acids, methods for delivering nucleic acids to
cells, tissues, organs, and patients, methods for inducing cells to express proteins using nucleic acids, methods, kits and devices for transfecting, gene editing, and reprogramming cells, and cells, organisms, therapeutics, and cosmetics
produced using these methods, kits, and devices.
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FAB-012: “Cationic Lipids and Transfection Methods” - The present invention relates in part to novel cationic lipids and their use, e.g., in delivering nucleic acids to cells.
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FAB-013: “Engineered Gene-Editing Proteins” - The present invention relates in part to nucleic acids encoding gene editing proteins, including novel engineered variants.
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FAB-016: “Mesenchymal Stem Cell Therapies” - Cell-based therapies based on mesenchymal stem cells (MSCs) are described.
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FAB-017: “Engineered Immune Cell Therapies” - The present disclosure relates in part to engineered immune cells that are, inter alia, silenced from a host immune response.
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FAB-018: “Circular RNA” - Nucleic acid structures that promote formation of circular RNAs (circRNAs), which may comprise hybridization of substantially complimentary regions within the nucleic acid and contact with an RNA ligase. The
nucleic acid structures may be used in gene editing and/or therapeutic applications. In some embodiments, the nucleic acid comprises the structure: 5'-X-Y-A-IRES-B-CDS-C-Y'-Z-3', wherein X, Y, Y' and Z each independently comprise one or
more nucleotides; Y and Y' are substantially complementary; X and Z are not substantially complementary; IRES comprises an internal ribosome entry site; CDS comprises a coding sequence; and A, B, and C are each independently a spacer
comprising one or more nucleotides or null.
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FAB-019: “Methods for reprogramming and gene editing cells” The present disclosure provides improved methods for reprogramming and gene editing cells, including manufacturing a population of cells comprising cells of the lymphoid lineage
and/or cells of the myeloid lineage.
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completion of preclinical laboratory tests, animal studies and formulation studies according to the FDA’s good laboratory practice, or GLP, regulations;
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submission of an investigational new drug application (“IND”), which must become effective before human clinical trials may begin and which must include approval by an institutional review board (“IRB”) at each clinical site before the
trials are initiated;
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performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug for its intended use conducted in compliance with federal regulations and good clinical practice (“GCP”), an
international standard meant to protect the rights and health of human clinical trial subjects and to define the roles of clinical trial sponsors, administrators, and monitors;
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submission to, and acceptance by, the FDA of a MA;
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satisfactory completion of an FDA inspection of our manufacturing facility or other facilities at which the drug or biologic is produced to assess compliance with current good manufacturing practice (“cGMP”), regulations to assure that
the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;
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potential FDA audit of the non-clinical and clinical trial sites that generated the data in support of the MA: and
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FDA review and approval of the MA.
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Phase 1 clinical trials involve the initial introduction of the drug or biologic into human subjects. These studies are designed to determine the safety of usually single doses of the compound and determine any dose limiting intolerance,
as well as evidence of the metabolism and pharmacokinetics of the drug in humans. For some products for severe or life-threatening diseases, especially if the product may be too toxic to administer to healthy humans, the initial clinical
trials may be conducted in individuals having a specific disease for which use the tested product is indicated.
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Phase 2 clinical trials usually involve studies in a limited patient population to evaluate the safety and efficacy of the drug or biologic for specific, targeted indications, to determine dosage tolerance and optimal dosage, and to
identify possible adverse effects and safety risks.
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In Phase 3, if a compound is found to be potentially effective and to have an acceptable safety profile in Phase 2 (or occasionally Phase 1) studies, the Phase 3 studies will be conducted to further confirm clinical efficacy, optimal
dosage and safety within an expanded population which may involve geographically diverse clinical trial sites. Generally, but not always, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of a
marketing application.
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Phase 4 clinical trials are studies required of or agreed to by a sponsor that are conducted after the FDA has approved a product for marketing. These studies are used to gain additional experience from the treatment of patients in the
intended therapeutic indication and to document a clinical benefit in the case of drugs approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for
approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement. Failure to promptly conduct Phase 4 clinical trials where necessary could result in withdrawal of
approval for products approved under accelerated approval regulations.
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controls on government-funded reimbursement for drugs;
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mandatory rebates or additional charges to manufacturers for their products to be covered on Medicare Part D formularies;
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controls on healthcare providers;
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controls on pricing of pharmaceutical products, including the possible reference of the pricing of United States drugs to non-United States drug pricing for the same product;
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challenges to the pricing of drugs or limits or prohibitions on reimbursement for specific products through other means;
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reform of drug importation laws;
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entering into contractual agreements with payors; and
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expansion of use of managed-care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person
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our ability to enter into strategic partnerships to deploy our mRNA technology platform, and the terms of such strategic partnerships, including the economic terms and the proceeds we receive, if any, thereunder;
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the pace and success of our potential strategic partners in developing and commercializing their product candidates and/or products that deploy our mRNA technology platform and the proceeds to us, if any, as a result;
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the cost of filing, prosecuting, defending and enforcing our patent claims and other intellectual property rights;
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the cost of defending potential intellectual property disputes, including patent infringement actions brought by third parties against us or any of our potential strategic partners or collaborators; and
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the effect of competing market developments.
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the scope of rights granted under the license agreement and other interpretation-related issues;
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whether and the extent to which our technology and processes infringe intellectual property of the licensor that is not subject to the licensing agreement;
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our right to sublicense patents and other intellectual property to third parties under the license agreement;
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our diligence obligations under the agreement and what activities satisfy those diligence obligations;
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the priority of invention of patented technology; and
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the ownership of inventions and know-how resulting from any joint creation or use of intellectual property by our licensors and us or our partners.
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we, or our license partners or current or future collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future;
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we, or our license partners or current or future collaborators, might not have been the first to file patent applications covering certain of our or their inventions;
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others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing, misappropriating or otherwise violating any of our owned or licensed intellectual property rights;
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it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents;
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issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties;
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our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale;
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we may not develop additional proprietary technologies that are patentable;
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the patents of others may harm our business;
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we may choose not to file a patent in order to maintain certain trade secrets or proprietary know- how, and a third party may subsequently file a patent covering such intellectual property; and
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our trade secrets or proprietary know-how may be unlawfully disclosed, thereby losing their trade secret or proprietary status.
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limit our flexibility in planning for, or reacting to, changes in our businesses and the industries in which we operate;
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• |
increase our vulnerability to general adverse economic and industry conditions; and
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place us at a competitive disadvantage compared to our competitors.
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the holders of our convertible notes may require us to repurchase some or all of their convertible notes at a price equal to 100% of the principal amount being repurchased, plus accrued and unpaid interest;
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the holders of our convertible notes could foreclose against our assets; and/or
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we could be forced into bankruptcy or liquidation.
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• |
the FDA or comparable foreign regulatory authorities may not authorize us or our future clinical investigators to commence planned clinical studies, or require that we suspend ongoing clinical studies through imposition of clinical
holds;
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• |
negative results from our ongoing studies or other industry studies involving engineered or gene-edited cell therapy product candidates;
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• |
delays in reaching or failing to reach agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical study sites, the terms of which can be subject to considerable negotiation and may vary
significantly among different CROs and study sites;
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inadequate quantity or quality of a product candidate or other materials necessary to conduct clinical studies, for example delays in the manufacturing of sufficient supply of finished drug product;
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• |
difficulties obtaining ethics committee or IRB, approval to conduct a clinical study at a prospective site or sites;
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• |
challenges in recruiting and enrolling subjects to participate in clinical studies, the proximity of subjects to study sites, eligibility criteria for the clinical study, the nature of the clinical study protocol, the availability of
approved effective treatments for the relevant disease and competition from other clinical study programs for similar indications;
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severe or unexpected drug-related side effects experienced by subjects in a clinical study, such as severe neurotoxicity and cytokine release syndrome;
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the FDA or comparable foreign regulatory authorities may disagree with a proposed clinical study design, implementation of clinical trials or our interpretation of data from clinical studies, or may change the requirements for approval
even after it has reviewed and commented on the design for our clinical studies;
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• |
reports from non-clinical or clinical testing of other competing candidates that raise safety or efficacy concerns; and
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• |
difficulties retaining subjects who have enrolled in a clinical study but may be prone to withdraw due to rigors of the clinical studies, lack of efficacy, side effects, personal issues, or loss of interest.
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• |
the demand for our therapeutic candidates, if we obtain marketing approval;
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• |
our ability to receive or set a price that we believe is fair for our future products;
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• |
our ability to generate revenue and achieve or maintain profitability;
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• |
the level of taxes that we are required to pay; and
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• |
the availability of capital.
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• |
if and when patents may issue based on our patent applications;
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• |
the scope of protection of any patent issuing based on our patent applications;
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• |
whether the claims of any issued patent will provide protection against competitors;
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• |
whether or not third parties will find ways to invalidate or circumvent our patent rights;
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• |
whether or not others will obtain patents claiming aspects similar to those covered by our patents and patent applications;
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• |
whether we will need to initiate litigation or administrative proceedings to enforce and/or defend our patent rights which will be costly whether we win or lose; and/or
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|
• |
whether the patent applications will result in issued patents with claims that cover each of our drug candidates or uses thereof in the United States or in other foreign countries.
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ITEM 1B. |
Unresolved Staff Comments
|
ITEM 1C. |
Cybersecurity
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ITEM 2. |
Properties
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ITEM 3. |
Legal Proceedings
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ITEM 4. |
Mine Safety Disclosures
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ITEM 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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ITEM 6. |
[Reserved]
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ITEM 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
Years ended December 31,
|
||||||||||||
(in thousands)
|
2023
|
2022
|
Change
|
|||||||||
Revenue
|
$
|
68
|
$
|
-
|
$
|
68
|
||||||
Cost of revenues
|
236
|
-
|
236
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|||||||||
Gross loss
|
(168
|
)
|
-
|
(168
|
)
|
|||||||
Operating expenses:
|
||||||||||||
Research and development
|
5,920
|
10,392
|
(4,472
|
)
|
||||||||
General and administrative
|
14,587
|
16,835
|
(2,248
|
)
|
||||||||
Acquisition of Exacis IPR&D
|
460
|
-
|
460
|
|||||||||
Impairment of IRX-2 IPR&D
|
-
|
5,990
|
(5,990
|
)
|
||||||||
Total operating expenses
|
20,967
|
33,217
|
(12,250
|
)
|
||||||||
Loss from operations
|
(21,135
|
)
|
(33,217
|
)
|
12,082
|
|||||||
Other expense, net:
|
||||||||||||
Change in fair value of warrant liabilities
|
215
|
10,795
|
(10,580
|
)
|
||||||||
Change in fair value of contingent consideration
|
118
|
-
|
118
|
|||||||||
Loss on non-controlling investment
|
(59
|
)
|
(941
|
)
|
882
|
|||||||
Interest income
|
138 | - | 138 | |||||||||
Interest expense
|
(614 | ) |
(30 | ) |
(584 | ) |
||||||
Other expense, net
|
(334 |
)
|
(1,141
|
)
|
807 | |||||||
Total other (expense) income, net
|
(536
|
)
|
8,683
|
(9,219
|
)
|
|||||||
Loss before income taxes
|
(21,671
|
)
|
(24,534
|
)
|
2,863
|
|||||||
Benefit (provision) for income taxes
|
3
|
(45
|
)
|
48
|
||||||||
Net loss
|
$
|
(21,668
|
)
|
$
|
(24,579
|
)
|
$
|
2,911
|
Years ended December 31,
|
||||||||||||
2023
|
2022
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
License and MSA expense
|
$
|
3,250
|
$
|
4,761
|
$
|
(1,511
|
)
|
|||||
Payroll-related
|
701
|
2,426
|
(1,725
|
)
|
||||||||
Stock-based compensation
|
234
|
1,249
|
(1,015
|
)
|
||||||||
Clinical
|
74
|
1,047
|
(973
|
)
|
||||||||
Professional fees
|
810
|
312
|
498
|
|||||||||
Other expenses, net
|
851
|
597
|
254
|
|||||||||
Total research and development expenses
|
$
|
5,920
|
$
|
10,392
|
$
|
(4,472
|
)
|
Years ended December 31,
|
||||||||||||
2023
|
2022
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
Professional fees
|
$
|
6,464
|
$
|
8,499
|
$
|
(2,035
|
)
|
|||||
Payroll-related
|
2,045
|
2,942
|
(897
|
)
|
||||||||
Insurance
|
1,140
|
1,951
|
(811
|
)
|
||||||||
Stock-based compensation
|
1,008
|
1,686
|
(678
|
)
|
||||||||
Loss on disposal or sale of fixed assets
|
1
|
280
|
(279
|
)
|
||||||||
Occupany expense
|
3,306
|
640
|
2,666
|
|||||||||
Other expenses, net
|
623
|
837
|
(214
|
)
|
||||||||
Total general and administrative expenses
|
$
|
14,587
|
$
|
16,835
|
$
|
(2,248
|
)
|
Years ended December 31,
|
||||||||||||
2023
|
2022
|
Change
|
||||||||||
(in thousands)
|
||||||||||||
SEPA fees
|
$
|
(280
|
)
|
$
|
-
|
$
|
(280
|
)
|
||||
Q1-22 PIPE transaction fees
|
-
|
(1,007
|
)
|
1,007
|
||||||||
Liquidated damages
|
-
|
(240
|
)
|
240
|
||||||||
Other (expense) income, net
|
(54
|
)
|
106
|
(160
|
)
|
|||||||
Total other expense, net
|
$
|
(334
|
)
|
$
|
(1,141
|
)
|
$
|
807 |
For the years ended
December 31, |
||||||||||||
(in thousands)
|
2023
|
2022
|
Change
|
|||||||||
Cash (used in) provided by:
|
||||||||||||
Operating activities
|
$
|
(20,408
|
)
|
$
|
(20,976
|
)
|
$
|
568
|
||||
Investing activities
|
(19
|
)
|
(47
|
)
|
28
|
|||||||
Financing activities
|
16,556
|
19,579
|
(3,023
|
)
|
||||||||
Net decrease in cash and cash equivalents
|
$
|
(3,871
|
)
|
$
|
(1,444
|
)
|
$
|
(2,427
|
)
|
ITEM 7A. |
Quantitative and Qualitative Disclosures about Market Risk
|
ITEM 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
ITEM 9A. |
Controls and Procedures
|
|
• |
enhancing the business process controls related to reviews over technical, complex, and non-recurring transactions;
|
|
• |
providing additional training to accounting personnel; and
|
|
• |
using an external accounting advisor to review management’s conclusions on technical, complex and non-recurring matters.
|
ITEM 10. |
Directors, Executive Officers and Corporate Governance
|
Name
|
|
Age
|
|
Position(1)
|
Sanjeev Luther
|
|
62
|
|
President and Chief Executive Officer and Director
|
Dorothy Clarke
|
|
59
|
|
General Counsel and Director
|
Sandra Gurrola
|
|
56
|
|
Senior Vice President, Finance
|
James Bristol
|
|
77
|
|
Chairman of the Board
|
Peter Cicala
|
|
62
|
|
Director
|
William Wexler
|
|
64
|
|
Director
|
ITEM 11. |
Executive Compensation
|
Name
|
|
Title
|
Matthew Angel(1)
|
|
Former Chief Executive Officer
|
Sandra Gurrola
|
|
Senior Vice President of Finance
|
Andrew Jackson (1)
|
|
Former Chief Financial Officer
|
(1) |
Dr. Angel and Mr. Jackson resigned as our Chief Executive Officer and Chief Financial Officer, respectively, effective December 31, 2023 and May 4, 2023, respectively.
