As filed with the Securities and Exchange Commission on July 16, 2026
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BlossomHill Therapeutics, Inc.
(Exact name of Registrant as specified in its charter)
| Delaware | 2834 | 85-1578711 | ||
| (State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
10255 Science Center Drive
Suite 200
San Diego, California 92121
(858) 732-3880
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
J. Jean Cui, Ph.D.
President and Chief Executive Officer
10255 Science Center Drive
Suite 200
San Diego, California 92121
(858) 732-3880
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
| Kenneth J. Rollins Charles S. Kim Edmond J. Lay Dylan S. Kornbluth Cooley LLP 10265 Science Center Drive San Diego, California 92121 (858) 550-6000 |
Vincent Liptak, J.D., Ph.D., MBA Executive Vice President and General Counsel BlossomHill Therapeutics, Inc. 10255 Science Center Drive Suite 200 San Diego, California 92121 (858) 732-3880 |
Matthew T. Bush Latham & Watkins LLP 12670 High Bluff Drive San Diego, California, 92130 (858) 523-5400 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended, check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| Non-accelerated filer | ☒ | Smaller reporting company | ☒ | |||
| Emerging growth company | ☒ | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.
Subject to completion, dated July 16, 2026
Preliminary prospectus
shares
Common stock
This is an initial public offering of shares of common stock of BlossomHill Therapeutics, Inc. We are offering shares of our common stock to be sold in this offering. The initial public offering price is expected to be between $ and $ per share.
Prior to this offering, there has been no public market for our common stock. We have applied to list our common stock on The Nasdaq Global Select Market under the symbol “BLSM,” and this offering is contingent upon obtaining such approval.
We are an “emerging growth company” and a “smaller reporting company” as defined under the U.S. federal securities laws and, as such, have elected to comply with certain reduced public company reporting requirements.
| Per share | Total | |||||||
| Initial public offering price |
$ | $ | ||||||
| Underwriting discounts and commissions(1) |
$ | $ | ||||||
| Proceeds to BlossomHill Therapeutics, Inc., before expenses |
$ | $ | ||||||
| (1) | See the section titled “Underwriting” for a description of the compensation payable to the underwriters. |
We have granted the underwriters an option for a period of 30 days to purchase up to an additional shares of our common stock.
Investing in the common stock involves a high degree of risk. Please see the section titled “Risk factors” beginning on page 14.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares to purchasers on or about , 2026.
| J.P. Morgan | Leerink Partners | Guggenheim Securities | LifeSci Capital | H.C. Wainwright & Co. |
, 2026
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Through and including , 2026 (the 25th day after the date of this prospectus), all dealers effecting transactions in our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.
Neither we nor the underwriters have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus, any amendment or supplement to this prospectus or in any free writing prospectus we may authorize to be delivered or made available to you. Neither we nor the underwriters take responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date on the front cover of this prospectus, or other earlier date stated in this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.
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For investors outside of the United States: Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.
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This summary highlights selected information included elsewhere in this prospectus. This summary does not contain all of the information you should consider before investing in our common stock. You should read this entire prospectus carefully, including the sections titled “Risk factors,” “Management’s discussion and analysis of financial condition and results of operations” and “Special note regarding forward-looking statements,” and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision. Unless the context otherwise requires, all references in this prospectus to “BlossomHill Therapeutics,” “BlossomHill,” “Registrant,” “we,” “us,” “our” and “Company” refer to BlossomHill Therapeutics, Inc.
Overview
We are a clinical-stage biopharmaceutical company applying our intentional, chemistry-based approach to develop innovative small molecule medicines that address significant unmet medical needs in cancer treatment. With each of our programs, we combine a deep understanding of disease and protein dynamics with our structure-based rational drug design expertise to identify the specific structural liabilities that limit existing therapies or approaches, and then design novel chemical scaffolds to directly address these limitations. Our scientific founder and the team we have assembled have a proven track record of developing innovative small molecule medicines that overcome the limitations of existing therapies, including multiple approved therapies that have delivered transformational patient outcomes.
Our initial development efforts are focused on our two clinical-stage programs: BH-30643, an investigational, non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of epidermal growth factor receptor (EGFR)-mutant non-small cell lung cancer (NSCLC), and BH-30236, an investigational macrocyclic CDC-like kinase (CLK) inhibitor being evaluated first in relapsed or refractory acute myeloid leukemia (R/R AML) and higher-risk myelodysplastic syndromes (HR-MDS). We also have a preclinical-stage product candidate, BH-501284, that leverages a novel chemical scaffold to selectively target and modulate activated KRAS.
Our most advanced product candidate, BH-30643, is an OMNI-EGFR inhibitor being evaluated in SOLARA, a global Phase 1/2 clinical trial in patients with EGFR-mutant NSCLC. While there are commercially available drugs targeting EGFR subtypes, there is a fragmentation of care in EGFR-mutant NSCLC because no drug is effective across all EGFR mutations. Moreover, the durability of response to prior-generation EGFR tyrosine kinase inhibitors (TKIs) has frequently been limited by the emergence of acquired on-target resistance mutations, notably the T790M gatekeeper mutation for first- and second-generation EGFR TKIs and C797S-mediated resistance for third-generation EGFR TKIs, such as osimertinib. BH-30643 is designed to address a broad spectrum of EGFR mutations, including classical mutations, on-target resistance mutations such as C797S and T790M, atypical mutations and exon 20 insertion mutations, with selectivity over wild-type EGFR. The SOLARA Phase 1/2 clinical trial is currently enrolling patients across dose expansion cohorts in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort, a population with no currently approved targeted therapy. To date, treatment with BH-30643 has been evaluated for safety, pharmacokinetics and preliminary efficacy in patients with EGFR-mutant NSCLC, including in patients with the C797S resistance mutation across diverse molecular contexts (with or without T790M) in the setting of classical or atypical mutations, and in TKI-naive patients with classical mutations. For additional details on the results observed in patients dosed with BH-30643, please see the section titled “Business—BH-30643: OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC.” We believe the early clinical data observed in this trial support a near-term development path in C797S resistance and establish the foundation for BH-30643’s potential against a broad spectrum of
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EGFR activating mutations. We plan to seek an end-of-Phase 1 meeting with the U.S. Food and Drug Administration (FDA) regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026.
Our second clinical-stage product candidate, BH-30236, is a CLK inhibitor currently being evaluated in an ongoing Phase 1 clinical trial in patients with R/R AML and HR-MDS. BH-30236 represents a novel approach to cancer treatment through the inhibition of CLK to target aberrant alternative mRNA splicing (aberrant alternative splicing), a defining feature implicated in cancer progression and therapeutic resistance across both hematologic malignancies and solid tumors. Our Phase 1 clinical trial is currently enrolling patients in the dose escalation part of the trial and is evaluating BH-30236 as a monotherapy and in combination with the BCL-2 inhibitor venetoclax, the established standard of care therapy for acute myeloid leukemia (AML) patients. To date, BH-30236 has been evaluated for safety, pharmacokinetics and preliminary efficacy across multiple dose levels as a monotherapy and in combination with venetoclax. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027.
We are also advancing our pan-KRAS program, initially focusing on our preclinical product candidate, BH-501284, which is designed using a novel chemical scaffold to achieve prolonged, potent and selective inhibition of KRAS mutations, but sparing HRAS and NRAS. We believe this molecule, which leverages a newly designed non-covalent scaffold, is unique in its potential to achieve tight and durable binding, a feature described as “pseudo-irreversible” binding. BH-501284 has demonstrated potent cellular pan-KRAS activity, achieved tumor regression at low oral dose levels in multiple KRAS-mutant mouse tumor models and improved oral bioavailability across species. We are currently conducting Investigational New Drug Application (IND) enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027.
Our pipeline
We are developing a wholly-owned pipeline of two clinical-stage product candidates and one preclinical-stage product candidate, as represented in the figure below.
| * | EOP1: End-of-Phase 1 |
BH-30643: OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC
Lung cancer is the leading cause of cancer-related death worldwide. NSCLC accounts for approximately 85% of all lung cancer cases, and, according to GlobalData, approximately 316,000 patients were diagnosed with EGFR-
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mutant NSCLC across key global markets of the United States, Europe, Japan and China in 2025. Activating mutations in the EGFR gene represent the most common targetable oncogenic driver in NSCLC and define a clinically and molecularly distinct patient population. A wide variety of EGFR mutations broadly grouped into three categories have been reported: classical mutations (exon 19 deletion and L858R mutation, collectively representing approximately 80% of EGFR mutations), atypical mutations (such as G719X, L861Q and S768I, collectively representing approximately 10% of EGFR mutations), and exon 20 insertion mutations (approximately 10% of EGFR mutations).
Three generations of EGFR TKIs are primarily approved for classical EGFR-mutant NSCLC, with treatment durations averaging less than approximately two years, as resistance typically develops by this point and limits further treatment. Importantly, at the time treatment resistance develops, the EGFR mutations present in NSCLC can evolve further, with the emergence of on-target resistance mutations such as C797S, T790M, L718X and G724X. First and second generation EGFR TKIs have a chemical group extending beyond the T790 residue, referred to as the “back-pocket motif,” and are vulnerable to resistance driven by the T790M gatekeeper mutation; newer TKIs that utilize a similar scaffold inherit this resistance vulnerability. Third generation EGFR TKIs rely on covalent binding for potency and are vulnerable to the C797S resistance mutation which blocks the necessary covalent binding. This C797S mutation is the most common EGFR mutation driving resistance to third generation EGFR-targeted therapy and is detected in approximately 13% of patients at the time of resistance, per several recent publications.
We estimate there are approximately 3,200 NSCLC patients annually in the United States with C797S-driven resistance and considerably more globally. There are currently no approved oral targeted therapies in the United States for patients with C797S-mediated resistance to third generation EGFR TKIs, the current standard of care.
Our most advanced product candidate, BH-30643, is a non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC. BH-30643 is designed to address a broad spectrum of EGFR mutations, including classical mutations, on-target resistance mutations such as C797S and T790M, atypical mutations and exon 20 insertion mutations, with selectivity over wild-type EGFR. BH-30643 is being evaluated in SOLARA, a global Phase 1/2, first-in-human clinical trial currently enrolling patients at over 40 sites in 10 countries. Ongoing dose expansion cohorts are enrolling in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort. For additional information, please see the section titled “Business—BH-30643: OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC.” We believe the early clinical data observed in this trial support a near-term development path in C797S resistance and establish the foundation for BH-30643’s potential against a broad spectrum of EGFR activating mutations.
We plan to seek an end-of-Phase 1 meeting with the FDA regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026. We expect to dose the first patient in our anticipated pivotal Phase 2 trial in the first quarter of 2027. We plan to report additional Phase 1 data on durability of response in the C797S population in the first half of 2027, the initial Phase 1 data on the chemotherapy combination cohort in the second half of 2027, and additional Phase 1 data on durability of response in the TKI-naive cohort for EGFR classical mutations in the second half of 2027.
BH-30236: CLK inhibitor for the treatment of R/R AML and HR-MDS
AML is the most common acute leukemia in adults, with approximately 21,000 new diagnoses and 11,000 deaths annually in the United States. Approximately one-third of AML patients do not have a complete
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remission or do not respond to frontline venetoclax and azacitidine combination therapy, and the majority of initial responders ultimately develop resistance and progressive disease. There is no currently approved targeted therapy for patients with resistance to venetoclax-based combination therapy in the absence of targetable genetic alterations. Patients with HR-MDS closely mirror AML in clinical course, frontline treatment, and unmet need in the relapsed and refractory setting. According to GlobalData, approximately 14,000 patients are diagnosed with HR-MDS annually in the United States.
AML and HR-MDS are, in part, diseases associated with aberrant alternative splicing. While it has been scientifically validated that CLK inhibition modulates aberrant alternative splicing across both hematologic malignancies and solid tumors, prior efforts to target alternative splicing through CLK inhibition have faced challenges clinically and encountered toxicities requiring intermittent dosing. The venetoclax-resistant and refractory segment, for which no approved therapy currently exists for broad application (or usage), represents our initial area of focus for BH-30236.
Our second clinical-stage product candidate, BH-30236, is a CLK inhibitor currently being evaluated in an ongoing Phase 1 first-in-human trial in patients with R/R AML and HR-MDS. Our Phase 1 clinical trial is currently enrolling patients in the dose escalation part of the trial and is evaluating BH-30236 as a monotherapy and in combination with the BCL-2 inhibitor venetoclax, the established standard of care therapy for AML patients. We also plan to explore the antileukemic effect of BH-30236 in additional myeloid malignancies as well as study the safety and antileukemic effect of BH-30236 with venetoclax plus azacitidine for the treatment of AML. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027.
BH-501284: pan-KRAS inhibitor
KRAS mutations are the most frequent oncogenic driver alterations in human cancer, present in approximately 25% of all malignancies — with particularly high prevalence in pancreatic ductal adenocarcinoma (approximately 90%), colorectal carcinoma (CRC) (approximately 40%) and lung adenocarcinomas (approximately 30%).
While covalent KRAS G12C inhibitors are now approved by the FDA to treat G12C-mutant NSCLC and CRC, these agents address only a single mutant allele and leave patients harboring other frequent oncogenic KRAS mutations, including G12D, G12V, G12S and G12A, without an approved targeted therapy. Investigational KRAS inhibitors leverage several emergent design approaches, including non-covalent Switch-II pocket inhibitors and tricomplex inhibitors. Though tricomplex RAS inhibitors offer broad activity, they face a greater adverse event burden in the clinic. To deliver a clinically meaningful pan-KRAS Switch-II inhibitor, we believe a fresh chemical scaffold is required to achieve both high cell potency and a favorable pharmacology profile, offering an opportunity to achieve a more durable benefit for patients.
We are advancing our preclinical pan-KRAS product candidate, BH-501284, which utilizes a novel Switch-II chemical scaffold designed to provide prolonged, potent and selective inhibition of KRAS, sparing HRAS and NRAS. In preclinical studies, BH-501284 achieved pseudo-irreversible binding characteristics with high binding affinity and a prolonged target residence time exceeding 54 hours, while maintaining high selectivity for KRAS. We are currently conducting IND-enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027.
Discovery programs
We are also advancing multiple discovery-stage efforts focused on validated and emerging new oncology targets. In addition, we believe our drug discovery approach may also have applicability beyond oncology.
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Our team and track record
We were founded by pioneers of small molecule drug design and are led by an executive and management team with deep expertise in oncology drug development and clinical research. We began operations in the summer of 2020, led by our scientific founder, President and Chief Executive Officer, J. Jean Cui, Ph.D. We have assembled a team with broad expertise, which has collectively been involved in the discovery or development of more than a dozen oncology programs and has guided multiple programs from first-in-human studies through FDA approval. Our team is united by a shared conviction that intentional, chemistry-based molecular design can deliver outcomes that broadly deployed screening-based approaches cannot and facilitates the speed of execution and capital efficiency required to successfully develop and launch new medicines.
Our scientific founder, Dr. Cui, is the lead inventor of three FDA-approved targeted cancer therapies—crizotinib (XALKORI), lorlatinib (LORBRENA) and repotrectinib (AUGTYRO)—the latter two of which leverage the macrocyclic small molecule approach that is also utilized in the design of our current clinical-stage candidates. Dr. Cui was elected to the National Academy of Engineering in 2024, one of the highest professional distinctions in engineering, and has received the American Chemical Society Heroes of Chemistry award (2013 and 2021) and the 38th Annual Inventor of the Year award (2011). Notably, lorlatinib, the second of Dr. Cui’s ALK-driven NSCLC medicines to be approved, demonstrated a median progression-free survival (PFS) exceeding 84 months, compared to approximately 10.9 months with crizotinib, a first-generation therapy. Repotrectinib, the lead program at Turning Point Therapeutics, which Dr. Cui co-founded, and which was acquired by Bristol-Myers Squibb in 2022, achieved an overall response rate (ORR) of 79% and a median progression-free survival of 35.7 months in TKI-naive ROS1-positive NSCLC. We believe the same design principles applied to develop these molecules may have the potential to produce a similarly meaningful advancement in EGFR-mutant NSCLC.
Our Chief Medical Officer, Geoffrey R. Oxnard, M.D., is a globally recognized authority on EGFR-mutant NSCLC and the co-author of the first published description of the EGFR C797S resistance mutation—the principal acquired resistance mechanism to third-generation EGFR TKIs such as osimertinib, which BH-30643 is designed to overcome. Prior to joining BlossomHill, Dr. Oxnard served as Vice President, Global Head of Thoracic Cancers at Eli Lilly and Company (formerly Loxo Oncology at Lilly), where he led early- and late-phase clinical development of a broad thoracic oncology portfolio. Before that, he served as Senior Vice President, Head of Clinical Development at Foundation Medicine, where he contributed to the FDA approval of FoundationOne Liquid CDx and oversaw the launch of an emerging circulating tumor DNA monitoring portfolio. Dr. Oxnard is a practicing oncologist who was previously on the faculty of Dana-Farber Cancer Institute and Harvard Medical School for nearly 10 years.
Our Co-Founder and Executive Chairman, Y. Peter Li, Ph.D., MBA, previously co-founded Turning Point Therapeutics and served as its Chairman and Chief Executive Officer leading up to its successful IPO in 2019. Our Chief Financial Officer, Jason Keyes, MBA, brings nearly 25 years of biotechnology finance experience, including roles as Chief Financial Officer at Equillium and Orexigen Therapeutics, and prior leadership positions at Amgen and Amylin Pharmaceuticals, as well as having served as director and Audit Committee chairman of multiple publicly-traded oncology therapeutic companies. Our General Counsel, Vincent P. Liptak, JD, Ph.D., MBA, brings over 25 years of legal experience with a focus on intellectual property law, including roles as Life Sciences Practice Co-Chair at Barnes & Thornburg, where he represented Turning Point Therapeutics as intellectual property counsel, and previously served as lead patent counsel for numerous programs at Pfizer.
Since our inception, we have raised over $257 million in capital from experienced healthcare-focused investors, including our 5% or greater holders Cormorant Asset Management, OrbiMed, Vivo Capital, and Janus Henderson Investors. Prospective investors should not rely on the investment decisions of our existing investors, as these
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investors may have different risk tolerances and purchased their shares in financings that were conducted at a significant discount to the price offered to the public in this offering.
Our strategy
We are committed to building a biopharmaceutical company focused on developing innovative small molecule medicines which address significant unmet medical needs in cancer treatment. Key elements of our strategy include:
| • | Advance the clinical development of BH-30643 in C797S-resistant EGFR-mutant NSCLC. |
| • | Continue to expand the clinical development of BH-30643 across the full spectrum of EGFR-mutant NSCLC, including earlier lines of therapy. |
| • | Advance the clinical development of BH-30236, our CLK inhibitor, as a novel approach for the treatment of AML and HR-MDS. |
| • | Advance BH-501284, our pan-KRAS inhibitor, into a first-in-human clinical trial in KRAS-mutant solid tumors. |
| • | Expand and diversify our pipeline through internal discovery efforts. |
| • | Build the capabilities needed to advance and commercialize our drug candidates. |
Summary of risk factors
Investing in our common stock involves significant risks. You should carefully consider the risks described in the section titled “Risk factors” immediately following this prospectus summary and elsewhere in this prospectus before making a decision to invest in our common stock. If we are unable to successfully address these risks and challenges, our business, financial condition, results of operations or prospects could be materially and adversely affected. In such case, the trading price of our common stock would likely decline, and you may lose all or part of your investment. Below is a summary of some of the more significant risks we face.
| • | We are a clinical-stage biopharmaceutical company with a limited operating history. We have not completed any pivotal or late-stage clinical trials and we have no history of commercializing products, which may make it difficult to evaluate our approach to the discovery and development of our product candidates and the prospects for our future viability. |
| • | Even if this offering is successful, we will require substantial additional financing to achieve our goals, which may cause dilution to our stockholders, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce, or terminate our product development or future commercialization efforts. |
| • | Our discovery and development programs are focused in part on precision medicines for patients with genetically defined cancers, which is a rapidly evolving and scientifically uncertain field, and our scientific approach, including with respect to BH-30643 and BH-30236, may never lead to marketable products. |
| • | We are early in our development efforts and only have two product candidates, BH-30643 and BH-30236, in early clinical development. Our pan-KRAS product candidate, BH-501284, is in the preclinical stage. If we are unable to continue to advance our product candidates through or into clinical development, obtain regulatory approval and ultimately commercialize our product candidates or we experience significant delays in doing so, our business will be materially harmed. |
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| • | Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial or real-world results. Our product candidates may not have favorable results in preclinical studies or clinical trials or receive regulatory approval on a timely basis, if at all. |
| • | We are currently developing and may in the future develop our product candidates in combination with other therapies, and safety or supply issues with combination-use products may delay or prevent development and approval of our product candidates. |
| • | We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. In addition, prior successes of our personnel may not be indicative of our future success. |
| • | Our success depends in large part on our ability to obtain, maintain, enforce, and defend the scope, ownership or control, validity and enforceability of our intellectual property rights, and we may not be able to do so. |
| • | We rely on third parties to conduct our preclinical studies and clinical trials. If these third parties that we rely on to execute our preclinical studies or clinical trials do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates. |
| • | We rely on third-party manufacturers and suppliers to supply our product candidates. The loss of our third-party manufacturers or suppliers, or their failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, within acceptable timeframes, or at all, would materially and adversely affect our business. |
| • | Competitive products may reduce or eliminate the commercial opportunity for our product candidates for our current or future indications. If our competitors develop technologies or product candidates more rapidly than we do, or their technologies are more effective or safer than ours, our ability to develop and successfully commercialize our product candidates may be adversely affected. |
| • | Even if our product candidates receive regulatory approval, they may fail to achieve the degree of market acceptance by physicians, patients and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable. |
| • | The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels, and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidates could limit our ability to market those products and decrease our ability to generate revenue. |
| • | The trading price of our common stock may be volatile and you could lose all or part of your investment. |
Corporate information
We were originally incorporated under the laws of the State of Delaware in June 2020. Our principal executive offices are located at 10255 Science Center Drive, Suite 200, San Diego, California 92121, and our telephone number is (858) 732-3880. Our website is www.bhtherapeutics.com. We have included our website in this prospectus solely as a textual reference. The information contained in, or accessible through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained in, or
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that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
This prospectus contains references to our trademarks and to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
Implications of being an emerging growth company and a smaller reporting company
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (JOBS Act), and we may remain an emerging growth company for up to five years following the closing of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we are not subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies; however, we may adopt certain new or revised accounting standards early. We would cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenue; (ii) the date on which we first qualify as a large accelerated filer under the rules of the U.S. Securities and Exchange Commission (SEC); (iii) the date on which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering.
We are also a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (Exchange Act). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year, and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
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The offering
| Common stock offered by us |
shares. |
| Option to purchase additional shares |
We have granted the underwriters an option to purchase up to additional shares of our common stock from us at any time within 30 days of the date of this prospectus. |
| Common stock to be outstanding immediately after this offering |
shares (or shares if the underwriters exercise their option to purchase additional shares in full). |
| Use of proceeds |
We estimate that the net proceeds to us from the sale of our common stock in this offering will be approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares in full), assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
| We intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, (i) to advance the clinical development of BH-30643 in EGFR-mutant NSCLC, including continuation of our ongoing global Phase 1/2 clinical trial and the planned initiation of a potential registrational Phase 2 clinical trial, (ii) to advance the clinical development of BH-30236, including continuation of our ongoing Phase 1 clinical trial of BH-30236 as both a monotherapy and combination therapy in AML, HR-MDS and other hematological malignancies, (iii) to complete IND-enabling studies, submit an IND and initiate a Phase 1 clinical trial of BH-501284, and (iv) the remainder for other research and development activities, as well as for capital expenditures, working capital and other general corporate purposes. See the section titled “Use of proceeds” for additional information. |
| Risk factors |
See the section titled “Risk factors” for additional information and a discussion of factors you should carefully consider before deciding to invest in our common stock. |
| Directed share program |
At our request, the underwriters have reserved up to 1% of the shares of common stock offered hereby, at the initial public offering price, to offer to our directors and officers and certain of our employees, business associates, investors and friends and family of our directors, officers, employees, business associates and investors. The sales will be made at our direction by J.P. Morgan Securities LLC, an underwriter of this offering, and its affiliates through a directed share program. The number of shares of common stock available for sale to the general public will be reduced to the extent these individuals purchase such reserved shares. Any reserved shares that are not so purchased |
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| will be offered by the underwriters to the general public on the same basis as the other shares offered by this prospectus. Except for any shares acquired by our directors and officers, shares purchased pursuant to the directed share program will not be subject to lock-up agreements with the underwriters. See the section titled “Underwriting” for additional information. |
| Proposed Nasdaq Global Select Market trading symbol |
“BLSM” |
The number of shares of our common stock to be outstanding after this offering set forth above is based on 99,653,723 shares of our common stock outstanding as of March 31, 2026, after giving effect to (i) the automatic conversion of all outstanding shares of our convertible preferred stock into 85,552,612 shares of our common stock in connection with the closing of this offering and (ii) the issuance of 1,711,033 shares of our common stock upon the exercise of outstanding options subsequent to March 31, 2026, of which shares remain subject to a right of repurchase as of the date of this prospectus (the Exercised Option Share Issuance), and excludes:
| • | 5,286,828 shares of our common stock issuable upon the exercise of stock options outstanding under the 2020 Equity Incentive Plan (2020 Plan) as of March 31, 2026, with a weighted-average exercise price of $1.18 per share, including 1,144,585 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $0.93 per share, of which shares remain subject to a right of repurchase as of the date of this prospectus; |
| • | 1,590,784 shares of our common stock issuable upon the exercise of stock options outstanding granted under the 2020 Plan subsequent to March 31, 2026, with a weighted-average exercise price of $2.73 per share, including 566,448 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $2.81 per share, of which shares remain subject to a right of repurchase as of the date of this prospectus; |
| • | shares of our common stock issuable upon the exercise of stock options to be granted to certain of our employees, executive officers and directors under our 2026 Equity Incentive Plan (2026 Plan), which will become effective upon the execution and delivery of the underwriting agreement for this offering, with an exercise price per share that is equal to the initial public offering price per share in this offering (the IPO Option Grants), as more fully described in the section titled “Executive and director compensation”; |
| • | shares of our common stock reserved for future issuance under our 2026 Plan (inclusive of the shares issuable under the IPO Option Grants), which will become effective upon the execution and delivery of the underwriting agreement for this offering (which shares include new shares plus the number of shares (not to exceed shares) that remain available for the issuance of awards under the 2020 Plan, at the time the 2026 Plan becomes effective, as more fully described in the section titled “Executive and director compensation—Equity incentive plans”), as well as any automatic increases in the number of shares of our common stock reserved for future issuance under the 2026 Plan; and |
| • | shares of our common stock reserved for future issuance under our 2026 Employee Stock Purchase Plan (ESPP), which will become effective upon the execution and delivery of the underwriting agreement for this offering, as well as any annual automatic increases in the number of shares of our common stock reserved for future issuance under the ESPP. |
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Unless otherwise indicated, the information in this prospectus reflects and assumes the following:
| • | the automatic conversion, in accordance with our existing certificate of incorporation, of all outstanding shares of our convertible preferred stock into an aggregate of 85,552,612 shares of our common stock in connection with the closing of this offering; |
| • | no exercise of the outstanding stock options other than the Exercised Option Share Issuance; |
| • | no exercise by the underwriters of their option to purchase up to additional shares of our common stock from us in this offering; |
| • | the filing and effectiveness of our amended and restated certificate of incorporation in Delaware in connection with the closing of this offering; |
| • | no purchases of shares of our common stock by existing stockholders or their affiliates pursuant to the directed share program or otherwise in this offering; and |
| • |
a one-for- reverse stock split of our common stock and convertible preferred stock to be effected as of , 2026. |
Summary financial data
The following tables summarize our financial data as of and for the periods indicated. We have derived the summary statements of operations data for the years ended December 31, 2024 and 2025 from our audited financial statements included elsewhere in this prospectus. We have also derived the summary interim condensed statements of operations data for the three months ended March 31, 2025 and 2026, and the summary interim condensed balance sheet data as of March 31, 2026 from our unaudited interim condensed financial statements included elsewhere in this prospectus. Our audited financial statements and unaudited interim condensed financial statements included elsewhere in this prospectus have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Our unaudited interim condensed financial statements were prepared on a basis consistent with our audited financial statements and include, in our opinion, adjustments of a normal and recurring nature that are necessary for the fair statement of the financial information set forth in those statements included elsewhere in this prospectus.
Our historical results presented below are not necessarily indicative of the results to be expected for any future period. The following summaries of our financial data should be read in conjunction with the sections titled “Risk factors,” “Capitalization,” and “Management’s discussion and analysis of financial condition and results of operations,” and our financial statements and the related notes included elsewhere in this prospectus. The summary financial data included in this section are not intended to replace the financial statements and are qualified in their entirety by our financial statements and the related notes included elsewhere in this prospectus.
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| Year ended December 31, | Three months ended March 31, |
|||||||||||||||
| (in thousands, except share and per share amounts) |
2024 | 2025 | 2025 | 2026 | ||||||||||||
| Statements of operations data: |
||||||||||||||||
| Operating expenses: |
||||||||||||||||
| Research and development |
$ | 31,810 | $ | 56,138 | $ | 9,572 | $ | 19,901 | ||||||||
| General and administrative |
4,591 | 7,886 | 1,882 | 2,206 | ||||||||||||
|
|
|
|||||||||||||||
| Total operating expenses |
36,401 | 64,024 | 11,454 | 22,107 | ||||||||||||
|
|
|
|||||||||||||||
| Loss from operations |
(36,401 | ) | (64,024 | ) | (11,454 | ) | (22,107 | ) | ||||||||
| Other income (expense), net: |
||||||||||||||||
| Interest income, net |
5,706 | 3,480 | 976 | 1,102 | ||||||||||||
| Other expense |
— | (11 | ) | — | (3 | ) | ||||||||||
|
|
|
|||||||||||||||
| Total other income, net |
5,706 | 3,469 | 976 | 1,099 | ||||||||||||
|
|
|
|||||||||||||||
| Net loss |
$ | (30,695 | ) | $ | (60,555 | ) | $ | (10,478 | ) | $ | (21,008 | ) | ||||
| Net loss per share attributable to common stockholders, basic and diluted(1) |
$ | (2.86 | ) | $ | (5.30 | ) | $ | (0.94 | ) | $ | (1.74 | ) | ||||
| Weighted-average shares outstanding, basic and diluted(1) |
10,730,731 | 11,424,996 | 11,181,337 | 12,084,191 | ||||||||||||
| Pro forma net loss per share attributable to common stockholders, basic and diluted (unaudited)(2) |
$ | $ | ||||||||||||||
| Pro forma weighted-average common shares outstanding, basic and diluted (unaudited)(2) |
||||||||||||||||
|
|
||||||||||||||||
| (1) | See Note 2 to our audited financial statements and Note 2 to our unaudited interim condensed financial statements included elsewhere in this prospectus for details on the calculation of net loss per share attributable to common stockholders, basic and diluted. |
| (2) | Pro forma net loss per share attributable to common stockholders, basic and diluted, is calculated giving effect to the automatic conversion of all outstanding shares of our convertible preferred stock into shares of our common stock and the Exercised Option Share Issuance. Pro forma net loss per share attributable to common stockholders does not include the shares expected to be sold and related proceeds to be received in this offering. Pro forma net loss per share attributable to common stockholders (unaudited) for the year ended December 31, 2025 and for the three months ended March 31, 2026 was calculated using the weighted-average number of shares of our common stock outstanding, including the pro forma effect of the automatic conversion of all outstanding shares of our convertible preferred stock into shares of our common stock and the Exercised Option Share Issuance, as if such conversion and issuance had occurred at the beginning of the period. |
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| As of March 31, 2026 | ||||||||||||
| (in thousands) | Actual | Pro forma(1) | Pro forma as adjusted(2)(3) |
|||||||||
| Balance sheet data: |
||||||||||||
| Cash and cash equivalents |
$ | 116,003 | $ | $ | ||||||||
| Working capital(4) |
103,545 | |||||||||||
| Total assets |
143,410 | |||||||||||
| Total liabilities |
38,707 | |||||||||||
| Convertible preferred stock |
256,823 | |||||||||||
| Accumulated deficit |
(156,037 | ) | ||||||||||
| Total stockholders’ deficit |
(152,120 | ) | ||||||||||
|
|
||||||||||||
| (1) | Gives effect to the automatic conversion of all outstanding shares of convertible preferred stock into an aggregate of 85,552,612 shares of our common stock and the related reclassification of the convertible preferred stock to permanent equity in connection with the closing of this offering and the Exercised Option Share Issuance. |
| (2) | Gives effect to (i) the pro forma adjustments set forth in footnote (1) above and (ii) our sale of shares of our common stock in this offering at an assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
| (3) | Pro forma as adjusted balance sheet data is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, working capital, total assets and total stockholders’ equity by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each one million share increase (decrease) in the number of shares offered by us would increase (decrease) each of our pro forma as adjusted cash and cash equivalents, working capital, total assets and total stockholders’ equity by approximately $ million, assuming that the assumed initial offering price to the public remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
| (4) | We define working capital as current assets less current liabilities. See our unaudited interim condensed financial statements and related notes included elsewhere in this prospectus for further details regarding our current assets and current liabilities. |
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Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including our financial statements and their related notes included elsewhere in this prospectus and the section titled “Management’s discussion and analysis of financial condition and results of operations.” If any of the following risks actually occurs, our business, prospects, operating results and financial condition could suffer materially, the trading price of our common stock could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may materially and adversely affect our business, prospects, operating results and financial condition.
Risks related to our limited operating history, financial position and need for additional capital
We are a clinical-stage biopharmaceutical company with a limited operating history. We have not completed any pivotal or late-stage clinical trials and we have no history of commercializing products, which may make it difficult to evaluate our approach to the discovery and development of our product candidates and the prospects for our future viability.
We are a clinical-stage biopharmaceutical company with a limited operating history. We were formed in June 2020 and our operations to date have been limited to conducting research and development, staffing our company, establishing and protecting our intellectual property portfolio, scaling up manufacturing processes and supplying our product candidates and other materials for our preclinical studies and clinical trials, leasing office and laboratory space, raising capital, business planning, and providing general and administrative support for these activities.
Our initial development efforts are focused on our two clinical-stage programs: BH-30643, an investigational, non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC, and BH-30236, an investigational macrocyclic CLK inhibitor being evaluated first in R/R AML and HR-MDS. We are also advancing our pan-KRAS program, initially focusing on our preclinical product candidate, BH-501284, which is designed using a novel chemical scaffold to achieve prolonged, potent and selective inhibition of KRAS mutations. We have not yet demonstrated an ability to successfully complete a clinical program, including large-scale, pivotal clinical trials, obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, conduct sales and marketing activities necessary for successful product commercialization or generate revenues or arrange for a third party to do so on our behalf. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products.
We have incurred substantial losses since our inception. We anticipate incurring substantial and increasing losses for the foreseeable future and may never achieve or maintain profitability.
Investment in pharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. For the years ended December 31, 2024 and 2025, our net losses were approximately $30.7 million and $60.6 million,
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respectively. For the three months ended March 31, 2025 and 2026, our net losses were $10.5 million and $21.0 million, respectively. As of March 31, 2026, we had an accumulated deficit of approximately $156.0 million. Substantially all of our losses have resulted from expenses incurred in connection with research and development, preclinical study and clinical trial costs, and from general and administrative costs associated with our operations.
We expect to continue to incur significant expenses and additional operating losses for the foreseeable future as we seek to advance our product candidates through preclinical and clinical development, expand our research and development activities, develop new product candidates, conduct clinical trials, seek regulatory approval and, if we receive regulatory approval, commercialize our products. Furthermore, the costs of advancing product candidates into each succeeding clinical phase tend to increase substantially over time. The total costs to advance any of our product candidates to regulatory approval in even a single jurisdiction would be substantial. Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of increased expenses or when, or if, we will be able to generate any revenue from the commercialization of any approved products or achieve or maintain profitability. Our expenses will also increase substantially as we operate as a public company and add clinical, scientific, operational, financial and management information systems and personnel, including personnel to support our product development and potential future commercialization efforts.
We have no product candidates approved for commercial sale and have not generated any revenue from the sale of products. Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue, if any, unless and until we, either alone or with a collaborator, are able to obtain regulatory approval for, and successfully commercialize, our product candidates for their initial and potential additional indications, or any other product candidates we may develop in the future.
Successful commercialization will require achievement of many key milestones, including demonstrating each product candidate’s safety and efficacy in clinical trials, obtaining regulatory approval for these product candidates, manufacturing, marketing and selling those products for which we, or any of our future collaborators, may obtain regulatory approval, satisfying any post-marketing requirements and obtaining reimbursement for our products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately and precisely predict the timing and amount of expenses or when, or if, we will be able to generate any revenue, the extent of any further losses, or if or when we might achieve profitability. We and any future collaborators may never succeed in these activities and, even if we do, or any future collaborators do, we may never generate revenues that are large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Additionally, our expenses could increase if we are required by the FDA, or any comparable foreign regulatory authority, to perform clinical trials in addition to those currently expected, or if there are any delays in completing our clinical trials or in the nonclinical or manufacturing-related activities associated with the development of our product candidates. Even if we succeed in obtaining regulatory approvals for and commercializing BH-30643, BH-30236 or any of our other product candidates, we expect to incur substantial development costs and other expenditures to develop and market additional product candidates.
We may also encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue or raise additional capital. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and our working capital. Our failure to become and remain profitable may depress the market price of our common stock and could impair our ability to raise capital, expand our business, build out our pipeline, or continue our
15
operations. If we continue to suffer losses as we have in the past, you may not receive any return on your investment and may lose your entire investment.
Even if this offering is successful, we will require substantial additional financing to achieve our goals, which may cause dilution to our stockholders, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce, or terminate our product development or future commercialization efforts.
The development of pharmaceutical product candidates is capital-intensive. We expect to continue to spend substantial amounts of cash to conduct further research and development, preclinical studies, and clinical trials of our current and any future product candidates, to seek regulatory approvals for our product candidates and to launch and commercialize any products if we receive regulatory approval.
Our operations have consumed substantial amounts of cash since our inception. As of March 31, 2026, we had $116.0 million in cash and cash equivalents. Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to fund our projected operating expenses and capital expenditure requirements into . Our future capital requirements and the period over which our existing resources will support our operations may vary significantly from what we expect, and we will in any event require additional capital in order to complete clinical development of our current programs. Our monthly spending levels will vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with development of our product candidates and programs is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and future commercialization activities, if any. Our future capital requirements will depend on many factors, including:
| • | the scope, timing, progress, costs and results of discovery, preclinical development, and clinical trials for our current or future product candidates; |
| • | the number of clinical trials required for regulatory approval of our current or future product candidates, which may differ between the United States and other countries or regions; |
| • | the costs, timing and outcome of regulatory review of any of our current or future product candidates; |
| • | the costs associated with potentially acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; |
| • | the cost of manufacturing clinical and commercial supplies of our current or future product candidates; |
| • | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any possible claims by third parties that we are infringing upon their intellectual property rights; |
| • | our ability to establish and maintain possible future strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; |
| • | the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any product candidate for which we receive regulatory approval; |
| • | the revenue, if any, received from commercial sales of the product candidate(s) for which we receive regulatory approval; |
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| • | expenses to attract, hire and retain skilled personnel; |
| • | the costs of operating as a public company; |
| • | our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors for any products that receive regulatory approval; |
| • | our ability to mitigate the impact of adverse macroeconomic conditions or geopolitical events and conflicts, including any health epidemics and their residual effects, bank failures or inflation and increased interest rates, on our preclinical and clinical development or operations; |
| • | the effect of competing technological and market developments; and |
| • | the extent to which we acquire or invest in businesses, products and technologies. |
We will require substantial additional capital in addition to the proceeds of this offering to achieve our business objectives, which we may raise through public or private equity offerings, debt financings or other capital sources, including strategic collaborations, licenses and other similar arrangements to enable us to complete the development and potential commercialization of our product candidates. Additional funds may not be available on a timely basis, on favorable terms or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Additionally, if we raise additional funds through future collaborations, licenses and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams or product candidates or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. Market volatility resulting from potential negative global economic conditions and disruptions in the United States and international credit and financial markets including due to geopolitical conflicts, tariffs, other fiscal and trade policy changes, bank failures, supply chain and labor disruptions, the effects of a health epidemic or pandemic or other factors may further adversely impact our ability to access capital as and when needed. Our failure to raise capital as and when needed would have a negative effect on our financial condition and our ability to pursue our business strategy. In addition, attempting to secure additional financing may divert the time and attention of our management from day-to-day activities and harm our development efforts.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
The report of our independent registered public accounting firm included a “going concern” explanatory paragraph.
We have concluded that there is substantial doubt about our ability to continue as a going concern, and the report of our independent registered public accounting firm on our financial statements as of and for the year
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ended December 31, 2025 included an explanatory paragraph indicating that there was substantial doubt about our ability to continue as a going concern. If we are unable to raise additional capital as and when needed, our business, financial condition and results of operations will be materially and adversely affected, and we may be forced to delay our development efforts, limit our activities and reduce research and development costs. If we are unable to continue as a going concern, we may have to liquidate our assets, and the values we receive for our assets in liquidation or dissolution could be significantly lower than the values reflected in our financial statements. The inclusion of a going concern explanatory paragraph by our independent registered public accounting firm, our limited cash resources and our potential inability to continue as a going concern may materially adversely affect our ability to raise new capital, enter into licensing and collaboration arrangements or other contractual relationships with third parties and otherwise execute our development strategy.
Risks related to the discovery, development and regulatory approval of our product candidates
Our discovery and development programs are focused in part on precision medicines for patients with genetically defined cancers, which is a rapidly evolving and scientifically uncertain field, and our scientific approach, including with respect to BH-30643 and BH-30236, may never lead to marketable products.
The discovery and development of precision medicines for patients with genetically defined cancers is an emerging field, and the scientific discoveries that form the basis for our efforts to discover and develop product candidates are relatively new. The scientific evidence to support the feasibility of developing product candidates based on these discoveries is both preliminary and limited. Although we believe, based on our preclinical work and preliminary clinical trial results, that the mutations targeted by certain of our programs are oncogenic drivers, future clinical results may not confirm this hypothesis, or may only confirm it for certain mutations or certain tumor types.
The patient populations for certain of our product candidates are limited to those with specific target mutations and may not be completely defined, but are substantially smaller than the general treated cancer population. We may need to screen and identify these patients with the targeted mutations, and successful identification is dependent on several factors, including achieving certainty as to how specific genetic alterations respond to our product candidates and developing companion diagnostics to identify such genetic alterations. Even if we are successful in identifying patients, we cannot be certain that the resulting patient populations for each targeted mutation will be sufficient to allow us to successfully complete clinical trials and obtain approval for each targeted mutation type or, if approved, to successfully commercialize our product candidates and achieve profitability.
In addition, our scientific approach to design novel chemical scaffolds to overcome specific structural liabilities that limit existing therapies or approaches may not be successful in addressing these limitations or creating product candidates that ultimately succeed in development, regulatory approval or commercialization. Even if our approach demonstrates clinical benefit for tumors harboring the targeted mutations that drive the diseases for which we are developing our product candidates, we may never successfully identify additional oncogenic mutations sufficient to obtain regulatory approvals with respect to such mutations. In addition, the heterogeneity of the tumor resistance environment our clinical product candidates are targeting heightens the risk around attempting to overcome both on- and off- target tumor resistance. We may also be unsuccessful in using our approach to identify additional product candidates, and any of our product candidates may be shown to have harmful side effects or other characteristics that necessitate additional clinical testing or make them unmarketable or unlikely to receive or maintain regulatory approval. In particular, any failure of one of our development programs—or a competitor’s product or program pursuing a similar approach—could create a perception that our other programs are less likely to succeed or that our overall approach is not viable.
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We believe we have had favorable preclinical study and early clinical trial results; however, we are early in our development efforts, including with respect to BH-30643 and BH-30236, and may not succeed in demonstrating the efficacy and safety of any product candidate in clinical trials or in obtaining regulatory approval thereafter. We also cannot be certain that our scientific and development approach, including with respect to BH-30643 and BH-30236, will result in an approvable or marketable product with commercial value in our initial targeted indications or any other indication.
Further, the pharmaceutical industry is characterized by rapidly advancing technologies, and our future success will depend in part on our ability to maintain a competitive position. If we fail to stay at the forefront of technological change, we may be unable to compete effectively. Our competitors may render our approach obsolete or limit the commercial value of our scientific approach or product candidates through advances in existing technologies or the development of new or different approaches. Conversely, adverse developments with respect to other companies pursuing a similar approach may adversely impact the actual or perceived value of our approach and the potential of our product candidates.
Therefore, we do not know whether our approach, including development of product candidates in genetically defined cancers, will be successful, or whether our specific development programs for BH-30643 and BH-30236 will yield approvable or commercially viable products. If our approach or our individual programs are unsuccessful, the value of our company could decline significantly.
We are early in our development efforts and only have two product candidates, BH-30643 and BH-30236, in early clinical development. Our pan-KRAS product candidate, BH-501284, is in the preclinical stage. If we are unable to continue to advance our product candidates through or into clinical development, obtain regulatory approval and ultimately commercialize our product candidates or we experience significant delays in doing so, our business will be materially harmed.
We are in the early stages of our development efforts and are substantially dependent on the success of our product candidates, BH-30643 and BH-30236, which are in early clinical development. Our pan-KRAS product candidate BH-501284 is in the preclinical stage. We will need to progress BH-30643 and BH-30236 through our ongoing and planned clinical trials and progress BH-501284 and any future development program through preclinical studies and submit INDs to the FDA or comparable foreign regulatory applications to applicable foreign regulatory authorities prior to initiating their clinical development. We will also need to submit INDs or comparable foreign regulatory applications prior to expanding development of our product candidates beyond our initial development focus into other distinct patient populations.
Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual successful commercialization of our product candidates. The success of our product candidates will depend on several factors, including the following:
| • | completion of preclinical studies with favorable results; |
| • | successful enrollment in, and completion of, clinical trials with favorable results; |
| • | sufficiency of our financial and other resources to complete necessary preclinical studies and clinical trials; |
| • | allowance to proceed with clinical trials under INDs by the FDA or under similar regulatory submissions by applicable foreign regulatory authorities for the conduct of clinical trials of our product candidates and our proposed design of future clinical trials; |
| • | demonstrating the safety and efficacy of our product candidates to the satisfaction of the FDA and other applicable foreign regulatory authorities; |
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| • | receipt of regulatory approvals from applicable regulatory authorities, including new drug applications (NDAs) from the FDA and approvals from comparable foreign regulatory authorities and maintaining such approvals; |
| • | making arrangements with third-party manufacturers, to manufacture sufficient quantities of product candidates for clinical and potential commercial use; |
| • | establishing sales, marketing and distribution capabilities and launching commercial sales of our products, if and when approved, whether alone or in collaboration with others; |
| • | acceptance of any products we develop and their benefits and uses, if and when approved, by patients, the medical community and third-party payors; |
| • | establishing and maintaining intellectual property protection, including patent and trade secret protection, or regulatory exclusivity for our product candidates; |
| • | effectively competing with other approved therapies or therapies that may be approved in the future; |
| • | obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; |
| • | maintaining an acceptable safety profile of our products following approval; and |
| • | building and maintaining an organization of people who can successfully develop our product candidates. |
We have not yet succeeded and may not succeed in demonstrating efficacy and safety for any product candidates in clinical trials or in obtaining regulatory approval thereafter. Given our early stage of development, it will take several years before we can demonstrate the safety and efficacy of a product candidate sufficient to warrant regulatory approval for commercialization, if we can do so at all. If we are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize, our product candidates, we may not be able to generate sufficient revenue, or any revenue at all, to continue our business.
Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial or real-world results. Our product candidates may not have favorable results in preclinical studies or clinical trials or receive regulatory approval on a timely basis, if at all.
BH-30643 and BH-30236 are in clinical development and their risk of failure is high. It is impossible to predict when or if our product candidates will receive regulatory approval. To obtain the requisite regulatory approvals to commercialize our product candidates, we must demonstrate through lengthy, complex and expensive clinical trials that our product candidates are safe and effective in patient populations for the intended indication(s) for use.
Preclinical studies and clinical trials can take many years to complete, and their outcomes are inherently uncertain. Failure can occur at any time during the preclinical study or clinical trial process, despite promising preclinical or clinical results. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials, and results in one indication may not be predictive of results to be expected for the same product candidates in another indication. Differences in trial design between early-stage clinical trials and later-stage clinical trials make it difficult to extrapolate the results of earlier clinical trials to later clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials. Such setbacks have occurred and may occur for many reasons, including, but not limited to: clinical sites and investigators may deviate from clinical trial protocols, whether due to lack of training or otherwise, and we may fail to detect any such deviations in a
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timely manner; patients may fail to adhere to any required clinical trial procedures, including any requirements for post-treatment follow-up; our product candidates may fail to demonstrate effectiveness or safety in certain patient subpopulations, or even in the target patient population, which has not been observed in earlier trials due to limited sample size, lack of analysis, or otherwise; or our clinical trials may not adequately represent the patient populations we intend to treat, whether due to limitations in our trial designs or otherwise, such as where one patient subgroup is overrepresented in the clinical trial. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates achieved promising results have nonetheless failed to obtain regulatory approval of such product candidates or, upon commercialization, achieve or maintain positive real-world results.
Furthermore, because our clinical trials for BH-30643 and BH-30236 are conducted primarily in patients with advanced disease whose prior therapies have not been effective, or have failed due to resistance, including resistance mutations and resistance due to biological mechanisms partially- or un-related to their prior therapies, patients may experience disease progression independent from our product candidates, which may make them unevaluable for purposes of the clinical trial and may require additional patient enrollment. For example, certain patients enrolled in the C797S resistance cohort of our SOLARA trial of BH-30643 have progressed following treatment with a third-generation EGFR TKI, representing a population for whom prior targeted therapy has already failed. Similarly, patients enrolled in our Phase 1 clinical trial of BH-30236 have R/R AML or HR-MDS, representing a population for whom prior treatments have not been effective or on which patients have relapsed. Because we are conducting trials in patients who are already sick and for whom prior treatments have not been effective, the clinical activity and tolerability results we observe may not be representative of what could be observed in patients earlier in the treatment continuum, including patients with less advanced disease or who have not yet been exposed to prior therapies. Inclusion of patients with significant co-morbidities in our clinical trials may also result in deaths or other adverse medical events due to an underlying condition or other therapies or medications that such patients may be using, which could prevent us from obtaining regulatory approval or, if approved, achieving or maintaining market acceptance.
Additionally, development risks may be heightened for targeted indications (such as C797S-positive NSCLC) or treatment mechanisms (such as CLK inhibition for BH-30236) where no approved targeted therapies currently exist, as there is limited regulatory and clinical precedent to guide development. We will also face distinct risks in target indications where established standards of care or competing approved therapies already exist, including in first-line NSCLC where osimertinib and other approved therapies are well-established standards of care. Clinical trials designed to support approval in earlier-line settings are likely to require randomized controlled designs with active comparator arms and primary endpoints based on progression-free or overall survival, rather than the ORR endpoints that may support approval in later-line settings with no approved alternative therapies. The probability of clinical success in these trials may be materially lower than in our initial indications, where the absence of approved targeted therapies provides a more favorable regulatory and clinical benchmark.
Future expansion of our development programs into additional hematologic malignancies and/or solid tumors and commencing any future clinical trials, including for BH-501284, is subject to finalizing the clinical trial protocol and submitting an IND to the FDA or a similar application to a comparable foreign regulatory authority to initiate a clinical trial. Even after we make our submission, the FDA or comparable foreign regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials in the manner we propose or disagree with our trial design, which may require us to complete additional preclinical studies or amend our protocols or impose stricter conditions on the commencement of clinical trials, which may lead to delays and increase the costs of our preclinical development programs.
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Most product candidates that commence clinical trials are never approved as commercial products and there can be no assurance that any of our current or future clinical trials will ultimately be successful or support the approval of our current or any future product candidates, or our need to raise additional capital.
We may experience delays in initiating or completing clinical trials or reporting data readouts for such trials, due to unforeseen events or otherwise, that could delay or prevent our ability to receive regulatory approval or commercialize our current and any future product candidates, including:
| • | regulators, such as the FDA or comparable foreign regulatory authorities, Institutional Review Boards (IRBs) or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols or regulators may disagree as to the design or implementation of our clinical trials and require that we modify or amend our clinical trial protocols or statistical analysis plans; |
| • | we may experience delays in reaching, or fail to reach, agreement on acceptable terms with contract research organizations (CROs) or with individual clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among trial sites; |
| • | delays in identifying, recruiting and training suitable clinical investigators; |
| • | IRBs refusing to approve, suspending or terminating the trial at an investigational site, precluding enrollment of additional patients or withdrawing their approval of the trial; |
| • | changes or amendments to the clinical trial protocol; |
| • | clinical trial sites may deviate from the trial protocol, fail to ensure the integrity of the data being collected at the site or drop out of a trial; |
| • | failure by any of our third-party contractors to perform in accordance with good clinical practices (GCP) requirements or applicable regulatory rules and guidelines in other countries; |
| • | the number of patients required for clinical trials may be larger than we anticipate, we may experience difficulty in finding and enrolling sufficient qualified patients for our trials, enrollment in clinical trials may be slower than we anticipate, prospective patients may fail to qualify for enrollment into our clinical trials or patients may drop out or fail to return for post-treatment follow-up at a higher rate than we anticipate; |
| • | patients may fail to enroll or remain in our trials at the rate we expect, or fail to return for post-treatment follow-up, including patients failing to remain in our trials due to movement; |
| • | patients choosing an alternative product for the indications for which we are developing our product candidates, or participating in competing clinical trials; |
| • | the cost of clinical trials may be greater than we anticipate; |
| • | the quality or quantity of data relating to our product candidates or other materials necessary to conduct our clinical trials may be inadequate to initiate or complete a given clinical trial; |
| • | we may experience difficulties in manufacturing, or fail to manufacture, sufficient quantities of our product candidates for use in clinical trials; |
| • | patients experiencing severe or serious unexpected drug-related adverse effects; |
| • | reports from clinical testing conducted by other companies of other therapies in the same class of agents that could be considered similar to our product candidates may raise safety, tolerability or efficacy concerns about our product candidates; |
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| • | we may lack adequate funding to initiate or continue one or more of our clinical trials; |
| • | selection of clinical endpoints that require prolonged periods of clinical observation or extended analysis of the resulting data; |
| • | a facility manufacturing our product candidates or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently suspend production due to violations of current Good Manufacturing Practice (cGMP) regulations or other applicable requirements or cross-contaminations of product candidates in the manufacturing process; |
| • | changes to our manufacturing processes may be necessary or desired; |
| • | third-party contractors being unwilling or unable to satisfy their contractual obligations to us in a timely or accurate manner; |
| • | third-party contractors could become debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our planned marketing applications; and |
| • | clinical trials of our product candidates may fail to show appropriate safety, tolerability or efficacy, may produce negative or inconclusive results or may otherwise fail to improve on the existing standard of care, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs. |
We may, in the future, conduct preclinical research and clinical trials in collaboration with other academic, pharmaceutical or biotechnology entities in which we combine our development efforts with those of prospective future collaborators. Such collaborations, if any, may be subject to additional delays because of the management of preclinical research and clinical trials, contract negotiations and the need to obtain agreement from multiple parties, which may increase our future costs and expenses.
Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities’ legal requirements, regulations and guidelines, and remain subject to oversight by these governmental agencies as well as ethics committees or IRBs responsible for overseeing the conduct of clinical trials and ensuring the welfare of the patients participating in clinical trials of our product candidates. We could encounter delays if a clinical trial is suspended or terminated by us, our potential future collaborators, the IRBs of the institutions at which such trials are being conducted, the FDA or comparable foreign regulatory authorities or the Data Safety Monitoring Board for such trial. A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, adverse findings from inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities, unforeseen safety issues or adverse side effects, failure to establish or achieve clinically meaningful clinical trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to regulators or to IRBs for reexamination, which may impact the costs, timing or successful completion of a clinical trial. Clinical trials may also be delayed or terminated as a result of ambiguous or negative interim results.
Many of the factors that cause, or lead to, a delay in the commencement or completion of, or the termination or suspension of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. Further, the FDA may disagree with our interpretation of data from clinical trials or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials.
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Our product development costs will increase if we experience delays in clinical testing or in seeking regulatory approvals. We do not know whether any of our clinical trials will begin as planned, will need to be redesigned or will be completed on schedule, or at all. Significant clinical trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates and may allow our competitors to bring products to market either before we do or in a short time-frame after we do, potentially impairing our ability to successfully commercialize our product candidates, if approved. Any delays or increase in costs in our clinical development programs may harm our business, financial condition, results of operations and prospects.
We may find it difficult to enroll patients in our clinical trials. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.
Patient enrollment is a significant factor in the timing and success of clinical trials, and the timing of our clinical trials depends, in part, on the speed at which we can recruit and enroll patients to participate in our trials, as well as their completion of required follow-up periods. We may not be able to initiate or continue clinical trials for our product candidates if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA or comparable foreign regulatory authorities. In particular, because some of our product candidate development plans are focused on patients with specific genetic mutations, our ability to enroll eligible patients may be limited or may result in slower enrollment than we anticipate. For example, with respect to BH-30643, we cannot be certain how many patients will have each of the genetic mutations that BH-30643 is designed to target or that the number of patients enrolled for each mutation will suffice to obtain regulatory approval for the targeted patient subset.
Patient enrollment is affected by many factors including the size and nature of the patient population, competing clinical trials in the same or similar indications or at the same trial site, the severity of the disease or condition under investigation, the availability and efficacy of approved drugs and diagnostics for the disease or condition under investigation, the number and location of clinical sites, the proximity of patients to clinical sites, willingness of patients to participate in a decentralized clinical trial that may involve remote monitoring technologies, the inclusion and exclusion criteria for the trial, perceived risks and benefits of the product candidate under study, the design of the clinical trial, continued enrollment of prospective patients by clinical trial sites, the risk that enrolled patients will not complete a clinical trial, our ability to recruit clinical trial investigators with the appropriate competencies and experience, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, the ability to monitor patients adequately during and after treatment, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for, or any product candidates under investigation for, the indications we are investigating. Clinical trial recruitment and enrollment activities may also be delayed as a result of macro-factors such as public health emergencies or pandemics, natural disasters and acts of terror or war.
Even if we are able to enroll a sufficient number of patients in our clinical trials, we may have difficulty maintaining enrollment of such patients, and delays in enrollment or patients dropping out early in our clinical trials may result in increased costs or may affect the timing or outcome of our clinical trials. Any of these conditions may negatively impact our ability to complete such trials or include results from such trials in regulatory submissions, which could adversely affect our ability to advance the development of our product candidates.
Further, other pharmaceutical or biotechnology companies targeting these same diseases may be recruiting clinical trial patients from similar patient populations, which may make it more difficult to fully enroll our clinical trials. Our inability to enroll a sufficient number of patients for any of our clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. In addition, we rely on
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clinical trial sites to ensure proper and timely conduct of our clinical trials and, while we enter into agreements governing their services, we have limited influence over their actual performance.
We cannot assure you that our assumptions used in determining expected clinical trial timelines are correct or that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond our expected timelines.
Use of our product candidates could be associated with adverse side effects, adverse events or other safety risks, which could delay or preclude the candidate’s approval, cause us to suspend or discontinue clinical trials, cause us to abandon the product candidates, limit the commercial profile of any future approved product or result in other significant negative consequences that could severely harm our business, prospects, operating results and financial condition.
Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics related to our product candidates. Undesirable side effects caused by our product candidates could cause us, the IRB or regulatory authorities to interrupt, delay or halt clinical trials or cause the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities, or, if such product candidate is approved, result in a more restrictive label and other post-approval requirements. Any treatment-related side effects could also affect patient recruitment or the ability of enrolled patients to complete the trial or could result in potential product liability claims. Any of these occurrences may harm our business, financial condition, and prospects significantly.
If our product candidates are associated with undesirable side effects or have unexpected characteristics in clinical trials, we may need to interrupt, delay or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-benefit perspective.
Patients in our ongoing and planned clinical trials have and in the future could suffer significant adverse events or other side effects whether or not observed in our preclinical studies or ongoing or previous clinical trials. For example, in our ongoing SOLARA Phase 1/2 clinical trial of BH-30643, treatment-related adverse events (TRAEs) were observed, including Grade 3 dose-limiting toxicities (DLTs) consisting of mucositis and bilirubin increase at higher dose levels and a Grade 4 alanine aminotransferase elevation. In our ongoing Phase 1 trial of BH-30236, TRAEs were observed, including cases of differentiation syndrome, all of which were Grade 2 and resolved with corticosteroid treatment, with or without dose interruption, and a Grade 3 DLT of diarrhea. In addition, we have and plan to continue to study our product candidates in combination with other therapies, which may exacerbate adverse events associated with such product candidates. For example, in our ongoing combination dose escalation of BH-30236 with venetoclax, TRAEs, including diarrhea, nausea, vomiting, decreased neutrophil count, decreased platelet count and decreased white blood cell count, were observed in the venetoclax combination arm. Further, patients treated with our product candidates may also be undergoing surgical, radiation and chemotherapy treatments, which can cause side effects or adverse events that are unrelated to our product candidates but may still impact the success of our clinical trials. The inclusion of critically ill patients in our clinical trials may result in deaths or other adverse medical events due to other therapies or medications that such patients may be using or due to the gravity of such patients’ illnesses. Furthermore, some of our product candidates may be evaluated in pediatric populations, for which safety concerns may be particularly scrutinized by regulatory agencies. Even if such side effects do not preclude the product candidates from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance due to tolerability concerns as compared to other available therapies. Any of these developments could materially harm our business, financial condition and prospects.
Additionally, if our product candidates receive regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result. For
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example, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy (REMS) to ensure that the benefits of treatment with such product candidates outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive and more costly than what is typical for the industry. Other potentially significant negative consequences associated with post-marketing identification of adverse events or other safety risks include:
| • | we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; |
| • | regulatory authorities may withdraw or modify their approvals of a product; |
| • | regulatory authorities may require additional warnings or new contraindications on the label, or may limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; |
| • | we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies; |
| • | we may be required to change the way a product is distributed or administered; |
| • | we could be subject to fines, injunctions or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to patients; and |
| • | a product may become less competitive, and our reputation may suffer. |
Any of these events could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of our product candidates, if approved by the FDA or other regulatory authorities.
We are currently developing and may in the future develop our product candidates in combination with other therapies, and safety or supply issues with combination-use products may delay or prevent development and approval of our product candidates.
We are currently developing and may in the future develop our product candidates in combination with one or more cancer therapies. For example, we are currently evaluating the use of BH-30236 as a combination therapy with venetoclax in patients with R/R AML and HR-MDS and we are planning to evaluate the use of BH-30643 as a combination therapy with carboplatin and pemetrexed in adults with locally advanced or metastatic NSCLC harboring EGFR or HER2 mutations. Even if any product candidate we develop were to receive regulatory approval or be commercialized for use in combination with other existing therapies, we would continue to be subject to the risks that the FDA or similar regulatory authorities outside of the United States could revoke approval of the therapy used in combination with our product candidates or that safety, efficacy, manufacturing or supply issues could arise with these existing therapies. Combination therapies are commonly used for the treatment of cancer, and we would be subject to similar risks if we develop any of our product candidates for use in combination with other drugs or for indications other than cancer. Similarly, if the therapies we use in combination with our product candidates are replaced as the standard of care for the indications we choose for any of our product candidates, the FDA or similar regulatory authorities outside of the United States may require us to conduct additional clinical trials, which may experience complications surrounding trial execution, such as complexities surrounding trial design, establishing trial protocols and interpretability of results, clinical trial site access and initiation, patient recruitment and enrollment, quality and supply of clinical drug product, safety issues or a lack of clinically relevant activity. The uncertainty resulting from the use of our product candidates in combination with other approved or unapproved therapies may make it difficult to accurately
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predict or evaluate side effects in clinical trials, or to evaluate the contribution of each component therapy to the potential efficacy of the combination therapy. The occurrence of any of these risks could result in our own products, if approved, being removed from the market if they are not also approved as monotherapies or being less commercially successful.
We may also evaluate our product candidates in combination with one or more cancer therapies that have not yet been approved for marketing by the FDA or a similar regulatory authority outside of the United States. We may be unable to effectively identify and collaborate with third parties for the evaluation of our product candidates in combination with their therapies. We will not be able to market and sell any product candidate we develop in combination with any such unapproved cancer therapies that do not ultimately obtain regulatory approval. The regulations prohibiting the promotion of products for unapproved uses are complex and subject to substantial interpretation by the FDA and other government agencies. In addition, there are additional risks similar to the ones described for our products currently in development and clinical trials that result from the fact that such cancer therapies are unapproved, such as the potential for serious adverse effects, delay in their clinical trials and lack of FDA approval.
If the FDA or a similar regulatory authority outside of the United States does not approve these other drugs or revokes approval of, or if safety, efficacy, manufacturing, or supply issues arise with, the drugs we choose to evaluate in combination with any product candidate we develop, we may be unable to obtain approval of or market such product.
Additionally, if the third-party providers of therapies or therapies in development used in combination with our product candidates are unable to produce sufficient quantities for clinical trials or for commercialization of our product candidates, or if the cost of combination therapies are prohibitive, our development and commercialization efforts would be impaired, which would have an adverse effect on our business, financial condition, results of operations and growth prospects.
We may expend our limited resources to pursue a particular product candidate or a particular indication and fail to capitalize on product candidates or indications that may present a greater commercial opportunity or for which there is a greater likelihood of success.
Because we have limited resources, we must choose to pursue and fund the development of specific product candidates. Our resource allocation and other decisions may cause us to fail to identify and capitalize on viable potential product candidates or additional indications or other profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable product candidates. If we do not accurately evaluate the commercial potential or target market for a particular indication or product candidate, we may relinquish valuable rights to that product candidate through collaborations, licenses and other similar arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidates.
Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes to the final data.
From time to time, we may publicly disclose preliminary or topline data from our preclinical studies and clinical trials, which are based on preliminary analyses of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular preclinical study or clinical trial. We also make assumptions, estimations, calculations and conclusions as part of our data analyses, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the topline or preliminary results that we report may differ from future results of the same
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studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Topline and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the topline or preliminary data we previously published. As a result, topline and preliminary data should be viewed with caution until the final data are available.
From time to time, we may also disclose interim data from our preclinical studies and clinical trials. Interim data from clinical trials are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available or as patients from our clinical trials continue other treatments for their disease. Unfavorable differences between interim data and final data could significantly harm our business prospects.
Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and could adversely affect the success of our business. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
If the interim, topline or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, financial condition, results of operations and prospects. Further, disclosure of interim, topline or preliminary data by us or by our competitors could result in volatility in the price of our common stock after this offering.
Even if we complete the necessary preclinical studies and clinical trials, the regulatory approval process is expensive, time-consuming and uncertain and may prevent us or any future collaboration partners from obtaining approvals for the commercialization of our product candidates.
Our product candidates and the activities associated with their discovery, development and commercialization, including their design, testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, import, export, marketing and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the United States, and by comparable foreign regulatory authorities. Failure to obtain regulatory approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction. We have not received approval to market any product candidates from regulatory authorities in any jurisdiction and it is possible that none of the product candidates we may seek to develop in the future will ever obtain regulatory approval. We have no experience in filing and supporting the applications necessary to gain regulatory approvals. Although we believe that we have the capabilities to conduct preclinical studies and clinical trials and to eventually submit regulatory approval applications using our internal resources, we selectively employ and may in the future rely on CROs or regulatory consultants to assist us in this process. Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority.
The process of obtaining regulatory approvals, both in the United States and abroad, is expensive, often takes many years following the commencement of clinical trials, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product
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candidates involved, as well as the target indications and patient populations. For example, our product candidates may receive greater scrutiny because they contain novel chemical scaffolds. Changes in regulatory approval policies during the development period, changes in existing, or the enactment of additional, statutes or regulations or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Prior to obtaining approval to commercialize a product candidate in the United States or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. Despite the time and expense invested in clinical development of product candidates, regulatory approval of a product candidate is never guaranteed. Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a product candidate for many reasons, including:
| • | such authorities may disagree with the design or execution of our clinical trials; |
| • | negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance or persuasiveness required by the FDA or comparable foreign regulatory agencies for approval; |
| • | serious and unexpected drug-related side effects may be experienced by patients in our clinical trials or by individuals using drugs similar to our product candidates; |
| • | the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; |
| • | such authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; |
| • | we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; |
| • | such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; |
| • | such authorities may not agree that the data collected from clinical trials of our product candidates are acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; |
| • | such authorities may disagree with us regarding the formulation, labelling and/or the product specifications of our product candidates; |
| • | approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; |
| • | such authorities may find deficiencies in the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies; or |
| • | such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission. |
With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods, and agreements with pricing authorities.
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Even if we eventually complete clinical trials and receive approval of an NDA or comparable foreign marketing application for our product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials and/or the implementation of a REMS, which may be required because the FDA believes it is necessary to ensure safe use of the product after approval.
If we experience delays in obtaining approval or if we fail to obtain approval of any product candidates we may develop, the commercial prospects for those product candidates, including for other targeted indications, may be harmed and our ability to generate revenues will be materially impaired.
Additionally, even if we eventually complete clinical trials and receive regulatory approval of any of our product candidates, the FDA or comparable foreign regulatory authority may approve our product candidates for a more limited indication or a narrower patient population than we originally requested. Even if regulatory approval is obtained for a particular indication, there is no guarantee that additional indications will be approved, which could materially limit the commercial potential of any approved product. In particular, there can be no assurance that BH-30643, BH-30236 or any of our other product candidates will receive regulatory approval for second-line or first-line treatment settings, and our failure to obtain approval for use in earlier lines of the treatment paradigm would materially limit our addressable patient population and could have a material adverse effect on our business, financial condition, results of operations and prospects.
We are conducting and plan to conduct additional clinical trials for our product candidates outside the United States and the FDA may not accept data from such trials.
We are conducting and plan to conduct additional clinical trials outside the United States. For example, we are conducting a global Phase 1/2 clinical trial of BH-30643 in adult patients with locally advanced or metastatic NSCLC harboring EGFR and/or HER2 mutations at sites outside of the United States, including in Australia, Canada, Hong Kong, Japan, Malaysia, Singapore, South Korea and Taiwan. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of such trial data by the FDA is subject to certain conditions.