|
2023 Summary Compensation Table
|
||||||||||||||||||
Name and
Principal Position
|
|
Fiscal
Year
|
|
Salary
(US$)
|
|
Bonus (US$)
|
|
Stock-
Based
Awards
(US$)(1)
|
|
Option-
Based
Awards
(US$)(1)
|
|
Non-Equity
Incentive Plan
Compensation
(US$)
|
|
Nonqualified
deferred
compensation
earnings
(US$)
|
|
All Other
Compensation
(US$)
|
|
Total
Compensation
(US$)
|
Matthew Angel, Former Chief Executive Officer and President(2)
|
|
2023
|
|
$350,000
|
|
$—
|
|
$—
|
|
$461,680
|
|
$13,000(3)
|
|
$—
|
|
$—)
|
|
$824,680
|
2022
|
|
$—
|
|
$210,959(4)
|
|
$—
|
|
$910,453
|
|
$—
|
|
$—
|
|
$29,842(5)
|
|
$1,151,254
|
||
Sandra Gurrola, Sr. Vice President of Finance(6)
|
|
2023
|
|
$255,833
|
|
$50,050(7)
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$305,883
|
Andrew Jackson, Former Chief Financial Officer(8)
|
|
2023
|
|
$144,621
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$—
|
|
$217,487(9)
|
|
$362,108
|
|
2022
|
|
$243,679
|
|
$—
|
|
$—
|
|
$305,466
|
|
$—
|
|
$—
|
|
$—
|
|
$549,145
|
1.
|
The amounts reported in this column represent the aggregate grant date fair value of stock options granted during the applicable year. These amounts were calculated in accordance with FASB ASC Topic 718,
Compensation – Stock Compensation, except that any estimate of forfeitures was disregarded. For a description of the assumptions used in computing the dollar amount recognized for financial statement reporting purposes, see Note 15,
Stock-Based Compensation, in the Notes to the Consolidated Financial Statements
|
2.
|
Dr. Angel was appointed our Interim Chief Executive Officer and President on May 26, 2022 and to our Board effective June 6, 2022. Dr. Angel was appointed our Chief Executive Officer and President on
January 1, 2023. Dr. Angel resigned as our Chief Executive Officer and President and from our Board effective August 4, 2023 and was reappointed as our Chief Executive Officer and President on August 9, 2023. Dr. Angel subsequently
resigned as our Chief Executive Officer and President effective December 31, 2023.
|
3. |
Represents amounts earned pursuant to Dr. Angel’s employment offer letter equal to two percent of the gross proceeds that we received from an exclusive option and license agreement entered into with a third party.
|
4. |
A cash signing bonus, which represents the salary Dr. Angel would have earned for the period during which he served as interim Chief Executive Officer and President, had Dr. Angel’s appointment as Chief Executive Officer and President
been in effect beginning May 26, 2022.
|
5. |
Represents a reimbursement of legal fees Dr. Angel incurred in connection with entering into his employment offer letter.
|
6. |
Ms. Gurrola has served as our Senior Vice President of Finance since May 2023 and was not a named executive officer for the year ended December 31, 2022.
|
7. |
Represents a discretionary spot bonus paid to Ms. Gurrola and approved by our Board.
|
8. |
Mr. Jackson was appointed Chief Financial Officer effective May 31, 2022 and resigned as our Chief Financial Officer effective May 4, 2023.
|
9. |
Includes $207,500 of severance payments, $9,787 in reimbursement payments for COBRA and $200 for cell phone reimbursement.
|
|
Option Awards
|
|
Stock Awards
|
||||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
securities
underlying
unexercised
options (#)
exercisable
|
|
|
Number of
securities
underlying
unexercised
options (#)
unexercisable
|
|
Equity
incentive
plan
awards:
Number of
securities
underlying
unexercised
unearned
options (#)
|
|
Option
exercise
price
($)
|
|
Option
expiration
date
|
|
Number of
shares or
units of
stock that
have not
vested (#)
|
|
Market
value of
shares of
units of
stock that
have not
vested ($)
|
|
Equity
incentive
plan
awards:
Number
of
unearned
shares,
units or
other
rights
that have
not
vested
(#)
|
|
Equity
incentive
plan
awards:
Market or
payout
value of
unearned
shares,
units or
other
rights that
have not
vested
shares ($)
|
Matthew Angel,
Former Chief
|
|
8/1/2022(1)
|
|
46,629
|
|
|
—
|
|
—
|
|
9.80
|
|
3/30/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
Executive Officer and President |
|
1/12/2023(1)
|
|
116,753
|
|
|
—
|
|
—
|
|
4.84
|
|
3/30/2024
|
|
—
|
|
—
|
|
—
|
|
—
|
Sandra Gurrola,
Sr. Vice President of Finance(3)
|
|
6/21/2021(2)
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
874
|
|
1,573
|
|
—
|
|
—
|
|
3/11/2022(3)
|
|
3,339
|
|
|
2,386
|
|
—
|
|
38.60
|
|
3/11/2032
|
|
—
|
|
—
|
|
—
|
|
—
|
|
Andrew Jackson,
Former Chief Financial Officer
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
1. |
Dr. Angel resigned effective December 31, 2023. Unvested options were immediately cancelled and vested options will expire 90 days from the date of termination.
|
2. |
The restricted stock units vest at a rate of 25% of the shares subject to the award in four substantially equal annual installments on the anniversary date of the grant date.
|
3. |
The option vests in 36 substantially equal monthly installments.
|
Compensation Element
|
|
Amount
|
||
Annual Board Member Compensation
|
|
Paid in cash or stock options, at the Board’s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non-employee director. Stock Options to vest quarterly over one year from grant
date:
|
||
|
a.
|
|
Board Member: $40,000
|
|
|
b.
|
|
Board Chair: $70,000
|
|
|
|
|||
Committee Member Retainers
|
|
Paid in cash or stock options, at the Board’s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non-employee director. Stock Options to vest quarterly over one year from grant
date:
|
||
|
c.
|
|
Audit Committee: $7,500
|
|
|
d.
|
|
Compensation Committee: $5,000
|
|
|
e.
|
|
Nominating/Governance Committee: $4,000
|
|
|
|
|||
Leadership Supplemental Retainer
|
|
Paid in cash or stock options, at the Board’s discretion. Cash paid in quarterly installments or upon the effective date of an earlier resignation of the non-employee director. Stock Options to vest quarterly over one year from grant
date:
|
||
|
f.
|
|
Audit Committee Chair: $15,000
|
|
|
g.
|
|
Compensation Committee Chair: $10,000
|
|
|
h.
|
|
Nominating/Governance Committee Chair: $8,000
|
|
|
|
|||
New Director Equity Award (outside directors)
|
|
Option for 8,290 shares of Common Stock, which option shall have an exercise price equal to the fair market value per share of common stock, as determined under the 2020 Plan, and, subject to continued service on the Board, vest in an
initial installment of 1/3 of the shares on the first anniversary of the grant date, with the remaining shares to vest in 24 substantially equal installments thereafter.
|
ITEM 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
|
• |
each person known by us to be the beneficial owner of more than 5% of outstanding common stock;
|
|
• |
each of our named executive officers and directors; and
|
|
• |
all of our executive officers and directors as a group.
|
Name and Address of Beneficial Owner
|
|
Common
Shares
Beneficially
Owned
|
|
Percentage
of Common
Shares
Beneficially
Owned
|
|
Series A
Convertible
Preferred
Stock
Beneficially
Owned
|
|
Percentage
of Series A
Convertible
Preferred
Stock
Beneficially
Owned
|
|
Percentage
of Total
Voting
Power
|
|||
Greater than 5% Stockholders:
|
|
|
|
|
|
||||||||
Charles Cherington(1)
|
|
1,212,707
|
|
19.99%
|
|
71,306
|
|
45.7%
|
|
19.99%
|
|||
George Denny(2)
|
|
1,237,448
|
|
19.99%
|
|
71,306
|
|
45.7%
|
|
19.99%
|
|||
Freebird Partners LP(3)
|
|
1,283,634
|
|
19.99%
|
|
—
|
|
—
|
|
19.99%
|
|||
Nicholas J. Singer(4)
|
|
600,480
|
|
9.99%
|
|
—
|
|
—
|
|
9.99%
|
|||
IAF, LLC(5)
|
|
576,899
|
|
9.99%
|
|
—
|
|
—
|
|
9.99%
|
|||
John Halpern(6)
|
|
550,282
|
|
9.99%
|
|
—
|
|
—
|
|
9.99%
|
|||
Named Executive Officers and Directors:
|
|
|
|
|
|
||||||||
Matthew Angel(7)
|
|
337,864
|
|
6.06%
|
|
—
|
|
—
|
|
6.06%
|
|||
Sandra Gurrola(8)
|
|
4,903
|
|
*
|
|
—
|
|
—
|
|
*
|
|||
Andrew Jackson
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||
James Bristol
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||
Dorothy Clarke
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||
Sanjeev Luther
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|||
William Wexler(9)
|
|
15,204
|
|
*
|
|
—
|
|
—
|
|
*
|
|||
All current directors and executive officers as a group (5 persons)(10)
|
|
20,107
|
|
6.43%
|
|
—
|
|
—
|
|
6.43%
|
*
|
Less than 1%
|
(1)
|
The number of common shares beneficially owned consists of (i) 556,465 shares of common stock, (ii) 8,460 shares of common stock issuable upon the conversion of shares of Series A convertible preferred stock (assuming a conversion
rate of 8.4282 per share) and (iii) 656,242 shares of common stock issuable upon exercise of note warrants and/or the conversion of convertible notes (assuming a conversion price of $1.9194 per share). As further described below, such
warrants and convertible notes are subject to a 19.99% blocker. The number of common shares beneficially owned, the percentage of common shares beneficially owned and the percentage of total voting power shown in the table gives effect
to such blocker. Pursuant to the terms of the note warrants and convertible notes, the number of shares of common stock that may be acquired by the holder thereof upon exercise of the note warrants and/or conversion of the convertible
notes is limited, to the extent necessary, to ensure that following such exercise and/or conversion, the number of shares of common stock then beneficially owned by the holder and any other persons or entities whose beneficial ownership
of common stock would be attributed to the holder for purposes of Section 13(d) of the Exchange Act does not exceed 19.99% of the total number of shares of our common stock then outstanding. Upon delivery of a written notice to us, the
holder may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease the blocker to any other percentage not in excess of 9.99%. Mr. Cherington’s address is c/o Ara
Partners, LLC, 200 Berkeley Street, 26th Floor, Boston, MA, 02116.
|
(2)
|
Denny Family Partners II, LLC owns 50,453 shares of common stock and the George Denny III Trust dated 6/11/1981 owns 406,785 shares of common stock. Mr. Denny disclaims beneficial ownership of the shares held by Denny Family Partners
II, LLC except to the extent of his pecuniary interest therein. Mr. Denny has sole voting and dispositive power over 204 shares of common stock and has shared voting and dispositive power over 460,209 shares of common stock. Mr.
Denny’s address is PO Box 423, Poland, ME 04274. The foregoing information has been included solely in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A filed by Mr. Denny with the
SEC on March 6, 2023.
The number of common shares beneficially owned consists of (i) 457,442 shares of common stock, (ii) 8,460 shares of common stock issuable upon the conversion of shares of Series A convertible preferred stock (assuming a conversion
rate of 8.4282 per share) and (iii) 780,006 shares of common stock issuable upon exercise of note warrants and/or the conversion of convertible notes (assuming a conversion price of $1.9194 per share). As further described below, such
warrants and convertible notes are subject to a 19.99% blocker. The number of common shares beneficially owned, the percentage of common shares beneficially owned and the percentage of total voting power shown in the table gives effect
to such blocker. Pursuant to the terms of the note warrants and convertible notes, the number of shares of common stock that may be acquired by the holder thereof upon exercise of the note warrants and/or conversion of the convertible
notes is limited, to the extent necessary, to ensure that following such exercise and/or conversion, the number of shares of common stock then beneficially owned by the holder and any other persons or entities whose beneficial ownership
of common stock would be attributed to the holder for purposes of Section 13(d) of the Exchange Act does not exceed 19.99% of the total number of shares of our common stock then outstanding. Upon delivery of a written notice to us, the
holder may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease the blocker to any other percentage not in excess of 9.99%.
|
(3)
|
The number of common shares beneficially owned consists of (i) 272,583 shares of common stock and (ii) 1,011,055 shares of common stock issuable upon exercise of note warrants and/or the conversion of convertible notes (assuming a
conversion price of $1.9194 per share). As further described below, such warrants and convertible notes are subject to a 19.99% blocker. The number of common shares beneficially owned, the percentage of common shares beneficially owned
and the percentage of total voting power shown in the table gives effect to such blocker. Pursuant to the terms of the note warrants and convertible notes, the number of shares of common stock that may be acquired by the holder thereof
upon exercise of the note warrants and/or conversion of the convertible notes is limited, to the extent necessary, to ensure that following such exercise and/or conversion, the number of shares of common stock then beneficially owned by
the holder and any other persons or entities whose beneficial ownership of common stock would be attributed to the holder for purposes of Section 13(d) of the Exchange Act does not exceed 19.99% of the total number of shares of our
common stock then outstanding. Upon delivery of a written notice to us, the holder may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease the blocker to any other
percentage not in excess of 9.99%. Curtis Huff is the sole member of Freebird Partners, LP. Freebird Partners, LP’s address is 2800 Post Oak Blvd, Suite 2000, Houston, TX 77056.
|
(4)
|
The number of common shares beneficially owned consists of shares of common stock issuable upon exercise of note warrants and/or the conversion of convertible notes held by Purchase Capital LLC, of which Mr. Singer is the controlling
person, or by Pacific Premier Trust as custodian for the benefit of Mr. Singer . The foregoing information has been included in reliance upon, and without independent investigation of, the disclosures contained in the Schedule 13G/A
filed by Mr. Singer with the SEC on January 19, 2024. As further described below, such warrants and convertible notes are subject to a 9.99% blocker. The number of common shares beneficially owned, the percentage of common shares
beneficially owned and the percentage of total voting power shown in the table gives effect to such blocker. Pursuant to the terms of the note warrants and convertible notes, the number of shares of common stock that may be acquired by
the holder thereof upon exercise of the note warrants and/or conversion of the convertible notes is limited, to the extent necessary, to ensure that following such exercise and/or conversion, the number of shares of common stock then
beneficially owned by the holder and any other persons or entities whose beneficial ownership of common stock would be attributed to the holder for purposes of Section 13(d) of the Exchange Act does not exceed 9.99% of the total number
of shares of our common stock then outstanding. Upon delivery of a written notice to us, the holder may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease the
blocker to any other percentage not in excess of 9.99%. Mr. Singer’s address is 1395 Brickell Avenue, Suite 800, Miami, FL 33131.
|
(5)
|
The number of common shares beneficially owned consists of (i) 212,464 shares of common stock and (ii) 364,435 shares of common stock issuable upon exercise of note warrants and/or the conversion of convertible notes (assuming a
conversion price of $1.9194 per share). As further described below, such warrants and convertible notes are subject to a 9.99% blocker. The number of common shares beneficially owned, the percentage of common shares beneficially owned
and the percentage of total voting power shown in the table gives effect to such blocker. Pursuant to the terms of the note warrants and convertible notes, the number of shares of common stock that may be acquired by the holder thereof
upon exercise of the note warrants and/or conversion of the convertible notes is limited, to the extent necessary, to ensure that following such exercise and/or conversion, the number of shares of common stock then beneficially owned by
the holder and any other persons or entities whose beneficial ownership of common stock would be attributed to the holder for purposes of Section 13(d) of the Exchange Act does not exceed 9.99% of the total number of shares of our
common stock then outstanding. Upon delivery of a written notice to us, the holder may from time to time increase (with such increase not effective until the 61st day after delivery of such notice) or decrease the blocker to any other
percentage not in excess of 9.99%. IAF, LLC has sole voting and dispositive powers. IAF LLC’s address is 115 Church Street, Charleston, SC 29401.
|
(6)
|
The number of common shares beneficially owned consists of (i) 452,284 shares of common stock held by the John D. Halpern Revocable Trust, of which, Mr. Halpern and Katherine H. Halpern are trustees and (ii) 97,998 shares of common
stock issuable upon exercise of note warrants and/or the conversion of convertible notes (assuming a conversion price of $1.9194 per share). As further described below, such warrants and convertible notes are subject to a 9.99%
blocker. The number of common shares beneficially owned, the percentage of common shares beneficially owned and the percentage of total voting power shown in the table gives effect to such blocker. Pursuant to the terms of the note
warrants and convertible notes, the number of shares of common stock that may be acquired by the holder thereof upon exercise of the note warrants and/or conversion of the convertible notes is limited, to the extent necessary, to ensure
that following such exercise and/or conversion, the number of shares of common stock then beneficially owned by the holder and any other persons or entities whose beneficial ownership of common stock would be attributed to the holder
for purposes of Section 13(d) of the Exchange Act does not exceed 9.99% of the total number of shares of our common stock then outstanding. Upon delivery of a written notice to us, the holder may from time to time increase (with such
increase not effective until the 61st day after delivery of such notice) or decrease the blocker to any other percentage not in excess of 9.99%. Mr. Halpern and Ms. Halpern share voting and dispositive powers. Mr. Halpern’s address is
PO Box 540 Portsmouth, New Hampshire 03802.
|
(7)
|
Includes 163,382 shares of common stock issuable upon exercise of options.
|
(8)
|
Includes 3,975 shares of common stock issuable upon exercise of options.
|
(9)
|
Represents shares of common stock issuable upon exercise of options.
|
(10)
|
Includes 19,179 shares of common stock issuable upon exercise of options.
|
|
Equity Compensation Plan Information
|
|||||||||||
Plan Category
|
Number of
securities to be
issued upon
exercise of
outstanding
options,
warrants and
rights
|
Weighted-
average
exercise price of
outstanding
options,
warrants and
rights
|
Number of
securities
remaining
available for future
issuance under
equity
compensation
plans (excluding
securities reflected
in column (a))
|
|||||||||
|
(a)
|
(b)
|
(c)
|
|||||||||
Equity compensation plans approved by securityholders(1)
|
296,116
|
$
|
9.79
|
684,023
|
||||||||
Equity compensation plans not approved by securityholders(2)
|
93,545
|
$
|
158.80
|
67,863
|
||||||||
Total
|
389,661
|
$
|
45.00
|
751,886
|
(1) |
At our 2021 annual meeting of stockholders, our stockholders approved a restatement of the Eterna Therapeutics Inc. Restated 2020 Stock Incentive Plan (the “Restated 2020 Plan”). The Restated 2020 Plan is a broad-based incentive plan,
which allows for the grant of stock options, restricted stock, restricted stock units, performance awards, unrestricted stock awards and similar kinds of equity-based compensation to employees, directors, consultants and prospective
employees.
|
(2) |
In May 2021, our Board adopted our 2021 Inducement Stock Incentive Plan (the “2021 Inducement Plan”). The 2021 Inducement Plan was adopted without stockholder approval pursuant to Section 711 of the Company Guide of the NYSE American
LLC, the stock exchange on which our common stock was listed at the time the 2021 Inducement Plan was adopted by our Board. The 2021 Inducement Plan provides for the grant of equity-based awards, including non-qualified stock options,
performance shares, performance units, restricted stock, restricted stock units, and stock appreciation rights. The awards available for grant under the 2021 Inducement Plan are available only to new employees and incentive stock options
may not be issued under the 2021 Inducement Plan.
|
ITEM 13. |
Certain Relationships and Related Transactions, and Director Independence
|
ITEM 14. |
Principal Accounting Fees and Services
|
Year
|
Audit Fees
|
Audit-Related Fees
|
Tax Fees
|
All Other Fees
|
Total
|
|||||||||||||||
2023
|
$
|
516,224
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
516,224
|
||||||||||
2022
|
$
|
435,750
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
435,750
|
ITEM 15. |
Exhibits, Financial Statement Schedules
|
Exhibit
|
Description
|
Incorporated By Reference
|
||
Plans of Acquisition
|
||||
Asset Purchase Agreement, dated April 26, 2023, by and among Eterna Therapeutics Inc., Exacis Biotherapeutics Inc., the stockholders party thereto and, with respect to certain provisions, Factor Bioscience Limited.
|
Exhibit 10.1 to Form 8-K filed on May 2, 2023
|
|||
Articles of Incorporation and Bylaws
|
||||
Composite Restated Certificate of Incorporation of the Company
|
Filed herewith.
|
|||
Second Amended and Restated Bylaws of the Company
|
Exhibit 3.2 to Form 8-K filed on October 11, 2022
|
|||
Certificate of Validation of Eterna Therapeutics Inc., as filed with the Secretary of State of the State of Delaware on September 3, 2021
|
Exhibit 3.1 to Form 8-K filed on September 13, 2021
|
|||
Instruments Defining Rights of Security Holders
|
||||
Description of Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
|
Exhibit 4.1 to Form 10-K filed on April 15, 2022
|
|||
Material Contracts
|
||||
Securities Purchase Agreement, dated as of March 6, 2022, between Eterna Therapeutics Inc. and the purchaser party thereto
|
Exhibit 10.1 to Form 8-K filed on March 9, 2022
|
|||
Registration Rights Agreement, dated as of March 6, 2022, between Eterna Therapeutics Inc. and the purchaser party thereto
|
Exhibit 10.4 to Form 8-K filed on March 9, 2022
|
|||
Form of Pre-Funded Warrant (March 2022)
|
Exhibit 10.2 to Form 8-K filed on March 9, 2022
|
|||
Form of Common Stock Warrant (March 2022)
|
Exhibit 10.3 to Form 8-K filed on March 9, 2022
|
|||
Securities Purchase Agreement, dated as of November 23, 2022, by and among Eterna Therapeutics Inc. and the purchasers party thereto
|
Exhibit 10.1 to Form 8-K filed on November 25, 2022
|
|||
Form of Warrant (November 2022)
|
Exhibit 10.1 to Form 8-K filed on December 5, 2022
|
|||
Registration Rights Agreement, dated as of December 2, 2022, by and among Eterna Therapeutics Inc. and the purchasers party thereto
|
Exhibit 10.2 to Form 8-K filed on December 5, 2022
|
|||
Registration Rights Agreement, dated as of April 5, 2023, by and between Eterna Therapeutics Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit 10.2 to Form 8-K filed on April 11, 2023
|
|||
Purchase Agreement, dated as of April 5, 2023, by and between Eterna Therapeutics Inc. and Lincoln Park Capital Fund, LLC
|
Exhibit 10.1 to Form 8-K filed on April 11, 2023
|
|||
Securities Purchase Agreement, dated as of July 13, 2023, by and among Eterna Therapeutics Inc. and the purchasers party thereto.
|
Exhibit 10.1 to Form 8-K filed on July 18, 2023
|
|||
Registration Rights Agreement, dated as of July 13, 2023, by and among Eterna Therapeutics Inc. and the purchasers party thereto.
|
Exhibit 10.4 to Form 8-K filed on July 18, 2023
|
|||
Form of 6% Senior Convertible Note (July 2023)
|
Exhibit 10.2 to Form 8-K filed on July 18, 2023
|
Form of Common Stock Purchase Warrant (July 2023)
|
Exhibit 10.3 to Form 8-K filed on July 18, 2023
|
|||
Securities Purchase Agreement, dated as of December 14, 2023, by and among Eterna Therapeutics Inc. and the purchasers party thereto.
|
Exhibit 10.1 to Form 8-K filed on December 20, 2023
|
|||
Registration Rights Agreement, dated as of December 14, 2023, by and among Eterna Therapeutics Inc. and the parties thereto.
|
Exhibit 10.2 to Form 8-K filed on December 20, 2023
|
|||
Form of 12.0% Senior Convertible Note (December 2023 and January 2024)
|
Exhibit 4.1 to Form 8-K filed on December 20, 2023
|
|||
Form of Warrant (December 2023 and January 2024)
|
Exhibit 4.2 to Form 8-K filed on December 20, 2023
|
|||
Amended and Restated Exclusive License Agreement, dated November 14, 2023, by and between Factor Bioscience Limited and Eterna Therapeutics Inc.
|
Exhibit 10.1 to Form 8-K filed on November 16, 2023
|
|||
Master Services Agreement, dated September 9, 2022, by and between Factor Bioscience Inc. and Eterna Therapeutics Inc.
|
Exhibit 10.1 to Form 8-K filed on September 15, 2022
|
|||
Offer Letter, dated December 30, 2022, by and among Eterna Therapeutics Inc. and Dr. Matthew Angel
|
Exhibit 10.1 to Form 8-K filed on January 4, 2023
|
|||
Agreement to Assign Space Lease dated March 5, 2022 between Eterna Therapeutics LLC and Regen Lab USA LLC.
|
Exhibit 10.5 to Form 10-Q filed on July 1, 2022
|
|||
Assignment and Assumption of Lease dated March 25, 2022 between Eterna Therapeutics LLC and Regen Lab USA LLC
|
Exhibit 10.6 to Form 10-Q filed on July 1, 2022
|
|||
Sublease Agreement, dated October 18, 2022, by and between E.R. Squibb & Sons, LLC and Eterna Therapeutics Inc.
|
Exhibit 10.16 to Form 10-K filed on March 20, 2023
|
|||
Amended and Restated Executive Employment Agreement, dated as of May 10, 2022, by and between Eterna Therapeutics Inc. and Andrew Jackson
|
Exhibit 10.1 to Form 8-K filed on May 31, 2022
|
|||
Separation Agreement and General Release, dated May 2, 2023, by and between Eterna Therapeutics Inc. and Andrew Jackson.
|
Exhibit 10.1 to Form 8-K filed on May 5, 2023
|
|||
Employment Agreement, dated as of December 19, 2023, by and among Eterna Therapeutics Inc. and Sanjeev Luther.
|
Exhibit 10.3 to Form 8-K filed on December 20, 2023
|
|||
Eterna Therapeutics Inc. 2021 Inducement Stock Incentive Plan (the “2021 Inducement Plan”)
|
Exhibit 10.3 to Form 8-K filed on May 26, 2021
|
|||
Form of Stock Option Inducement Award for issuances under the 2021 Inducement Plan
|
Filed herewith
|
|||
Form of Restricted Stock Unit Inducement Award for issuances under the 2021 Inducement Plan
|
Filed herewith
|
|||
Eterna Therapeutics Inc. Restated 2020 Stock Incentive Plan (the “Restated 2020 Plan”)
|
Exhibit 99.1 to Form 8-K filed on September 13, 2021
|
|||
Form of Stock Option Inducement Award for issuances under the Restated 2020 Plan
|
Filed herewith
|
|||
Form of Restricted Stock Unit Inducement Award for issuances under the Restated 2020 Plan
|
Filed herewith
|
|||
Inducement Stock Option Award Agreement entered into with Sanjeev Luther
|
Exhibit 99.1 to Form S-8 filed on January 16, 2024
|
|||
Employment Agreement, effective January 1, 2023, by and among Eterna Therapeutics Inc. and Dorothy Clarke.
|
Filed herewith
|
|||
Employment Agreement, dated June 16, 2021, by and among Eterna Therapeutics Inc. and Sandra Gurrola.
|
Exhibit 10.1 to Form 8-K filed on June 21, 2021
|
|||
Form of indemnification agreement for directors and officers
|
Exhibit 10.1 to Form 8-K filed on April 16, 2021
|
|||
Subsidiaries of the Company
|
Filed herewith
|
|||
Consent of the Independent Registered Accounting Firm, Grant Thornton LLP
|
Filed herewith
|
|||
Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
Filed herewith
|
|||
Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
|||
Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
Furnished herewith
|
|||
Eterna Therapeutics Inc. Clawback Policy
|
Filed herewith
|
|||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
Filed herewith
|
||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
Filed herewith
|
||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed herewith
|
||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
Filed herewith
|
||
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
Filed herewith
|
||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
Filed herewith
|
||
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
|
* |
Indicates management contract or compensatory plan.
|
** |
Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and such information is not
otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request.
|
# |
Pursuant to Regulation S-K Item 601(b)(2), certain exhibits and schedules to this exhibit have been omitted. The Company agrees to furnish supplementally a copy of any omitted exhibit or schedule to the SEC upon its request.
|
^ |
Pursuant to Item 601(b)(10) of Regulation S-K, certain confidential portions of this exhibit were omitted by means of marking such portions with an asterisk because such information is both not material and is the type that the Company
treats as private or confidential.
|
ITEM 16. |
Form 10-K Summary
|
ETERNA THERAPEUTICS INC.