Where data from foreign clinical trials are intended to serve as the sole basis for regulatory approval in the United States, regardless of whether such clinical trials were conducted pursuant to an IND, the FDA will not approve the application on the basis of foreign data alone unless those data are applicable to the U.S. population and U.S. medical practice, the clinical trials were performed by clinical investigators of recognized competence and the data are considered valid without the need for an on-site inspection by the FDA or, if the FDA considers such an inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. In addition, even where the foreign trial data are not intended to serve as the sole basis for approval, if the study was not otherwise subject to an IND, the FDA will not accept the data as support for an application for regulatory approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such clinical trials would be subject to the applicable local laws of the foreign jurisdictions where the clinical trials are conducted. There can be no assurance the FDA will accept data from clinical trials conducted outside of the United States. If the FDA does not accept any such data, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay aspects of our development plan.
In addition, the conduct of clinical trials outside the United States could have a significant impact on us. Risks inherent in conducting international clinical trials include:
| • | foreign regulatory requirements that could burden or limit our ability to conduct our clinical trials; |
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| • | difficulties staffing and managing foreign operations; |
| • | compliance with legal requirements applicable to privacy, data protection, information security and other matters; |
| • | compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; |
| • | foreign taxes, including value-added tax, withholding and payroll taxes; |
| • | administrative burdens of conducting clinical trials under multiple foreign regulatory schema; |
| • | foreign exchange fluctuations; |
| • | manufacturing, customs, shipment and storage requirements; |
| • | impact of geopolitical events or a public health crisis on our ability to produce our product candidates and conduct clinical trials in foreign countries; |
| • | potential liability under the Foreign Corrupt Practices Act of 1977, as amended (FCPA), or comparable foreign regulations; |
| • | cultural differences in medical practice and clinical research; and |
| • | diminished protection of intellectual property in some countries. |
Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.
We may seek regulatory approval for our product candidates outside the United States. Foreign regulatory authorities have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants regulatory approval of a product candidate, comparable regulatory authorities in foreign jurisdictions also must approve the manufacturing, marketing and promotion of the product candidate in those jurisdictions. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In addition, in some jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products also is subject to approval.
Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. We do not have any product candidates approved for sale in any jurisdiction, including in international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with the regulatory requirements in international markets and/or receive and maintain applicable regulatory approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed, which could adversely affect our business, results of operations and financial condition.
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Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
As product candidates progress through clinical trials to regulatory approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered along the way in an effort to optimize safety, efficacy, stability, purity, yield and manufacturing batch size, minimize costs and achieve consistent quality and results. Such changes carry the risk that they will not achieve their intended objectives and/or may lead to delays and additional costs. For example, we intend to move to a tablet formulation of BH-30643 in expansion cohorts of our ongoing clinical trial and may potentially modify the formulation of other product candidates in future clinical trials. The formulation and any other changes we may make to our product candidates may cause such candidates to perform differently than in prior clinical trials, or could negatively affect our ability to utilize or interpret our existing data. Such changes could delay initiation or completion of clinical trials, lead to negative trial results, require the conduct of bridging studies or clinical trials or the repetition of one or more studies or clinical trials, increase development costs, delay potential regulatory approval and jeopardize our ability to commercialize our product candidates or generate revenue.
We may fail to obtain orphan drug designations from the FDA for our product candidates, and even if we obtain such designations, we may be unable to maintain the benefits associated with orphan drug designation, including the potential for market exclusivity.
Regulatory authorities in some jurisdictions, including the United States, may designate drugs designed to address relatively small patient populations as “orphan drugs.” Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is defined as one occurring in a patient population of fewer than 200,000 in the United States, or a patient population greater than 200,000 in the United States, where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. In the United States, orphan designation entitles a party to financial incentives such as opportunities for grant funding for clinical trial costs, tax advantages and user-fee waivers. In addition, if a product candidate that has orphan designation subsequently receives the first FDA approval within the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications, including an NDA, to market the same drug for the same approved use or indication within such rare disease or condition for seven years, except in limited circumstances.
In March 2026, the FDA granted orphan drug designation to BH-30236 for the treatment of AML. We may seek orphan drug designations for BH-30236 in other diseases or conditions or for our other product candidates. There can be no assurances that we will be able to obtain such designations. Even if we, or any future collaborators, obtain orphan drug designation for a product candidate, we, or they, may not be able to obtain or maintain orphan drug exclusivity for that product candidate. Further, even if we, or any future collaborators, obtain orphan drug exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different active ingredients may be approved for the same uses or indications. Even after an orphan drug is approved, the FDA can subsequently approve the same drug for the same use or indication within the same rare disease or condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major contribution to patient care with respect to the exclusivity-protected use or indication, or if the manufacturer of the product with orphan exclusivity is unable to maintain sufficient product quantity to meet the needs relating to the relevant indication or use. Orphan drug designation neither shortens the development or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.
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We may seek approval of our product candidates, where applicable, under the FDA’s accelerated approval pathway. This pathway may not lead to faster development, regulatory review or approval process and it does not increase the likelihood that our product candidates will receive regulatory approval.
We may seek approval of product candidates using the FDA’s accelerated approval pathway. A product may be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies upon a determination that the product candidate has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit. The FDA considers a clinical benefit to be a positive therapeutic effect that is clinically meaningful in the context of a given disease, such as irreversible morbidity or mortality. For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit, but is not itself a measure of clinical benefit. An intermediate clinical endpoint is a clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit. The accelerated approval pathway may be used in cases in which the advantage of a new drug or biologic over available therapy may not be a direct therapeutic advantage, but is a clinically important improvement from a patient and public health perspective.
As a condition of approval, the FDA generally requires that a sponsor of a drug receiving accelerated approval perform adequate and well-controlled confirmatory clinical trials. These confirmatory trials must be completed with due diligence. The FDA is permitted to require that a post-approval confirmatory study or studies be underway prior to approval or within a specified time period after the date of accelerated approval was granted. Sponsors are required to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets, and the FDA must post this information publicly. The FDA also has authority to withdraw approval of a drug granted accelerated approval on an expedited basis if the sponsor fails to conduct such studies in a timely manner, send the necessary updates to the FDA, or if such post-approval studies fail to verify the drug’s predicted clinical benefit. The FDA is empowered to take action, such as issuing fines, against companies that fail to conduct with due diligence any post-approval confirmatory study or submit timely reports to the agency on their progress. In addition, the FDA currently requires, unless otherwise informed by the FDA, pre-approval of promotional materials for products receiving accelerated approval, which could adversely impact the timing of the commercial launch of the product.
Prior to seeking accelerated approval for any of our product candidates, we intend to seek feedback from the FDA and will otherwise evaluate our ability to seek and receive accelerated approval. There can be no assurance that after our evaluation of the feedback and other factors we will decide to pursue or submit an NDA for accelerated approval or any other form of expedited development, review or approval. Furthermore, if we decide to submit an application for accelerated approval for our product candidates, there can be no assurance that such application will be accepted or that any expedited development, review or approval will be granted on a timely basis, or at all. The FDA could also require us to conduct further studies prior to considering our application or granting approval of any type. A failure to obtain accelerated approval or any other form of expedited development, review or approval for our product candidate would result in a longer time period to commercialization of such product candidate, if any, could increase the cost of development of such product candidate and could harm our competitive position in the marketplace.
If we are required by the FDA to obtain approval of a companion diagnostic in connection with approval of any of our product candidates, and we do not obtain, or face delays in obtaining, FDA approval of such companion diagnostic, we will not be able to commercialize such product candidate and our ability to generate revenue will be materially impaired.
According to FDA guidance, if the FDA determines that a companion diagnostic is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic
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product or new therapeutic product indication if the companion diagnostic is not also approved or cleared for that indication. The process of obtaining or creating such diagnostic is time consuming and costly.
Companion diagnostics are developed in conjunction with clinical programs for the associated product and are subject to regulation as medical devices by the FDA and comparable foreign regulatory authorities, and the FDA has generally required premarket approval of companion diagnostics for cancer therapies. The approval or clearance of a companion diagnostic as part of the therapeutic product’s further labeling limits the use of the therapeutic product to only those patients who express the specific characteristic that the companion diagnostic was developed to detect.
If the FDA or a comparable foreign regulatory authority requires approval or clearance of a companion diagnostic for any of our product candidates, whether before or after the product candidate obtains regulatory approval, we and/or any future third-party collaborators may encounter difficulties in developing and obtaining approval or clearance for these companion diagnostics. Any delay or failure by us or any future third-party collaborators to develop or obtain regulatory approval or clearance of a companion diagnostic could delay or prevent approval or continued marketing of the relevant product. For example, we are conducting clinical trials for BH-30643 in a genetically defined patient population having the C797S mutation in EGFR+ NSCLC, and if or when we are able to obtain clinical data supportive of approval of BH-30643 by the FDA, we may be required to obtain FDA approval for a companion diagnostic to identify patients with the C797S mutation before we are able to obtain approval for the use of BH-30643 within this patient population. We, or our future collaborators, may also experience delays in developing a sustainable, reproducible and scalable manufacturing process for the companion diagnostic or in transferring that process to commercial partners or negotiating insurance reimbursement plans, all of which may prevent us from completing our clinical trials or commercializing our product candidates, if approved, on a timely or profitable basis, if at all.
Risks related to our business and operations
We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business.
As of March 31, 2026, we had 63 full-time employees. As we continue development and pursue the potential commercialization of our product candidates, and as we transition into operating as a public company, we expect to expand our employee base for managerial, development, regulatory, financial, legal, business development, information technology, marketing and sales capabilities, or contract with third parties to provide these capabilities for us. In the future, we expect to have to manage additional relationships with licensees or licensors, collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial, and management controls, reporting systems and procedures, which may lead to significant costs and may divert management attention. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. Our inability to successfully manage our growth and expand our operations could adversely affect our business, financial condition, results of operations and prospects.
We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. In addition, prior successes of our personnel may not be indicative of our future success.
Our success depends in part on our continued ability to attract, retain, and motivate highly qualified management, clinical, and scientific personnel. We are highly dependent upon our Chief Executive Officer and other members of our management team. The loss of services of any of these individuals could delay or prevent
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the successful development and commercialization of our product candidates. Although we have executed employment agreements or offer letters with each member of our senior management team, these agreements are terminable at will with or without notice and, therefore, we may not be able to retain their services as expected. We do not currently maintain “key person” life insurance on the lives of our executives or any of our employees. This lack of insurance means that we may not have adequate compensation for the loss of the services of these individuals. In addition, although our leadership team and other key personnel previously played key roles in the design, development, and commercialization of commercially successful targeted cancer therapies, no assurance can be given that their prior successes will be indicative of our future success.
We will need to expand and effectively manage our managerial, operational, financial and other resources in order to successfully pursue our clinical development and commercialization efforts. We may not be successful in maintaining our company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among pharmaceutical, biotechnology and other businesses, particularly in the greater San Diego area. If we are not able to attract, integrate, retain, and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.
We are exposed to the risk of employee fraud or other illegal activity by our current and any future employees, independent contractors, consultants, commercial partners, CROs, third-party manufacturers and vendors. Misconduct by these parties could include intentional, reckless and/or negligent conduct that fails to comply with FDA or other regulations, provide true, complete and accurate information to the FDA and other comparable foreign regulatory authorities, comply with manufacturing standards we may establish, comply with healthcare fraud and abuse laws and regulations, report financial information or data accurately or disclose unauthorized activities to us. If we obtain FDA approval of our product candidates and begin commercializing one or more products in the United States, our potential exposure under these laws will increase significantly, and our costs associated with compliance with these laws are likely to increase. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. It is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations or reputational harm.
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Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could adversely affect our business, financial condition, results of operations and prospects.
As we conduct clinical trials of our current or future product candidates, we are exposed to significant product liability risks inherent in the development, testing, manufacturing and marketing of new treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in obtaining approval for, and marketing products, such claims or certain adverse event trends could result in an investigation by the FDA, comparable foreign regulatory authorities or other regulators into the safety and efficacy of our future approved products, our manufacturing processes and facilities or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used, or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our future approved products, termination of clinical trial sites or entire trial programs, withdrawal of patients in our clinical trials, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial patients, loss of revenue, the inability to commercialize any products that we may develop and a decline in our stock price. We may need to obtain higher levels of product liability insurance for later stages of clinical development or marketing our product candidates. Any insurance we may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could adversely affect our business, financial condition, results of operations and prospects.
We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include property, general liability, clinical trials, and directors’ and officers’ liability insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations and prospects.
If our information technology systems or those of third parties upon whom we rely, or our data, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits and other adverse consequences.
We rely on computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations that are critical to our business, or collectively, information technology systems. We own and manage some of these information technology systems, but also rely on third parties for a range of information technology systems and related products and services. Additionally, in the ordinary course of business, we and the third parties upon whom we rely, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share, or collectively, process, personal data and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, information we collect about patients in connection with clinical trials, and sensitive third-party information, or collectively, sensitive data.
As a result, we and the third parties upon whom we rely face a variety of evolving threats that could threaten the confidentiality, integrity, and availability of our information technology systems and sensitive data, or those of the third-parties upon whom we rely. Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon whom we rely. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,”
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threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties upon whom we rely may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our information technology systems and operations.
We and the third parties upon whom we rely are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence (AI), telecommunications failures, earthquakes, fires, floods and other similar threats.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
It may be difficult and/or costly to detect, investigate, mitigate, contain and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties upon whom we rely to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, sensitive data losses and disruptions of our business and information technology systems. Threat actors may also gain access to other networks and systems after a compromise of our data and information technology systems.
Remote work has increased risks to our information technology systems and sensitive data, as more of our personnel utilize network connections, computers and devices outside our premises or network, including working at home, while in transit or in public locations. Additionally, future business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program.
In addition, our reliance on third parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on various third parties and technologies to operate critical information technology systems and to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, personnel email and other functions. We also rely on third parties to provide other products, services, parts or otherwise to operate our business, including with respect to our cybersecurity infrastructure. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties upon whom we rely experience a security incident or other interruption, we could experience adverse consequences that materially impact our business.
While we may be entitled to damages if such third parties fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such
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award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties upon whom we rely have not been compromised.
Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of or access to our sensitive data or our information technology systems, or those of the third parties upon whom we rely. For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts to continue in the future. While to date no incidents have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.
We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data.
Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, regulators and investors, of security incidents, or take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.
If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant material consequences may negatively impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage, if any, will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
In addition to experiencing a security incident, third parties may gather, collect or infer sensitive data about us from public sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, sensitive data that we possess could be leaked, disclosed or revealed as a result of or in connection with our personnel’s or vendors’ use of AI Technologies (defined below) or AI-based cyber-attacks.
The adoption and deployment of AI and machine learning technologies in our operations, and in particular our R&D efforts, may not be effective and may expose us to risk.
We use AI and machine learning (AI Technologies) in our business and expect to make investments in this area.
We expect that investment will be required in the future to continuously improve our use of AI Technologies. As with many technological innovations, there are significant risks involved in developing, maintaining and
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deploying these technologies and there can be no assurance that the usage of or our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.
Any sensitive data that we input into a third-party generative AI Technology could be leaked or disclosed to others, including if sensitive data is used to train the third parties’ AI Technology. Additionally, where an AI Technology model ingests personal data and makes connections using such data, those AI Technologies may reveal other personal or sensitive data generated by the model.
AI Technologies may create flawed, incomplete, or inaccurate outputs, some of which may appear correct. This may happen if the inputs that the model relied on were inaccurate, incomplete or flawed (including if a bad actor “poisons” the AI Technology with bad inputs or logic), or if the logic of the AI Technology is flawed. We or third parties upon which we rely may rely on outputs from AI Technologies to make certain decisions. Due to these potential inaccuracies or flaws, the model could be biased and could lead us to make decisions that could bias certain individuals (or classes of individuals), and adversely impact their rights, employment, and ability to obtain certain pricing, products, services, or benefits. Moreover, the information technology and cybersecurity risks described in the above risk factor apply to AI Technologies, which expand the potential attack surface and compound traditional cybersecurity risks. Given the nature of AI Technologies, any issues experienced by us or third parties upon whom we rely could pose significant impact across workflows or operations.
The development and use of AI Technologies also present various privacy and security risks that may impact our business. For example, AI Technologies are subject to privacy and data security laws, as well as increasing regulation and scrutiny. Several jurisdictions around the globe, including South Korea, Japan, and certain U.S. states, have proposed, enacted, or are considering laws governing the development and use of AI Technologies, such as Japan’s Act on the Promotion of Research and Development and the Utilization of AI-Related Technologies, South Korea’s Framework Act on the Development of Artificial Intelligence and Establishment of Trust (AI Basic Act) and the Colorado Artificial Intelligence Act (AIA). For example, the Colorado AIA sets out a risk-based framework, subjecting certain AI Technologies to numerous compliance obligations, including transparency, annual impact assessments, monitoring and human oversight requirements. Under the AIA, non-compliant companies may be subject to administrative fines of up to $20,000 per violation (or more if the violation is committed against senior citizens) of the algorithmic discrimination provisions, as well as fines, injunctive relief, and other penalties to compensate for unfair or deceptive practices. Certain of our activities subject us to these comprehensive AI laws and depending on how these laws are implemented and interpreted, we may have to adapt our business practices, contractual arrangements, and services to comply with such obligations. We expect other jurisdictions will adopt similar laws and for existing laws to undergo amendment and evolution based on regulatory and judicial application and interpretation.
Additionally, certain privacy laws extend rights to consumers (such as the right to delete certain personal data) and regulate automated decision making, which may be incompatible with our use of AI Technologies. These obligations may make it harder for us to conduct our business using AI Technologies, lead to regulatory fines or penalties, require us to change our business practices, retrain our AI Technologies, or prevent or limit our use of AI Technologies. For example, the Federal Trade Commission has required other companies to turn over (or disgorge) valuable insights or trainings generated through the use of AI Technologies where they allege the company has violated privacy and consumer protection laws. If we cannot use AI Technologies or that use is restricted, our business may be less efficient, or we may be at a competitive disadvantage.
Our projections regarding the market opportunities for our product candidates may not be accurate and the actual market for our products may be smaller than we estimate.
The precise incidence and prevalence for the conditions we aim to address with our product candidates are unknown. Our projections of both the number of people who have these diseases, as well as the subset of
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people with these diseases who have the potential to benefit from treatment with our product candidates, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, which may include sales of our competitors, scientific literature, surveys of clinics, patient foundations or market research, and may prove to be incorrect in general, or as to their applicability to our company. Further, new clinical trials or research may change the estimated incidence or prevalence of these diseases. The total addressable market of our product candidates, if approved, will ultimately depend upon, among other things, the diagnosis criteria included in the final label for our product candidates approved for sale for these indications, if any, the ability of our product candidates to improve on the safety, convenience, cost, and efficacy of competing therapies or therapies in development, acceptance by the medical community and patients, drug pricing and reimbursement. The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product, if approved, or our product candidates or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our business, financial condition, results of operations and prospects.
Our business could be adversely affected by the effects of health pandemics, endemics or epidemics, which could cause significant disruptions in our operations and those of our current or future third-party manufacturers, CROs, and other third parties upon whom we rely.
Health pandemics, endemics or epidemics have in the past and could again in the future result in quarantines, stay-at-home orders, remote work policies or other similar events that may disrupt businesses, delay our research and development programs and timelines, negatively impact productivity and increase risks associated with cybersecurity, the future magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations. More specifically, these types of events may negatively impact personnel at third-party manufacturing facilities or the availability or cost of materials, which could disrupt our supply chain. Moreover, our clinical trials may be negatively affected. Clinical site activation and patient enrollment may be delayed due to prioritization of hospital resources. Some patients may not be able or willing to comply with trial protocols if quarantines impede patient movement or interrupt healthcare services. Our ability to recruit and retain patients, principal investigators and site staff (who as healthcare providers may have heightened exposure) may be hindered, which would adversely affect our clinical trial operations. Disruptions or restrictions on our ability to travel to monitor data from our clinical trials, or to conduct clinical trials, or the ability of patients enrolled in our clinical trials or staff at clinical trial sites to travel, as well as temporary closures of our clinical trial partners and third-party manufacturers’ facilities, would negatively impact our clinical trial activities. In addition, we rely on independent clinical investigators, CROs and other third-party service providers to assist us in managing, monitoring and otherwise carrying out certain of our preclinical studies and clinical trials, including the collection of data from our clinical trials, and the effects of health pandemics, endemics or epidemics may affect their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us. Similarly, our clinical trials could be delayed and/or disrupted. As a result, the expected timeline for data readouts, including incompleteness in data collection and analysis and other related activities, and certain regulatory filings may be negatively impacted, which would adversely affect our ability to obtain regulatory approval for and to commercialize our product candidates, if approved, increase our operating expenses, and adversely affect our business, financial condition, results of operations and prospects. In addition, impact on the operations of the FDA or comparable foreign regulatory authorities could negatively affect our planned clinical trials and approval processes. Finally, economic conditions and business activity may be negatively impacted and may not recover as quickly as anticipated.
Our business could be affected by litigation, government investigations and enforcement actions.
We currently operate in a number of jurisdictions in a highly regulated industry and we could be subject to litigation, government investigation and enforcement actions on a variety of matters in the United States or
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foreign jurisdictions, including, without limitation, intellectual property, regulatory, product liability, environmental, whistleblower, false claims, privacy, anti-kickback, anti-bribery, securities, commercial, contract, employment and other claims and legal proceedings that may arise from conducting our business. Any determination that our operations or activities are not in compliance with existing laws or regulations could result in the imposition of fines, civil and criminal penalties, equitable remedies, including disgorgement, injunctive relief and/or other sanctions against us, and remediation of any such findings could have an adverse effect on our business operations.
Legal proceedings, government investigations and enforcement actions can be expensive and time-consuming. An adverse outcome resulting from any legal proceedings, investigations or enforcement actions could result in significant damages awards, fines, penalties, exclusion from the federal healthcare programs, healthcare debarment, injunctive relief, product recalls, reputational damage and modifications of our business practices, which could have a material adverse effect on our business, financial condition, results of operations and prospects. Even if such a proceeding, investigation or enforcement action is ultimately decided in our favor, the investigation and defense thereof could require substantial financial and management resources.
Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
Our future growth may depend, in part, on our ability to develop and commercialize our product candidates in foreign markets, for which we may rely on collaboration with third parties. We are not permitted to market or promote our product candidates before we receive regulatory approval from the applicable regulatory authority in that foreign market and may never receive such regulatory approval for our product candidates. To obtain separate regulatory approval in many other countries, we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing and distribution of our product candidates, and we cannot predict success in these jurisdictions. If we fail to comply with the regulatory requirements in international markets and do not receive applicable regulatory approvals on a timely basis, if at all, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed. Our failure to obtain approval of our product candidates by regulatory authorities in another country may significantly diminish the commercial prospects of such product candidates and our business, financial condition, results of operations and prospects could be adversely affected. Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements, and reduced protection of intellectual property rights in some foreign countries.
Our operations are concentrated in one location, and we or the third parties upon whom we depend may be adversely affected by a wildfire and earthquake or other natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
Our current operations are predominantly located in California. Any unplanned event, such as a flood, wildfire, explosion, earthquake, extreme weather condition, epidemic, endemic or pandemic, power outage, telecommunications failure or other natural or manmade accidents or incidents that result in us being unable to fully utilize our facilities could adversely impact our ability to operate our business, particularly on a daily basis, and have significant negative consequences on our financial and operating conditions. Any similar impacts of natural or manmade disasters on our third-party contract manufacturing organizations (CMOs) and CROs could cause delays in our clinical trials and may have a material and adverse effect on our ability to operate our business and have significant negative consequences on our financial and operating conditions. If a natural disaster, power outage or other event occurred that prevented us from using our clinical sites, impacted clinical supply or the conduct of our clinical trials, that damaged critical infrastructure, such as the manufacturing facilities of our third-party CMOs, or
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that otherwise disrupted operations, it may be difficult or, in certain cases, impossible, for us to continue our business for a substantial period of time. The disaster recovery and business continuity plans we and our CMOs and CROs have in place may prove inadequate in the event of a serious disaster or similar event. In the event of an accident or incident at these facilities, we cannot assure you that the amounts of insurance we currently carry will be sufficient to satisfy any damages and losses. If our facilities, or the manufacturing facilities of our CMOs or CROs, are unable to operate because of an accident or incident or for any other reason, even for a short period of time, any or all of our development programs may be harmed. Any business interruption could adversely affect our business, financial condition, results of operations and prospects.
Risks related to our intellectual property
Our success depends in large part on our ability to obtain, maintain, enforce, and defend the scope, ownership or control, validity and enforceability of our intellectual property rights, and we may not be able to do so.
Our success depends in large part on our ability to obtain and maintain protection of the intellectual property we own (or may license in the future) including pursuing, obtaining and maintaining patent protection in the United States and other countries intended to cover the composition of matter of our product candidates, their manufacture, their methods of use, related technologies, and other inventions important to our business. In addition to patent protection, we may also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. Accordingly, if we do not adequately pursue, obtain, maintain, protect or enforce our intellectual property rights to prevent the manufacture, sale or use of our inventions by others, including our competitors, our competitive advantage will be eroded, which will have a material adverse effect on our business, financial condition, results of operations and prospects.
We seek to protect our proprietary position by filing patent applications and enforcing resulting patents related to our product candidates and other technologies that are important to our business in the United States and select other countries. However, we cannot guarantee that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our product candidates, the methods of use or the manufacture of those product candidates. If we are unable to obtain and maintain meaningful patent protection in jurisdictions important to our business for our product candidates, their respective components, formulations, methods of use, including combination therapies, methods used to manufacture them, or other proprietary technologies, our business, the financial condition, results of operations and prospects of our company could be adversely affected. The patent prosecution process is expensive, time-consuming and complex, and we may not be able to file, prosecute, maintain or license, if applicable, all necessary or desirable patent applications or enforce or defend resulting patents at a reasonable cost or in a timely manner. It is also possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.
The patent rights of pharmaceutical and biotechnology companies, like ours, generally are highly uncertain, involve complex legal and factual questions and have been the subject of extensive litigation. No consistent policy regarding the breadth of claims allowed in biotechnology and pharmaceutical patents, particularly those related to oncology, has emerged in the United States. The relevant patent laws and their interpretation outside of the United States are also uncertain. Various courts, including the U.S. Supreme Court, have rendered decisions that affect, for example, the scope of patent claims or the patent eligibility of certain inventions or discoveries relating to biotechnology. The U.S. Supreme Court has ruled on several patent cases in recent years, either narrowing the scope of patent protection available in certain circumstances or weakening the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. In addition, patent eligibility and the scope of patent protection outside the United States is uncertain, and laws of foreign countries may not protect our rights to the same extent as the laws of the United States or vice versa. For example, several foreign countries,
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including India and countries in the Andean Community, severely limit or completely prohibit the patentability of methods of treatment of the human body. We cannot predict whether the patent applications we are currently pursuing will issue as patents that protect our technology and product candidates, in whole or in part, in any particular jurisdiction or whether the claims of any issued patents will provide sufficient protection from competitors. Changes in either the patent laws or interpretation of the patent laws in the United States or other countries may diminish the value of our patents and our ability to obtain, maintain, protect, defend and enforce our patent rights, narrow the scope of our patent protection and, more generally, affect the value of our patent rights.
Further, third parties may have filed or will file patent applications on aspects of our technology that, once published or patented, may negatively affect our ability to pursue our own patent protection. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases are not published at all. Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in the patents or patent applications we own or any patents or patent applications we may own in the future, or that we were the first to file for patent protection of such inventions. If a third party can establish that we were not the first to make or the first to file for patent protection of such inventions, our patent applications may not issue as patents and, even if issued, may be challenged and invalidated or rendered unenforceable. As a result, the issuance, ownership, inventorship, scope, validity, enforceability and commercial value of our patent rights are uncertain. For example, currently unpublished patent applications may later publish and limit our ability to obtain valid and enforceable patents.
Moreover, any issued patents we do obtain may be challenged, invalidated, or circumvented. We or any of our future licensors may be subject to a third-party pre-issuance submission of prior art to the U.S. Patent and Trademark Office (USPTO), or to a foreign patent office, or become involved in opposition, derivation, revocation, reexamination, inter partes review, post-grant review, interference proceedings, or litigation challenging our patent rights or the patent rights of others. An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights. If the breadth or strength of protection provided by any patents we obtain and patent applications we have filed is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates. Moreover, our competitors may independently develop similar technologies that are outside the scope of the rights granted under any issued patents we may obtain.
Additionally, the breadth of the claims in a patent application can be significantly reduced during prosecution, and the scope of the granted claims can be reinterpreted after issuance. Even if our owned or any possible future in-licensed patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us, or otherwise provide us with any competitive advantage. The issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and any patents we do obtain may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and product candidates. Such challenges also may result in substantial cost and require significant time from our management and employees, even if the eventual outcome is favorable to us. Furthermore, our competitors may be able to circumvent any patents we obtain by developing similar or alternative technologies or products in a non-infringing manner. For these reasons, even if we are successful in obtaining patents in the future, our patent portfolio may not provide us with sufficient rights to exclude others
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from using or commercializing technology and products similar or identical to any of our technology and product candidates for any period of time.
Patent terms may not protect our competitive position on our product candidates for an adequate amount of time.
Issued patents can provide protection for varying periods of time, depending, for example, upon the type of patent, the date of filing of the patent application, the date of patent issuance and the legal term of patents in the countries in which they are obtained. However, patents have a limited lifespan. In the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S. non-provisional or international patent application filing date. The term of a patent outside of the U.S. varies in accordance with the laws of the foreign jurisdiction. Various extensions may be available, but the life of a patent, and the protection it affords, is limited. Even if patents covering our product candidates are obtained, once the patent life has expired we may be subject to competition from competitive products, including generics. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are approved for use or commercialized.
Third parties may allege that we are infringing, misappropriating or otherwise violating their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on our business.
Our commercial success depends, in part, upon our ability and the ability of our possible future collaborators to develop, manufacture, market and sell our product candidates and use our proprietary technologies without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of third parties. There is considerable amount of patent and other intellectual property litigation in the pharmaceutical and biotechnology industries. We may become party to, or be threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to product candidates, including interference proceedings, post grant review, inter partes review and derivation proceedings before the USPTO and similar proceedings in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, including our competitors, exist in the fields in which we are pursuing product candidates. In particular, the fields of molecularly targeted oncology therapies, including inhibition of oncogenic signaling pathways, as well as macrocyclic small molecule design are characterized by extensive patent portfolios held by established pharmaceutical and biopharmaceutical companies, and we cannot be certain that our product candidates, including BH-30643, BH-30236 and BH-501284, do not infringe existing or future patents held by such parties. As the biotechnology and pharmaceutical industries expand and more patents are issued, and as we gain greater visibility and market exposure as a public company, the risk increases that our technologies or product candidates or commercializing activities may be subject to claims that they infringe the patent rights of third parties. Our competitors and others may have significantly larger and more mature patent portfolios than we have. In addition, future litigation may be initiated by patent holding companies or other third parties who do not have a relevant product or service revenue and against whom our current and future patents, if any, may provide little or no deterrence or protection. Competitors may also assert that our product candidates infringe their intellectual property rights as part of a business strategy to impede our successful entry into those markets.
The legal threshold for initiating litigation or contested proceedings is low, so that even lawsuits or proceedings with a low probability of success might be initiated and require significant resources and management attention to defend. The risks of being involved in such litigation and proceedings may increase if and as our product candidates near commercialization and as we gain greater visibility as a public company. Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future,
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regardless of merit. Because patent applications can take many years to issue, and some may not publish prior to being granted, pending patent applications may result in issued patents that our product candidates may infringe. For example, there may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture, methods for use or methods for treatment related to the discovery, use or manufacture of our product candidates or technology. We may not be aware of all such intellectual property rights potentially relating to our technology and product candidates, or we may incorrectly conclude that a third-party’s intellectual property is invalid and unenforceable or that our activities and product candidates do not infringe the intellectual property rights of third parties. Thus, we do not know with certainty that our technology and product candidates, or our development and commercialization thereof, do not and will not infringe, misappropriate or otherwise violate any third party’s intellectual property rights. Parties making claims against us may also obtain injunctive or other equitable relief. For example, if any third-party patents were held to cover the manufacturing process of our product candidates, including any molecules formed during the manufacturing process or any final product itself, the holders of any such patents may be able to block our ability to commercialize such product candidates. In the event of a successful claim of infringement against us, we may be enjoined from developing or commercializing the infringing products or technology; we may also have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, indemnify customers, future collaborators or other third parties, seek new regulatory approvals, and redesign our infringing products, which may not be possible or practical. If we are found to infringe, misappropriate or otherwise violate a third party’s intellectual property rights, we may be required to obtain a license from such third party to continue developing, manufacturing and marketing our technology and product candidates. However, we may not be able to obtain any required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-exclusive, thereby giving our competitors and other third parties access to the same technologies licensed to us, and the license terms could require us to make substantial licensing fees or royalty payments or both. Claims that we have misappropriated the confidential information, trade secrets or other intellectual property rights of third parties could have a similar material adverse effect on our business, financial condition, results of operations and prospects.
We may be subject to claims by third parties asserting that our employees, consultants or contractors have wrongfully used or disclosed confidential information of such third parties, or that they have wrongfully used or disclosed alleged trade secrets of their current or former employers, or that we have misappropriated their intellectual property, or that they own what we regard as our own intellectual property.
Many of our employees, physician or scientist partners, consultants and contractors are or were previously employed at or engaged by universities or other pharmaceutical or biotechnology companies, including our competitors or potential competitors. Many of them executed proprietary rights, non-disclosure and/or non-competition agreements in connection with such present or previous employment or engagement. A significant number of our key scientific and management personnel, including members of our founding team, previously worked at major pharmaceutical companies, and we cannot guarantee that prior employment agreements applicable to such individuals do not reach inventions or technologies that these individuals developed for us. Although we try to ensure that the individuals who work for us do not use the intellectual property rights, proprietary information, know-how or trade secrets of others in their work for us, we may be subject to claims that we or they have, inadvertently or otherwise, used, infringed, misappropriated or otherwise violated the intellectual property rights, or disclosed the alleged trade secrets or other proprietary and/or confidential information, of their former employers, competitors or other third parties. We may also be subject to claims that we have improperly used or obtained such trade secrets or other proprietary and/or confidential information. Litigation may be necessary to defend against these claims. Any litigation or the threat of litigation may adversely affect our ability to hire employees or engage consultants or contractors. A loss of key personnel or their work product could hamper or prevent us from developing and commercializing product candidates, which could harm our business.
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In addition, while it is our policy to require our employees, physician or scientist partners, consultants and contractors who may be involved in the conception or development of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in obtaining such an agreement from each party who in fact develops intellectual property that we regard as our own. Our intellectual property assignment agreements with them may not be self-executing or may be breached, and we may be forced to bring claims against third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual property. Additionally, assignment agreements and related agreements may be interpreted under the laws of the U.S. or a foreign country in a manner which may be unpredictable and may result in outcomes that negatively affect our claim to ownership. Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.
If we fail in prosecuting or defending any such claims, we may be required to pay monetary damages, and we may also lose valuable intellectual property rights or personnel, which could have a material adverse effect on our competitive position and prospects. Such intellectual property rights could be awarded to a third party, and we could be required to obtain a license from such third party to commercialize our technology or products, which license may not be available on commercially reasonable terms, or at all, or such license may be non-exclusive thereby giving our competitors and other third parties access to the same technologies licensed to us, and could require us to make substantial licensing fees or royalty payments or both. Even if we are successful in prosecuting or defending against such claims, litigation could result in substantial costs and be a distraction to our management and employees.
If we are unable to obtain, maintain, defend or enforce patent or other intellectual property protection for BH-30643, BH-30236, BH-501284, or any other of our product candidates that we may pursue or if the scope of the intellectual property protection we currently have or obtain in the future is not sufficiently broad, our competitors could develop and commercialize product candidates similar or identical to ours, and our ability to successfully commercialize BH-30643, BH-30236, BH-501284 and any other of our product candidates that we may pursue may be impaired.
In some instances, we submit patent applications directly with the USPTO as provisional patent applications. However, U.S. provisional patent applications are not eligible to become issued patents unless and until, among other things, we file a non-provisional patent application within 12 months of the provisional application filing date. With regard to such U.S. provisional patent applications, if we do not timely file any non-provisional patent applications, we may lose our priority date with respect to our provisional patent applications and any patent protection on the inventions disclosed in our provisional patent applications. Failure to timely convert any such application could result in the loss of priority dates that are material to the protection of our product candidates. Any pending and future patent applications that we own may not result in patents being issued that protect our product candidates or technology, in whole or in part, or that effectively prevent others from commercializing competitive product candidates. The claimed scope in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. Even if patent applications issue as patents, they may not issue in a form that will provide us with any meaningful protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our patents may be challenged in the courts or USPTO or foreign patent offices. Such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical product candidates to ours or limit the duration of the patent protection of our product candidates. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized. As a result, our
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patent portfolio may not provide us with sufficient rights to exclude others from commercializing drugs similar or identical to ours.
If we are unable to protect the confidentiality of our trade secrets and other proprietary information, our business and competitive position would be adversely affected.
In addition to seeking patents for some of our technology and product candidates, we also rely on trade secrets and confidentiality agreements to protect our unpatented know-how, technology and other proprietary information to maintain our competitive position. We seek to protect our trade secrets and other proprietary technology, in part, by entering into non-disclosure and confidentiality agreements with parties who have access to them, such as our employees, consultants, corporate collaborators, outside scientific collaborators, contract research organizations, contract manufacturers, consultants, advisors and other third parties. We cannot guarantee that we have entered into such agreements with each party that may have or has had access to our trade secrets or proprietary technology. Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, our unpublished patent applications or other confidential research, and we may not be able to obtain adequate remedies for such breaches. Detecting the disclosure or misappropriation of a trade secret and enforcing a claim that a party illegally disclosed or misappropriated a trade secret is difficult, expensive and time-consuming, and the outcome is unpredictable. In addition, some courts inside and outside the United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained or independently developed by a competitor or other third party, we would have no right to prevent them, or those to whom they communicate such trade secrets, from using that technology or information to compete with us.
Furthermore, we expect that, over time, our trade secrets, know-how and proprietary information may be disseminated within the industry through independent development, the publication of journal articles and the movement of personnel to and from academic and industry scientific positions. Consequently, without costly efforts to protect our proprietary technology, we may be unable to prevent others from exploiting that technology, which could affect our ability to expand in domestic and international markets. If any of our trade secrets were to be disclosed to or independently developed by a competitor or other third party, our competitive position would be materially and adversely affected.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. These security measures may be breached or otherwise accessed in an unauthorized manner, and we may not have adequate remedies for any breach.
Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, 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.
Periodic maintenance fees, renewal fees, annuity fees and various other government fees on any issued patent or application are due to be paid to the USPTO and patent agencies in foreign countries in several stages over the lifetime of the patent. The USPTO and patent agencies in foreign countries require compliance with a number of procedural, documentary, fee payment and other requirements during the patent application process. We currently maintain many pending patent applications and issued patents across numerous jurisdictions worldwide, including jurisdictions in North America, Europe, Asia-Pacific, the Middle East, Latin America and Africa, and the breadth and complexity of this portfolio significantly increases our maintenance and prosecution compliance obligations. In the future, we may rely on licensing partners to pay these fees due to U.S. and non-U.S. patent agencies and to comply with these other requirements with respect to any future licensed patents and patent applications. While an inadvertent lapse can sometimes be cured by payment of a
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late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in partial or complete loss of a patent or patent rights in the relevant jurisdiction. Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to timely file the application in the relevant jurisdiction, failure to respond to official actions within prescribed time limits, non-payment of fees related to patent procurement in patent offices in the relevant jurisdiction, failure to properly legalize and submit formal documents in the relevant jurisdiction and failure to pay annuities and/or maintenance fees in the relevant jurisdiction.
In addition, public health pandemics, geopolitical instability, natural disasters, or similar events may impair our ability to comply with these procedural, document submission, fee payment, and other requirements imposed by government patent agencies, which may materially and adversely affect our ability to obtain or maintain patent protection for our product candidates. There could also be delays at the USPTO caused by staffing cuts and other U.S. government actions as a result of the U.S. Department of Government Efficiency or other executive actions to reduce the size of the U.S. government.
The USPTO and various foreign agencies require compliance with certain foreign filing requirements during the patent application process. For example, in some countries, including the United States, China, India and some European countries, a foreign filing license is required before certain patent applications are filed. The foreign filing license requirements vary by country and depend on various factors, including where the inventive activity occurred, citizenship status of the inventors, the residency of the inventors and the invention owner, the place of business for the invention owner and the nature of the subject matter to be disclosed (e.g., items related to national security or national defense). In some, but not all cases, for example in China and India, a foreign filing license cannot be obtained retroactively in accordance with the applicable rules. There are situations, however, in which non-compliance can result in abandonment of a pending patent application or can be grounds for revoking or invalidating an issued patent, resulting in the loss of patent rights in the relevant jurisdiction. In such an event, potential competitors might be able to enter the relevant markets with similar or identical products or technology, which could have a material adverse effect on our business, financial condition, results of operations and prospects. We may also be dependent on our licensors to take the necessary actions to comply with these requirements with respect to our licensed intellectual property.
If we do not obtain patent term extension in the United States under the Hatch-Waxman Act and in foreign countries under similar legislation, which if granted could extend the term of our marketing exclusivity for any product candidates we may develop, our business may be materially and adversely affected.
In the United States, the term of a patent that covers an FDA-approved drug may be eligible for limited patent term extension, which permits limited patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration date of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval. In addition, the patent term of only one patent applicable to an approved drug may be extended, and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended. Similar provisions are available in Europe and certain other non-U.S. jurisdictions to extend the term of a patent that covers an approved drug. While, in the future, if and when our product candidates receive FDA approval or regulatory approval in any foreign country, we expect to apply for patent term extensions on patents covering those product candidates and methods for use thereof, and that are eligible for such patent term extension, there is no guarantee that the applicable authorities will agree with our assessment of whether such extensions should be granted and, even if granted, the length of such extensions. We may not be granted patent term extension either in the United States or in any foreign
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country, even where we obtain a patent that is eligible for patent term extension, if, for example, an applicable government authority determines that we fail to exercise due diligence during the testing phase or regulatory review process, fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request. If we obtain such an extension, it may be for a shorter period than we had sought. If we are unable to obtain any patent term extension or the term of any such extension is less than we request, our competitors may obtain approval of competing products following the expiration of our patent rights, and our business, financial condition, results of operations and prospects could be materially and adversely affected.
Furthermore, for any patents we may in-license in the future, we may not have the right to control prosecution, including filing with the USPTO, of a petition for patent term extension under the Hatch-Waxman Act, or the filing of any petition for patent term extension in any foreign country where such extensions are available. Thus, if a patent that we in-license in the future is eligible for patent term extension under the Hatch-Waxman Act or in any foreign country under similar legislation, we may not be able to control whether a petition to obtain a patent term extension is filed or whether the requested extension is obtained from the USPTO or from the relevant jurisdiction.
Also, there are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Approved Drug Products with Therapeutic Equivalence Evaluations, or the Orange Book. We may be unable to obtain or in-license patents covering our product candidates that contain one or more claims that satisfy the requirements for listing in the Orange Book. Even if we or our future licensors submit a patent for listing in the Orange Book, the FDA may decline to list the patent, or a manufacturer of generic drugs may challenge the listing. If one of our product candidates is approved and a patent covering that product candidate is not listed in the Orange Book, a manufacturer of generic drugs would not have to provide advance notice to us of any abbreviated new drug application filed with the FDA to obtain permission to sell a generic version of such product candidate.
If we are unable to obtain licenses from third parties on commercially reasonable terms, our business could be adversely affected.
It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain a license from such third parties. The in-licensing and acquisition of third-party intellectual property rights is a competitive area, and a number of more established companies may also be pursuing strategies to in-license or acquire third-party intellectual property rights that we may consider attractive or necessary to our business. These established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities. Furthermore, companies that perceive us to be a competitor may be unwilling to sell, assign or license intellectual property rights to us. Moreover, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us. In addition, we expect that competition for the in-licensing or acquisition of third-party intellectual property rights for product candidates that are attractive to us may increase in the future, which may mean fewer suitable opportunities for us as well as higher acquisition or licensing costs. If we are unable to license such technology, or if we are forced to in-license such technology on unfavorable terms, such as substantial licensing fees or royalty payments, our business could be materially and adversely affected. If we are unable to obtain a necessary license, the third parties owning such intellectual property rights could seek an injunction prohibiting our manufacturing, use, and/or sales or we may be unable to otherwise develop or commercialize the affected product candidates, which could materially harm our business. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.
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If we are unable to obtain rights to required third-party intellectual property rights, we may be required to expend significant time and resources to redesign our technology, product candidates, the methods for manufacturing them, the methods of using them or to develop or in-license replacement technology, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected technology and product candidates, which could harm our business, financial condition, results of operations, and prospects significantly.
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 our product candidates.
Changes in either the patent laws or interpretation of the patent laws in the United States could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents and may diminish our ability to protect our inventions, obtain, maintain, enforce and protect our intellectual property rights and, more generally, could affect the value of our intellectual property or narrow the scope of our future owned and licensed patents. Under the Leahy Smith America Invents Act, or the America Invents Act, enacted in September 2011, the United States transitioned to a first-inventor-to-file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. A third party that files a patent application in the USPTO before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party. This regime requires us to be cognizant of the time from invention to filing of a patent application and be diligent in filing patent applications, but circumstances could prevent us from promptly filing patent applications on our inventions. Since patent applications in the United States and most other countries are confidential for a period after filing or until issuance, we cannot be certain that we or our future licensors were the first to either (i) file any patent application related to our product candidates or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.
The America Invents Act also includes a number of significant changes that affect the way patent applications filed after March 2013 are prosecuted, challenged, and litigated and provided more efficient and cost-effective avenues for competitors to challenge the validity of patents. These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO-administered post-grant proceedings, including post-grant review, inter partes review and derivation proceedings. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in U.S. federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate our patent claims that would not have been invalidated if first challenged by the third party as a defendant in a district court action. Therefore, the current laws governing patents in the United States, including the America Invents Act, and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our current or future issued patents, all of which could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.
In addition, the patent positions of companies in the development and commercialization of biopharmaceuticals are particularly uncertain. For example, U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. This combination of events has created uncertainty with respect to the validity and enforceability of patents, once obtained. Depending on future actions by the U.S. Congress, the federal courts and the USPTO, and the relevant law-making bodies in other countries, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our existing patent portfolio and our ability to
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obtain, maintain, protect and enforce our intellectual property in the future. For example, certain decisions, including by the U.S. Court of Appeals for the Federal Circuit, raise questions regarding the award of patent term adjustment (PTA), for patents in families where related patents have issued without PTA. Thus, it cannot be said with certainty how PTA will or will not be viewed in the future and whether patent expiration dates may be impacted.
In the European Union (EU), a new unitary patent system took effect on June 1, 2023, which may significantly impact European patents, including those based on European patent applications filed after introduction of the new system. Under the new system, the proprietor of a European patent can opt for that patent to become a unitary patent which will cover all of the EU states that have ratified the Agreement on the Unified Patent Court at that point in time (UPC Countries), and the European patent will then be subject to the jurisdiction of a new unitary patent court (UPC). During a transition period of the first seven years of the UPC’s existence (which under the current legislation could potentially be extended by an administrative committee for up to seven additional years), European patent applications can be opted out of the jurisdiction of the UPC, and validated as exclusively national patents in any one or more of the UPC Countries, even if those patents grant after the end of the transition period.
We may decide to opt out future European patents from the UPC, but doing so may preclude us from realizing some benefits of the UPC. If we do opt a European patent out of the jurisdiction of the UPC, we may decide to opt that European patent back into the jurisdiction of the UPC in the future if we do wish to take advantage of certain benefits of the UPC, but we will only be able to do this if no actions have been brought before a national court in relation to the European patent concerned. In addition, if we do not meet all of the formalities and requirements for opt-out under the UPC, our future European patents could remain under the jurisdiction of the UPC.
We may decide not to opt out future European Patents from the UPC, but not opting out will put our European patent under the jurisdiction of the UPC for all UPC Countries and we will still be required to validate the European patent in countries that are not signatories to the unitary patent system, such as Spain, Switzerland and the United Kingdom, and failure to validate would prevent us from securing patent rights in those countries. European patents that are under the jurisdiction of the UPC may be challenged in a single UPC-based revocation proceeding that, if successful, could invalidate the patent in all UPC countries.
The UPC will also provide our competitors with a new forum to centrally revoke our European patents, and allow for the possibility of a competitor to obtain pan-European injunction against us in infringement proceedings, in at least all countries which are signatories to the UPC. Further, because the UPC is a new court system having little established precedent for the court’s decisions, there is increased uncertainty regarding the outcome of any patent litigation. We are unable to predict what impact the new patent regime may have on our ability to exclude competitors in the European market.
We may not be able to protect our intellectual property rights throughout the world.
Patents are of national or regional effect. Filing, prosecuting and defending patents on our product candidates in all countries throughout the world would be prohibitively expensive. In addition, intellectual property rights in some countries outside the United States can be less extensive than those in the United States. Prosecution of foreign patent applications may be a longer process and patents may grant at a later date, and therefore with a shorter term of enforceability, than in the United States and the requirements for patentability differ in certain jurisdictions and countries. Moreover, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States, even in countries where we do pursue patent protection. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our
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inventions in and into the United States or other jurisdictions. In addition, competitors may use our product candidates in jurisdictions where we have not obtained patent protection to develop their own products and may also export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our product candidates, and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Furthermore, some jurisdictions, such as Europe, Japan and China, may have different (and potentially heightened) examination guidelines or requirements for securing a patent than in the United States, including, for example, the requirement of claims having literal support in the original patent filing, different support requirements for making claim amendments and different requirements regarding the ability to provide post-patent application filing evidence to support the patentability of the claims under examination. Thus, due to these different requirements or restrictions, we may not be able to obtain sufficient patent protection in certain jurisdictions even though the same or similar patent protection can be secured in the United States and other jurisdictions.
Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. For example, in European Union countries, compulsory licensing laws compel patent owners to grant licenses to third parties. In addition, some countries limit the enforceability of patents against government agencies or government contractors. Proceedings to enforce our patent rights in foreign jurisdictions, whether or not successful, could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Similarly, if our trade secrets are disclosed in a foreign jurisdiction, competitors worldwide could have access to our proprietary information and we may be without satisfactory recourse. Such disclosure could have a material adverse effect on our business. Moreover, our ability to protect and enforce our intellectual property rights may be adversely affected by unforeseen changes in foreign intellectual property laws, which could limit our potential revenue opportunities. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or may in-license in the future.
In addition, geopolitical actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any future licensors and the maintenance, enforcement or defense of our issued patents or those of any future licensors. For example, the United States and foreign government actions related to Russia’s invasion of Ukraine may limit or prevent filing, prosecution and maintenance of patent applications in Russia. Government actions may also prevent maintenance of issued patents in Russia. These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia. If such an event were to occur, it could have a material adverse effect on our business. In addition, a decree was adopted by the Russian government in March 2022 allowing Russian companies and individuals to exploit inventions owned by patentees from the United States without consent or compensation. Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia. Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be materially and adversely affected by certain geopolitical actions.
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We may become involved in lawsuits to protect or enforce our patent or other intellectual property rights, which could be expensive, time-consuming and unsuccessful.
Competitors and other third parties may infringe, misappropriate or otherwise violate patents or other intellectual property rights that we own or may in-license in the future. As a result, we may need to file infringement, misappropriation or other intellectual property claims against those entities, which can be expensive and time-consuming and divert the time and attention of our management and other employees. Our pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless and until a patent issues from such applications. Any claims we assert against others could provoke them to assert counterclaims against us alleging that we infringe, misappropriate or otherwise violate their intellectual property rights. Our ability to stop competitors and other third parties from making, using, selling, offering to sell, or importing products that infringe our intellectual property rights will depend in part on the extent to which we obtain and enforce patent claims that cover our product candidates, technology, inventions, and improvements.
Furthermore, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability. In a patent infringement proceeding, the perceived infringers could counterclaim that the patents we or our future licensors have asserted are invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are common. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement, insufficient written description, or failure to claim patent-eligible subject matter. Grounds for an unenforceability assertion include an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. Third parties may institute such claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, interference proceedings, derivation proceedings and equivalent proceedings in foreign jurisdictions, such as opposition proceedings in the European Patent Office. The outcomes of allegations of invalidity or unenforceability are unpredictable. With respect to validity, for example, even if we are successful in obtaining patents or in-licensing patents, we cannot be certain that there is no invalidating prior art of which the patent examiner and we or our future licensing partners were unaware during prosecution that is ultimately used to invalidate our or our future licensors’ patents.
An adverse result in any such proceeding could put one or more of the patents that we own or may own in the future at risk of being invalidated or interpreted narrowly, and could put any of our present or future owned or in-licensed patent applications at risk of not yielding any issued patent. A court may also refuse to stop the third party from using the technology at issue in a proceeding, for example, on the basis that our patents do not cover that technology, or decide that the other party’s use of our patented technology falls under an exemption to patent infringement including, for example, research exemptions such as the safe harbor to patent infringement under 35 U.S.C. § 271(e)(1). Furthermore, if the breadth or strength of protection provided by our present or future patents or patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
In addition, interference or derivation proceedings provoked by third parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our present or future patents or patent applications. An unfavorable outcome could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be adversely affected if the prevailing party does not offer us a license on commercially reasonable terms or at all, or if a non-exclusive license is offered and our competitors gain access to the same technology. Our defense of interference or derivation proceedings may fail and, even if successful, may result in substantial costs and distract our
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management and other employees. In addition, the uncertainties associated with defended interference or derivation proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research and discovery programs, or enter into development partnerships that would help us bring our product candidates to market.
Furthermore, because of the substantial amount of discovery required in connection with patent office proceedings and intellectual property litigation, there is a risk that some of our confidential information or trade secrets could be compromised by disclosure during litigation. There could also be public announcements of the results of hearings, motions, or other interim proceedings or developments. Any of the foregoing could allow third parties to develop and commercialize competing technologies and products and have a material adverse impact on our business, financial condition, results of operations and prospects.
Moreover, there is no assurance that we will have sufficient financial or other resources to file and pursue such infringement, misappropriation, or violation claims, which typically last for years before they are concluded. Further, we may not obtain an injunction against further infringing activity and instead may only be awarded monetary damages, which may or may not be an adequate remedy. Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and other employees could outweigh any benefit we receive as a result of the proceedings.
If we fail to comply with our obligations in any future intellectual property licenses with third parties that we may enter into, or otherwise experience disruptions to our business relationships with our future licensors, we could lose intellectual property rights that are important to our business.
Although we do not currently hold any in-licenses and our intellectual property portfolio is wholly owned by us, we may in the future enter into licensing and funding arrangements with third parties that may impose, among other things, diligence, development, and commercialization timelines, milestone payment, royalties, insurance and other obligations on us. If we fail to comply with those obligations or we are subject to bankruptcy-related proceedings, our counterparties may have the right to terminate these agreements, in which event we might not be able to develop, manufacture or market, or may be forced to cease developing, manufacturing or marketing, any product candidate that is covered by these agreements or we may be subject to litigation for breach of these agreements or face other penalties under such agreements, or our counterparties may require us to grant them certain rights. Such an occurrence could materially adversely affect the value of any product candidate being developed under any such agreement. Termination of these agreements or reduction or elimination of our rights under these agreements, or restrictions on our ability to freely assign or sublicense our rights under such agreements when it is in the interest of our business to do so, may result in our having to negotiate new or reinstated agreements with less favorable terms, cause us to lose our rights under these agreements, including our rights to important intellectual property or technology, which would have a material adverse effect on our business, financial condition, results of operations, and prospects, or impede, delay or prohibit the further development or commercialization of, one or more product candidates that rely on such agreements.
If we or our future licensors fail to adequately protect our licensed intellectual property, our ability to develop and commercialize product candidates under such agreements could suffer. We may not have complete control over the maintenance, prosecution and litigation of the in-licensed patents and patent applications and may have limited control over future intellectual property that may be in-licensed. For example, we cannot be certain that activities such as the maintenance and prosecution by our future licensors will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. It is possible that our future licensors’ infringement proceedings or defense activities may be less vigorous than had we conducted them ourselves or may not be conducted in accordance with our best interests.
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In addition, intellectual property license agreements are complex, and certain provisions in such agreements may be susceptible to multiple interpretations. The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects. Moreover, if disputes over intellectual property that we may license prevent or impair our ability to maintain our licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected technology and product candidates, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
For example, disputes may arise regarding intellectual property that is or becomes subject to a licensing agreement, including:
| • | the scope of rights granted under the license agreement and other matters of contract interpretation; |
| • | whether and the extent to which our technology and processes infringe the intellectual property rights of the licensor that are not subject to the licensing agreement; |
| • | whether our licensor or its licensor had the right to grant the license agreement; |
| • | whether third parties are entitled to compensation or equitable relief, such as an injunction, for our use of the intellectual property rights without their authorization; |
| • | our involvement in the prosecution of licensed patents and our licensors’ overall patent enforcement strategy; |
| • | the amounts of royalties, milestones or other payments due under the license agreement; |
| • | the sublicensing of patent and other rights under collaborative development relationships; |
| • | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
| • | the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and |
| • | the priority of invention of patented technology. |
If we do not prevail in such disputes, we may lose any or all of our rights under such license agreements.
If our trademarks and trade names are not adequately protected, we may not be able to build name recognition in our markets of interest and our business may be adversely affected.
Our trademarks or trade names may be challenged, infringed, diluted, circumvented, declared generic or determined to be infringing, misappropriating or violating on other marks. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition or cancellation proceedings. This can be time-consuming and expensive, particularly for a company of our size. In addition, in an infringement proceeding, a court may decide that a trademark of ours is not valid or is unenforceable, or may determine another trademark is not infringing our trademarks. We may not be able to obtain, protect or enforce our rights to these trademarks and trade names or may be forced to stop using these trademarks or trade names, which we need to build name recognition among potential collaborators or customers in our markets of interest. At times, competitors or other third parties may adopt trademarks or trade names similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trademark or trade
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name infringement, misappropriation, dilution or other claims brought by owners of other registered trademarks or trade names that incorporate variations of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to successfully register our trademarks and trade names and establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks and trade names may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition or results of operations. Our current trademark applications and additional trademark applications we may file in the future may not proceed to registration and/or may be opposed by third parties. Even if such applications proceed to registration, third parties may challenge our use of such trademarks or seek to invalidate our registration in the future. Other companies in our industry may be using trademarks that are similar to ours and may in the future allege that the use of our trademarks in connection with our products infringes or otherwise violates their trademark rights. Trademark-granting authorities may decide to investigate our trademarks on their own initiative if they believe that there may be potential issues to be resolved. In addition, failure to maintain our trademark registrations, or to obtain new trademark registrations in the future, could limit our ability to protect and enforce our trademarks and impede our marketing efforts in the countries in which we operate. Over the long term, if we are unable to establish brand recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.
Intellectual property rights do not necessarily address all potential threats.
The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations and may not adequately protect our business or permit us to maintain our competitive advantage. For example:
| • | others may be able to make products similar to any drug candidates we may develop or utilize similarly related technologies that are not covered by the claims of the patents that we may license or may own in the future; |
| • | we, or any future licensing partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we may license or own in the future; |
| • | we, or any future licensing partners or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; |
| • | 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 future-licensed intellectual property rights; |
| • | it is possible that our pending patent applications or those that we may own in the future will not lead to issued patents; |
| • | 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; |
| • | if we enter into license agreements or other collaboration agreements in the future on a non-exclusive basis, others may have access to the same intellectual property rights licensed to us; |
| • | our competitors or other third parties might conduct research and development activities in countries where we or our future licensing partners or collaborators do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; |
| • | we may not develop additional proprietary technologies that are patentable; |
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| • | we may fail to identify potential patentable subject matter and/or may fail to file on it; |
| • | the patents or other intellectual property rights of others may harm our business; and |
| • | we may choose not to file for patent protection in order to maintain certain trade secrets or know how, and a third party may subsequently file a patent application covering such intellectual property or disclose information resulting in a loss of protection of such trade secret. |
Should any of these events occur, they could have a material adverse effect on our business, financial condition, results of operations and prospects.
Risks related to our reliance on third parties
We rely on third parties to conduct our preclinical studies and clinical trials. If these third parties that we rely on to execute our preclinical studies or clinical trials do not successfully carry out their contractual duties, comply with applicable regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates.
We do not independently conduct our preclinical studies or clinical trials. We rely on medical institutions, contract laboratories and other third parties, such as CROs, to conduct or otherwise support our preclinical studies and clinical trials for our product candidates. We rely heavily on these parties for execution of our preclinical studies and clinical trials for our product candidates and control only certain aspects of their activities. Though we expect to carefully manage our relationships with such CROs, investigators and other third parties, there can be no assurance that we will not encounter challenges or delays in the future, or that these delays or challenges will not have a material adverse impact on our business, financial condition and prospects. Further, while we have and will have agreements governing the activities of our third-party contractors, we have limited influence over their actual performance. Nevertheless, we are responsible for ensuring that each of our preclinical studies and clinical trials is conducted in accordance with the applicable protocol and legal and regulatory requirements and scientific standards, and our reliance on CROs and other third parties will not relieve us of our regulatory responsibilities. For any violations of laws and regulations during the conduct of our preclinical studies and clinical trials, we could be subject to untitled letters, warning letters or enforcement action that may include civil penalties up to and including criminal prosecution.
We and the third parties on which we rely for clinical trials are required to comply with regulations and requirements, including good laboratory practices (GLP) and GCP for conducting, monitoring, recording and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trial patients are adequately informed of the potential risks of participating in clinical trials and their rights are protected. These regulations are enforced by the FDA and comparable foreign regulatory authorities for any drugs in clinical development. The FDA and comparable foreign regulatory authorities enforce GCP requirements through periodic inspections of clinical trial sponsors, principal investigators and trial sites. If we or these third parties fail to comply with applicable GCP, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, the FDA or comparable foreign regulatory authorities will determine that any of our future clinical trials will comply with GCP. In addition, our clinical trials must be conducted with product candidates produced under cGMP regulations. Our failure or the failure of the third parties on which we rely to comply with these regulations may require us to terminate, delay or repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action. We also are required to register certain ongoing clinical trials and provide certain information, including information relating to the trial’s protocol, on
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a government-sponsored database, www.clinicaltrials.gov, within specific timeframes. Failure to do so can result in fines, adverse publicity and civil and criminal sanctions.
Although we design our clinical trials for our product candidates, we will rely on third parties to conduct our clinical trials. As a result, many important aspects of our clinical development, including clinical trial conduct and timing, will be outside of our direct control. Our reliance on third parties to conduct future clinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff.
Communicating with third parties can also be challenging, potentially leading to mistakes, as well as difficulties in coordinating activities. Third parties may:
| • | have staffing difficulties or turnover of key personnel; |
| • | fail to comply with contractual obligations; |
| • | experience regulatory compliance issues; |
| • | undergo changes in priorities or become financially distressed; or |
| • | form relationships with other entities, some of which may be our competitors. |
If third parties do not perform our clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, we would be unable to rely on clinical data collected by these third parties and may be required to repeat, extend the duration of or increase the size of any clinical trials we conduct, which could significantly delay commercialization and require significantly greater expenditures.
If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative third parties on commercially reasonable terms, or at all. Our CROs have the right to terminate their agreements with us in the event of an uncured material breach and under other specified circumstances. If third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain are compromised due to the failure to adhere to our clinical protocols, regulatory requirements or for other reasons, any clinical trials such third parties are associated with may be extended, delayed or terminated, and we may not be able to obtain regulatory approval for or successfully commercialize our product candidates. As a result, we believe that our financial results and the commercial prospects for our product candidates in the subject indication would be harmed, our costs could increase and our ability to generate revenue could be delayed.
Moreover, principal investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services. Under certain circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities. The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected the interpretation of the trial. The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized. This could result in a delay in approval, refusal to accept or rejection of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of regulatory approval of our product candidates.
We may, from time to time, establish partnerships in relation to our clinical trials, receiving advisory services and other support from third parties. Although we believe that these partnerships will enable us to accelerate the development of our product candidates and clinical trials, we cannot guarantee that such collaborations will be successful and, in the event they are not, we may lose our competitive advantage and/or incur additional costs.
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We rely on third-party manufacturers and suppliers to supply our product candidates. The loss of our third-party manufacturers or suppliers, or their failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, within acceptable timeframes, or at all, would materially and adversely affect our business.
We do not own or operate facilities for drug manufacturing, storage, distribution, or quality testing and have no current plans to develop our own clinical or commercial-scale manufacturing capabilities. We currently rely, and expect to continue to rely, on third-party contract developers and manufacturers to manufacture bulk drug substances, drug products, raw materials and other components for our product candidates, as well as for commercial manufacture if our product candidates receive regulatory approval. Any change in our relationships with our third-party manufacturers or changes to contractual terms of our agreements with them could adversely affect our business, financial condition, results of operations and prospects.
Reliance on third-party manufacturers may expose us to different risks than if we were to manufacture the product candidates ourselves. There can be no assurance that our clinical development product supplies will not be limited, interrupted, terminated or will be of satisfactory quality or be available at acceptable prices. In addition, any replacement of our manufacturer could require significant effort and time because there may be a limited number of qualified replacements. Further, we do not have any long-term commitments or supply agreements with our third-party manufacturers. We may be unable to establish any long-term supply agreements with third-party manufacturers or to do so on acceptable terms or at all, which increases the risk of failing to timely obtain sufficient quantities of our product candidates or such quantities at an acceptable cost.
Establishing additional or replacement suppliers for these supplies, and obtaining regulatory clearance or approvals that may result from adding or replacing suppliers, could take a substantial amount of time, result in increased costs and impair our ability to produce our products, which would adversely impact our business, financial condition, results of operations and prospects. Any such interruption or delay may force us to seek similar supplies from alternative sources, which may not be available at reasonable prices, or at all. Any interruption in the supply of limited source components for our product candidates would adversely affect our ability to meet scheduled timelines and budget for the development and commercialization of our product candidates, could result in higher expenses and would harm our business. Although we have not experienced any significant disruption as a result of our reliance on our suppliers, we have a limited operating history and cannot assure you that we will not experience disruptions in our supply chain in the future as a result of such reliance or otherwise.
The manufacturing process for our product candidates will be subject to the FDA’s review and, in the future, may be subject to comparable foreign regulatory authority review. We, our suppliers and our manufacturers must meet applicable manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory standards, such as cGMP, and to ensure the quality and safety of our product candidates. Securing regulatory approval for our product candidates will also require the submission of detailed information about the product manufacturing process to, and inspection of manufacturing facilities by, the FDA and comparable foreign regulatory authorities. If our third-party manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory authorities, they will not be able to secure and/or maintain regulatory approval for the use of their manufacturing facilities to produce our product candidates. Moreover, we do not conduct the manufacturing process ourselves and are completely dependent on our third-party manufacturers for manufacturing our product candidates in compliance with cGMP and other applicable requirements. In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations in relation to quality, timing, or otherwise, or if our projected manufacturing capacity or supply of materials becomes limited, interrupted or more costly than anticipated, we may be forced to enter into an agreement with another third party, which we may not be able to do timely or on reasonable terms, if at all.
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If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with applicable quality standards and regulations and guidelines; and we may be required to repeat some of the development program with the new manufacturer. The delays and costs associated with the verification of a new manufacturer could negatively affect our ability to develop our product candidates in a timely manner or within budget, or obtain regulatory approval for or market our product candidates.
We expect to continue to rely on third-party manufacturers if we receive regulatory approval for any product candidate. To the extent that we have existing, or enter into future, manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with contractual and regulatory requirements, including those related to quality control and assurance. Any manufacturing facilities used to produce our product candidates will be subject to periodic review and inspection by the FDA and comparable foreign regulatory authorities, including for continued compliance with cGMP requirements, quality control, quality assurance and corresponding maintenance of records and documents. If we are unable to obtain or maintain third-party manufacturing for our product candidates, or to do so on commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully. Our or a third party’s failure to execute on our manufacturing requirements, comply with cGMP or maintain a compliance status acceptable to the FDA or comparable foreign regulatory authorities could adversely affect our business in a number of other ways, including:
| • | an inability to initiate or complete clinical trials of a product candidate in a timely manner; |
| • | delay in submitting regulatory applications, or receiving regulatory approvals, for a product candidate; |
| • | subjecting third-party manufacturing facilities to additional inspections by regulatory authorities; |
| • | loss of the cooperation of existing or future collaborators; |
| • | requirements to cease development or to recall batches of our product candidates; and |
| • | in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products. |
If our third-party manufacturers are unable to increase the scale of their production of our product candidates, and/or increase the product yield of their manufacturing, then our costs to manufacture our product candidates may increase, we may not achieve sufficient manufacturing capacity to support our clinical trials or commercial demand if any of our products are approved, and commercialization may be delayed.
Reliance on third-party manufacturers entails additional risks such as limitations on supply availability resulting from capacity and scheduling constraints of third parties; the possible breach of manufacturing agreements by third parties because of factors beyond our control; the possible termination or non-renewal of the manufacturing agreements by the third party, at a time that is costly or inconvenient to us; failure to manufacture our product according to our schedule or at all; and the possible misappropriation of our proprietary information, including our trade secrets and know-how. Additionally, our third-party manufacturers may experience difficulties due to resource constraints or as a result of labor disputes or unstable political environments. If any of our third-party manufacturers were to encounter any of these difficulties, our ability to provide our product candidates to patients in clinical trials, or to provide product for treatment of patients if approved, would be jeopardized. Any performance failure on the part of our existing or future manufacturers could delay clinical development or regulatory approval, and any related remedial measures may be costly or time-consuming to implement, which would have a material adverse impact on our financial position.
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We may form or seek collaborations or strategic alliances, enter into licensing arrangements or other business transactions in the future, and we may not realize the benefits of such transactions.
We may enter into licensing arrangements and strategic transactions to acquire and advance new assets or product candidates in the future, including strategic partnerships, in-licensing or out-licensing of product candidates, strategic collaborations, joint ventures, restructurings, divestitures, acquisitions of companies, asset purchases, business combinations, and investments.