|
||
Date: March 14, 2024
|
By:
|
/s/ Sandra Gurrola |
Sandra Gurrola
|
||
Senior Vice President of Finance
(Principal Financial Officer and
Principal Accounting Officer)
|
Name
|
Title
|
Date
|
||
/s/ Sanjeev Luther |
President, Chief Executive Officer, and Director (Principal Executive Officer)
|
March 14, 2024
|
||
Sanjeev Luther
|
||||
/s/ Sandra Gurrola |
Senior Vice President of Finance (Principal Financial Officer and Principal Accounting Officer)
|
March 14, 2024
|
||
Sandra Gurrola
|
||||
/s/ James Bristol |
Chairman of the Board
|
March 14, 2024
|
||
James Bristol
|
||||
/s/ Peter Cicala |
Director
|
March 14, 2024
|
||
Peter Cicala
|
||||
/s/ Dorothy Clarke |
Director
|
March 14, 2024
|
||
Dorothy Clarke
|
||||
/s/ William Wexler |
Director
|
March 14, 2024
|
||
William Wexler
|
Page
|
|
Report of Independent Registered Public Accounting Firm (PCAOB ID: 248) | F-2 |
Consolidated Financial Statements:
|
|
|
|
F-3
|
|
|
|
F-4
|
|
|
|
F-5
|
|
F-6
|
|
F-7
|
December 31,
2023
|
December 31,
2022
|
|||||||
ASSETS
|
|
|
||||||
Current assets:
|
||||||||
Cash
|
$
|
7,575
|
$
|
11,446
|
||||
Other receivables
|
425
|
951
|
||||||
Prepaid expenses and other current assets
|
1,599
|
1,284
|
||||||
Total current assets
|
9,599
|
13,681
|
||||||
Restricted cash
|
4,095 | 4,095 | ||||||
Property and equipment, net
|
493
|
236
|
||||||
Right-of-use assets - operating leases
|
32,781
|
1,030
|
||||||
Goodwill
|
2,044
|
2,044
|
||||||
Investment in non-controlling interest
|
-
|
59
|
||||||
Other assets
|
120
|
1,134
|
||||||
Total assets
|
$
|
49,132
|
$
|
22,279
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,067
|
$
|
1,620
|
||||
Accrued expenses
|
1,893
|
3,626
|
||||||
Income taxes payable
|
2 | - | ||||||
Operating lease liabilities, current
|
2,216 | 295 | ||||||
Due to related party, current
|
1,205 | 1,750 | ||||||
Deferred revenue, current
|
190
|
-
|
||||||
Other current liabilities
|
-
|
363
|
||||||
Total current liabilities
|
6,573
|
7,654
|
||||||
Convertible notes, net
|
6,773 | - | ||||||
Warrant liabilities
|
116 | 331 | ||||||
Operating lease liabilities, non-current
|
32,854
|
887
|
||||||
Due to related party, non-current
|
- | 1,206 | ||||||
Deferred revenue, non-current
|
392 | - | ||||||
Contingent consideration liability
|
107 | - | ||||||
Other liabilities
|
84
|
94
|
||||||
Total liabilities
|
46,899
|
10,172
|
||||||
Stockholder’s equity:
|
||||||||
Preferred stock, $0.005 par value, 1,000 shares authorized, 156 designated and
outstanding of Series A convertible preferred stock at December 31, 2023 and 2022, $156 liquidation preference
|
1
|
1
|
||||||
Common stock, $0.005 par value, 100,000 shares authorized at December 31, 2023 and
2022; 5,410
and 5,127 issued and outstanding at December 31, 2023 and 2022, respectively
|
27
|
26
|
||||||
Additional paid-in capital
|
189,186
|
177,377
|
||||||
Accumulated deficit
|
(186,981
|
)
|
(165,297
|
)
|
||||
Total stockholders’ equity
|
2,233
|
12,107
|
||||||
Total liabilities and stockholders’ equity
|
$
|
49,132
|
$
|
22,279
|
Years ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Revenue
|
$ | 68 | $ | - | ||||
Cost of revenues
|
236 | - | ||||||
Gross loss
|
(168 | ) | - | |||||
Operating expenses:
|
||||||||
Research and development
|
5,920
|
10,392
|
||||||
General and administrative
|
14,587
|
16,835
|
||||||
Acquisition of Exacis in-process research and development
|
460
|
-
|
||||||
Impairment of in-process research and development
|
- | 5,990 | ||||||
Total operating expenses
|
20,967
|
33,217
|
||||||
Loss from operations
|
(21,135
|
)
|
(33,217
|
)
|
||||
Other expense, net:
|
||||||||
Change in fair value of warrant liabilities
|
215 | 10,795 | ||||||
Change in fair value of contingent consideration
|
118 | - | ||||||
Loss on non-controlling investment
|
(59 | ) | (941 | ) | ||||
Interest income |
138 | - | ||||||
Interest expense |
(614 | ) | (30 | ) | ||||
Other expense, net
|
(334
|
)
|
(1,141
|
)
|
||||
Total other (expense) income , net
|
(536
|
)
|
8,683
|
|||||
Loss before income taxes
|
(21,671 | ) | (24,534 | ) | ||||
Benefit (provision) for income taxes
|
3 | (45 | ) | |||||
Net loss
|
(21,668
|
)
|
(24,579
|
)
|
||||
Series A convertible preferred stock dividend
|
(16
|
)
|
(16
|
)
|
||||
Net loss attributable to common stockholders
|
$
|
(21,684
|
)
|
$
|
(24,595
|
)
|
||
Net loss per common share - basic and diluted
|
$
|
(4.08
|
)
|
$
|
(8.06
|
)
|
||
Weighted average shares outstanding - basic and diluted
|
5,314
|
3,051
|
Series A Convertible
Preferred Stock
|
Common Stock |
Additional Paid-
in
|
Accumulated | |||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|||||||||||||||||||||
Balances at January 1, 2022
|
156
|
$
|
1
|
2,601
|
$
|
13
|
$
|
166,191
|
$
|
(140,702
|
)
|
$
|
25,503
|
|||||||||||||||
Issuance of common stock in connection with private offering
|
-
|
-
|
275
|
1
|
(1
|
)
|
-
|
-
|
||||||||||||||||||||
Issuance of common stock from vested restricted stock units
|
-
|
-
|
2
|
-
|
(5
|
)
|
-
|
(5
|
)
|
|||||||||||||||||||
Issuance of common stock and warrants in connection with November 2022 private offering, net.
|
-
|
-
|
2,185
|
12
|
7,383
|
-
|
7,395
|
|||||||||||||||||||||
Forfeiture of unvested restricted stock
|
-
|
-
|
(4
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||||||||
Cash dividends to Series A convertible preferred stockholders
|
-
|
-
|
-
|
-
|
-
|
(16
|
)
|
(16
|
)
|
|||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
2,935
|
-
|
2,935
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(24,579
|
)
|
(24,579
|
)
|
|||||||||||||||||||
|
||||||||||||||||||||||||||||
Balances at January 1, 2023
|
156
|
$
|
1
|
5,127
|
$
|
26
|
$
|
177,377
|
$
|
(165,297
|
)
|
$
|
12,107
|
|||||||||||||||
Issuance of common stock in connection with Exacis asset acquisition
|
-
|
-
|
69
|
-
|
208
|
-
|
208
|
|||||||||||||||||||||
Issuance of common stock related to stock purchase agreement with Lincoln Park Capital Fund, LLC, net
|
-
|
-
|
214
|
1
|
579
|
-
|
580
|
|||||||||||||||||||||
Issuance of note warrants
|
-
|
-
|
-
|
-
|
9,014
|
-
|
9,014
|
|||||||||||||||||||||
Repricing of warrants in connection with December 2023 financing
|
-
|
-
|
-
|
-
|
766
|
-
|
766
|
|||||||||||||||||||||
Cash dividends to Series A convertible preferred stockholders
|
-
|
-
|
-
|
-
|
-
|
(16
|
)
|
(16
|
)
|
|||||||||||||||||||
Stock-based compensation
|
-
|
-
|
-
|
-
|
1,242
|
-
|
1,242
|
|||||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(21,668
|
)
|
(21,668
|
)
|
|||||||||||||||||||
Balances at December 31, 2023
|
156
|
$
|
1
|
5,410
|
$
|
27
|
$
|
189,186
|
$
|
(186,981
|
)
|
$
|
2,233
|
For years ended | ||||||||
December 31,
|
||||||||
2023
|
2022
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(21,668
|
)
|
$
|
(24,579
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation and amortization
|
84
|
161
|
||||||
Stock-based compensation
|
1,242
|
2,935
|
||||||
Commitment shares issued to Lincoln Park Capital, LLC
|
249 | - | ||||||
Loss on shares sold to Lincoln Park Capital, LLC
|
11 | - | ||||||
Amortization of right-of-use asset
|
1,039
|
336
|
||||||
Impairment of right-of-use asset
|
- | 772 | ||||||
Non-cash component of acquisition of Exacis in-process research and development
|
433 | - | ||||||
Gain on remeasurement of operating lease liability and right-of-use-asset
|
- | (642 | ) | |||||
Impairment of in-process research and development
|
- | 5,990 | ||||||
Loss on disposal of fixed assets
|
1
|
280
|
||||||
Gain on lease termination
|
- | (85 | ) | |||||
Accrued interest expense |
176 | - | ||||||
Paid-in-kind interest expense
|
113 | - | ||||||
Amortization of debt discount and debt issuance costs
|
303 | - | ||||||
Change in fair value of warrant liabilities
|
(215 | ) | (10,795 | ) | ||||
Change in fair value of contingent consideration liability
|
(118 | ) | - | |||||
Loss on non-controlling investment
|
59 | 941 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Other receivables
|
527 |
(262
|
)
|
|||||
Prepaid expenses and other current assets
|
(556
|
)
|
(187
|
)
|
||||
Other non-current assets
|
1,014 |
(646
|
)
|
|||||
Accounts payable and accrued expenses
|
(2,898
|
)
|
2,034
|
|||||
Operating lease liability
|
1,338
|
(340
|
)
|
|||||
Due to related party
|
(1,750 | ) | 2,956 | |||||
Deferred revenue
|
582 | - | ||||||
Other liabilities
|
(374
|
)
|
155
|
|||||
Net cash used in operating activities
|
(20,408
|
)
|
(20,976
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(19
|
)
|
(297
|
)
|
||||
Proceeds from the sale of fixed assets
|
- | 250 | ||||||
Net cash used in investing activities
|
(19
|
)
|
(47
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds received from the convertible notes financings
|
16,503 | - | ||||||
Fees paid related to the Convertible Notes Financings
|
(251 | ) | - | |||||
Proceeds received under promissory note
|
1,500 | - | ||||||
Principal payment made on promissory note
|
(1,500 | ) | - | |||||
Proceeds from sale of common stock pursuant to stock purchase agreement with Lincoln Park Capital Fund, LLC
|
320 | - | ||||||
Proceeds from issuance of common stock and warrants in connection with private offering
|
- | 19,706 | ||||||
Fees paid in connection with private offering
|
- | (110 | ) | |||||
Issuance of common stock from exercise of pre-funded warrants
|
- | 7 | ||||||
Payroll tax remitted on net share settlement of equity awards
|
- | (5 | ) | |||||
Dividends paid to Series A convertible preferred stockholders
|
(16 | ) | (16 | ) | ||||
Cash paid for fractional shares in connection with reverse stock split
|
- | (1 | ) | |||||
Principal payments on finance leases
|
-
|
(2
|
)
|
|||||
Net cash provided by financing activities
|
16,556
|
19,579
|
||||||
Net decrease in cash and cash equivalents
|
(3,871
|
)
|
(1,444
|
)
|
||||
Cash, cash equivalents and restricted cash at beginning of period
|
15,541
|
16,985
|
||||||
Cash, cash equivalents and restrictd cash at end of period
|
$
|
11,670
|
$
|
15,541
|
||||
|
||||||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid during the period for:
|
||||||||
Interest
|
$
|
20
|
$
|
30
|
||||
Income taxes
|
$
|
4
|
$
|
15
|
||||
Supplemental disclosure of non-cash investing and financing activities:
|
||||||||
Contingent consideration for Exacis asset acquisition
|
$ | 225 | $ | - | ||||
Issuance of common stock for Exacis asset acquisition
|
$ | 208 | $ | - | ||||
Note warrants issued
|
$ | 9,219 | $ | - | ||||
Repricing of warrants in connection with December 2023 financing
|
$ | 766 | $ | - | ||||
Unpaid fees incurred in connection with the December 2023 financing
|
$ | 116 | $ | - | ||||
Paid-in-kind interest added to convertible notes principal
|
$ | 113 | $ | - | ||||
Initial measurement of ROU assets
|
$ | 34,410 | $ | 1,706 | ||||
Initial measurement of lease liabilities
|
$ | 34,170 | $ | 1,706 | ||||
Adjustment to lease liability and ROU asset due to remeasurement
|
$ | (1,620 | ) | $ | - | |||
Accrual for purchases of property and equipment
|
$ | 323 | $ | - | ||||
Conversion of warrant liability to equity
|
$ | - | $ | 867 | ||||
Unpaid fees incurred in connction with November 2022 private offering
|
$ | - | $ | 208 | ||||
Initial measurement of finance lease liabilities
|
$ | - | $ | 10 | ||||
|
||||||||
Reconciliation of cash, cash equivalents and restricted cash at end of period:
|
||||||||
Cash and cash equivalents
|
$ | 7,575 | $ | 11,446 | ||||
Restricted cash
|
4,095 | 4,095 | ||||||
Total cash, cash equivalents and restriced cash at end of period
|
$ | 11,670 | $ | 15,541 |
1) |
Organization and Description of Business Operations
|
2) |
Liquidity and Capital Resources
|
3) |
Basis of Accounting Presentation and Summary of Significant Accounting Policies
|
4)
|
Asset Acquisition
|
(i)
|
if, at any time during the three-year
period commencing on the closing date and ending on the three-year anniversary of the closing date, the Company’s market
capitalization equals or exceeds $100.0 million for at least ten consecutive trading days, then the Company will issue to Exacis a number of shares of common stock equal to (x) $2.0 million divided by (y) the quotient of $100.00
million divided by the number of the Company’s then issued and outstanding shares of common stock;
|
(ii)
|
if, at any time during the three-year
period commencing on the closing date and ending on the three-year anniversary of the closing date, the Company’s market capitalization equals or exceeds $200.0 million for at least ten consecutive trading days, then the Company will issue to
Exacis a number of additional shares of common stock equal to (x) $2.0 million divided by (y) the quotient of $200.00 million divided by the number of the Company’s then issued and outstanding shares of common stock (collectively with (i) above, the
“Market Cap Contingent Consideration”); and
|
(iii)
|
during the five-year period commencing on the closing date and ending on the five-year anniversary of the closing date, the Company will pay or deliver to Exacis 20% of all cash or other consideration (collectively, “License Contingent Consideration”) actually received by the Company during such five-year period from (i) third-party licensees or sublicensees of
the intellectual property rights acquired by the Company from Exacis pursuant to the Exacis Purchase Agreement, or (ii) subject to certain exceptions, the sale of such intellectual property rights; provided, that the License Contingent
Consideration shall not in any event exceed $45.0 million.
|
Stock price
|
$
|
3.00
|
||
Risk-free rate
|
3.58
|
%
|
||
Volatility
|
100
|
%
|
||
Dividend yield
|
0
|
%
|
||
Expected term
|
3.0 years
|
|
Fair Value of
Consideration |
|||
Shares issued
|
$
|
208
|
||
Contingent consideration
|
225
|
|||
Direct costs
|
27
|
|||
Total fair value
|
$
|
460
|
5) |
Contract with Customer
|
6) |
Promissory Note and Convertible Note Financings
|
|
Allocation of Proceeds and Costs:
|
Allocation of
|
||||||||||||||||||
|
Relative
Fair Value |
Allocation
Percentage |
Proceeds
|
Costs
|
Proceeds,
Net |
|||||||||||||||
July 2023 convertible notes
|
$
|
8,715
|
39.94
|
%
|
$
|
3,481
|
$
|
(80
|
)
|
$
|
3,401
|
|||||||||
July 2023 warrants
|
13,103
|
60.06
|
%
|
5,234
|
(121
|
)
|
5,113
|
|||||||||||||
|
$
|
21,818
|
100.00
|
%
|
$
|
8,715
|
$
|
(201
|
)
|
$
|
8,514
|
|
Allocation of Proceeds and Costs:
|
Allocation of
|
||||||||||||||||||||||
|
Relative
Fair Value |
Allocation
Percentage |
Proceeds
|
Costs
|
Warrant
Repricing |
Proceeds,
Net |
||||||||||||||||||
December 2023 convertible notes
|
$
|
9,059
|
48.83
|
%
|
$
|
3,803
|
$
|
(81
|
)
|
$
|
(766
|
)
|
$
|
2,956
|
||||||||||
December 2023 warrants
|
9,495
|
51.17
|
%
|
3,985
|
(85
|
)
|
(802
|
)
|
3,098
|
|||||||||||||||
|
$
|
18,554
|
100.00
|
%
|
$
|
7,788
|
$
|
(166
|
)
|
$
|
(1,568
|
)
|
$
|
6,054
|
|
Stock
Price |
Credit
Spread |
Volatility
|
Risk-Free
Rate |
||||||||||||
July 2023 convertible notes
|
$
|
2.81
|
2,500
|
108
|
%
|
4.60
|
%
|
|||||||||
December 2023 convertible notes
|
$
|
1.51
|
2,000
|
109
|
%
|
3.90
|
%
|
|
Stock
Price |
Exercise
Price |
Expected
Life |
Volatility
|
Dividend
|
Risk-Free
Rate |
|||||||||||||||
July 2023 warrants
|
$
|
2.81
|
$
|
2.61
|
5 years
|
98
|
%
|
0.00
|
%
|
4.04
|
%
|
||||||||||
December 2023 warrants
|
$
|
1.51
|
$
|
1.43
|
5 years
|
101
|
%
|
0.00
|
%
|
3.91
|
%
|
Gross convertible notes at issuance
|
$
|
16,503
|
||
Debt discount and debt issuance costs
|
(10,146
|
)
|
||
Amortization of debt discount and debt issuance costs
|
303
|
|||
Paid-in-kind interest added to principal
|
113
|
|||
Convertible notes, net, at December 31, 2023
|
$
|
6,773
|
Years ending December 31,
|
Principal
Payments
|
|||
2024
|
$
|
-
|
||
2025
|
-
|
|||
2026
|
-
|
|||
2027
|
-
|
|||
2028
|
16,616
|
|||
Total
|
$
|
16,616
|
7) |
Property and Equipment
|
As of December 31,
|
||||||||
2023
|
2022
|
|||||||
Laboratory and manufacturing equipment
|
$
|
40
|
$
|
28
|
||||
Furniture and fixtures |
19 | - | ||||||
Leasehold improvements
|
274
|
-
|
||||||
Computer equipment and programs
|
274
|
240
|
||||||
607
|
268
|
|||||||
Less accumulated depreciation and amortization
|
(114
|
)
|
(32
|
)
|
||||
Property and equipment, net
|
$
|
493
|
$
|
236
|
8) |
Leases
|
Years ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Operating lease expense
|
$
|
3,399
|
$
|
595
|
||||
Sublease income
|
(84
|
)
|
(84
|
)
|
||||
Variable lease expense
|
136
|
150
|
||||||
Total lease expense
|
$
|
3,451
|
$
|
661
|
Operating Lease
ROU Assets
|
||||
Operating lease ROU assets at January 1, 2023
|
$
|
1,030
|
||
Recognition of ROU asset for Somerville Sublease
|
34,410
|
|||
Adjustment to ROU asset for remeasurement of Somvervile Sublease liability
|
(1,620
|
)
|
||
Amortization of operating lease ROU assets
|
(1,039
|
)
|
||
Operating lease ROU assets at December 31, 2023
|
$
|
32,781
|
Operating Lease
Liabilities
|
||||
Operating lease liabilities at January 1, 2023
|
$
|
1,182
|
||
Recognition of lease liability for Somerville Sublease
|
34,169
|
|||
Accretion of interest for Somerville Sublease
|
1,858
|
|||
Adjustment to lease liablity due to remeasurement of Somerville Sublease
|
(1,620
|
)
|
||
Principal payments on operating lease liabilities
|
(519
|
)
|
||
Operating lease liabilities at December 31, 2023
|
35,070
|
|||
Less non-current portion
|
32,854
|
|||
Current portion at December 31, 2023
|
$
|
2,216
|
As of
December 31,
2023
|
||||
2024
|
$
|
6,972
|
||
2025
|
6,075
|
|||
2026
|
6,238
|
|||
2027
|
6,308
|
|||
2028
|
6,406
|
|||
Thereafter
|
33,879
|
|||
Total payments
|
65,878
|
|||
Less imputed interest
|
(30,808
|
)
|
||
Total operating lease liabilities
|
$
|
35,070
|
|
As of
December 31,
2023
|
|||
2024
|
$
|
86
|
||
2025
|
88
|
|||
2026
|
75
|
|||
Total payments
|
$
|
249
|
9) |
Fair Value of Financial Instruments
|
|
As of December 31,
|
|||||||||||
Description
|
Level
|
2023
|
2022
|
|||||||||
Liabilities:
|
||||||||||||
Warrant liabilities - Common Warrants
|
3
|
$
|
116
|
$
|
331
|
|||||||
Market Cap Contingent Consideration
|
3
|
$
|
107
|
$
|
-
|
|
Warrant
Liabilities |
Contingent
Consideration |
||||||
|
||||||||
Fair value at January 1, 2023
|
$
|
331
|
$
|
-
|
||||
Initial measurement
|
-
|
225
|
||||||
Change in fair value
|
(215
|
)
|
(118
|
)
|
||||
Fair value at December 31, 2023
|
$
|
116
|
$
|
107
|
|
December 31,
2023 |
|||||||||||
|
Level
|
Carrying
Value |
Fair
Value |
|||||||||
Convertible Notes
|
3
|
$
|
16,616
|
$
|
17,594
|
10) |
Goodwill and In-Process Research & Development
|
11)
|
Related Party Transactions
|
12) |
Accrued Expenses
|
As of December 31,
|
||||||||
2023
|
2022
|
|||||||
Legal fees and related
|
$
|
643
|
$
|
1,139
|
||||
Professional fees
|
239
|
124
|
||||||
Somerville facility |
218 | 138 | ||||||
Convertible Notes interest |
176 | - | ||||||
Accrued compensation
|
109
|
1,065
|
||||||
Clinical |
18
|
570
|
||||||
Other |
490 | 590 | ||||||
Total accrued expenses
|
$
|
1,893
|
$
|
3,626
|
13) |
Commitments and Contingencies
|
14) |
Basic and Diluted Net Loss per
Common Share
|
|
Years Ended December 31,
|
|||||||
|
2023
|
2022
|
||||||
Numerator:
|
||||||||
Net loss attributable to common stockholders
|
$
|
(21,684
|
)
|
$
|
(24,595
|
)
|
||
Denominator
|
||||||||
Weighted average shares outstanding - basic and diluted
|
5,314
|
3,051
|
||||||
Net loss per common share - basic and diluted
|
$
|
(4.08
|
)
|
$
|
(8.06
|
)
|
Years ended December 31,
|
||||||||
|
2023
|
2022
|
||||||
Warrants
|
18,922 | 4,713 | ||||||
Convertible Notes converted into common stock | 7,877 | - | ||||||
Stock options
|
389
|
359 | ||||||
Preferred stock converted into common stock
|
18
|
7 | ||||||
RSUs | 1 | 4 | ||||||
Total potential common shares excluded from computation
|
27,207
|
5,083 |
15) |
Stock-Based Compensation
|
Year ended December 31, | ||||||||
2023
|
2022 | |||||||
Weighted average risk-free rate
|
3.82
|
%
|
2.52 | % | ||||
Weighted average volatility
|
95.15
|
%
|
90.49 | % | ||||
Dividend yield
|
0
|
%
|
0 | % | ||||
Expected term
|
5.44 years | 5.79 years |
Outstanding
Options
|
Weighted
Average
Exercise
Price per
Share
|
Weighted
Average
Remaining
Contractual
Life (in
years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding January 1, 2022
|
199
|
$
|
168
|
9.38 |
$
|
-
|
||||||||||
Granted
|
287
|
17
|
||||||||||||||
Cancelled
|
(127 | ) | 141 | |||||||||||||
Outstanding December 31, 2022
|
359
|
|
57
|
7.57
|
|
-
|
||||||||||
Granted
|
237 | 4 | ||||||||||||||
Cancelled
|
(207 | ) | 19 | |||||||||||||
Outstanding December 31, 2023 | 389 | $ | 45 | 7.04 | $ | - | ||||||||||
Options vested and exercisable at December 31, 2023
|
331
|
$
|
50
|
6.69
|
$
|
-
|
Outstanding
Restricted
Stock Units
|
Weighted
Average
Fair
Value per
Share
|
|||||||
January 1, 2022
|
12
|
$
|
276
|
|||||
Granted
|
55
|
39
|
||||||
Released
|
(3 | ) | 271 | |||||
Cancelled
|
(60 | ) | 61 | |||||
December 31, 2022
|
4
|
236
|
||||||
Cancelled
|
(3 | ) | 199 | |||||
December 31, 2023 | 1 | $ | 322 | |||||
Balance expected to vest at December 31, 2023
|
1
|
$ |
322 |
Years ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Research and development
|
$ |
234
|
$ |
1,249
|
||||
General and administrative
|
1,008
|
1,686
|
||||||
Total
|
$ |
1,242
|
$ |
2,935
|
16) |
Equity and Warrants
|
Q1-22 Common
Warrants
|
Q4-22
Warrants
|
July 2023
Warrants
|
December 2023
Warrants
|
Total
Warrants
|
||||||||||||||||
Balance as of January 1, 2023
|
343
|
4,370
|
- |
-
|
4,713
|
|||||||||||||||
Granted
|
-
|
-
|
6,094 |
8,115
|
14,209
|
|||||||||||||||
Balance as of December 31, 2023
|
343
|
4,370
|
6,094 |
8,115
|
18,922
|
|
1. |
If the Company (a) pays a dividend or makes a distribution in shares of its common stock, (b) subdivides its outstanding shares of common stock into a greater number of shares, (c) combines its
outstanding shares of common stock into a smaller number of shares, or (d) issues by reclassification of its shares of common stock any shares of its common stock (other than a change in par value, or from par value to no par value, or
from no par value to par value), then the conversion rate in effect immediately prior to the applicable event will be adjusted so that the holders of the Series A Preferred Stock will be entitled to receive the number of shares of
common stock which they would have owned or have been entitled to receive immediately following the happening of the event, had the Series A Preferred Stock been converted immediately prior to the record or effective date of the
applicable event.
|
|
2. |
If the outstanding shares of the Company’s common stock are reclassified (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a
subdivision, combination or stock dividend), or if the Company consolidates with or merge into another corporation and the Company is not the surviving entity, or if the Company sells all or substantially all of its property, assets,
business and goodwill, then the holders of the Series A Preferred Stock will thereafter be entitled upon conversion to the kind and amount of shares of stock or other equity securities, or other property or assets which would have been
receivable by such holders upon such reclassification, consolidation, merger or sale, if the Series A Preferred Stock had been converted immediately prior thereto.
|
|
3. |
If the Company issues common stock without consideration or for a consideration per share less than the then applicable Equivalent Preference Amount (as defined below), then the Equivalent Preference
Amount will immediately be reduced to the amount determined by dividing (A) an amount equal to the sum of (1) the number of shares of common stock outstanding immediately prior to such issuance multiplied by the Equivalent Preference
Amount in effect immediately prior to such issuance and (2) the consideration, if any, received by the Company upon such issuance, by (B) the total number of shares of common stock outstanding immediately after such issuance. The
“Equivalent Preference Amount” is the value that results when the liquidation preference of one share of Series A Preferred Stock (which is $1.00)
is multiplied by the conversion rate in effect at that time; thus the conversion rate applicable after the adjustment in the Equivalent Preference Amount as described herein will be the figure that results when the adjusted Equivalent
Preference Amount is divided by the liquidation preference of one share of Series A Preferred Stock.
|
17) |
Income Taxes
|
|
Years ended December 31,
|
|||||||
|
2023
|
2022
|
||||||
(in thousands) |
|
|
||||||
Domestic
|
$
|
(21,654
|
)
|
$
|
(24,513
|
)
|
||
Foreign
|
(17
|
)
|
(21
|
)
|
||||
Total loss before income taxes
|
$
|
(21,671
|
)
|
$
|
(24,534
|
)
|
Years ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Current Tax Provision
|
||||||||
Federal
|
$
|
-
|
$
|
-
|
||||
State
|
1
|
4
|
||||||
Foreign
|
- | - | ||||||
1 | 4 | |||||||
Deferred Tax Provision
|
||||||||
Federal
|
(2,155
|
)
|
(6,851
|
)
|
||||
State
|
8 |
(1,602
|
)
|
|||||
Foreign
|
(2 | ) |
(187
|
)
|
||||
(2,149 | ) | (8,640 | ) | |||||
Change in valuation allowance
|
2,145 |
8,681
|
||||||
Total tax (benefit) provision for income taxes
|
$
|
(3
|
)
|
$
|
45
|
|
As of December 31,
|
|||||||
|
2023
|
2022
|
||||||
Deferred Tax Assets:
|
||||||||
Net operating losses
|
$
|
12,740
|
$
|
9,382
|
||||
Foreign net operating losses
|
784
|
782
|
||||||
Stock compensation | 2,141 | 2,173 | ||||||
In-process research and development | 1,009 | 1,233 | ||||||
Capitalized rearch and development expenses | 3,105 | 1,502 | ||||||
R&D credit carryforwards
|
437
|
517
|
||||||
Compensation accrual
|
3
|
81
|
||||||
ROU Liabilities |
8,932 | 334 | ||||||
Other |
132 | 549 | ||||||
Total gross deferred tax assets
|
29,283
|
16,553
|
||||||
Valuation allowance
|
(18,302
|
)
|
(16,157
|
)
|
||||
Net deferred tax assets
|
10,981
|
396
|
||||||
|
||||||||
Deferred Tax Liabilities:
|
||||||||
Fixed assets
|
(6
|
)
|
(10
|
)
|
||||
ROU Assets
|
(8,349 | ) | (291 | ) | ||||
Convertible debt
|
(2,507 | ) | - | |||||
Intangibles - goodwill
|
(179
|
)
|
(160
|
)
|
||||
Total deferred tax liabilities
|
(11,041
|
)
|
(461
|
)
|
||||
Net deferred taxes
|
$
|
(60
|
)
|
$
|
(65
|
)
|
As of December 31,
|
||||||||
2023 | 2022 | |||||||
Tax at federal income tax rate
|
21.00
|
%
|
21.00 | % | ||||
State income tax, net of federal tax
|
4.92
|
%
|
6.52 | % | ||||
Foreign tax differential | (0.01 | %) | (0.01 | %) | ||||
Non-deductible expenses/excludable items
|
(0.74
|
%)
|
6.09 | % | ||||
Change in valuation allowance
|
(9.90 | %) | (35.38 | %) | ||||
Convertible debt
|
(11.92 | %) | 0.00 | % |
||||
Credits
|
0.00
|
%
|
0.98 | % | ||||
Uncertain tax positions |
0.00 | % | (0.49 | %) | ||||
Other
|
(3.34
|
%)
|
1.11 | % | ||||
Benefit (provision) for income taxes
|
0.01
|
%
|
(0.18 | %) |
As of December 31,
|
||||||||
2023
|
2022
|
|||||||
Beginning balance of uncertain tax positions
|
$
|
121
|
$
|
-
|
||||
Additions based on current year’s tax positions
|
-
|
45
|
||||||
Net changes based on prior year’s tax positions
|
272
|
76
|
||||||
Ending balance of uncertain tax positions
|
$
|
393
|
$
|
121
|
18) |
Subsequent Event
|
Participant Name:
|
[●]
|
|
Grant ID:
|
[●]
|
|
Grant Date:
|
[●]
|
|
Exercise Price per Share:
|
[●]
|
|
Number of Shares:
|
[●]
|
|
Type of Option:
|
Non-Qualified Stock Option
|
|
Expiration Date:
|
[●]
|
|
Vesting Commencement Date:
|
[●]
|
|
Vesting Schedule:
|
[insert applicable vesting schedule]
|
|
1. |
This Option is governed by all the terms and conditions of the Plan applicable to this Option, whether or not such terms and conditions are stated in the Award Agreement. This Option is governed by the terms and conditions of this Award
Agreement. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.
|
|
2. |
Participant has received a copy of the Plan, this Award Agreement, the Plan prospectus (if required under applicable law), and the Company’s insider trading policy, and represents that he or she has read these documents and is familiar
with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to this Option and the Plan.
|
|
3. |
Vesting of this Option is subject to Participant’s continued employment as an employee, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes
the nature of that relationship.
|
|
4. |
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his
or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
|
|
5. |
Participant consents to electronic delivery and participation as set forth in this Award Agreement.
|
|
6. |
If Participant does not accept or decline this Option within 60 days of the Grant Date or by such other date that may be communicated to Participant by the Company,
the Company will accept this Option on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of this Option set forth in the Plan and this Award Agreement. If Participant wishes to decline this
Option, Participant should promptly notify [●] at [●]. If Participant declines this Option, this Option will be cancelled and
no benefits from this Option nor any compensation or benefits in lieu of this Option will be provided to Participant.
|
Eterna Therapeutics Inc.
|
Participant
|
|||
By:
|
Signature
|
:
|
||
Title:
|
Date: |
|
1. |
Grant of Option. Capitalized terms used in the Award Agreement but not defined in the Award Agreement will have the
same meanings specified in the Plan. Participant has been granted an Option to purchase up to the number of Shares set forth in the Notice at the Exercise Price set forth in the Notice.