Any future transactions that we enter into may not be successful. In particular, the success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include that:
| • | licensees or collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; |
| • | licensees or collaborators may not pursue development and commercialization of our product candidates or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; |
| • | licensees or collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidates; |
| • | a licensee or a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; |
| • | we could grant exclusive rights to our licensees or collaborators that would prevent us from collaborating with others; |
| • | licensees or collaborators may not properly maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; |
| • | disputes may arise between us and a licensee or a collaborator that cause the delay or termination of the research, development or commercialization of our future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; |
| • | licensees or collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; |
| • | collaborators may own or co-own intellectual property covering our product candidates that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and |
| • | a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings. |
Additionally, we may have conflicts with our future collaborators, such as conflicts concerning the interpretation of preclinical or clinical data, the achievement of milestones, the interpretation of contractual obligations, payments for services, development obligations or the ownership of intellectual property
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developed during our collaboration. If any conflicts arise with any of our collaborators, such collaborator may act in a manner that is adverse to our best interests. Any such disagreement could result in one or more of the following, each of which could delay or prevent the development or commercialization of our product candidates, and in turn prevent us from generating revenue: disputes regarding milestone payments or royalties; uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations; unwillingness by the collaborator to cooperate in the development or manufacture of a product candidate, including providing us with data or materials; unwillingness on the part of a collaborator to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; initiating of litigation or alternative dispute resolution options by either party to resolve the dispute; or attempts by either party to terminate the agreement. Collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates. In addition, any future transactions could increase our near and long-term expenditures, result in potentially dilutive issuances of our equity securities, including our common stock, or the incurrence of debt, contingent liabilities, amortization expenses or acquired in-process research and development expenses, any of which could affect our financial condition, liquidity and results of operations.
Future acquisitions may also require us to obtain additional financing, which may not be available on favorable terms or at all. These transactions may never be successful and may require significant time and attention of our management. In addition, the integration of any business that we may acquire in the future may disrupt our existing business and may be a complex, risky and costly endeavor for which we may never realize the full benefits of the acquisition. Accordingly, although there can be no assurance that we will undertake or successfully complete any additional transactions of the nature described above, any additional transactions that we do complete could adversely affect our business, financial condition, results of operations and prospects.
We have vendors and service providers located outside of the United States that subject us to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.
Currently, we have vendors and service providers located outside of the United States. As a result of our global supplier network, we are subject to risks associated with doing business abroad, including:
| • | political unrest, terrorism, labor disputes and economic instability resulting in the disruption of trade from foreign countries in which our product candidates are manufactured; |
| • | the imposition of new laws and regulations, including those relating to labor conditions, quality, and safety standards, imports, duties, taxes and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports from countries where our suppliers operate; |
| • | greater challenges and increased costs with enforcing and periodically auditing or reviewing our suppliers’ and manufacturers’ compliance with cGMPs or status acceptable to the FDA or comparable foreign regulatory authorities; |
| • | reduced protection for intellectual property rights, including trademark protection, in some countries; |
| • | disruptions in operations due to global, regional or local public health crises or other emergencies or natural disasters; |
| • | disruptions or delays in shipments; and |
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| • | changes in local economic conditions in countries where our manufacturers or suppliers are located. |
These and other factors beyond our control could interrupt our vendor and service providers’ operations, influence the ability of these companies to render services and export our clinical supplies cost-effectively or at all, and inhibit their ability to procure certain materials.
CMOs may become subject to legislation, trade restrictions, sanctions, tariffs and other regulatory requirements by the U.S. government, which could restrict or even prohibit our ability to work with such entities, thereby potentially disrupting the supply of material to us. For example, the U.S. Congress has recently passed legislation known as the BIOSECURE Act (BIOSECURE Act) to prohibit U.S. federal executive agencies from procuring or obtaining any biotechnology equipment or service produced or provided by a “biotechnology company of concern” (BCC) or entering into or renewing a contract, loan, or grant with an entity that uses such biotechnology equipment or services. Specifically, on December 18, 2025, President Trump signed the National Defense Authorization Act for fiscal year 2026 into law, which includes the BIOSECURE Act. The BIOSECURE Act prohibits the U.S. government from procuring or obtaining biotechnology equipment or services produced or provided by a BCC; entering into, extending, or renewing government contracts with an entity that directly or indirectly (e.g., via a subcontractor) uses biotechnology equipment or services from a BCC in performance of that federal contract; and/or issuing grants or loans to purchase, obtain, or use biotechnology equipment or services produced by a BCC. The BIOSECURE Act also prohibits U.S. government loan and grant recipients from using federal loan or grant money to enter into contracts with entities that use equipment from BCCs in the performance of any federal prime contract or subcontract. Companies designated as a BCC include those that are identified on the U.S. Department of Defense’s annual List of Chinese Military Companies, also known as the 1260H List, and the U.S. government also has the ability to designate entities as BCCs through a separate designation process. While the U.S. BIOSECURE Act has a grandfathering period of five years for existing contracts and has carveouts for manufacture of drugs for supply under Medicaid and Medicare Part B, subject to the Secretary of Veteran Affairs’ discretion, the impact of the U.S. BIOSECURE Act on the biotechnology industry is uncertain. Given the BIOSECURE Act, we may be restricted in our ability to work with certain Chinese biotechnology companies to the extent we would contract with, or otherwise receive funding from, the U.S. government. Such disruption could have adverse effects on the development of our product candidates. Furthermore, any U.S. executive action, legislative action or potential sanctions including the imposition of higher tariffs on imports into the United States and other governmental regulations affecting trade between the United States and China, and any retaliatory actions by China could materially impact our work or potential work in the future with Chinese biotechnology companies. In addition, U.S. executive agencies may designate entities and individuals on various governmental prohibited and restricted parties lists. Depending on the designation, potential consequences can range from a comprehensive prohibition on all transactions or dealings with designated parties, or a limited prohibition on certain types of activities, such as exports and financing activities, with designated parties. Such disruption could have adverse effects on the development of our product candidates. We are actively engaging alternative suppliers or manufacturers outside of China for our active pharmaceutical ingredients (APIs). Additionally, although drug product for our product candidates are not currently manufactured in China, we may explore future manufacturing of our drug product for our product candidates in China. Without an alternative manufacturing plan for our APIs and possible future drug product for our product candidates, there is a risk that, if supplies are interrupted, or the quality of ingredients provided by such alternative sources is not to our specification, it would cause delays in our supply chain and increase the cost of manufacturing our drugs, which could materially harm our business.
Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.
Because we currently rely on third parties to manufacture our product candidates and to perform quality testing, we must, at times, share our proprietary technology and confidential information, including trade
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secrets, with them. We seek to protect our proprietary technology, in part, by entering into confidentiality agreements, and, if applicable, material transfer agreements, collaborative research agreements, consulting agreements or other similar agreements with our collaborators, advisors, employees and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are intentionally or inadvertently incorporated into the technology of others or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets and despite our efforts to protect our trade secrets, a competitor’s discovery of our proprietary technology and confidential information or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business, financial condition, results of operations, and prospects.
Risks related to commercialization of our product candidates
Competitive products may reduce or eliminate the commercial opportunity for our product candidates for our current or future indications. If our competitors develop technologies or product candidates more rapidly than we do, or their technologies are more effective or safer than ours, our ability to develop and successfully commercialize our product candidates may be adversely affected.
The pharmaceutical industry is characterized by rapid innovation and intense competition. While we believe that our clinical programs provide us with competitive advantages, we face competition from multiple companies that are similarly working to develop therapeutics targeting similar indications, as well as from academic institutions, governmental agencies, and public and private research institutions. Many of our potential competitors, either alone or with collaboration partners, have significantly greater financial resources than we do, as well as equal or greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products. Accordingly, our potential competitors may be more successful than we are in achieving regulatory approvals and commercializing their products. We anticipate that we will face intense and increasing competition from existing, approved drugs, as well as new drugs entering the market and emerging technologies that become available. The following sets forth the currently known competitive landscape impacting our product candidates.
BH-30643 (OMNI-EGFR). The EGFR-mutant NSCLC landscape is particularly competitive, with multiple approved therapies and numerous investigational agents in active clinical development across modalities.
| • | C797S-resistant population. There are currently no approved targeted therapies for patients with C797S-mediated resistance to osimertinib or other third-generation EGFR TKIs. The most recently approved post-osimertinib regimen—amivantamab (RYBREVANT) in combination with platinum-based chemotherapy—was approved in September 2024. Platinum-based chemotherapy remains the predominant systemic option for C797S-resistant patients. We are aware of numerous companies targeting C797S-mediated resistance to EGFR TKIs or broader EGFR resistance mutations in early clinical development, such as Abbisko Therapeutics, Betta Pharma, Black Diamond Therapeutics, Bridge Therapeutics, Chia Tai Tianqing, Dizal Pharmaceuticals Co., Hansoh Pharma, J INTS BIO, Qilu, Voronoi and Wayshine Biopharm. Additionally, Blueprint Medicines advanced two programs targeting C797S into clinical development; both programs have been discontinued. |
| • | Classical mutation setting. Osimertinib (TAGRISSO), marketed by AstraZeneca is the current standard of care in the first-line setting for classical EGFR mutations. Amivantamab (RYBREVANT) in combination with lazertinib, marketed by Johnson & Johnson, is also approved in the first-line classical mutation setting and would represent additional competition in any first-line program we may pursue. We are aware of numerous |
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| companies developing EGFR TKIs in the classical mutation setting, such as ArriVent BioPharma, Black Diamond Therapeutics, TYK Medicines and Voronoi. |
| • | Uncommon EGFR mutation settings (including atypical and exon 20 insertion). Afatinib (GILOTRIF), marketed by Boehringer Ingelheim, is the only FDA-approved TKI specifically indicated for a subset of atypical mutations (G719X, L861Q, and S768I). Amivantamab (RYBREVANT) in combination with platinum-pemetrexed chemotherapy is approved as a first-line regimen for EGFR exon 20 insertion-positive NSCLC. Mobocertinib, the first oral agent approved in this setting, was voluntarily withdrawn from the U.S. market in 2024 following its failure to demonstrate a benefit over chemotherapy. We are aware of numerous companies developing inhibitors against uncommon EGFR mutations (including atypical mutations including exon 20 insertions), such as ArriVent BioPharma, Avistone Pharma, Black Diamond Therapeutics, Cullinan Therapeutics, Dizal Pharmaceuticals Co., ORIC Pharmaceuticals, Taiho Oncology and Voronoi. |
BH-30236 (CLK inhibitor). The AML and HR-MDS landscapes are competitive, with multiple approved therapies and numerous investigational agents across our target patient populations.
| • | CLK inhibitor class. There are currently no approved CLK inhibitors. We are aware of several companies developing CLK inhibitors, including Biosplice Therapeutics and Chordia Therapeutics. |
| • | R/R AML and HR-MDS; venetoclax-resistant setting. Although multiple therapies are approved for AML and HR-MDS in earlier lines of treatment or in molecularly defined subsets, there are currently no approved targeted therapies specifically indicated for patients whose disease is resistant to or has relapsed following venetoclax-based therapy. In this setting, treatment typically consists of salvage chemotherapy, hypomethylating agents (e.g., azacitidine (VIDAZA), marketed by Bristol Myers Squibb), FLT3 inhibitors for patients with FLT3-mutant disease, IDH inhibitors for patients with IDH1- or IDH2-mutant disease, or supportive care. Allo-HCT may be potentially curative for a subset of patients, but is available only to a minority given the age, fitness, comorbidities, donor availability and disease-control requirements of the affected population. |
| • | We are aware of several approved agents that may compete for patients in R/R AML including gilteritinib (XOSPATA), marketed by Astellas Pharma, for FLT3-mutant AML; ivosidenib (TIBSOVO), marketed by Servier, for IDH1-mutant AML; enasidenib (IDHIFA), marketed by Bristol Myers Squibb, for IDH2-mutant AML; and menin inhibitors in molecularly defined subsets, including ziftomenib (KOMZIFTI), marketed by Kura Oncology, for NPM1-mutant AML, and revumenib (REVUFORJ), marketed by Syndax Pharmaceuticals, for NPM1-mutant AML and acute leukemia with a KMT2A translocation. In HR-MDS, approved therapies include hypomethylating agents and other agents used in selected settings, but there remains no approved targeted therapy specifically indicated for the broader population following hypomethylating agent failure or venetoclax-based treatment failure. |
| • | Combination setting and broader competition. A key component of our development strategy for BH-30236 is combination therapy with venetoclax. As a result, we expect competition not only from monotherapy approaches in R/R AML and HR-MDS, but also from investigational combination regimens intended to improve upon or restore sensitivity to venetoclax-based treatment, including BCL-2 pathway-directed regimens, FLT3-directed therapies, menin inhibitors, TP53-associated approaches and other targeted therapies intended to address leukemic survival and resistance mechanisms. Although these programs may not directly inhibit CLK, they may compete for the same patients, clinical trial sites, investigators, and future treatment settings. |
BH-501284 (pan-KRAS). The KRAS inhibition landscape is competitive, with multiple approved therapies and numerous investigational agents in active clinical development.
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| • | KRAS G12C / G12D inhibitors: There are two approved KRAS G12C inhibitors – sotorasib (LUMAKRAS), marketed by Amgen, and adagrasib (KRAZATI), marketed by Bristol-Myers Squibb. We are aware of numerous companies developing inhibitors targeting a single mutant allele, such as KRAS G12C and KRAS G12D, such as Astellas, D3 Bio, Eli Lilly, Frontier Medicines, Genfleet, Hansoh Pharma Quanta, Revolution Medicines and Roche. |
| • | Pan-KRAS tricomplex inhibitors: There are currently no approved pan-RAS inhibitors. We are aware of numerous companies developing pan-RAS tricomplex inhibitors, such as Adlai Nortye, Betta Pharmaceuticals, Erasca, Revolution Medicines and Roche. |
| • | Pan-KRAS (non-covalent Switch-II pocket inhibitors and degraders): We are aware of numerous companies developing pan-KRAS non-covalent Switch-II pocket inhibitors and/or degraders, such as Amgen, Astellas, AstraZeneca, BeOne, Boehringer Ingelheim, BridgeBio Oncology Therapeutics, Erasca, Eli Lilly, PAQ Therapeutics, Pfizer and Roche. |
The development of pan-KRAS inhibitors across these modalities by established and well-resourced competitors could significantly reduce the commercial opportunity for BH-501284.
Additionally, established pharmaceutical companies may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make our product candidates less competitive. Any new product that competes with an approved product must demonstrate compelling advantages in efficacy, convenience, tolerability and safety in order to overcome price competition and to be commercially successful. Accordingly, our competitors may succeed in obtaining patent protection, discovering, developing, receiving regulatory approval for or commercializing drugs before we do, which would have an adverse impact on our business and results of operations. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. Our profitability and financial position will suffer if our product candidates receive regulatory approval but cannot compete effectively in the marketplace.
Even if our product candidates receive regulatory approval, they may fail to achieve the degree of market acceptance by physicians, patients and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable.
We have never commercialized a product candidate for any indication. Even if our product candidates are approved by the appropriate regulatory authorities for marketing and sale, our product candidates may not gain acceptance among patients, patients’ families, advocacy groups, physicians, third-party payors and others in the medical community. If the product candidates for which we obtain regulatory approval do not gain an adequate level of market acceptance, we may not generate sufficient product revenue or become profitable. Further, the number of patients that our product candidates is designed to treat may be smaller than expected.
The degree of market acceptance of our product candidates, if approved and commercialized, will depend on a number of factors, some of which are beyond our control, including:
| • | the pricing and cost-effectiveness of our product candidates, as well as the ease of administration, time burden and market acceptance; |
| • | the safety, efficacy and tolerability of our product candidates; |
| • | acceptance of our product candidates by patients and their families, prescribing physicians and the broader medical community and third-party payors; |
| • | changes in the standard of care for the indications we are developing our product candidates for and the reluctance of physicians to switch their patients’ current standard of care; |
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| • | the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; |
| • | the clinical indications for which our product is approved and the scope of efficacy/safety claims that we may make for the product; |
| • | any restrictions on the use of our product, and the prevalence and severity of any adverse effects; |
| • | any distribution and use restrictions imposed by the FDA in connection with any regulatory approval; |
| • | the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; |
| • | the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; |
| • | the extent and strength of our marketing and distribution of such product candidate; |
| • | the timing of market introduction of such product candidate, as well as competitive products; |
| • | our ability to offer our product candidates for sale at competitive prices; |
| • | adverse publicity about our product or favorable publicity about competitive products; and |
| • | potential product liability claims. |
Our efforts to educate the medical community and third-party payors about the benefits of our product candidates may require significant resources and may never be successful. Even if our product candidates, if approved, are safe and effective for their approved indications, physicians and patients (and their families, as applicable) may not immediately be receptive to such product candidates and may be slow to adopt them as an accepted treatment for the approved indications. If our current or future product candidates are approved, but do not achieve an adequate level of acceptance among physicians, patients and third-party payors, we may not generate meaningful revenue from our product candidates and may never become profitable.
We currently have no marketing and sales organization and have no experience as a company in commercializing products, and we may have to invest significant resources to develop these capabilities. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our products, we may not be able to generate product revenue.
We have no internal sales, marketing or distribution capabilities, nor have we commercialized a product. If any of our product candidates ultimately receives regulatory approval, we must build a marketing and sales organization with technical expertise and supporting distribution capabilities to commercialize each such product in major markets, which will be expensive and time consuming, or collaborate with third parties that have direct sales forces and established distribution systems, either to augment our own sales force and distribution systems or in lieu of our own sales force and distribution systems. We have no prior experience as a company in the marketing, sale and distribution of pharmaceutical products and there are significant risks involved in building and managing a sales organization, including our ability to hire, retain and incentivize qualified individuals, generate sufficient sales leads, provide adequate training to sales and marketing personnel and effectively manage a geographically dispersed sales and marketing team. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. We may not be able to enter into collaborations or hire consultants or external service providers to assist us in sales, marketing and distribution functions on acceptable financial terms, or at all. In addition, our product revenues and our profitability, if any, may be lower if we rely on third
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parties for these functions than if we were to market, sell and distribute any products that we develop ourselves. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our products effectively. If we are not successful in commercializing our products, either on our own or through arrangements with one or more third parties, we may not be able to generate any future product revenue and we would incur significant additional losses.
The successful commercialization of our product candidates, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels, and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidates could limit our ability to market those products and decrease our ability to generate revenue.
The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers, and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidates, if approved. Our ability to achieve coverage and acceptable levels of reimbursement for our product(s) by third-party payors will have an effect on our ability to successfully commercialize any products we may successfully develop. Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. We cannot be sure that coverage and reimbursement in the United States or elsewhere will be available for any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future.
Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs when an equivalent generic drug or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidates as substitutable and only offer to reimburse patients for the less expensive product. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products, if approved, and may not be able to obtain a satisfactory financial return on products that we may develop.
There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. Regulatory approvals, pricing and reimbursement for new drug products vary widely from country to country. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered. Some third-party payors may require prior authorization before covering new or innovative drug therapies and reimbursing healthcare providers who use such therapies. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization. It is difficult to predict at this time what third-party payors will decide with respect to coverage and reimbursement for our products, if approved.
Obtaining and maintaining reimbursement status is time-consuming, costly and uncertain. The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs. However, no uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and
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adequate reimbursement will be applied consistently or obtained in the first instance. Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that changes in these rules and regulations are likely.
Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products. For example, the U.S. Department of Health and Human Services (HHS), imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. Drugs that are granted one or more orphan drug designation (ODD) by FDA are exempt from such Medicare Drug Price Negotiation Program. Unless we are able to obtain orphan drug designation for our product candidates, in the future, we may face price negotiation to the extent the Medicare Drug Price Negotiation Program remains in effect in its current form. We also expect to experience pricing pressures in connection with the sale of our product candidates, if approved for marketing, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products.
Risks related to government regulation
Our relationships with healthcare providers and third-party payors may be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to significant penalties, including criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
Healthcare providers, including physicians, and third-party payors in the United States and elsewhere play a primary role in the recommendation and prescription of pharmaceutical products. Our current and future arrangements with healthcare providers, third-party payors and customers can expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, which may constrain the business or financial arrangements and relationships through which we research, and if approved, sell, market and distribute our products. In particular, the research of our product candidates, as well as the promotion, sales and marketing of a future approved product, is subject to extensive laws designed to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, structuring, and commission(s), certain customer incentive programs and other business arrangements generally. Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials. The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate now or in the future include, but are not limited to:
| • | the federal Anti-Kickback Statute, which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe or rebate), directly or |
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| indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, or recommendation of any good, facility, item, or service for which payment may be made, in whole or in part, under a federal healthcare program, such as the Medicare and Medicaid programs. A person or entity can be found guilty of violating the statute without actual knowledge of the statute or specific intent to violate it. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other; |
| • | the civil monetary penalties statute which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to, among others, a federal healthcare program that the person knows or should know is for a medical or other item or service that was not provided as claimed or is false or fraudulent; |
| • | the federal civil and criminal false claims laws, including the federal False Claims Act (FCA), which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal healthcare programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government healthcare programs if they are deemed to “cause” the submission of false or fraudulent claims. In addition, a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The FCA also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery; |
| • | the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created additional federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact, or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating the health care fraud statute under HIPAA without actual knowledge of the statute or specific intent to violate it; |
| • | HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH) and its implementing regulations, which also imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy and security of individually identifiable health information of covered entities, including health plans, healthcare clearinghouses and certain healthcare providers and their business associates, independent contractors of a covered entity that perform certain services involving the use or disclosure of individually identifiable health information for or on their behalf, as well as their covered subcontractors; |
| • | the federal Physician Payments Sunshine Act and its implementing regulations, which require some manufacturers of drugs, devices, biologicals, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually to the Centers for Medicare & Medicaid Services (CMS) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), |
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| certain non-physician practitioners (such as physician assistants and nurse practitioners), and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; |
| • | federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and |
| • | analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and may be broader in scope than their federal equivalents; state laws that require the licensure or registration in order to distribute or manufacture pharmaceutical products; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and local laws that require the registration of pharmaceutical sales representatives. |
The distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products. Distribution of prescription drug samples to licensed prescribers is also highly regulated within the United States.
The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform. Federal, state and foreign enforcement bodies have continued their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions, significant fines and penalties and settlements in the healthcare industry. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and may divert our management’s attention from the operation of our business.
It is possible that governmental and enforcement authorities will conclude that our business practices may not comply with current or future statutes, regulations, or case law interpreting applicable fraud and abuse or other healthcare laws and regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, disgorgement, individual imprisonment, possible exclusion from participation in federal and state funded healthcare programs, contractual damages and the curtailment or restricting of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws. Any action for violation of these laws, even if successfully defended, could cause us to incur significant legal expenses and divert management’s attention from the operation of our business. Prohibitions or restrictions on sales or withdrawal of future marketed products could adversely affect our business, results of operations and financial condition.
Even if we receive regulatory approval of our product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our product candidates.
If our product candidates are approved, they will be subject to extensive and ongoing regulatory requirements for manufacturing, labeling, packaging, distribution, storage, advertising, promotion, import, export, sampling,
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record-keeping, conduct of post-marketing studies and submission of safety, efficacy and other post-market information, including both federal and state requirements in the United States and requirements of comparable foreign regulatory authorities. In addition, we will be subject to continued compliance with cGMPs and similar requirements outside the United States and GCP requirements for any clinical trials that we conduct post-approval.
Manufacturers and manufacturers’ facilities are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs or similar regulations. As such, we and our contract manufacturers will be subject to continual review and periodic, unannounced inspections by the FDA and other regulatory authorities to assess compliance with cGMPs or similar requirements and adherence to commitments made in any NDA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom we work must continue to expend time, money and effort in all areas of regulatory compliance, including manufacturing, production and quality control.
Any regulatory approvals that we may receive for our product candidates will require the submission of reports to regulatory authorities and surveillance to monitor the safety and efficacy of the product candidate, and such approvals may be subject to significant limitations on the approved indicated uses for which the product may be marketed (e.g., use restrictions for specified age groups, warnings, precautions or contraindications), and may include burdensome post-approval study or risk management requirements. For example, the FDA may require a REMS program as a condition of approval of our product candidates or similar risk management measures, which could entail requirements for long-term patient follow-up, a medication guide, physician training and communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA or comparable foreign regulatory authorities may impose consent decrees or withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with our product candidates, such as adverse events of unanticipated severity or frequency, or problems with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in restrictions on that product, the manufacturing facility or us, including revisions to the approved labeling to add new safety information, contraindications or a “black box” warning, imposition of post-market studies or clinical trials to assess new safety risks, or imposition of distribution restrictions or other restrictions under a REMS. Other potential consequences include, among other things:
| • | restrictions on the marketing or manufacturing of our products, withdrawal of the product from the market or product recalls; |
| • | restrictions on product distribution or use, or requirements to conduct post-marketing studies or clinical trials; |
| • | fines, restitutions, disgorgement of profits or revenues, warning letters, untitled letters or holds on clinical trials; |
| • | refusal by the FDA or comparable foreign regulatory authorities to approve pending applications or supplements to approved applications submitted by us or suspension or revocation of approvals; |
| • | product seizure or detention or refusal to permit the import or export of our products; and |
| • | injunctions or the imposition of civil or criminal penalties. |
The occurrence of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.
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The policies of the FDA and comparable regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to enforcement action and our business, results of operations and financial condition could be adversely affected.
The FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
The FDA and comparable foreign regulatory authorities strictly regulate the marketing, labeling, advertising, and promotion of prescription drugs. These regulations include standards for direct-to-consumer advertising (in the United States only), industry-sponsored scientific and educational activities and promotional activities involving the internet, as well as restrictions on promoting approved drugs for unapproved uses or patient populations (known as “off-label promotion”). Products may be promoted only for the approved indications and in accordance with the provisions of the approved label. While physicians in the United States may choose, and are generally permitted, to prescribe drugs for off-label uses in their independent professional judgment, manufacturers may not market or promote such uses. However, companies may share truthful and not misleading information that is not inconsistent with the labeling, and the FDA has published guidance with recommendations for how drug manufacturers can share scientifically sound and clinically relevant information on unapproved uses with health care providers so long as such presentations are not promotional.
If we are found to have promoted any off-label uses of our future approved products, or to have engaged in the promotion of an unapproved product candidate, we may become subject to significant liability. The U.S. federal government has levied large civil and criminal fines against companies for alleged improper promotion of off-label use and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed. If we cannot successfully manage the promotion of our future approved products, we could become subject to significant liability, which would materially adversely affect our business, results of operations and financial condition.
Ongoing healthcare legislative and regulatory reform measures may adversely affect our business, results of operations and financial condition.
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, (collectively, ACA), was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers.
Other legislative changes have been proposed and adopted in the United States since the ACA. These changes include aggregate reductions to Medicare payments to providers, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken. Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminated the statutory cap on drug manufacturers’ Medicaid drug rebate liability, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024. More recently, on July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA
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also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies.
The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct to consumer platform (TrumpRx), U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives; (3) imposing tariffs on imported pharmaceutical products; and (4) as part of the Make America Healthy Again (MAHA) Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager (PBM) payment methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. In June 2024, the U.S. Supreme Court’s Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program. At the state level, individual states in the United States have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug affordability boards with the goal of imposing price limits on certain drugs in these states, while some states are also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution.
We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. We cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, if approved, any of which could adversely affect our business, results of operations and financial condition.
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Disruptions to the operations of the FDA, the SEC, other U.S. governmental agencies or comparable foreign regulatory authorities caused by funding shortages, leadership changes, staffing cuts or other staffing shortages, along with uncertainty regarding the potential for new initiatives, laws, regulations, policies and guidance affecting our product candidates or other aspects of our business, could materially and adversely affect our business.
The ability of the FDA or other comparable foreign regulatory authorities to review and approve new products or take action with respect to other regulatory matters can be affected by a variety of factors, including government budget and funding levels, leadership changes, the ability to hire and retain key personnel and accept payment of user fees, the availability of personnel and other resources, changes in statutes, regulations and policies that affect the FDA’s or comparable foreign regulatory authorities’ ability to perform routine functions, and other business disruptions. Average review times at the FDA and comparable foreign regulatory authorities have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable.
Over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. In addition, there have recently been terminations of large numbers of federal employees at various federal agencies, including the FDA. Changes and cuts in FDA staffing could result in delays in the FDA’s responsiveness or in its ability to review INDs, NDAs, or other submissions or applications, issue regulations or guidance or implement or enforce regulatory requirements in a timely fashion, or at all. If a prolonged government shutdown occurs and/or employee terminations or resignations could significantly impact the ability of the FDA or other federal agencies to timely review and process our regulatory submissions, which could have a material adverse effect on our business. Further, future government shutdowns and/or employee terminations or resignations at the SEC could impact our ability to access the public markets and obtain necessary capital in order to properly capitalize and continue our operations.
There is substantial uncertainty as to whether and how the current U.S. Presidential administration will seek to modify or revise the requirements and policies of the FDA and other regulatory agencies with jurisdiction over our product candidates and any products for which we obtain approval. This uncertainty could present new challenges as we navigate development and approval of our product candidates. Some of these efforts have manifested to date in the form of personnel cuts and measures that could impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA regarding our product candidates and obtain the requisite regulatory approvals in the future. There is uncertainty as to whether we will be materially and negatively impacted by governmental orders, regulations, policies or guidance or disruptions to the normal operations of government agencies.
International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.
We operate in a global economy, which includes using third-party suppliers in several countries outside the United States. There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic and national security factors can lead to global trade restrictions and changes in trade policies and export regulations that may adversely affect our business and operations. The current international trade and regulatory environment is subject to significant ongoing uncertainty. The U.S. government has announced substantial new tariffs affecting a wide range of products and jurisdictions and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry. In response, certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures. These developments have created a dynamic
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and unpredictable trade landscape, which may adversely impact our business, results of operations, financial condition and prospects. The Bureau of Industry and Security, U.S. Department of Commerce, has initiated an investigation to determine whether pharmaceutical ingredients, including finished drug product, manufactured outside the United States pose a national security risk and should be subject to additional tariffs.
We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We currently rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for clinical testing, as well as for manufacture of any products that we may commercialize, if approved. Currently, our suppliers are located outside of the United States, and the APIs for BH-30643 and BH-30236 are manufactured in China. We also rely on specialized laboratory equipment, supplies, materials and precursor compounds, all or part of which we believe may be ultimately sourced from multiple countries outside the United States, to advance our research and development efforts.
Current or future tariffs will result in increased research and development expenses, including with respect to increased costs associated with APIs, raw materials, laboratory equipment and research materials and components. In addition, such tariffs will increase our supply chain complexity and could also potentially disrupt our existing supply chain. Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain adjustments particularly difficult and costly. Trade restrictions affecting the import of materials necessary for clinical trials could result in delays to our development timelines. Increased development costs and extended development timelines could place us at a competitive disadvantage compared to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our ability to secure additional financing on favorable terms or at all. In addition, as we advance toward commercialization in the future, tariffs and trade restrictions could hinder our ability to establish cost-effective production capabilities, negatively impacting our growth prospects.
The complexity of announced or future tariffs may also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States or foreign jurisdictions related to compliance with trade regulations. Foreign governments may also adopt non-tariff measures, such as procurement preferences or informal disincentives to engage with, purchase from or invest in U.S. entities, which may limit our ability to compete internationally and attract non-U.S. investment, employees, customers and suppliers. Foreign governments may also take other retaliatory actions against U.S. entities, such as decreased intellectual property protection, increased enforcement actions or delays in regulatory approvals, which may result in heightened international legal and operational risks. In addition, the United States and other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity on our business.
Trade disputes, tariffs, restrictions and other political tensions between the United States and other countries may also exacerbate unfavorable macroeconomic conditions including inflationary pressures, foreign exchange volatility, financial market instability and economic recessions or downturns. The ultimate impact of current or future tariffs and trade restrictions remains uncertain and could materially and adversely affect our business, financial condition and prospects. While we actively monitor these risks, any prolonged economic downturn, escalation in trade tensions or deterioration in international perception of U.S.-based companies could materially and adversely affect our business, ability to access the capital markets or other financing sources, results of operations, financial condition and prospects. In addition, tariffs and other trade developments have and may continue to heighten the risks related to the other risk factors described elsewhere in this prospectus.
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We and the third parties upon whom we rely are subject to stringent and evolving U.S. and foreign laws, regulations, and rules, contractual obligations, industry standards, policies and other obligations related to data privacy and security. Our (or the third parties upon whom we rely) actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions; litigation (including class claims) and mass arbitration demands; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse business consequences.
In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions, financial information (collectively, sensitive data). Such data processing activities subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements and other obligations relating to data privacy and security.
For example, in the United States, federal, state and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act) and other similar laws (e.g., wiretapping laws). We may obtain personal health information from third parties, such as research institutions with which we collaborate, that are subject to privacy and security requirements under HIPAA. Although we do not believe that we are directly subject to HIPAA, other than potentially with respect to providing certain employee benefits, we could be subject to criminal penalties if we knowingly obtain or disclose individually identifiable health information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA. In addition, other federal and state laws have established and may in the future establish requirements for protecting the privacy and security of health information that is not protected by HIPAA. Additionally, numerous U.S. states have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data. Although there are minimum revenue or personal data processing thresholds for entities to be subject to many of these laws and there are limited exemptions for clinical trial data under the U.S. state comprehensive privacy laws, such laws may impact (possibly significantly) our business activities depending on how they are interpreted and if we become subject to such state comprehensive privacy laws in the future. In addition, similar laws are being considered, in other states, as well as at the international, federal and local levels, and we expect more laws related to personal data to become effective in the future. These developments may further complicate compliance efforts and increase our legal risk and compliance costs for us and the third parties upon whom we rely.
Outside the United States, an increasing number of laws, regulations, and industry standards may govern data privacy and security, including in relation to clinical trial data. For example, China’s Personal Information Protection Law (PIPL), Australia’s Privacy Act 1988 (Cth) and the Australian Privacy Principles (APPs), as well as comprehensive privacy and data protection laws in other jurisdictions where we operate, have staff, or otherwise process sensitive data about local residents, each of which impose strict requirements for processing personal data of individuals within China, Australia, and other relevant jurisdictions. These data protection laws impose comprehensive data privacy compliance obligations in relation to our collection and use of data relating to an identifiable living individual or “personal data”, including a principle of accountability and the obligation to demonstrate compliance through policies, procedures, training and audit, as well as regulating cross-border transfers of personal data out of China, Australia, and other relevant jurisdictions. In addition, some of the personal data we process in respect of clinical trial patients is special category or sensitive personal data under the PIPL, the APPs, or other relevant laws, and subject to additional compliance obligations and to local law derogations.
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Each of these foreign data protection laws carries significant fines and penalties for failure to comply. For example, failure to comply with PIPL can result in fines of up to RMB 50 million or 5% of the prior year’s total annual revenue for the personal information processor and/or a suspension of services or data processing activities. Other potential penalties include a fine of up to RMB 1 million on the person in charge or directly responsible personnel and, in serious cases, individuals and entities may be exposed to criminal liabilities under other local Chinese law, such as the Criminal Law of the People’s Republic of China. The PIPL also prohibits responsible personnel for violations of the PIPL from holding high level management or data protection officer positions in relevant enterprises. Similar such fines and penalties can arise under the APP or other data protection laws.
In addition, we may be unable to transfer personal data or we may have to implement additional measures to enable the transfer of data to the United States or other countries due to data localization requirements or limitations on cross-border data flows. For example, the PIPL imposes data localization requirements on important data processors and critical information infrastructure operators and personal information processors which process personal information above a certain threshold prescribed by the relevant authorities, unless a security assessment (Security Assessment) is passed. The PIPL also requires data processors to rely on a data export mechanism and comply with certain requirements prior to the transfer of Personal Information outside of China, such as compliance with a Security Assessment or certification by an agency designated by the relevant authorities or entering into standard form model contracts approved by the relevant authorities with the overseas recipient, unless an exemption applies. Other data protection laws may require specific consent to export sensitive data, among other risk assessments, contractual language, enhanced safeguards for the sensitive data, or other mechanisms or practices. We expect the existing legal complexity and uncertainty regarding international personal data transfers to continue and international transfers to the United States and to other jurisdictions more generally to continue to be subject to enhanced scrutiny by regulators. As the regulatory guidance and enforcement landscape in relation to data transfers continue to develop, we could suffer additional costs, complaints and/or regulatory investigations or fines, and/or if we are otherwise unable to transfer personal data between and among countries and regions in which we operate, it could affect the manner in which we operate our business, the geographical location or segregation of our relevant systems and operations, and could adversely affect our financial results.
Additionally, the U.S. Department of Justice (DoJ) issued a rule entitled the Preventing Access to U.S. Sensitive Personal Data and Government-Related Data by Countries of Concern or Covered Persons, which places additional restriction on certain data transactions involving countries of concern (e.g., China, Russia, Iran) and covered persons (i.e., individuals and entities who are designated as such by the U.S. Attorney General or are (1) foreign entities organized under the laws of, or with a principal place of business in, a country of concern or 50% or more owned, individually or in the aggregate, by one or more countries of concern or other covered persons; (2) foreign entities 50% or more owned, individually or in the aggregate, by a country of concern or another covered person; (3) foreign individuals that are employees or contractors of a country of concern or covered person; and (4) foreign individuals who are primarily a resident in a country of concern) that may impact certain business or management activities such as vendor engagements, licensing arrangements, partnership engagements, sale or sharing of data, employment of certain individuals and investor agreements. Violations of the rule could lead to significant civil and criminal fines and penalties. We may in the future engage in data transactions that could be subject to the rule. Although the DoJ issued compliance guidance and responded to industry questions, we are not aware of the existence of enforcement data or case law that would provide additional guidance on how the rule will be interpreted, and there is a risk that our interpretation of its applicability, scope and requirements could be incorrect, incomplete, or misapplied. The rule applies regardless of whether data is anonymized, key-coded, pseudonymized, de-identified or encrypted, which presents particular challenges for companies like ours and may impact our ability to enter into certain agreements.
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Our employees and personnel use AI Technologies to perform their work, and the disclosure and use of personal data in AI Technologies is subject to various privacy laws and other privacy obligations. Governments have passed and are likely to pass additional laws and regulations regulating AI Technologies. Our use of this technology could result in additional compliance costs, regulatory investigations and actions, and lawsuits. If we are unable to use AI Technologies, it could make our business less efficient and result in competitive disadvantages.
In addition to data privacy and security laws, we are contractually subject to industry standards adopted by industry groups and may become subject to such obligations in the future. We are also bound by other contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.
We do and may in the future publish privacy policies and other statements concerning data privacy, and security. Regulators are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
Obligations related to data privacy and security are quickly changing, becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying with these obligations requires us to devote significant resources, which may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations. Moreover, despite our efforts, our personnel or third parties upon whom we rely may fail (or be perceived to have failed) to comply with such obligations, which could negatively impact our business operations. If we or the third parties upon whom we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to: government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar); litigation (including class-action claims) and mass arbitration demands; additional reporting requirements and/or oversight; bans or restrictions on processing personal data; or orders to destroy or not use personal data.
In particular, plaintiffs have become increasingly more active in bringing privacy-related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the recovery of statutory damages on a per violation basis, and, if viable, carry the potential for monumental statutory damages, depending on the volume of data and the number of violations.
Any of these events could have a material adverse effect on our reputation, business, or financial condition, including but not limited to: interruptions or stoppages in our business operations; loss of customers; inability to process personal data or to operate in certain jurisdictions; limited ability to develop or commercialize our products; expenditure of time and resources to defend any claim or inquiry; potentially significant financial penalties if we are found to be in violation of our privacy obligations; adverse publicity; or substantial changes to our business model or operations.
We are subject to certain U.S. and foreign anti-corruption, export control, sanctions and other trade laws and regulations. We can face serious consequences for violations.
We are subject to anti-corruption laws and regulations, including the FCPA, the U.S. domestic bribery statute contained in 18 U.S.C. § 201, the U.S. Travel Act and other state and national anti-bribery laws in the countries
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in which we may conduct activities in the future. Anti-corruption laws are interpreted broadly and generally prohibit companies and their employees, agents, contractors and other third-party collaborators from offering, promising, giving, or authorizing others to give anything of value, either directly or indirectly through third parties, to any person in the public or private sector to obtain or retain business. The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. Compliance with anti-corruption laws is expensive and difficult, particularly in countries in which corruption is a recognized problem. In addition, anti-corruption laws present particular challenges in the pharmaceutical industry, because in many countries, hospitals are operated by the government, and doctors and other hospital employees are considered foreign officials. We have direct or indirect interactions with officials and employees of government authorities or government-affiliated hospitals, universities and other organizations. We also expect our non-U.S. activities to increase over time. We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations and other regulatory approvals, and we can be held liable for the corrupt or other illegal activities of our personnel, agents or partners, even if we do not explicitly authorize or have prior knowledge of such activities. Any violation of the laws and regulations described above may result in substantial civil and criminal fines and penalties, imprisonment, the loss of export or import privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.
We are also subject to export control and import laws and regulations, including the U.S. Export Administration Regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Compliance with applicable regulatory requirements regarding the export of our products may create delays in the introduction of our products in international markets or, in some cases, prevent the export of our products to some countries altogether. Furthermore, U.S. export control laws and economic sanctions prohibit the provision of certain products and services to countries, governments and persons targeted by U.S. sanctions.
There is no certainty that all of our employees, agents, suppliers, manufacturers, contractors or collaborators, or those of our affiliates, will comply with all applicable anti-corruption, export and import control, and sanctions laws and regulations. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers, or our employees, the closing down of facilities, including those of our suppliers and manufacturers, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business. Any such violations could include prohibitions on our ability to offer our products in one or more countries as well as difficulties in manufacturing or continuing to develop our products, and could materially damage our reputation, our brand, our international expansion efforts, our ability to attract and retain employees, and our business, prospects, operating results and financial condition.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
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We maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.
Risks related to this offering and ownership of our common stock
There has been no public market for our common stock. An active trading market for our common stock may not develop or be sustained, or we may in the future fail to satisfy the continued listing requirements of the Nasdaq Global Select Market (Nasdaq) and our stock may be delisted, and you may not be able to resell your shares of our common stock at or above the public offering price, if at all.
Prior to this offering, there has been no public market for our common stock. We have applied to list our common stock on Nasdaq under the symbol “BLSM,” and the offering is contingent upon obtaining such approval. An active trading market for our shares may never develop or be sustained following this offering. In addition, the initial price for our common stock in this offering will be determined through negotiations with the underwriters. This price does not necessarily reflect the price at which investors in the market will be willing to buy and sell our shares following this offering. The lack of an active market may impair the value of your shares, your ability to sell your shares at the time you wish to sell them and the prices that you may obtain for your shares. Further, an inactive trading market for our common stock may also impair our ability to raise capital by selling shares of our common stock or enter into strategic partnerships and transactions by issuing shares of our common stock as consideration. If an active trading market for our common stock does not develop, or is not sustained, you may not be able to sell your shares quickly or at the market price, or at all, and it may be difficult for you to sell your shares without depressing the market price for our common stock.
Moreover, if, after listing, we fail to satisfy the continued listing requirements of Nasdaq, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we can provide no assurance that any action taken by us to restore compliance with listing requirements would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with the listing requirements of Nasdaq.
Our quarterly and annual operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts or any guidance we may publicly provide, each of which may cause our stock price to fluctuate or decline.
We expect our operating results to be subject to quarterly and annual fluctuations which may, in turn, cause the price of our common stock to fluctuate substantially. Our net loss and other operating results will be affected by numerous factors, including:
| • | variations in the level of expense related to the ongoing development of BH-30643, BH-30236, BH-501284 or future research and development programs; |
| • | results and timing of preclinical studies and ongoing and future clinical trials, or the addition or termination of any such clinical trials; |
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| • | variations in the level of expenses associated with other aspects of our operations including the costs of manufacturing our product candidates, organizational growth and retention and the associated costs of compensation and benefits, fluctuations in the costs of insurance, especially director and officer insurance, changes in tax expenses, and the costs of any potential future legal claims against the company; |
| • | the timing of payments we may make or receive under existing license and collaboration arrangements or the termination or modification thereof; |
| • | our execution of any strategic transactions, including acquisitions, collaborations, licenses or similar arrangements, and the timing and amount of payments we may make or receive in connection with such transactions; |
| • | any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved; |
| • | recruitment and departures of key personnel; |
| • | if our product candidates receive regulatory approval in the future, the terms of such approval and market acceptance and demand for such products; |
| • | regulatory developments affecting our product candidates or those of our competitors; |
| • | global or regional public health emergencies, including any health epidemics and their residual effects, natural disasters or major catastrophic events; |
| • | adverse macroeconomic conditions or geopolitical events and conflicts, any health epidemics and their residual effects, bank failures, or inflation and increased interest rates, on our preclinical and clinical development or operations; |
| • | the impacts of inflation and rising interest rates on our business and operations; and |
| • | changes in general market, and economic conditions. |
If our quarterly or annual operating results fall below the expectations of investors or securities analysts or any forecasts or guidance we may provide to the market, the price of our common stock could decline substantially. Such a stock price decline could occur even when we have met any previously publicly stated guidance we may provide. We believe that quarterly or annual comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.
The trading price of our common stock may be volatile and you could lose all or part of your investment.
The trading price of our common stock after this offering is likely to be volatile. The stock market in general and the market for stock of biotechnology companies in particular have experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your shares of our common stock at or above the initial public offering price. The market price for our common stock may be influenced by those factors discussed in this “Risk factors” section and many other factors, including:
| • | volatility and instability in the financial and capital markets; |
| • | announcements relating to our product candidates, including the results of clinical trials by us or our collaborators; |
| • | market acceptance of our product candidates, if approved, and the recognition of our brand; |
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| • | introduction of proposed products, technologies or treatment techniques by us or our competitors; |
| • | announcements of significant contracts, acquisitions, divestitures or partnerships by us, our competitors or our collaboration partners; |
| • | regulatory clearance, certification or approval of our product candidates or those products of our competitors or collaboration partners, or the failure to obtain such clearances, certifications or approvals on the projected timeline or at all; |
| • | the announcement of a product recall, suspension or other safety notice associated with our products or the products of our competitors, or other similar regulatory enforcement actions; |
| • | financial and operating results relative to the expectations of securities analysts and other market participants and the issuance of securities analysts’ reports or recommendations; |
| • | threatened or actual litigation, regulatory proceedings or government investigations; |
| • | the costs and timing of manufacturing for our product; |
| • | the success and market acceptance of existing or new competitive therapies, products or technologies; |
| • | development of new products that may address our markets and make our product candidates less attractive; |
| • | failure or discontinuation of any of our research or development programs; |
| • | changes in the level of expenses related to any of our research or development programs; |
| • | developments related to any existing or future collaborations; |
| • | the recruitment or departure of key personnel; |
| • | regulatory or legal developments in the United States and other countries; |
| • | announcements by us, our partners or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; |
| • | changes in the structure of healthcare payment systems; |
| • | developments or disputes concerning patent applications, issued patents or other proprietary rights; |
| • | failure to meet or exceed financial estimates and projections of the investment community or that we provide to the public; |
| • | actual or expected changes in estimates as to financial results, development timelines or recommendations by securities analysts; |
| • | announcement or expectation of additional financing efforts; |
| • | sales of common stock by us, our executive officers, directors or principal stockholders, or others; |
| • | variations in our financial results or those of companies that are perceived to be similar to us; |
| • | market conditions in the pharmaceutical and biotechnology sector; |
| • | general economic, political and market conditions and other factors; |
| • | changes in accounting principles; and |
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| • | the other factors described in this “Risk factors” section and elsewhere in this prospectus. |
Following price volatility, holders of securities may institute securities class action litigation against the issuer. If any holders of our common stock were to bring such a lawsuit against us, we could incur substantial costs defending the lawsuit and the attention of our board of directors and senior management would be diverted from the operation of our business. Any adverse determination in litigation could also subject us to significant liabilities. If the market price of our common stock following this offering does not exceed the initial public offering price, you may not realize any return on, or you may lose some or all of your investment. Broad market and industry factors such as these could materially and adversely affect the market price of our stock, regardless of our actual operating performance.
After this offering, our executive officers, directors and principal stockholders, if they choose to act together, will continue to have the ability to control or significantly influence all matters submitted to stockholders for approval.
Upon the closing of this offering, our executive officers, directors and stockholders who owned more than 5% of our outstanding common stock before this offering and their respective affiliates will, in the aggregate, hold approximately % of our outstanding common stock (based on the number of shares of our common stock outstanding as of March 31, 2026 and assuming no purchase of shares in this offering by any of this group, no exercise of the underwriters’ option to purchase additional shares of our common stock and no exercise of outstanding options other than the Exercised Option Share Issuance). As a result, if these stockholders choose to act together, they would be able to control or significantly influence all matters submitted to our stockholders for approval, as well as our management and affairs. For example, these persons, if they choose to act together, would control or significantly influence the election of directors, the composition of our management and approval of any merger, consolidation, sale of all or substantially all of our assets or other business combination that other stockholders may desire. The interests of these stockholders may not always coincide with your interests or the interests of other stockholders, and they may act in a manner that advances their best interests and not necessarily those of other stockholders, including seeking a premium value for their common stock. Any of these actions could adversely affect the market price of our common stock.
A significant portion of our total outstanding shares are eligible to be sold into the market in the near future, which could cause the market price of our common stock to drop significantly, even if our business is doing well.
Sales of a substantial number of shares of our common stock in the public market, or the perception in the market that the holders of a large number of shares intend to sell shares of our common stock, could reduce the market price of our common stock. After this offering, we will have shares of common stock outstanding (assuming no exercise of the underwriters’ option to purchase additional shares of our common stock). This includes the shares that we are selling in this offering, which may be resold in the public market immediately without restriction, unless purchased by our affiliates. Substantially all of the remaining shares of our common stock initially will be restricted as a result of securities laws, market standoff provisions or lock-up agreements, but will become eligible to be sold after this offering as described in the section titled “Shares eligible for future sale.” We, our directors, our officers and substantially all of the holders of our common stock or securities convertible into, exercisable for, or exchangeable for our common stock have entered into market standoff agreements with us and have entered or will enter into lock-up agreements under which we have agreed or will agree, subject to specific exceptions described in the section titled “Underwriting,” not to offer, sell, or transfer such securities for 180 days following the date of this prospectus. We refer to such period as the lock-up period. The underwriters may, in their sole discretion and at any time or from time to time before the termination of the lock-up period release all or any portion of the securities subject to lock-up agreements.
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Moreover, after this offering, holders of an aggregate of shares of our common stock will have rights, subject to specified conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders, until such shares can otherwise be sold without restriction under Rule 144 under the Securities Act of 1933, as amended (Securities Act), or until the rights terminate pursuant to the terms of the stockholder agreements between us and such holders. See the section titled “Description of capital stock—Registration rights.” Registration of these shares under the Securities Act would result in the shares becoming freely tradable without restriction under the Securities Act, except for shares held by affiliates, as defined in Rule 144 under the Securities Act. We also intend to register all shares of our common stock subject to equity awards issued or reserved for future issuance under our equity compensation plans on a registration statement on Form S-8. Once we register these shares, they can be freely sold in the public market upon issuance, subject to volume limitations applicable to affiliates under Rule 144 under the Securities Act and the market standoff provisions and lock-up agreements described above. Any sales of securities by these stockholders could have a negative impact on the trading price of our common stock.
If you purchase common stock in this offering, you will suffer immediate and substantial dilution of your investment.
The initial public offering price of our common stock is substantially higher than the net tangible book value per share of our outstanding common stock immediately after the closing of this offering. Based on an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover page of this prospectus), you will experience immediate dilution of $ per share as of March 31, 2026, representing the difference between our pro forma as adjusted net tangible book value per share, after giving effect to this offering and the assumed initial public offering price. This dilution is due to our investors who purchased shares prior to this offering having paid a price for their shares that is substantially less than the price offered to the public in this offering, as well as the exercise of stock options granted to our employees, directors and consultants. To the extent any outstanding options are exercised, you will experience further dilution. As a result of this dilution, investors purchasing stock in this offering may receive significantly less than the full purchase price that they paid for the shares purchased in this offering in the event of a liquidation. See the section titled “Dilution” for additional information.
We are an emerging growth company and a smaller reporting company, and the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (JOBS Act). For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in this prospectus and our periodic reports and proxy statements, and (iii) exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not approved previously. In addition, as an emerging growth company, we are only required to provide two years of audited financial statements and two years of selected financial data in this prospectus.
We could be an emerging growth company for up to five years following the year in which we complete this offering, although circumstances could cause us to lose that status earlier. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion and (c) in which we are deemed to be a large accelerated filer, which requires the market value of our common stock that is held by
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non-affiliates to exceed $700.0 million as of the prior June 30th, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.
Under the JOBS Act, emerging growth companies also can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of this exemption, and, as a result, our operating results and financial statements may not be comparable to the operating results and financial statements of companies who have adopted the new or revised accounting standards.
We also are a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our annual report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
Future sales and issuances of our securities, including pursuant to our equity incentive plans, may cause dilution to our stockholders or decrease our stock price.
We expect that significant additional capital may be necessary to continue our planned operations, including to expand product development and commercialize our products. We may seek additional capital through public or private equity or debt financings or other capital sources, which may include strategic collaborations and other strategic arrangements with third parties, to enable us to complete the development and potential commercialization of our product candidates. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder.
Pursuant to our 2026 Plan, our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. Additionally, the number of shares of our common stock reserved for issuance under our 2026 Plan will automatically increase on January 1 of each calendar year, beginning on January 1, 2027 and continuing through and including January 1, 2036, by 5.0% of the total number of shares of our common stock (including shares issuable upon exercise, conversion, or exchange of all then-outstanding pre-funded warrants, or other rights exercisable for or convertible into, directly or indirectly, shares of common stock (whether vested or unvested), but excluding shares issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under our then-existing equity incentive plan(s) and employee stock purchase plan(s), if any) outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors. In addition, pursuant to our ESPP, the number of shares of our common stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2027 and continuing through and including January 1, 2036, by the lesser of (i) 1.0% of the total number of shares of our common stock (including shares issuable upon exercise, conversion, or exchange of all then-outstanding pre-funded warrants, or other rights exercisable for or convertible into, directly or indirectly, shares of common
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stock (whether vested or unvested), but excluding shares issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under our then-existing equity incentive plan(s) and employee stock purchase plan(s), if any) outstanding on the last day of the calendar month before the date of the automatic increase and (ii) shares; provided that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). Unless our board of directors elects not to increase the number of shares available for future grant each year, our stockholders may experience additional dilution, which could cause our stock price to fall.
Participation in this offering by our existing stockholders and/or their affiliated entities may reduce the public float for our common stock.
To the extent certain of our existing stockholders and their affiliated entities participate in this offering, such purchases would reduce the non-affiliate public float of our shares, meaning the number of shares of our common stock that are not held by officers, directors and controlling stockholders. A reduction in the public float could reduce the number of shares that are available to be traded at any given time, thereby adversely impacting the liquidity of our common stock and depressing the price at which you may be able to sell shares of our common stock purchased in this offering.
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the value of our common stock. We expect that we will use the net proceeds of this offering as set forth in the section titled “Use of proceeds.” However, our use of these proceeds may differ substantially from our current plans. The failure by our management to apply these funds effectively could result in financial losses that could have a negative impact on our business, cause the price of our common stock to decline and delay the development and commercialization of our product candidates. Pending their use, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, would be your sole source of gain.
We have never declared or paid any cash dividends on our common stock. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of our common stock would be your sole source of gain on an investment in our common stock for the foreseeable future. See the section titled “Dividend policy” for additional information.
Delaware law and provisions in our amended and restated certificate of incorporation and amended and restated bylaws which will become effective immediately prior to and upon the closing of this offering could make a merger, tender offer or proxy contest difficult, thereby depressing the trading price of our common stock.
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to the closing of this offering, may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:
| • | permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); |
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| • | provide that the authorized number of directors may be changed only by resolution of the board of directors; |
| • | provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
| • | provide that the board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least 66-2/3% of the voting power of all of our then outstanding common stock; |
| • | divide our board of directors into three classes, with each class serving staggered three-year terms; |
| • | require that any action to be taken by our stockholders be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; |
| • | provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; |
| • | do not provide for cumulative voting rights, therefore allowing the holders of a majority of the shares of our common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose; and |
| • | provide that special meetings of our stockholders may be called only by the Chairman of the board, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors. |
The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require approval by the holders of at least 66-2/3% of our then-outstanding common stock.
In addition, as a Delaware corporation, we are subject to Section 203 of the Delaware General Corporation Law (DGCL). These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time. A Delaware corporation may opt out of this provision by express provision in its original certificate of incorporation or by amendment to its certificate of incorporation or bylaws approved by its stockholders. However, we have not opted out of this provision.
These and other provisions in our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law could make it more difficult or costly for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by our then-current board of directors, including delay or impede a merger, tender offer or proxy contest involving our company. The existence of these provisions could negatively affect the price of our common stock and limit opportunities for you to realize value in a corporate transaction.
For information regarding these and other provisions, see the section titled “Description of capital stock.”
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Our amended and restated certificate of incorporation that will become effective immediately prior to the closing of this offering will provide that the Court of Chancery of the State of Delaware and any appellate court therefrom will be the exclusive forums for substantially all disputes between us and our stockholders, other than any complaint asserting a cause of action arising under the Exchange Act or the Securities Act, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
Our amended and restated certificate of incorporation that will become effective immediately prior to the closing of this offering will provide that the Court of Chancery of the State of Delaware is the exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:
| • | any derivative action or proceeding brought on our behalf; |
| • | any action asserting a breach of fiduciary duty; |
| • | any action asserting a claim against us arising under the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws; |
| • | any action seeking to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our amended and restated bylaws; |
| • | any action to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; and |
| • | any action asserting a claim against us that is governed by the internal-affairs doctrine. |
This provision would not apply to suits brought to enforce a duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Furthermore, Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all such Securities Act actions. Accordingly, both state and federal courts have jurisdiction to entertain such claims. Additionally, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation will further provide that the federal district courts of the United States will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions. In such instance, we would expect to vigorously assert the validity and enforceability of the exclusive forum provisions of our amended and restated certificate of incorporation. This may require significant additional costs associated with resolving such action in other jurisdictions and the provisions may not be enforced by a court in those other jurisdictions. If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, results of operations and financial condition.
This exclusive forum provision may result in increased costs to stockholders to bring a claim. Further, this exclusive forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.
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General risk factors
Our ability to use our net operating loss (NOL) carryforwards and certain other tax attributes to offset taxable income or taxes may be limited.
We have incurred significant losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability. As of December 31, 2025, we had federal NOL carryforwards of $72.3 million and state NOL carryforwards of $23.5 million. Certain of these NOL carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under the Internal Revenue Code of 1986, as amended (Code), federal NOL carryforwards arising in taxable years beginning after December 31, 2017 will not expire and may be carried forward indefinitely, but the deductibility of such federal NOL carryforwards is generally limited to no more than 80% of current year taxable income (with certain adjustments). As of December 31, 2025, we also had U.S. federal and state research and development tax credit carryforwards of $4.8 million and $2.6 million, respectively, which may be available to reduce future tax liabilities. The U.S. federal research and development tax credit carryforward will expire beginning in 2041 and the state research and development tax credits will expire beginning in 2039. For state income tax purposes, there may be periods during which the use of NOL carryforwards is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California imposed limits on the usability of California state NOLs to offset taxable income and certain business credits to offset California state tax liabilities in tax years beginning after 2023 and before 2027.
In addition, under Sections 382 and 383 of the Code, if a corporation undergoes an “ownership change,” generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and certain other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. We have not completed a Section 382 study to assess whether one or more ownership changes have occurred since our formation, due to the complexity and cost associated with such a study. In addition, we may also experience ownership changes in the future including in connection with this offering or as a result of subsequent changes in our stock ownership, some of which may be outside of our control. As a result, if we undergo (or already have undergone) an ownership change, and our ability to use our pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset our post-change income or taxes is limited, it could harm our future results of operations by effectively increasing our future tax obligations. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. Even if we attain profitability, we may be unable to use all or a material portion of our NOLs and other tax attributes, which could adversely affect our future cash flows.
Changes and evolving requirements in tax laws or their interpretation could adversely affect our business.
The tax regimes we are subject to or operate under, including with respect to income and non-income taxes, are unsettled and may be subject to significant change. The OBBBA enacted in 2025, the Inflation Reduction Act enacted in 2022, the Coronavirus Aid, Relief, and Economic Security Act enacted in 2020, and the Tax Cuts and Jobs Act enacted in 2017 made many significant changes to the Code. Future guidance from the Internal Revenue Service and other tax authorities with respect to any legislation may affect us, and certain aspects of such legislation could be repealed or modified in future legislation or sunset in future years. It is possible that changes in or interpretations under the OBBBA or other tax legislation, or the enactment of new tax legislation, could increase our future tax liability, which could in turn adversely impact our business and future profitability. The U.S. government may enact further changes to the taxation of business entities including, among others, an increase in the corporate income tax rate, the imposition of minimum taxes or surtaxes on certain types of income and significant changes to the taxation of income derived from international operations. We are unable to predict what changes to the tax laws of the United States and other jurisdictions
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may be proposed or enacted in the future or what effect such changes would have on our business. Any of these or similar developments or changes to tax laws or rulings (which changes may have retroactive application) could result in adverse impacts to our financial condition, operating results and prospects and a material change to the tax considerations described herein.
Unstable economic and market conditions may have serious adverse consequences on our business, financial condition and stock price.
Global economic and business activities continue to face widespread uncertainties, and global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, bank failures, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks and uncertainty about economic and geopolitical stability (such as the geopolitical tensions between the United States and China, the Russia/Ukraine conflict, conflicts in the Middle East, which has recently included actions by Iran, Israel and the United States). While we do not expect further developments with any such banks to have a material impact on our cash and cash equivalents balance, expected results of operations or financial performance for the foreseeable future, if further failures in financial institutions occur where we hold deposits, we could experience additional risk. Any such loss or limitation on our cash and cash equivalents would adversely affect our business.
The extent of the impact of these conditions on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted. There can be no assurance that further deterioration in economic or market conditions will not occur, or how long these challenges will persist. If the current equity and credit markets further deteriorate, or do not improve, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. Furthermore, our stock price may decline due in part to the volatility of the stock market and the general economic downturn.
We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a public company, and our management will be required to devote substantial time to compliance with our public company responsibilities and corporate governance practices, which could impact our financial condition and results of operations and make it more difficult to run our business.
As a public company, and particularly after we are no longer an emerging growth company or smaller reporting company, we will incur significant legal, accounting and other expenses that we did not incur as a private company, including costs associated with public company reporting requirements. We also have incurred and will continue to incur costs associated with the Sarbanes-Oxley Act, and related rules implemented by the SEC and Nasdaq. The expenses generally incurred by public companies for reporting and corporate governance purposes have been increasing. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. These laws and regulations also could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees or as our executive officers. Furthermore, these rules and regulations will increase our legal and financial compliance costs and will make some activities more time-consuming and costly. We cannot predict or estimate the amount of additional costs we will incur as a public company or the timing of such costs. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions, other regulatory action and potentially civil litigation. Accordingly, increases in costs incurred as a result of becoming a publicly-traded company may adversely affect our business, financial condition and results of operations.
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If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results or prevent or detect misstatements, whether due to fraud or error. As a result, stockholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
SEC rules that implement Section 404(a) of the Sarbanes-Oxley Act require that, beginning with our second annual report following our initial public offering, management assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal control over financial reporting. Although SEC rules that implement Section 404(b) of the Sarbanes-Oxley Act require our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting, we have opted to rely on the exemptions provided in the JOBS Act, and consequently will not be required to comply with SEC rules that implement Section 404(b) of the Sarbanes-Oxley Act until such time as we are no longer an emerging growth company or smaller reporting company.
Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us or any subsequent testing by our independent registered public accounting firm, may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.
Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.
Upon the closing of this offering, we will be subject to the periodic reporting requirements of the Exchange Act. We designed our disclosure controls and procedures to reasonably assure that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management and recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.
These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. For example, our directors or executive officers could inadvertently fail to disclose a new relationship or arrangement, causing us to fail to make any related party transaction disclosures. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements due to error or fraud may occur and not be detected.
We could be subject to securities class action litigation.
In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biotechnology companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business. Additionally, the increase in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements and damages awarded to plaintiffs.
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If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.
The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. Securities and industry analysts do not currently, and may never, publish research on our company. If no or only very few securities analysts commence coverage of us, or if industry analysts cease coverage of us, the trading price for our common stock would be negatively affected. If one or more of the analysts who cover us downgrade our common stock or publish inaccurate or unfavorable research about our business, our common stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common stock could decrease, which might cause our common stock price and trading volume to decline.
Our insurance policies may be inadequate, may not cover all of our potential liabilities and may potentially expose us to unrecoverable risks.
We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include property, general liability, fiduciary liability workers’ compensation, clinical trials/products liability, cyber security liability, directors’ and officers’ and employment practices insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. No assurance can be given that an insurance carrier will not seek to cancel or deny coverage after a claim has occurred. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our financial position and results of operations. For example, although we maintain product liability insurance coverage that also covers our clinical trials, this insurance may not be adequate to cover all liabilities that we may incur, and we may be required to increase our product liability insurance coverage. We anticipate that we will need to increase our insurance coverage each time we commence a clinical trial and successfully commercialize any product candidate. Insurance availability, coverage terms and pricing continue to vary with market conditions. We endeavor to obtain appropriate insurance coverage for insurable risks that we identify. However, we may fail to correctly anticipate or quantify insurable risks, we may not be able to obtain appropriate insurance coverage and insurers may not respond as we intend to cover insurable events that may occur. Any significant uninsured liability may require us to pay substantial amounts, which would materially adversely affect our business, financial condition, results of operations and growth.
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Special note regarding forward-looking statements
This prospectus contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this prospectus, including statements regarding our plans, objectives, goals, strategies, future events, future revenues or performance, financing needs, plans, or intentions relating to our product candidates and development programs and markets and business trends are forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections. In some cases, you can identify forward-looking statements because they contain words such as “aim,” “anticipate,” “assume,” “believe,” “can,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “might,” “objective,” “plan,” “positioned,” “potential,” “predict,” “project,” “seek,” “shall,” “should,” “target,” “will,” “would” or the negative of these words or other similar terms or expressions.
These statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| • | the initiation, timing, progress and results of our research and development programs, preclinical studies and clinical trials; |
| • | our ability to develop and advance BH-30643, BH-30236, BH-501284 and any future product candidates as both monotherapy and combination therapy regimens; |
| • | the timing of and costs involved in obtaining and maintaining regulatory approval of BH-30643, BH-30236, BH-501284 and any future product candidates that we may identify or develop; |
| • | the beneficial characteristics, including potential safety, efficacy and therapeutic effects of BH-30643, BH-30236 and BH-501284; |
| • | our ability to efficiently and cost-effectively conduct our current and future preclinical studies and clinical trials; |
| • | our ability to obtain funding for our operations necessary to complete further development and, if approved, commercialization of BH-30643, BH-30236 and BH-501284; |
| • | our ability to identify and develop BH-30643, BH-30236 and BH-501284 for the treatment of additional indications; |
| • | the performance of our third-party service providers, including our suppliers and manufacturers; |
| • | the rate and degree of market acceptance and clinical utility for BH-30643, BH-30236, BH-501284 and any other product candidates we may develop; |
| • | the effects of competition with respect to BH-30643, BH-30236 and BH-501284 or any other product candidates we may develop, as well as innovations by competitors in our industry; |
| • | our estimates regarding the potential market opportunities and the number of patients for BH-30643, BH-30236, BH-501284 and any future product candidates, if approved for commercial use; |
| • | the implementation of our strategic plans for our business, BH-30643, BH-30236, BH-501284 and any future product candidates we may develop; |
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| • | our intellectual property position, including the scope of protection we are able to establish, maintain, defend and enforce for intellectual property rights covering BH-30643, BH-30236, BH-501284 and any future product candidates we may develop; |
| • | our ability to attract and retain key scientific or management personnel; |
| • | regulatory and legal developments in the United States; |
| • | our ability to attract and retain employees and collaborators with development, regulatory and commercialization expertise; |
| • | the accuracy of our estimates regarding future expenses, future revenue, capital requirements and need for additional financing; |
| • | the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements; |
| • | our expectations regarding the impact of global health pandemics, geopolitical conflicts and economic uncertainty, including interest rate changes and inflation on our business and operations, including clinical trials, collaborators, clinical research organizations (CROs) and employees; |
| • | our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; and |
| • | our anticipated use of the proceeds from this offering. |
These forward-looking statements reflect our management’s beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this prospectus and are subject to risks and uncertainties. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. We discuss many of the risks associated with the forward-looking statements in this prospectus in greater detail in the section titled “Risk factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-looking statements.
You should carefully read this prospectus and the documents that we have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this prospectus by these cautionary statements.
Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events, or otherwise.
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Market, industry and other data
Certain market, industry and competitive data included in this prospectus were obtained from our own internal estimates and research, as well as from publicly available information, reports of governmental agencies and industry and academic publications and research conducted by third parties. In some cases, we do not expressly refer to the sources from which this data is derived. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and involves a number of assumptions and limitations; as a result, actual events or circumstances may differ materially from events and circumstances that are assumed in this information, and you are cautioned not to give undue weight to such information.
The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section titled “Risk factors.” These and other factors could cause results to differ materially from those expressed in estimates made by third parties or by us.
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We have never declared or paid any cash dividends on our capital stock and we do not currently intend to pay any cash dividends on our capital stock for the foreseeable future. We currently intend to retain all available funds and any future earnings to support operations and to finance the growth and development of our business. Any future determination to pay dividends will be made at the discretion of our board of directors, subject to applicable laws and will depend upon, among other factors, our results of operations, financial condition, contractual restrictions and capital requirements.
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We estimate that we will receive net proceeds from this offering of approximately $ million (or approximately $ million if the underwriters exercise their option to purchase additional shares in full) assuming an initial public offering price of $ per share of our common stock, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Similarly, each one million share increase (decrease) in the number of shares offered by us would increase (decrease) the net proceeds to us from this offering by approximately $ million, assuming that the assumed initial offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the initial price to the public or the number of shares by these amounts would have a material effect on the uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital.
The principal purposes of this offering are to obtain additional capital to support our operations, to create a public market for our common stock and to facilitate our future access to the public equity markets. We currently intend to use the net proceeds from this offering, together with our existing cash and cash equivalents, as follows:
| • | approximately $ million to advance the clinical development of BH-30643 in EGFR-mutant NSCLC, including continuation of our ongoing global Phase 1/2 clinical trial and the planned initiation of a potential registrational Phase 2 clinical trial; |
| • | approximately $ million to advance the clinical development of BH-30236, including continuation of our ongoing Phase 1 clinical trial of BH-30236 as both a monotherapy and combination therapy in AML, HR-MDS and other hematological malignancies; |
| • | approximately $ million to complete IND-enabling studies, submit an IND and initiate a Phase 1 clinical trial of BH-501284; and |
| • | the remaining amounts for other research and development activities, as well as for capital expenditures, working capital and other general corporate purposes. |
We may also use a portion of the net proceeds for strategic investments in complementary businesses, products, technologies or assets. However, we do not have agreements or commitments to enter into any such acquisitions or investments at this time.