|
|
2. |
Exercise of Option. This Option is exercisable during its term in accordance with the Vesting Schedule contained in the
Notice and the applicable provisions of the Plan and the Award Agreement. Participant may exercise the vested portion of this Option only by following the option exercise procedures established by the Committee and payment of the aggregate
Exercise Price for the Shares to be purchased, together with any applicable taxes that the Company or any member of the Company Group is required by any law or regulation of any governmental authority, whether federal, state or local,
domestic or foreign (“Taxes”), to withhold in connection with the exercise of the Option.
|
|
3. |
Method of Payment. Participant may always pay the Exercise Price by personal check (or readily available funds), wire
transfer, or cashier’s check. The Committee may also allow any other method of payment permitted by Section 6(g) of the Plan in its discretion at the time of exercise, and any restrictions deemed necessary or appropriate to facilitate
compliance with applicable law or administration of the Plan (including to avoid the recognition of additional compensation expenses for financial reporting purposes).
|
|
4. |
Option Term.
|
|
a. |
Maximum Term. This Option will in all events expire at the close of business at Company headquarters on the Expiration
Date specified in the Notice, unless it terminates earlier in connection with the termination of Participant’s employment (as provided below) or a Change in Control (as provided in the Plan).
|
|
b. |
Post-Termination Exercise Period. If Participant’s employment terminates prior to the Expiration Date of this Option
other than for Cause, the unvested portion of this Option will automatically expire on Participant’s date of termination, and the vested portion of this Option will remain outstanding and exercisable for the following periods, unless
otherwise determined by the Committee and in no event after the Expiration Date of this Option:
|
i. |
ninety (90) days following a termination for any reason other than Cause, Disability, or death;
|
|
ii. |
twelve (12) months following a termination due to Disability; and
|
|
iii. |
twelve (12) months following the date of Participant’s death, if Participant dies while in employment, or during the period provided in clause (ii) above.
|
|
c. |
Termination for Cause. If Participant’s employment is terminated for Cause, this Option will terminate and be forfeited immediately upon such Participant’s termination of employment, and
Participant will be prohibited from exercising any portion (including any vested portion) of this Option on or after the date of such termination. If Participant’s employment is suspended pending an investigation of whether Participant’s
employment will be terminated for Cause, all of Participant’s rights under this Option, including the right to exercise the Option, shall be suspended during the investigation period.
|
|
d. |
Determination of Termination Date. For purposes of this Option, Participant’s employment will be considered terminated
as of the date Participant is no longer actively providing services to the Company Group (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where
Participant is employed or the terms of Participant’s employment agreement, if any). The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of this Option
(including whether Participant may still be considered to be providing services while on a leave of absence).
|
|
e. |
No Notice of Option Expiration. Participant is responsible for keeping track of the Expiration Date and the
post-termination exercise periods following Participant’s termination of employment for any reason. The Company is not obligated to provide further notice of such periods. In no event will this Option be exercised later than the Expiration
Date set forth in the Notice.
|
|
5. |
Non-Transferability of Option. This Option may not be transferred in any manner other than by will or by the laws of
descent or distribution or court order and may be exercised during the lifetime of Participant only by Participant. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and
assigns of Participant.
|
|
6. |
Taxes.
|
|
a. |
Responsibility for Taxes. By accepting this Option, Participant acknowledges that, regardless of any action taken by
the Company or, if different, any member of the Company Group that employs Participant (the “Employer”), the ultimate liability for all Taxes is and remains Participant’s responsibility and may exceed the amount actually withheld by
the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Taxes in connection with any aspect of this Option, including, but
not limited to, the grant, vesting, or exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms
of the grant or any aspect of this Option to reduce or eliminate Participant’s liability for Taxes or achieve any particular tax result. Further, if Participant is subject to Taxes in more than one jurisdiction, as applicable, Participant
acknowledges that the Company and/or the Employer may be required to withhold or account for Taxes in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Taxes that the Company or the Employer
may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares or the proceeds of the
sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Taxes.
|
|
b. |
Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all Taxes. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard
to all Taxes by one or a combination of the following:
|
i. |
withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any member of the Company Group;
|
|
ii. |
withholding from proceeds of the sale of Shares acquired at exercise of this Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without
further consent);
|
|
iii. |
withholding Shares to be issued upon exercise of this Option, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate
applicable in Participant’s jurisdiction;
|
|
iv. |
Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
|
|
v. |
any other arrangement approved by the Committee and permitted under applicable law.
|
|
7. |
Nature of Grant. In accepting this Option, Participant acknowledges,
understands and agrees that: (a) the Plan is established voluntarily by the Company, is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; (b) the grant of
this Option is voluntary and occasional and does not create any contractual or other right to receive future grants, or benefits in lieu of grants, even if grants have been made in the past; (c) all decisions with respect to future grants,
if any, will be at the sole discretion of the Company; (d) Participant is voluntarily receiving this Option; (e) this Option and the Shares allocated to this Option are not intended to replace any pension rights or compensation and are
outside the scope of Participant’s employment contract, if any; (f) this Option and the Shares allocated to this Option, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without
limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; (g) unless otherwise provided in
the Plan or by the Company in its discretion, this Option and the benefits evidenced by this Award Agreement do not create any entitlement to have this Option or any such benefits transferred to, or assumed by, another company nor to be
exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and (h) neither the Company nor any member of the Company Group shall be liable for any foreign exchange rate fluctuation between
Participant’s local currency and the United States Dollar or the selection by the Company or any member of the Company Group in its sole discretion of an applicable foreign exchange rate that may affect the value of this Option (or the
calculation of income or Taxes thereunder) or of any amounts due to Participant pursuant to the settlement of this Option or the subsequent sale of the Shares allocated to this Option.
|
|
8. |
Code Section 409A. It is intended that the terms of this Option will not result in the imposition of any tax liability
pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Notwithstanding the foregoing, no member of the Company Group shall be liable for any costs incurred by
Participant under Section 409A of the Code and similar state laws.
|
|
9. |
Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any
other grant materials by and among the Company and the members of the Company Group for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that the Company and the
members of the Company Group may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Shares or directorships held in the Company, details of all grants, or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”),
for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be transferred to such stock plan service provider as may be selected by the Company, presently or in the future, which may be
assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the
United States) may have different data privacy laws and protections than Participant’s country. Participant authorizes the Company, the stock plan service provider as may be selected by the Company, and any other possible recipients which
may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing the Plan. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, or instructs
the Company to cease the processing of the Data, his or her employment or service will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent or instructing the Company to cease processing,
is that the Company would not be able to grant Participant the Option or any other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect
Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources
representative.
|
|
10. |
Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award
Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of the State of Delaware, or the federal courts for the United States for the
District of Delaware, and no other courts, where this grant is made and/or to be performed.
|
|
11. |
Addendum and Sub-Plans. Notwithstanding any provisions in this Award
Agreement, this Option shall be subject to any special terms and conditions set forth in any Addendum to this Award Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Addendum (if
any), the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The
Addendum (if any) constitutes part of this Award Agreement. Further, the Plan shall be deemed to include any special terms and conditions set forth in any applicable sub-plan for Participant’s country, and, if Participant relocates to a
country for which the Company has established a sub-plan, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or
advisable for legal or administrative reasons.
|
|
12. |
Entire Agreement; Enforcement of Rights; Amendment. This Award Agreement, together with the Plan, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, agreements, commitments, negotiations and arrangements between them. Except as contemplated by the
Plan, no modification of or amendment to this Award Agreement, nor any waiver of any rights under this Award Agreement, shall be effective unless in writing signed by the parties to this Award Agreement to the extent it would alter or
impair rights or obligations under the Option. The failure by either party to enforce any rights under this Award Agreement shall not be construed as a waiver of any rights of such party. Notwithstanding anything to the contrary in the Plan
or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition or costs under Section 409A of the Code in connection with this Option.
|
|
13. |
Severability. If one or more provisions of this Award Agreement are held to be unenforceable under applicable laws, the
parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement,
(b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.
|
|
14. |
Language. If Participant has received this Award Agreement, the Plan or any
other document related to this Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
|
15. |
Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s
participation in the Plan, on this Option and on any Shares purchased upon exercise of this Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept
any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
|
16. |
Notices. Any notice, demand or request required or permitted to be given
under this Award Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax, or forty-eight (48) hours after being deposited in the U.S. mail or a comparable
foreign mail service, as certified or registered mail with postage or shipping charges prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or
if no address is specified on the signature page, at the most recent address, email or fax number set forth in the Company’s books and records.
|
|
17. |
Counterparts. This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile, email or other electronic execution and delivery of this Award Agreement (including but not limited to execution
by electronic signature or click-through electronic acceptance) shall constitute valid and binding execution and delivery for all purposes and shall be deemed to be, and have the effect of, an original signature.
|
|
18. |
Successors and Assigns. The rights and benefits of this Award Agreement shall inure to the benefit of, and be
enforceable by the Company’s successors and assigns.
|
|
19. |
Consent to Electronic Delivery and Participation. By accepting this Option, Participant agrees to participate in the
Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan
prospectuses (if any), and all other documents, communications, or information related to this Option and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the
internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company
a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Company’s stock plan administration.
|
Participant Name:
|
[●]
|
|
Grant ID:
|
[●]
|
|
Grant Date:
|
[●]
|
|
Number of RSUs:
|
[●]
|
|
Country at Grant:
|
[●]
|
|
Vesting Commencement Date:
|
[●]
|
|
Vesting Schedule:
|
[insert applicable vesting schedule]
|
|
1. |
This RSU Grant is governed by all the terms and conditions of the Plan applicable to the RSU Grant, whether or not such terms and conditions are stated in the Award Agreement. The RSU Grant is governed by the terms and conditions of this
Award Agreement. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.
|
|
2. |
Participant has received a copy of the Plan, this Award Agreement, the Plan prospectus (if required under applicable law), and the Company’s insider trading policy, and represents that he or she has read these documents and is familiar
with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to the RSU Grant and the Plan.
|
|
3. |
Vesting of the RSUs is subject to Participant’s continued employment as an employee, which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in this Award Agreement or the Plan changes the
nature of that relationship.
|
|
4. |
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his
or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
|
|
5. |
Participant consents to electronic delivery and participation as set forth in this Award Agreement.
|
|
6. |
If Participant does not accept or decline the RSUs within 60 days of the Grant Date or by such other date that may be communicated to Participant by the Company,
the Company will accept the RSUs on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of the RSUs set forth in the Plan and this Award Agreement. If Participant wishes to decline the RSUs,
Participant should promptly notify [●] at [●]. If Participant declines the RSUs, the RSUs will be cancelled and no benefits
from the RSUs nor any compensation or benefits in lieu of the RSUs will be provided to Participant.
|
Eterna Therapeutics Inc.
|
Participant
|
|||
By:
|
Signature:
|
|||
Title:
|
Date:
|
|
1. |
Grant of RSUs. Capitalized terms used in the Award Agreement but not defined in the Award Agreement will have the same
meanings specified in the Plan. An RSU is a non-voting unit of measurement which is deemed solely for bookkeeping purposes to be equivalent to one outstanding share of Common Stock (a “Share”). The RSUs are used solely as a device to
determine the number of Shares to eventually be issued to Participant if such RSUs vest. The RSUs shall not be treated as property or as a trust fund of any kind.
|
|
2. |
Settlement. On or as soon as administratively practical (and within thirty (30) days) following the applicable date of
vesting under the Vesting Schedule set forth in the Notice (a “Vesting Date”), the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in
book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the RSU Grant that vest on the applicable Vesting Date, subject to payment by Participant of any applicable taxes that the Company or
any member of the Company Group is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign (“Taxes”) to withhold in connection with such delivery. No fractional RSUs or
rights for fractional Shares shall be created pursuant to this Award Agreement.
|
|
3. |
Dividend and Voting Rights. Unless and until such time as Shares are issued in settlement of vested RSUs, Participant
will have no ownership of the Shares allocated to the RSUs, and will have no rights to vote such Shares and no rights to dividends.
|
|
4. |
Non-Transferability of RSUs. The RSUs and any interest therein will not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs,
successors, and assigns of Participant.
|
|
5. |
Termination. If Participant’s employment terminates for any reason, all unvested RSUs will be forfeited to the Company,
and all rights of Participant to such RSUs will immediately terminate without payment of any consideration to Participant. The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing
services for purposes of this RSU Grant (including whether Participant may still be considered to be providing services while on a leave of absence).
|
|
6. |
Taxes.
|
|
a. |
Responsibility for Taxes. By accepting this RSU Grant, Participant acknowledges that, regardless of any action taken by
the Company or, if different, any member of the Company Group that employs Participant (the “Employer”), the ultimate liability for all Taxes is and remains Participant’s
responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any
Taxes in connection with any aspect of the RSU Grant, including, but not limited to, the grant, vesting, or settlement of the RSU Grant, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends;
and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Grant to reduce or eliminate Participant’s liability for Taxes or achieve any particular tax result. Further, if Participant
is subject to Taxes in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Taxes in more than one jurisdiction. Participant agrees to pay to the
Company or the Employer any amount of Taxes that the Company or the Employer may be required to withhold or account for as a result of the RSUs that cannot be satisfied by the means described in this Section. The Company may refuse to issue
or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Taxes.
|
|
b. |
Withholding. Prior to the relevant taxable or Taxes withholding event, as applicable, Participant agrees to make
adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Taxes. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with
regard to all Taxes by one or a combination of the following:
|
i. |
withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any member of the Company Group;
|
|
ii. |
withholding from proceeds of the sale of Shares acquired on settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without
further consent);
|
|
iii. |
withholding Shares to be issued upon settlement of the RSUs, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate
applicable in Participant’s jurisdiction;
|
|
iv. |
Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
|
|
v. |
any other arrangement approved by the Committee and permitted under applicable law.
|
|
7. |
Nature of Grant. In accepting the RSUs, Participant acknowledges, understands
and agrees that: (a) the Plan is established voluntarily by the Company, is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; (b) the grant of the RSUs is
voluntary and occasional and does not create any contractual or other right to receive future grants, or benefits in lieu of grants, even if grants have been made in the past; (c) all decisions with respect to future grants, if any, will be
at the sole discretion of the Company; (d) Participant is voluntarily receiving the RSUs; (e) the RSUs and the Shares allocated to the RSUs are not intended to replace any pension rights or compensation and are outside the scope of
Participant’s employment contract, if any; (f) the RSUs and the Shares allocated to the RSUs, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any
severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; (g) unless otherwise provided in the Plan or by the Company
in its discretion, the RSUs and the benefits evidenced by this Award Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted
for, in connection with any corporate transaction affecting the Shares; and (h) neither the Company nor any member of the Company Group shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the
United States Dollar or the selection by the Company or any member of the Company Group in its sole discretion of an applicable foreign exchange rate that may affect the value of the RSUs (or the calculation of income or Taxes thereunder)
or of any amounts due to Participant pursuant to the settlement of the RSUs or the subsequent sale of the Shares allocated to the RSUs.
|
|
8. |
Code Section 409A. It is intended that the terms of the RSUs will not result in the imposition of any tax liability
pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this Restricted Stock Unit Grant are intended to constitute separate payments for purposes
of Section 409A of the Code. Notwithstanding the foregoing, no member of the Company Group shall be liable for any costs incurred by Participant under Section 409A of the Code and similar state laws.
|
|
9. |
Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any
other grant materials by and among the Company and the members of the Company Group for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that the Company and the
members of the Company Group may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Shares or directorships held in the Company, details of all grants, or any other entitlement to Shares awarded, canceled, received, vested, unvested or outstanding in Participant’s favor (“Data”),
for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be transferred to such stock plan service provider as may be selected by the Company, presently or in the future, which may be
assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the
United States) may have different data privacy laws and protections than Participant’s country. Participant authorizes the Company, the stock plan service provider as may be selected by the Company, and any other possible recipients which
may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing the Plan. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, or instructs
the Company to cease the processing of the Data, his or her employment or service will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent or instructing the Company to cease processing,
is that the Company would not be able to grant Participant the RSUs or any other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect
Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources
representative.