Based on our current operating plans, we estimate that our existing cash and cash equivalents as of the date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to fund our projected operating expenses and capital expenditure requirements into . We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
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The expected net proceeds from this offering, together with our existing cash and cash equivalents, will not be sufficient for us to fund our product candidates through clinical trials, regulatory approval and commercialization, and we will need to raise substantial additional capital in order to do so.
We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the progress, cost, and results of our preclinical and clinical development programs, our ability to obtain additional financing and other factors described under “Risk factors” in this prospectus, as well as the amount of cash used in our operations and any unforeseen cash needs. Therefore, our actual expenditures may differ materially from the estimates described above. We may find it necessary or advisable to use the net proceeds for other purposes. Our management will have broad discretion over the use of the net proceeds of this offering and investors will be relying on the judgment of our management regarding the use of those net proceeds.
Pending the use of proceeds from this offering described above, we intend to invest the net proceeds in short- and intermediate-term, interest-bearing, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government.
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The following table sets forth our cash and cash equivalents and our capitalization as of March 31, 2026 on:
| • | an actual basis; |
| • | a pro forma basis, giving effect to (i) the automatic conversion of all outstanding shares of our convertible preferred stock as of March 31, 2026 into 85,552,612 shares of our common stock upon the closing of this offering and the related reclassification of the carrying value of our convertible preferred stock to permanent equity in connection with the closing of this offering, (ii) the Exercised Option Share Issuance and (iii) the filing and effectiveness of our amended and restated certificate of incorporation upon the closing of this offering; and |
| • | a pro forma as adjusted basis, giving effect to (i) the pro forma adjustments set forth above and (ii) the issuance and sale of shares of our common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
The pro forma and pro forma as adjusted information below is illustrative only, and our cash and cash equivalents and restricted cash and capitalization following the closing of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. You should read the information in this table together with our financial statements and the related notes included elsewhere in this prospectus and the section titled “Management’s discussion and analysis of financial condition and results of operations” and other financial information contained in this prospectus.
| As of March 31, 2026 | ||||||||||||
| Actual | Pro forma | Pro forma as adjusted(1) |
||||||||||
| (in thousands, except share and per share data) |
||||||||||||
| Cash and cash equivalents |
$ | 116,003 | $ | $ | ||||||||
| Convertible preferred stock, $0.0001 par value; 85,552,612 shares authorized, 85,552,612 shares issued and outstanding, actual; no shares authorized, issued or outstanding, pro forma and pro forma as adjusted |
$ | 256,823 | $ | $ | ||||||||
| Stockholders’ deficit: |
||||||||||||
| Preferred stock, $0.0001 par value; no shares authorized, issued or outstanding, actual; 10,000,000 shares authorized and no shares issued or outstanding, pro forma and pro forma as adjusted |
||||||||||||
| Common stock, $0.0001 par value; shares authorized, 12,390,078 shares issued and outstanding, actual; 700,000,000 shares authorized, pro forma and pro forma as adjusted; shares issued and outstanding, pro forma; shares issued and outstanding, pro forma as adjusted |
1 | |||||||||||
| Additional paid-in capital |
3,916 | |||||||||||
| Accumulated deficit |
(156,037 | ) | ||||||||||
|
|
|
|||||||||||
| Total stockholders’ deficit |
(152,120 | ) | ||||||||||
|
|
|
|||||||||||
| Total capitalization |
$ | 104,703 | $ | $ | ||||||||
|
|
||||||||||||
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| (1) | Each $1.00 increase (or decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of our cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each one million share increase (decrease) in the number of shares offered by us at the assumed initial public offering price per share of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted amount of each of our cash and cash equivalents, additional paid-in capital, total stockholders’ equity and total capitalization by approximately $ million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. |
Except as otherwise indicated, the information in the table above excludes:
| • | 5,286,828 shares of our common stock issuable upon the exercise of stock options outstanding under the 2020 Plan as of March 31, 2026, with a weighted-average exercise price of $1.18 per share, including 1,144,585 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $0.93 per share, of which shares remain subject to a right of repurchase as of the date of this prospectus; |
| • | 1,590,784 shares of our common stock issuable upon the exercise of stock options outstanding granted under the 2020 Plan subsequent to March 31, 2026, with a weighted-average exercise price of $2.73 per share, including 566,448 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $2.81 per share, of which shares remain subject to a right of repurchase as of the date of this prospectus; |
| • | shares of our common stock issuable upon the exercise of the IPO Option Grants, as more fully described in the section titled “Executive and director compensation”; |
| • | shares of our common stock reserved for future issuance under our 2026 Plan (inclusive of the shares issuable under the IPO Option Grants), which will become effective upon the execution and delivery of the underwriting agreement for this offering (which shares include new shares plus the number of shares (not to exceed shares) that remain available for the issuance of awards under the 2020 Plan, at the time the 2026 Plan becomes effective, as more fully described in the section titled “Executive and director compensation”), as well as any automatic increases in the number of shares of our common stock reserved for future issuance under the 2026 Plan; and |
| • | shares of our common stock reserved for future issuance under our ESPP, which will become effective upon the execution and delivery of the underwriting agreement for this offering, as well as any annual automatic increases in the number of shares of our common stock reserved for future issuance under the ESPP. |
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If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after the closing of this offering.
As of March 31, 2026, we had a historical net tangible book value (deficit) of approximately $(152.1) million, or $(12.28) per share of our common stock based on 12,390,078 shares of our common stock outstanding as of such date. Our historical net tangible book value (deficit) per share represents the amount of our total tangible assets less our total liabilities and convertible preferred stock, divided by the total number of shares of our common stock outstanding as of March 31, 2026.
After giving effect to (i) the automatic conversion of all outstanding shares of our convertible preferred stock into 85,552,612 shares of our common stock and the related reclassification of the carrying value of our convertible preferred stock to permanent equity in connection with the closing of this offering and assuming the occurrence of such conversion as of March 31, 2026 and (ii) the Exercised Option Share Issuance assuming the occurrence of such issuance as of March 31, 2026, our pro forma net tangible book value as of March 31, 2026, would have been approximately $ million, or approximately $ per share of our common stock.
Net tangible book value dilution per share to new investors represents the difference between the amount per share paid by purchasers of shares of our common stock in this offering and the pro forma as adjusted net tangible book value per share of our common stock immediately after closing of this offering. After giving further effect to the sale of shares of our common stock that we are offering at the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of March 31, 2026 would have been $ million, or approximately $ per share of our common stock. This amount represents an immediate increase in pro forma net tangible book value of $ per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of approximately $ per share to new investors participating in this offering.
Dilution per share to new investors is determined by subtracting pro forma as adjusted net tangible book value per share after this offering from the assumed initial public offering price per share paid by new investors. The following table illustrates this dilution:
| Assumed initial public offering price per share |
$ | |||||||
| Historical net tangible book value (deficit) per share as of March 31, 2026 |
$ | |||||||
| Pro forma increase in historical net tangible book value per share as of March 31, 2026 |
||||||||
|
|
|
|||||||
| Pro forma net tangible book value per share as of March 31, 2026, before this offering |
||||||||
| Increase in pro forma net tangible book value per share attributed to new investors purchasing shares in this offering |
||||||||
|
|
|
|||||||
| Pro forma as adjusted net tangible book value per share immediately after this offering |
||||||||
|
|
|
|||||||
| Dilution per share to new investors in this offering |
$ | |||||||
|
|
||||||||
The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted net tangible book value
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per share after this offering by approximately $ , and dilution in pro forma net tangible book value per share to new investors by approximately $ , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us.
We may also increase or decrease the number of shares we are offering. Each increase of one million shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase our pro forma as adjusted net tangible book value per share after this offering by approximately $ and decrease the dilution to investors participating in this offering by approximately $ per share, assuming that the assumed initial public offering price remains the same, and after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us. Similarly, each decrease of one million shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would decrease the pro forma as adjusted net tangible book value per share after this offering by approximately $ and increase the dilution to investors participating in this offering by approximately $ per share, assuming the assumed initial public offering price of $ per share remains the same, and after deducting the estimated underwriting discounts and commissions and the estimated offering expenses payable by us.
If the underwriters exercise their option to purchase up to additional shares of our common stock in full in this offering, the pro forma as adjusted net tangible book value after the offering would be $ per share, the increase in pro forma as adjusted net tangible book value per share to existing stockholders would be $ per share and the dilution per share to new investors would be $ per share, in each case assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions payable by us.
To the extent that outstanding options with an exercise price per share that is less than the pro forma as adjusted net tangible book value per share are exercised, new investors will experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
The following table summarizes, on the pro forma as adjusted basis described above, as of March 31, 2026, the differences between the number of shares of our common stock purchased from us by our existing stockholders and common stock by new investors purchasing shares in this offering, the total consideration paid to us in cash and the weighted-average price per share paid by existing stockholders for shares of our common stock issued prior to this offering and the price to be paid by new investors for shares of our common stock in this offering. The calculation below is assuming an initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
| Shares purchased |
Total consideration |
Weighted- average price per share |
||||||||||||||||||
| Number | Percent | Amount | Percent | |||||||||||||||||
| Existing stockholders |
% | $ | % | $ | ||||||||||||||||
| New investors(1) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
100.0% | $ | 100.0% | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
||||||||||||||||||||
| (1) | The presentation in this table regarding ownership by existing stockholders does not give effect to any purchases that existing stockholders may make through our directed share program or otherwise purchase in this offering. |
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Each $1.00 increase in the assumed initial public offering price of $ per share would increase total consideration paid by new investors, total consideration paid by all stockholders and the weighted-average price per share paid by all stockholders by $ million, $ million and $ , respectively, while each $1.00 decrease in the assumed initial public offering price of $ per share, would decrease total consideration paid by new investors, total consideration paid by all stockholders and the weighted-average price per share paid by all stockholders by $ million, $ million and $ , respectively, and assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and before deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
Similarly, each one million share increase in the number of shares offered by us, as set forth on the cover page of this prospectus, would increase the total consideration paid by investors participating in this offering, total consideration paid by all stockholders and the weighted-average price per share paid by all stockholders by approximately $ million, $ million and $ , respectively, while each one million share decrease in the number of shares offered by us, as set forth on the cover page of this prospectus, would decrease the total consideration paid by investors participating in this offering, total consideration paid by all stockholders and the weighted-average price per share paid by all stockholders by approximately $ million, $ million and $ , respectively, assuming the assumed initial public offering price of $ per share remains the same, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
The table above assumes no exercise of the underwriters’ option to purchase additional shares of our common stock in this offering. If the underwriters were to fully exercise their option to purchase additional shares of our common stock from us, the percentage of our common stock held by existing stockholders after this offering would be reduced to % of the total number of shares of our common stock outstanding after this offering, and the percentage of our common stock held by new investors would be increased to % of the total number of shares of our common stock outstanding after this offering.
Except as otherwise indicated, the discussion and the tables above assume no exercise of the underwriters’ option to purchase additional shares of our common stock and excludes:
| • | 5,286,828 shares of our common stock issuable upon the exercise of outstanding stock options as of March 31, 2026, with a weighted-average exercise price of $1.18 per share, including 1,144,585 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $0.93 per share, of which shares remain subject to a right of repurchase as of the date of this prospectus; |
| • | 1,590,784 shares of our common stock issuable upon the exercise of outstanding stock options granted subsequent to March 31, 2026, with a weighted-average exercise price of $2.73 per share, including 566,448 shares of our common stock pursuant to the Exercised Option Share Issuance, with a weighted-average exercise price of $2.81 per share, of which shares remain subject to a right of repurchase; |
| • | shares of our common stock issuable upon the exercise of the IPO Option Grants, as more fully described in the section titled “Executive and director compensation”; |
| • | shares of our common stock reserved for future issuance under our 2026 Plan (inclusive of the shares issuable under the IPO Option Grants), which will become effective upon the execution and delivery of the underwriting agreement for this offering (which shares include new shares plus the number of shares (not to exceed shares) that remain available for the issuance of awards under the 2020 Plan at the time the 2026 Plan becomes effective, as more fully described in the section titled “Executive and director compensation—Equity incentive plans”), as well as any automatic increases in the number of our common stock reserved for future issuance under the 2026 Plan; and |
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| • | shares of our common stock reserved for future issuance under our ESPP, as well as any annual automatic increases in the number of shares of our common stock reserved for future issuance under the ESPP, which will become effective upon the execution and delivery of the underwriting agreement for this offering. |
We may choose to raise additional capital through the sale of equity or convertible debt securities due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that stock options are exercised or we issue additional shares of our common stock or other equity or convertible debt securities in the future, there will be further dilution to investors participating in this offering.
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Management’s discussion and analysis of financial condition and results of operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes and other financial information included elsewhere in this prospectus. In addition to historical financial information, the following discussion and analysis contains forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions, such as statements regarding our plans, objectives, expectations, intentions and projections. Our actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed in the section titled “Risk factors” and elsewhere in this prospectus. You should carefully read the section titled “Risk factors” to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special note regarding forward-looking statements.”
Overview
We are a clinical-stage biopharmaceutical company applying our intentional, chemistry-based approach to develop innovative small molecule medicines that address significant unmet medical needs in cancer treatment. With each of our programs, we combine a deep understanding of disease and protein dynamics with our structure-based rational drug design expertise to identify the specific structural liabilities that limit existing therapies or approaches, and then design novel chemical scaffolds to directly address these limitations. Our scientific founder and the team we have assembled have a proven track record of developing innovative small molecule medicines that overcome the limitations of existing therapies, including multiple approved therapies that have delivered transformational patient outcomes.
Our initial development efforts are focused on our two clinical-stage programs: BH-30643, an investigational, non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of epidermal growth factor receptor (EGFR)-mutant non-small cell lung cancer (NSCLC), and BH-30236, an investigational macrocyclic CDC-like kinase (CLK) inhibitor being evaluated first in relapsed or refractory acute myeloid leukemia (R/R AML) and higher-risk myelodysplastic syndromes (HR-MDS). We also have a preclinical-stage product candidate, BH-501284, that leverages a novel chemical scaffold to selectively target and modulate activated KRAS.
Our most advanced product candidate, BH-30643, is an OMNI-EGFR inhibitor being evaluated in SOLARA, a global Phase 1/2 clinical trial in patients with EGFR-mutant NSCLC. While there are commercially available drugs targeting EGFR subtypes, there is a fragmentation of care in EGFR-mutant NSCLC because no drug is effective across all EGFR mutations. Moreover, the durability of response to prior-generation EGFR tyrosine kinase inhibitors (TKIs) has frequently been limited by the emergence of acquired on-target resistance mutations, notably the T790M gatekeeper mutation for first- and second-generation EGFR TKIs and C797S-mediated resistance for third-generation EGFR TKIs, such as osimertinib. BH-30643 is designed to address a broad spectrum of EGFR mutations, including classical mutations, on-target resistance mutations such as C797S and T790M, atypical mutations and exon 20 insertion mutations, with selectivity over wild-type EGFR. The SOLARA Phase 1/2 clinical trial is currently enrolling patients across dose expansion cohorts in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort, a population with no currently approved targeted therapy. Our second clinical-stage product candidate, BH-30236, is a CLK inhibitor currently being evaluated in an ongoing Phase 1 clinical trial in patients with R/R AML and HR-MDS. Our Phase 1 clinical trial is currently enrolling patients in the dose escalation part of the trial and is evaluating BH-30236 as a monotherapy and in combination with the BCL-2 inhibitor venetoclax, the established standard of care therapy for AML patients. We
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are also advancing our pan-KRAS program, initially focusing on our preclinical product candidate, BH-501284, which is designed using a novel chemical scaffold to achieve prolonged, potent and selective inhibition of KRAS mutations, but sparing HRAS and NRAS. We are currently conducting Investigational New Drug Application (IND) enabling studies of BH-501284.
We commenced our operations in 2020 and have devoted substantially all of our resources to date to conducting research and development, staffing our company, establishing and protecting our intellectual property portfolio, scaling up manufacturing processes and supplying our product candidates and other materials for our preclinical studies and clinical trials, leasing office and laboratory space, raising capital, business planning, and providing general and administrative support for these activities. Our operations to date have been funded primarily through the issuance and sale of shares of our convertible preferred stock. From our inception through March 31, 2026, we have raised aggregate gross proceeds of $257.2 million. As of March 31, 2026, we had cash and cash equivalents of $116.0 million. Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to fund our projected operating expenses and capital expenditures into . However, this estimate is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.
Since our inception, we have incurred significant operating losses. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product candidates. Our net losses were $30.7 million and $60.6 million for the years ended December 31, 2024 and 2025, respectively, and $10.5 million and $21.0 million for the three months ended March 31, 2025 and 2026, respectively. As of March 31, 2026, we had an accumulated deficit of $156.0 million. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing and extent of our clinical development activities, other research and development activities and capital expenditures. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future as we seek to advance our product candidates through clinical and preclinical development, expand our research and development activities, seek regulatory approval, hire additional personnel and protect our intellectual property. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. We may also incur expenses in connection with the in-licensing or acquisition of additional product candidates. Furthermore, following the closing of this offering, we expect to incur increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director costs and investor relations costs associated with operating as a public company that we did not incur as a private company.
We have never generated any revenue from product sales and do not expect to generate any revenue from product sales unless and until we successfully complete development of and obtain regulatory approval for our product candidates, which will not be for several years, if ever. Accordingly, until such time as we can generate significant revenue from sales of our product candidates, if ever, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include future strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be or could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take
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specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through future collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional capital or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability. Even if we are able to generate product sales, we may not become profitable. If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations.
We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We have engaged, and expect to continue to rely on, third-party contract manufacturers to produce and supply our product candidates for use in our preclinical studies and clinical trials. Because we are responsible for ensuring all aspects of our product candidates’ compliance and quality but rely on third-party contract manufacturers and analytical testing laboratories, we must employ personnel with extensive technical, manufacturing, analytical, and quality experience to oversee our contract manufacturing and testing activities, and to compile manufacturing and quality information for our regulatory submissions. We believe our current third-party manufacturers have the scale, systems and experience to supply our currently planned clinical trials. None of our product candidates have been approved for sale. If and when our product candidates receive marketing approval, we intend to commercialize them on our own, or jointly with a partner, in the United States and potentially in other geographies. We plan to continually evaluate the economics of commercializing our product candidates versus other strategic commercialization arrangements.
Financial overview
Components of results of operations
Operating expenses
Our operating expenses consist of (i) research and development expenses and (ii) general and administrative expenses.
Research and development
Our research and development expenses consist primarily of external and internal costs related to the discovery and development of product candidates.
External costs include:
| • | expenses incurred in connection with the discovery and preclinical development of our product candidates, including under agreements with third parties, such as consultants and CROs; |
| • | expenses incurred in connection with conducting clinical trials including investigator grants, site payments, pass-through expenses and expenses incurred under agreements with CROs, central laboratories and other service providers engaged to support the conduct of our trials; |
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| • | the cost of consultants engaged in research and development related services; |
| • | costs related to the outsourced development of CMC processes, scale-up of drug substance manufacturing and procuring our product candidates and other investigational materials for use in our clinical trials and preclinical studies; and |
| • | costs related to regulatory compliance and quality assurance. |
Internal costs include:
| • | personnel-related expenses, including salaries, bonuses, benefits, travel and stock-based compensation expenses for personnel engaged in research and development functions; and |
| • | facilities, depreciation, and other expenses, which include allocated expenses for rent and maintenance of facilities, insurance and supplies. |
We expense research and development costs in the periods in which they are incurred. External expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the level of service that has been performed at each reporting date. Payments made prior to the receipt of goods or services to be used in research and development are recorded as prepaid expenses on the balance sheet until the goods are received or services are performed. We track external research and development costs of specific programs once a specific product candidate has been identified for development. We do not track our internal research and development costs on a program-by-program basis because these costs are associated with multiple programs and, as such, are not separately identified.
Research and development activities are central to our business model, and the successful development of our product candidates is highly uncertain. There are numerous factors associated with the approval and successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Potential future changes to regulatory factors beyond our control may impact our development programs. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. In addition, we cannot predict which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
Preclinical and clinical development timelines, the probability of success and total development costs can differ materially from expectations. We anticipate that we will make determinations as to which product candidates and indications to pursue and how much funding to direct to each product candidate on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments, and our ongoing assessments as to each product candidate’s commercial potential. Therefore, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the development and commercialization of any of our product candidates or any future product candidates. However, we expect that our research and development expenses will increase substantially as we advance the preclinical and clinical development of our current and potential future product candidates.
Our future development costs may vary significantly based on factors, including, but not limited to:
| • | the number and scope of preclinical and IND-enabling studies; |
| • | the number of clinical trials required for approval; |
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| • | the number of sites included in the clinical trials; |
| • | the countries in which the trials are conducted; |
| • | the length of time required to enroll eligible patients; |
| • | the number of patients that participate in the clinical trials; |
| • | the number of doses evaluated in the clinical trials; |
| • | the costs of manufacturing our product candidates and the costs of procuring any third-party products for use in clinical trials of combination therapies; |
| • | the drop-out or discontinuation rates of patients; |
| • | potential additional safety monitoring requested by regulatory agencies; |
| • | the duration of patient participation in the clinical trials and follow-up; |
| • | the phase of development of the product candidate; and |
| • | the efficacy, safety and tolerability profile of the product candidate. |
A change in the outcome of any of these variables may significantly impact the costs and timing associated with the development of our product candidates.
General and administrative
General and administrative expenses support our key business functions as we grow and mature as a company. General and administrative expenses consist of personnel-related expenses, including salaries, bonuses, benefits, travel and stock-based compensation expenses for personnel engaged in executive, finance, legal and other administrative functions. Other significant general and administrative expenses include facilities-related costs, legal fees relating to intellectual property and corporate matters, audit costs, information technology-related costs and insurance costs.
We expect that our general and administrative expenses will increase substantially for the foreseeable future to support our continued and potentially growing research and development activities, pre-commercial preparation activities for our product candidates, and, if any product candidate receives marketing approval, commercialization activities.
Following the closing of this offering, we also anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums, board of director costs and investor relations costs associated with operating as a public company.
Interest income, net
Interest income, net consists primarily of interest on our cash equivalents held in money market funds.
Other expenses, net
Other expenses, net consists primarily of foreign exchange gains and losses.
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Results of operations for the three months ended March 31, 2025 and 2026
The following table summarizes our results of operations for the three months ended March 31, 2025 and 2026 (in thousands):
| Three Months Ended March 31, | ||||||||||||
| 2025 | 2026 | Change | ||||||||||
| Operating expenses: |
||||||||||||
| Research and development |
$ | 9,572 | $ | 19,901 | 10,329 | |||||||
| General and administrative |
1,882 | 2,206 | 324 | |||||||||
|
|
|
|
|
|||||||||
| Total operating expenses |
11,454 | 22,107 | 10,653 | |||||||||
|
|
|
|
|
|||||||||
| Loss from operations |
(11,454 | ) | (22,107 | ) | (10,653 | ) | ||||||
| Other income (expense), net: |
||||||||||||
| Interest income, net |
976 | 1,102 | 126 | |||||||||
| Other expense |
— | (3 | ) | (3 | ) | |||||||
| Total other income, net |
976 | 1,099 | 123 | |||||||||
|
|
|
|
|
|||||||||
| Net loss |
$ | (10,478 | ) | $ | (21,008 | ) | (10,530 | ) | ||||
Research and development expenses
We track external research and development costs of specific programs once a specific product candidate has been identified for development. We do not track internal research and development costs on a program-by-program basis.
The following table summarizes our research and development expenses by program for the three months ended March 31, 2025 and 2026 (in thousands):
| Three Months Ended March 31, | ||||||||||||
| 2025 | 2026 | Change | ||||||||||
| External research and development expense: |
||||||||||||
| BH-30643 |
$ | 1,782 | $ | 9,550 | $ | 7,768 | ||||||
| BH-30236 |
1,048 | 1,747 | 699 | |||||||||
| BH-501284 |
— | 585 | 585 | |||||||||
| Other preclinical programs and discovery |
1,842 | 1,012 | (830 | ) | ||||||||
| Internal research and development expense: |
||||||||||||
| Personnel-related |
4,202 | 5,435 | 1,233 | |||||||||
| Facilities, overhead and other |
698 | 1,572 | 874 | |||||||||
|
|
|
|
|
|||||||||
| Total research and development expense |
$ | 9,572 | $ | 19,901 | $ | 10,329 | ||||||
Research and development expenses were $9.6 million for the three months ended March 31, 2025, compared to $19.9 million for the three months ended March 31, 2026. The increase of $10.3 million was primarily due to increases in both external and internal research and development costs, which are described in more detail below.
For BH-30643, external costs were $1.8 million for the three months ended March 31, 2025, compared to $9.6 million for the three months ended March 31, 2026. The increase of approximately $7.8 million was primarily due to significant growth in clinical trial enrollment and sites activated and an increase in
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manufacturing costs related to the clinical development of BH-30643. For BH-30236, external costs were $1.0 million for the three months ended March 31, 2025, compared to $1.7 million for the three months ended March 31, 2026. The increase of approximately $0.7 million was primarily due to the advancement of our ongoing clinical trial. For BH-501284, external costs were $0.6 million for the three months ended March 31, 2026. There were no related costs in 2025. The increase of $0.6 million was primarily comprised of manufacturing-related expenses to support IND-enabling studies and potential future clinical development. These increases in external research and development costs were partially offset by a decrease of $0.8 million in external expenses related to our other programs and discovery, as we focused investment toward the development of our most advanced product candidates.
Internal costs were $4.9 million for the three months ended March 31, 2025, compared to $7.0 million for the three months ended March 31, 2026. The increase of approximately $2.1 million was due to a $1.2 million increase in personnel-related expenses driven by our additional headcount as we expanded the number of research and development employees to support our programs, and an increase of approximately $0.9 million in facilities, overhead and other expenses.
General and administrative expenses. General and administrative expenses were $1.9 million for the three months ended March 31, 2025, compared to $2.2 million for the three months ended March 31, 2026. The increase of $0.3 million was comprised of a $0.4 million increase in personnel-related expenses and a $0.2 million increase in facilities-related expenses, partially offset by a decrease in legal expenses of $0.2 million and a decrease in general overhead and outside services expense of $0.1 million.
Interest income, net. Interest income, net was $1.0 million for the three months ended March 31, 2025, compared to $1.1 million for the three months ended March 31, 2026. The increase of $0.1 million was primarily due to an increase in interest income on our invested cash equivalents held in our money market funds, driven by an increase in average balance held in money market funds and to a lesser extent by changing interest rates.
Results of operations for the years ended December 31, 2024 and 2025
The following table summarizes our results of operations for the years ended December 31, 2024 and 2025 (in thousands):
| Year ended December 31, | ||||||||||||
| 2024 | 2025 | Change | ||||||||||
| Operating expenses: |
||||||||||||
| Research and development |
$ |
31,810 |
|
$ |
56,138 |
|
$ |
24,328 |
| |||
| General and administrative |
|
4,591 |
|
|
7,886 |
|
|
3,295 |
| |||
|
|
|
|
|
|||||||||
| Total operating expenses |
|
36,401 |
|
|
64,024 |
|
|
27,623 |
| |||
|
|
|
|
|
|||||||||
| Loss from operations |
(36,401 | ) | (64,024 | ) | (27,623 | ) | ||||||
| Other income (expense), net: |
||||||||||||
| Interest income, net |
5,706 | 3,480 | (2,226 | ) | ||||||||
| Other expense, net |
— | (11 | ) | (11 | ) | |||||||
| Total other income, net |
5,706 | 3,469 | (2,237 | ) | ||||||||
|
|
|
|
|
|||||||||
| Net loss |
$
|
(30,695
|
)
|
$
|
(60,555
|
)
|
$
|
(29,860
|
)
| |||
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Research and development expenses
The following table summarizes our research and development expenses by program for the years ended December 31, 2024 and 2025 (in thousands):
| Year ended December 31, | ||||||||||||
| 2024 | 2025 | Change | ||||||||||
| External research and development costs: |
||||||||||||
| BH-30643 |
$ | 5,958 | $ | 20,648 | $ | 14,690 | ||||||
| BH-30236 |
3,841 | 6,829 | 2,988 | |||||||||
| BH-501284 |
— | 891 | 891 | |||||||||
| Other preclinical programs and discovery |
6,691 | 4,363 | (2,328 | ) | ||||||||
| Internal research and development costs: |
||||||||||||
| Personnel-related |
12,056 | 18,360 | 6,304 | |||||||||
| Facilities, overhead and other |
3,264 | 5,047 | 1,783 | |||||||||
|
|
|
|
|
|||||||||
| Total research and development expense |
$ | 31,810 | $ | 56,138 | $ | 24,328 | ||||||
Research and development expenses were $31.8 million for the year ended December 31, 2024, compared to $56.1 million for the year ended December 31, 2025. The increase of $24.3 million was primarily due to increases in both external and internal research and development costs, which are described in more detail below.
For BH-30643, external costs were $6.0 million for the year ended December 31, 2024, compared to $20.6 million for the year ended December 31, 2025. The increase of approximately $14.7 million was primarily due to our advancing the development of this product candidate, including the initiation of a clinical trial. For BH-30236, external costs were $3.8 million for the year ended December 31, 2024, compared to $6.8 million for the year ended December 31, 2025. The increase of approximately $3.0 million was primarily due to our advancing the development of this product candidate, including the ongoing clinical trial. For BH-501284, external costs were $0.9 million for the year ended December 31, 2025. There were no related costs in 2024. The increase of $0.9 million was primarily comprised of manufacturing-related expenses to support IND-enabling studies and potential future clinical development. These increases in external research and development costs were partially offset by a decrease of $2.3 million in external expenses related to our other programs and discovery, as we focused investment toward the development of our most advanced product candidates.
Internal costs were $15.3 million for the year ended December 31, 2024, compared to $23.4 million for the year ended December 31, 2025. The increase of approximately $8.1 million was due to a $6.3 million increase in personnel-related expenses driven by our additional headcount as we expanded the number of research and development employees to support our programs, and an increase of approximately $1.8 million in facilities, overhead and other expenses.
General and administrative expenses. General and administrative expenses were $4.6 million for the year ended December 31, 2024, compared to $7.9 million for the year ended December 31, 2025. The increase of $3.3 million was comprised of a $1.3 million increase in personnel-related expenses, a $1.1 million increase in legal expenses, a $0.4 million increase in general overhead, a $0.3 million increase in outside services and a $0.2 million increase in facilities-related expenses.
Interest income, net. Interest income, net was $5.7 million for the year ended December 31, 2024, compared to $3.5 million for the year ended December 31, 2025. The decrease of $2.2 million was primarily due to a decrease
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in interest income on our invested cash equivalents held in our money market funds in 2025, driven by a decrease in average balance held in money market funds and to a lesser extent by changing interest rates.
Liquidity and capital resources
Sources of liquidity
We have incurred net losses and negative cash flows from operations since our inception and expect to continue to incur significant and increasing operating losses for the foreseeable future. We have never generated any revenue from product sales and do not expect to generate any revenue from product sales unless and until we successfully complete development of and obtain regulatory approval for one or more of our product candidates, which will not be for several years, if ever. In addition, if we obtain regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.
From our inception through March 31, 2026, we have raised aggregate gross proceeds of $257.2 million to fund our operations, comprised primarily from our issuance of convertible preferred stock.
Cash flows
The following table sets forth a summary of the net cash flow activity for the periods indicated (in thousands):
| Year ended December 31, | Three months ended March 31, |
|
||||||||||||||||||||||
| 2024 | 2025 | Change | 2025 | 2026 | Change | |||||||||||||||||||
| Net cash provided by (used in): |
||||||||||||||||||||||||
| Operating activities |
$ | (31,416 | ) | $ | (46,925 | ) | $ | (15,509 | ) | $ | (10,979 | ) | $ | (20,940 | ) | $ | (9,961 | ) | ||||||
| Investing activities |
(92 | ) | (1,067 | ) | (975 | ) | (402 | ) | (13 | ) | 389 | |||||||||||||
| Financing activities |
17,560 | 84,527 | 66,967 | 39 | 274 | 235 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net increase (decrease) in cash |
$ | (13,948 | ) | $ | 36,535 | $ | 50,483 | $ | (11,342 | ) | $ | (20,679 | ) | $ | (9,337 | ) | ||||||||
Operating activities
Net cash used in operating activities for the three months ended March 31, 2025 was $11.0 million, consisting primarily of our net loss of $10.5 million, adjusted for $0.5 million in non-cash charges, primarily related to non-cash lease expense, stock-based compensation expense, and depreciation, as well as $1.0 million in net changes in operating assets and liabilities.
Net cash used in operating activities for the three months ended March 31, 2026 was $20.9 million, consisting primarily of our net loss of $21.0 million, adjusted for $0.8 million in non-cash charges, primarily related to non-cash lease expense, stock-based compensation expense, and depreciation, as well as $0.7 million in net changes in operating assets and liabilities.
Net cash used in operating activities for the year ended December 31, 2024 was $31.4 million, consisting primarily of our net loss of $30.7 million, adjusted for $1.6 million in non-cash charges, primarily related to non-cash lease expense, stock-based compensation expense, and depreciation, as well as $2.3 million in net changes in operating assets and liabilities.
Net cash used in operating activities for the year ended December 31, 2025 was $46.9 million, consisting primarily of our net loss of $60.6 million, adjusted for $2.8 million in non-cash charges, primarily related to non-cash lease expense, stock-based compensation expense, and depreciation, as well as $10.8 million in net changes in operating assets and liabilities.
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Investing activities
Net cash used in investing activities was $0.4 million and $13,000 for the three months ended March 31, 2025 and 2026, respectively, consisting primarily of purchases of property and equipment.
Net cash used in investing activities was $0.1 million and $1.1 million for the years ended December 31, 2024 and 2025, respectively, consisting primarily of purchases of property and equipment.
Financing activities
Net cash provided by financing activities for the three months ended March 31, 2025 was $39,000, consisting of proceeds from the exercise of stock options.
Net cash provided by financing activities for the three months ended March 31, 2026 was $0.3 million, consisting of proceeds from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2024 was $17.6 million, consisting primarily of proceeds, net of issuance costs, of $17.1 million from the issuance and sale of shares of our Series B convertible preferred stock, and from proceeds of $0.4 million from the exercise of stock options.
Net cash provided by financing activities for the year ended December 31, 2025 was $84.5 million, consisting of proceeds, net of issuance costs, of $83.9 million from the issuance and sale of shares of our Series B convertible preferred stock, and proceeds of $0.6 million from the exercise of stock options.
Future funding requirements
Our financial statements included elsewhere in this prospectus have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.
As of March 31, 2026, we had cash and cash equivalents of $116.0 million. We have incurred significant losses and negative cash flows from operations since our inception. As of March 31, 2026, we had an accumulated deficit of $156.0 million. Based on the current cash forecast, management has determined that there is uncertainty about whether our present capital resources will be sufficient to fund our planned operations beyond twelve months from the issuance date of the financial statements included elsewhere in this prospectus and thus has concluded that substantial doubt exists as to our ability to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our business plan and raise capital. If we are unable to raise capital, to continue as a going concern, we would need to modify our operating plans and decrease our spending, which could include delaying, downsizing or ceasing altogether the clinical development of certain of our programs. The financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.
Based on our current operating plan, we estimate that our existing cash and cash equivalents as of the date of this prospectus, together with the estimated net proceeds from this offering, will be sufficient to fund our projected operating expenses and capital expenditures into . However, this estimate is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect.
Our future capital requirements will depend on many factors, including:
| • | the scope, timing, progress, costs and results of discovery, preclinical development, and clinical trials for our current or future product candidates; |
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| • | the number of clinical trials required for regulatory approval of our current or future product candidates, which may differ between the United States and other countries or regions; |
| • | the costs, timing and outcome of regulatory review of any of our current or future product candidates; |
| • | the costs associated with potentially acquiring or licensing additional product candidates, technologies or assets, including the timing and amount of any milestones, royalties or other payments due in connection with our acquisitions and licenses; |
| • | the cost of manufacturing clinical and commercial supplies of our current or future product candidates; |
| • | the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims, including any possible claims by third parties that we are infringing upon their intellectual property rights; |
| • | our ability to establish and maintain possible future strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty or other payments due under any such agreement; |
| • | the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any product candidate for which we receive regulatory approval; |
| • | the revenue, if any, received from commercial sales of the product candidate(s) for which we receive regulatory approval; |
| • | expenses to attract, hire and retain skilled personnel; |
| • | the costs of operating as a public company; |
| • | our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors for any products that receive regulatory approval; |
| • | our ability to mitigate the impact of adverse macroeconomic conditions or geopolitical events and conflicts, including any health epidemics and their residual effects, bank failures or inflation and increased interest rates, on our preclinical and clinical development or operations; |
| • | the effect of competing technological and market developments; and |
| • | the extent to which we acquire or invest in businesses, products and technologies. |
Until such time, if ever, that we can generate substantial revenue from sales of our product candidates, we expect to finance our cash needs through public or private equity or debt financings or other capital sources, which may include future strategic collaborations and other strategic arrangements with third parties. However, we may not be able to raise additional funds or enter into such other arrangements when needed or on favorable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through future collaboration or licensing arrangements with third parties or other strategic transactions, we may have to relinquish rights to our intellectual property, future revenue streams, research programs, or product candidates or grant licenses on
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terms that may not be favorable to us and/or may reduce the value of our common stock. If we are unable to raise additional funds or enter into such arrangements when needed, we could be forced to delay, limit, reduce or terminate our research and development programs or future commercialization efforts, or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Contractual obligations and commitments
As part of the capital needs to fund our ongoing operations, our material cash requirements include the following contractual obligations.
In June 2024, we entered into a non-cancelable operating lease for office and laboratory space in San Diego, California, with a ten-year initial term through June 2035 (Science Center Lease). The Science Center Lease commenced in June 2025 and includes aggregate monthly rent payments of approximately $0.3 million, with scheduled annual increases in base rent and rent abatements during an initial period of the term. Additionally, we are obligated to pay real estate taxes, maintenance costs, and other operating expenses allocable to the leased premises, which are variable in nature. We paid a cash security deposit of $0.9 million, which is refundable at the end of the lease term and is included in other long-term assets in our balance sheet as of March 31, 2026.
As of March 31, 2026, we have future remaining operating lease payments of $39.2 million relating to leases we have recognized in the balance sheet. These obligations are further described in Note 8 to our audited financial statements and Note 6 to our unaudited condensed financial statements included elsewhere in this prospectus.
In addition, we enter into agreements and purchase orders in the normal course of business with vendors for the provision of goods and services. These agreements may include certain provisions for termination, with notice, which typically consist of payments for services provided or expenses incurred through the date of cancellation. We believe that our non-cancelable obligations under these agreements are not material.
Critical accounting estimates
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States (GAAP). The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, costs, and expenses and the disclosure of contingent assets and liabilities in our financial statements and accompanying notes. We base our estimates on historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and judgments on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this prospectus, we believe that the following accounting policies are the most critical for fully understanding and evaluating our financial condition and results of operations.
Research and development expenses and accrued research and development costs
We are required to estimate our expenses resulting from obligations under contracts with vendors, consultants and CROs, in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows
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that do not match the periods over which materials or services are provided under such contracts. We reflect research and development expenses in our financial statements by matching those expenses with the period in which services and efforts are expended. We account for these expenses according to the progress of the preclinical or clinical study as measured by the timing of various aspects of the study or related activities. We determine accrual estimates through review of the underlying contracts along with preparation of financial models taking into account discussions with research, clinical operations and other key personnel, as well as considering the input from our CROs, as to the progress of studies, or other services being conducted.
Although we do not expect our estimates to be materially different from amounts actually incurred, if our estimates of the status and timing of services performed differ from the actual status and timing of services performed, it could result in us reporting amounts that are too high or too low in any particular period.
Stock-based compensation expense
Stock-based compensation expense represents the cost of the grant date fair value of employee, officer, director and non-employee stock options. We estimate the fair value of stock options on the date of grant using the Black-Scholes option pricing model and recognize the expense over the requisite service period of the awards, which is generally the vesting period, on a straight-line basis. We account for forfeitures when they occur and reverse any compensation cost previously recognized for awards for which the requisite service has not been completed, in the period that the award is forfeited.
The Black-Scholes option pricing model uses inputs which are based on highly subjective assumptions and generally require significant judgment. These assumptions include the risk-free interest rate, the expected stock price volatility, the expected term of stock options, the expected dividend yield and the fair value of the underlying common stock on the date of grant.
See Note 6 to our audited financial statements and Note 5 to our unaudited condensed financial statements included elsewhere in this prospectus for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options. Certain of such assumptions involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation could be materially different.
Common stock valuation
We are required to estimate the fair value of the common stock underlying our stock-based awards when performing fair value calculations using the Black-Scholes option pricing model. Because our common stock is not currently publicly traded, the fair value of the common stock underlying our stock-based awards has been determined on each grant date by our board of directors or our compensation committee, with input from management, considering our most recently available third-party valuation of common shares. All options to purchase shares of our common stock are intended to be granted with an exercise price per share no less than the fair value per share of our common stock underlying those options on the date of grant, based on the information known to us on the date of grant.
Our determination of the value of our common stock was performed using methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants (AICPA), Audit and Accounting Practice Aid Series: Valuation of Privately Held Company Equity Securities Issued as Compensation (the AICPA Practice Aid). In addition, our board of directors considered various objective and subjective factors to determine the fair value of our common stock, including:
| • | the prices at which we sold shares of our convertible preferred stock and the superior rights, preferences and privileges of the convertible preferred stock relative to our common stock at the time of each grant; |
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| • | the progress of our research and development programs; |
| • | our stage of development and our business strategy; |
| • | external market conditions affecting the biotechnology industry and trends within the biotechnology industry; |
| • | our financial position, including cash on hand, and our historical and forecasted performance and operating results; |
| • | the lack of an active public market for our common stock and our convertible preferred stock; |
| • | the likelihood of achieving a liquidity event, such as an initial public offering or sale of our company in light of prevailing market conditions; and |
| • | the analysis of IPOs and the valuations and market performance of similar companies in the biotechnology industry. |
The AICPA Practice Aid prescribes several valuation approaches for setting the value of an enterprise, such as the cost, income and market approaches, and various methodologies for allocating the value of an enterprise to its common stock. The cost approach establishes the value of an enterprise based on the cost of reproducing or replacing the property less depreciation and functional or economic obsolescence, if present. The income approach establishes the value of an enterprise based on the present value of future cash flows that are reasonably reflective of our future operations, discounting to the present value with an appropriate risk adjusted discount rate or capitalization rate. The market approach is based on the assumption that the value of an asset is equal to the value of a substitute asset with the same characteristics.
In accordance with the AICPA Practice Aid, we considered the various methods for allocating the enterprise value to determine the fair value of our common stock at the valuation date. Under the option pricing method (OPM), shares are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class. The value of the common stock is inferred by analyzing these options. The probability weighted expected return method (PWERM) is a scenario-based analysis that estimates the value per share based on the probability-weighted present value of expected future investment returns, considering each of the possible outcomes available to us, as well as the economic and control rights of each share class.
Based on our early stage of development and other relevant factors, for options granted prior to February 11, 2026, we determined that an OPM method was the most appropriate method for allocating our enterprise value to determine the estimated fair value of our common stock. For options granted after February 11, 2026, we determined that a hybrid method that combines both OPM and PWERM was the most appropriate method for allocating our enterprise value to determine the estimated fair value of our common stock. In determining the estimated fair value of our common stock, our board of directors also considered the fact that our stockholders could not freely trade our common stock in the public markets. Accordingly, we applied discounts to reflect the lack of marketability of our common stock based on the weighted-average expected time to liquidity.
There are significant judgments and estimates inherent in the determination of the fair value of our common stock. These judgments and estimates include assumptions regarding our future operating performance, the time to completing a liquidity event and the determination of the appropriate valuation methods. If we had made different assumptions, our stock-based compensation expense, net loss and net loss per share of common stock could have been significantly different.
Once a public trading market for our common stock has been established in connection with the closing of this offering, it will no longer be necessary to estimate the fair value of our common stock in connection with our
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accounting for stock option grants and other such awards we may grant, as the fair value of our common stock will be determined based on the quoted market price of our common stock.
Recently issued accounting pronouncements
A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited financial statements and unaudited condensed financial statements included elsewhere in this prospectus.
Quantitative and qualitative disclosures about market risks
Interest rate and market risk
We are exposed to market risks in the ordinary course of our business, primarily limited to interest rate fluctuations. Our cash and cash equivalents consist primarily of amounts invested in money market instruments, such as money market funds, treasury bills and securities issued by the U.S. government or its agencies. The primary objective of our investment activities is to preserve principal and liquidity while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes.
Due to the short-term nature of our investment portfolio, we do not believe that a hypothetical 10% increase or decrease in interest rates during any of the periods presented would have a material effect on our financial statements included elsewhere in this prospectus.
Effects of inflation
Inflation generally affects us by increasing our cost of labor and research and development contract costs. We do not believe inflation has had a material effect on our results of operations during the periods presented in our financial statements included elsewhere in this prospectus.
Emerging growth company and smaller reporting company status
We are an “emerging growth company” as defined in the JOBS Act, and we may remain an emerging growth company for up to five years following the closing of this offering. For so long as we remain an emerging growth company, we are permitted and intend to rely on certain exemptions from various public company reporting requirements, including not being required to have our internal control over financial reporting audited by our independent registered public accounting firm pursuant to Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute payments not previously approved. In particular, in this prospectus, we have provided only two years of audited financial statements and have not included all of the executive compensation-related information that would be required if we were not an emerging growth company. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you hold stock.
In addition, the JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. This provision allows an emerging growth company to delay the adoption of some accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we are not subject to the same requirements to adopt new or revised accounting standards as other public companies that are not emerging growth companies; however, we may adopt certain new or revised accounting standards early. We would cease to be an emerging growth company upon the earliest to occur of: (i) the last day of the fiscal year in which we have $1.235 billion or more in annual revenue; (ii) the date on which we first qualify as a large accelerated filer under the rules of the SEC; (iii) the date on
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which we have, in any three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of this offering.
We are also a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year, and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
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Overview
We are a clinical-stage biopharmaceutical company applying our intentional, chemistry-based approach to develop innovative small molecule medicines that address significant unmet medical needs in cancer treatment. With each of our programs, we combine a deep understanding of disease and protein dynamics with our structure-based rational drug design expertise to identify the specific structural liabilities that limit existing therapies or approaches, and then design novel chemical scaffolds to directly address these limitations. Our scientific founder and the team we have assembled have a proven track record of developing innovative small molecule medicines that overcome the limitations of existing therapies, including multiple approved therapies that have delivered transformational patient outcomes.
Our initial development efforts are focused on our two clinical-stage programs: BH-30643, an investigational, non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of epidermal growth factor receptor (EGFR)-mutant non-small cell lung cancer (NSCLC), and BH-30236, an investigational macrocyclic CDC-like kinase (CLK) inhibitor being evaluated first in relapsed or refractory acute myeloid leukemia (R/R AML) and higher-risk myelodysplastic syndromes (HR-MDS). We also have a preclinical-stage product candidate, BH-501284, that leverages a novel chemical scaffold to selectively target and modulate activated KRAS.
Our most advanced product candidate, BH-30643, is an OMNI-EGFR inhibitor being evaluated in SOLARA, a global Phase 1/2 clinical trial in patients with EGFR-mutant NSCLC. While there are commercially available drugs targeting EGFR subtypes, there is a fragmentation of care in EGFR-mutant NSCLC because no drug is effective across all EGFR mutations. Moreover, the durability of response to prior-generation EGFR tyrosine kinase inhibitors (TKIs) has frequently been limited by the emergence of acquired on-target resistance mutations, notably the T790M gatekeeper mutation for first- and second-generation EGFR TKIs and C797S-mediated resistance for third-generation EGFR TKIs, such as osimertinib. BH-30643 is designed to address a broad spectrum of EGFR mutations, including classical mutations, on-target resistance mutations such as C797S and T790M, atypical mutations and exon 20 insertion mutations, with selectivity over wild-type EGFR. The SOLARA Phase 1/2 clinical trial is currently enrolling patients across dose expansion cohorts in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort, a population with no currently approved targeted therapy. To date, treatment with BH-30643 has been evaluated for safety, pharmacokinetics and preliminary efficacy in patients with EGFR-mutant NSCLC, including in patients with the C797S resistance mutation across diverse molecular contexts (with or without T790M) in the setting of classical or atypical mutations, and in TKI-naive patients with classical mutations. We believe the early clinical data observed in this trial support a near-term development path in C797S resistance and establish the foundation for BH-30643’s potential against a broad spectrum of EGFR activating mutations. We plan to seek an end-of-Phase 1 meeting with the U.S. Food and Drug Administration (FDA) regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026.
Our second clinical-stage product candidate, BH-30236, is a CLK inhibitor currently being evaluated in an ongoing Phase 1 clinical trial in patients with R/R AML and HR-MDS. BH-30236 represents a novel approach to cancer treatment through the inhibition of CLK to target aberrant alternative mRNA splicing (aberrant alternative splicing), a defining feature implicated in cancer progression and therapeutic resistance across both hematologic malignancies and solid tumors. Our Phase 1 clinical trial is currently enrolling patients in the dose escalation part of the trial and is evaluating BH-30236 as a monotherapy and in combination with the BCL-2 inhibitor venetoclax, the established standard of care therapy for acute myeloid leukemia (AML) patients. To date, BH-30236 has been evaluated for safety, pharmacokinetics and preliminary efficacy across multiple dose
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levels as a monotherapy and in combination with venetoclax. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027.
We are also advancing our pan-KRAS program, initially focusing on our preclinical product candidate, BH-501284, which is designed using a novel chemical scaffold to achieve prolonged, potent and selective inhibition of KRAS mutations, but sparing HRAS and NRAS. We believe this molecule, which leverages a newly designed non-covalent scaffold, is unique in its potential to achieve tight and durable binding, a feature described as “pseudo-irreversible” binding. BH-501284 has demonstrated potent cellular pan-KRAS activity, achieved tumor regression at low oral dose levels in multiple KRAS-mutant mouse tumor models and improved oral bioavailability across species. We are currently conducting Investigational New Drug Application (IND) enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027.
Our ability to develop differentiated small molecules is made possible by our team, led by our scientific founder, President and Chief Executive Officer, J. Jean Cui, Ph.D., who is the lead inventor of three FDA-approved targeted cancer therapies—crizotinib (XALKORI), lorlatinib (LORBRENA) and repotrectinib (AUGTYRO), all of which have achieved significant commercial success and the latter two of which have established the macrocyclic TKI structure as a validated therapeutic design. Our Chief Medical Officer, Geoffrey R. Oxnard, M.D., is a globally recognized clinical and translational cancer investigator focused on molecular drivers of sensitivity and resistance to precision cancer therapies. Dr. Oxnard has played a foundational role in defining the C797S resistance mutation and the application of molecular diagnostics to advance cancer care and drug development.
We believe the combination of Dr. Cui’s proven drug design expertise and Dr. Oxnard’s clinical and scientific leadership in precision oncology, together with our broader executive and management leadership team that has deep experience in drug development, uniquely positions us to execute on our mission to develop innovative small molecule medicines with the potential to overcome the limitations of existing therapies or approaches and address significant unmet medical needs in cancer treatment.
Our pipeline
We are developing a wholly-owned pipeline of two clinical-stage product candidates and one preclinical-stage product candidate, as represented in the figure below.
| * | EOP1: End-of-Phase 1 |
BH-30643: OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC
Lung cancer is the leading cause of cancer-related death worldwide. NSCLC accounts for approximately 85% of all lung cancer cases, and, according to GlobalData, approximately 316,000 patients were diagnosed with EGFR-mutant NSCLC across key global markets of the United States, Europe, Japan and China in 2025. Activating mutations in the
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EGFR gene represent the most common targetable oncogenic driver in NSCLC and define a clinically and molecularly distinct patient population. A wide variety of EGFR mutations broadly grouped into three categories have been reported: classical mutations (exon 19 deletion and L858R mutation, collectively representing approximately 80% of EGFR mutations), atypical mutations (such as G719X, L861Q and S768I, collectively representing approximately 10% of EGFR mutations) and exon 20 insertion mutations (approximately 10% of EGFR mutations).
Three generations of EGFR TKIs are primarily approved for classical EGFR-mutant NSCLC, with treatment durations averaging less than approximately two years, as resistance typically develops by this point and limits further treatment. Importantly, at the time treatment resistance develops, the EGFR mutations present in NSCLC can evolve further, with the emergence of on-target resistance mutations such as C797S, T790M, L718X and G724X. First and second generation EGFR TKIs have a chemical group extending beyond the T790 residue, referred to as the “back-pocket motif,” and are vulnerable to resistance driven by the T790M gatekeeper mutation; newer TKIs that utilize a similar scaffold inherit this resistance vulnerability. Third generation EGFR TKIs rely on covalent binding for potency and are vulnerable to the C797S resistance mutation which blocks the necessary covalent binding. This C797S mutation is the most common EGFR mutation driving resistance to third generation EGFR-targeted therapy and is detected in approximately 13% of patients at the time of resistance, per several recent publications.
We estimate there are approximately 3,200 NSCLC patients annually in the United States with C797S-driven resistance and considerably more globally. There are currently no approved oral targeted therapies in the United States for patients with C797S-mediated resistance to third generation EGFR TKIs, the current standard of care.
Our most advanced product candidate, BH-30643, is a non-covalent, macrocyclic, brain active, mutant-selective OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC. BH-30643 is designed to address a broad spectrum of EGFR mutations, including classical mutations, on-target resistance mutations such as C797S and T790M, atypical mutations and exon 20 insertion mutations, with selectivity over wild-type EGFR. BH-30643 is being evaluated in SOLARA, a global Phase 1/2, first-in-human clinical trial currently enrolling patients at over 40 sites in 10 countries. Ongoing dose expansion cohorts are enrolling in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort. We believe the early clinical data observed in this trial support a near-term development path in C797S resistance and establish the foundation for BH-30643’s potential against a broad spectrum of EGFR activating mutations.
We plan to seek an end-of-Phase 1 meeting with the FDA regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026. We expect to dose the first patient in our anticipated pivotal Phase 2 trial in the first quarter of 2027. We plan to report additional Phase 1 data on durability of response in the C797S population in the first half of 2027, the initial Phase 1 data on the chemotherapy combination cohort in the second half of 2027, and additional Phase 1 data on durability of response in the TKI-naive cohort for EGFR classical mutations in the second half of 2027.
BH-30236: CLK inhibitor for the treatment of R/R AML and HR-MDS
AML is the most common acute leukemia in adults, with approximately 21,000 new diagnoses and 11,000 deaths annually in the United States. Approximately one-third of AML patients do not have a complete remission or do not respond to frontline venetoclax and azacitidine combination therapy, and the majority of initial responders ultimately develop resistance and progressive disease. There is no currently approved targeted therapy for patients with resistance to venetoclax-based combination therapy in the absence of targetable genetic alterations. Patients with HR-MDS closely mirror AML in clinical course, frontline treatment and unmet need in the relapsed and refractory setting. According to GlobalData, approximately 14,000 patients are diagnosed with HR-MDS annually in the United States.
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AML and HR-MDS are, in part, diseases associated with aberrant alternative splicing. While it has been scientifically validated that CLK inhibition modulates aberrant alternative splicing across both hematologic malignancies and solid tumors, prior efforts to target alternative splicing through CLK inhibition have faced challenges clinically and encountered toxicities requiring intermittent dosing. The venetoclax-resistant and refractory segment, for which no approved therapy currently exists for broad application (or usage), represents our initial area of focus for BH-30236.
Our second clinical-stage product candidate, BH-30236, is a CLK inhibitor currently being evaluated in an ongoing Phase 1 first-in-human trial in patients with R/R AML and HR-MDS. Our Phase 1 clinical trial is currently enrolling patients in the dose escalation part of the trial and is evaluating BH-30236 as a monotherapy and in combination with the BCL-2 inhibitor venetoclax, the established standard of care therapy for AML patients. We also plan to explore the antileukemic effect of BH-30236 in additional myeloid malignancies as well as study the safety and antileukemic effect of BH-30236 with venetoclax plus azacitidine for the treatment of AML. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027.
BH-501284: pan-KRAS inhibitor
KRAS mutations are the most frequent oncogenic driver alterations in human cancer, present in approximately 25% of all malignancies—with particularly high prevalence in pancreatic ductal adenocarcinoma (approximately 90%), colorectal carcinoma (CRC) (approximately 40%) and lung adenocarcinomas (approximately 30%).
While covalent KRAS G12C inhibitors are now approved by the FDA to treat G12C-mutant NSCLC and CRC, these agents address only a single mutant allele and leave patients harboring other frequent oncogenic KRAS mutations, including G12D, G12V, G12S and G12A, without an approved targeted therapy. Investigational KRAS inhibitors leverage several emergent design approaches, including non-covalent Switch-II pocket inhibitors and tricomplex inhibitors. Though tricomplex RAS inhibitors offer broad activity, they face a greater adverse event burden in the clinic. To deliver a clinically meaningful pan-KRAS Switch-II inhibitor, we believe a fresh chemical scaffold is required to achieve both high cell potency and a favorable pharmacology profile, offering an opportunity to achieve a more durable benefit for patients.
We are advancing our preclinical pan-KRAS product candidate, BH-501284, which utilizes a novel Switch-II chemical scaffold designed to provide prolonged, potent and selective inhibition of KRAS, sparing HRAS and NRAS. In preclinical studies, BH-501284 achieved pseudo-irreversible binding characteristics with high binding affinity and a prolonged target residence time exceeding 54 hours, while maintaining high selectivity for KRAS. We are currently conducting IND-enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027.
Discovery programs
We are also advancing multiple discovery-stage efforts focused on validated and emerging new oncology targets. In addition, we believe our drug discovery approach may also have applicability beyond oncology.
Our team and track record
We were founded by pioneers of small molecule drug design and are led by an executive and management team with deep expertise in oncology drug development and clinical research. We began operations in the summer of 2020, led by our scientific founder, President and Chief Executive Officer, J. Jean Cui, Ph.D. We have assembled a team with broad expertise, which has collectively been involved in the discovery or development of more than a dozen oncology programs and has guided multiple programs from first-in-human studies through FDA approval. Our team is united by a shared conviction that intentional, chemistry-based molecular design can
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deliver outcomes that broadly deployed screening-based approaches cannot and facilitates the speed of execution and capital efficiency required to successfully develop and launch new medicines.
Our scientific founder
Our scientific founder, Dr. Cui, is the lead inventor of three FDA-approved targeted cancer therapies—crizotinib (XALKORI), lorlatinib (LORBRENA) and repotrectinib (AUGTYRO)—the latter two of which leverage the macrocyclic small molecule approach that is also utilized in the design of our current clinical-stage candidates. Dr. Cui was elected to the National Academy of Engineering in 2024, one of the highest professional distinctions in engineering, and has received the American Chemical Society Heroes of Chemistry award (2013 and 2021) and the 38th Annual Inventor of the Year award (2011). Notably, lorlatinib, the second of Dr. Cui’s ALK-driven NSCLC medicines to be approved, demonstrated a median progression-free survival (PFS) exceeding 84 months, compared to approximately 10.9 months with crizotinib, a first-generation therapy. Repotrectinib, the lead program at Turning Point Therapeutics, which Dr. Cui co-founded and which was acquired by Bristol-Myers Squibb in 2022, achieved an overall response rate (ORR) of 79% and a median PFS of 35.7 months in TKI-naive ROS1-positive NSCLC. We believe the same design principles applied to develop these molecules may have the potential to produce a similarly meaningful advancement in EGFR-mutant NSCLC.
Dr. Cui’s FDA-approved medicines
| Medicine | Target / Mechanism | Initial Indication | Follow-on Indication | |||
| Crizotinib (XALKORI) | ALK / ROS1 / MET TKI 1st generation |
ALK+ NSCLC | ROS1+ NSCLC | |||
| Lorlatinib (LORBRENA) | ALK / ROS1 TKI 3rd generation |
ALK+ NSCLC after prior TKI | First-line ALK+ NSCLC | |||
| Repotrectinib (AUGTYRO) | ROS1 / NTRK TKI 2nd generation, macrocyclic |
ROS1+ NSCLC with / without prior TKI |
NTRK+ solid tumors | |||
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Our executive leadership team
Our Chief Medical Officer, Geoffrey R. Oxnard, M.D., is a globally recognized authority on EGFR-mutant NSCLC and the co-author of the first published description of the EGFR C797S resistance mutation—the principal acquired resistance mechanism to third-generation EGFR TKIs such as osimertinib, which BH-30643 is designed to overcome. Prior to joining BlossomHill, Dr. Oxnard served as Vice President, Global Head of Thoracic Cancers at Eli Lilly and Company (formerly Loxo Oncology at Lilly), where he led early- and late-phase clinical development of a broad thoracic oncology portfolio. Before that, he served as Senior Vice President, Head of Clinical Development at Foundation Medicine, where he contributed to the FDA approval of FoundationOne Liquid CDx and oversaw the launch of an emerging circulating tumor DNA monitoring portfolio. Dr. Oxnard is a practicing oncologist who was previously on the faculty of Dana-Farber Cancer Institute and Harvard Medical School for nearly 10 years.
Our Co-Founder and Executive Chairman, Y. Peter Li, Ph.D., MBA, previously co-founded Turning Point Therapeutics and served as its Chairman and Chief Executive Officer leading up to its successful IPO in 2019. Our Chief Financial Officer, Jason Keyes, MBA, brings nearly 25 years of biotechnology finance experience, including roles as Chief Financial Officer at Equillium and Orexigen Therapeutics and prior leadership positions at Amgen and Amylin Pharmaceuticals, as well as having served as director and Audit Committee chairman of multiple publicly-traded oncology therapeutic companies. Our General Counsel, Vincent P. Liptak, JD, Ph.D., MBA, brings over 25 years of legal experience with a focus on intellectual property law, including roles as Life
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Sciences Practice Co-Chair at Barnes & Thornburg, where he represented Turning Point Therapeutics as intellectual property counsel and previously served as lead patent counsel for numerous programs at Pfizer.
Since our inception, we have raised over $257 million in capital from experienced healthcare-focused investors, including our 5% or greater holders Cormorant Asset Management, OrbiMed, Vivo Capital and Janus Henderson Investors. Prospective investors should not rely on the investment decisions of our existing investors, as these investors may have different risk tolerances and purchased their shares in financings that were conducted at a significant discount to the price offered to the public in this offering.
Our strategy
We are committed to building a biopharmaceutical company focused on developing innovative small molecule medicines which address significant unmet medical needs in cancer treatment. Key elements of our strategy include:
| • | Advance the clinical development of BH-30643 in C797S-resistant EGFR-mutant NSCLC. Our near-term priority is to develop BH-30643 for the treatment of C797S-resistant EGFR-mutant NSCLC (with or without T790M) for which there is no currently approved oral targeted therapy. Our Phase 1/2 SOLARA trial is currently enrolling patients across dose expansion cohorts in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort that is our near-term development priority. To date in this trial, BH-30643 has been evaluated for safety, pharmacokinetics and preliminary efficacy in patients with EGFR-mutant NSCLC, including with C797S-resistant NSCLC. For additional information, please see the subsection titled “—BH-30643: OMNI-EGFR inhibitor for the treatment of EGFR-mutant NSCLC.” We plan to seek an end-of-Phase 1 meeting with the FDA regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026. We expect to dose the first patient in our anticipated pivotal Phase 2 trial in the first quarter of 2027. We plan to report additional Phase 1 data on durability of response in the C797S population in the first half of 2027. |
| • | Continue to expand the clinical development of BH-30643 across the full spectrum of EGFR-mutant NSCLC, including earlier lines of therapy. We believe that our preliminary clinical data in difficult-to-treat on-target resistance mutations, such as C797S, is consistent with our preclinical data and supports BH-30643’s potential against a broad spectrum of EGFR activating mutations. Our current plan is for the Phase 1/2 SOLARA trial to investigate BH-30643 in expansion cohorts across diverse EGFR-mutant populations – including classical, atypical and exon 20 insertions – with the objective of prioritizing late-stage development in populations where emerging clinical results support doing so. We are also evaluating BH-30643 in TKI-naive cohorts in the SOLARA trial and will use that data to finalize the first-line development approach for BH-30643. In addition to our ongoing monotherapy expansion cohorts, we also plan to evaluate BH-30643 in combination with platinum-based chemotherapy initially for resistance settings, and potentially for use in earlier lines. We plan to report initial Phase 1 data on the chemotherapy combination cohort in the second half of 2027 and additional Phase 1 data on durability of response in the TKI-naive cohort for EGFR classical mutations in the second half of 2027. |
| • | Advance the clinical development of BH-30236, our CLK inhibitor, as a novel approach for the treatment of AML and HR-MDS. We are currently evaluating BH-30236 as a monotherapy and in combination with venetoclax in AML and HR-MDS in our Phase 1 clinical trial and intend to generate preliminary proof-of-concept data to inform further development in the relapsed/refractory and first-line settings. Based on the preliminary anti-leukemic activity observed with BH-30236 plus venetoclax in patients with progression on prior venetoclax-based therapy, we believe CLK inhibition with BH-30236 plus venetoclax may provide meaningful clinical benefit and supports the planned combination with venetoclax plus azacitidine to |
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| enable first-line investigation. Clinical investigation is now expanding to include additional hematologic malignancies and, pending proof of concept, may expand further to include solid tumors. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027. |
| • | Advance BH-501284, our pan-KRAS inhibitor, into a first-in-human clinical trial in KRAS-mutant solid tumors. We intend to evaluate BH-501284 in a Phase 1 clinical trial in patients with KRAS-mutant solid tumors, subject to receipt of regulatory clearance. Our novel pan-KRAS inhibitor, BH-501284, was designed to overcome pharmacokinetic limitations of current KRAS inhibitors in the clinic through durable inhibition of KRAS signaling and has achieved potent preclinical activity against multiple KRAS-mutant forms, which are among the most common oncogenic driver alterations in solid tumors. BH-501284 has demonstrated tumor regression at low oral dose levels in multiple mouse tumor models and good oral bioavailability across species in preclinical studies. We are currently conducting IND-enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027. |
| • | Expand and diversify our pipeline through internal discovery efforts. Our approach has enabled us to rapidly identify differentiated product candidates that have the potential to overcome challenges of existing therapies. We have identified other oncology settings where there continues to be significant unmet need and plan to pursue additional discovery-stage programs leveraging our novel drug design expertise and macrocyclic architecture. In addition, we believe our design approach has potential applicability beyond oncology. We intend to advance new candidates from our internal discovery efforts in a capital-efficient manner. |
| • | Build the capabilities needed to advance and commercialize our drug candidates. We intend to leverage the worldwide rights of our broad, strategic intellectual property portfolio across product candidates and preclinical programs to build a fully integrated biopharmaceutical company through which we can pursue the development and potential commercialization of our key product candidates. We may also opportunistically evaluate partnerships and other strategic collaborations that could accelerate development timelines, expand our capabilities or enhance the commercial potential of our programs. |
Background and key limitations on prior generations of targeted therapies
Advances in the understanding of genomic alterations that drive tumor initiation, growth and therapeutic resistance, together with increased use of genomic profiling, have transformed cancer drug development. As genomic profiling and molecular characterization have become more widely adopted, cancers are increasingly understood not only by tissue of origin, but also by specific genomic alterations that drive tumor growth and proliferation and, in some cases, emerge over the course of treatment to confer resistance to available therapy. The ability to identify these genomic alterations and match patients to therapies directed against them has given rise to the current era of targeted therapy, in which treatment decisions increasingly are driven by the genomic profile of a patient’s cancer, both at diagnosis and following disease progression and resistance to prior therapy. These advances have delivered substantial clinical benefit across multiple tumor types, made targeted therapies integral to the standard of care, and created significant commercial opportunities. In EGFR-mutant NSCLC, our initial key area of focus, the worldwide market of EGFR medicines was estimated to be approximately $8.0 billion in 2025 and is expected to grow to over $13.4 billion by 2030.
The history of targeted therapy development demonstrates both the promise and the limitations of prior generations of these medicines. Although many targeted therapies have validated important disease mechanisms and changed the treatment paradigm for patients, validation of a target does not by itself resolve all of the biological and therapeutic challenges associated with that target. Across targeted oncology, prior generations of therapies have often improved outcomes while still leaving important treatment gaps unresolved.
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Key limitations of prior generation therapies
Emergence of on-target and off-target resistance mechanisms
A common feature of cancer cells is their ability to gain new mutations to sustain continuous oncogenic signaling and fuel growth and proliferation. Despite the progress achieved with targeted therapies, their clinical benefit is often limited by the emergence of both on-target and off-target resistance mechanisms. On-target resistance in mutation dependent cancers can arise through secondary mutations in the target protein that alter the structural basis of drug binding and reduce inhibitor activity. Off-target resistance may occur through activation of alternative signaling pathways or compensatory mechanisms that enable cancer cells to bypass target inhibition. As a result, patients who initially respond to targeted therapy frequently experience disease progression through predictable resistance mechanisms, limiting the durability of response. For example, the durability of response to prior-generation EGFR TKIs has frequently been limited by the emergence of acquired on-target resistance mutations, notably the T790M gatekeeper mutation for first- and second-generation EGFR TKIs and C797S-mediated resistance for third-generation EGFR TKIs, such as osimertinib. The emergence of these resistance mutations has led to a growing patient population with limited or no options for approved targeted therapy.
Limitations in achieving adequate potency while maintaining selectivity
Many targeted therapies also face inherent challenges in achieving sufficient potency against disease-driving targets while maintaining selectivity over corresponding wild-type proteins, minimizing off-target activity and preserving drug-like properties, including pharmacokinetic characteristics needed to support sustained target coverage. These challenges can constrain both efficacy and tolerability. Inhibition of wild-type proteins in mutation driven cancer or unintended off-target effects may result in toxicities that limit dose intensity or treatment duration, while insufficient potency against the intended mutant targets or suboptimal pharmacokinetic properties may prevent sustained pathway suppression at clinically relevant exposures. Together, these limitations can restrict the therapeutic window and reduce the depth and durability of clinical responses. Targeted therapies purposefully designed to combine high potency against disease-driving mutations with improved wild-type and off-target selectivity and favorable pharmacokinetic properties could increase target coverage to minimize residual disease, potentially leading to more durable responses and opportunities for use in earlier lines of therapy.
Incomplete coverage across molecular drivers of disease
In many settings, prior generations of targeted therapies have not provided a single therapeutic approach capable of addressing a broad spectrum of clinically relevant disease mechanisms. Instead, treatment may remain fragmented across different mutation subtypes, resistance states or biologically defined patient populations. For example, osimertinib has been approved for NSCLC patients with EGFR classical mutations, but not for atypical and exon 20 insertion mutations. The lack of a broadly usable EGFR TKI that can address uncommon and resistant EGFR mutations results in fragmentation of care. Similarly, while covalent KRAS inhibitors have received FDA approval specifically for G12C mutations, the vast majority of KRAS-mutant cancers carry other mutation types—these patient populations remain inadequately served by available targeted therapies. The emergence of multi-KRAS inhibitors offers an opportunity for broader utility across KRAS subtypes, while potentially also addressing KRAS-driven resistance mechanisms to allele-specific KRAS inhibitors.
Advancing beyond high-throughput screening to build on prior insights
We believe that building on prior generations of targeted therapy requires more than incremental modifications to predecessor molecules. Rather, it requires understanding why earlier agents initially succeeded, how they
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were limited in their success and whether key liabilities are inherent in the underlying scaffold, their binding mode or a broader design approach. We believe the history of targeted therapy development demonstrates that first-generation therapies often validate a target and establish clinical proof of concept, but do not necessarily fully address the significant unmet need. Instead, we believe they may create or define therapeutic challenges, including resistance, selectivity, tolerability and breadth of patient coverage. We believe this is the result of drug discovery in targeted oncology often relying on high-throughput screening or iterative modification of existing molecular frameworks, which may create or retain structural features associated with these liabilities. As a result, successive generations of targeted therapies may address specific limitations of earlier agents while remaining constrained by the same underlying structural logic. In our view, next-generation targeted therapies should seek not only to achieve clinical activity, but also to address the liabilities that have historically constrained the depth, durability and breadth of benefit.
We believe high-throughput screening is insufficient for developing truly novel chemical scaffolds for drug design. High-throughput screening usually involves identification of a candidate compound followed by iterative modification of predecessor molecules to achieve a threshold profile for clinical development. While this approach has historically produced important medicines, we believe it may also result in compounds that have unintended limitations, including poor drug-like properties, insufficient potency against the intended target or inadequate selectivity. Likewise, we believe a candidate compound derived from a predecessor molecule may achieve potency through a known binding motif while also inheriting liabilities of the predecessor molecule and the broader scaffold class. In our view, certain resistance mechanisms are not random biological accidents; they are structural consequences of binding geometry, often predictable in advance from the scaffold’s design. These perspectives guide our chemistry-driven approach to designing novel chemical scaffolds intended to address limitations of prior therapies rather than merely optimizing around predecessor molecules.
Our drug design approach
We believe targeted cancer therapies should be designed from first principles, leveraging a structure-based rational design approach. Our approach encompasses four design components: (1) identification of unmet medical need in defined targets, (2) structural analysis of existing approaches and their limitations, (3) precision drug designs based on deep understanding of target biology and protein structure dynamics and (4) iteration and optimization toward specified performance objectives. This approach, which underlies BH-30643, BH-30236 and BH-501284, produced the two next-generation FDA-approved medicines discovered by our scientific founder, Dr. Cui—lorlatinib (LORBRENA) and repotrectinib (AUGTYRO).
1. Identification of unmet medical need in defined targets
We focus on targets which have clinical proof of concept or well-established disease biology, but where structural or mechanistic liabilities limit the benefit of approved or clinical-stage therapies to patients. Beginning with a validated target allows us to focus our expertise on the question we are best positioned to answer: whether an intentionally designed molecule can deliver a meaningful and durable improvement over what currently exists or achieve approval where others have not succeeded. Equally important, we define at the outset the specific patient population that is underserved—whether due to mutation subtype, acquired resistance or disease in anatomical sites that existing therapies cannot reach—and design compounds to address that population’s specific clinical need.
2. Structural analysis of existing approaches and their limitations
After identifying a target of choice, we conduct a comprehensive structural audit of existing medicines and/or clinical candidates in the target class: their binding modes, the scaffold families they represent and the precise
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molecular contacts that generate both their potency and their vulnerabilities. We then leverage a deep understanding of target biology and protein dynamics, including the preferred conformation under disease conditions, to establish design principles geared toward overcoming the existing liabilities. This structural analysis allows us to identify not merely that a drug fails or may fail, but also why it fails and how we are going to overcome its limitations—providing key insights into the liabilities intrinsic to an existing chemical scaffold. For example, within EGFR-mutant NSCLC, this analysis reveals that approved EGFR TKIs that use a back-pocket motif inherit T790M vulnerability and those that use the pyrimidine scaffold with covalent binding inherit C797S vulnerability. The analysis informs us to exclude designs based on existing scaffolds and create a potentially transformational new generation scaffold from first principles.
3. Precision drug designs based on deep understanding of target biology and protein structure dynamics
Using the insights we gain from our deep understanding of the biology behind a disease, the chemistry of prior therapies and candidates and the unique protein characteristics of the target, we design molecules with novel chemical structures and develop these into orally available small molecule therapeutic candidates. For programs where the structural biology behind the disease creates the opportunity, we employ three-dimensional macrocyclic scaffolds, a class pioneered by our scientific founder, Dr. Cui, who developed lorlatinib, the first FDA-approved macrocyclic kinase inhibitor. A macrocycle’s architecture pre-organizes the molecule’s conformation into the target’s disease-preferred conformation, enabling a precise contact surface that achieves high binding affinity and conformational selectivity. This architecture is particularly suited to targets for which the disease-relevant protein state is structurally distinct from the normal state. For example, oncogenically mutated kinases preferentially adopt the active, closed conformation whereas wild-type kinases exist predominantly in the inactive, open conformation in the absence of a ligand. The precise three-dimensional macrocyclic architecture of BH-30643 is tuned to selectively engage the mutant EGFR active, closed conformation over the wild-type EGFR inactive, open conformation. The macrocyclic design also rigidifies the molecule to reduce off-target effects.
4. Iterate and optimize toward specified performance objectives
As we employ our first-principles, rational drug design approach, we rigorously iterate until we optimize for a set of essential performance objectives:
| • | high potency as demonstrated by sub-nanomolar cellular inhibitory activity, allowing high target coverage, which we believe is mechanistically required for the depth and duration of response needed to compete at the front of the treatment paradigm rather than solely in later lines; |
| • | broad inhibition of driver and resistance mechanisms to address the full spectrum of driver mutations and resistance mutations in tumor subclones to prevent resistance subclones evolving and shortening duration of response; |
| • | a wide therapeutic window through selective inhibition of the oncogenic target while minimizing potency against off-target (or wild-type) proteins, thus enabling aggressive dosing without dose-limiting off-target toxicity; |
| • | deep and durable target engagement through tight binding, favorable pharmacokinetics and good tolerability that sustain continuous pathway suppression across the dosing interval, preventing the brief pathway reactivation that enables tumor adaptation, and most importantly, minimizing minimal residual disease to achieve long, durable responses; and |
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| • | chemistry scalability and commercial viability achievable through chemical process manufacturing development and a defensible IP position, as these are considerations which can derail the long-term global impact of otherwise attractive chemical candidates. |
Our drug design approach constitutes an integrated process that begins with patient need, proceeds through structural analysis, creates a purpose-built molecular structure and executes toward specified performance objectives. Each of our programs represents the application of this process to a distinct target biology and patient population with significant unmet medical need.
BH-30643: OMNI-EGFR inhibitor
BH-30643 is an investigational, novel, orally bioavailable, non-covalent, macrocyclic, brain active, mutant-selective, OMNI-EGFR inhibitor. In preclinical studies, BH-30643 demonstrated potent inhibitory activity across diverse EGFR mutation categories—classical activating mutations, on-target resistance mutations such as C797S (with and without T790M), atypical mutations and exon 20 insertions—while maintaining marked selectivity over wild-type EGFR. BH-30643 is being evaluated in SOLARA, a global Phase 1/2, first-in-human clinical trial currently enrolling patients across dose expansion cohorts in both TKI-pretreated and TKI-naive settings, including a C797S resistance cohort. BH-30643 is to our knowledge the first TKI monotherapy to demonstrate meaningful clinical responses in patients with EGFR-mutant NSCLC who have developed the C797S resistance mutation in diverse molecular contexts following treatment with a third-generation EGFR TKI—a population for which no approved oral targeted therapy currently exists. We believe the early clinical data observed in this trial support a near-term development path in C797S resistance and establish the foundation for BH-30643’s potential against a broad spectrum of EGFR activating mutations.
We plan to seek an end-of-Phase 1 meeting with the FDA regarding the recommended Phase 2 dose and a potential accelerated approval pathway for BH-30643 in patients with advanced or metastatic C797S-positive EGFR-mutant NSCLC in the fourth quarter of 2026. We expect to dose the first patient in our anticipated pivotal Phase 2 trial in the first quarter of 2027. We plan to report additional Phase 1 data on durability of response in the C797S population in the first half of 2027, the initial Phase 1 data on the chemotherapy combination cohort in the second half of 2027, and additional Phase 1 data on durability of response in the TKI-naive cohort for EGFR classical mutations in the second half of 2027 .
EGFR-mutant NSCLC: disease and treatment landscape
Landscape of EGFR mutations in NSCLC
Lung cancer is the leading cause of cancer-related death worldwide, accounting for an estimated 1.8 million deaths annually. NSCLC accounts for approximately 85% of all lung cancer cases. Activating mutations in the EGFR gene represent the most common targetable oncogenic driver in NSCLC and define a clinically and molecularly distinct patient population.
EGFR activating mutations occur in approximately 10-20% of NSCLC patients of Caucasian ancestry and approximately 40-60% of NSCLC patients of Asian ancestry and are associated with specific clinical characteristics including non-smoking or light-smoking history, female sex and adenocarcinoma histology. According to GlobalData, approximately 316,000 patients were diagnosed with EGFR-mutant NSCLC across key global markets of the United States, Europe, Japan and China in 2025. With the growth of next-generation sequencing of tumor and plasma cell-free DNA, there is a growing appreciation of the diversity of EGFR driver and resistance mutations (Figure 1). At diagnosis, the majority of EGFR mutations are considered classical (exon 19 deletion and L858R, collectively representing approximately 80% of EGFR mutations) – a population which has been the target of most pharmaceutical development, including three generations of approved EGFR
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inhibitors. A second population is EGFR exon 20 insertions (representing approximately 10% of EGFR mutations), a population which has more recently been targeted for therapeutic development. The remainder of EGFR mutations at diagnosis are considered atypical EGFR mutations, including G719X, L861Q and S768I, which are the most frequent atypical point mutations. The atypical population is less well characterized and is estimated to make up approximately 10% of EGFR-mutant NSCLC. Importantly, at the time of treatment resistance the landscape of EGFR mutations can evolve further, with the emergence of on-target resistance mutations such as C797S, T790M, L718X and G724X. Recent papers have estimated that C797S is the most common EGFR mutation driving resistance to third-generation EGFR-targeted therapy, detected in approximately 13% of patients at time of resistance.
Figure 1. EGFR-mutant lung cancer prevalence. 1. Derived from Bandlamudi et al, Cancer Cell, 2026 and Russo et al, JTO, 2026; classical plus atypical grouped with classical per FLAURA label. 2. Derived from Piotrowska et al, Cancer Disc, 2026.
BH-30643 in broader EGFR-mutant NSCLC: classical, atypical, and exon 20 insertion mutations
Background and unmet need
Patients with classical EGFR mutations represent the largest single EGFR-mutant patient population, which we estimate represents approximately 250,000 new patients annually across key global markets of the United States, Europe, Japan and China. Three generations of EGFR inhibitors have been approved for EGFR mutant NSCLC. Osimertinib-based regimens currently are used widely, either as a monotherapy or in combination with chemotherapy. Osimertinib was the first EGFR inhibitor approved by the FDA to treat resistance from 1st generation EGFR inhibitors and received its initial accelerated approval in November 2015 to treat NSCLC patients harboring the EGFR T790M resistance mutation who progressed on or after EGFR TKI therapy.
Osimertinib was initially evaluated as first-line treatment in two treatment-naive cohorts of the same Phase 1 study. In those cohorts, 60 treatment-naive patients with EGFR-mutant NSCLC received osimertinib at the 80 mg or 160 mg dose levels (30 patients at each dose), of whom approximately 25% had a history of brain metastases at baseline. Across both dose levels, the reported ORR was 77% and the disease control rate was 97%. By dose, the reported ORR was 67% at 80 mg and 87% at 160 mg, and the reported disease control rate was 93% at 80 mg and 100% at 160 mg. The mean best change in target lesion size was approximately a 48% reduction across doses. Building on these results, the FLAURA trial was able to then demonstrate the superiority of osimertinib over first-generation EGFR TKIs in the first-line setting. The FLAURA2 trial subsequently demonstrated that the addition of platinum-pemetrexed chemotherapy to osimertinib extended PFS further, with a hazard ratio of 0.62 and 57% of patients in the combination arm alive and progression-free
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at 24 months compared to 41% for osimertinib monotherapy. More recent trials, such as MARIPOSA, have shown that other first-line combination therapies built off a backbone of a third-generation EGFR TKI can also improve treatment outcomes in the first-line setting. Although the combination therapies based on third generation EGFR inhibitors improved treatment duration, resistance has been shown to typically develop within one to two years. Moreover, intolerance to third-generation EGFR TKIs has shown to be a real clinical problem. For example, osimertinib trials have routinely reported that approximately 11% to 13% of patients discontinue the drug due to adverse events. There is an unmet medical need to develop next generation EGFR inhibitors with better safety and longer treatment duration. BH-30643’s preclinical profile—its high potency against classical EGFR mutations, its resistance-proofing against C797S and T790M, its central nervous system (CNS) activity and its wild-type EGFR selectivity—forms the mechanistic basis for investigating whether (1) BH-30643 can be successfully developed for the C797S-resistance population following third-generation EGFR TKI treatment and (2) deeper, more durable responses are achievable with BH-30643 in the first-line setting. If approved, BH-30643 may also be developed to address for patients intolerant to osimertinib. We believe developing BH-30643 as a TKI for C797S-resistance represents our near-term opportunity, while the longer-term opportunity we see for BH-30643 is contingent on clinical data from the TKI-naive expansion cohorts in SOLARA.
The growing adoption of tumor next-generation sequencing has created increased awareness around less common subtypes of EGFR mutations. Exon 20 insertion mutations account for approximately 10% of oncogenic EGFR mutations, which we estimate represents roughly 31,000 patients annually across key global markets of the United States, Europe, Japan and China in 2025. These insertions are structurally heterogeneous, comprising more than 100 distinct insertion, deletion and point mutations. Exon 20 insertions confer intermediate catalytic activity and structural rigidity at the aC-helix, creating steric resistance to most first- and second-generation TKIs, while maintaining EGFR in an intermediate activation state. The established options—amivantamab (RYBREVANT) with platinum-pemetrexed chemotherapy (first-line, based on PAPILLON: median PFS 11.4 vs. 6.7 months for chemotherapy alone) and amivantamab (RYBREVANT) alone (second-line)—require drug infusion or injection and are associated with meaningful toxicity, including venous thromboembolism, edema and cutaneous toxicity. EGFR TKIs that effectively target exon 20 insertions represent an area of active investigation, but where progress has been halting. Mobocertinib, the first oral agent approved for EGFR exon 20 insertion-positive NSCLC, was voluntarily withdrawn from the U.S. market in 2024 following failure to demonstrate benefit over chemotherapy in the confirmatory Phase 3 EXCLAIM-2 trial. An effective, well-tolerated, oral, brain-active small molecule represents a significant unmet need in this population.
Atypical EGFR mutations, comprising mutations in exons 18–21 other than classical mutations and exon 20 insertions, account for approximately 10% of oncogenic EGFR mutations, which we estimate represents roughly 31,000 patients annually across key global markets of the United States, Europe, Japan and China in 2025. Importantly, these mutations are less well described and can co-exist with other EGFR mutations (including classical mutations), so their prevalence is more difficult to estimate with precision. Atypical mutations present a distinct clinical challenge: they are less sensitive to first- and third-generation EGFR TKIs than classical mutations, and they have been excluded from many major clinical trials. Afatinib, a second-generation TKI, is the only agent with an FDA-approved indication for atypical mutations. The approval was based on retrospective analysis of 32 patients with metastatic NSCLC harboring non-resistant EGFR mutations (S768I, L861Q and/or G719X) other than exon 19 deletions or exon 21 L858R substitutions, with relatively limited clinical activity data captured in the FDA label. Osimertinib has demonstrated activity in small prospective studies (ORR 47-55%; median PFS 8.2–10.5 months) but is not approved for atypical mutations. The population is highly heterogeneous: mutations occur across exons 18–21 at more than 30 residues, frequently as compound mutation combinations and with variable sensitivity to available agents. No therapy has been prospectively validated across the breadth of atypical mutations.
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The OMNI-EGFR design of BH-30643—targeting the active, closed conformation shared across all oncogenic EGFR mutation types—is intended to provide clinical activity across a broader set of EGFR-mutant patient populations that are inadequately served by currently approved agents. These broader populations are the subject of ongoing SOLARA expansion cohorts, which are currently in an exploratory stage. We plan to evaluate results from these cohorts to inform subsequent clinical development in additional EGFR-mutant subsets.
History of treatment and the scaffold inheritance problem
The history of EGFR TKI development is substantially the history of scaffold inheritance. Three generations of EGFR TKIs have been approved for EGFR-mutant NSCLC, and all are ATP-competitive inhibitors anchored to the adenine-binding hinge region of the kinase domain. These three generations have emerged from two structural families, and we believe the on-target resistance mechanisms that define the clinical limitations of each generation are a direct consequence of the scaffold choices made during their design.
First and second generations: the anilinoquinazoline scaffold, wild-type inhibition, and the T790M vulnerability
The first generation of approved EGFR inhibitors—gefitinib and erlotinib—were optimized around the anilinoquinazoline chemical scaffold. This scaffold was screened to inhibit wildtype EGFR, and only later found to be potent against mutant EGFR NSCLC following the discovery of EGFR mutations. Inhibition of wild-type EGFR leads to class-characteristic toxicities—diarrhea, rash and stomatitis—that are dose-limiting and prevent the high sustained exposures that may be required for deep, durable target engagement. Second-generation inhibitors, afatinib and dacomitinib, retained the same anilinoquinazoline architecture and added irreversible covalent binding at C797 residue to improve potency, while also adding pan-HER potency that further increased clinical toxicity, with more mucositis and diarrhea. The back-pocket anilino-motif that conferred potency to first- and second-generation TKIs was also the source of their primary resistance liability: the T790M gatekeeper mutation which altered the geometry of the back pocket in a way that interrupted the bonding of this scaffold class and increased catalytic activity of ATP, driving resistance in 40-60% of patients following first- or second-generation TKI treatment.
Third generation: the covalent pyrimidine scaffold and the C797S vulnerability
Osimertinib and other follow-on third-generation EGFR TKIs leverage a covalent pyrimidine-based scaffold discovered through the screening of a collection of covalent molecules with the intent to overcome T790M resistance. These medicines could overcome the T790M mutation while optimizing potency against classical mutations and wild-type selectivity. Osimertinib is a covalent inhibitor that obtains potency through an indolyl group interaction with P-loop and more importantly via an acrylamide-based covalent bond with the cysteine residue at position 797 (C797). Osimertinib is the most widely used first-line therapy for patients with EGFR-mutant NSCLC harboring classical activating mutations. While the covalent pyrimidine-based scaffold of osimertinib solved the T790M resistance problem, it created the next problem – C797S resistance. Pyrimidine-based EGFR inhibitors have been generally designed to form a covalent bond with C797, which enhances target engagement and prolongs residence time. Such covalent binding is a key contributor to their overall potency, as the underlying non-covalent interactions alone provide limited affinity of these molecules relative to the fully-bound state. A scaffold that requires a covalent bond to achieve clinical potency is structurally vulnerable to any mutation that disrupts that bond. C797S—which substitutes serine for cysteine and prevents the covalent bond formation on which osimertinib depends for its potency—is now the primary on-target resistance mechanism to osimertinib, detected in approximately 13% of patients.
The field has not escaped either scaffold family. Prior to designing BH-30643, we reviewed the chemical structures of more than 30 EGFR TKIs, including both approved agents and investigational compounds in clinical or advanced preclinical development, and concluded that the field had remained substantially within
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these two structural families (Figure 2). Agents that use a back-pocket motif inherit the T790M vulnerability of first- and second-generation inhibitors; agents that use the pyrimidine scaffold with covalent or near-covalent binding inherit the C797S vulnerability of third-generation inhibitors. Several investigational agents attempt to address both liabilities by appending structural modifications onto existing scaffolds, but these agents do not represent new molecular approaches or have not achieved the required potency and breadth of mutation coverage of EGFR mutations to support broad development.
Existing EGFR Tyrosine Kinase Inhibitors Share Structural Families and Design Liabilities
Figure 2. Scaffold inheritance in EGFR TKI development. Structural families and shared design liabilities across approved and investigational EGFR inhibitors.
Our solution: BH-30643
BH-30643 is an investigational mutant-selective, non-covalent, macrocyclic brain active, mutant-selective OMNI-EGFR inhibitor which has demonstrated sub-nanomolar cellular in vitro potency against a broad spectrum of EGFR activating mutations, has been well-tolerated and demonstrated favorable pharmacokinetics in our ongoing SOLARA trial, and has confirmed radiographic responses in patients with EGFR-mutant NSCLC, including with C797S-resistant NSCLC (with or without T790M).
Design rationale
BH-30643 was designed to overcome the limitations of currently approved EGFR inhibitors, which were discovered over a decade ago without the current, modern understanding of the structure and protein dynamics of mutant EGFRs.
Targeting the disease-driven active conformation—the mutant OMNI effect
Under normal physiological conditions, wild-type EGFR exists predominantly in an inactive, open conformation with a larger, less-defined ATP-binding pocket. Upon ligand stimulation, wild-type EGFR transitions to the active, closed conformation with a smaller, well-defined ATP-binding pocket to transduce the extracellular signal. The oncogenic activating mutants of EGFR are constitutively active and preferentially adopt the active, closed conformation (Figure 3). Because all oncogenic EGFR mutation types—classical mutations, atypical mutations, exon 20 insertions and acquired resistance mutations—are activating mutations that induce the
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protein to adopt the active, closed conformation as the mechanism of constitutive signaling, a molecule designed to engage that conformation selectively should achieve both breadth across the mutation space and selectivity over wild-type EGFR in a single, mechanistically integrated way. We believe targeting the active, closed conformation unlocks the potential for OMNI-EGFR activity while maintaining wild-type sparing tolerability.
Figure 3. EGFR kinase domain conformations. Wild-type EGFR favors the inactive, open conformation; activating mutations lock the kinase in the active, closed conformation targeted by BH-30643.
Eliminating the T790M and C797S vulnerabilities—non-covalent binding
BH-30643 leverages an entirely novel macrocyclic scaffold in an effort to uniquely address both T790M and C797S resistance. Because BH-30643 is not reliant on a back-pocket motif to achieve potency, the T790M mutation—which blocks the binding of first- and second-generation EGFR inhibitors—does not diminish BH-30643’s observed binding affinity. Further, BH-30643’s binding is not driven by covalent attachment and thus, the C797S mutation—which destroys the covalent chemistry by which osimertinib depends—does not reduce BH-30643’s potential therapeutic strength. Our design approach is not an incremental modification of an existing scaffold, but rather represents a newly designed EGFR scaffold that eliminates the structural vulnerability that disables all prior-generation EGFR TKIs in the C797S-resistant population.
Macrocyclic architecture—conformational precision, potency and selectivity
BH-30643 was invented based on a carefully designed 15-member pyrazolopyridine macrocyclic architecture (Figure 4), which was chosen based on the unique size of EGFR ATP adenine hinge area to achieve the conformational precision required to distinguish the active, closed conformation of mutant EGFR from the inactive, open conformation of wild-type EGFR with high affinity and selectivity. The use of a macrocyclic scaffold in approved kinase inhibitors—including lorlatinib and repotrectinib, both designed by our scientific
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founder, Dr. Cui—has demonstrated that this structural approach can achieve exceptional potency, selectivity and pharmacokinetic properties in clinical practice.
Figure 4. Approved macrocyclic TKIs and BH-30643 macrocyclic scaffold.
Together, these three design principles constitute the OMNI-EGFR approach: a single molecule with the structural basis to address classical, atypical, exon 20 insertion, and resistance mutations, including C797S (with or without T790M), in a unified mechanistic framework.
Background: the C797S resistance problem
There are currently no approved targeted therapies for EGFR-mutant NSCLC patients with C797S-mediated resistance to third-generation EGFR TKIs. We estimate that more than 16,000 patients annually develop C797S-mediated resistance across key global markets of the United States, Europe, Japan and China, including approximately 3,200 in the United States and approximately 2,200 in Japan, a number projected to grow substantially as global first-line use of third-generation EGFR TKIs such as osimertinib expands.
Targeting resistance is a well-established path for targeted therapy development in lung cancer. Osimertinib was the first EGFR inhibitor designed to treat resistance from 1st generation EGFR inhibitors, and received its initial accelerated approval in November 2015 to treat NSCLC patients harboring the EGFR T790M resistance mutation who progressed on or after EGFR TKI therapy. Building on these results and supported by early Phase 1 data suggesting activity in treatment-naive patients, the FLAURA trial was able to then demonstrate the superiority of osimertinib over first-generation EGFR TKIs in the first-line setting. The FLAURA2 trial subsequently demonstrated that the addition of platinum-pemetrexed chemotherapy to osimertinib extended PFS further, with a hazard ratio of 0.62 and 57% of patients in the combination arm alive and progression-free at 24 months compared to 41% for osimertinib monotherapy. More recent trials, such as MARIPOSA, have shown that other first-line combination therapies built off a backbone of a third-generation EGFR TKI can also improve treatment outcomes in the first-line setting.
Despite these advances, resistance has invariably developed. The primary on-target resistance mechanism to osimertinib and other third-generation covalent EGFR TKIs is the C797S mutation, which substitutes serine for cysteine at position 797 of the EGFR kinase domain. Because osimertinib and other third-generation covalent EGFR TKIs depend on forming a covalent bond with the cysteine at C797 to achieve their clinical potency, the serine substitution—which prevents the covalent bond from forming—effectively eliminates the primary source of osimertinib’s binding affinity. Recent reports suggest that C797S accounts for approximately 13% of acquired resistance following first-line osimertinib use, and it can also emerge in later-line settings. C797S may occur with T790M (the triple mutant combination) in patients who received sequential first- or second-generation followed by third-generation TKI therapy, creating a compound mutation against which, to our knowledge, no covalent inhibitor has retained activity.
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The EGFR C797S mutation was first described more than a decade ago, but no targeted therapies have been able to demonstrate meaningful responses. The only regimen to receive full approval following third-generation EGFR TKI resistance has been chemotherapy plus amivantamab (RYBREVANT), an EGFR-MET bispecific antibody, based on the MARIPOSA-2 Phase 3 clinical trial. While the MARIPOSA-2 trial was positive for PFS, showing a median PFS of 6.3 months for amivantamab (RYBREVANT) plus chemotherapy vs 4.2 months for chemotherapy (p<0.001), the toxicity profile is burdensome and there has been no report of overall survival improvement. Moreover, a retrospective subset analysis of MARIPOSA-2 patients with secondary EGFR mutations (including C797S) in circulating tumor DNA at baseline demonstrated no meaningful PFS improvement with the addition of amivantamab (RYBREVANT) (median 5.7 months vs. 5.0 months)—biologically consistent with the expectation that the addition of an EGFR-MET bispecific antibody to chemotherapy would not overcome C797S-mediated on-target kinase resistance with meaningful benefit over chemotherapy alone. Accordingly, platinum-based chemotherapy remains the predominant systemic option for C797S-resistant patients.
More recent therapeutic development has focused on antibody-drug conjugates, including the accelerated approval of dato-DxD, which achieved an ORR of 42.7% and a median PFS of 5.8 months in patients following treatment with EGFR TKI and chemotherapy. Given the considerable toxicity burden of investigational antibody-drug conjugates (ADC) agents and treatment inconvenience from infusion, there remains a significant need for an oral targeted therapy with a favorable safety profile. The lack of progress in the development of treatments for C797S-resistant EGFR-mutant NSCLC has left this patient population with limited treatment options. Furthermore, given both osimertinib monotherapy and osimertinib-based combinations are now established first-line standards of care, the global exposure to osimertinib—and consequently the incidence of C797S resistance—is expected to continue to grow. We believe that the significant and growing patient population with C797S resistance could be meaningfully addressed by BH-30643.
Why BH-30643 specifically addresses C797S resistance
We believe the non-covalent design of BH-30643—described above—is directly and specifically consequential for the C797S-resistant population. Osimertinib’s potency against EGFR depends on its acrylamide warhead forming a covalent bond with the cysteine at position 797. Without that bond, the underlying pyrimidine scaffold has insufficient intrinsic binding affinity to inhibit the EGFR kinase at clinically achievable concentrations. When C797S occurs, the serine substitution—which prevents the covalent bond from forming—effectively eliminates the primary source of osimertinib’s binding affinity.
BH-30643 was designed to avoid this vulnerability. By targeting the active, closed conformation of mutant EGFRs through non-covalent interactions that do not depend on a single protein residue for potency, BH-30643’s binding affinity is structurally unaffected by the C797S substitution. In addition, the triple mutants—ex19del/T790M/C797S or L858R/T790M/C797S—against which both first/second-generation agents (blocked by T790M) and third-generation agents (blocked by C797S) are inactive, have appeared addressable by BH-30643 in preclinical models. This is the mechanistic foundation for BH-30643’s near-term development program.
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Preclinical activity
Preclinical activity across EGFR mutations
In preclinical studies, we believe the cell activity of BH-30643 observed against EGFR classical, atypical, exon 20 insertion and C797S/T790M resistance mutations, and selectivity observed against wild-type EGFR (Figure 5), validate our molecular design and support the evaluation of BH-30643 across EGFR mutations in NSCLC patients.
Figure 5. BH-30643 cellular potency across EGFR mutation subtypes. IC50 values across representative classical, atypical, and exon 20 insertion cell lines, with and without C797S/T790M resistance mutations.
Classical mutations in the OMNI context: substantial potency and potential first-line differentiation
In cell proliferation assays across eleven primary cancer and engineered Ba/F3 cell lines carrying classical EGFR mutations (exon 19 deletion or L858R), BH-30643 demonstrated IC50 values of 0.05 to 1.07 nM. This level of cellular potency forms the mechanistic basis for our hypothesis that deeper, more durable tumor suppression may be achievable in the treatment-naive setting. BH-30643 demonstrated robust antitumor activity in a PC9 cell-derived xenograft (CDX) mouse tumor model with the EGFR exon 19 deletion and an H1975 cell-derived xenograft (CDX) model with an L858R/T790M compound mutation (Figure 6). We believe the OMNI-EGFR design
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-will cause any C797S resistance emerging following first-line treatment to remain susceptible to continued BH-30643 activity—a potential durability advantage informing our longer-term first-line investigation.
Figure 6. In Vivo Activity of BH-30643 in Classical EGFR Mutation Models. Right: H1975 (L858R/T790M) CDX tumor model; Left: PC-9 (ex19del) CDX tumor model. All doses orally administered.
Atypical mutations
In cell proliferation assays across 51 engineered Ba/F3 cell lines carrying single or compound atypical EGFR mutations, BH-30643 exhibited potent inhibitory activity with a median IC50 of 0.81 nM. Mutations evaluated covered residues G719, S768, L861, E709, L747, V834, L833, V769 tested as single mutations and as compound mutations with classical, with other atypical variants, and with T790M, C797S or T790M and C797S.
Exon 20 insertions
In cell proliferation assays across 35 engineered Ba/F3 cell lines carrying EGFR exon 20 insertion mutations, BH-30643 inhibited cell growth with a median IC50 of 4.61 nM. BH-30643 demonstrated preferential activity against insertions located in the C-terminal of the aC-helix (median IC50 1.68 nM, N=3) and the near loop following the aC-helix (median IC50 4.03 nM, N=18) compared to far-loop insertions (median IC50 39.7 nM, N=7). Potency was maintained in the presence of C797S, T790M or C797S and T790M resistance mutations compound with near-loop exon 20 insertions (median IC50 1.78 nM, N=6).
HER2 kinase domain mutations
In cell proliferation assays across 35 Ba/F3 cell lines, BH-30643 demonstrated a median IC50 of 8.13 nM in cell lines harboring HER2 exon 20 insertion or tyrosine kinase domain mutations versus 57.7 nM for wild-type HER2. BH-30643 was less potent against WT HER2 and retained potency in Ba/F3 cell lines harboring HER2 mutations compound with T798M/I or C805S acquired resistance mutations.
Preclinical activity: C797S focus
In preclinical studies, BH-30643 demonstrated potent inhibitory activity against classical EGFR mutations and their C797S resistance variants, including the triple mutant combinations (classical/T790M/C797S) that define the near-term development opportunity.
Classical mutations and retained potency with C797S and T790M
In cell proliferation assays across seven primary cancer and engineered Ba/F3 cell lines carrying classical EGFR mutations, BH-30643 was studied and compared to osimertinib and other EGFR TKIs investigated to target
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EGFR resistance mutations (Figure 7). BH-30643 demonstrated IC50 values of 0.18 to 1.07 nM, compared to 1.92 nM to 7.77 nM for osimertinib in the same cell lines. Consistent with this proliferation activity, BH-30643 potently inhibited EGFR phosphorylation in primary cancer cell lines carrying classical mutations (ex19del: IC50 0.69 nM in PC-9 cells; L858R: IC50 0.26 nM in 11-18 cells). BH-30643 retained potency in the presence of T790M and C797S resistance mutations: IC50 values in six cell lines carrying compound classical/resistance mutations ranged from 0.05 to 0.71 nM, including the triple mutant combinations L858R/T790M/C797S (IC50 0.54 nM) and ex19del/T790M/C797S (IC50 0.43 nM), against which osimertinib had IC50 values greater than 1,000 nM. Other EGFR TKIs targeting C797S, including BLU-945, have demonstrated activity across C797S-containing genotypes (e.g., classical/C797S IC50 values of 23.3 and 91.9 nM and classical/T790M/C797S IC50 values of 3.33 and 9.40 nM), but show reduced potency against classical EGFR mutations (IC50 values of 47.9 -832 nM). Similarly, BDTX-1535 has demonstrated potent activity against classical/C797S (IC50 values of 1.52 and 2.44 nM) but exhibits reduced activity against classical/T790M mutations (IC50 >350 nM).
Figure 7. Cellular potency of BH-30643 vs. selected EGFR TKIs. Cell proliferation IC50 (nM) for driver mutations, C797S and/or T790M compounds and wild-type EGFR (A431 cells).
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Triple mutant in vivo: tumor regression where osimertinib showed no activity
In mouse tumor models bearing EGFR triple mutants—a patient-derived xenograft (PDX) model harboring ex19del/T790M/C797S and a CDX model harboring L858R/T790M/C797S—oral administration of BH-30643 induced deep, dose-dependent tumor regression (Figure 8). Osimertinib showed no antitumor activity in either model. We believe these preclinical findings are encouraging for the potential of BH-30643’s non-covalent mechanism to translate to clinical benefit in the C797S-resistant population.
Figure 8. In vivo activity of BH-30643 in triple-mutant CDX and PDX models. Top: Ba/F3 EGFR L858R/T790M/C797S CDX model; Bottom: LD1-0025-200717 PDX model harboring EGFR ex19del/T790M/C797S. Osimertinib 25 mg/kg once-daily (QD) shown for comparison on all charts.
Sub-nanomolar cellular potency as a first-line differentiator
The first-line classical mutation market has recently seen improving benchmarks from osimertinib-based combination regimens, raising the threshold for monotherapy competition. We believe the next generation of first-line agents is likely to be defined by the depth and durability of initial tumor response, and that molecules with sub-nanomolar cellular IC50 values against classical EGFR mutations in preclinical assays—BH-30643 has demonstrated IC50 values of 0.18 nM to 1.07 nM against classical mutations compared to 1.92 nM to 7.77 nM for osimertinib in the same cell lines—may achieve longer PFS by more completely suppressing the initial tumor clone, especially when higher clinical exposure is also achieved. In a preclinical colony formation assay (CFA) analysis comparing BH-30643 versus osimertinib in an EGFR L858R-mutant model, the depth and durability of response were more profound with BH-30643, especially under the challenge of ligand EGF which served as a
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potential resistance mechanism (Figure 9). We believe this data supports the potential for BH-30643 to offer a more prolonged impact in the first-line setting.
Figure 9. Preclinical colony formation assay (CFA) analysis comparing BH-30643 versus osimertinib in an EGFR L858R-mutant model (11-18)
Brain Penetration and CNS activity
In primate studies, the ratio of unbound CSF to free plasma concentrations for BH-30643 was approximately 27% at clinically relevant steady state trough exposure level, comparable to that reported in human data for other CNS-active EGFR TKIs such as osimertinib. Given the high prevalence of CNS metastases in EGFR-mutant NSCLC, activity against brain metastases is a key requirement for an EGFR TKI. In an intracranial xenograft model, HCC827-luc tumor cells carrying an EGFR ex19del mutation were implanted intracranially and tumor growth was monitored by bioluminescent imaging (Figures 10, 11). Oral administration of BH-30643 at 10 mg/kg twice-daily (BID) induced a profound reduction in intracranial tumor burden, demonstrating CNS activity at therapeutically relevant concentrations.
Figure 10. CNS activity of BH-30643 in intracranial HCC-827 (ex19del) CDX model. Left: Bioluminescence signal (BLI) over time; Right: Body weight. BH-30643 10 mg/kg BID vs. vehicle control.
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Figure 11. Bioluminescence imaging of intracranial HCC-827 (ex19del) CDX tumors. Vehicle control (Group 1, left) vs. BH-30643 10 mg/kg BID (Group 2, right) over 28 days. Signal reflects intracranial tumor burden.
PK/PD: pharmacodynamic target coverage against the triple mutant
In pharmacokinetic and pharmacodynamic studies using the Ba/F3 EGFR L858R/T790M/C797S CDX tumor model, BH-30643 inhibited phospho-EGFR in a dose- and concentration-dependent manner, establishing a free plasma 90% of target inhibition (EC90) of 1.79 nM for 90% inhibition of mutant EGFR phosphorylation (Figure 12), that is
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equivalent to a total human plasma concentration of 67 ng/mL. These parameters provided the pharmacological rationale for dose levels selected in SOLARA and the clinical exposure benchmarks against which BH-30643’s human pharmacokinetics are evaluated.
Figure 12. PK/PD relationship: pEGFR inhibition vs. free plasma concentration. Ba/F3 EGFR L858R/T790M/C797S CDX tumor model. Free plasma EC50 = 1.19 nM; EC90 = 1.79 nM.
Wild-type EGFR selectivity.
In cell proliferation assays, BH-30643 exhibited substantially reduced activity in A431 cells harboring wild-type EGFR amplification (IC50 ~ 217 nM), compared to 0.05–1.07 nM for classical mutations in the same assay format. BH-30643 did not inhibit proliferation of normal human fibroblast BJ cells (IC50 5,220 nM) or parental Ba/F3 cells (IC50 4,450 nM), demonstrating specificity for mutant EGFR-driven proliferation.
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Kinase selectivity.
In a selectivity screen against 372 wild-type human kinases (Figure 13), BH-30643 inhibited greater than 90% of enzymatic kinase activity at 100 nM for only four kinases in addition to EGFR and HER2: TNIK, MINK, HGK and LRRK2.
Figure 13. Kinase selectivity profile of BH-30643. BH-30643 inhibits only four additional kinases (TNIK, MINK, HGK, LRRK2) beyond EGFR and HER2 in a screen of 372 wild-type human kinases.
BH-30643: Development Plans
Our development strategy for BH-30643 is first focused on the EGFR TKI resistant population, followed by evidence generation to support our expanded development strategies as described below.
C797S monotherapy development strategy
Our near-term development priority for BH-30643 is to advance through Phase 1 dose expansion, establish a recommended Phase 2 dose (RP2D), and subsequently conduct a pivotal Phase 2 trial in C797S-positive resistance for a potential single arm accelerated approval. The current Phase 1 C797S expansion cohort (Cohort A) is intended to inform the design of our anticipated pivotal Phase 2 trial which can generate potentially registration-enabling data, with ORR as the planned primary endpoint and DOR/PFS as secondary endpoints, subject to discussion and alignment with FDA.
Evidence generation to support broader development in EGFR-mutant NSCLC
We believe the market for EGFR-targeted therapies is evolving rapidly driven by the combination of an EGFR inhibitor backbone with different treatment modalities, such as chemotherapy, ADC or novel biologics. The improvement of the EGFR inhibitor backbone is fundamental for the success of the combination therapies. We
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believe the profile of BH-30643 has the potential to be an improved EGFR inhibitor backbone. Osimertinib, the current standard of care for first-line treatment of NSCLC patients with classical mutations, reported sales of over $7 billion in 2025. We believe BH-30643 has the potential to make an impact for patients that are resistant to or that cannot tolerate osimertinib, as well as in settings where osimertinib is a current standard of care.
| • | Preclinical potency and clinical exposure levels. We believe BH-30643’s OMNI-EGFR design rationale, preclinical potency results and clinical exposure level provide a mechanistic basis for investigating BH-30643 in the first-line classical mutation setting. Our preliminary clinical evidence has demonstrated plasma concentrations of BH-30643 exceeding that of published osimertinib plasma exposure data, and our preclinical results show BH-30643 demonstrated IC50 values of 0.18 to 1.07 nM against classical mutations compared to 1.92 to 7.77 nM for osimertinib in the same cell lines. As established in targeted therapy development, later generation TKIs that are more potent against both primary and resistance mutations (e.g., osimertinib, lorlatinib, and repotrectinib) often provide longer and more durable treatment outcomes when used in the first-line setting. We believe the development of BH-30643 in the first-line setting represents a longer-term opportunity—the design and pursuit of any clinical development for first-line classical mutations would be informed by results from the TKI-naive expansion cohorts in SOLARA, regulatory alignment, and capital allocation decisions. We do not have randomized clinical data in TKI-naive patients, and we expect that any decision to pursue a global registrational program in the first-line setting, either as a monotherapy or combination therapy, would be made in a data-driven manner. |
| • | OMNI-EGFR coverage as a strategic advantage. As comprehensive genomic profiling becomes standard practice in the frontline setting, we believe clinicians and payers may increasingly favor agents that are active across the full spectrum of EGFR mutations—not only classical mutations but also atypical variants, exon 20 insertions and resistance mutations that emerge during treatment. We believe BH-30643’s OMNI-EGFR design, which is intended to address classical, atypical, exon 20 insertion and C797S resistance mutations with or without T790M within a single molecule, could address this need potentially with longer duration of treatment. We will continue generating clinical data in Phase 1 expansion TKI-naive cohorts for classical, atypical and exon 20 insertion mutations to inform future development in these populations, either as a monotherapy or a combination therapy. The specific trial design, patient selection criteria, endpoints and regulatory strategy for any such programs is expected to be determined based on expansion cohort data and discussions with the FDA. |
| • | Target selectivity derived from macrocyclic design as a therapeutic window determinant. We believe tolerability at high clinical exposures to be a key competitive requirement for any agent seeking to demonstrate superior efficacy over osimertinib in the first-line setting. Wild-type EGFR inhibition has historically been dose-limiting for earlier-generation agents, constraining the exposures achievable in clinical practice. BH-30643’s observed selectivity over wild-type EGFR—which in preclinical assays supported a potential therapeutic window of approximately 200- to 1,000-fold over classical mutation potency—is designed to enable the high, sustained clinical exposures required for deep and durable target suppression. Moreover, BH-30643’s macrocyclic non-covalent design also has enabled it to avoid the idiopathic toxicities observed with osimertinib, including rare pneumonitis (1%) and no cardiac effects. Osimertinib’s covalent binding also causes frequent cytopenias through off-target inhibition of JAK3 and BTK; we believe the absence of burdensome cytopenias observed with BH-30643 in our SOLARA trial supports its potential for combination with cytotoxic regimens including chemotherapy and emerging ADCs. We plan to establish the potential safety of BH-30643 as a combination partner in our chemotherapy combination cohort in the SOLARA trial. |
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BH-30643: Clinical Development (the SOLARA trial)
Trial design
BH-30643 is being evaluated in SOLARA, a Phase 1/2, open-label, multicenter, first-in-human trial evaluating the safety, tolerability, pharmacokinetics and antitumor activity of BH-30643 as monotherapy or in combination with carboplatin and pemetrexed in adults with locally advanced or metastatic NSCLC harboring EGFR and/or HER2 mutations. The trial began enrollment in January 2025 in the United States and currently has over 40 active sites across 10 countries, including the United States, Australia, Canada, Hong Kong, Japan, Malaysia, Singapore, Taiwan, Thailand and South Korea.
The Phase 1 portion of the trial consists of three parts. Phase 1, Part 1 (Dose Escalation/Backfill) uses a Bayesian Optimal Interval (BOIN) design to evaluate safety, tolerability, pharmacokinetics and preliminary antitumor activity across escalating dose levels and to identify Recommended Dose(s) for Expansion (RDEs). Phase 1, Part 2 (Dose Expansion/Optimization) evaluates the RDEs across molecularly defined expansion cohorts to identify a Recommended Phase 2 Dose (RP2D). Phase 1, Part 3 (Combination) is evaluating BH-30643 in combination with carboplatin and pemetrexed at selected RDEs. Dose-limiting toxicities (DLTs) are evaluated during the first cycle of treatment. Efficacy is evaluated by Response Evaluation Criteria in Solid Tumors (RECIST) 1.1 criteria per investigator assessment. Serial plasma circulating tumor DNA (ctDNA) samples are collected at baseline and on treatment.
The SOLARA trial currently includes multiple expansion cohorts intended to further characterize the safety, PK and antitumor activity of BH-30643, including patients previously treated with EGFR-targeted therapies as well as patients who are targeted therapy naive. The first expansion cohort is focused on the enrollment of patients with C797S-resistance and supports the near-term development focus; the remaining cohorts are exploratory at this stage and will inform the future development of BH-30643. Each cohort is planned to enroll approximately 20-40 patients per dose level. A transition to Phase 2 development is then planned in select populations based on emerging expansion cohort data.
Patient population: Dose Escalation and Backfill
The preliminary clinical findings from Dose Escalation and Backfill were presented at the American Society of Clinical Oncology (ASCO) 2026 Annual Meeting using a March 2, 2026 data cut, with further efficacy follow-up through an April 29, 2026 data cut. As of the March 2, 2026 safety data cut, 82 patients had enrolled into the SOLARA dose escalation and backfill cohorts of whom 31 remained on therapy (Figure 14). Seven dose levels evaluated ranged from 10 mg BID to 80 mg BID and 80 mg QD. Patients were heavily pretreated, with a median of three prior lines of systemic therapy (range 1-12) and 66% having a history of brain metastases at baseline.
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Driver mutation subtypes at enrollment included EGFR classical mutations in 54 patients, exon 20 insertions in 16 patients, atypical or other mutations in 10 patients and HER2 mutations in two patients.
Figure 14: Dose escalation and backfill cohorts enrolled a heavily pretreated and heterogenous NSCLC population. Left: 1Backfill cohorts enrolled at potentially efficacious doses based on PK and/or preclinical anti-tumor activity; 2Includes patients enrolled into pilot food effect sub study at 40mg BID. Right: 3All data as of the March 2, 2026 data cut, with efficacy follow-up through the April 29, 2026 data cut; 4Includes historical and baseline molecular results.
Pharmacokinetics
Pharmacokinetics was assessed in the dose escalation and backfill cohorts, with results available for 64 patients as of the March 2, 2026 ASCO cutoff. BH-30643 has been absorbed with a median time to maximum concentration of two to four hours across all dose levels in dose escalation and backfill cohorts. Systemic exposure (Cmax and AUC) increased with dose across the evaluated range. At steady state, the geometric mean plasma trough concentration (C12) at 40 mg BID was 205 ng/mL, exceeding the total human plasma exposure of 67 ng/mL required for EC90 against phosphorylation of EGFR L858R/C797S/T790M mutation derived from a free EC90 of 1.79 nM (0.93 ng/mL) in a mouse PK/PD study. The plasma exposures of BH-30643 at ≥ 40 mg BID
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exceeded the steady-state plasma exposures of osimertinib and other contemporary EGFR TKIs at their respective clinical doses (Figure 16). The elimination half-life of BH-30643 was approximately 12 hours at steady state.
Figure 15. BH-30643 median plasma profile at steady state (C1D15). Median plasma concentrations at 20 mg BID, 40 mg BID, 50 mg BID, and 60 mg BID versus targeted EC90 (dashed line); EC90 = 67 ng/mL of total human plasma concentration derived from a free EC90 of 1.79 nM, representing the concentration required for 90% inhibition of mutant EGFR phosphorylation in the L858R/T790M/C797S CDX tumor model). Geometric mean trough concentration (C12) at 40 mg BID = 205 ng/mL (approximately 3x EC90). Exposures at ≥40 mg BID well exceeded the EC90.
Figure 16. The plasma exposures of BH-30643 at ≥ 40 mg BID exceeded exposure levels of many contemporary EGFR TKIs. Note: The clinical exposure data for contemporary EGFR TKIs are from publications and the comparisons presented above are based on cross-study comparisons and are not based on any head-to-head
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clinical trials. Differences exist between trial designs, patient characteristics and other factors and caution should be exercised in drawing any conclusions from a comparison of the data across studies as cross study comparisons are inherently limited and such data may not be directly comparable.
Safety and tolerability
As of the March 2, 2026 data cut, BH-30643 was generally well-tolerated across all evaluated dose levels in dose escalation and backfill (N=82), with a median duration of treatment of 3.0 months. Treatment-related adverse events (TRAEs) occurred in 71 of 82 patients (87%) and were predominantly Grade 1 or 2. The most frequently reported TRAEs (occurring in 10% or more of patients) were diarrhea (37%), rash (37%), bilirubin increased (35%), stomatitis (18%), fatigue (17%), dry skin (12%), nausea (12%) and paronychia (10%). Grade 2 or higher EGFR wild-type-related TRAEs were reported in 27% of patients, more commonly at doses of 60 mg BID and above. Grade 3 TRAEs were observed in 16 of 82 patients (20%), most commonly bilirubin elevation (11 of 16 Grade 3 TRAEs). Three dose-limiting toxicities (DLTs) were reported: one Grade 3 mucositis and one bilirubin increase at 80 mg BID, and one Grade 3 mucositis at 60 mg BID. TRAEs led to dose reduction in 13 patients (16%, predominantly bilirubin increase) and to discontinuation in one patient (1.2%). Two Grade 4 AEs were reported as possibly related, one of which (Grade 4 hyponatremia) was later changed to unlikely related. One patient reported possibly related Grade 4 alanine aminotransferase (ALT) elevation in the absence of bilirubin elevation; this patient enrolled after treatment with an immune checkpoint inhibitor, and ALT elevation resolved with steroids and interruption of BH-30643. No Grade 5 TRAEs were observed.
Figure 17. BH-30643 treatment-related adverse events observed in the dose escalation and backfill safety population (N=82).
Bilirubin elevation was observed in 29 patients (35%) and we believe is attributable to inhibition of the UGT1A1 enzyme and the hepatic transporter OATP1B1 by BH-30643, not to hepatocellular injury or wild-type EGFR inhibition. The nonclinical studies indicate that BH-30643 is not a substrate of UGT1A1 but is a potent inhibitor of UGT1A1 activity in both recombinant enzyme and human liver microsome systems. Bilirubin elevation has been predominantly unconjugated and asymptomatic and has generally been observed early in treatment, consistent
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with exposure-dependent UGT1A1 inhibition. The resulting hyperbilirubinemia has been pharmacologically analogous to Gilbert syndrome—asymptomatic, unconjugated and not associated with transaminase elevation, anemia or clinical liver dysfunction. Cases of bilirubin elevation were generally isolated (no aspartate aminotransferase (AST)/ALT elevation), low grade and reversible upon dose interruption or reduction; bilirubin has normalized rapidly following dose interruption without additional therapeutic intervention. Treatment-emergent ALT or AST elevations were observed in 12 patients (15%), including two Grade 3 events and one Grade 4 event. No cases met criteria for Hy’s law.
A comprehensive pharmacovigilance review of the broader safety dataset of 196 patients treated with BH-30643, as of May 12, 2026, suggests that idiosyncratic toxicity of BH-30643 was infrequent with pneumonitis (possibly related) reported in two patients (1.0%, one Grade 3 and one Grade 4) and no clinically meaningful QTc prolongation or other treatment-related cardiac conditions observed. Treatment-related Grade ≥3 ALT elevations were reported in 14 patients (7.1%, two Grade 4) and AST elevations were reported in 9 patients (4.6%, all Grade 3), with no cases meeting Hy’s law criteria. No other Grade 4 TRAEs were reported, and no Grade 5 TRAEs were reported. All grade treatment-emergent neutropenia was observed in 7.1% and thrombocytopenia in 10.2% of patients. All cause TEAEs reported in >10% of participants are shown in Figure 18, including the profile at the 3 dose levels taken forward for expansion investigation. Following the May 12, 2026 data cut, two additional cases with Grade 4 transaminitis were reported. The first, reported as an SAE, presented with asymptomatic Grade 4 ALT and Grade 4 AST and occurred without concurrent bilirubin elevation, in the setting of concurrent pravastatin and doxycycline; treatment was interrupted and LFTs improved. The second, not reported as an SAE, presented with asymptomatic Grade 4 ALT and Grade 3 AST and occurred with Grade 2 bilirubin elevation (50% unconjugated) in the setting of known liver metastases; treatment was interrupted and further evaluation and monitoring is underway.
| TEAEs, Starting Dose and Grade |
All doses (N = 196) |
40 mg BID (N = 85) |
50 mg BID (N=60) |
60 mg BID (N = 28) |
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| N (%), by preferred term |
All Grade |
Grade 3+ | All Grade |
Grade 3+ | All Grade |
Grade 3+ | All Grade |
Grade 3+ | ||||||||||||||||||||||||
| Any TEAEs |
189 (96.4) | 75 (38.3) | 84 (98.8) | 32 (37.6) | 57 (95.0) | 18 (30.0) | 25 (89.3) | 12 (42.9) | ||||||||||||||||||||||||
| Rash1 |
93 (47.4) | 6 (3.1) | 42 (49.4) | 3 (3.5) | 25 (41.7) | 0 | 15 (53.6) | 1 (3.6) | ||||||||||||||||||||||||
| Bilirubin Elevation2 |
93 (47.4) | 21 (10.7) | 43 (50.6) | 7 (8.2) | 29 (48.3) | 4 (6.7) | 11 (39.3) | 4 (14.3) | ||||||||||||||||||||||||
| Diarrhea |
87 (44.4) | 4 (2.0) | 41 (48.2) | 0 | 21 (35.0) | 2 (3.3) | 14 (50.0) | 1 (3.6) | ||||||||||||||||||||||||
| Dry skin |
45 (23.0) | 0 | 22 (25.9) | 0 | 14 (23.3) | 0 | 8 (28.6) | 0 | ||||||||||||||||||||||||
| Stomatitis3 |
45 (23.0) | 4 (2.0) | 19 (22.4) | 1 (1.2) | 12 (20.0) | 0 | 8 (28.6) | 2 (7.1) | ||||||||||||||||||||||||
| Aspartate aminotransferase increased |
38 (19.4) | 9 (4.6) | 22 (25.9) | 6 (7.1) | 9 (15.0) | 2 (3.3) | 2 (7.1) | 0 | ||||||||||||||||||||||||
| Fatigue |
38 (19.4) | 3 (1.5) | 19 (22.4) | 2 (2.4) | 8 (13.3) | 0 | 6 (21.4) | 0 | ||||||||||||||||||||||||
| Alanine aminotransferase increased |
37 (18.9) | 17 (8.7) | 22 (25.9) | 10 (11.8) | 10 (16.7) | 4 (6.7) | 1 (3.6) | 0 | ||||||||||||||||||||||||
| Nausea |
30 (15.3) | 1 (0.5) | 17 (20.0) | 1 (1.2) | 3 (5.0) | 0 | 5 (17.9) | 0 | ||||||||||||||||||||||||
| Paronychia |
29 (14.8) | 1 (0.5) | 17 (20.0) | 0 | 5 (8.3) | 0 | 3 (10.7) | 1 (3.6) | ||||||||||||||||||||||||
| Decreased appetite |
26 (13.3) | 2 (1.0) | 10 (11.8) | 2 (2.4) | 6 (10.0) | 0 | 5 (17.9) | 0 | ||||||||||||||||||||||||
| Anaemia |
25 (12.8) | 6 (3.1) | 13 (15.3) | 4 (4.7) | 4 (6.7) | 0 | 3 (10.7) | 1 (3.6) | ||||||||||||||||||||||||
| Headache |
25 (12.8) | 1 (0.5) | 12 (14.1) | 1 (1.2) | 5 (8.3) | 0 | 6 (21.4) | 0 | ||||||||||||||||||||||||
| Vomiting |
23 (11.7) | 0 | 10 (11.8) | 0 | 4 (6.7) | 0 | 7 (25.0) | 0 | ||||||||||||||||||||||||
| Constipation |
21 (10.7) | 0 | 11 (12.9) | 0 | 4 (6.7) | 0 | 5 (17.9) | 0 | ||||||||||||||||||||||||
| Cough |
20 (10.2) | 0 | 9 (10.6) | 0 | 3 (5.0) | 0 | 3 (10.7) | 0 | ||||||||||||||||||||||||
| 1 | Rash is a grouping term and includes PTs of Rash, Rash maculo-papular, Dermatitis acneiform, Dermatitis contact, and Dermatitis. |
| 2 | Bilirubin elevation: Grouped term includes PTs of Blood bilirubin increased and Hyperbilirubinaemia. |
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| 3 | Stomatitis includes: Stomatitis, Mucosal Inflammation. |
Figure 18: Summary of treatment-emergent adverse events (TEAE) reported in >10% of participants as of the May 12, 2026 safety data cut (N=196), with a median exposure of 2.8 months. TEAE profile for the dose levels selected for expansion investigation is shown, noting that median exposure is longer for 40 mg BID (4.7 months) as compared to 50 mg BID (2.1 months) or 60mg BID (1.9 months).
Preliminary clinical activity: Dose Escalation and Backfill
As of the March 2, 2026 data cut, 82 patients had been enrolled in the dose escalation and backfill cohorts across all evaluated dose levels. Of the 82 patients enrolled in this heavily pretreated population, 31 patients (38%) remained on therapy as of the April 29, 2026 efficacy cutoff, with the longest ongoing treatment duration exceeding 13 months.
Figure 19. Responses (confirmed or ongoing) and prolonged stable disease observed in the dose escalation and backfill safety population (N=82).
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Among the 77 patients in this population who had at least one post-baseline imaging assessment, antitumor activity was observed across diverse EGFR genotypes and was enriched in patients with multiple (or compound) EGFR mutations, informing our initial development focus on tumors harboring C797S resistance mutations. Confirmed or ongoing partial responses were observed in greater than 20% of evaluable patients in this unselected, heavily pretreated population, including patients with EGFR classical, atypical, and exon 20 insertion mutations.
Figure 20. Best percent change from baseline in target lesion size for the dose escalation and backfill cohorts (N=77) with at least one (1) post-baseline imaging, illustrating responses across patients with diverse EGFR genotypes.
Representative case examples from the dose escalation and backfill cohorts illustrate clinical activity across diverse EGFR genotypes. A patient with EGFR exon 19 deletion and C797S resistance achieved a confirmed partial response following prior treatment with osimertinib, amivantamab and immunotherapy, with treatment ongoing after nearly a year. A patient with an atypical EGFR mutation achieved a confirmed partial response despite prior therapy with three different EGFR TKIs. A patient with an EGFR exon 20 insertion mutation
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previously treated with multiple lines of chemotherapy achieved a confirmed partial response, including reduction of a large brain metastasis, in the absence of radiation or steroids.
Figure 21. Representative case examples from the dose escalation and backfill cohorts illustrating clinical responses: 44 year-old female, enrolled at 40mg BID, with EGFR exon 19 deletion & C797S detected after prior osimertinib, amivantamab and immunotherapy and >11 months on treatment (left); 68 year-old female enrolled at 80mg QD, with EGFR L861Q previously treated with chemotherapy, erlotinib, osimertinib, mobocertinib and nine (9) months on treatment (center); 51 year-old male enrolled at 80mg BID, with EGFR exon 20 insertion with three (3) prior lines of chemotherapy with no brain radiation or steroids and eight (8) months on treatment (right).
Preliminary clinical activity: C797S resistance
As described previously, the Phase 1 Part 1 dose escalation / backfill experience included a number of patients with multiple EGFR mutations such as concurrent C797S and T790M who had a response to BH-30643 after prior TKI treatment. To characterize this signal further, expansion enrollment was initiated studying on-target resistance mutations such as C797S. The combined experience across escalation / backfill and early expansion represents the clinical activity against C797S that supports the near-term development plans.
To study whether BH-30643 can achieve effective inhibition of resistant clones, serial liquid biopsy analysis was performed using circulating tumor DNA (ctDNA) sequencing at baseline and after 3-6 weeks on therapy. Central plasma next-generation sequencing identified 27 patients across the dose escalation and expansion cohorts with C797S, T790M or both detected at baseline. Clearance of C797S in circulating tumor DNA was observed in 19 of 22 patients with detectable C797S at baseline (86%), and clearance of T790M was observed in 9 of 14 patients with detectable T790M at baseline (64%). Nine patients had concurrent C797S and T790M, of whom five
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demonstrated clearance of both resistance mutations. Clearance of C797S and T790M was observed across diverse EGFR driver backgrounds, including exon 19 deletions or indels, L858R, atypical G719X and exon 20 insertions.
Figure 22. C797S and T790M ctDNA clearance in the context of diverse EGFR driver mutations including exon 19 del or indel, L858R, G719X and exon 20 ins.
Efficacy was studied in the C797S target population including 44 patients from dose escalation/backfill and expansion cohorts as of an updated May 20, 2026 efficacy cutoff (Figure 23). This analysis excludes patients with concurrent driver alterations or who previously received a TKI specifically targeting C797S. The median follow-up is 4.2 months as of the data cut; 32 of 44 participants (73%) remain on therapy at the time of analysis with the longest on therapy for approximately 12.5 months. 34 patients were evaluable for response with at least one post-baseline tumor assessment across the dose escalation/backfill and expansion cohorts (Figure 24). Partial responses (including 14 confirmed responses and two (2) unconfirmed responses ongoing at time of analysis) were observed in 53% of patients without prior chemotherapy (8/15) and 42% of patients with prior chemotherapy (8/19). Partial responses were observed both with and without concurrent T790M and both with and without a prior history of brain metastases, and were observed in the context of diverse EGFR driver mutations: exon 19 deletion and indel, L858R, and atypical G719X and E709K. This response profile continues to evolve with ongoing follow-up; as of the May 20, 2026 data cut, two (2) patients were ongoing on treatment with only a single follow-up scan available and two (2) patients with stable disease had developed a partial
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response which was pending confirmation (uPR). These data remain preliminary and are subject to change as additional patients are enrolled and follow-up matures.
Figure 23. Swimmer plot showing 44 patients from the target C797S population as of the May 20, 2026 efficacy data cut, which excludes patients with concurrent driver alterations or who previously received a TKI specifically targeting C797S. 32 patients (73%) remain on therapy at time of analysis, with two patients over 12 months on therapy.
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Confirmed Responses Observed Across Dose Levels in Patients with C797S
Figure 24. Waterfall plot showing 34 patients from the target C797S population who were response evaluable across escalation/backfill and expansion cohorts as of the May 20, 2026 efficacy data cut. Overall response rate (including confirmed responses or unconfirmed responses which were ongoing) was 53% (8/15) in chemo naive patients and 42% (8/19) in chemo pretreated patients, with a median of 4.2 months of follow-up.
Preliminary clinical activity: TKI Naive with EGFR Classical Mutations
We are also evaluating BH-30643 in a dose expansion cohort of patients with advanced classical EGFR-mutant NSCLC who have not received prior EGFR TKI therapy. As of the May 20, 2026 efficacy data cut, 27 patients in this TKI-naive cohort had undergone at least one post-baseline tumor assessment with four having only one post treatment scan (Figure 25). This cohort was enriched for patients with higher-risk disease features, including 48% with a history of brain metastases and 30% with exon 19 deletion/insertions or other higher-risk genotypes such as H870R. With a median follow-up of approximately 4.2 months, 21 of 27 patients (78%) achieved a partial response (16 confirmed, 5 unconfirmed with three having only one follow-up scan and two from SD and ongoing), and all evaluable patients experienced a reduction in target lesion size, with a median best reduction of approximately 43%. Among patients with paired circulating tumor DNA assessments, 11 of 13 (85%) showed complete clearance of detectable EGFR mutations after three to six weeks and the two remaining
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patients showed greater than 98% reduction. These data remain preliminary and are subject to change as additional patients are enrolled and follow-up matures.
Figure 25. Waterfall plot showing 27 TKI naive patients from the expansion cohort with classical EGFR mutations who were response evaluable as of the May 20, 2026 efficacy data cut. Overall response rate (including confirmed responses or unconfirmed responses which were ongoing) was 78% with a median of 4.2 months of follow-up.
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Representative case examples from this cohort include a patient with EGFR L858R treatment-naive disease treated at 40 mg BID who achieved a confirmed partial response with an approximately 86% reduction in target lesion size, and a patient with EGFR exon 19 deletion and H870R treatment-naive disease presenting with multiple brain metastases, treated at 40 mg BID, who achieved both a systemic and a CNS partial response in the absence of radiation or steroids. Both responses were ongoing as of the May 20, 2026 efficacy data cut.
Figure 26. Representative case examples from the classical TKI-naive dose expansion cohort: L858R treatment naive patient, treated at 40 mg BID, with treatment ongoing and partial response confirmed on second scan (-86%) (left); exon19del & H870R treatment naive patient, presented with multiple brain mets, treated at 40mg BID with systemic and CNS PR, in the absence of radiation / steroids, with therapy ongoing (right).
Ongoing expansion investigation
Enrollment is also ongoing in multiple dose expansion cohorts to inform selection of RP2D, including for patients with resistance mutations as well as targeted therapy naive patients with EGFR classical, atypical or exon 20 insertion mutations. Data from these cohorts are at an early stage, and we expect to provide additional information regarding clinical activity in these populations as the cohorts mature. The protocol also now includes
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the addition of a chemotherapy combination cohort to characterize the safety and preliminary antitumor activity of BH-30643 plus platinum / pemetrexed in patients following progression on a 3rd-generation EGFR TKI.
Figure 27. SOLARA trial design. Following dose escalation / backfill, molecularly defined expansion cohorts and combination cohorts are designed to further characterize the clinical profile in TKI-pretreated and TKI-naive patient populations, support the transition to Phase 2 and inform broader development plans.
BH-30236: our CLK inhibitor
BH-30236 is an investigational orally bioavailable, macrocyclic inhibitor of the CDC-like kinase family. At clinically relevant concentrations, BH-30236 has also been shown in preclinical studies to inhibit DYRK1A, DYRK1B, DYRK2, PIM3 and FLT3. BH-30236 is currently in clinical development for the treatment of AML and HR-MDS. BH-30236 is designed to modulate aberrant alternative splicing in cancerous tissue, targeting the same aberrant splicing machinery that drives AML and HR-MDS disease biology and that cancer cells exploit to develop resistance to venetoclax, FLT3 inhibitors and chemotherapy.
We are evaluating BH-30236 in a Phase 1/1b multicenter, open-label, first-in-human dose escalation and expansion trial in adults with R/R AML and HR-MDS. The FDA has granted orphan drug designation to BH-30236 for the treatment of AML. As of the April 10, 2026 safety data cut, BH-30236 was well-tolerated across multiple monotherapy dose levels and in combination with the BCL-2 inhibitor venetoclax, with preliminary antileukemic activity observed in both settings. We expect to report updated safety and efficacy data from the BH-30236 Phase 1 trial in the first half of 2027.
Disease and treatment landscape
AML and HR-MDS: disease, epidemiology, and unmet need
AML is the most common acute leukemia in adults, with approximately 21,000 new diagnoses and 11,000 deaths annually in the United States. The median age at AML diagnosis is approximately 68 years, and the disease disproportionately affects older patients who may be unable to tolerate intensive induction chemotherapy. Despite
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therapeutic advances over the past decade, the prognosis for patients with relapsed or refractory AML remains poor: median overall survival without allogeneic hematopoietic cell transplantation (allo-HCT) is less than three months, and allo-HCT, while potentially curative, is available to only a minority of patients given the age and fitness of the affected population. Myelodysplastic syndromes (MDS) are clonal hematopoietic disorders characterized by ineffective hematopoiesis, peripheral blood cytopenias and variable risk of transformation to AML. According to GlobalData, approximately 14,000 patients are diagnosed with HR-MDS annually in the United States, with a median age at diagnosis of approximately 77 years. Patients with HR-MDS closely mirror AML in clinical course, frontline treatment, and unmet need in the relapsed and refractory setting. For patients with HR-MDS who progress following hypomethylating agent therapy, median overall survival is approximately five to six months.
Together, AML and HR-MDS represent approximately 35,000 new diagnoses annually in the United States. The venetoclax-resistant and refractory segment, for which no approved therapy currently exists for broad application (or usage), represents the initial area of focus for BH-30236. The global AML therapeutics market is estimated to exceed $3 billion and is projected to grow substantially over the coming decade, driven by aging demographics, the established role of venetoclax-based regimens in frontline therapy and the consequent emergence of venetoclax-resistant disease as a growing and largely unaddressed clinical segment. We estimate that approximately 10,000 to 15,000 AML patients in the United States annually have disease that is resistant to or has relapsed following venetoclax-based therapy. The HR-MDS market represents a parallel opportunity of comparable scale: according to GlobalData, approximately 14,000 patients are diagnosed with HR-MDS annually in the United States, the majority of whom will likely ultimately require therapy beyond frontline hypomethylating agents (HMAs), and for whom no approved targeted option currently exists following HMA failure.
Splicing as disease driver and resistance enabler
AML and HR-MDS are, in part, diseases of aberrant splicing. Aberrant splicing is common in cancer and can influence many hallmarks of cancer including the apoptosis pathway and the DNA damage repair pathway. In myeloid malignancies, spliceosome gene mutations—in genes including SF3B1, SRSF2 (as defined below) and U2AF1—are among the most common recurrent genetic events, present in up to 25% of AML cases and up to 85% of MDS. Even in patients without somatic spliceosome mutations, genome-wide aberrant alternative splicing led by oncogenic signaling has been documented in AML: approximately one-third of genes show differential splicing patterns compared with normal myeloid precursors. These aberrant splicing events are not incidental—they drive leukemic proliferation, impair differentiation and promote evasion of apoptosis from the outset of disease.