|
|
10. |
Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award
Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of the State of Delaware, or the federal courts for the United States for the
District of Delaware, and no other courts, where this grant is made and/or to be performed.
|
|
11. |
Addendum and Sub-Plans. Notwithstanding any provisions in this Award
Agreement, the RSUs shall be subject to any special terms and conditions set forth in any Addendum to this Award Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Addendum (if
any), the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The
Addendum (if any) constitutes part of this Award Agreement. Further, the Plan shall be deemed to include any special terms and conditions set forth in any applicable sub-plan for Participant’s country, and, if Participant relocates to a
country for which the Company has established a sub-plan, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or
advisable for legal or administrative reasons.
|
|
12. |
Entire Agreement; Enforcement of Rights; Amendment. This Award Agreement, together with the Plan, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, agreements, commitments, negotiations and arrangements between them. Except as contemplated by the
Plan, no modification of or amendment to this Award Agreement, nor any waiver of any rights under this Award Agreement, shall be effective unless in writing signed by the parties to this Award Agreement to the extent it would alter or
impair rights or obligations under the RSUs. The failure by either party to enforce any rights under this Award Agreement shall not be construed as a waiver of any rights of such party. Notwithstanding anything to the contrary in the Plan
or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition or costs under Section 409A of the Code in connection with the RSUs.
|
|
13. |
Severability. If one or more provisions of this Award Agreement are held to be unenforceable under applicable laws, the
parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement,
(b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.
|
|
14. |
Language. If Participant has received this Award Agreement, the Plan or any
other document related to the RSUs and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
|
15. |
Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s
participation in the Plan, on the RSUs and on any Shares received under the RSUs, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional
agreements or undertakings that may be necessary to accomplish the foregoing.
|
|
16. |
Notices. Any notice, demand or request required or permitted to be given
under this Award Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax, or forty-eight (48) hours after being deposited in the U.S. mail or a comparable
foreign mail service, as certified or registered mail with postage or shipping charges prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or
if no address is specified on the signature page, at the most recent address, email or fax number set forth in the Company’s books and records.
|
|
17. |
Counterparts. This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile, email or other electronic execution and delivery of this Award Agreement (including but not limited to execution
by electronic signature or click-through electronic acceptance) shall constitute valid and binding execution and delivery for all purposes and shall be deemed to be, and have the effect of, an original signature.
|
|
18. |
Successors and Assigns. The rights and benefits of this Award Agreement shall inure to the benefit of, and be
enforceable by the Company’s successors and assigns.
|
|
19. |
Consent to Electronic Delivery and Participation. By accepting the RSUs, Participant agrees to participate in the Plan
through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan prospectuses
(if any), and all other documents, communications, or information related to the RSUs and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of
any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Company’s stock administration.
|
Participant Name:
|
|
[ ]
|
Grant ID:
|
|
[ ]
|
Grant Date:
|
|
[ ]
|
Exercise Price per Share:
|
|
[ ]
|
Number of Shares:
|
|
[ ]
|
Type of Option:
|
|
[ ]
|
Expiration Date:
|
|
[ ]
|
Vesting Commencement Date:
|
|
[ ]
|
Vesting Schedule:
|
|
[ ]
|
|
1. |
This Option is governed by all the terms and conditions of the Plan applicable to this Option, whether or not such terms and conditions are stated in the Award Agreement. This Option is governed by the terms and conditions of this Award
Agreement. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.
|
|
2. |
Participant has received a copy of the Plan, this Award Agreement, the Plan prospectus (if required under applicable law), and the Company’s insider trading policy, and represents that he or she has read these documents and is familiar
with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to this Option and the Plan.
|
|
3. |
Vesting of this Option is subject to Participant’s continued [employment] [service] as an [employee] [director] [consultant], which is for an unspecified duration and may be terminated at any time, with or without Cause, and nothing in
this Award Agreement or the Plan changes the nature of that relationship.
|
|
4. |
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his
or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
|
|
5. |
Participant consents to electronic delivery and participation as set forth in this Award Agreement.
|
|
6. |
If Participant does not accept or decline this Option within 60 days of the Grant Date or by such other date that may be communicated to Participant by the Company,
the Company will accept this Option on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of this Option set forth in the Plan and this Award Agreement. If Participant wishes to decline this
Option, Participant should promptly notify [●] at [●]. If Participant declines this Option, this Option will be cancelled and
no benefits from this Option nor any compensation or benefits in lieu of this Option will be provided to Participant.
|
Eterna Therapeutics Inc.
|
Participant
|
|||
By:
|
Signature:
|
|||
Title:
|
Date:
|
|
1. |
Grant of Option. Capitalized terms used in the Award Agreement but not defined in the Award Agreement will have the
same meanings specified in the Plan. Participant has been granted an Option to purchase up to the number of Shares set forth in the Notice at the Exercise Price set forth in the Notice. If designated in the Notice as an Incentive Stock
Option, this Option is intended to qualify as an Incentive Stock Option under Section 422 of the Code. However, even if this Option is intended to be an Incentive Stock Option, it will be treated as a Non-Qualified Stock Option to the
extent that it exceeds the $100,000 limit contained in Section 422(d) of Code, as provided in the Plan.
|
|
2. |
Exercise of Option. This Option is exercisable during its term in accordance with the Vesting Schedule contained in the
Notice and the applicable provisions of the Plan and the Award Agreement. Participant may exercise the vested portion of this Option only by following the option exercise procedures established by the Committee and payment of the aggregate
Exercise Price for the Shares to be purchased, together with any applicable taxes that the Company is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign (“Taxes”), to
withhold in connection with the exercise of the Option.
|
|
3. |
Method of Payment. Participant may always pay the Exercise Price by personal check (or readily available funds), wire
transfer, or cashier’s check. The Committee may also allow any other method of payment permitted by Section 6(h) of the Plan in its discretion at the time of exercise, and any restrictions deemed necessary or appropriate to facilitate
compliance with applicable law or administration of the Plan (including to avoid the recognition of additional compensation expenses for financial reporting purposes).
|
|
4. |
Option Term.
|
|
a. |
Maximum Term. This Option will in all events expire at the close of business at Company headquarters on the Expiration
Date specified in the Notice, unless it terminates earlier in connection with the termination of Participant’s [employment] [service] (as provided below) or a Change in Control (as provided in the Plan).
|
|
b. |
Post-Termination Exercise Period. If Participant’s [employment] [service] terminates prior to the Expiration Date of
this Option other than for Cause, the unvested portion of this Option will automatically expire on Participant’s date of termination, and the vested portion of this Option will remain outstanding and exercisable for the following periods,
unless otherwise determined by the Committee and in no event after the Expiration Date of this Option:
|
i. |
ninety (90) days following a termination for any reason other than Cause, Disability, or death;
|
|
ii. |
twelve (12) months following a termination due to Disability; and
|
|
iii. |
twelve (12) months following the date of Participant’s death, if Participant dies while in [employment] [service], or during the period provided in clause (ii) above.
|
|
c. |
Termination for Cause. If Participant’s [employment] [service] is terminated for Cause, this Option will terminate and be forfeited immediately upon such Participant’s termination of
[employment] [service], and Participant will be prohibited from exercising any portion (including any vested portion) of this Option on or after the date of such termination. If Participant’s [employment] [service] is suspended pending an
investigation of whether Participant’s [employment] [service] will be terminated for Cause, all of Participant’s rights under this Option, including the right to exercise the Option, shall be suspended during the investigation period.
|
|
d. |
Determination of Termination Date. For purposes of this Option, Participant’s [employment] [service] will be considered
terminated as of the date Participant is no longer actively providing services to the Company Group (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the
jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any). The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of
this Option (including whether Participant may still be considered to be providing services while on a leave of absence).
|
|
e. |
No Notice of Option Expiration. Participant is responsible for keeping track of the Expiration Date and the
post-termination exercise periods following Participant’s termination of [employment] [service] for any reason. The Company is not obligated to provide further notice of such periods. In no event will this Option be exercised later than the
Expiration Date set forth in the Notice.
|
|
5. |
Non-Transferability of Option. This Option may not be transferred in any manner other than by will or by the laws of
descent or distribution or court order and may be exercised during the lifetime of Participant only by Participant. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs, successors, and
assigns of Participant.
|
|
6. |
Taxes.
|
|
a. |
Responsibility for Taxes. By accepting this Option, Participant acknowledges that, regardless of any action taken by
the Company or, if different, any member of the Company Group that employs Participant (the “Employer”), the ultimate liability for all Taxes is and remains Participant’s responsibility and may exceed the amount actually withheld by
the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Taxes in connection with any aspect of this Option, including, but
not limited to, the grant, vesting, or exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms
of the grant or any aspect of this Option to reduce or eliminate Participant’s liability for Taxes or achieve any particular tax result. Further, if Participant is subject to Taxes in more than one jurisdiction, as applicable, Participant
acknowledges that the Company and/or the Employer may be required to withhold or account for Taxes in more than one jurisdiction. Participant agrees to pay to the Company or the Employer any amount of Taxes that the Company or the Employer
may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means described in this Section. The Company may refuse to issue or deliver the Shares or the proceeds of the
sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Taxes.
|
|
b. |
Withholding. Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate
arrangements satisfactory to the Company and/or the Employer to satisfy all Taxes. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard
to all Taxes by one or a combination of the following:
|
|
i. |
withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any member of the Company Group;
|
|
ii. |
withholding from proceeds of the sale of Shares acquired at exercise of this Option either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without
further consent);
|
|
iii. |
withholding Shares to be issued upon exercise of this Option, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate
applicable in Participant’s jurisdiction;
|
|
iv. |
Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
|
|
v. |
any other arrangement approved by the Committee and permitted under applicable law.
|
|
7. |
Notice of Disqualifying Disposition of Incentive Stock Option Shares. If Participant is subject to Taxes in the United
States and sells or otherwise disposes of any of the Shares acquired pursuant to an Incentive Stock Option on or before the later of (a) two years after the Grant Date, or (b) one year after the exercise date, Participant will immediately
notify the Company in writing of such disposition.
|
|
8. |
Nature of Grant. In accepting this Option, Participant acknowledges,
understands and agrees that: (a) the Plan is established voluntarily by the Company, is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; (b) the grant of
this Option is voluntary and occasional and does not create any contractual or other right to receive future grants, or benefits in lieu of grants, even if grants have been made in the past; (c) all decisions with respect to future grants,
if any, will be at the sole discretion of the Company; (d) Participant is voluntarily participating in the Plan; (e) this Option and the Shares allocated to this Option are not intended to replace any pension rights or compensation and are
outside the scope of Participant’s employment contract, if any; (f) this Option and the Shares allocated to this Option, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without
limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; (g) unless otherwise provided in
the Plan or by the Company in its discretion, this Option and the benefits evidenced by this Award Agreement do not create any entitlement to have this Option or any such benefits transferred to, or assumed by, another company nor to be
exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and (h) neither the Company nor any member of the Company Group shall be liable for any foreign exchange rate fluctuation between
Participant’s local currency and the United States Dollar or the selection by the Company or any member of the Company Group in its sole discretion of an applicable foreign exchange rate that may affect the value of this Option (or the
calculation of income or Taxes thereunder) or of any amounts due to Participant pursuant to the settlement of this Option or the subsequent sale of the Shares allocated to this Option.
|
|
9. |
Code Section 409A. It is intended that the terms of this Option will not result in the imposition of any tax liability
pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Notwithstanding the foregoing, no member of the Company Group shall be liable for any costs incurred by
Participant under Section 409A of the Code and similar state laws.
|
|
10. |
Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any
other grant materials by and among the Company and the members of the Company Group for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that the Company and the
members of the Company Group may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Shares or directorships held in the Company, details of all grants, or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”),
for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be transferred to such stock plan service provider as may be selected by the Company, presently or in the future, which may be
assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the
United States) may have different data privacy laws and protections than Participant’s country. Participant authorizes the Company, the stock plan service provider as may be selected by the Company, and any other possible recipients which
may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing Participant’s participation in the Plan. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his
or her consent, or instructs the Company to cease the processing of the Data, his or her employment or service will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent or instructing the
Company to cease processing, is that the Company would not be able to grant Participant the Option or any other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her
consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local
human resources representative.
|
|
11. |
Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award
Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of the State of Delaware, or the federal courts for the United States for the
District of Delaware, and no other courts, where this grant is made and/or to be performed.
|
|
12. |
Addendum and Sub-Plans. Notwithstanding any provisions in this Award
Agreement, this Option shall be subject to any special terms and conditions set forth in any Addendum to this Award Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Addendum (if
any), the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The
Addendum (if any) constitutes part of this Award Agreement. Further, the Plan shall be deemed to include any special terms and conditions set forth in any applicable sub-plan for Participant’s country, and, if Participant relocates to a
country for which the Company has established a sub-plan, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or
advisable for legal or administrative reasons.
|
|
13. |
Entire Agreement; Enforcement of Rights; Amendment. This Award Agreement, together with the Plan, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, agreements, commitments, negotiations and arrangements between them. Except as contemplated by the
Plan, no modification of or amendment to this Award Agreement, nor any waiver of any rights under this Award Agreement, shall be effective unless in writing signed by the parties to this Award Agreement to the extent it would alter or
impair rights or obligations under the Option. The failure by either party to enforce any rights under this Award Agreement shall not be construed as a waiver of any rights of such party. Notwithstanding anything to the contrary in the Plan
or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition or costs under Section 409A of the Code in connection with this Option.
|
|
14. |
Severability. If one or more provisions of this Award Agreement are held to be unenforceable under applicable laws, the
parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement,
(b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.
|
|
15. |
Language. If Participant has received this Award Agreement, the Plan or any
other document related to this Option and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
|
16. |
Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s
participation in the Plan, on this Option and on any Shares purchased upon exercise of this Option, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept
any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
|
17. |
Notices. Any notice, demand or request required or permitted to be given
under this Award Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax, or forty-eight (48) hours after being deposited in the U.S. mail or a comparable
foreign mail service, as certified or registered mail with postage or shipping charges prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or
if no address is specified on the signature page, at the most recent address, email or fax number set forth in the Company’s books and records.
|
|
18. |
Counterparts. This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile, email or other electronic execution and delivery of this Award Agreement (including but not limited to execution
by electronic signature or click-through electronic acceptance) shall constitute valid and binding execution and delivery for all purposes and shall be deemed to be, and have the effect of, an original signature.
|
|
19. |
Successors and Assigns. The rights and benefits of this Award Agreement shall inure to the benefit of, and be
enforceable by the Company’s successors and assigns.
|
|
20. |
Consent to Electronic Delivery and Participation. By accepting this Option, Participant agrees to participate in the
Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan
prospectuses (if any), and all other documents, communications, or information related to this Option and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the
internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company
a paper copy of any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to Company’s stock plan administration.
|
Participant Name:
|
[ ]
|
Grant ID:
|
[ ]
|
Grant Date:
|
[ ]
|
Number of RSUs:
|
[ ]
|
Country at Grant:
|
[ ]
|
Vesting
Commencement Date:
|
[ ]
|
Vesting Schedule:
|
[ ]
|
|
1. |
This RSU Grant is governed by all the terms and conditions of the Plan applicable to the RSU Grant, whether or not such terms and conditions are stated in the Award Agreement. The RSU Grant is governed by the terms and conditions of this
Award Agreement. In the event of a conflict between the terms of the Plan and this Award Agreement, the terms of the Plan will prevail.