Alternative splicing enables a single gene to produce multiple forms of a protein, called isoforms. Cancer cells can exploit this mechanism by generating protein isoforms that drive uncontrolled growth, and when alternative splicing becomes dysregulated it can contribute to disease progression and therapeutic resistance. Upregulation and mutation of serine/arginine-rich splicing factors (SRSFs) have been reported in hematologic malignancies and solid tumors. By way of example, dysregulated alternative splicing can result in increased
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expression of pro-growth oncoproteins such as MET, or decreased expression of pro-apoptotic regulators such as p53, contributing to tumor progression and resistance to therapy.
Figure 28. CLK–SRSF axis in cancers: mechanism of aberrant alternative splicing and treatment resistance.
The molecular machinery responsible for this aberrant splicing includes the CLK–SRSF axis (Figure 28). The CDC-like kinase family comprises nuclear serine/threonine kinases—CLK1, CLK2, CLK3 and CLK4—that phosphorylate SRSF proteins, which regulate spliceosome assembly, exon recognition and splice site selection. Overexpression of SRSFs and dysregulated CLK activity drives SRSF hyperphosphorylation, producing the genome-wide splicing alterations that characterize myeloid malignancy. The same CLK–SRSF machinery that contributes to disease at diagnosis is the mechanism that cancer cells exploit to develop resistance to standard-of-care therapy, venetoclax—making CLK inhibition an approach with the potential to address both the underlying disease biology and the primary mechanisms of therapeutic failure simultaneously.
Current standard of care and limitations
For patients with AML who are older or otherwise ineligible for intensive induction chemotherapy—a large and growing proportion of the patient population given aging demographics—the combination of venetoclax and azacitidine has become the established standard of care. In the VIALE-A trial, a Phase 3, randomized, double-blind study evaluating the combination of venetoclax and azacitidine, this combination demonstrated a composite complete remission rate of 66.4% and a median overall survival of 14.7 months versus 9.6 months for azacitidine alone, establishing the regimen as a meaningful advancement over prior therapy in this population. For patients with HR-MDS, hypomethylating agents represent standard of care, with ORR of
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approximately 20-30%. In addition, venetoclax-based combinations are increasingly used in HR-MDS in a manner parallel to their application in AML.
Despite these advances, the durability of venetoclax-based therapy is limited. For example, approximately one-third of AML patients do not have a complete remission or do not respond to frontline venetoclax and azacitidine combination therapy, and the majority of initial responders ultimately develop resistance and progressive disease. Resistance to venetoclax-based combination therapy arises through multiple interconnected mechanisms: upregulation of the anti-apoptotic proteins MCL-1 and BCL2A1, which share structural features with BCL-2 but are not inhibited by venetoclax; expansion of monocytic leukemic clones with intrinsic BCL-2 independence; and activation of the FLT3 and RAS/MAPK signaling pathways that bypass BCL-2 dependency. What unifies these mechanisms is that each is enabled or maintained through aberrant alternative splicing—making the CLK–SRSF axis not merely one pathway among many, but the upstream regulator that governs resistance across all of these routes simultaneously. Direct BCL-2 inhibition with venetoclax cannot address these upstream splicing-mediated resistance mechanisms, which explains both the high rate of primary non-response and development of acquired resistance over time.
Prior CLK inhibitors: a validated mechanism with an unresolved tolerability problem
The therapeutic rationale for CLK inhibition in AML has been established by prior clinical programs. CLK inhibitors cirtuvivint (SM08502) and rogocekib (CTX-712) have reached clinical development in solid tumors with rogocekib also in R/R AML and HR-MDS. Both have demonstrated preliminary proof-of-concept that CLK inhibition can produce clinical antitumor effect—but both programs have prioritized intermittent dosing rather than daily dosing, primarily due to tolerability limitations.
Cirtuvivint is an investigational potent CLK inhibitor that demonstrated antiproliferative activity across a broad range of tumor models. In a Phase 1 clinical trial in patients with advanced solid tumors, gastrointestinal toxicities required intermittent dosing (5 days on, 2 days off), limiting the feasibility of continuous splicing suppression and constraining the program’s combination potential. Rogocekib reported an ORR of 42.9% in a Phase 1 clinical trial of 14 patients with R/R AML and HR-MDS in Japan, the majority of whom had received prior azacitidine-based therapy including venetoclax, providing clinical validation of CLK inhibition as an active mechanism in this setting. Activity trended higher in patients with splicing factor mutations (SRSF2, U2AF1) than in those without, though responses were observed in both groups. However, diarrhea and cytopenias have limited rogocekib to a twice-weekly intermittent dosing schedule.
These experiences illustrate what we believe is a fundamental challenge for the class: sustained SRSF phosphorylation suppression—the mechanism by which CLK inhibition remodels BCL-2 family isoform expression and sensitizes leukemic cells to venetoclax—requires maintained drug exposure that intermittent schedules may be unable to provide. We specifically designed BH-30236 with the objective of targeting aberrant alternative mRNA splicing in cancers in a manner suitable for daily oral dosing without the tolerability challenges that limited prior molecules.
Our solution: BH-30236
BH-30236 is an investigational, novel, macrocyclic, non-covalent CLK inhibitor which has been well-tolerated with continuous daily dosing across multiple monotherapy dose levels and in combination with the BCL-2 inhibitor venetoclax, with preliminary antileukemic activity observed in both settings. Aberrant SRSF activity, which can be modulated by CLK, can be a driver of the underlying disease biology of AML and HR-MDS when resistance develops to venetoclax and other therapies. BH-30236 targets CLK upstream of multiple resistance pathways—not by addressing one resistance mechanism after it develops, but by suppressing the splicing machinery that enables resistance to begin.
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Design rationale
BH-30236 was designed to achieve high potency against the primary disease-relevant kinase targets while maintaining a tolerability profile consistent with continuous once-daily dosing. The macrocyclic scaffold was chosen to impose the conformational rigidity required to achieve selective binding across the CLK/DYRK/PIM/FLT3 kinase cluster while minimizing the off-target interactions that drove the tolerability challenges encountered with prior CLK inhibitors.
Continuous once-daily dosing is a core design objective for BH-30236, given that the BCL-2 family remodeling that underlies venetoclax sensitization, specifically, the reduction of MCL-1, BCL2A1 and BCL-2 expression through SRSF suppression and nonsense-mediated mRNA decay, is a transcriptional and splicing-level effect that requires sustained CLK inhibition to maintain. We believe the intermittent dosing schedules that have been evaluated for cirtuvivint and rogocekib are likely to permit recovery of SRSF phosphorylation and BCL-2 family anti-apoptotic protein expression during off-drug intervals. This interrupted inhibition undermines the durability of splicing remodeling and limits the potential for synergistic interaction with venetoclax. BH-30236 was designed to address this limitation.
As a multi-kinase CLK inhibitor, BH-30236 was also designed to inhibit other disease-relevant targets at clinically relevant concentrations. In preclinical studies, BH-30236 has also been shown to inhibit DYRK1A, DYRK1B, DYRK2, PIM3 and FLT3, with all primary targets inhibited at sub-nanomolar concentrations in enzymatic kinase assays. At cellular anti-phosphorylation assays, BH-30236 inhibited the phosphorylation of DYRK substrate TAU protein and PIM substrate 4EBP1 with IC50s of approximately 50 nM and approximately 80 nM. BH-30236 potently inhibited the phosphorylation of FLT3 with an IC50 of 0.2 nM as shown in the table. DYRK family is close to CLK family and plays roles in alternative splicing. PIM3 regulates the proliferation, survival and chemotaxis of AML cell lines and FLT3 mutations occur in up to 35% of AML. We believe co-inhibition of DYRK, FLT3 and PIM3 may provide additive antileukemic effects. The primary therapeutic rationale for BH-30236 is CLK-mediated splicing remodeling and venetoclax sensitization; the multikinase profile is a supporting characteristic of the compound’s design.
Figure 29. Enzymatic and phosphorylation assay profile of BH-30236 demonstrating multi-kinase activity across CLKs 1-4, DYRK1A, DYRK1B, DYRK2, PIM3 and FLT3.
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Key differentiation versus other CLK inhibitors
Although no head-to-head clinical studies have been conducted, BH-30236 demonstrated low nanomolar enzymatic potency against CLK family kinases in our preclinical studies, comparable to cirtuvivint (SM08502) and rogocekib (CTX-712). In head-to-head cellular assays, BH-30236 demonstrated more potent inhibition of SRSF phosphorylation comparable to rogocekib or cirtuvivint (Figure 30).
Figure 30. Inhibition of phosphorylation of SRSFs in KASUMI-1 cells.
Preclinical studies and data
Biochemical and cellular potency
BH-30236 demonstrated sub-nanomolar enzymatic potency against CLK1, CLK2 and CLK4, and also potently inhibited PIM3, DYRK1A, DYRK1B, DYRK2 and FLT3 at sub-nanomolar concentrations in enzymatic kinase assays. In cellular anti-phosphorylation assays, BH-30236 inhibited the phosphorylation of DYRK substrate TAU protein and PIM substrate 4EBP1 with IC50s of approximately 50 nM and approximately 80 nM. BH-30236 potently inhibited the phosphorylation of FLT3 with an IC50 of 0.2 nM.
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Antiproliferative activity
In antiproliferative assays across a panel of 116 hematologic and solid tumor cell lines and three normal cell lines, BH-30236 demonstrated broad antiproliferative activity, with notably greater potency in hematologic malignancy lines than in solid tumor lines or normal cells, reflecting activity concentrated in disease-relevant cell types (Figure 31).
Figure 31. Antiproliferative activity of BH-30236 in a panel of 116 hematologic and solid tumor cell lines and three normal cell lines.
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In patient-derived AML cell models and primary AML cell line models, BH-30236 demonstrated greater antiproliferative potency than venetoclax in 22 out of 27 models tested, including models harboring splicing factor mutations commonly encountered in AML and HR-MDS (Figure 32). We believe this observed mutation-agnostic activity pattern supports the potential for BH-30236 to be active across a broad, biomarker-unselected AML patient population—a characteristic we believe distinguishes BH-30236 from rogocekib, for which reported clinical activity has appeared enriched in patients with splicing factor mutations.
Figure 32. BH-30236 vs. venetoclax antiproliferative activity in patient-derived AML cell models (n=27; CTG assay) and primary cell lines.
Mechanism of action: SRSF suppression and BCL-2 family remodeling
In our preclinical studies, we characterized the mechanism by which BH-30236 sensitizes leukemic cells to venetoclax through RNA sequencing of patient-derived AML cell models and targeted protein analyses in established AML cell lines. We observed that BH-30236 dose-dependently downregulated SRSF family members at both the mRNA and protein levels through nonsense-mediated mRNA decay (NMD) driven by poison exon splicing—a self-reinforcing mechanism by which CLK inhibition reduces SRSF expression, which in turn further diminishes aberrant alternative splicing activity. BH-30236 also suppressed DNA damage repair gene expression through alternative splicing-induced NMD.
The downstream functional consequence most directly relevant to the venetoclax combination is a coordinated remodeling of BCL-2 family expression. BH-30236 dose-dependently reduced mRNA expression of MCL1, BCL2 and BCL2A1—three anti-apoptotic proteins each independently implicated as a primary mediator of venetoclax resistance—while simultaneously increasing expression of the pro-apoptotic BCLxS isoform in leukemic cell lines (Figure 33). This simultaneous suppression of all three primary venetoclax resistance effectors through a single
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upstream mechanism is the molecular basis for the venetoclax synergy demonstrated in subsequent combination studies.
Figure 33. BCL-2 family mRNA expression in AML cell lines following BH-30236 treatment (Kasumi-1 cells shown). MCL1, BCL2, and BCL2A1 mRNA levels decreased dose-dependently; pro-apoptotic BCLxS increased.
BH-30236 additionally downregulated FLT3 expression through NMD in AML cell lines. This potential mechanism of FLT3 suppression is mechanistically distinct from direct FLT3 kinase inhibition: because BH-30236 not only inhibited FLT3 autophosphorylation, but also eliminated FLT3 transcript, it is not subject to the secondary kinase domain mutations that confer resistance to approved FLT3 inhibitors. This property may be of clinical relevance in patients who have relapsed following FLT3 inhibitor-containing regimens.
Venetoclax combination: preclinical rationale and evidence
The scientific rationale for combining BH-30236 with venetoclax follows directly from the BCL-2 family remodeling characterized in the mechanism of action studies. Venetoclax inhibits BCL-2 directly, but resistance emerges primarily through upregulation of MCL-1 and BCL2A1—BCL-2 homologs that venetoclax does not inhibit. By suppressing MCL-1, BCL2A1 and BCL-2 expression through upstream splicing remodeling, BH-30236 is designed to remove the anti-apoptotic proteins that allow leukemic cells to survive venetoclax pressure. We believe the combination therefore represents a mechanistic convergence: one agent blocking BCL-2 at the protein level, the other eliminating the alternative survival proteins at the transcriptional and splicing level through non-overlapping and mutually reinforcing mechanisms.
We observed that BH-30236 demonstrated equal potency in venetoclax-resistant and cytarabine-resistant cell lines relative to their parental counterparts, suggesting that the mechanisms driving resistance to these two major therapeutic classes do not confer cross-resistance to BH-30236 (Figure 34). This finding is consistent with
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BH-30236 acting upstream of the resistance effectors to which both agents have already failed and supports its evaluation in patients with prior venetoclax or cytarabine exposure.
Figure 34. BH-30236 activity in venetoclax-resistant (VR) and cytarabine-resistant (Ara-C-R) cell lines versus parental counterparts.
In vitro combination studies demonstrated synergistic activity for BH-30236 and venetoclax across a broad panel of AML, diffuse large B-cell lymphoma and mantle cell lymphoma cell lines, including models harboring FLT3, TP53 and NRAS mutations. Bliss synergy scores (quantified as the difference between the observed effect of a drug combination and the expected effect, calculated as if the drugs act independently) (Figure 35) suggest that the combination was synergistic—not merely additive—across multiple hematologic tumor types and across the major molecular subtypes of AML most commonly encountered in the venetoclax-resistant population.
Figure 35. BH-30236 + venetoclax in vitro synergy across hematologic cell line panel (AML, DLBCL, MCL). Bliss synergy scores >10 indicate synergy. * Highest average Bliss score across 3x3 field matrix.
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In vivo antitumor activity
In venetoclax-resistant AML mouse tumor models, the combination of BH-30236 and venetoclax achieved substantial antitumor activity—substantially exceeding the activity of either agent alone—at BH-30236 doses within the range currently under evaluation in the Phase 1 clinical trial. Complete tumor regression was achieved in resistant models (Figure 36), with tumors remaining absent following cessation of both agents, demonstrating that the combination can overcome single-agent resistance at clinically achievable exposures. Consistent combination activity was observed across molecularly distinct AML models representing both FLT3-mutant and FLT3 wild-type AML, supporting the view that the venetoclax synergy of BH-30236 is not restricted to a specific oncogenic driver.
Figure 36. BH-30236 + venetoclax in MOLM-13 (FLT3-ITD, venetoclax-resistant) CDX model. Combination achieves 200% tumor growth inhibition (TGI) vs. 33% venetoclax alone; complete regression with no regrowth post-cessation.
Given BH-30236 has FLT3 inhibitory activity in addition to CLK inhibition, we investigated the mechanism of anti-leukemic effect in a FLT3-driven model. In mouse xenograft studies of FLT3-ITD mutant AML, we observed that BH-30236 administered as a single agent achieved complete and durable tumor regression (Figure 37), with no tumor regrowth observed for at least 30 days following cessation of dosing. The durability of effect exceeded that of a FLT3 inhibitor alone and mirrored the effect of a different CLK inhibitor, but with less toxicity. Evidence of reduced CD123 RNA expression on therapy suggests durability seen may reflect NMD-mediated elimination of FLT3 transcript, which may produce more sustained suppression of FLT3 signaling
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than reversible kinase inhibition—consistent with the absence of tumor regrowth upon treatment discontinuation in a model where approved FLT3 inhibitors demonstrate rapid regrowth upon cessation.
Figure 37. BH-30236 single-agent activity in MV-4-11 (FLT3-ITD) xenograft model. 25 mg/kg QD; complete regression with no regrowth 30 days post-cessation.
Clinical development
Trial design and enrollment status
We are evaluating BH-30236 in a Phase 1/1b, multicenter, open-label, first-in-human dose escalation and expansion trial in adults with R/R AML or HR-MDS. The trial employs a Bayesian Optimal Interval (BOIN) design for dose escalation and is structured in multiple parts, including monotherapy and combination dose escalation, followed by expansion cohorts to establish the RP2D.
We are now enrolling the monotherapy dose escalation/backfill portion of the trial evaluating the safety, tolerability, pharmacokinetics and pharmacodynamics of BH-30236 as a single agent in up to 50 participants, with the primary objectives of characterizing the dose-limiting toxicities and identifying the maximum tolerated dose and RDE. As of the April 10, 2026 safety data cut, 30 participants had been enrolled in the Phase 1 monotherapy dose escalation (AML n=23; HR-MDS n=7) across dose levels from 5 mg to 120 mg once daily. Monotherapy participants had a median age of 70 years (range 23 to 85), a median of 2 prior lines of therapy, and a median treatment duration of 1.1 months (range 0.3 to 10.1 months). Of the patients enrolled, 26 of 30 (87%) had received prior venetoclax-based therapy.
Concurrently, we are evaluating BH-30236 in combination with venetoclax at a target dose of 400 mg once daily in the combination dose escalation portion of the trial in up to 48 participants, with the primary objective of identifying the recommended Phase 2 dose for the combination. As of the cutoff date, 18 participants had been enrolled in Phase 1, Part 2 combination dose escalation (AML n=14; HR-MDS n=4) at BH-30236 dose levels of 20 mg, 30 mg, 60 mg and 90 mg once daily in combination with venetoclax. Combination arm participants had a median age of 73 years (range 27 to 85), a median of 2 prior lines of therapy, and a median treatment duration of 1.1 months (range 0.5 to 3.6 months). Of the patients enrolled, 16 of 18 (89%) had received prior venetoclax-based therapy.
Additional dose escalation investigations are planned to include monotherapy in other hematologic malignancies (e.g. MPNs) as well as triplet combination with azacitidine and venetoclax. Future Phase 1b expansion cohorts are then planned to enroll participants in monotherapy and combination cohorts (including in newly diagnosed unfit AML) to further evaluate safety and antileukemic activity and to generate preliminary efficacy data to support Phase 2 design.
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Pharmacokinetics
Pharmacokinetic exposure of BH-30236 monotherapy increased with dose (Figure 38), with no accumulation observed with continuous once-daily dosing. In the combination dose escalation, no apparent pharmacokinetic drug interaction was observed between BH-30236 and venetoclax.
Figure 38. BH-30236 median single dose whole blood exposure profile at C1D1, including patients dosed in both monotherapy and combination therapy cohorts. Median whole blood concentrations increased with increasing dose.
Safety and tolerability
As of the April 10, 2026 data cut, BH-30236 has been generally well tolerated as a continuous once-daily dose, with manageable gastrointestinal toxicities as the most frequent TRAEs. Across all patients dosed (monotherapy or combination), three had events consistent with differentiation syndrome. All events were Grade 2 and resolved with corticosteroid treatment with and without dose interruption. Dose reductions due to TRAEs occurred in two (2) out of 48 (4.2%) patients with discontinuations due to TRAEs in one (1) of 48 (2.1%) patients.
As a monotherapy, BH-30236 has been generally well-tolerated at continuous once-daily doses through 90 mg. As of the data cut, one DLT of Grade 3 diarrhea was observed at 120 mg once daily. TRAEs were reported in 18 of 30 monotherapy participants (60.0%), half of which were Grade 2 or lower. The most frequently reported TRAEs (occurring in 10% or more of participants) were diarrhea, nausea and vomiting; the only Grade 3 or higher TRAE occurring in 10% or more of participants was diarrhea (Figure 39). Two cases of possible differentiation syndrome were observed; both were managed with corticosteroids without dose interruption. No clinically significant cardiac effects or QTc prolongation has been observed.
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In the venetoclax combination arm, TRAEs were reported in 10 of 18 participants (55.6%). Combination tolerability was similar to monotherapy with more frequent cytopenias consistent with a venetoclax-based regimen. The most frequently reported TRAEs (occurring in 10% or more of combination participants) were diarrhea, nausea, vomiting, decreased neutrophil count, decreased platelet count and decreased white blood cell count (Figure 39). No DLTs were observed with BH-30236 in combination with venetoclax.
| Safety Analysis Set (N=48) | Monotherapy (N=30) |
Venetoclax Combination (N=18) | ||||||
| All Grades | Grade ≥3 | All Grades | Grade ≥3 | |||||
| Any BH-30236 Related AEs |
18 (60.0) | 9 (30.0) | 10 (55.6) | 9 (50.0) | ||||
| Dose Limiting Toxicities (DLTs) |
1 Grade 3 diarrhea | 0 | ||||||
| Gastrointestinal | ||||||||
| Diarrhea |
10 (33.3) | 5 (16.7) | 5 (27.8) | 2 (11.1) | ||||
| Nausea |
9 (30.0) | 0 | 6 (33.3) | 0 | ||||
| Vomiting |
4 (13.3) | 0 | 4 (22.2) | 0 | ||||
| Hematologic | ||||||||
| Neutrophil count decreased |
2 (6.7) | 1 (3.3) | 5 (27.8) | 5 (27.8) | ||||
| Platelet count decreased |
2 (6.7) | 2 (6.7) | 5 (27.8) | 4 (22.2) | ||||
| Anemia |
2 (6.7) | 2 (6.7) | 4 (22.2) | 4 (22.2) | ||||
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Figure 39. Treatment-related adverse events observed in patients receiving BH-30236 as monotherapy or in combination with venetoclax as of the April 10, 2026 data cut.
Treatment-emergent serious adverse events (SAEs) reported for BH-30236 were generally consistent with the high morbidity of AML and HR-MDS profiles: 36 of 48 treated participants (75.0%) experienced at least one SAE, including 23 of 30 (76.7%) with BH-30236 monotherapy and 13 of 18 (72.2%) with BH-30236 plus venetoclax. Overall, SAEs assessed as at least possibly related to BH-30236 were reported in nine of 48 participants (18.8%), comprising five of 30 (16.7%) in monotherapy and four of 18 (22.2%) in combination therapy. These related SAEs were infrequent and generally consistent with the emerging safety results described in Figure 39, including diarrhea, cytopenia-associated complications such as febrile neutropenia or infection, and differentiation syndrome and related manifestations. In monotherapy, one AML participant had SAEs of Grade 3 hypotension and Grade 3 sinus tachycardia assessed by the investigator as possibly related, although we assessed these SAEs as unlikely related in the context of extensive medical history, significant comorbidities and concomitant infections. In the combination therapy arm, one AML participant experienced SAE of Grade 3 fatigue assessed as possibly related to both BH-30236 and venetoclax in the setting of a concurrent SAE of Grade 2 bacteremia assessed as unlikely related to BH-30236 and related to venetoclax.
Preliminary clinical activity
A preliminary assessment of anti-leukemic activity was performed as of the May 20, 2026 data cut. In the Phase 1 monotherapy dose escalation, marrow blast count reductions of 50% or greater were observed in six (6) of 21 participants (28.6%) with post-baseline bone marrow assessment (Figure 40), including one participant with HR-MDS treated at 60 mg once daily who achieved a sustained blast count reduction with treatment ongoing for more than a year (Cycle 13+). In total, two (2) of six (6) patients with pretreated HR-MDS treated with BH-30236 monotherapy experienced complete response (33%): one patient achieved a CR after the first cycle of treatment,
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and a second patient achieved a measurable residual disease (MRD) negative complete remission with limited count recovery (CRL) and discontinued treatment to undergo allogeneic stem cell transplant (HSCT).
Figure 40. BH-30236 monotherapy anti-leukemic activity for evaluable participants at all dose levels. CR: complete remission; CRL: complete remission with limited hematologic recovery.
Figure 41. Case examples of individual patient outcomes for three patients treated with BH-30236 monotherapy. NR: non-response; CR: complete response; CRL: complete remission with limited hematologic recovery; MRD: minimal residual disease; HSCT: hematopoietic stem cell transplantation.
In the Phase 1, Part 2 combination dose escalation, among 15 evaluable participants with post-baseline bone marrow assessments, marrow blast count reductions of 50% or greater were observed in 8 of 15 evaluable participants (53.3%) and overall response rate in 11 patients with R/R AML was 36% (4/11) (Figure 42). One
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participant with AML whose disease was refractory to all prior therapy, including venetoclax, achieved a measurable residual disease (MRD)-negative complete remission (CR) and subsequently proceeded to HSCT. A second participant with disease refractory to venetoclax therapy also achieved a sustained CR and is continuing therapy awaiting HSCT (Figure 43). A third patient with HR-MDS with disease progression after HMA therapy achieved a CRL and is continuing on treatment. While these results are subject to change as additional participants are enrolled and follow-up matures, we believe these early findings in a heavily venetoclax-pretreated population are consistent with the preclinical mechanistic evidence and provide initial clinical support for BH-30236-mediated venetoclax sensitization.
Venetoclax Combo: Anti-leukemic Activity Observed in Ven Pre-treated Patients Across Dose Levels
Figure 42. BH-30236 plus venetoclax combination anti-leukemic activity in patients with prior venetoclax exposure. PR: partial response; CR: complete remission; CRL: complete remission with limited hematologic recovery; MLFS: morphologic leukemia-free state; #: venetoclax naive.
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Figure 43. Individual patient outcomes for three patients treated with BH-30236 plus venetoclax combination. NR: non-response; CR: complete remission; CRL: complete remission with limited hematologic recovery; MRD: minimal residual disease; HSCT: hematopoietic stem cell transplantation.
Development plan
Our development strategy for BH-30236 is organized around investigating monotherapy in HR-MDS and potential venetoclax synergy in AML and HR-MDS as well as initiating investigation in additional hematologic malignancies.
| • | Development path for R/R AML and HR-MDS. Our near-term priority is to complete monotherapy and combination dose escalation, select the dose levels for expansion, and advance BH-30236 monotherapy and combination with venetoclax into Phase 1b dose expansion cohorts. We anticipate that ORR and biomarker data from the Phase 1b expansion would support discussions with the FDA regarding further development paths in R/R AML and HR-MDS, including the RP2D, trial design and primary endpoints. |
| • | Hematologic malignancies beyond AML and HR-MDS. We believe the preclinical data demonstrate the potential for BH-30236 activity across a range of hematologic malignancy and solid tumor models. We plan to submit a protocol amendment, pursuant to which we plan to evaluate BH-30236 in additional myeloid malignancies such as myeloproliferative neoplasms (MPN). Pending proof-of-concept, we would plan to further develop BH-30236 in hematologic malignancies and/or solid tumor cohorts based on emerging clinical and translational data. |
BH-501284: pan-KRAS inhibitor
BH-501284 is an investigational, orally bioavailable pan-KRAS inhibitor, which utilizes a novel Switch-II chemical scaffold in an effort to achieve prolonged, potent and selective inhibition of KRAS mutations, sparing HRAS and NRAS. We believe this molecule, which uses a non-covalent scaffold, is unique in achieving tight and durable binding, a feature described as “pseudo-irreversible” binding. In preclinical studies, BH-501284 has demonstrated high potency across KRAS-mutant cell lines, prolonged target binding exceeding 54 hours, and consistent deep responses in mouse tumor CDX models at low and clinically relevant doses. We are currently conducting IND-enabling studies of BH-501284 and plan to submit an IND in the first quarter of 2027.
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Background and unmet need
KRAS mutations are the most frequent oncogenic driver alterations in human cancer, present in approximately 25% of all malignancies—with particularly high prevalence in pancreatic ductal adenocarcinoma (PDAC) (approximately 90%), CRC (approximately 40%), and NSCLC (approximately 30%)—and the most common alterations occur at codon 12, including G12C, G12D, G12V, G12S and G12A. Though we believe the approval of covalent KRAS G12C inhibitors validated the allosteric Switch-II pocket as a tractable site for small molecule intervention, these agents address only a single mutant allele and leave patients harboring G12D, G12V, G12S, G12A and other KRAS alterations without an approved targeted therapy. While tricomplex pan-RAS inhibitors have recently demonstrated meaningful clinical activity, the parallel inhibition of HRAS and NRAS in addition to KRAS can result in a narrow therapeutic window limiting efficacy. While there is hope that non-covalent Switch-II pocket inhibitors could offer a better therapeutic window, the inhibitors under investigation, evolving as a class from MRTX1133 (a molecule no longer in development), have generally required a higher molecular weight to achieve potency leading to suboptimal oral bioavailability (Figure 44). The recent progress in KRAS inhibitor development is fundamentally motivating, but there remains a significant need for a fresh approach—a new chemical scaffold which can allow potent and durable pan-KRAS inhibition in an oral targeted therapy with a favorable therapeutic window.
Figure 44. Representative examples of KRAS inhibitors that share structural similarities with the MRTX1133 scaffold.
Many non-covalent KRAS inhibitors in the clinic have iterated on the MRTX1133 chemical scaffold, potentially inheriting ADME/PK and/or potency liabilities.
Our solution: BH-501284
BH-501284 is designed as a pseudo-irreversible, HRAS and NRAS sparing, orally bioavailable pan-KRAS inhibitor targeting the allosteric Switch-II pocket using a novel chemical scaffold which has demonstrated favorable cell potency against KRAS G12V/D/C and other KRAS mutations and good preclinical oral bioavailability and tolerability in multiple species.
Design rationale
BH-501284 was designed as a non-covalent inhibitor to have the prolonged blocking of KRAS signaling, equivalent to covalent inhibitors, bolstered by prolonged residence time and high binding affinity for mutant
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KRAS proteins. The novel chemical scaffold was designed to target Switch-II and induce KRAS conformational change. As with our other programs, this molecule was designed after a detailed review of contemporary KRAS inhibitors, and represents years of iterative, creative chemical evolution to achieve differentiated properties. A key feature of the new chemical scaffold is the strong IP position of this molecule, made possible through its differentiated design.
Pan-KRAS Switch-II inhibition with pseudo-irreversible binding
The allosteric pocket near the Switch-II loop, known as the Switch-II pocket, is an inducible pocket that was first discovered by developers of covalent KRAS G12C inhibitors. The allosteric Switch-II pocket exists in both KRAS GTP (on) or GDP (off) states. The allosteric Switch-II inhibitors induce GTP-bound KRAS and GDP-bound KRAS into a similar conformation that is more rigid and no longer flexible enough for interaction with different effectors, leading to blocking downstream signaling (Figure 45).
Figure 45. Molecular surface model of KRAS protein Switch II pocket and GDP/GTP allosteric site (left) and molecular ribbon model of MRTX1133 within the KRAS G12D Switch-II binding pocket in the “On” and “Off” state (right).
Our approach was to design a novel Switch-II inhibitor scaffold strongly inducing KRAS conformational change that leads to high binding affinity and a long residence time, a binding mode we refer to as pseudo-irreversible, to effectively block KRAS interactions with effectors, resulting in our product candidate BH-501284. Modeling of BH-501284 demonstrated deep binding in the Switch-II pocket enabling the prolonged pseudo-irreversible binding (Figure 46).
Figure 46. Molecular surface of BH-501284 modeled within the KRAS G12D Switch-II binding pocket.
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Preclinical studies and data
Pan-KRAS cellular potency
In enzymatic assays, BH-501284 potently inhibited SOS1-mediated KRAS nucleotide exchange across a broad panel of codon 12 alleles, with sub-nanomolar IC50 values, and demonstrated substantially reduced activity against HRAS and NRAS. In cellular anti-ERK phosphorylation assays and 2D cell viability assays across a panel of KRAS-mutant cancer cell lines (Figure 47 and 48), BH-501284 demonstrated low nanomolar potency against the most clinically prevalent KRAS mutations, including G12V, G12C, G12D and amplified KRAS, with high selectivity for KRAS over HRAS- and NRAS mutant cell lines. Median IC50 in cell viability assays was 0.73 nM for G12V, 2.8 nM for G12D and 0.62 nM for G12C.
Figure 47. BH-501284 cellular potency across KRAS-mutant cancer cell lines. Note: Any IC50 value >300 nM, or >1000 nM was plotted as 300 nM, or 1000 nM, respectively.
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Figure 48. Median cell viability IC50 0.81 nM in 41 KRAS G12/G13 mutant cells excluding KRAS G12R.
In comparative cell proliferation studies, BH-501284 demonstrated cellular potency comparable to the pan-RAS tricomplex inhibitor daraxonrasib and greater cellular potency than the non-covalent pan-KRAS Switch-II inhibitor AMG410 (Figure 49). Whereas daraxonrasib inhibited proliferation of both KRAS-mutant and KRAS-wild-type cells as well as in HRAS and NRAS wild-type cells, BH-501284 inhibited only KRAS-mutant or KRAS-amplified cells and exhibited substantially reduced activity against HRAS- and NRAS-wild-type cells and in the normal colon epithelial cell line CCD841CoN. We believe this profile reflects BH- 501284’s selectivity for mutant and amplified KRAS, distinguishing its mechanism from that of pan-RAS tricomplex inhibitors that engage all wild-type RAS isoforms.
Figure 49. Cellular potency of BH-501284 vs. selected KRAS and pan-RAS inhibitors. Cell proliferation IC50 (nM) across KRAS-mutant, KRAS-wild-type and normal colon (CCD841CoN) cell lines. Any IC50 value greater than 300 nM or 1,000 nM was plotted as 300 nM or 1,000 nM, respectively.
Pseudo-irreversible kinetic profile
In a surface plasmon resonance (SPR) study performed at Reaction Biology, BH-501284 exhibited picomolar binding affinity to KRAS G12D in the GDP-bound state (KD <0.015 nM) and a target residence time exceeding
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54 hours in the GDP (Off) state and approximately 37.5 hours in the GTP (On) state, compared to approximately 1.4 hours and 1.2 hours, respectively, for the clinical non-covalent Switch-II inhibitor AMG410 in the same assays (Figure 50) – supporting the pseudo-irreversible binding profile of BH-501284.
Figure 50. In an SPR study, BH-501284 showed pseudo-irreversible binding characteristics with long residence time.
In a separate study evaluating the kinetics of RAS pathway modulation in the KRAS G12D-mutant GP2D cell line, BH-501284 and daraxonrasib both reduced RAS-GTP levels rapidly. BH-501284 achieved a greater maximal reduction in RAS-GTP than daraxonrasib, consistent with more complete elimination of GTP-bound RAS, which we believe may result in deeper inhibition of KRAS signaling and a more durable response (Figure 51).
Figure 51. Kinetics of RAS-GTP reduction following KRAS inhibitor treatment in the GP2D (KRAS G12D) cell line. RAS-GTP levels (% of DMSO control) over time for BH-501284 and daraxonrasib at 1 µm.
Pseudo-irreversible pharmacological effect
To evaluate the impact of the pseudo-irreversible properties on the pharmacological effect, BH-501284 was studied in a cellular washout experiment in H358 cells with KRAS G12C mutation with the covalent, irreversible KRAS G12C inhibitor, divarasib, and non-covalent, reversible pan-KRAS inhibitor AMG410 as controls (Figure 52).
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BH-501284 sustained the inhibition of phosphorylation of ERK kinase comparably to the covalent, irreversible KRAS G12C inhibitor, divarasib over 24 hours after washing out the compounds in cells, while AMG410 lost inhibition quickly.
The sustained pharmacological activity of pseudo-irreversible binding enabled BH-501284 to achieve 149% tumor growth inhibition (49% tumor regression) at 5 mg/kg twice a day (BID) dosing schedule, which was comparable with the covalent inhibitor divarasib, while the reversible AMG410 only showed 59% tumor growth inhibition at 100 mg/kg BID in the same study (Figure 52).
Figure 52. BH-501284 vs. selected covalent and non-covalent inhibitors: Cellular washout and tumor growth inhibition in H358 cells and in tumor mouse model.
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Antitumor activity in KRAS-mutant mouse tumor models
In multiple KRAS-mutant cell-derived and one patient-derived (LU2529) xenograft mouse tumor models spanning NSCLC, leiomyosarcoma and pancreatic cancer histologies—and across G12V, G12C and G12D alleles—oral administration of BH-501284 achieved dose-dependent increase of exposure at steady state, tumor growth inhibition and tumor regression at low and clinically relevant dose levels (Figure 53).
Figure 53. Steady state mouse oral PK exposures at 5, 15, and 50 mg/kg after 28-day BID dosing and in vivo activity of BH-501284 in five KRAS-mutant CDX and one PDX (LU2529) tumor models spanning NSCLC (G12C), leiomyosarcoma (G12V), and pancreatic cancer (G12V, G12D, G12C) at 5, 15, and 50 mg/kg BID or 30 mg/kg QD oral dosing. TGI = tumor growth inhibition.
In a CDX tumor model derived from the KRAS G12D-mutant PANC04.03 cell line (Figure 54), oral administration of BH-501284 at 30 mg/kg once daily induced deeper and more durable tumor regression than daraxonrasib (25 mg/kg once daily) or zoldonrasib (30 mg/kg once daily). After stopping treatment, the tumors gradually grew back for daraxonrasib and zoldonrasib groups while tumors remained minimal in the BH-501284 group. Body
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weight remained stable across all treatment arms over the course of dosing, consistent with the tolerability observed for BH-501284 in other preclinical models.
Figure 54. In vivo activity of BH-501284 in the PANC04.03 (KRAS G12D) PDAC CDX tumor model. Left: tumor volume over time for vehicle, BH-501284 (30 mg/kg QD), daraxonrasib (25 mg/kg QD) and zoldonrasib (30 mg/kg QD). Right: body weight over time.
Across in vivo efficacy studies, BH-501284 was well-tolerated, with stable body weight maintained in tumor-bearing animals, and demonstrated good oral bioavailability across species, including approximately 30% in mouse, 27% in rat, 13% in dog and 12% in Bama miniature pig.
Development plan
Based on the data from our preclinical studies, we selected BH-501284 to conduct IND-enabling studies. Subsequently, we are planning for clinical evaluation in advanced KRAS-mutant solid tumors, with an initial focus on NSCLC, pancreatic cancer and CRC.
Our discovery programs
We are also advancing multiple discovery-stage efforts focused on validated and emerging new oncology targets. In addition, we believe our drug discovery approach may also have applicability beyond oncology.
Competition
The development and commercialization of oncology therapeutics is highly competitive. Many of the companies developing therapies in our targeted indications have substantial resources, extensive oncology development experience, and greater commercial infrastructure than we do. Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize therapies that are safer, more effective, better tolerated, more convenient to administer or less expensive than ours, or if they obtain regulatory approval more rapidly than we are able to.
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BH-30643: OMNI-EGFR
The EGFR-mutant NSCLC landscape is particularly competitive, with multiple approved therapies and numerous investigational agents in active clinical development across modalities. Given our focus on small molecule development, we describe below the competitive targeted therapies and programs we are aware of that are relevant to the patient populations we are targeting.
C797S-resistant population.
There are currently no approved targeted therapies for patients with C797S-mediated resistance to osimertinib or other third-generation EGFR TKIs. The most recently approved post-osimertinib regimen—amivantamab (RYBREVANT) in combination with platinum-based chemotherapy—was approved in September 2024. Platinum-based chemotherapy remains the predominant systemic option for C797S-resistant patients.
We are aware of numerous companies targeting C797S-mediated resistance to EGFR TKIs or broader EGFR resistance mutations in early clinical development, such as Abbisko Therapeutics, Betta Pharma, Black Diamond Therapeutics, Bridge Therapeutics, Chia Tai Tianqing, Dizal Pharmaceuticals Co., Hansoh Pharma, J INTS BIO, Qilu, Voronoi and Wayshine Biopharm. Additionally, Blueprint Medicines advanced two programs targeting C797S into clinical development; both programs have been discontinued.
Classical mutation setting.
Osimertinib (TAGRISSO), marketed by AstraZeneca, is the current standard of care in the first-line setting for classical EGFR mutations. Amivantamab (RYBREVANT) in combination with lazertinib (LAZCLUZE), marketed by Johnson & Johnson, is also approved in the first-line classical mutation setting and would represent additional competition in any first-line program we may pursue. We are aware of numerous companies developing EGFR TKIs in the classical mutation setting, such as ArriVent BioPharma, Black Diamond Therapeutics, TYK Medicines and Voronoi.
Uncommon EGFR mutation setting (including atypical and exon 20 insertion).
Afatinib (GILOTRIF), marketed by Boehringer Ingelheim, is the only FDA-approved TKI specifically indicated for a subset of atypical mutations (G719X, L861Q and S768I). Amivantamab (RYBREVANT) in combination with platinum-pemetrexed chemotherapy is approved as a first-line regimen for EGFR exon 20 insertion-positive NSCLC. Mobocertinib (EXKIVITY), the first oral agent approved in this setting, was voluntarily withdrawn from the U.S. market in 2024 following its failure to demonstrate a benefit over chemotherapy. We are aware of numerous companies developing inhibitors against uncommon EGFR mutations (including atypical mutations including exon 20 insertions), such as ArriVent BioPharma, Avistone Pharma, Black Diamond Therapeutics, Cullinan Therapeutics, Dizal Pharmaceuticals Co., ORIC Pharmaceuticals, Taiho Oncology and Voronoi.
BH-30236: CLK inhibitor
The AML and HR-MDS landscapes are competitive, with multiple approved therapies and numerous investigational agents in active clinical development. We describe below the principal competitive agents and programs relevant to the patient populations we are targeting.
CLK inhibitor class.
There are currently no approved CLK inhibitors. We are aware of several companies developing CLK inhibitors, including Biosplice Therapeutics and Chordia Therapeutics.
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R/R AML and HR-MDS; venetoclax-resistant setting.
Although multiple therapies are approved for AML and HR-MDS in earlier lines of treatment or in molecularly defined subsets, there are currently no approved targeted therapies specifically indicated for patients whose disease is resistant to or has relapsed following venetoclax-based therapy. In this setting, treatment typically consists of salvage chemotherapy, hypomethylating agents (e.g., azacitidine (VIDAZA), marketed by Bristol Myers Squibb), FLT3 inhibitors for patients with FLT3-mutant disease, IDH inhibitors for patients with IDH1- or IDH2-mutant disease, or supportive care. Allo-HCT may be potentially curative for a subset of patients, but is available only to a minority given the age, fitness, comorbidities, donor availability and disease-control requirements of the affected population.
We are aware of several approved agents that may compete for patients in R/R AML including gilteritinib (XOSPATA), marketed by Astellas Pharma, for FLT3-mutant AML; ivosidenib (TIBSOVO), marketed by Servier, for IDH1-mutant AML; enasidenib (IDHIFA), marketed by Bristol Myers Squibb, for IDH2-mutant AML; and menin inhibitors in molecularly defined subsets, including ziftomenib (KOMZIFTI), marketed by Kura Oncology, for NPM1-mutant AML, and revumenib (REVUFORJ), marketed by Syndax Pharmaceuticals, for NPM1-mutant AML and acute leukemia with a KMT2A translocation. In HR-MDS, approved therapies include hypomethylating agents and other agents used in selected settings, but there remains no approved targeted therapy specifically indicated for the broader population following hypomethylating agent failure or venetoclax-based treatment failure.
Combination setting and broader competition.
A key component of our development strategy for BH-30236 is combination therapy with venetoclax. As a result, we expect competition not only from monotherapy approaches in R/R AML and HR-MDS, but also from investigational combination regimens intended to improve upon or restore sensitivity to venetoclax-based treatment, including BCL-2 pathway-directed regimens, FLT3-directed therapies, menin inhibitors, TP53-associated approaches and other targeted therapies intended to address leukemic survival and resistance mechanisms. Although these programs may not directly inhibit CLK, they may compete for the same patients, clinical trial sites, investigators and future treatment settings.
BH-501284: pan-KRAS
The KRAS inhibition landscape is competitive, with multiple approved therapies and numerous investigational agents in active clinical development. We describe below the principal competitive agents and programs relevant to the patient populations we are targeting, including agents targeting a subset of mutations.
KRAS G12C / G12D inhibitors.
There are two approved KRAS G12C inhibitors – sotorasib (LUMAKRAS), marketed by Amgen, and adagrasib (KRAZATI), marketed by Bristol-Myers Squibb. We are aware of numerous companies developing inhibitors targeting a single mutant allele, such as KRAS G12C and KRAS G12D, such as Astellas, D3 Bio, Eli Lilly, Frontier Medicines, Genfleet, Hansoh Pharma Quanta, Revolution Medicines and Roche.
Pan-RAS tricomplex inhibitors.
There are currently no approved pan-RAS inhibitors. We are aware of numerous companies developing pan-RAS tricomplex inhibitors, such as Adlai Nortye, Betta Pharmaceuticals, Erasca, Revolution Medicines and Roche. To our knowledge, Revolution Medicines is the most advanced in development and recently reported positive pivotal Phase 3 results for daraxonrasib in previously treated metastatic pancreatic cancer, which could become the first pan-RAS inhibitor approved in that indication.
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Pan-KRAS (non-covalent Switch-II pocket inhibitors and degraders).
We are aware of numerous companies developing pan-KRAS non-covalent Switch-II pocket inhibitors and/or degraders, such as Amgen, Astellas, AstraZeneca, BeOne, Boehringer Ingelheim, BridgeBio Oncology Therapeutics, Erasca, Eli Lilly, PAQ Therapeutics, Pfizer and Roche.
Intellectual property
Our commercial success depends in part on our ability (i) to obtain and maintain patent and other proprietary and intellectual property protection for our technology, inventions and improvements; (ii) to protect and preserve the confidentiality of our trade secrets and know-how; (iii) to defend and enforce our intellectual property rights, including patents we own, patents we may own in the future, and patents for which we may acquire a license in the future; and (iv) to operate without infringing the valid and enforceable patents and other proprietary rights of third parties. We own provisional applications and non-provisional patent applications (including PCT applications) directed to our discovery programs and product candidates, including methods for use. Currently, our intellectual property portfolio is wholly owned by us—we do not hold any in-licenses, we do not have government-funded intellectual property, and we are not party to any joint ownership arrangements. As of June 1, 2026, our wholly owned patent estate contains 29 patent families, including 10 pending U.S. non-provisional patent applications, 13 pending U.S. provisional patent applications, 11 pending PCT applications, 265 pending patent applications in various jurisdictions outside of the United States, one (1) issued composition of matter patent in Taiwan encompassing BH-30236 and having an expected natural expiry date of December 16, 2041, and three (3) total issued patents in China, Japan, and Taiwan that do not encompass a product candidate and having an expected natural expiry date in July 2041, as further described below. The pending patent applications for our lead product candidates, BH-30643, BH-30236 and BH-501284, if granted, are currently expected to expire between 2041 and 2047 for composition of matter claims, absent any patent term adjustment, extension or terminal disclaimers, and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees, but we cannot guarantee that any such patents will issue as expected or that such expiry estimates will remain accurate.
We strive to protect our proprietary position in our technology, inventions, improvements and product candidates that are important to the development and implementation of our business by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States. We also rely, in part, on trade secrets and know-how relating to our proprietary technology and product candidates and continuing innovation to develop, strengthen and maintain our proprietary position in the field of precision oncology. Our future plans also include reliance on data exclusivity, market exclusivity, patent term adjustments in the United States, and patent term extensions when and where available.
The patent rights of biotechnology and pharmaceutical companies like ours are generally uncertain and can involve complex legal, scientific and factual issues. In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted and even challenged after issuance. As a result, we cannot guarantee that any of our product candidates will be protectable or remain protected by enforceable patents that we own or in-license now or in the future. Our pending and future patent applications may not result in the issuance of any patent in any particular jurisdiction, and the claims of any current or future issued patents may not provide sufficient protection from competitors. Moreover, any patent we may own may be challenged, circumvented or invalidated by third parties. Notwithstanding the scope of the patent protection available to us, a competitor could develop competitive technologies and products that are not covered by our patents, and we may be unable to stop such competitor from commercializing such technologies and products. For a more comprehensive description of risks related to our intellectual property, see “Risk factors—Risks related to our intellectual property.”
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We have filed patent applications directed generally to compositions of matter, solid forms, pharmaceutical formulations and therapeutic methods of use related to our EGFR, CLK and KRAS programs, as summarized below.
BH-30643
With regard to BH-30643, as of June 1, 2026, we own six (6) pending U.S. patent applications (including three (3) provisional patent applications) and 100 pending foreign non-provisional patent applications in Europe, Asia, South America, North America, Africa, and Australia relating to BH-30643 as a composition of matter, to solid forms of BH-30643, to related EGFR inhibitory compounds, and methods of use of such compounds and solid forms. Any U.S. and foreign patents with claims encompassing BH-30643, its solid forms, or its use that may issue based on these applications and are not found to be invalid or unenforceable during their patent term or are not abandoned for any other reason, are expected to expire as early as December 2041 and as late as January 2047, exclusive of possible patent term adjustments, extensions or terminal disclaimers, and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. We intend to timely file the related non-provisional applications claiming priority to any pending provisional patent applications related to BH-30643; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage. We also intend to file new provisional applications related to BH-30643 to capture any future new inventions; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage.
BH-30236
With regard to BH-30236, as of June 1, 2026, we own one (1) granted composition of matter patent in Taiwan, seven (7) pending U.S. patent applications (including four (4) provisional patent applications) and 104 pending foreign non-provisional patent applications in Europe, Asia, South America, North America, Africa, and Australia relating to BH-30236 as a composition of matter, to solid forms of BH-30236, to related CLK inhibitory compounds and methods of use of such compounds and solid forms. Any U.S. and foreign patents with claims encompassing BH-30236, its solid forms, or its use that may issue based on these applications and are not found to be invalid or unenforceable during their patent term or are not abandoned for any other reason, are expected to expire as early as December 2041 and as late as January 2047, exclusive of possible patent term adjustments, extensions or terminal disclaimers, and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. We intend to timely file the related non-provisional applications claiming priority to any pending provisional patent applications related to BH-30236; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage. We also intend to file new provisional applications related to BH-30236 to capture any future new inventions; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage.
BH-501284
With regard to BH-501284, as of June 1, 2026, we own six (6) pending U.S. provisional patent applications and nine (9) pending foreign non-provisional patent applications in Asia, South America, and North America relating to BH-501284 as a composition of matter, to solid forms thereof, and to related methods of use of such compounds and solid forms. Any U.S. and foreign patents with claims encompassing our lead and backup KRAS compounds that may issue based on these applications are not found to be invalid or unenforceable during their patent term or are not abandoned for any other reason are expected to expire as early as July 2045 or as late as January 2047, exclusive of possible patent term adjustments, extensions or terminal disclaimers, and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees. Any provisional patent applications
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describing KRAS inhibitory compounds are not eligible to become an issued patent unless and until we file a non-provisional patent application within 12 months of the provisional filing date. We intend to timely file the related non-provisional applications; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage. We also intend to file new provisional applications related to BH-501284 to capture any future new inventions; however, we cannot predict whether any such application will result in the issuance of patents that provide us with any competitive advantage.
Other programs
We also own pending patent applications directed to our other preclinical programs. We intend to continue to file patent applications related to these programs as they advance.
Individual patents have terms of 20 years from the earliest effective filing date of a non-provisional patent application or PCT application to which priority is claimed, subject to the payment of applicable maintenance, renewal, annuity and other governmental fees. In addition, patent term adjustments may be available to compensate for USPTO examination delays, and patent term extensions of up to five years may be available under the Hatch-Waxman Act as compensation for time spent in FDA regulatory review process, subject to applicable statutory and regulatory requirements and a cap of 14 years of patent protection remaining from the date of product approval by the FDA. Similar provisions are available in Europe and certain other foreign jurisdictions to extend the term of patents that cover an approved drug. When available, we intend to apply for patent term extensions for any approved product candidates, including BH-30643 and BH-30236, if and when approved, and to seek similar extensions in applicable foreign jurisdictions, although there is no guarantee such extensions will be granted or, if granted, will be of the requested length.
In addition to patent protection, we rely on trade secrets, know-how and continuing technological innovation to develop and maintain our proprietary position, including aspects of our synthetic chemistry processes. We seek to protect our proprietary information by entering into non-disclosure, confidentiality, non-competition and invention assignment agreements with our employees, consultants, scientific advisors and contractors, although these agreements may be breached and may not provide adequate protection.
We also pursue trademark protection for our company name, brand and product designations, including our OMNI-EGFR™ platform. As of June 1, 2026, we own two registered trademarks and one allowed trademark application in the United States, including the registered trademarks for our company name and logo, and the allowed trademark application for OMNI-EGFR™ in the United States.
For more information regarding the risks related to our intellectual property, see “Risk factors—Risks related to our intellectual property.”
Commercialization
None of our product candidates have been approved for sale. If and when our product candidates receive marketing approval, we intend to commercialize them on our own, or jointly with a partner, in the United States and potentially in other geographies. We plan to continually evaluate the economics of commercializing our product candidates versus other strategic commercialization arrangements.
Manufacturing
We do not own or operate manufacturing facilities for the production of our product candidates and currently have no immediate plans to build our own clinical or commercial scale manufacturing capabilities. We currently engage with third-party manufacturers in other geographies for the manufacture of our product candidates. We rely on and expect to continue to engage third-party manufacturers for the production of both drug substance
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and finished drug product. We currently obtain our supplies from these manufacturers on a purchase order basis and do not have long-term supply arrangements in place. Should any of these manufacturers become unavailable to us for any reason, we believe that there are a number of potential replacements. We believe our current manufacturers have the scale, systems, and experience to supply our currently planned clinical trials.
Government regulation
Government authorities in the United States, at the federal, state and local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing and export and import of human drug products. We, along with any third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory authorities of the countries in which we wish to conduct studies or seek approval of our product candidates. The process of obtaining regulatory approvals and ensuring compliance with applicable federal, state, local and foreign statutes, regulations and requirements both during development and post-approval requires the expenditure of substantial time and financial resources.
U.S. drug development process
In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations. A new drug must be approved by the FDA through the New Drug Application (NDA) process before it may be legally marketed in the United States. Failure to comply with the applicable U.S. requirements at any time during the product development or approval process, or after approval, may subject an applicant to administrative or judicial sanctions brought by the FDA and the U.S. Department of Justice (DOJ), or other governmental entities. The process required by the FDA before a drug may be marketed in the United States generally involves the following:
| • | completion of preclinical laboratory tests, including animal studies and formulation studies, certain of which must be completed in accordance with FDA’s good laboratory practice (GLP) regulations, and other applicable requirements; |
| • | submission to the FDA of an IND, which must become effective before human clinical trials may begin; |
| • | approval by an Institutional Review Board (IRB) or ethics committee before each clinical trial may be initiated; |
| • | performance of adequate and well-controlled human clinical trials in accordance with good clinical practices (GCPs) requirements to evaluate the safety and efficacy of the proposed drug for its intended use; |
| • | preparation of and submission to the FDA of an NDA; |
| • | a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; |
| • | satisfactory completion of an FDA advisory committee review, if applicable; |
| • | satisfactory completion of FDA inspections of the manufacturing facility or facilities at which the drug is produced to assess readiness for commercial manufacturing and conformance to the manufacturing-related elements of the application, to conduct a data integrity audit, and 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; |
| • | satisfactory completion of potential inspections of selected clinical investigation sites to assess compliance with GCPs; and |
| • | FDA review and approval of the NDA. |
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Preclinical studies and IND application
Once a product candidate is identified for development, it enters the preclinical development stage. The preclinical development stage generally involves laboratory evaluations of chemistry, formulation, and stability, as well as studies to evaluate the product candidate’s toxicity, in an effort to support subsequent clinical testing.
Prior to beginning the first clinical trial with a product candidate in the United States, the product’s developer, also referred to as the IND sponsor, must submit the results of preclinical testing, together with manufacturing information and analytical data, to the FDA as part of an IND. An IND is a request for allowance from the FDA to administer an investigational drug product to humans, and must become effective before human clinical trials may begin. In addition to including the results of these nonclinical studies, the IND will also include a general investigational plan and a study protocol, detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the trial protocol includes an efficacy evaluation. The IND may also include any available human data or literature to support the use of the product candidate. Additional nonclinical testing may continue even after the IND is submitted.
The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the IND on a full or partial clinical hold. In such case, the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin or begin as proposed. Submission of an IND therefore may or may not result in FDA allowance to begin a clinical trial. Clinical holds also may be imposed by the FDA at any time after initiation of clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and in such case, the applicable trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted. A clinical hold may affect one or more specific studies or all studies conducted under an active IND.
Human clinical trials in support of an NDA
All clinical trials must be conducted under the supervision of one or more qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCPs, which include, among other things, the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials must be conducted under protocols detailing, among other things, the objectives of the trial, dosing procedures, research subject selection and exclusion criteria and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and a separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent material amendments to a protocol. While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA. Sponsors also must submit written IND safety reports to the FDA and investigators in a timely manner for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.
Furthermore, an IRB must review and approve the protocol before a clinical trial commences and must also approve the information regarding the trial and the consent form that must be signed by each research subject or the research subject’s legal representative, monitor the study until completed, and otherwise comply with IRB regulations. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. In addition, some clinical trials also include oversight by an
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independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. Depending on its charter, this group may determine whether a trial may move forward at designated check points based on access to certain data from the trial.
Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:
| • | Phase 1: The product candidate is initially introduced into healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, excretion, distribution and elimination, and, if possible, to gain an early indication of its effectiveness. |
| • | Phase 2: The product candidate is administered to a limited patient population with a specified disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases, and to determine dosage tolerance and optimal dosage. |
| • | Phase 3: The product candidate is administered to an expanded patient population to further evaluate dosage, to provide substantial evidence of efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide an adequate basis for product labeling. |
In some cases, the FDA may require, or sponsors may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product within the intended indication. These post-marketing clinical trials, sometimes referred to as “Phase 4” studies, may be used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.
During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice and for the sponsor and the FDA to reach alignment on the next phase of development.
Concurrent with clinical trials, sponsors usually complete additional nonclinical studies and must also develop additional information about the chemical and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the finished drug product. In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life.
Disclosure of clinical trial information
Sponsors of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trial information on a public registry maintained by the U.S. National Institutes of Health (NIH). In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. Although sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed, in some cases for up to two years after the date of completion of the trial. Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.
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U.S. review and approval process
Assuming successful completion of the required clinical testing, the results of nonclinical studies and clinical trials, along with detailed descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial user fee, unless a waiver or exemption applies. An annual program fee is also assessed on sponsors of approved prescription drug products. FDA adjusts these user fees on an annual basis.
The FDA conducts a preliminary review of a submitted NDA within the first 60 days after submission, before accepting the application for filing, to determine whether it is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once filed, the FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether it is being manufactured in accordance with cGMP requirements to assure and preserve the product’s identity, strength, quality and purity. Under the Prescription Drug User Fee Act (PDUFA), guidelines that are currently in effect, the FDA has a goal of ten months from the filing date to complete its review of a standard application for a drug that is a new molecular entity, and six months from the filing date for an NDA that has been granted priority review. The FDA does not always meet its PDUFA goal dates and the review process may be extended for a three-month period by FDA to respond to new information deemed a “major amendment” to the application.
The FDA also may require the development of a risk evaluation and mitigation strategy (REMS) if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the product. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve the NDA without an approved REMS, if required. A REMS can include medication guides, physician communication plans and/or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making product approval and risk mitigation decisions.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to ensure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to ensure that the clinical trials were conducted in compliance with GCP regulations and to assure the integrity of the clinical data submitted to the FDA.
After the FDA completes its evaluation of the NDA and any required inspections or advisory committee consultations, the FDA will issue either an approval letter or a Complete Response Letter (CRL), to the NDA applicant. An approval letter authorizes commercial marketing of the drug for specific indications for use. A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A CRL usually describes the specific deficiencies in the NDA identified by the FDA. Such deficiencies may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials or other significant and time-consuming requirements related to nonclinical studies or manufacturing. If a CRL is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies
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that the FDA has identified in the letter, or withdraw the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter to the applicant. The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months from the date of receipt depending on the type of information included. Even if such additional data and information are submitted, however, the FDA may ultimately decide that the resubmitted NDA does not satisfy the regulatory criteria for approval.
If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct Phase 4 or other post-market trials to further assess a drug’s safety and effectiveness after NDA approval, and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval, including the requirement for a REMS, to assure the safe use of the drug. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.
In addition, the Pediatric Research Equity Act (PREA), requires a sponsor to conduct pediatric clinical trials for most drugs; specifically, in relation to applications for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. Sponsors must also submit Pediatric Study Plans (PSPs), to the agency for review within sixty days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 clinical trial. The initial PSP must include an outline of the pediatric trial or trials that the sponsor plans to conduct, including trial objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric trials along with supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials or other clinical development programs.
The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless a waiver or deferral has been granted. The FDA may defer, on its own initiative or upon the sponsor’s request, submission of the pediatric assessments for some or all pediatric subpopulations until a specified date after approval. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin. The FDA must send a PREA non-compliance letter to any sponsor that fails to submit the required assessment, fails to keep a deferral current or fails to submit a request for approval of a pediatric formulation. The agency publicly posts such PREA non-compliance letters and sponsor’s response.
Orphan drug designation
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat patients with a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting an NDA. After the FDA grants Orphan Drug
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Designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The Orphan Drug Designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.
If a product that has Orphan Drug Designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same approved use or indication within such rare disease or condition for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity within the relevant indication or use, or if the holder of the orphan drug exclusivity cannot assure the availability of sufficient quantities of the orphan drug to meet the needs relating to the approved indication or use of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for any indication or use, or the same drug or biologic for a different indication or use. Among the other benefits of Orphan Drug Designation are tax credits for certain research and a waiver of the NDA application user fee.
Fast track, breakthrough therapy, and priority review designations
The FDA offers a number of programs intended to expedite the development or review of a marketing application for an investigational drug. For example, the Fast Track designation program is intended to expedite or facilitate the process for developing and reviewing product candidates that are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during development and, once an NDA is submitted, the application may be eligible for priority review. An NDA for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA.
A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review. A product candidate can receive Breakthrough Therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the Fast Track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.
In addition, an NDA may be eligible for priority review if the product candidate is designated to treat a serious condition, and if approved, would provide a significant improvement in safety or efficacy compared to available therapies for such disease or condition. The FDA will attempt to direct additional resources to the evaluation of an NDA designated for priority review in an effort to facilitate the review. For new-molecular-entity NDAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date, as compared to ten months for standard review of new-molecular-entity NDAs under its current PDUFA review goals.
Fast Track designation, Breakthrough Therapy designation, and priority review do not change the standards for approval, but they may expedite the development or approval process. Even if a product candidate qualifies for
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one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
Accelerated approval pathway
Additionally, product candidates studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions and that provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval. Such products may be approved on the basis of adequate and well-controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on an intermediate clinical endpoint that can be measured earlier than irreversible morbidity or mortality (IMM), that is reasonably likely to predict an effect on IMM or other clinical benefits, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA will generally require the sponsor of a drug receiving accelerated approval to perform adequate and well-controlled confirmatory clinical trials to verify and describe the drug’s clinical benefit, and may require that such confirmatory trials be underway prior to granting accelerated approval. Sponsors are also required to send updates to the FDA every 180 days on the status of such studies, including progress toward enrollment targets and other milestones.
NDA sponsors must conduct such post-approval confirmatory studies in a diligent manner, and as a result a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements.
Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the required confirmatory studies in a timely manner or if such studies fail to verify the predicted clinical benefit. In addition, all promotional materials for product candidates being considered and approved under the accelerated approval pathway are subject to prior review by the FDA, which could adversely impact the timing of the commercial launch of the product. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.
Post-approval requirements
Following approval of a new drug, the manufacturer and the approved product are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring and record-keeping, reporting of adverse experiences with the product, periodic reporting, product sampling and distribution and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Certain modifications may require the NDA sponsor to develop additional data or conduct additional nonclinical studies and clinical trials.
There also are continuing, annual program fees for any marketed products. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies to assess compliance with cGMP requirements and other laws. The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products. In addition, changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting requirements on the NDA applicant and any third-party manufacturers involved in producing the approved drug
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product. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMPs and other aspects of quality control and quality assurance. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of requirements for post-market studies or clinical trials to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS. Other potential consequences include, among other things:
| • | restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; |
| • | mandated modification of promotional materials or labeling and the issuance of corrective information; |
| • | the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; |
| • | fines, warning letters or untitled letters; |
| • | clinical holds on ongoing or planned clinical trials; |
| • | refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; |
| • | product seizure or detention, or refusal to permit the import or export of products; |
| • | consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; or |
| • | injunctions or the imposition of civil or criminal penalties. |
The FDA closely regulates the marketing, labeling, advertising and promotion of prescription drug products following approval. A company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, e.g., unapproved uses or unapproved patient populations. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Although physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested and approved by the FDA, manufacturers may not market or promote such uses. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. Manufacturers may also share truthful and not misleading information about their products that is otherwise consistent with a product’s FDA-approved labeling, which helps to support well-informed clinical decision-making by physicians and other health care professionals.
Marketing and data exclusivity
Orange book listing
In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims covering the applicant’s product or method of using the product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with
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Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an Abbreviated New Drug Application (ANDA). An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown to be bioequivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as generic equivalents to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.
The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. The ANDA applicant may also elect to submit a Section VIII statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired.
A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been received by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.
An applicant may also submit an NDA under Section 505(b)(2) of the FDCA, also referred to as a 505(b)(2) NDA, which permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference. A 505(b)(2) NDA sponsor is required to certify to the FDA regarding any patents listed in the Orange Book for the approved product it references to the same extent that an ANDA applicant would.
Exclusivity
Regulatory exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications that seek to reference an FDA-approved product. The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an ANDA, or file a 505(b)(2) NDA, for another version of such drug where the applicant does not own or have a legal right of reference to such data required for approval. However, an application may be submitted after four years if it contains a Paragraph IV certification.
The FDCA alternatively provides three years of non-patent exclusivity for an original NDA, 505(b)(2) NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, such as studies conducted for new indications, dosages or strengths of an existing drug. This three-year exclusivity period covers only the modification or change for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for
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different conditions of approval. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA that does not reference the approved application. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.
Pediatric exclusivity is another type of marketing exclusivity available in the United States. If granted, pediatric exclusivity provides for the attachment of an additional six months of marketing exclusivity to the term of any existing regulatory exclusivity or listed patent terms. Pediatric exclusivity is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application. A product may be eligible for this six-month period of exclusivity if the NDA sponsor voluntarily conducts clinical trials in pediatric studies and submits information requested in writing by the FDA, referred to as a Written Request, relating to the use of the product’s active moiety in pediatric patients. The issuance of a Written Request does not require the sponsor to undertake the described clinical trials. In addition, the clinical trial data do not need to show the product to be effective in the pediatric population studied; rather, the additional protection is granted if the pediatric clinical trial is deemed to have fairly responded to the FDA’s Written Request. Although the FDA may issue a Written Request for studies on either approved or unapproved indications, it may only do so where it determines that information relating to that use of a product candidate in a pediatric population, or part of the pediatric population, may produce health benefits in that population.
Other U.S. healthcare laws and compliance requirements
In the United States, our current and future operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services (CMS), other divisions of the U.S. Department of Health and Human Services (HHS) (e.g., the Office of Inspector General, the Office for Civil Rights), the DOJ and individual U.S. Attorney offices within the DOJ, the U.S. Federal Trade Commission, and state and local governments. For example, our business practices, including our clinical research program and any future sales, marketing and scientific/educational grant programs may be required to comply with the anti-fraud and abuse laws, the false claims laws, transparency requirements, health information privacy and security laws, and similar state laws, each as amended, as applicable.
The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Rather, if “one purpose” of the remuneration is to induce referrals, the federal Anti-Kickback Statute is violated. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, and formulary managers on the other. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.
The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to, among others, a federal healthcare
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program that the person knows or should know is for a medical or other item or service that was not provided as claimed or is false or fraudulent.
The federal false claims laws, including the False Claims Act (FCA), impose significant penalties and can be enforced by private citizens through civil qui tam actions, prohibit, any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs such as Medicare and Medicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. For instance, historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, off-label, and thus generally non-reimbursable, uses. In addition, a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA.
The Health Insurance Portability and Accountability Act (HIPAA), created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.
Additionally, the federal Physician Payments Sunshine Act (Sunshine Act), and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report information annually to CMS related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to report accurately could result in penalties. In addition, many states also govern the reporting of payments or other transfers of value, many which differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts.
Also, many states have similar, and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. In order to distribute pharmaceutical products commercially in the future, should FDA approval be granted to any of our candidates, we must comply with state laws that require the licensure or registration of manufacturers and wholesale distributors of drug products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state. Several states have enacted legislation requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
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Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor. Violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to drug manufacturers can result in significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of operations.
Coverage, pricing, and reimbursement
Our ability to commercialize any products successfully will also depend in part on the extent to which coverage and adequate reimbursement for our drug candidates, if approved, will be available from government health administration authorities, private health insurers and other organizations. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, determine which products they will cover and establish reimbursement levels. Assuming coverage is obtained for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. Therefore, coverage and adequate reimbursement for new products is critical to the acceptance of such products. Coverage decisions may depend upon clinical and economic standards that disfavor new products when more established or lower cost therapeutic alternatives are already available or subsequently become available.
Government authorities and other third-party payors are developing increasingly sophisticated methods of cost containment, such as including price controls, restrictions on coverage and reimbursement and requirements for substitution of less expensive products and procedures. For example, HHS, imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to 20 products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. Government and other third-party payors are increasingly challenging the prices charged for health care products, examining the cost effectiveness of new drugs, in addition to their safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement.
Further, no uniform policy requirement for coverage and reimbursement exists among third-party payors in the United States, which causes significant uncertainty related to the insurance coverage and reimbursement of newly approved products. Therefore, coverage and reimbursement can differ significantly from payor to payor and health care provider to health care provider. As a result, the coverage determination process is often a time-consuming and costly process that requires the provision of scientific and clinical support for the use of new products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Further, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we or our collaborators receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
There may also be significant delays in obtaining coverage and reimbursement for newly approved products, and coverage may be more limited than the purposes for which the product is approved by the FDA. Moreover, eligibility for coverage and reimbursement does not imply that a product will be paid for in all cases or at a rate
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which the health care providers who purchase those products will find cost effective. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization. Additionally, there may be pricing pressures in connection with the sale of any of our drug candidates, once approved, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes.
Coverage and reimbursement may impact the demand for, the price of, or our ability to successfully commercialize, any drug candidate for which we obtain marketing approval.
Healthcare reform in the United States and potential changes to healthcare laws
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably. By way of example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (collectively, the ACA), was signed into law, which substantially changed the way healthcare is financed by both governmental and private insurers.