|
|
2. |
Participant has received a copy of the Plan, this Award Agreement, the Plan prospectus (if required under applicable law), and the Company’s insider trading policy, and represents that he or she has read these documents and is familiar
with their terms. Participant further agrees to accept as binding, conclusive, and final all decisions and interpretations of the Committee regarding any questions relating to the RSU Grant and the Plan.
|
|
3. |
Vesting of the RSUs is subject to Participant’s continued employment as an [employment] [service] as an [employee] [director] [consultant], which is for an unspecified duration and may be terminated at any time, with or without Cause, and
nothing in this Award Agreement or the Plan changes the nature of that relationship.
|
|
4. |
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding participation in the Plan. Participant should consult with his
or her own personal tax, legal, and financial advisors regarding participation in the Plan before taking any action related to the Plan.
|
|
5. |
Participant consents to electronic delivery and participation as set forth in this Award Agreement.
|
|
6. |
If Participant does not accept or decline the RSUs within 60 days of the Grant Date or by such other date that may be communicated to Participant by the Company,
the Company will accept the RSUs on Participant’s behalf and Participant will be deemed to have accepted the terms and conditions of the RSUs set forth in the Plan and this Award Agreement. If Participant wishes to decline the RSUs,
Participant should promptly notify [●] at [●]. If Participant declines the RSUs, the RSUs will be cancelled and no benefits
from the RSUs nor any compensation or benefits in lieu of the RSUs will be provided to Participant.
|
Eterna Therapeutics Inc.
|
Participant
|
|||
By:
|
Signature:
|
|||
Title:
|
Date:
|
|
1. |
Grant of RSUs. Capitalized terms used in the Award Agreement but not defined in the Award Agreement will have the same
meanings specified in the Plan. An RSU is a non-voting unit of measurement which is deemed solely for bookkeeping purposes to be equivalent to one outstanding share of Common Stock (a “Share”). The RSUs are used solely as a device to
determine the number of Shares to eventually be issued to Participant if such RSUs vest. The RSUs shall not be treated as property or as a trust fund of any kind.
|
|
2. |
Settlement. On or as soon as administratively practical (and within thirty (30) days) following the applicable date of
vesting under the Vesting Schedule set forth in the Notice (a “Vesting Date”), the Company will deliver to Participant a number of Shares (either by delivering one or more certificates for such Shares or by entering such Shares in
book entry form, as determined by the Company in its discretion) equal to the number of RSUs subject to the RSU Grant that vest on the applicable Vesting Date, subject to payment by Participant of any applicable taxes that the Company or
any member of the Company Group is required by any law or regulation of any governmental authority, whether federal, state or local, domestic or foreign (“Taxes”) to withhold in connection with such delivery. No fractional RSUs or
rights for fractional Shares shall be created pursuant to this Award Agreement.
|
|
3. |
Dividend and Voting Rights. Unless and until such time as Shares are issued in settlement of vested RSUs, Participant
will have no ownership of the Shares allocated to the RSUs, and will have no rights to vote such Shares and no rights to dividends.
|
|
4. |
Non-Transferability of RSUs. The RSUs and any interest therein will not be sold, assigned, transferred, pledged,
hypothecated, or otherwise disposed of in any manner other than by will or by the laws of descent or distribution or court order. The terms of the Plan and this Award Agreement will be binding upon the executors, administrators, heirs,
successors, and assigns of Participant.
|
|
5. |
Termination. If Participant’s [employment][service] terminates for any reason, all unvested RSUs will be forfeited to
the Company, and all rights of Participant to such RSUs will immediately terminate without payment of any consideration to Participant. The Committee shall have the exclusive discretion to determine when Participant is no longer actively
providing services for purposes of this RSU Grant (including whether Participant may still be considered to be providing services while on a leave of absence).
|
|
6. |
Taxes.
|
|
a. |
Responsibility for Taxes. By accepting this RSU Grant, Participant acknowledges that, regardless of any action taken by
the Company or, if different, any member of the Company Group that employs Participant (the “Employer”), the ultimate liability for all Taxes is and remains Participant’s
responsibility and may exceed the amount actually withheld by the Company or the Employer. Participant further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any
Taxes in connection with any aspect of the RSU Grant, including, but not limited to, the grant, vesting, or settlement of the RSU Grant, the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any dividends;
and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the RSU Grant to reduce or eliminate Participant’s liability for Taxes or achieve any particular tax result. Further, if Participant
is subject to Taxes in more than one jurisdiction, as applicable, Participant acknowledges that the Company and/or the Employer may be required to withhold or account for Taxes in more than one jurisdiction. Participant agrees to pay to the
Company or the Employer any amount of Taxes that the Company or the Employer may be required to withhold or account for as a result of the RSUs that cannot be satisfied by the means described in this Section. The Company may refuse to issue
or deliver the Shares, or the proceeds of the sale of Shares, if Participant fails to comply with Participant’s obligations in connection with the Taxes.
|
|
b. |
Withholding. Prior to the relevant taxable or Taxes withholding event, as applicable, Participant agrees to make
adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Taxes. In this regard, Participant authorizes the Company or the Employer, or their respective agents, at their discretion, to satisfy the obligations with
regard to all Taxes by one or a combination of the following:
|
i. |
withholding from Participant’s wages or other cash compensation paid to Participant by the Company and/or the Employer or any member of the Company Group;
|
|
ii. |
withholding from proceeds of the sale of Shares acquired on settlement of the RSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on Participant’s behalf pursuant to this authorization and without
further consent);
|
|
iii. |
withholding Shares to be issued upon settlement of the RSUs, provided the Company only withholds a number of Shares necessary to satisfy no more than the withholding amounts determined based on the maximum permitted statutory rate
applicable in Participant’s jurisdiction;
|
|
iv. |
Participant’s payment of a cash amount (including by check representing readily available funds or a wire transfer); or
|
|
v. |
any other arrangement approved by the Committee and permitted under applicable law.
|
|
7. |
Nature of Grant. In accepting the RSUs, Participant acknowledges, understands
and agrees that: (a) the Plan is established voluntarily by the Company, is discretionary in nature, and may be amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan; (b) the grant of the RSUs is
voluntary and occasional and does not create any contractual or other right to receive future grants, or benefits in lieu of grants, even if grants have been made in the past; (c) all decisions with respect to future grants, if any, will be
at the sole discretion of the Company; (d) Participant is voluntarily receiving the RSUs; (e) the RSUs and the Shares allocated to the RSUs are not intended to replace any pension rights or compensation and are outside the scope of
Participant’s employment contract, if any; (f) the RSUs and the Shares allocated to the RSUs, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any
severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; (g) unless otherwise provided in the Plan or by the Company
in its discretion, the RSUs and the benefits evidenced by this Award Agreement do not create any entitlement to have the RSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted
for, in connection with any corporate transaction affecting the Shares; and (h) neither the Company nor any member of the Company Group shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the
United States Dollar or the selection by the Company or any member of the Company Group in its sole discretion of an applicable foreign exchange rate that may affect the value of the RSUs (or the calculation of income or Taxes thereunder)
or of any amounts due to Participant pursuant to the settlement of the RSUs or the subsequent sale of the Shares allocated to the RSUs.
|
|
8. |
Code Section 409A. It is intended that the terms of the RSUs will not result in the imposition of any tax liability
pursuant to Section 409A of the Code, and this Award Agreement shall be construed and interpreted consistent with that intent. Payments pursuant to this Restricted Stock Unit Grant are intended to constitute separate payments for purposes
of Section 409A of the Code. Notwithstanding the foregoing, no member of the Company Group shall be liable for any costs incurred by Participant under Section 409A of the Code and similar state laws.
|
|
9. |
Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Award Agreement and any
other grant materials by and among the Company and the members of the Company Group for the purpose of implementing, administering and managing Participant’s participation in the Plan. Participant understands that the Company and the
members of the Company Group may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any Shares or directorships held in the Company, details of all grants, or any other entitlement to Shares awarded, canceled, received, vested, unvested or outstanding in Participant’s favor (“Data”),
for the purpose of implementing, administering and managing the Plan. Participant understands that Data will be transferred to such stock plan service provider as may be selected by the Company, presently or in the future, which may be
assisting the Company with the implementation, administration and management of the Plan. Participant understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the
United States) may have different data privacy laws and protections than Participant’s country. Participant authorizes the Company, the stock plan service provider as may be selected by the Company, and any other possible recipients which
may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering
and managing the Plan. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, or instructs
the Company to cease the processing of the Data, his or her employment or service will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent or instructing the Company to cease processing,
is that the Company would not be able to grant Participant the RSUs or any other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect
Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources
representative.
|
|
10. |
Governing Law and Venue. This Award Agreement shall be governed by and construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this grant or this Award
Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Delaware and agree that such litigation shall be conducted only in the courts of the State of Delaware, or the federal courts for the United States for the
District of Delaware, and no other courts, where this grant is made and/or to be performed.
|
|
11. |
Addendum and Sub-Plans. Notwithstanding any provisions in this Award
Agreement, the RSUs shall be subject to any special terms and conditions set forth in any Addendum to this Award Agreement for Participant’s country. Moreover, if Participant relocates to one of the countries included in the Addendum (if
any), the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The
Addendum (if any) constitutes part of this Award Agreement. Further, the Plan shall be deemed to include any special terms and conditions set forth in any applicable sub-plan for Participant’s country, and, if Participant relocates to a
country for which the Company has established a sub-plan, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or
advisable for legal or administrative reasons.
|
|
12. |
Entire Agreement; Enforcement of Rights; Amendment. This Award Agreement, together with the Plan, sets forth the entire
agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, agreements, commitments, negotiations and arrangements between them. Except as contemplated by the
Plan, no modification of or amendment to this Award Agreement, nor any waiver of any rights under this Award Agreement, shall be effective unless in writing signed by the parties to this Award Agreement to the extent it would alter or
impair rights or obligations under the RSUs. The failure by either party to enforce any rights under this Award Agreement shall not be construed as a waiver of any rights of such party. Notwithstanding anything to the contrary in the Plan
or this Award Agreement, the Company reserves the right to revise this Award Agreement as it deems necessary or advisable, in its sole discretion and without the consent of Participant, to comply with Section 409A of the Code or to
otherwise avoid imposition of any additional tax or income recognition or costs under Section 409A of the Code in connection with the RSUs.
|
|
13. |
Severability. If one or more provisions of this Award Agreement are held to be unenforceable under applicable laws, the
parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Award Agreement,
(b) the balance of this Award Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of this Award Agreement shall be enforceable in accordance with its terms.
|
|
14. |
Language. If Participant has received this Award Agreement, the Plan or any
other document related to the RSUs and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
|
15. |
Imposition of Other Requirements. The Company reserves the right to impose other requirements on Participant’s
participation in the Plan, on the RSUs and on any Shares received under the RSUs, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Participant to accept any additional
agreements or undertakings that may be necessary to accomplish the foregoing.
|
|
16. |
Notices. Any notice, demand or request required or permitted to be given
under this Award Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email or fax, or forty-eight (48) hours after being deposited in the U.S. mail or a comparable
foreign mail service, as certified or registered mail with postage or shipping charges prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, as subsequently modified by written notice, or
if no address is specified on the signature page, at the most recent address, email or fax number set forth in the Company’s books and records.
|
17. |
Counterparts. This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Facsimile, email or other electronic execution and delivery of this Award Agreement (including but not limited to execution
by electronic signature or click-through electronic acceptance) shall constitute valid and binding execution and delivery for all purposes and shall be deemed to be, and have the effect of, an original signature.
|
|
18. |
Successors and Assigns. The rights and benefits of this Award Agreement shall inure to the benefit of, and be
enforceable by the Company’s successors and assigns.
|
|
19. |
Consent to Electronic Delivery and Participation. By accepting the RSUs, Participant agrees to participate in the Plan
through an on-line or electronic system established and maintained by the Company or a third party designated by the Company, and consents to the electronic delivery of the Award Agreement, the Plan, account statements, Plan prospectuses
(if any), and all other documents, communications, or information related to the RSUs and current or future participation in the Plan. Electronic delivery may include the delivery of a link to the Company intranet or the internet site of a
third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at the Company’s discretion. Participant acknowledges that Participant may receive from the Company a paper copy of
any documents delivered electronically at no cost if Participant contacts the Company by telephone, through a postal service, or electronic mail to the Company’s stock plan administrator.
|
ETERNA THERAPEUTICS, INC.
|
||
/s/ Sandra M. Gurrola
|
||
By:
|
Sandra Gurrola
|
|
Its:
|
Sr. VP of Finance
|
|
EXECUTIVE
|
||
/s/ Dorothy Clarke
|
||
Dorothy Clarke
|
Subsidiary
|
State Or Country of Organization
|
|
Eterna Therapeutics LLC
|
Delaware
|
/s/ Grant Thornton LLP
|
|
New York, New York
|
|
March 14, 2024
|
|
(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
|
|
(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: March 14, 2024
|
/s/ Sanjeev Luther
|
|
Sanjeev Luther
President and Chief Executive Officer
Eterna Therapeutics Inc.
|
|
(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
|
|
(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: March 14, 2024
|
/s/ Sandra Gurrola
|
|
Sandra Gurrola
Senior Vice President of Finance
Eterna Therapeutics Inc.
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Dated: March 14, 2024
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/s/ Sanjeev Luther
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Sanjeev Luther
President and Chief Executive Officer
Eterna Therapeutics Inc.
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Dated: March 14, 2024
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/s/ Sandra Gurrola
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Sandra Gurrola
Senior Vice President of Finance
Eterna Therapeutics Inc.
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I.
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Introduction
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II.
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Administration
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III.
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Covered Executives
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IV.
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Incentive-Based Compensation
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Annual bonuses and other short- and long-term cash incentives.
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Stock options.
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Stock appreciation rights.
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Restricted stock or restricted stock units.
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Performance shares or performance units.
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Company stock price.
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Total shareholder return.
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Revenues.
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Net income.
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Earnings before interest, taxes, depreciation, and amortization (EBITDA).
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Funds from operations.
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Liquidity measures such as working capital or operating cash flow.
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Return measures such as return on invested capital or return on assets.
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Earnings measures such as earnings per share.
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V.
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Recoupment; Accounting Restatement
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VI.
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Excess Incentive Compensation: Amount Subject to Recovery
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VII.
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Method of Recoupment
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requiring reimbursement of cash Incentive-Based Compensation previously paid;
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seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;
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offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;
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cancelling outstanding vested or unvested equity awards; and/or
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taking any other remedial and recovery action permitted by law, as determined by the Board.
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VIII.
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No Indemnification; Successors
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IX.
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Exception to Enforcement
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X.
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Interpretation
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XI.
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Effective Date
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XII.
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Amendment; Termination
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XIII.
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Other Recoupment Rights
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1. |
Covered Executive has read and understands the Clawback Policy and has had an opportunity to ask questions to the Company regarding the Clawback Policy.
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2. |
Covered Executive is bound by and to abide by the terms of the Clawback Policy and intends for the Clawback Policy to be applied to the fullest extent of the law.
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3. |
The Clawback Policy shall apply to any and all Incentive-Based Compensation that is approved, awarded or granted to Covered Executive on or after the Effective Date or received by Covered Executive during the
Look-Back Period (as defined in the Clawback Policy).
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4. |
Covered Executive is not entitled to indemnification or right of advancement of expenses in connection with any enforcement of the Clawback Policy by the Company.
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5. |
In the event of any inconsistency between the provisions of the Clawback Policy and this Acknowledgment or any applicable incentive-based compensation arrangements, employment agreement, equity agreement,
indemnification agreement or similar agreement or arrangement setting forth the terms and conditions of any Incentive-Based Compensation, the terms of the Clawback Policy shall govern.
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Name:
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