There have been executive, judicial and Congressional challenges to certain aspects of the ACA. For example, on July 4, 2025, the One Big Beautiful Bill Act (the OBBBA) was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies.
Other legislative changes have been proposed and adopted in the United States since the ACA. These changes include aggregate reductions to Medicare payments to providers, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken.
The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct to consumer platform (TrumpRx), U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives; (3) imposing tariffs on imported pharmaceutical products; and (4) as part of the Make America Healthy Again (MAHA) Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager (PBM) payment methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. In June 2024, the U.S. Supreme Court’s
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Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.
At the state level, individual states in the United States have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, marketing cost disclosure, drug price reporting and other transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Some states have enacted legislation creating so-called prescription drug affordability boards with the goal of imposing price limits on certain drugs in these states, while some states are also seeking to implement general, across the board price caps for pharmaceuticals, or are seeking to regulate drug distribution. Some measures are designed to encourage importation from other countries. Some third-party payors also require prior authorization before they will cover new or innovative devices or therapies and reimburse healthcare providers that use such therapies.
Foreign government regulation
To market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products.
The approval process varies from country to country, can involve additional testing beyond that required by FDA, and may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing, promotion, and reimbursement vary greatly from country to country. Failure to comply with applicable foreign regulatory requirements, may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
The Foreign Corrupt Practices Act
The Foreign Corrupt Practices Act prohibits any U.S. individual or business, as well as their employees, representatives, and agents, from providing, paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for foreign political office for the purpose of influencing any act or decision in order to obtain or retain business or otherwise obtain an improper advantage. Under the FCPA, health care professionals and other employees of foreign hospitals, clinics, research facilities and medical schools in countries with public health care or public education systems are considered “foreign officials” under the FCPA. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls.
Additional regulation
In addition to the foregoing, state, federal, and foreign laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservation and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that we are in material
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compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.
Data privacy and security
Numerous state, federal, and foreign laws, regulations, and standards govern the collection, use, access to, confidentiality, security, and other processing of personal data and health-related data, including clinical trial data, and could apply now or in the future to our operations or the operations of our partners. For example, in the United States numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, comprehensive data privacy laws, and consumer protection laws and regulations, govern the collection, use, disclosure, protection, and other processing of personal data, including health-related data. Further, to the extent we collect personal data from individuals outside of the United States, through clinical trials or otherwise, we could be subject to foreign laws, such as China’s Personal Information Protection Act or Australia’s Privacy Act 1988 (Cth) and Australian Privacy Principles, which govern the privacy and security of personal data, including health-related data. Privacy and security laws, regulations and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on personal data processing.
Facilities
Our principal office is located in San Diego, California, where we lease approximately 46,300 square feet of office and laboratory space. This lease is expected to expire in June 2035. We believe that our facilities are adequate for our current needs and that suitable additional or substitute space would be available if needed.
Employees and human capital resources
As of March 31, 2026, we had 63 full-time employees and no part-time employees. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.
Our human capital resources objectives include identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants. We have not experienced any work stoppages as a result of labor disputes or strikes. The principal purposes of our equity and cash incentive plans are to attract, retain and reward personnel through the granting of stock-based and cash-based compensation awards, in order to increase stockholder value and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives.
Legal proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. There are currently no claims or actions pending against us, the ultimate disposition of which we believe could have a material adverse effect on our results of operations. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
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The following table sets forth certain information for our executive officers and directors as of July 1, 2026:
| Name | Age | Position(s) | ||||
| Executive officers | ||||||
| J. Jean Cui, Ph.D. |
63 | President, Chief Executive Officer, Director | ||||
| Y. Peter Li, Ph.D., MBA |
61 | Executive Chairman | ||||
| Jason Keyes, MBA |
55 | Chief Financial Officer, Executive Vice President | ||||
| Vincent Liptak, J.D., Ph.D., MBA |
55 | General Counsel, Executive Vice President | ||||
| Geoff Oxnard, M.D. |
49 | Chief Medical Officer, Executive Vice President | ||||
| Non-employee directors |
||||||
| Sundeep Agrawal, M.D.(2)(3) |
41 | Director | ||||
| Bihua Chen, MBA(1)(2) |
58 | Director | ||||
| Carl L. Gordon, Ph.D., CFA(1)(3) |
61 | Director | ||||
| Sheila Gujrathi, M.D.(2)(3) |
55 | Director | ||||
| John Schmid, MBA(1) |
63 | Director | ||||
| Timothy Stubbs, M.D.(4) |
38 | Director | ||||
|
| ||||||
| (1) | Member of the audit committee. |
| (2) | Member of the compensation committee. |
| (3) | Member of the nominating and corporate governance committee. |
| (4) | Dr. Stubbs has notified us that he intends to resign from our board of directors effective as of immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. |
Executive officers
J. Jean Cui, Ph.D. Dr. Cui is our Scientific Founder, President, Chief Executive Officer and a member of our board of directors and has served in these roles since founding our company in June 2020. Prior to BlossomHill, Dr. Cui was the scientific founder of Turning Point Therapeutics, Inc. Dr. Cui served as Turning Point’s Chief Scientific Officer and a member of its board of directors from October 2013 to June 2020. Prior to Turning Point, Dr. Cui was a Senior Principal Scientist and Associate Research Fellow at Pfizer. Prior to Pfizer, Dr. Cui served as Project Leader and Group Leader at Sugen, Inc., a Pharmacia Corporation. Dr. Cui received her B.S. and M.S. in chemistry from the University of Science and Technology of China, her Ph.D. in organic chemistry from The Ohio State University and her postdoctoral training in chemistry at Lawrence Berkeley National Laboratory and the University of California, Berkeley.
We believe that Dr. Cui is qualified to serve on our board of directors based on her distinguished scientific background, track record with drug design and FDA approvals and experience in leadership roles in the biopharmaceutical industry.
Y. Peter Li, Ph.D., MBA Dr. Li is our cofounder and Executive Chairman and has served in these roles since the founding of our company in June 2020. Before BlossomHill, Dr. Li co-founded Turning Point Therapeutics, Inc. in October 2013. Dr. Li served as Turning Point’s Chief Executive Officer and Chairman of its board of directors
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from October 2013 through October 2018, and as a member of its board of directors through April 2019. Prior to Turning Point, Dr. Li served in roles of increasing responsibility at Epitomics, Inc., an antibody technology company that was acquired by Abcam plc in March 2012, including as Executive Vice President. Dr. Li received his B.S. from the University of Science and Technology of China, his MBA from the Haas School of Business at the University of California, Berkeley, his Ph.D. in biochemistry from The Ohio State University and his postdoctoral training in molecular biology at the University of California, Berkeley.
We believe that Dr. Li is qualified to serve on our board of directors based on his business and leadership experience as an executive in the biopharmaceutical industry, including his experience co-founding and scaling biopharmaceutical companies.
Jason Keyes, MBA Mr. Keyes has served as our Executive Vice President and Chief Financial Officer since May 2025. Prior to joining BlossomHill, Mr. Keyes served as the Chief Financial Officer of Equillium, Inc. from March 2018 through April 2025. From January 2013 through February 2018, Mr. Keyes served in various roles of increasing responsibility at Orexigen Therapeutics, Inc. (Orexigen), a publicly held pharmaceutical company, serving most recently as Executive Vice President and Chief Financial Officer. From August 2007 through January 2013, Mr. Keyes served in various financial leadership roles, including as Senior Director of Finance, at Amylin Pharmaceuticals, Inc., which was acquired by Bristol-Myers Squibb in 2012. Earlier in his career, Mr. Keyes also held leadership positions in finance and corporate strategy at Amgen Inc. and at Baxter Healthcare Corporation. Since August 2024, Mr. Keyes has served on the board of directors and as chair of the audit committee of Actuate Therapeutics, Inc. From February 2020 to March 2023, Mr. Keyes also served on the board of directors and as chair of the audit committee and member of the compensation committee of Sesen Bio, Inc. Mr. Keyes received his B.S. and M.S. in civil engineering from Stanford University and his MBA from the Anderson School at the University of California, Los Angeles.
Vincent Liptak, J.D., Ph.D., MBA Dr. Liptak has served as our Executive Vice President and General Counsel since April 2023. Prior to joining BlossomHill, Dr. Liptak was a partner at Barnes & Thornburg, LLP from June 2014 to October 2023 and also served as co-chair of the firm’s Life Sciences Practice Group. Prior to Barnes & Thornburg, Dr. Liptak served as corporate counsel in the intellectual property division at Pfizer from 2009 to 2012, and as a Director of Licensing and Intellectual Property at HUYA Bioscience International LLC from 2013 to 2014. Prior to entering the legal profession, Dr. Liptak was a postdoctoral researcher in chemistry and neuroscience at the California Institute of Technology. Dr. Liptak received his B.S. in chemistry and mathematics from Loyola University Chicago, his M.S. from the University of Chicago, his MBA and J.D. from the University of San Diego and his Ph.D. from the University of Chicago.
Geoff Oxnard, M.D. Dr. Oxnard has served as our Executive Vice President and Chief Medical Officer since January 2025. Dr. Oxnard also has had a medical practice since April 2021, serving as a part-time thoracic oncologist at Boston Medical Center, a safety-net hospital in Boston. Prior to joining BlossomHill, Dr. Oxnard served as Vice President, Global Head of Thoracic Cancers at Eli Lilly & Co. from September 2023 through January 2025. From April 2021 through September 2023, Dr. Oxnard served as Senior Vice President, Head of Clinical Development at Foundation Medicine, a F. Hoffmann-La Roche AG company. Prior to joining Foundation Medicine, Dr. Oxnard spent nearly 10 years on faculty at the Dana-Farber Cancer Institute and Harvard Medical School from 2011 through 2020 where his research focused on molecular drivers of sensitivity and resistance to precision cancer therapies and the application of molecular diagnostics to advance cancer care and drug development. Dr. Oxnard received his B.A. in chemistry from Harvard University and his M.D. from the University of Chicago-Pritzker School of Medicine. He completed his residency in internal medicine at Massachusetts General Hospital and completed a fellowship in medical oncology at Memorial Sloan-Kettering Cancer Center in New York City.
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Non-employee directors
Sundeep Agrawal, M.D. Dr. Agrawal has served as a member of our board of directors since December 2023. Dr. Agrawal is the Founder and Managing Partner of Brahma Capital, a biotechnology-focused investment firm he founded in February 2019. Previously, he was a General Partner at Colt Ventures, a U.S. based investment firm, from February 2019 to November 2024. Earlier in his career, Dr. Agrawal served as a Vice President at Longitude Capital, a healthcare investment firm, from July 2017 to December 2019, and as an Executive Director in Healthcare Investment Banking at Oppenheimer & Co., from September 2010 to May 2017. He has served on the board of directors of PAVmed Inc., a publicly held medical technology company, since September 2024, and previously served on the board of directors of FoxWayne Enterprises Acquisition Corp from January 2021 to January 2023. Dr. Agrawal received his B.A. in biology from George Washington University and his M.D. from the George Washington School of Medicine. He completed his clinical training at Lenox Hill Hospital in New York.
We believe that Dr. Agrawal is qualified to serve on our board of directors based on his significant experience in investment banking and private equity, his medical and scientific background, and his extensive relationships in the biopharmaceuticals industry and broader life sciences community.
Bihua Chen, MBA Ms. Chen has served as a member of our board of directors since February 2021. Ms. Chen is the founder of Cormorant Asset Management, LP, an investment firm focused on innovative biotechnology, medical technology and life science companies, and has managed Cormorant’s hedge fund as well as its private equity funds since its founding in February 2013. Prior to founding Cormorant, from 2005 to 2010, Ms. Chen served as a sub-adviser to Millennium Management LLC, a multi-strategy hedge fund. Previously, from 2001 to 2002, Ms. Chen was a healthcare analyst and sector portfolio manager for investment advisor American Express Asset Management. Ms. Chen also served as a portfolio manager for the Asterion Life Science Fund from 2001 to 2002, an equity analyst and portfolio manager for Bellevue Research from 2000 to 2001 and an equity analyst for Putnam Investments from 1998 to 2001. Ms. Chen has served on the board of directors of Helix Acquisition Corp III, a publicly traded biotechnology special purpose acquisition company, since January 2026, and BridgeBio Oncology Therapeutics, Inc. since August 2025. Ms. Chen served on the board of directors of Biomea Fusion, Inc. from December 2020 to July 2025, Erasca, Inc. from March 2021 through August 2023, Helix Acquisition Corp II, a publicly traded biotechnology special purpose acquisition company that entered into a business combination with BridgeBio Oncology Therapeutics in August 2025, from January 2024 to August 2025, and Atea Pharmaceuticals, Inc. from June 2018 through October 2020. From August 2020 to April 2022, Ms. Chen served as the Chief Executive Officer and Chairman of the board of directors of Helix Acquisition Corp., a publicly traded biotechnology special purpose acquisition company that entered into a business combination with MoonLake Immunotherapeutics AG in April 2022. Ms. Chen received her B.S. in genetics and genetic engineering from Fudan University, Shanghai, China, her M.S. in molecular biology from the Weill Cornell Graduate School of Medical Sciences and her MBA from the Wharton School of the University of Pennsylvania.
We believe that Ms. Chen is qualified to serve on our board of directors based on her extensive experience in the biopharmaceutical industry, including as a board member of various biotechnology and pharmaceutical companies, and her experience with life sciences investments.
Carl L. Gordon, Ph.D., CFA Dr. Gordon has served as a member of our board of directors since February 2021. Dr. Gordon is a Managing Partner at OrbiMed Advisors LLC, an investment firm, where he has served since January 1998. Dr. Gordon has served on the board of directors of Compass Therapeutics Inc., a publicly held biopharmaceutical company, since September 2015, and on the board of directors of Lomond Therapeutics Holdings, Inc., a privately held biotechnology company, since August 2024, as well as several other privately held companies. He previously served on the boards of directors of Adicet Bio, Inc. from August 2015 to April 2025, ArriVent BioPharma, Inc. from December 2022 to June 2025, Gemini Therapeutics Inc., from April 2016 until December 2022 (acquired by Disc Medicine, Inc.), Keros Therapeutics, Inc. from March 2020 to March
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2026, Kinnate Biopharma Inc. from December 2019 to April 2024, MBX Biosciences, Inc. from July 2020 to June 2025, ORIC Pharmaceuticals, Inc. from November 2015 until November 2021, Terns Pharmaceuticals, Inc. from October 2018 to February 2025, and Theseus Pharmaceuticals, Inc. from June 2018 until February 2024 (acquired by Concentra Biosciences, LLC). Dr. Gordon earned a B.A. in chemistry from Harvard College, a Ph.D. in molecular biology from the Massachusetts Institute of Technology and was a Postdoctoral Fellow at the Rockefeller University.
We believe that Dr. Gordon is qualified to serve on our board of directors based on his scientific expertise, extensive business experience, and experience in venture capital and the life science industry, including as a board member of various biotechnology and pharmaceutical companies.
Sheila Gujrathi, M.D. Dr. Gujrathi has served as a member of our board of directors since May 2026. Dr. Sheila Gujrathi is a seasoned biotech entrepreneur, physician executive, translational scientist, and drug developer. She has served as founder and Chief Executive Officer of Prana Therapies since March 2023, as founder and Executive Chair of the board of directors of Lila Biologics, Inc., a privately held biopharmaceutical company, since March 2023, as founder and Executive Chair of the board of directors of Vidya Therapeutics, Inc., a privately held biotechnology company, since March 2023, as a member of the board of directors of Janux Therapeutics, Inc., a publicly held biopharmaceutical company, since March 2021, as Executive Chair of the board of directors of Ventyx Biosciences, Inc., a publicly held biopharmaceutical company, since May 2021, and as Executive Chair of the board of directors of Generian Pharmaceuticals, Inc., a privately held biotechnology company, since May 2023. Dr. Gujrathi previously served as Chair of the board of directors of ADARx Pharmaceuticals, Inc., a privately held biopharmaceutical company, from June 2020 to January 2025, as Chair of the board of directors of ImmPACT Bio USA Inc., a privately held biotechnology company, from December 2021 until its acquisition by Lyell Immunopharma, Inc. in October 2024, as a member of the board of directors of Turning Point Therapeutics, Inc. (acquired by Bristol-Myers Squibb Company in August 2022) (Turning Point), a then-publicly held biopharmaceutical company, from November 2017 to March 2021, and as Chair of the board of directors of Turning Point from April 2019 to March 2021. Dr. Gujrathi previously served as a member of the board of directors of Five Prime Therapeutics, Inc. (acquired by Amgen, Inc. in April 2021) from December 2015 to June 2019 and as a member of the board of directors of Ambrx, Inc., a then-publicly held biopharmaceutical company, from February 2014 until its acquisition by Johnson & Johnson in June 2015. Dr. Gujrathi is a Co-Founder of Gossamer Bio, Inc., a publicly held biopharmaceutical company, and served as its President and Chief Executive Officer from July 2018 to November 2020 and as its President and Chief Operating Officer from October 2015 to June 2018 and as a member of its board of directors from October 2015 to November 2020. Previously, Dr. Gujrathi was the Chief Medical Officer of Receptos, Inc., a then-publicly held biopharmaceutical company, a position she held from June 2011 until its acquisition by Celgene Corporation in August 2015. Previously, Dr. Gujrathi worked at Bristol-Myers Squibb Company, where she served as Vice President of the Global Clinical Research Group in Immunology from August 2008 to June 2011. Prior, Dr. Gujrathi worked at Genentech, Inc., where she held roles of increasing responsibility in the Immunology, Tissue Growth and Repair clinical development group from Oct 2002 to July 2008. From 1999 until 2002, Dr. Gujrathi was a management consultant at McKinsey & Company in the healthcare practice, where she provided strategic advice on a variety of projects in the healthcare and pharmaceutical industry. Dr. Gujrathi received her B.S. in biomedical engineering and M.D. from Northwestern University. Dr. Gujrathi completed her internal medicine internship and residency at Brigham and Women’s Hospital, Harvard Medical School and is board certified in internal medicine. Dr. Gujrathi received additional training at the University of California, San Francisco and Stanford University in their Allergy and Immunology Fellowship Program.
We believe that Dr. Gujrathi is qualified to serve on our board of directors based on her extensive experience as a leader in the biopharmaceutical industry, including as a board member of multiple biotechnology and biopharmaceutical companies.
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John Schmid, MBA Mr. Schmid has served as a member of our board of directors since May 2026. Mr. Schmid has served as a member of the boards of directors of AnaptysBio, Inc., a publicly held biotechnology company (AnaptysBio), since June 2015, Design Therapeutics, Inc., a publicly held biopharmaceutical company, since November 2020, Bright Peak Therapeutics, Inc., a privately held biopharmaceutical company, since March 2025, Helix Acquisition Corp III, a special purpose acquisition company (Helix Acquisition Corp III), since January 2026, and First Tracks Biotherapeutics, Inc., a publicly held biopharmaceutical company, since April 2026 and following its spin out from AnaptysBio. Mr. Schmid serves as chairman of the board of directors of Speak, Inc., a speakers bureau, which he helped found in 1989. Mr. Schmid previously served as a member of the board of directors of Xeris Pharmaceuticals, Inc. from September 2017 to June 2025, Poseida Therapeutics, Inc. from July 2018 until its acquisition by Roche in January 2025, Blacksmith Medicines (formerly known as Forge Therapeutics, Inc.) from May 2017 to April 2024, Neos Therapeutics LP from June 2015 until its acquisition by Aytu BioSciences, Inc. in March 2021, Helix Acquisition Corporation, a special purpose acquisition company, from October 2020 to April 2022 and Helix Acquisition Corporation II from February 2024 to August 2025. From September 2013 to June 2015, Mr. Schmid served as Chief Financial Officer of Auspex Pharmaceuticals, Inc. until its sale to Teva Pharmaceutical Industries Ltd in May 2015. From June 2004 to September 2013, Mr. Schmid co-founded Trius Therapeutics, Inc. where he served as Chief Financial Officer until its merger with Cubist Pharmaceuticals, Inc. in September 2013. Mr. Schmid served as Chief Financial Officer of GeneFormatics, Inc. from 1998 until its acquisition by Cengent Therapeutics in May 2003. From 1995 to 1998, Mr. Schmid served as Chief Financial Officer of Endonetics Inc. Mr. Schmid received his B.A. in economics from Wesleyan University and his MBA from the University of San Diego.
We believe that Mr. Schmid is qualified to serve on our board of directors based on his extensive financial experience, including his leadership positions at multiple biopharmaceutical companies, and his experience as a board member of various biotechnology and pharmaceutical companies.
Timothy Stubbs, M.D. Dr. Stubbs has served as a member of our board of directors since March 2024. Dr. Stubbs has served as an Executive Director at Vivo Capital LLC, a public and crossover biotech investment firm, since March 2022. Prior to Vivo, Dr. Stubbs was a Vice President at Morgan Stanley from March 2015 through March 2022. Prior to Morgan Stanley, Dr. Stubbs worked as a National Health Service physician in London, where he spent time in medical and surgical specialties, as well as the emergency room. Dr. Stubbs received his B.S. in anatomical science and MBChB from the University of Bristol, United Kingdom
We believe that Dr. Stubbs is qualified to serve on our board of directors based on his medical background and his experience with the global pharmaceutical industry, including in healthcare investment banking and private and public biotech investing.
Involvement in certain legal proceedings
None of our directors or executive officers has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years except as follows:
Mr. Keyes served in various roles of increasing responsibility at Orexigen from January 2013 to February 2018, serving most recently as Executive Vice President and Chief Financial Officer. In March 2018, Orexigen filed a voluntary petition for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware (Bankruptcy Court). In June 2018, the Bankruptcy Court entered an order (i) approving the sale of substantially all of the assets of Orexigen free and clear of all liens, encumbrances, claims, and interests, (ii) approving the assumption and assignment of designated executory contracts and unexpired leases, and (iii) granting related relief (the Sale Order). Pursuant to the Sale Order, the sale of substantially all of Orexigen’s assets closed in July 2018.
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Family relationships and other arrangements
J. Jean Cui, Ph.D., our President, Chief Executive Officer and member of our board of directors, is the spouse of Y. Peter Li, Ph.D., MBA, our Executive Chairman and Chair of our board of directors. There are no other family relationships among the directors and executive officers. Pursuant to our amended and restated voting agreement, which will terminate upon the closing of this offering, the following directors were designated as members of our board of directors:
| • | Dr. Cui, designated pursuant to her service as our Chief Executive Officer; |
| • | Dr. Li, designated by majority agreement of the then-holders of our Series Angel convertible preferred stock; |
| • | Dr. Gordon, designated by OrbiMed Private Investments VIII, LP; |
| • | Dr. Gujrathi, designated by majority agreement of the then-holders of our Series A convertible preferred stock; |
| • | Ms. Chen, designated by Cormorant Private Healthcare Fund III, LP and Cormorant Global Healthcare Master Fund, LP; |
| • | Dr. Agrawal, designated by Colt Blossom Hill, LLC; |
| • | Dr. Stubbs, designated by Vivo Innovation Fund II Holdings, L.P.; and |
| • | Mr. Schmid, designated by majority agreement of the then-holders of our common stock and preferred stock. |
Composition of our board of directors
Our business and affairs are organized under the direction of our board of directors, which currently consists of eight members. Dr. Stubbs has notified us that he intends to resign from our board of directors effective as of immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. Following Dr. Stubbs’ resignation, our board of directors will consist of seven members. Such resignation from our board of directors is an ordinary course transition in connection with our public company preparedness. There have been no disagreements between us and the resigning director on any matter relating to our operations, policies or practices. The primary responsibilities of our board of directors are to provide oversight, strategic guidance, counseling and direction to our management. Our board of directors meets on a regular basis and on an ad hoc basis as required. In accordance with the terms of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to and upon the closing of this offering, respectively, we will divide our board of directors into three classes, as follows:
| • | Class I, which will consist of Dr. Li, Dr. Gordon and Mr. Schmid, whose terms will expire at our first annual meeting of stockholders to be held following this offering; |
| • | Class II, which will consist of Dr. Cui and Dr. Agrawal, whose terms will expire at our second annual meeting of stockholders to be held following this offering; and |
| • | Class III, which will consist of Ms. Chen and Dr. Gujrathi, whose terms will expire at our third annual meeting of stockholders to be held following this offering. |
At each annual meeting of stockholders to be held after the initial classification, the successors to directors whose terms then expire will serve until the third annual meeting following their election and until their successors are duly elected and qualified. The authorized size of our board of directors is currently eight members. The authorized number of directors may be changed only by resolution of our board of directors. Any
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additional directorships resulting from an increase in the number of directors will be distributed among three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in our control or management. Our directors may be removed for cause by the affirmative vote of the holders of at least 66-2/3% of our voting stock.
Board leadership structure
Our board of directors is currently chaired by Dr. Li, who has authority, among other things, to call and preside over board of directors meetings, to set meeting agendas and to determine materials to be distributed to the board of directors. Accordingly, the Chair has substantial ability to shape the work of the board of directors. Our board of directors has also appointed Dr. Gujrathi to serve as our lead independent director. The lead independent director’s responsibilities include: facilitating communication between management, the independent directors, and the Chair; actively participating in setting agendas for meetings of our board of directors; presiding at executive sessions of the board of directors; and performing such other duties as specified by the board of directors.
In addition, we have a separate chair for each committee of our board of directors. The chair of each committee is expected to report annually to our board of directors on the activities of their committee in fulfilling their responsibilities as detailed in their respective charters or specify any shortcomings should that be the case. We believe that the separation of responsibilities as among our President and Chief Executive Officer, Executive Chairman, our lead independent director and our committee chairs provides a balanced approach to managing the board of directors and overseeing our company. Our board of directors has concluded that our current leadership structure is appropriate at this time. However, our board of directors will continue to periodically review our leadership structure and may make such changes in the future as it deems appropriate.
Role of the board in risk oversight
The audit committee of our board of directors is primarily responsible for overseeing our risk management processes on behalf of our board of directors. Going forward, we expect that the audit committee will receive reports from management periodically regarding our assessment of risks. In addition, the audit committee reports regularly to our board of directors, which also considers our risk profile. The audit committee and our board of directors focus on the most significant risks we face and our general risk management strategies. While our board of directors oversees our risk management, management is responsible for day-to-day risk management processes. Our board of directors expects management to consider risk and risk management in each business decision, to proactively develop and monitor risk management strategies and processes for day-to-day activities and to effectively implement risk management strategies adopted by the audit committee and our board of directors. We believe this division of responsibilities is the most effective approach for addressing the risks we face and that our board of directors’ leadership structure, which also emphasizes the independence of our board of directors in its oversight of its business and affairs, supports this approach.
Committees of our board of directors
Our board of directors has established or will establish an audit committee, a compensation committee and a nominating and corporate governance committee. Our board of directors may establish other committees to facilitate the management of our business. The composition and functions of each committee are described below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Our board of directors may establish other committees as it deems necessary or appropriate from time to time. Each committee has adopted or will adopt a written charter that satisfies the applicable rules and regulations of the Sarbanes-Oxley Act, the SEC and the listing standards of the Nasdaq Stock Market LLC (Nasdaq), which we will post on our website, www.bhtherapeutics.com, upon the closing of this offering. We have included our website in this prospectus solely as a textual reference. The information contained in, or accessible
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through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained in, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
Audit committee
Upon the closing of this offering, our audit committee will consist of Ms. Chen, Dr. Gordon and Mr. Schmid. Mr. Schmid will serve as the chair of our audit committee. Our board of directors has determined that each of the members of our audit committee satisfies Nasdaq and SEC independence requirements. The primary functions of this committee include, among other things:
| • | evaluating the performance, qualifications and independence of our independent auditor and determining whether to retain our existing independent auditor or engage new independent auditor; |
| • | determining and approving the engagement of our independent auditor to perform audit services and any permissible non-audit services; |
| • | monitoring the rotation of partners of our independent auditor on our engagement team as required by law; |
| • | prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of our independent auditor; |
| • | reviewing our annual and quarterly financial statements and reports, including the disclosures contained under the caption “Management’s discussion and analysis of financial condition and results of operations,” and discussing the statements and reports with our independent auditor and management; |
| • | reviewing, with our independent auditor and management, major issues that arise regarding accounting principles and financial statement presentation, including any significant changes in selection or application of accounting principles, significant regulatory or accounting initiatives or developments, as well as off-balance sheet structures, that may have a material impact on our financial statements; |
| • | reviewing, with our management, the scope, adequacy and effectiveness of our internal control over financial reporting; |
| • | reviewing with management and our independent auditor any earnings announcements and other public announcements regarding material developments; |
| • | establishing procedures for the receipt, retention and treatment of complaints received by us regarding accounting, internal accounting controls or auditing matters, as well as other matters; |
| • | preparing the audit committee report required by the rules of the SEC to be included in our annual proxy statement; |
| • | reviewing, approving or ratifying and providing oversight of any related-person transactions in accordance with our related-person transaction policy; |
| • | reviewing and monitoring compliance with programs and policies designed to ensure adherence to applicable laws and our code of business conduct and ethics; |
| • | reviewing and assessing our risk management, risk assessment and major risk exposures with respect to financial, accounting, operational, tax, privacy and cybersecurity and information technology risks; |
| • | reviewing on a periodic basis our investment policy and related-person transactions policy; and |
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| • | reviewing and evaluating, at least on an annual basis, the performance of the audit committee and the adequacy of the audit committee charter. |
Our board of directors has determined that Mr. Schmid qualifies as an “audit committee financial expert” within the meaning of SEC regulations and meets the financial sophistication requirements of the Nasdaq Listing Standards. In making this determination, our board has considered prior experience, business acumen and independence. Both our independent registered public accounting firm and management periodically meet privately with our audit committee.
We believe that the composition and functioning of our audit committee complies with all applicable requirements of the Sarbanes-Oxley Act, and all applicable SEC and rules and regulations. We intend to comply with future requirements to the extent they become applicable to us.
Compensation committee
Upon the closing of this offering, our compensation committee will consist of Dr. Agrawal, Ms. Chen, and Dr. Gujrathi. Ms. Chen will serve as the chair of our compensation committee. Our board of directors has determined that each of the members of our compensation committee is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act and satisfies the independence requirements. The primary functions of this committee include, among other things:
| • | overseeing our overall compensation practices and objectives, and assessing whether our compensation practices establish appropriate incentives in light of our specific business objectives; |
| • | reviewing and approving (or if it deems it appropriate, making recommendations to the full board of directors regarding) the compensation and other terms of employment of our executive officers; |
| • | reviewing and approving (or if it deems it appropriate, making recommendations to the full board of directors regarding) corporate goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives; |
| • | reviewing and approving (or if it deems it appropriate, making recommendations to the full board of directors regarding) the establishment or modification of our equity-based compensation plans and any other of our incentive compensation plans; |
| • | evaluating risks associated with our compensation policies and practices and assessing whether risks arising from our compensation policies and practices for our employees are reasonably likely to have a material adverse effect on us; |
| • | reviewing and discussing with management our policies and practices related to our management of human capital resources and corporate culture; |
| • | modifying and overseeing the compensation clawback or similar policies; |
| • | reviewing and making recommendations to the full board of directors regarding the form and amount of director compensation; |
| • | providing recommendations to the full board of directors on compensation-related proposals to be considered at our annual meeting of stockholders, including any applicable advisory votes on executive compensation and the frequency of such votes, incentive and other compensation plans and amendments to such plans; |
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| • | reviewing and assessing the independence of compensation consultants, legal counsel and other advisors as required by Section 10C of the Exchange Act; |
| • | administering our incentive and equity-based compensation plans; |
| • | establishing policies with respect to equity compensation arrangements; |
| • | reviewing and approving the list of companies, if any, to be included in any compensation peer group used to determine pay levels based on criteria the compensation committee deems appropriate; |
| • | reviewing and approving (or if it deems it appropriate, making recommendations to the full board of directors regarding) any employment or post-employment agreement or arrangement (including severance and change in control benefits) applicable to any of our executive officers; |
| • | reviewing with management and approving our disclosures under the caption “Compensation Discussion and Analysis” to be included in our annual proxy statement or annual report on Form 10-K, in accordance with the rules of the SEC; |
| • | preparing the compensation committee report on executive officer compensation as required by the SEC to be included in our annual proxy statement or annual report on Form 10-K filed with the SEC; |
| • | reviewing with management and making recommendations to the full board of directors regarding the plans for succession of our Chief Executive Officer and other key executives; and |
| • | reviewing and assessing on an annual basis the performance of the compensation committee and the compensation committee charter. |
We believe that the composition and functioning of our compensation committee complies with all applicable requirements of the Sarbanes-Oxley Act, and all applicable SEC and Nasdaq rules and regulations. We intend to comply with future requirements to the extent they become applicable to us.
Nominating and corporate governance committee
Upon the closing of this offering, our nominating and corporate governance committee will consist of Dr. Agrawal, Dr. Gordon, and Dr. Gujrathi. Dr. Gujrathi will serve as the chair of our nominating and corporate governance committee. Our board of directors has determined that each of the members of this committee satisfies the independence requirements. The primary functions of this committee include, among other things:
| • | identifying, reviewing, screening and evaluating candidates to serve on our board of directors consistent with criteria approved by our board of directors; |
| • | determining the minimum qualifications for service on our board of directors; |
| • | overseeing evaluations of director performance on the board and applicable committees of the board and determining whether continued service on our board is appropriate; |
| • | reviewing and making recommendations to the board of directors concerning the size, structure, composition and functioning of the board and its committees; |
| • | reviewing any stockholder proposals submitted for inclusion in our proxy statement and recommending to the full board of directors any statements by us in response, and considering stockholder nominees for election to our board of directors at our annual meeting of stockholders; |
| • | considering and assessing the independence of members of our board of directors and executive officers; |
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| • | periodically reviewing the corporate governance guidelines and recommending to our board of directors any changes to such guidelines; |
| • | overseeing our environmental, social and governance strategies, targets, policies, performance and reporting; and |
| • | reviewing and assessing on an annual basis the performance of the nominating and corporate governance committee and the nominating and corporate governance committee charter. |
We believe that the composition and functioning of our nominating and corporate governance committee complies with all applicable requirements of the Sarbanes-Oxley Act, and all applicable SEC and Nasdaq rules and regulations. We intend to comply with future requirements to the extent they become applicable to us.
Compensation committee interlocks and insider participation
None of our current or former executive officers serve as a member of the compensation committee. None of our officers serve, or have served during the last completed fiscal year, on the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or our compensation committee.
Code of business conduct and ethics
In connection with this offering, we have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or person performing similar functions. Following this offering, a current copy of the code will be available on the Corporate Governance section of our website, www.bhtherapeutics.com. We have included our website in this prospectus solely as a textual reference. The information contained in, or accessible through, our website is not incorporated by reference into this prospectus, and you should not consider any information contained in, or that can be accessed through, our website as part of this prospectus or in deciding whether to purchase our common stock.
Director independence
Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment and affiliations, our board of directors has determined that, with the exception of Dr. Cui and Dr. Li, none of our directors have relationships that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under the applicable listing standards. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our shares held by each non-employee director and the transactions described in the section titled “Certain relationships and related party transactions.”
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Executive and director compensation
Our named executive officers for the year ended December 31, 2025, consisting of our principal executive officer and the next two most highly compensated executive officers, were:
| • | J. Jean Cui, Ph.D., our President and Chief Executive Officer; |
| • | Jason Keyes, MBA, our Executive Vice President and Chief Financial Officer; and |
| • | Geoff Oxnard, M.D., our Executive Vice President and Chief Medical Officer. |
Summary compensation table for the year ended December 31, 2025
The following table presents all of the compensation awarded to, earned by or paid to our named executive officers during the year ended December 31, 2025.
| Name and principal position | Year | Salary ($) |
Bonus ($) |
Option awards ($)(1) |
Non-equity incentive plan compensation ($)(2) |
All other compensation ($)(3) |
Total ($) |
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| J. Jean Cui, Ph.D. |
2025 | 500,000 | — | — | 250,000 | 13,947 | 763,947 | |||||||||||||||||||||
| Jason Keyes, MBA(4) |
2025 | 295,890 | 40,000 | (5) | 808,211 | 118,356 | 10,500 | 1,272,957 | ||||||||||||||||||||
| Geoff Oxnard, M.D.(6) |
2025 | 450,000 | 153,000 | (5) | 850,435 | 180,000 | 14,000 | 1,647,435 | ||||||||||||||||||||
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| (1) | In accordance with SEC rules, this column reflects the aggregate grant date fair value of the stock options granted during the year ended December 31, 2025. These amounts have been computed in accordance with Financial Accounting Standards Board (FASB), Accounting Standards Codification (ASC) Topic 718. As required by SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Assumptions used in the calculation of these amounts are described in Note 2 to our financial statements included elsewhere in this prospectus. These amounts do not reflect the actual economic value that may be realized by our named executive officers upon vesting or exercise of the stock options or the sale of the common stock underlying such awards. |
| (2) | The amounts disclosed represent performance-based bonuses earned with respect to the year ended December 31, 2025, as described in the subsection below titled “—Annual bonus.” |
| (3) | The amounts disclosed represent 401(k) matching contributions. For additional information, please see the subsection titled “—401(k) plan.” |
| (4) | Mr. Keyes commenced employment as our Executive Vice President and Chief Financial Officer in May 2025. |
| (5) | The amounts disclosed represent signing bonuses received by Mr. Keyes and Dr. Oxnard upon their respective commencement of employment in 2025, as described in the subsection below titled “—Employment arrangements with our named executive officers.” |
| (6) | Dr. Oxnard commenced employment as our Executive Vice President and Chief Medical Officer in January 2025. |
Narrative to summary compensation table
Annual base salary
Our named executive officers receive base salaries to compensate them for services rendered to us. The base salary payable to each named executive officer is intended to provide a fixed component of compensation, taking into account such named executive officer’s qualifications, experience, the scope of such named executive officer’s responsibilities and competitive market compensation paid by other companies for similar
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positions within the industry and geography. Base salaries are reviewed periodically and adjusted from time to time to realign salaries with market levels after taking into account individual responsibilities, performance and experience. The 2025 annual base salary rates for our named executive officers are set forth in the table below, and the base salaries ultimately earned by our named executive officers for 2025 are reported above in the “Salary” column of the Summary Compensation Table. Mr. Keyes’ base salary was prorated to reflect the portion of the year that he was employed by us during 2025.
| Name | 2025 Base salary | |
| J. Jean Cui, Ph.D. |
$500,000 | |
| Jason Keyes, MBA |
$450,000 | |
| Geoff Oxnard, M.D. |
$450,000 | |
|
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Annual bonus
In addition to base salaries, our named executive officers are eligible to receive annual bonuses based on the achievement of certain performance criteria approved by our board of directors, including those related to research and development and clinical milestones and other corporate goals, as well as individual performance. The amount of any annual bonus is based on a quantitative assessment of the extent to which the corporate goals were achieved, with the ultimate amount paid, if any, determined by the board of directors. For the year ended December 31, 2025, annual cash bonus targets, as a percentage of base salary, were 50% for Dr. Cui, 40% for Mr. Keyes and 40% for Dr. Oxnard. Following its assessment of 2025 corporate and individual performance, the board of directors determined that each named executive officer had earned a 2025 annual bonus at 100% of target (for Mr. Keyes, prorated based on the part of the year that he served as our Executive Vice President and Chief Financial Officer). The annual bonuses ultimately earned by our named executive officers for 2025 are reported above in the “Non-equity incentive plan compensation” column of the Summary Compensation Table.
Equity-based incentive awards
Our equity-based incentive awards are designed to align the interests of our stockholders with those of our employees, including our named executive officers. The board of directors or an authorized committee thereof is responsible for approving equity grants.
Prior to this offering, we have granted stock options pursuant to our 2020 Equity Incentive Plan (2020 Plan), to certain of our executives. Following this offering, we will grant equity awards under the terms of our 2026 Equity Incentive Plan (2026 Plan). The terms of our equity plans are described below under the subsection titled “—Equity benefit plans.” Our named executive officers received the following stock option awards in the year ended December 31, 2025:
| • | On January 3, 2025, our board of directors granted an option award to Dr. Oxnard, covering 797,280 shares of our common stock. This award has an exercise price of $1.20 per share and vests over a period of four years, with 25% of the option vesting on the first anniversary of the vesting commencement date and the remaining 75% of the option vesting ratably on a monthly basis thereafter, subject to Dr. Oxnard’s continued service with us through each vesting date. |
| • | On May 15, 2025, our board of directors granted an option award to Mr. Keyes, covering 821,921 shares of our common stock. This award has an exercise price of $1.34 per share and vests over a period of four years, with 25% of the option vesting on the first anniversary of the vesting commencement date and the remaining 75% of the option vesting ratably on a monthly basis thereafter, subject to Mr. Keyes’ continued service with us through each vesting date. |
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| • | On August 24, 2025, in recognition of his contributions toward achieving certain clinical milestones, our board of directors granted an option award to Dr. Oxnard, covering 159,456 shares of our common stock. This award has an exercise price of $1.34 per share and vests over a period of four years, with 25% of the option vesting on the first anniversary of the vesting commencement date and the remaining 75% of the option vesting ratably on a monthly basis thereafter, subject to Dr. Oxnard’s continued service with us through each vesting date. |
IPO option awards
| • | In 2026, our board of directors approved the grant of the following options to purchase shares of our common stock under our 2026 Plan, effective upon the effectiveness of the registration statement of which this prospectus forms a part: (i) an option to purchase shares to Dr. Cui; (ii) an option to purchase shares to Dr. Oxnard; (iii) an option to purchase shares to Mr. Keyes; and (iv) options to purchase an aggregate of approximately million shares to employees of the Company other than the named executive officers (including an option to purchase shares to Dr. Li, our Executive Chairman and a member of our board of directors). These options will have an exercise price equal to the initial public offering price of a share of our common stock. Each such option will vest over a period of four years, with 25% of the option vesting on the first anniversary of the vesting commencement date and the remaining 75% of the option vesting ratably on a monthly basis thereafter, subject to the applicable recipient’s continuous service with us through each vesting date. |
Outstanding equity awards as of December 31, 2025
The following table presents the outstanding equity awards held by each named executive officer as of December 31, 2025.
| Option awards(1) | ||||||||||||||||||||||||
| Name | Grant date |
Vesting commencement date |
Number
of (#) |
Number
of (#) |
Option exercise price ($) |
Option expiration date |
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| Jason Keyes, MBA |
5/15/2025 | 5/5/2025 | (2) | — | 821,921 | $ | 1.34 | 5/5/2035 | ||||||||||||||||
| Geoff Oxnard, M.D. |
1/3/2025 | 1/1/2025 | (2) | — | 797,280 | $ | 1.20 | 1/2/2035 | ||||||||||||||||
| 8/24/2025 | 8/21/2025 | (2) | — | 159,456 | $ | 1.34 | 8/21/2035 | |||||||||||||||||
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| (1) | All of the option awards were granted under the 2020 Plan, the terms of which plan is described below under “—Equity benefit plans—2020 Equity incentive plan.” |
| (2) | 25% of the total shares vest on the first anniversary of the vesting commencement date and the remaining 75% of the total shares vest ratably in monthly installments over the three-year period thereafter, subject to continuous service with us through each vesting date. In addition, the shares subject to this option are subject to acceleration as set forth in our Severance Plan (as described below). For more information, please see the subsection titled “—Potential payments upon termination or change of control” below. |
Employment arrangements with our named executive officers
We have entered into an employment agreement or employment offer letter, as applicable, with each of our named executive officers. The material terms of each such agreement are described below. The employment of each of our named executive officers is “at will” and may be terminated at any time.
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J. Jean Cui, Ph.D.
Effective March 2021, we entered into an executive employment agreement with Dr. Cui in connection with her service as our President and Chief Executive Officer (Cui Agreement). Under the Cui Agreement, Dr. Cui’s initial annual base salary was set at $350,000 (which was increased to $500,000 effective January 1, 2025), subject to review and adjustment from time to time. The Cui Agreement also provides that Dr. Cui is eligible to receive an annual discretionary bonus at a target amount of 45% of her then-current base salary (increased to 50% of her then-current base salary effective beginning with her 2025 bonus opportunity), based upon our and Dr. Cui’s achievement of objectives and milestones to be determined on an annual basis by our board of directors.
On 2026, we entered into an amended and restated executive employment agreement with Dr. Cui in connection with her service as our President and Chief Executive Officer (A&R Cui Agreement), which will be effective upon the effectiveness of the registration statement of which this prospectus forms a part. Under the A&R Cui Agreement, Dr. Cui’s annual base salary is set at $660,000, subject to review and adjustment from time to time. The A&R Cui Agreement also provides that Dr. Cui is eligible to receive an annual discretionary bonus at a target amount of 55% of her then-current base salary, based upon our and Dr. Cui’s achievement of objectives and milestones to be approved by our board of directors.
In the event of certain qualifying terminations of her employment, Dr. Cui will be entitled to receive severance benefits pursuant to our Severance Plan, as described below under “—Potential payments upon termination or change of control.”
Jason Keyes, MBA
Effective May 2025, we entered into an employment offer letter with Mr. Keyes in connection with his service as our Executive Vice President and Chief Financial Officer (Keyes Agreement). Under the Keyes Agreement, Mr. Keyes’ initial annual base salary was set at $450,000, subject to review and adjustment from time to time. The Keyes Agreement also provides that Mr. Keyes is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based on the achievement of individual and corporate performance targets and metrics to be approved by our board of directors. Under the Keyes Agreement and following approval by our board of directors, in May 2025, Mr. Keyes was granted an option under our 2020 Plan to purchase 821,921 shares of our common stock, 25% of which will vest on the first anniversary of the date that Mr. Keyes commenced employment with us, with the remaining 75% vesting ratably on a monthly basis over the three-year period thereafter, subject to Mr. Keyes’ continuous service with us through each such vesting date. Under the Keyes Agreement, Mr. Keyes also received a signing bonus of $40,000, subject to repayment in the event of a termination of employment for any reason (other than an involuntary termination without cause (as defined in our Severance Plan)) prior to the first anniversary of Mr. Keyes’ start date.
On 2026, we entered into an amended and restated executive employment agreement with Mr. Keyes in connection with his service as our Executive Vice President and Chief Financial Officer (A&R Keyes Agreement), which will be effective upon the effectiveness of the registration statement of which this prospectus forms a part. Under the A&R Keyes Agreement, Mr. Keyes’ annual base salary is set at $509,000, subject to review and adjustment from time to time. The A&R Keyes Agreement also provides that Mr. Keyes is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based on the achievement of individual and corporate performance targets and metrics to be approved by our board of directors.
In the event of certain qualifying terminations of his employment, Mr. Keyes will be entitled to receive severance benefits pursuant to our Severance Plan, as described below under “—Potential payments upon termination or change of control.”
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Geoff Oxnard, M.D.
Effective January 2025, we entered into an employment offer letter with Dr. Oxnard in connection with his service as our Executive Vice President and Chief Medical Officer (Oxnard Agreement). Under the Oxnard Agreement, Dr. Oxnard’s initial annual base salary was set at $450,000, subject to review and adjustment from time to time. The Oxnard Agreement also provides that Dr. Oxnard is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based on the achievement of individual and corporate performance targets and metrics to be approved by our board of directors. Under the Oxnard Agreement and following approval by our board of directors, in January 2025 and August 2025, Dr. Oxnard was granted, under our 2020 Plan, (i) an option to purchase 797,280 shares of our common stock, 25% of which vested on the first anniversary of the date that Dr. Oxnard commenced employment with us, with the remaining 75% vesting ratably on a monthly basis over the three-year period thereafter, subject to his continuous service with us through each such vesting date, and (ii) in recognition of his contributions toward the achievement of certain clinical milestones, an option to purchase 159,456 shares of our common stock, 25% of which will vest on the first anniversary of the vesting commencement date, with the remaining 75% vesting ratably on a monthly basis over the three-year period thereafter, subject to Dr. Oxnard’s continuous service with us through each such vesting date. Under the Oxnard Agreement, Dr. Oxnard also received a signing bonus of $153,000, which was subject to repayment in the event of a termination of employment for any reason (other than an involuntary termination without cause (as defined in our Severance Plan)) prior to the first anniversary of Dr. Oxnard’s start date.
On 2026, we entered into an amended and restated executive employment agreement with Dr. Oxnard in connection with his service as our Executive Vice President and Chief Medical Officer (A&R Oxnard Agreement), which will be effective upon the effectiveness of the registration statement of which this prospectus forms a part. Under the A&R Oxnard Agreement, Dr. Oxnard’s annual base salary is set at $535,000, subject to review and adjustment from time to time. The A&R Oxnard Agreement also provides that Dr. Oxnard is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based on the achievement of individual and corporate performance targets and metrics to be approved by our board of directors.
In the event of certain qualifying terminations of his employment, Dr. Oxnard will be entitled to receive severance benefits pursuant to our Severance Plan, as described below under “—Potential payments upon termination or change of control.”
Potential payments upon termination or change of control
Upon and following this offering, each of our named executive officers will be eligible to receive severance benefits upon certain terminations of employment under the terms of our Severance Plan, which was adopted in June 2026 (Severance Plan). The Severance Plan supersedes and replaces in its entirety our prior Severance Benefit Plan, which was adopted in October 2024.
Upon a termination without Cause or resignation for Good Reason (each as defined in our Severance Plan) outside of the period beginning 3 months prior to and ending 12 months following a change in control (CIC Period), each of our named executive officers will be entitled to receive the following severance benefits: (i) a lump sum cash payment equal to a specified portion of the named executive officer’s base salary (15 months for Dr. Cui and 9 months for each of Mr. Keyes and Dr. Oxnard) and (ii) payment of COBRA premiums for the duration of the applicable severance period (15 months for Dr. Cui and 9 months for each of Mr. Keyes and Dr. Oxnard).
Upon a termination without Cause or resignation for Good Reason during the CIC Period, each of our named executive officers will be entitled to receive the following severance benefits in lieu of those described above:
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(i) a lump sum cash payment equal to a specified portion of the named executive officer’s base salary (18 months for Dr. Cui and 12 months for each of Mr. Keyes and Dr. Oxnard), (ii) a lump sum cash payment equal to a specified percentage of the named executive officer’s annual target bonus for the year in which the change in control termination occurs (150% for Dr. Cui and 100% for each of Mr. Keyes and Dr. Oxnard), (iii) payment of COBRA premiums for the duration of the applicable severance period (18 months for Dr. Cui and 12 months for each of Mr. Keyes and Dr. Oxnard), and (iv) accelerated vesting of all then-outstanding and unvested time-based equity awards held by the named executive officer.
All severance benefits under our Severance Plan are subject to the named executive officer’s execution (and non-revocation) of an effective release of claims against us.
Our named executive officers’ equity awards are further subject to the terms of our 2020 Plan and 2026 Plan, as applicable, and the applicable award agreements thereunder. A description of the termination and change in control provisions in our 2020 Plan and 2026 Plan and awards granted thereunder is provided below under “—Equity Benefit Plans,” and a description of the vesting provisions of each equity award held by our named executive officers which is outstanding and unvested as of December 31, 2025 is provided above under “—Outstanding equity awards as of December 31, 2025.”
Other compensation and benefits
All of our current named executive officers are eligible to participate in our employee benefit plans, which includes medical, dental and life insurance coverage, in each case on the same basis as all of our other employees. We pay a portion of the premiums for the medical and dental insurance, including our named executive officers. We generally do not provide perquisites or personal benefits to our named executive officers. In addition, we provide the opportunity to participate in a 401(k) plan to our employees, including each of our named executive officers, as discussed in the subsection titled “—401(k) plan” below.
401(k) plan
Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (Roth) basis, up to the statutorily prescribed annual limits on contributions under the Internal Revenue Code of 1986, as amended (Code). Contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participants’ directions. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Our board of directors may elect to adopt qualified or nonqualified benefit plans in the future, if it determines that doing so is in our best interests.
Clawback policy
In connection with this offering, we have adopted a compensation recovery policy that is compliant with the Nasdaq Listing Rules, as required by the Dodd-Frank Act, to be effective upon the consummation of this offering.
Equity benefit plans
We believe that our ability to grant equity-based awards is a valuable and necessary compensation tool that aligns the long-term financial interests of our employees, consultants and directors with the financial interests
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of our stockholders. In addition, we believe that our ability to grant stock options and other equity-based awards helps us to attract, retain and motivate employees, consultants and directors, and encourages them to devote their best efforts to our business and financial success. The principal features of our equity incentive plans are summarized below. These summaries are qualified in their entirety by reference to the actual text of the plans, which are filed as exhibits to the registration statement of which this prospectus forms a part.
2026 Equity incentive plan
Our board of directors adopted our 2026 Plan in June 2026 and our stockholders approved our 2026 Plan in . Our 2026 Plan is a successor to our 2020 Plan and will become effective on the execution of the underwriting agreement related to this offering. Once our 2026 Plan becomes effective, no further grants will be made under our 2020 Plan.
Types of awards. Our 2026 Plan provides for the grant of incentive stock options (ISOs) to employees, including employees of any parent or subsidiary, and for the grant of nonstatutory stock options (NSOs), stock appreciation rights, restricted stock awards, restricted stock unit awards, performance awards and other forms of stock awards to employees, directors, and consultants, including employees and consultants of our affiliates.
Authorized shares. Initially, the maximum number of shares of our common stock that may be issued under our 2026 Plan after it becomes effective will be shares, which is the sum of: (i) new shares, plus (ii) shares available for issuance under the 2020 Plan as of the effective date of the 2026 Plan, plus (iii) up to shares subject to outstanding awards under the 2020 Plan that, following the effective date of the 2026 Plan, are not issued because such awards expire, are settled in cash, or are forfeited, or such shares are withheld to satisfy the exercise price thereof or to satisfy tax withholding obligations. In addition, the number of shares of our common stock reserved for issuance under our 2026 Plan will automatically increase on January 1 of each calendar year, starting on January 1, 2027 (assuming the 2026 Plan becomes effective in 2026) through January 1, 2036, in an amount equal to 5.0% of the total number of shares of our capital stock (including shares issuable upon exercise, conversion, or exchange of all then-outstanding pre-funded warrants, or other rights exercisable for or convertible into, directly or indirectly, shares of common stock (whether vested or unvested), but excluding shares issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under our then-existing equity incentive plan(s) and employee stock purchase plan(s), if any) outstanding as of the last day of the calendar month before the date of each automatic increase, or a lesser number of shares determined by our board of directors. The maximum number of shares of our common stock that may be issued on the exercise of ISOs under our 2026 Plan is shares.
Shares subject to stock awards granted under our 2026 Plan that expire or terminate without being exercised in full, or that are paid out in cash rather than in shares, do not reduce the number of shares available for issuance under our 2026 Plan. Additionally, shares become available for future grant under our 2026 Plan if they were issued under stock awards under our 2026 Plan and we repurchase them or they are forfeited. This includes shares used to pay the exercise price of a stock award or to satisfy the tax withholding obligations related to a stock award.
Plan administration. Our board of directors, or a duly authorized committee of our board of directors (referred to herein as the plan administrator), will administer our 2026 Plan. Our board of directors may also delegate to one or more persons or bodies the authority to do one or more of the following (i) designate recipients (other than officers) of specified stock awards provided that no person or body may be delegated authority to grant a stock award to themselves; (ii) determine the number of shares subject to such stock award; and (iii) determine the terms of such stock awards. Under our 2026 Plan, our board of directors has the authority to determine and amend the terms of awards and underlying agreements, including recipients, the exercise, purchase or strike price of stock awards, if any, the number of shares subject to each stock award, the vesting schedule applicable
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to the awards, together with any vesting acceleration and the form of consideration, if any, payable on exercise or settlement of the award.
In addition, subject to the terms of the 2026 Plan, the administrator also has the power to modify outstanding awards under our 2026 Plan, including the authority to reprice any outstanding option or stock appreciation right, cancel and re-grant any outstanding option or stock appreciation right in exchange for new stock awards, cash or other consideration, or take any other action that is treated as a repricing under generally accepted accounting principles, with the consent of any materially adversely affected participant.
Stock options. ISOs and NSOs are granted under stock option agreements adopted by the plan administrator. The plan administrator determines the exercise price for stock options, within the terms and conditions of the 2026 Plan, provided that the exercise price of a stock option generally cannot be less than 100% of the fair market value of our common stock on the date of grant. Options granted under the 2026 Plan vest at the rate specified in the stock option agreement as determined by the plan administrator.
Tax limitations on ISOs. The aggregate fair market value, determined at the time of grant, of our common stock with respect to ISOs that are exercisable for the first time by an option holder during any calendar year under all of our stock plans may not exceed $100,000. Options or portions thereof that exceed such limit will generally be treated as NSOs. No ISO may be granted to any person who, at the time of the grant, owns or is deemed to own stock possessing more than 10% of our total combined voting power or that of any of our affiliates unless (i) the option exercise price is at least 110% of the fair market value of the stock subject to the option on the date of grant; and (ii) the option is not exercisable after the expiration of five years from the date of grant.
Restricted stock unit awards. Restricted stock units are granted under restricted stock unit award agreements adopted by the plan administrator. Restricted stock units may be granted in consideration for any form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. A restricted stock unit may be settled by cash, delivery of stock, a combination of cash and stock as deemed appropriate by the plan administrator, or in any other form of consideration set forth in the restricted stock unit agreement. Additionally, dividend equivalents may be credited in respect of shares covered by a restricted stock unit. Except as otherwise provided in the applicable award agreement, restricted stock units that have not vested will be forfeited once the participant’s continuous service ends for any reason.
Restricted stock awards. Restricted stock awards are granted under restricted stock award agreements adopted by the plan administrator. A restricted stock award may be awarded in consideration for cash, check, bank draft or money order, past services to us, or any other form of legal consideration that may be acceptable to our board of directors and permissible under applicable law. The plan administrator determines the terms and conditions of restricted stock awards, including vesting and forfeiture terms. If a participant’s service relationship with us ends for any reason, we may receive any or all of the shares of our common stock held by the participant that have not vested as of the date the participant terminates service with us through a forfeiture condition or a repurchase right.
Stock appreciation rights. Stock appreciation rights are granted under stock appreciation grant agreements adopted by the plan administrator. The plan administrator determines the purchase price or strike price for a stock appreciation right, which generally cannot be less than 100% of the fair market value of our common stock on the date of grant. A stock appreciation right granted under the 2026 Plan vests at the rate specified in the stock appreciation right agreement as determined by the plan administrator.
Performance awards. The 2026 Plan permits the grant of performance-based stock and cash awards. The plan administrator may structure awards so that the shares of our stock, cash, or other property will be issued or paid only following the achievement of certain pre-established performance goals during a designated
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performance period. The performance criteria that will be used to establish such performance goals may be based on any one of, or combination of, the following as determined by the plan administrator: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; share price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholder’s equity; capital expenditures; debt levels; operating profit or net operating profit; growth of net income or operating income; billings; financing; regulatory milestones; stockholder liquidity; corporate governance and compliance; intellectual property; personnel matters; progress of internal research; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention; number of users, including unique users; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution and sale of our products; supply chain achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals; corporate development and planning goals; and other measures of performance selected by the plan administrator.
The performance goals may be based on a company-wide basis, with respect to one or more business units, divisions, affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise (i) in the award agreement at the time the award is granted or (ii) in such other document setting forth the performance goals at the time the goals are established, we will appropriately make adjustments in the method of calculating the attainment of performance goals as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by us achieved performance objectives at targeted levels during the balance of a performance period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of our common stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under our bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, we retain the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of the goals. The performance goals may differ from participant to participant and from award to award.
Other stock awards. The plan administrator may grant other awards based in whole or in part by reference to our common stock. The plan administrator will set the number of shares under the stock award and all other terms and conditions of such awards.
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Non-employee director compensation limit. The aggregate value of all compensation granted or paid to any non-employee director with respect to any fiscal year following the year in which the underwriting agreement for this offering is executed, including stock awards granted and cash fees paid by us to such non-employee director, will not exceed $750,000 in total value, or in the event such non-employee director is first appointed or elected to the board of directors during such fiscal year, $1,000,000 in total value (in each case, calculating the value of any such stock awards based on the grant date fair value of such stock awards for financial reporting purposes).
Changes to capital structure. In the event there is a specified type of change in our capital structure, such as a stock split, reverse stock split, or recapitalization, appropriate adjustments will be made to (i) the class and maximum number of shares reserved for issuance under the 2026 Plan; (ii) the class and maximum number of shares by which the share reserve may increase automatically each year; (iii) the class and maximum number of shares that may be issued on the exercise of ISOs; and (iv) the class and number of shares and exercise price, strike price, or purchase price, if applicable, of all outstanding stock awards.
Corporate transactions. The following applies to stock awards under the 2026 Plan in the event of a corporate transaction, unless otherwise provided in a participant’s stock award agreement or other written agreement with us or one of our affiliates or unless otherwise expressly provided by the plan administrator at the time of grant.
In the event of a corporate transaction (as defined in the 2026 Plan), any stock awards outstanding under the 2026 Plan may be assumed, continued or substituted for by any surviving or acquiring corporation (or its parent company), and any reacquisition or repurchase rights held by us with respect to the stock award may be assigned to the successor (or its parent company). If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then with respect to any such stock awards that are held by participants whose continuous service has not terminated prior to the effective time of the transaction, or current participants, the vesting (and exercisability, if applicable) of such stock awards will be accelerated in full to a date prior to the effective time of the transaction (contingent upon the effectiveness of the transaction), and such stock awards will terminate if not exercised (if applicable) at or prior to the effective time of the transaction, and any reacquisition or repurchase rights held by us with respect to such stock awards will lapse (contingent upon the effectiveness of the transaction). With respect to performance awards with multiple vesting levels depending on performance level, unless otherwise provided by an award agreement or by the plan administrator, the award will accelerate at 100% of target. If the surviving or acquiring corporation (or its parent company) does not assume, continue or substitute for such stock awards, then with respect to any such stock awards that are held by persons other than current participants, such awards will terminate if not exercised (if applicable) prior to the effective time of the transaction, except that any reacquisition or repurchase rights held by us with respect to such stock awards will not terminate and may continue to be exercised notwithstanding the transaction. The plan administrator is not obligated to treat all stock awards or portions of stock awards in the same manner and is not obligated to take the same actions with respect to all participants.
In the event a stock award will terminate if not exercised prior to the effective time of a transaction, the plan administrator may provide, in its sole discretion, that the holder of such stock award may not exercise such stock award but instead will receive a payment equal in value to the excess (if any) of (i) the value of the property the participant would have received upon the exercise of the stock award over (ii) any exercise price payable by such holder in connection with such exercise.
Under our 2026 Plan, a corporate transaction is defined to include: (i) a sale of all or substantially all of our assets; (ii) the sale or disposition of more than 50% of our outstanding securities; (iii) the consummation of a merger or consolidation where we do not survive the transaction; and (iv) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding before such
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transaction are converted or exchanged into other property by virtue of the transaction, unless otherwise provided in an award agreement or other written agreement between us and the award holder.
Change in control. In the event of a change in control, as defined under our 2026 Plan, awards granted under our 2026 Plan will not receive automatic acceleration of vesting and exercisability, although this treatment may be provided for in an award agreement.
Under the 2026 Plan, a change in control is defined to include (i) the acquisition by any person or company of more than 50% of the combined voting power of our then outstanding stock; (ii) a merger, consolidation or similar transaction in which our stockholders immediately before the transaction do not own, directly or indirectly, more than 50% of the combined voting power of the surviving entity (or the parent of the surviving entity); (iii) a sale, lease, exclusive license or other disposition of all or substantially all of our assets other than to an entity more than 50% of the combined voting power of which is owned by our stockholders; and (iv) an unapproved change in the majority of the board of directors.
Clawback. All awards granted under the 2026 Plan will be subject to recoupment in accordance with any clawback policy that we are required to adopt pursuant to the listing standards of any national securities exchange or association on which our securities are listed or as is otherwise required by the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, our board of directors may impose such other clawback, recovery or recoupment provisions in a stock award agreement as our board of directors determines necessary or appropriate.
Transferability. A participant may not transfer stock awards under our 2026 Plan other than by will, the laws of descent and distribution, or as otherwise provided under our 2026 Plan.
Plan amendment or termination. Our board of directors has the authority to amend, suspend, or terminate our 2026 Plan, provided that such action does not materially impair the existing rights of any participant without such participant’s written consent. Certain material amendments also require the approval of our stockholders. No ISOs may be granted after the tenth anniversary of the date our board of directors adopted our 2026 Plan. No stock awards may be granted under our 2026 Plan while it is suspended or after it is terminated.
2026 Employee stock purchase plan
Our board of directors adopted our ESPP in June 2026 and our stockholders approved our ESPP in . The ESPP will become effective upon the execution of the underwriting agreement for this offering. The purpose of the ESPP is to secure and retain the services of new employees, to retain the services of existing employees, and to provide incentives for such individuals to exert maximum efforts toward our success and that of our affiliates. Our ESPP will include two components. One component will be designed to allow eligible U.S. employees to purchase our common stock in a manner that may qualify for favorable tax treatment under Section 423 of the Code. The other component will permit the grant of purchase rights that do not qualify for such favorable tax treatment in order to allow deviations necessary to permit participation by eligible employees who are foreign nationals or employed outside of the United States while complying with applicable foreign laws.
Share reserve. Following this offering, the ESPP authorizes the issuance of shares of our common stock under purchase rights granted to our employees or to employees of any of our designated affiliates. The number of shares of our common stock reserved for issuance will automatically increase on January 1 of each calendar year, beginning on January 1, 2027 (assuming the ESPP becomes effective in 2026) through January 1, 2036, by the lesser of (i) 1.0% of the total number of shares of our capital stock (including shares issuable upon exercise, conversion, or exchange of all then-outstanding pre-funded warrants, or other rights exercisable for
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or convertible into, directly or indirectly, shares of common stock (whether vested or unvested), but excluding shares issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under our then-existing equity incentive plan(s) and employee stock purchase plan(s), if any) outstanding as of the last day of the calendar month before the date of the automatic increase; and (ii) shares; provided that before the date of any such increase, our board of directors may determine that such increase will be less than the amount set forth in clauses (i) and (ii). As of the date hereof, no shares of our common stock have been purchased under the ESPP.
Administration. Our board of directors, or a duly authorized committee thereof, will administer our ESPP. Our board of directors may delegate concurrent authority to administer the ESPP to our compensation committee under the terms of the compensation committee’s charter. The ESPP is implemented through a series of offerings under which eligible employees are granted purchase rights to purchase shares of our common stock on specified dates during such offerings. Under the ESPP, we may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of our common stock will be purchased for employees participating in the offering. An offering under the ESPP may be terminated under certain circumstances.
Payroll deductions. Generally, all regular employees, including executive officers, employed by us or by any of our designated affiliates, may participate in the ESPP and may contribute, normally through payroll deductions, up to 15% of their earnings (as defined in the ESPP) for the purchase of our common stock under the ESPP. Unless otherwise determined by our board of directors, common stock will be purchased for the accounts of employees participating in the ESPP at a price per share that is at least the lesser of (i) 85% of the fair market value of a share of our common stock on the first date of an offering; or (ii) 85% of the fair market value of a share of our common stock on the date of purchase.
Limitations. Employees may have to satisfy one or more of the following service requirements before participating in the ESPP, as determined by our board of directors, including: (i) customary employment with us or one of our affiliates for more than 20 hours per week and more than five months per calendar year; or (ii) continuous employment with us or one of our affiliates for a minimum period of time (not to exceed two years). No employee may purchase shares under the ESPP at a rate in excess of $25,000 worth of our common stock based on the fair market value per share of our common stock at the beginning of an offering for each year such a purchase right is outstanding. Finally, no employee will be eligible for the grant of any purchase rights under the ESPP if immediately after such rights are granted, such employee has voting power over 5% or more of our outstanding capital stock measured by vote or value under Section 424(d) of the Code.
Changes to capital structure. In the event that there occurs a change in our capital structure through such actions as a stock split, merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, liquidating dividend, combination of shares, exchange of shares, change in corporate structure, or similar transaction, the board of directors will make appropriate adjustments to: (i) the number of shares reserved under the ESPP; (ii) the maximum number of shares by which the share reserve may increase automatically each year; (iii) the number of shares and purchase price of all outstanding purchase rights; and (iv) the number of shares that are subject to purchase limits under ongoing offerings.
Corporate transactions. In the event of certain significant corporate transactions (as defined in the ESPP), including: (i) a sale of all or substantially all of our assets; (ii) the sale or disposition of more than 50% of our outstanding securities; (iii) the consummation of a merger or consolidation where we do not survive the transaction; and (iv) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction, any then-outstanding rights to purchase our stock under the
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ESPP may be assumed, continued or substituted for by any surviving or acquiring entity (or its parent company). If the surviving or acquiring entity (or its parent company) elects not to assume, continue, or substitute for such purchase rights, then the participants’ accumulated payroll contributions will be used to purchase shares of our common stock within ten business days before such corporate transaction, and such purchase rights will terminate immediately.
ESPP amendment or termination. Our board of directors has the authority to amend or terminate our ESPP, provided that except in certain circumstances such amendment or termination may not materially impair any outstanding purchase rights without the holder’s consent. We will obtain stockholder approval of any amendment to our ESPP as required by applicable law or listing requirements.
2020 Equity incentive plan
Our board of directors adopted, and our stockholders approved, our 2020 Plan in June 2020. Our 2020 Plan was most recently amended in March 2025. The 2020 Plan will terminate on the date the 2026 Plan becomes effective, and thereafter no further stock awards will be granted under the 2020 Plan. However, any outstanding stock awards granted under the 2020 Plan will remain outstanding, subject to the terms of our 2020 Plan and award agreements, until such outstanding stock awards are exercised or until such outstanding stock awards terminate or expire by their terms.
Types of awards. Our 2020 Plan provides for the grant of ISOs to employees, including employees of our affiliates, and for the grant of NSOs, stock bonuses and rights to acquire restricted stock to employees, directors, and consultants, including employees and consultants of our affiliates.
Share reserve. Subject to certain capitalization adjustments, the common stock that may be issued pursuant to stock awards under the 2020 Plan will not exceed in the aggregate 9,003,346 shares of our common stock. The shares of our common stock subject to the 2020 Plan may be unissued shares or reacquired shares, bought on the market or otherwise. As of December 31, 2025, only options have been granted under the 2020 Plan.
Administration. Our board of directors or one or more duly authorized committees of our board of directors (referred to herein as the plan administrator) administers our 2020 Plan and the stock awards granted under it. Under our 2020 Plan, the board has the power, subject to, and within the limitations of, the express provisions of the 2020 Plan (i) to determine from time to time which of the persons eligible under the 2020 Plan will be granted stock awards; when and how each stock award will be granted; what type or combination of types of stock award will be granted; the provisions of each stock award granted; and the number of shares of our common stock with respect to which a stock award will be granted to each such person; (ii) to construe and interpret the 2020 Plan and stock awards granted under it, and to establish, amend and revoke rules and regulations for its administration; (iii) to amend the 2020 Plan or a stock award; (iv) to terminate or suspend the 2020 Plan; and (v) generally, to exercise such powers and to perform such acts as our board of directors deems necessary or expedient to promote our best interests and that are not in conflict with the provisions of the 2020 Plan.
Options. Each option under the 2020 Plan will be in such form and will contain such terms and conditions as determined by the plan administrator. The exercise price of an ISO under the 2020 Plan generally will not be less than 100% of the fair market value of our common stock on the date of grant (or 110% of the fair market value for certain major stockholders). The exercise price of an NSO under the 2020 Plan generally will not be less than 85% of the fair market value of our common stock on the date of grant.
The purchase price of shares of our common stock acquired pursuant to an option under the 2020 Plan will be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the option is
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exercised or (ii) at the discretion of the plan administrator at the time the option is granted (or subsequently in the case of an NSO) (1) by delivery to us of other shares of our common stock, (2) according to a deferred payment or other similar arrangement with the optionholder or (3) in any other form of legal consideration that may be acceptable to the plan administrator.
ISOs are not transferable except by will or by the laws of descent and distribution and are exercisable during the lifetime of the optionholder only by the optionholder. NSOs generally are transferable to the extent provided in the option agreement. If an NSO does not provide for transferability, then the NSO is not transferable except by will or by the laws of descent and distribution and is exercisable during the lifetime of the optionholder only by the optionholder.
In the event that an optionholder’s continuous service terminates (other than upon the optionholder’s death or disability), the optionholder may exercise his or her option (to the extent that the optionholder was entitled to exercise such option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three months following the termination of the optionholder’s continuous service (or such longer or shorter period specified in the option agreement), or (ii) the expiration of the term of the option as set forth in the option agreement. If, after termination, the optionholder does not exercise his or her option within the time specified in the option agreement, the option will terminate.
Corporate transactions. In the event of a corporate transaction (as defined in the 2020 Plan), including: (i) a sale of all or substantially all of our assets; (ii) the sale or disposition of at least 90% of our outstanding securities; (iii) the consummation of a merger or consolidation where we do not survive the transaction; and (iv) the consummation of a merger or consolidation where we do survive the transaction but the shares of our common stock outstanding immediately before such transaction are converted or exchanged into other property by virtue of the transaction, then any surviving corporation or acquiring corporation may assume any or all stock awards outstanding under the 2020 Plan or may substitute similar stock awards for stock awards outstanding under the 2020 Plan. In the event that any surviving corporation or acquiring corporation does not assume any or all such outstanding stock awards or substitute similar stock awards for such outstanding stock awards, then with respect to stock awards that have been neither assumed nor substituted and that are held by participants whose continuous service has not terminated prior to the effective time of the corporate transaction, the vesting of such stock awards will (contingent upon the effectiveness of the corporate transaction) be accelerated in full to a date prior to the effective time of such corporate transaction as determined by our board of directors, and the stock awards will terminate if not exercised (if applicable) at or prior to such effective time. With respect to any other stock awards outstanding under the 2020 Plan that have been neither assumed nor substituted, the vesting of such stock awards will not be accelerated unless otherwise provided in a written agreement between us or any affiliate and the holder of such stock award, and such stock awards will terminate if not exercised (if applicable) prior to the effective time of the corporate transaction.
Capitalization adjustments. In the event of certain changes in our capitalization, the 2020 Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the 2020 Plan and the maximum number of securities subject to award to any person, and the outstanding stock awards under the 2020 Plan will be appropriately adjusted in the class(es) and number of securities and price per share of our common stock subject to such outstanding stock awards.
Plan amendment or termination. Our board of directors may amend, suspend, or terminate the 2020 Plan at any time. Unless terminated sooner, the 2020 Plan will automatically terminate on June 29, 2030. No stock awards may be granted under the 2020 Plan while it is suspended or after it is terminated.
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Director compensation
Historically, we have not had a formal compensation policy with respect to service on our board of directors, and in 2025, we did not provide compensation to any of our non-employee directors (all of whom are investor designee directors) related to their board service.
Each of Dr. Cui, our President and Chief Executive Officer, and Y. Peter Li, Ph.D. MBA, the Executive Chairman of our board of directors, is a member of our board of directors and an employee of the Company, but does not receive any additional compensation for service as a director. The compensation earned by or paid to Dr. Cui as a named executive officer for the fiscal year ended December 31, 2025 is set forth above under “—Summary compensation table for the year ended December 31, 2025.” Dr. Li received compensation in 2025 pursuant to his employment with us as Executive Chairman, as shown in the table and described below. Dr. Agrawal received compensation in 2025 pursuant to his consulting agreement with us, as shown in the table and described below.
The following table sets forth information regarding the compensation earned by or paid to our non-employee directors and Dr. Li during the fiscal year ended December 31, 2025.
| Name | Non-equity incentive plan compensation ($) |
Option awards ($)(1) |
All other ($) |
Total ($) | ||||||||||||
| Sundeep Agrawal, M.D. |
— | — | 46,439 | (2) | 46,439 | |||||||||||
| Bihua Chen, MBA |
— | — | — | — | ||||||||||||
| Carl L. Gordon, Ph.D., CFA |
— | — | — | — | ||||||||||||
| George Lee, Ph.D. |
— | — | — | — | ||||||||||||
| Y. Peter Li, Ph.D., MBA |
160,000 | (3) | — | 414,000 | (4) | 574,000 | ||||||||||
| Timothy Stubbs, M.D.(5) |
— | — | — | — | ||||||||||||
|
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| (1) | As of December 31, 2025, Dr. Agrawal held an outstanding option to purchase 50,000 shares of our common stock. As of December 31, 2025, neither our other non-employee directors nor Dr. Li held options to purchase shares of our common stock. As of December 31, 2025, none of our non-employee directors or Dr. Li held any unvested stock awards. |
| (2) | Amount reflects the aggregate grant date fair value of a stock option granted to Dr. Agrawal pursuant to the Agrawal Consulting Agreement (as described below) during the year ended December 31, 2025, computed in accordance with FASB ASC Topic 718. See Note 2 to our financial statements included elsewhere in this prospectus for a discussion of the assumptions used in the calculation. |
| (3) | The amount disclosed represents a performance-based bonus earned by Dr. Li with respect to the year ended December 31, 2025, in connection with his employment with us as Executive Chairman, as described in the subsection below titled “—Li employment agreement.” |
| (4) | The amount disclosed represents (i) $400,000 in base salary earned by Dr. Li in 2025 in connection with his employment with us as Executive Chairman, as described in the subsection below titled “—Li employment agreement,” and (ii) $14,000 in 401(k) matching contributions, as described in the subsection above titled “—401(k) plan.” |
| (5) | Dr. Stubbs has notified us that he intends to resign from our board of directors effective as of immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. |
Agrawal consulting agreement
In August 2025, we entered into a consulting agreement with Dr. Agrawal (Agrawal Consulting Agreement), pursuant to which Dr. Agrawal agreed to render general advisory services in the field of business development and investor relations to us. As compensation for services provided to us pursuant to the Agrawal Consulting Agreement, in August 2025, Dr. Agrawal received a nonqualified option to purchase 50,000 shares of our common stock under our 2020 Plan, which vests in equal monthly installments over the 12-month period starting on the one-month anniversary of the vesting commencement date.
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Li employment agreement
Effective March 2021, we entered into an executive employment agreement with Dr. Li in connection with his service as our Executive Chairman (Li Agreement). Under the Li Agreement, Dr. Li’s initial annual base salary was set at $300,000 (which was increased to $400,000 effective January 1, 2025), subject to review and adjustment from time to time. The Li Agreement also provides that Dr. Li is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based upon our and Dr. Li’s achievement of objectives and milestones to be determined on an annual basis by our board of directors. On 2026, we entered into an amended and restated executive employment agreement with Dr. Li in connection with his service as our Executive Chairman (A&R Li Agreement), which will be effective upon the effectiveness of the registration statement of which this prospectus forms a part. Under the A&R Li Agreement, Dr. Li’s annual base salary is set at $511,100, subject to review and adjustment from time to time. The A&R Li Agreement also provides that Dr. Li is eligible to receive an annual discretionary bonus at a target amount of 40% of his then-current base salary, based upon our and Dr. Li’s achievement of objectives and milestones to be approved by our board of directors.
In the event of certain qualifying terminations of his employment, Dr. Li will be entitled to receive severance benefits pursuant to our Severance Plan, consistent with those described above for Dr. Cui under “—Potential payments upon termination or change of control.”
Li IPO option award
In 2026, as described above under “Narrative to summary compensation table—IPO option grants,” our board of directors approved the grant to Dr. Li of an option under our 2026 Plan to purchase shares of our common stock, effective as of the effectiveness of the registration statement of which this prospectus forms a part and with an exercise price equal to the initial public offering price. The option will vest over a period of four years, with 25% of the option vesting on the first anniversary of the vesting commencement date and the remaining 75% of the option vesting ratably on a monthly basis thereafter, subject to Dr. Li’s continuous service with us through each vesting date.
Non-employee director compensation policy
In June 2026, our board of directors adopted a non-employee director compensation policy (Director Compensation Policy), pursuant to which our non-employee directors will be eligible to receive compensation for service on our board of directors and committees of our board of directors, which will be effective upon the execution and delivery of the underwriting agreement related to this offering. The Director Compensation Policy provides that each non-employee director will receive the following compensation for service on our board of directors:
| • | an annual cash retainer of $40,000; |
| • | an additional cash retainer of $30,000 for service as lead independent director; |
| • | an additional annual cash retainer of $10,000, $7,500, and $5,000 for service as a non-chair member of the audit committee, compensation committee, and the nominating and corporate governance committee, respectively; |
| • | an additional annual cash retainer of $20,000, $15,000, and $10,000 for service as chairman of the audit committee, chairman of the compensation committee, and chairman of the nominating and corporate governance committee, respectively (in lieu of the committee member retainer above); |
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| • | an initial option grant to purchase 112,000 shares of our common stock, vesting in equal monthly installments over 3 years from the date of grant; and |
| • | an annual option grant to purchase 56,000 shares of our common stock, vesting on the earlier of (i) the date that is 12 months following the date of grant or (ii) the date of the next annual meeting. |
Each of the option grants described above will be granted under our 2026 Plan, the terms of which are described in more detail above under “Equity benefit plans—2026 Equity incentive plan.” Each such option grant will vest and become exercisable subject to the director’s continuous service with us, provided that each option will vest in full upon a change in control (as defined in the 2026 Plan) of the company. The term of each option will be 10 years, subject to earlier termination as provided in the 2026 Plan.
Non-employee director IPO option awards
In 2026, our board of directors also approved the grant of an initial option under our 2026 Plan to purchase 112,000 shares of our common stock, effective as of the effectiveness of the registration statement of which this prospectus forms a part and with an exercise price equal to the initial public offering price, to each of the following non-employee directors (who had not previously received equity grants in respect of their service as non-employee directors): Dr. Agrawal, Ms. Chen and Dr. Gordon. The terms of such option grants are as set forth above with respect to initial option grants under our Director Compensation Policy.
Limitations of liability and indemnification matters
Our amended and restated certificate of incorporation that will become effective immediately prior to the closing of this offering limits the liability of our current and former directors and officers for monetary damages to the fullest extent permitted by Delaware law. Delaware law provides that directors and officers of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors or officers, except liability for:
| • | any breach of the director’s or officer’s duty of loyalty to the corporation or its stockholders; |
| • | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| • | as a director, unlawful payments of dividends or unlawful stock repurchases or redemptions; |
| • | as an officer, derivative claims brought on behalf of the corporation by a stockholder; or |
| • | any transaction from which the director or officer derived an improper personal benefit. |
This limitation of liability does not apply to liabilities arising under federal securities laws and does not affect the availability of equitable remedies such as injunctive relief or rescission.
Our amended and restated certificate of incorporation will authorize us to indemnify our directors, officers, employees, and other agents to the fullest extent permitted by Delaware law. Our amended and restated bylaws will provide that we are required to indemnify our directors and officers to the fullest extent permitted by Delaware law and may indemnify our other employees and agents. Our amended and restated bylaws will also provide that, on satisfaction of certain conditions, we will advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding, and permit us to secure insurance on behalf of any officer, director, employee, or other agent for any liability arising out of his or her actions in that capacity regardless of whether we would otherwise be permitted to indemnify him or her under the provisions of Delaware law. We have entered and expect to continue to enter into agreements to indemnify our directors, executive officers, and other employees as determined by the board of directors. With certain exceptions, these agreements provide for indemnification for related expenses including attorneys’ fees, judgments, fines, and settlement amounts incurred by any of these individuals in any action or proceeding.
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We believe that the amended and restated certificate of incorporation, amended and restated bylaw provisions and indemnification agreements are necessary to attract and retain qualified persons as directors and officers. We also maintain customary directors’ and officers’ liability insurance.
The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Further, a stockholder’s investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions.
Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (Securities Act), may be permitted for directors, executive officers, or persons controlling us, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
At present, there is no pending litigation or proceeding involving any of our directors, executive officers or employees for which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.
Rule 10b5-1 sales plans
Our directors and executive officers may adopt written plans, known as Rule 10b5-1 plans, in which they will contract with a broker to buy or sell shares of our common stock on a periodic basis. Under a Rule 10b5-1 plan, a broker executes trades pursuant to parameters established by the director or executive officer when entering into the plan, without further direction from them. The director or executive officer may amend a Rule 10b5-1 plan in some circumstances and may terminate a Rule 10b5-1 plan at any time. Our directors and executive officers also may buy or sell additional shares outside of a Rule 10b5-1 plan when they are not in possession of material nonpublic information subject to compliance with the terms of our insider trading policy and any applicable Rule 10b5-1 guidelines.
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Certain relationships and related party transactions
The following includes a summary of transactions since January 1, 2023, to which we have been a party, in which the amount involved in the transaction exceeded the lesser of $120,000 or 1% of the average of our total assets as of December 31, 2024 and 2025, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock at the time of such transaction, or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described in the sections titled “Executive and director compensation” and “Executive and director compensation—Non-employee director compensation.”
Series B preferred stock financing
In December 2023 and January 2024, we issued and sold to investors, in our Series B preferred stock financing, an aggregate of 26,575,222 shares of our Series B preferred stock (Series B Preferred) at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $100 million.
The following table summarizes the shares of Series B Preferred issued in our Series B preferred stock financing to holders of more than 5% of our capital stock and entities affiliated with our directors and executive officers.
| Participants | Series B preferred |
Aggregate purchase price ($) |
||||||
| Entities affiliated with Cormorant Asset Management(1) |
5,315,048 | 19,999,994 | ||||||
| OrbiMed Private Investments VIII, LP(2) |
2,923,277 | 10,999,999 | ||||||
| Colt Blossom Hill, LLC(3) |
2,730,605 | 10,274,994 | ||||||
| Vivo Innovation Fund II Holdings, L.P.(4) |
1,594,514 | 5,999,997 | ||||||
| RongShan, LLC(5) |
265,752 | 999,998 | ||||||
| Jingwei Cui(6) |
166,095 | 624,999 | ||||||
| Walter T. Liptak Revocable Trust(7) |
53,150 | 199,998 | ||||||
|
|
||||||||
| (1) | Entities affiliated with Cormorant Asset Management LP hold more than 5% of our outstanding capital stock. The shares consist of (i) 4,931,302 shares purchased by Cormorant Private Healthcare Fund V, LP and (ii) 383,746 shares purchased by Cormorant Global Healthcare Master Fund, LP. Cormorant Asset Management LP is the investment manager to Cormorant Private Healthcare Fund V, LP and Cormorant Global Healthcare Master Fund, LP, and, in such capacity, exercises shared voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP and may be deemed to beneficially own such securities. Bihua Chen, a member of our board of directors, serves as the managing member of Cormorant Asset Management LP and, as such, shares voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP. |
| (2) | OrbiMed Private Investments VIII, LP (OPI VIII) holds more than 5% of our outstanding capital stock. OrbiMed Capital GP VIII LLC (GP VIII) is the general partner of OPI VIII, and OrbiMed Advisors LLC (Advisors) is the managing member of GP VIII. By virtue of such relationships, GP VIII and Advisors may be deemed to have voting power and investment power over the securities held by OPI VIII and as a result, may be deemed to have beneficial ownership of such securities. Advisors exercises voting and investment power through a management committee comprised of Carl L. Gordon, Sven H. Borho, and W. Carter Neild, each of whom disclaims beneficial ownership of the shares held by OPI VIII. Dr. Gordon, a member of our board of directors, is a Founding Member and Managing Partner at OrbiMed Advisors. |
| (3) | Sundeep Agrawal, M.D., a member of our board of directors, was a General Partner at Colt Blossom Hill, LLC during a portion of the period encompassing the closings of the Series B preferred stock financing that occurred in December 2023 and January 2024, and, as such, may have been deemed to have voting and dispositive power over the securities held by Colt Blossom Hill, LLC. |
| (4) | Vivo Innovation Fund II Holdings, L.P. holds more than 5% of our outstanding capital stock. Timothy Stubbs, M.D., a member of our board of directors, has served as an Executive Director at Vivo Capital LLC since March 2022. Dr. Stubbs has notified us that he intends to resign from our board of directors effective as of immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. |
| (5) | Y. Peter Li, Ph.D., MBA, our Executive Chairman and a member of our board of directors, is manager of RongShan, LLC. |
| (6) | Jingwei Cui is a sibling of J. Jean Cui, our President and Chief Executive Officer. |
| (7) | Walter T. Liptak is a beneficiary and trustee of the Walter T. Liptak Revocable Trust. Vincent Liptak, J.D., Ph.D., MBA, our Executive Vice President and General Counsel, is a co-beneficiary and co-trustee of the Walter T. Liptak Revocable Trust. |
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Series B bridge preferred stock financing
In November and December 2025, we issued and sold to investors, in our Series B preferred stock bridge financing, an aggregate of 22,363,844 shares of our Series B Preferred at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $84.2 million.
The following table summarizes the shares of Series B Preferred issued in our Series B bridge financing to holders of more than 5% of our capital stock and entities affiliated with our directors and executive officers.
| Participants | Series B preferred |
Aggregate purchase price ($) |
||||||
| Janus Henderson Biotech Innovation Master Fund Limited(1) |
5,315,049 | 19,999,997.89 | ||||||
| Brahma BlossomHill Partners, LLC(2) |
2,710,675 | 10,199,999 | ||||||
| Entities affiliated with Cormorant Asset Management(3) |
2,657,524 | 9,999,997 | ||||||
| OrbiMed Private Investments VIII, LP(4) |
1,993,143 | 7,499,998 | ||||||
| Vivo Innovation Fund II Holdings, L.P.(5) |
531,504 | 1,999,996 | ||||||
| The Li and Cui Family Trust(6) |
531,504 | 1,999,996 | ||||||
| RongShan, LLC(7) |
318,902 | 1,199,996 | ||||||
| Jingwei Cui(8) |
132,876 | 499,999 | ||||||
| Walter T. Liptak Revocable Trust(9) |
93,013 | 349,999 | ||||||
|
|
||||||||
| (1) | Janus Henderson Biotech Innovation Master Fund Limited holds more than 5% of our outstanding capital stock. |
| (2) | Sundeep Agrawal, M.D., a member of our board of directors, is the Founder and Managing Partner of Brahma Capital, LLC, which manages Brahma BlossomHill Partners, LLC, and, as such, may be deemed to have voting and dispositive power over the securities held by Brahma BlossomHill Partners, LLC. |
| (3) | Entities affiliated with Cormorant Asset Management LP hold more than 5% of our outstanding capital stock. See footnote (1) to the Series B Preferred Stock Financing table above. The shares consist of (i) 1,753,169 shares purchased by Cormorant Private Healthcare Fund VI, LP and (ii) 904,355 shares purchased by Cormorant Global Healthcare Master Fund, LP. Cormorant Asset Management LP is the investment manager to Cormorant Private Healthcare Fund VI, LP and Cormorant Global Healthcare Master Fund, LP, and, in such capacity, exercises shared voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP and may be deemed to beneficially own such securities. Bihua Chen, a member of our board of directors, serves as the managing member of Cormorant Asset Management LP and, as such, shares voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP. |
| (4) | See footnote (2) to the Series B Preferred Stock Financing table above. |
| (5) | See footnote (4) to the Series B Preferred Stock Financing table above. |
| (6) | Y. Peter Li, Ph.D., MBA, our Executive Chairman and a member of our board of directors, is trustee of The Li and Cui Family Trust. |
| (7) | See footnote (5) to the Series B Preferred Stock Financing table above. |
| (8) | See footnote (6) to the Series B Preferred Stock Financing table above. |
| (9) | See footnote (7) to the Series B Preferred Stock Financing table above. |
Investor agreements
In connection with our convertible preferred stock financings, we entered into investor rights, right of first refusal and co-sale and voting agreements, which contain, among other things, registration rights, information rights, voting rights and rights of first refusal, with certain holders of our capital stock, including entities affiliated with Cormorant Asset Management LP, OrbiMed Private Investments VIII, LP, entities affiliated with Vivo Capital LLC, Janus Henderson Biotech Innovation Master Fund Limited, Y. Peter Li, Ph.D., MBA, Brahma BlossomHill Partners, LLC, the Walter T. Liptak Revocable Trust and certain of our other stockholders. These agreements will terminate upon the closing of this offering, except for the registration rights granted under our investor rights agreement (defined below), as more fully described in the section titled “Description of capital stock—Registration rights.” See also the section titled “Principal stockholders” for additional information regarding beneficial ownership of our capital stock.
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Employment arrangements, severance benefit plan and indemnification agreements
We have entered into employment agreements with certain of our executive officers. For more information regarding these agreements with our named executive officers, see the section titled “Executive and director compensation—Employment arrangements with our named executive officers.”
We have also entered into agreements with our executive officers pursuant to which each such executive officer is a participant under our Severance Plan. For more information regarding the rights of our named executive officers under our Severance Plan, see the section titled “Executive and director compensation—Potential payments upon termination or change of control.”
Our amended and restated certificate of incorporation upon the closing of this offering will contain provisions limiting the liability of directors, and our amended and restated bylaws that will be in effect upon the closing of this offering will provide that we will indemnify each of our directors and officers to the fullest extent permitted under Delaware law. Our amended and restated certificate of incorporation and amended and restated bylaws upon the closing of this offering will also provide our board of directors with discretion to indemnify our employees and other agents when determined appropriate by the board.
In addition, we have entered, and intend to enter, into an indemnification agreement with each of our directors and executive officers, which requires us to indemnify them. For more information regarding these agreements, see the section titled “Executive and director compensation—limitations of liability and indemnification matters.”
Stock option grants to directors and executive officers
We have granted stock options to our directors and executive officers, as more fully described in the section titled “Executive and director compensation.”
Directed share program
At our request, the underwriters have reserved for sale, at the initial public offering price, up to approximately shares of our common stock being offered hereby (approximately 1%) to our directors, officers, employees, business associates, investors and friends and family of our directors, officers, employees, business associates and investors, as part of a directed share program. The directed share program will not limit the ability of our directors, officers and their family members, or holders of more than 5% of our capital stock, to purchase more than $120,000 in value of our common stock. We do not currently know the extent to which these related persons will participate in our directed share program, if at all, or the extent to which they will purchase more than $120,000 in value of our common stock.
Policies and procedures for related party transactions
Prior to the closing of this offering, we will adopt a written related person transactions policy that sets forth our policies and procedures regarding the identification, review, consideration and continuing oversight of “related person transactions.” For purposes of our policy only, a “related person transaction” is a transaction, arrangement or relationship (or any series of similar transactions, arrangements or relationships) in which we and any “related person” are participants involving an amount that exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years. Transactions involving compensation for services provided to us as an employee, consultant or director are not considered related person transactions under this policy. A related person is any executive officer, director, nominee to become a director or a holder of more than 5% of any class of our voting securities, including any of their immediate
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family members and affiliates, and entities owned or controlled by such persons or entities in which such person has a 5% or greater beneficial ownership interest.
Under the policy, where a transaction has been identified as a related person transaction, management must present information regarding the proposed related person transaction to our audit committee (or, where review by our audit committee would be inappropriate for reasons of conflict of interest or otherwise, to another independent body of our board of directors) for review. The presentation must include a description of, among other things, all of the parties thereto, the direct and indirect interests of the related persons, the purpose of the transaction, the material facts, the benefits of the transaction to us and whether any alternative transactions are available, an assessment of whether the terms are comparable to the terms available from unrelated third parties or to employees generally and management’s recommendation. To identify related person transactions in advance, we rely on information supplied by our executive officers, directors and certain significant stockholders. In considering related person transactions, our audit committee or another independent body of our board of directors takes into account the relevant available facts and circumstances including, but not limited to:
| • | the risks, costs and benefits to us; |
| • | the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
| • | the terms of the transaction; |
| • | the availability of other sources for comparable services or products; and |
| • | the terms available to or from, as the case may be, unrelated third parties. |
In the event a director has an interest in the proposed transaction, the director must recuse himself or herself from the deliberations and approval.
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The following table sets forth information with respect to the beneficial ownership of our capital stock as of June 30, 2026, as adjusted to reflect the sale of our common stock offered by us in this offering assuming no exercise of the underwriters’ option to purchase additional shares, for:
| • | each of our named executive officers; |
| • | each of our directors; |
| • | all of our executive officers and directors as a group; and |
| • | each person or group of affiliated persons known by us to beneficially own more than 5% of our common stock. |
We have determined beneficial ownership in accordance with the rules and regulations of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Except as indicated by the footnotes below, we believe, based on information furnished to us, that the persons and entities named in the table below have sole voting and sole investment power with respect to all shares that they beneficially own, subject to applicable community property laws.
Applicable percentage ownership before the offering is based on 99,566,638 shares of our common stock outstanding as of June 30, 2026, assuming the automatic conversion of all outstanding shares of our convertible preferred stock into 85,552,612 shares of our common stock upon the closing of this offering. Applicable percentage ownership after the offering is based on the sale of shares of our common stock in this offering, assuming no exercise by the underwriters of their option to purchase additional shares. In computing the number of shares beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares subject to options held by the person that are currently exercisable, or exercisable within 60 days of June 30, 2026. However, except as described above, we did not deem such shares outstanding for the purpose of computing the percentage ownership of any other person.
Unless otherwise indicated, the address of each beneficial owner listed below is c/o BlossomHill Therapeutics, Inc., 10255 Science Center Drive, Suite 200, San Diego, California 92121. We believe, based on information provided to us, that each of the stockholders listed below has sole voting and investment power with respect to the shares beneficially owned by the stockholder unless noted otherwise, subject to community property laws where applicable.
The following table does not reflect any potential purchases by our executive officers, directors, their affiliated entities, certain other parties related to us pursuant to the directed share program, holders of more than 5% of our common stock in this offering or any equity awards granted to our executive officers or directors contingent on this offering. If any shares are purchased by and to the extent any such equity awards have been granted to
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these persons or entities, the number and percentage of shares of our common stock beneficially owned by them after this offering will differ from the amounts set forth in the following table.
| Shares beneficially owned prior to offering |
Shares beneficially owned after offering |
|||||||||||||||
| Name of beneficial owner | Number | Percentage | Number | Percentage | ||||||||||||
| 5% or Greater Stockholders: |
||||||||||||||||
| J. Jean Cui, Ph.D. and Y. Peter Li, Ph.D., MBA and related affiliates(1) |
18,616,158 | 18.7% | % | |||||||||||||
| Entities affiliated with Cormorant Asset Management LP(2) |
15,469,346 | 15.5% | % | |||||||||||||
| OrbiMed Private Investments VIII, LP(3) |
9,789,323 | 9.8% | % | |||||||||||||
| Vivo Innovation Fund II Holdings, L.P.(4) |
6,998,921 | 7.0% | % | |||||||||||||
| Entities affiliated with Janus Henderson(5) |
5,315,049 | 5.3% | % | |||||||||||||
| Named Executive Officers and Directors: |
||||||||||||||||
| J. Jean Cui, Ph.D.(1) |
18,616,158 | 18.7% | % | |||||||||||||
| Y. Peter Li, Ph.D., MBA(1) |
18,616,158 | 18.7% | % | |||||||||||||
| Geoff Oxnard, M.D.(6) |
355,454 | * | % | |||||||||||||
| Jason Keyes, MBA(7) |
256,850 | * | % | |||||||||||||
| Sundeep Agrawal, M.D.(8) |
2,760,675 | 2.8% | % | |||||||||||||
| Bihua Chen, MBA(9) |
15,469,346 | 15.5% | % | |||||||||||||
| Carl L. Gordon, Ph.D., CFA(10) |
9,789,323 | 9.8% | % | |||||||||||||
| Sheila Gujrathi, M.D.(11) |
422,448 | * | % | |||||||||||||
| John Schmid, MBA(12) |
316,836 | * | % | |||||||||||||
| Timothy Stubbs, M.D.(13) |
— | — | % | |||||||||||||
| All directors and executive officers as a group (11 persons)(14) |
48,593,390 | 48.4% | % | |||||||||||||
|
|
||||||||||||||||
| * | Represents beneficial ownership of less than 1%. |
| (1) | Consists of (i)(a) 7,500,000 shares of common stock issuable upon conversion of our Series Angel Preferred Stock and (b) 531,504 shares of common stock issuable upon conversion of our Series B Preferred, in each case held by The Li and Cui Family Trust, (ii) 584,654 shares of common stock issuable upon conversion of our Series B Preferred held by RongShan, LLC (RongShan), (iii) 5,000,000 shares of common stock held directly by Dr. Cui, of which 1,000,000 shares were transferred subsequent to June 30, 2026 for estate planning purposes, are no longer beneficially owned by Dr. Cui or Dr. Li, and are excluded from the shares beneficially owned after offering, and (iv) 5,000,000 shares of common stock held directly by Dr. Li, of which 1,000,000 shares were transferred subsequent to June 30, 2026 for estate planning purposes, are no longer beneficially owned by Dr. Cui or Dr. Li, and are excluded from the shares beneficially owned after offering. Both Dr. Cui and Dr. Li have voting and dispositive power over the securities held by The Li and Cui Family Trust, and both are beneficiaries and serve as trustees of such trust. Dr. Li is the manager of RongShan and may be deemed to have voting and dispositive power over the securities held by RongShan. Dr. Li disclaims beneficial ownership of the securities held by RongShan. Dr. Cui and Dr. Li are married, and each may be deemed to have indirect beneficial ownership of the securities held by each other. |
| (2) | Consists of (i) 4,931,302 shares of common stock issuable upon conversion of our Series B Preferred held by Cormorant Private Healthcare Fund V, LP, (ii) 5,755,274 shares of common stock issuable upon conversion of our Series A Preferred Stock held by Cormorant Private Healthcare Fund III, LP, (iii)(a) 1,741,500 shares of common stock issuable upon conversion of our Series A Preferred Stock and (b) 1,288,101 shares of common stock issuable upon conversion of our Series B Preferred, in each case held by Cormorant Global Healthcare Master Fund, LP, and (iv) 1,753,169 shares of common stock issuable upon conversion of our Series B Preferred held by Cormorant Private Healthcare Fund VI, LP. Cormorant Asset Management LP is the investment manager to Cormorant Private Healthcare Fund III, LP, Cormorant Private Healthcare Fund V, LP, Cormorant Private Healthcare Fund VI, LP and Cormorant Global Healthcare Master Fund, LP, and, in such capacity, exercises shared voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP and may be deemed to beneficially own such securities. Bihua Chen, a member of our board of directors, serves as the managing member of Cormorant Asset Management LP and, as such, shares voting and dispositive power over the securities held by the entities affiliated with Cormorant Asset Management LP. The principal address for the Cormorant Asset Management LP entities is 200 Clarendon Street, 52nd Floor, Boston, Massachusetts 02116. |
| (3) | Consists of (i) 4,872,903 shares of common stock issuable upon conversion of our Series A Preferred Stock and (ii) 4,916,420 shares of common stock issuable upon conversion of our Series B Preferred, in each case held by OrbiMed Private Investments VIII, LP. (OPI VIII). OrbiMed Capital GP VIII LLC (GP VIII) is the general partner of OPI VIII, and OrbiMed Advisors LLC (Advisors) is the managing member of GP VIII. By virtue of such relationships, GP VIII and Advisors may be deemed to have voting power and investment power over the securities held by OPI VIII and, as a result, may be deemed to have beneficial ownership of such securities. Advisors exercise voting and investment power through a management committee comprised of Carl L. Gordon, Sven H. Borho, and W. Carter Neild, each of whom disclaims beneficial ownership of the shares held by OPI VIII. The principal business address of each of the foregoing entities is 601 Lexington Avenue, 54th Floor, New York, NY 10022. |
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| (4) | Consists of (i) 4,872,903 shares of common stock issuable upon conversion of our Series A Preferred Stock and (ii) 2,126,018 shares of common stock issuable upon conversion of our Series B Preferred, in each case held by Vivo Innovation Fund II Holdings, L.P. Vivo Innovation II, LLC is the general partner of Vivo Innovation Fund II Holdings, L.P. Frank Kung, Edgar Engleman, Gaurav Aggarwal, Michael Chang and David Liu are voting members of Vivo Innovation II, LLC and have power to vote and dispose of the securities held by Vivo Innovation Fund II Holdings. None of such voting members have individual voting or investment power with respect to these securities, and each of such voting members disclaims beneficial ownership of such securities. Timothy Stubbs, M.D., a member of our board of directors, has served as an Executive Director at Vivo Capital LLC since March 2022. The principal business address of each of the foregoing entities is c/o Vivo Capital LLC, 192 Lytton Avenue, Palo Alto, CA 94301. |
| (5) | Consists of 5,315,049 shares of common stock issuable upon conversion of our Series B Preferred held by Janus Henderson Biotech Innovation Master Fund Limited (JHBIF). Such securities may be deemed to be beneficially owned by Janus Henderson Investors US LLC (Janus), an investment adviser registered under the Investment Advisers Act of 1940, who acts as investment adviser for JHBIF and has the ability to make decisions with respect to the voting and disposition of the shares subject to the oversight of the board of directors of JHBIF. Under the terms of its management contract with JHBIF, Janus has overall responsibility for directing the investments of JHBIF in accordance with JHBIF’s investment objective, policies and limitations. JHBIF has one or more portfolio managers appointed by and serving at the pleasure of Janus who makes decisions with respect to the disposition of these securities. The portfolio managers for JHBIF are: Andrew Acker, Daniel S. Lyons and Agustin Mohedas. The principal business address of JHBIF is c/o Janus Henderson Investors US LLC, 151 Detroit Street, Denver, Colorado 80206. |
| (6) | Consists of (i) 83,333 shares of common stock held directly and (ii) 272,121 shares of common stock subject to options that are exercisable within 60 days of June 30, 2026. |
| (7) | Consists of shares of common stock subject to options that are exercisable within 60 days of June 30, 2026. |
| (8) | Consists of (i) 50,000 shares of common stock subject to options held by Dr. Agrawal that are exercisable within 60 days of June 30, 2026, and (ii) 2,710,675 shares of common stock issuable upon conversion of our Series B Preferred held by Brahma BlossomHill Partners, LLC. Dr. Agrawal is the Founder and Managing Partner of Brahma Capital, LLC, which manages Brahma BlossomHill Partners, LLC. The principal business address of Brahma BlossomHill Partners, LLC is 713 Creek Bluff Drive, Keller, Texas 76248. |
| (9) | Consists of the securities described in footnote (2) above. |
| (10) | Consists of the securities described in footnote (3) above. |
| (11) | Consists of shares of common stock held directly, of which 413,647 remain subject to a right of repurchase as of June 30, 2026. |
| (12) | Consists of shares of common stock subject to options that are exercisable within 60 days of June 30, 2026. |
| (13) | Dr. Stubbs has notified us that he intends to resign from our board of directors effective as of immediately prior to the effectiveness of the registration statement of which this prospectus forms a part. |
| (14) | Consists of (i) the shares described in footnotes (1) and (6)-(12) above, (ii) 500,000 shares of common stock held directly by Dr. Liptak, of which 104,167 remain subject to a right of repurchase as of June 30, 2026, and (iii) 106,300 shares of common stock issuable upon conversion of our Series B Preferred held by the Walter T. Liptak Revocable Trust (Liptak Trust). Dr. Liptak is a co-beneficiary and co-trustee of the Liptak Trust. |
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Upon the filing of our amended and restated certificate of incorporation and the closing of this offering, our authorized capital stock will consist of 700,000,000 shares of our common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. All of our authorized preferred stock upon the closing of this offering will be undesignated. The following is a summary of the rights of our common and preferred stockholders and some of the provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to and upon the closing of this offering, respectively, and of the Delaware General Corporation Law (DGCL). This summary is not complete. For more detailed information, please see our amended and restated certificate of incorporation and amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus is a part, as well as the relevant provisions of the DGCL.
Common stock
Outstanding shares
As of March 31, 2026, we had 12,390,078 shares of our common stock outstanding held of record by 37 stockholders. This amount excludes our outstanding shares of convertible preferred stock, which will convert into 85,552,612 shares of our common stock in connection with the closing of this offering. Based on the number of shares of our common stock outstanding as of March 31, 2026, and assuming (i) the automatic conversion of all of our outstanding shares of convertible preferred stock, (ii) the Exercised Option Share Issuance, (iii) the issuance by us of shares of our common stock in this offering and (iv) no exercise by the underwriters of their option to purchase additional shares, there will be shares of our common stock outstanding upon the closing of this offering.
Voting
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of stockholders, except as otherwise expressly provided in our amended and restated certificate of incorporation or required by applicable law. There are no cumulative voting rights.
Dividends
Subject to preferences that may be applicable to any then-outstanding preferred stock, the holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.
Liquidation
In the event of our liquidation, dissolution or winding-up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities, subject to the satisfaction of any liquidation preference granted to the holders of any outstanding shares of preferred stock.
Rights, preferences and privileges
Holders of our common stock have no preemptive, conversion or subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
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Fully paid and nonassessable
All of our outstanding shares of our common stock are, and the shares of our common stock to be issued in this offering will be, fully paid and nonassessable.
Convertible preferred stock
As of March 31, 2026, there were 85,552,612 shares of convertible preferred stock outstanding, held of record by 77 stockholders.
In connection with the closing of this offering, all outstanding shares of convertible preferred stock will automatically convert into 85,552,612 shares of our common stock.
Under the amended and restated certificate of incorporation that will become effective immediately prior to the closing of this offering, our board of directors will have the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon and to increase or decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of the common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing a change in our control that may otherwise benefit holders of our common stock and may adversely affect the market price of the common stock and the voting and other rights of the holders of our common stock. We have no current plans to issue any shares of preferred stock.
Stock options
As of March 31, 2026, 5,286,828 shares of our common stock were issuable upon the exercise of outstanding stock options, issued under our 2020 Plan, at a weighted-average exercise price of $1.18 per share. Subsequent to March 31, 2026, an additional 1,590,784 stock options were granted under our 2020 Plan at a weighted-average exercise price of $2.73 per share, and subsequent to March 31, 2026, we issued 1,711,033 shares of our common stock upon the exercise of outstanding options, at a weighted-average exercise price of $ per share, of which shares remain subject to a right of repurchase as of the date of this prospectus. For information regarding the terms of our equity incentive plans, see the section titled “Executive and director compensation—Equity benefit plans.”
Registration rights
Upon the closing of this offering, certain holders of shares of our common stock, including those issuable upon the automatic conversion of preferred stock, will be entitled to rights with respect to the registration of these securities under the Securities Act. These rights are provided under the terms of an amended and restated investor rights agreement (investor rights agreement) between us and holders of our preferred stock. These shares are collectively herein referred to as registrable securities. The investor rights agreement includes demand registration rights, Form S-3 registration rights and piggyback registration rights. All fees, costs and expenses of underwritten registrations under this agreement will be borne by us and all selling expenses, including underwriting discounts and selling commissions, will be borne by the holders of the shares being registered.
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Form S-1 demand registration rights
Beginning 180 days after the effective date of the registration statement of which this prospectus is a part, certain holders of registrable securities are entitled to demand registration rights. Under the terms of the investor rights agreement, we will be required, upon the request of the holders of at least 70% of our outstanding registrable securities, as defined in the investor rights agreement, to file a registration statement with respect to outstanding registrable securities having an anticipated aggregate gross offering price to the public, of at least $15 million, and use best efforts to effect, as expeditiously as reasonably possible, the registration of all or a portion of their registrable securities for public resale. We are not obligated to take any action in response to such request (i) during the period starting from the date of filing of, and ending 180 days after the effective date of, our initial public offering, (ii) if we have already effected two registrations pursuant to such requests for registration on Form S-1, (iii) if within 30 days of receipt of a written request from initiating holders, the company gives notice to such holders of its intention to file a registration statement within 90 days, or (iv) if the initiating holders propose to dispose of shares of registrable securities that may be immediately registered on Form S-3. Additionally, if we furnish to the holders requesting such registration a certificate signed by our Chair stating that, in the good faith judgment of our board of directors, it would be seriously detrimental to us and our stockholders for such registration statement to either become effective at such time, then we shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than 180 days after the request of the initiating holders is given; provided, however, that we may not invoke this right more than twice in any 12-month period, as described in the investor rights agreement.
Form S-3 demand registration rights
Pursuant to the investor rights agreement, if we are eligible to file a registration statement on Form S-3, we will be required, upon request of the holders of at least 30% of our outstanding registrable securities, as defined in the investor rights agreement, to register their registrable securities under the Securities Act so long as the total amount of registrable shares requested to be registered has an anticipated aggregate offering price to the public, net of selling expenses, of at least $1 million. We are not obligated to take any action in response to such request if, within 30 days of receipt of a written request from initiating holders, we give notice to such holders of our intention to make a public offering within 90 days. We are required to effect only two registrations in any twelve-month period (and three registrations in the aggregate) pursuant to this provision of the investor rights agreement. Additionally, if we furnish to the holders requesting such registration a certificate signed by our Chair stating that, in the good faith judgment of our board of directors, it would be materially detrimental to us and our stockholders for such registration statement to either become effective at such time, then we shall have the right to defer taking action with respect to such filing, and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more than 120 days after the request of the initiating holders is given; provided, however, that we may not invoke this right more than twice in any 12-month period, as described in the investor rights agreement.
Piggyback registration rights
If we propose to register any of our securities under the Securities Act in another offering, either for our own account or for the account of other security holders, the holders of registrable securities will be entitled to notice of the registration and will be entitled to include their shares of our common stock in the registration, subject to certain conditions and limitations, including the right of the underwriters to limit the number of shares included in such registration under specified circumstances.
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Anti-takeover effects of provisions of our amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law
Delaware anti-takeover law
We are subject to Section 203 of the DGCL (Section 203). Section 203 generally prohibits a public Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time that such stockholder became an interested stockholder, unless:
| • | prior to such time the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
| • | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
| • | at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
Section 203 defines a “business combination” to include (subject to exceptions):
| • | any merger or consolidation involving the corporation or any direct or indirect majority-owned subsidiary of the corporation and the interested stockholder; |
| • | any sale, transfer, pledge or other disposition of 10% or more of the assets of the corporation involving the interested stockholder (in one transaction or a series of transactions); |
| • | any transaction that results in the issuance or transfer by the corporation or by any direct or indirect majority-owned subsidiary of the corporation of any stock of the corporation or of such subsidiary to the interested stockholder; |
| • | any transaction involving the corporation or any direct or indirect majority-owned subsidiary of the corporation that has the effect, directly or indirectly, of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and |
| • | the receipt by the interested stockholder of the benefit, directly or indirectly, of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an “interested stockholder” as any entity or person who, together with the person’s affiliates and associates, beneficially owns, or within the three years prior to the time of determination of interested stockholder status did own, 15% or more of the outstanding voting stock of the corporation.
A Delaware corporation may “opt out” of these provisions with an express provision in its original certificate of incorporation or an express provision in its amended and restated certificate of incorporation or amended and restated bylaws resulting from a stockholders’ amendment approved by at least a majority of the outstanding voting shares. We have not opted out of these provisions. As a result, mergers or other takeover or change in control attempts of us may be discouraged or prevented.
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Amended and restated certificate of incorporation and amended and restated bylaws
Provisions of our amended and restated certificate of incorporation and amended and restated bylaws, which will become effective immediately prior to and upon the closing of this offering, respectively, may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares or transactions that our stockholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws:
| • | permit our board of directors to issue up to 10,000,000 shares of preferred stock, with any rights, preferences and privileges as they may designate (including the right to approve an acquisition or other change in our control); |
| • | provide that the authorized number of directors may be changed only by resolution of the board of directors; |
| • | provide that the board of directors or any individual director may only be removed with cause and the affirmative vote of the holders of at least 66-2/3% of the voting power of all of our then outstanding common stock; |
| • | provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
| • | divide our board of directors into three classes with each class serving three-year staggered terms; |
| • | require that any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and not be taken by written consent; |
| • | provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner and also specify requirements as to the form and content of a stockholder’s notice; |
| • | do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of our common stock entitled to vote in any election of directors to elect all of the directors standing for election, if they should so choose); |
| • | provide that special meetings of our stockholders may be called only by the Chair of the board, our Chief Executive Officer or by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors; |
| • | provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware and any appellate court therefrom shall be the sole and exclusive forum for: (i) any derivative claim or cause of action brought on our behalf, (ii) any claim or cause of action that is based upon a violation of a duty owed by any of our current or former director, officer, employees or stockholder, to us or our stockholders; (iii) any claim or cause of action against us or any of our current or former directors, officers or other employees, arising out of or pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our bylaws; (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of our amended and restated certificate of incorporation or our bylaws; (v) any claim or cause of action as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and (vi) any claim or cause of action or proceeding asserting a claim against us or any of our current or former directors, officers or other employees governed by the internal-affairs doctrine or otherwise related to our internal affairs, in all cases to the fullest extent permitted by applicable law and |
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| subject to the court’s having personal jurisdiction over the indispensable parties named as defendants; provided, however, that if the designation of such court as the sole and exclusive forum for a claim or action referred to in foregoing clauses (i) through (vi) would violate applicable law, then the U.S. District Court for the District of Delaware shall be the sole and exclusive forum for such claim or cause of action; and |
| • | provide that unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against any defendant named in such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by us, our officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering. The amendment of any of these provisions, with the exception of the ability of our board of directors to issue shares of preferred stock and designate any rights, preferences and privileges thereto, would require approval by the holders of at least 66-2/3% of our then-outstanding common stock. |
Exchange listing
We have applied to list our common stock on the Nasdaq Global Select Market under the symbol “BLSM.” We believe that upon the closing of this offering, we will meet the standards for listing on Nasdaq, and the closing of this offering is contingent upon such listing.
Transfer agent and registrar
Upon the closing of this offering, the transfer agent and registrar for our common stock will be Computershare Trust Company, N.A. The transfer agent and registrar’s address is 150 Royall Street, Canton, Massachusetts 02021, and its telephone number is (781) 575-4019.
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Shares eligible for future sale
Prior to this offering, there has been no public market for our common stock. Future sales of substantial amounts of our common stock in the public market, or the perception that such sales may occur, could adversely affect the market price of our common stock. Furthermore, because only a limited number of shares of our common stock will be available for sale shortly after this offering due to certain contractual and legal restrictions on resale described below, sales of substantial amounts of our common stock in the public market after such restrictions lapse, or the anticipation of such sales, could adversely affect the prevailing market price of our common stock and our ability to raise equity capital in the future. Although we have applied to have our common stock listed on the Nasdaq Global Select Market, we cannot assure you that there will be an active public market for our common stock.
Following the closing of this offering, based on 12,390,078 shares of our common stock outstanding as of March 31, 2026 and assuming (i) the issuance of shares of our common stock in this offering, (ii) the automatic conversion of all outstanding shares of our convertible preferred stock into 85,552,612 shares of our common stock, which will automatically occur upon the closing of the offering, (iii) the Exercised Option Share Issuance, and (iv) no exercise of the underwriters’ option to purchase additional shares, we will have an aggregate of approximately shares of our common stock outstanding.
Of these shares, all shares of our common stock sold in this offering will be freely tradable without restriction or further registration under the Securities Act, except for any shares of our common stock purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act or any shares, including any shares purchased by any of our affiliates pursuant to our directed share program, subject to lock-up agreements. Shares purchased by our affiliates would be subject to the Rule 144 resale restrictions described below, other than the holding period requirement.
The remaining shares of our common stock outstanding after this offering will be “restricted securities,” as that term is defined in Rule 144 under the Securities Act. These restricted securities are eligible for public sale only if they are registered under the Securities Act or if they qualify for an exemption from registration under Rule 144 or Rule 701 under the Securities Act, each of which is summarized below and, if subject to lock-up agreements, may only be sold after the expiration of the 180-day lock-up period. We expect that substantially all of these shares will be subject to a 180-day lock-up period under the lock-up and market stand-off agreements described below.
We may issue shares of our common stock from time to time as consideration for future acquisitions, investments or other corporate purposes. In the event any such acquisition, investment or other transaction is significant, the number of shares of our common stock that we may issue may also be significant. We may also grant registration rights covering those shares of our common stock issued in connection with any such acquisition, investment or other transaction.
In addition, shares of our common stock that are either subject to outstanding options or reserved for future issuance under our equity incentive plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements described below and Rules 144 and 701 under the Securities Act.
Rule 144
In general, under Rule 144 as currently in effect, once we have been subject to public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, an eligible stockholder is entitled to sell such shares without complying with the manner of sale, volume limitation or notice provisions of
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Rule 144, subject to compliance with the public information requirements of Rule 144. To be an eligible stockholder under Rule 144, such stockholder must not be deemed to have been one of our affiliates for purposes of the Securities Act at any time during the 90 days preceding a sale and must have beneficially owned the shares proposed to be sold for at least six months, including the holding period of any prior owner other than our affiliates. If such a person has beneficially owned the shares proposed to be sold for at least one year, including the holding period of any prior owner other than our affiliates, then such person is entitled to sell such shares without complying with any of the requirements of Rule 144, subject to the expiration of the lock-up agreements described below.
In general, under Rule 144, as currently in effect, our affiliates or persons selling shares on behalf of our affiliates will be entitled to sell shares on expiration of the lock-up agreements described below. Beginning 90 days after the date of this prospectus, within any three-month period, such stockholders may sell a number of shares that does not exceed the greater of:
| • | 1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; or |
| • | the average weekly trading volume in our common stock on the Nasdaq Global Select Market during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale, provided in each case that we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. |
Sales under Rule 144 by our affiliates or persons selling shares on behalf of our affiliates are also subject to certain manner of sale provisions and notice requirements and to the availability of current public information about us.
Rule 701
Rule 701 generally allows a stockholder who was issued shares under a written compensatory plan or contract and who is not deemed to have been an affiliate of our company during the immediately preceding 90 days, to sell these shares in reliance on Rule 144, but without being required to comply with the public information, holding period, volume limitation or notice provisions of Rule 144. Rule 701 also permits our affiliates to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144. All holders of Rule 701 shares, however, are required by that rule to wait until 90 days after the date of this prospectus before selling those shares under Rule 701, subject to the expiration of the lock-up agreements described below and in the section titled “Underwriting.”
Form S-8 registration statement
We intend to file one or more registration statements on Form S-8 under the Securities Act to register all shares of our common stock subject to outstanding stock options and common stock issued or issuable under the 2020 Plan, the 2026 Plan and the ESPP. We expect to file the registration statement covering shares offered pursuant to these stock plans shortly after the date of this prospectus, permitting the resale of such shares by non-affiliates in the public market without restriction under the Securities Act and the sale by affiliates in the public market subject to compliance with the resale provisions of Rule 144.
Lock-up agreements
We, our directors, executive officers and the holders of substantially all of our equity securities, have agreed with the underwriters that for a period of 180 days after the date of this prospectus, subject to specified
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exceptions as detailed further in the section titled “Underwriting,” we or they will not, except with the prior written consent of J.P. Morgan Securities LLC, Leerink Partners LLC and Guggenheim Securities, LLC offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to sell or otherwise dispose of or transfer any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock, request or demand that we file a registration statement related to our common stock, or enter into any swap or other agreement that transfers to another, in whole or in part, directly or indirectly, the economic consequence of ownership of the common stock. Substantially all of our optionholders are subject to a market stand-off agreement with us, which imposes similar restrictions.
Upon expiration of the lock-up period, certain of our stockholders will have the right to require us to register their shares under the Securities Act. See the sections titled “Registration rights” below and “Description of capital stock—Registration rights.”
Upon the expiration of the lock-up period, substantially all of the shares subject to such lock-up restrictions will become eligible for sale, subject to the limitations discussed above.
Registration rights
Upon the closing of this offering and the expiration or release from the terms of applicable lock-up agreements, holders of an aggregate of shares of our common stock, which includes all of the shares of our common stock issuable upon the automatic conversion of our convertible preferred stock immediately prior to the closing of this offering, or their transferees, will be entitled to various rights with respect to the registration of these shares under the Securities Act. Registration of these shares under the Securities Act would result in these shares becoming fully tradable without restriction under the Securities Act immediately upon the effectiveness of the registration, except for shares subsequently purchased by affiliates. See the section titled “Description of capital stock—Registration rights” for additional information.
Rule 10b5-1 sales plans
After the closing of this offering, certain of our employees, including our executive officers, and/or directors, may enter into written trading plans that are intended to comply with Rule 10b5-1 under the Exchange Act. Sales under these trading plans would not be permitted until the expiration of the lock-up agreements relating to the offering described above.
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Material U.S. federal income tax consequences to non-U.S. holders of our common stock
The following is a summary of the material U.S. federal income tax consequences to non-U.S. holders (as defined below) of the acquisition, ownership, and disposition of our common stock issued pursuant to this offering. This discussion is not a complete analysis of all potential U.S. federal income tax consequences relating thereto, does not address the potential application of the Medicare contribution tax on net investment income, the alternative minimum tax provisions of the Code, or the special tax accounting rules under Section 451(b) of the Code, and does not address any estate or gift tax consequences or any tax consequences arising under any state, local, or non-U.S. tax laws, or any U.S. federal tax laws other than U.S. federal income tax laws. This discussion is based on the Code and applicable Treasury Regulations promulgated thereunder, published rulings and administrative pronouncements of the Internal Revenue Service (IRS), and judicial decisions, all as in effect as of the date hereof. These authorities are subject to differing interpretations and may change, possibly retroactively, resulting in U.S. federal income tax consequences different from those discussed below. We have not requested a ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS or a court will agree with such statements and conclusions.
This discussion is limited to non-U.S. holders who purchase our common stock pursuant to this offering and who hold our common stock as a “capital asset” within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion does not address all of the U.S. federal income tax consequences that may be relevant to a particular holder in light of such holder’s particular circumstances. This discussion also does not consider any specific facts or circumstances that may be relevant to holders subject to special rules under U.S. federal income tax laws, including but not limited to:
| • | certain former citizens or long-term residents of the United States; |
| • | “controlled foreign corporations” or “foreign controlled foreign corporations”; |
| • | “passive foreign investment companies”; |
| • | corporations that accumulate earnings to avoid U.S. federal income tax; |
| • | banks, financial institutions, investment funds, insurance companies, brokers, dealers, or traders in securities or foreign currencies; |
| • | tax-exempt organizations and governmental organizations; |
| • | tax-qualified retirement plans; |
| • | “qualified foreign pension funds” as defined in Section 897(l)(2) of the Code and entities all of the interests of which are held by qualified foreign pension funds; |
| • | persons that own, or have owned, actually or constructively, more than 5% of our stock at any time; |
| • | persons who have elected to mark securities to market; |
| • | persons holding our common stock as part of a hedging or conversion transaction or straddle, a constructive sale, or other risk reduction strategy or integrated investment; |
| • | persons who acquire our common stock through the exercise of an employee option or otherwise as compensation; and |
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| • | corporations organized outside of the United States, any state thereof and the District of Columbia that are nonetheless treated as U.S. taxpayers for U.S. federal income tax purposes. |
If an entity or arrangement that is classified as a partnership for U.S. federal income tax purposes holds our common stock, the U.S. federal income tax treatment of the partnership and the partners thereof generally depends on the status of the partner and the activities of the partnership. Partnerships holding our common stock and the partners in such partnerships are urged to consult their tax advisors about the particular U.S. federal income tax consequences to them of holding and disposing of our common stock.
THIS DISCUSSION IS FOR INFORMATIONAL PURPOSES ONLY AND IS NOT TAX ADVICE. PROSPECTIVE INVESTORS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF ACQUIRING, OWNING, AND DISPOSING OF OUR COMMON STOCK, AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL, OR NON-U.S. TAX LAWS AND ANY OTHER U.S. FEDERAL TAX LAWS.
Definition of non-U.S. holder
For purposes of this discussion, the term “non-U.S. holder” means any beneficial owner of our common stock that is neither a “U.S. person” nor a partnership (including any entity or arrangement treated as a partnership) for U.S. federal income tax purposes. A U.S. person is any person that, for U.S. federal income tax purposes, is or is treated as any of the following:
| • | an individual who is a citizen or resident of the United States; |
| • | a corporation (or entity treated as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States, any state thereof, or the District of Columbia; |
| • | an estate, the income of which is subject to U.S. federal income tax regardless of its source; or |
| • | a trust (i) whose administration is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person. |
Distributions on our common stock
As described in the section titled “Dividend policy,” we have not paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock for the foreseeable future. However, if we make cash or other property distributions on our common stock, such distributions will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Amounts that exceed our current and accumulated earnings and profits and, therefore, are not treated as dividends for U.S. federal income tax purposes will constitute a return of capital and will first be applied against and reduce a holder’s tax basis in our common stock, but not below zero. Any amount distributed in excess of basis will be treated as gain realized on the sale or other disposition of our common stock and will be treated as described under the subsection titled “—Gain on disposition of our common stock” below.
Subject to the discussions below regarding effectively connected income, backup withholding and Sections 1471 through 1474 of the Code (commonly referred to as Foreign Account Tax Compliance Act (FATCA)), dividends paid to a non-U.S. holder generally will be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends or such lower rate specified by an applicable income tax treaty. To receive the benefit of a reduced treaty rate, a non-U.S. holder must furnish us or our paying agent with a valid IRS Form W-8BEN or
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IRS Form W-8BEN-E (or applicable successor form) and satisfy applicable certification and other requirements. This certification must be provided to us or our paying agent before the payment of dividends and must be updated periodically. If the non-U.S. holder holds the stock through a financial institution or other agent acting on the non-U.S. holder’s behalf, the non-U.S. holder will be required to provide appropriate documentation to the agent, which then will be required to provide certification to us or our paying agent, either directly or through other intermediaries.
If a non-U.S. holder holds our common stock in connection with the conduct of a trade or business in the United States, and dividends paid on our common stock are effectively connected with such holder’s U.S. trade or business (and, if required by an applicable tax treaty, are attributable to such holder’s permanent establishment in the United States), the non-U.S. holder generally will be exempt from U.S. federal withholding tax, provided such non-U.S. holder complies with applicable certification and disclosure requirements. To claim the exemption, the non-U.S. holder generally must furnish a valid IRS Form W-8ECI (or applicable successor form) to the applicable withholding agent. However, any such effectively connected dividends paid on our common stock generally will be subject to U.S. federal income tax on a net income basis at the regular U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (or such lower rate specified by an applicable income tax treaty) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
Non-U.S. holders that do not provide the required certification on a timely basis, but that qualify for a reduced treaty rate, may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.
Gain on disposition of our common stock
Subject to the discussions below regarding backup withholding and FATCA, a non-U.S. holder generally will not be subject to U.S. federal income tax on any gain realized on the sale or other taxable disposition of our common stock, unless:
| • | the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States, and if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by the non-U.S. holder in the United States; |
| • | the non-U.S. holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition, and certain other requirements are met; or |
| • | our common stock constitutes a United States real property interest (USRPI), by reason of our status as a United States real property holding corporation (USRPHC), for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding the disposition or the non-U.S. holder’s holding period for our common stock, and our common stock is not regularly traded on an established securities market as defined by applicable Treasury Regulations. |
The determination of whether we are a USRPHC depends on the fair market value of our USRPIs relative to the fair market value of worldwide real property interests and our other assets used or held for use in a trade or business. We believe that we are not currently and do not anticipate becoming a USRPHC for U.S. federal income tax purposes, although there can be no assurance we will not become a USRPHC in the future. Even if we are or were to become a USRPHC, gain arising from the sale or other taxable disposition of our common stock by a non-U.S. holder will not be subject to U.S. federal income tax if our common stock is “regularly
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traded” (as defined by applicable Treasury Regulations) on an established securities market. Prospective investors are encouraged to consult their own tax advisors regarding the possible consequences to them if we are, or were to become, a USRPHC.
Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular U.S. federal income tax rates in the same manner as if such holder were a resident of the United States. A non-U.S. holder that is a foreign corporation also may be subject to an additional branch profits tax equal to 30% (unless an applicable income tax treaty provides for different treatment) of its effectively connected earnings and profits for the taxable year, as adjusted for certain items. A non-U.S. holder described in the second bullet point above will be subject to U.S. federal income tax at a flat 30% rate (or such lower rate specified by an applicable income tax treaty) on gain realized upon the sale or other taxable disposition of our common stock, but such gain may be offset by certain U.S.-source capital losses (even though the individual is not considered a resident of the United States), provided that the non-U.S. holder has timely filed U.S. federal income tax returns with respect to such losses. Non-U.S. holders should consult their tax advisors regarding any applicable income tax treaties that may provide for different rules.
Information reporting and backup withholding
Annual reports are required to be filed with the IRS and provided to each non-U.S. holder indicating the amount of distributions on our common stock paid to such holder and the amount of any tax withheld with respect to those distributions. These information reporting requirements apply regardless of whether such distributions constitute dividends and even if no withholding was required. This information also may be made available under a specific treaty or agreement with the tax authorities in the country in which the non-U.S. holder resides or is established. Backup withholding, currently at a 24% rate, generally will not apply to payments to a non-U.S. holder of dividends on, or the gross proceeds of a disposition of, our common stock provided the non-U.S. holder furnishes the required certification for its non-U.S. status, such as by providing a valid IRS Form W-8BEN, IRS Form W-8BEN-E, or IRS Form W-8ECI, or certain other requirements are met. Backup withholding may apply if the applicable withholding agent has actual knowledge, or reason to know, that the holder is a U.S. person who is not an exempt recipient.
Backup withholding is not an additional tax. If any amount is withheld under the backup withholding rules, the non-U.S. holder should consult with a U.S. tax advisor regarding the possibility of and procedure for obtaining a refund or a credit against the non-U.S. holder’s U.S. federal income tax liability, if any.
FATCA
FATCA imposes a U.S. federal withholding tax of 30% on certain payments made to a “foreign financial institution” (as specially defined under these rules) unless such institution enters into an agreement with the U.S. government to withhold on certain payments and to collect and provide to the U.S. tax authorities substantial information regarding certain U.S. account holders of such institution (which includes certain equity and debt holders of such institution, as well as certain account holders that are foreign entities with U.S. owners) or an exemption applies. FATCA also generally will impose a U.S. federal withholding tax of 30% on certain payments made to a non-financial foreign entity unless such entity provides the withholding agent a certification identifying certain direct and indirect U.S. owners of the entity or an exemption applies. An intergovernmental agreement between the United States and an applicable foreign country may modify these requirements. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes. FATCA currently applies to certain U.S. source payments such as dividends paid on our common stock. Under applicable Treasury Regulations and administrative guidance, withholding under FATCA would have applied to payments of gross proceeds from the sale or other disposition of stock, but under proposed Treasury
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Regulations (the preamble to which specifies that taxpayers are permitted to rely on such proposed regulations pending finalization), no withholding would apply with respect to payments of gross proceeds.
Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of the FATCA rules on their investment in our common stock.
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We are offering the shares of our common stock described in this prospectus through a number of underwriters. J.P. Morgan Securities LLC, Leerink Partners LLC and Guggenheim Securities, LLC are acting as book-running managers of the offering and as representatives of the underwriters. We have entered into an underwriting agreement with the underwriters. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of shares of our common stock listed next to its name in the following table:
| Name | Number of shares | |||
| J.P. Morgan Securities LLC |
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| Leerink Partners LLC |
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| Guggenheim Securities, LLC |
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| LifeSci Capital LLC |
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| H.C. Wainwright & Co., LLC |
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|
|
|
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| Total |
|
|
||
The underwriters are committed to purchase all the shares of our common stock offered by us if they purchase any shares. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of non-defaulting underwriters may also be increased or the offering may be terminated.
The underwriters propose to offer the shares of our common stock directly to the public at the initial public offering price set forth on the cover page of this prospectus and to certain dealers at that price less a concession not in excess of $ per share. After the initial offering of the shares to the public, if all of the shares of our common stock are not sold at the initial public offering price, the underwriters may change the offering price and the other selling terms. Sales of any shares made outside of the United States may be made by affiliates of the underwriters.
The underwriters have an option to buy up to additional shares of our common stock from us to cover sales of shares by the underwriters which exceed the number of shares specified in the table above. The underwriters have 30 days from the date of this prospectus to exercise this option to purchase additional shares. If any shares are purchased with this option to purchase additional shares, the underwriters will purchase shares in approximately the same proportion as shown in the table above. If any additional shares of our common stock are purchased, the underwriters will offer the additional shares on the same terms as those on which the shares are being offered.
The underwriting fee is equal to the public offering price per share of our common stock less the amount paid by the underwriters to us per share of our common stock. The underwriting fee is $ per share. The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase additional shares.
| Without option to purchase additional shares exercise |
With full option to purchase additional shares exercise |
|||||||
| Per share |
$ | $ | ||||||
| Total |
$ | $ | ||||||
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We estimate that the total expenses of this offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding the underwriting discounts and commissions, will be approximately $ . We have also agreed to reimburse the underwriters for certain of their expenses in an amount up to $40,000.
A prospectus in electronic format may be made available on the web sites maintained by one or more underwriters, or selling group members, if any, participating in the offering. The underwriters may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the representatives to underwriters and selling group members that may make Internet distributions on the same basis as other allocations.
We have agreed that we will not (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, or submit to, or file with, the Securities and Exchange Commission a registration statement under the Securities Act relating to, any shares of our common stock or securities convertible into or exercisable or exchangeable for any shares of our common stock, or (ii) enter into any swap or other arrangement that transfers all or a portion of the economic consequences associated with the ownership of any shares of our common stock or any such other securities (regardless of whether any of these transactions are to be settled by the delivery of shares of our common stock or such other securities, in cash or otherwise), in each case without the prior written consent of the representatives for a period of 180 days after the date of this prospectus, other than the shares of our common stock to be sold in this offering.
The restrictions on our actions, as described above, do not apply to certain transactions, including (i) the issuance of shares of our common stock or securities convertible into or exercisable for shares of our common stock pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options (including net or cashless exercise) outstanding on the date of the underwriting agreement and described in this prospectus; (ii) grants of stock options, stock awards, restricted stock, RSUs, or other equity awards and the issuance of shares of our common stock or securities convertible into or exercisable or exchangeable for shares of our common stock (whether upon the exercise, vesting or settlement of such equity awards) to our employees, officers, directors, advisors, or consultants pursuant to an equity compensation plan in effect as of the closing of this offering and described in this prospectus, provided that such recipients enter into a lock-up agreement with the underwriters; (iii) the issuance of up to 5% of the outstanding shares of our common stock, or securities convertible into, exercisable for, or which are otherwise exchangeable for, our common stock, or the entrance into an agreement to issue our common stock or any securities convertible into, exercisable for, or which are otherwise exchangeable for, our common stock immediately following the closing of this offering, in connection with any bona fide licensing, commercialization, joint ventures, technology transfer, acquisitions, mergers, development collaboration or other similar strategic transactions, provided that such recipients enter into a lock-up agreement with the underwriters; or (iv) the filing of any registration statement on Form S-8 relating to securities granted or to be granted pursuant to any plan in effect on the date of the underwriting agreement and described in this prospectus or any assumed benefit plan pursuant to an acquisition, merger or similar strategic transaction.
Our directors and executive officers, and substantially all of our shareholders (such persons, the lock-up parties) have entered into lock-up agreements with the underwriters prior to the commencement of this offering pursuant to which each lock-up party, with limited exceptions, for a period of 180 days after the date of this prospectus (such period, the restricted period), may not (and may not cause any of their direct or indirect affiliates to), without the prior written consent of the representatives, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock (including,
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without limitation, shares of our common stock or such other securities which may be deemed to be beneficially owned by such lock-up parties in accordance with the rules and regulations of the SEC and securities which may be issued upon exercise of a stock option or warrant (collectively with the shares of our common stock, the lock-up securities)), (ii) enter into any hedging, swap or other agreement or transaction that transfers, in whole or in part, any of the economic consequences of ownership of the lock-up securities, whether any such transaction described in clause (i) above or this clause (ii) is to be settled by delivery of lock-up securities, in cash or otherwise, (iii) make any demand for, or exercise any right with respect to, the registration of any lock-up securities, or (iv) publicly disclose the intention to do any of the foregoing. Such persons or entities have further acknowledged that these undertakings preclude them from engaging in any hedging or other transactions or arrangements (including, without limitation, any short sale or the purchase or sale of, or entry into, any put or call option, or combination thereof, forward, swap or any other derivative transaction or instrument, however described or defined) designed or intended, or which could reasonably be expected to lead to or result in, a sale or disposition or transfer (by any person or entity, whether or not a signatory to such agreement) of any economic consequences of ownership, in whole or in part, directly or indirectly, of any lock-up securities, whether any such transaction or arrangement (or instrument provided for thereunder) would be settled by delivery of lock-up securities, in cash or otherwise.
The restrictions described in the immediately preceding paragraph and contained in the lock-up agreements between the underwriters and the lock-up parties do not apply, subject in certain cases to various conditions, to certain transactions, including (a) transfers or dispositions of lock-up securities: (i) as a bona fide gift or gifts or charitable contribution, or for bona fide estate planning purposes, (ii) by will or intestacy or any other testamentary document, (iii) to any member of the lock-up party’s immediate family or to any trust for the direct or indirect benefit of the lock-up party or any immediate family member, or if the lock-up party is a trust, to a trustor, trustee, or beneficiary of the trust or to the estate of a trustor, trustee, or beneficiary of such trust (iv) to a corporation, partnership, limited liability company, investment fund or other entity (A) of which the lock-up party and its immediate family members are the legal and beneficial owner of all of the outstanding equity securities or similar interests or (B) controlled by, or under common control with, the lock-up party or its immediate family member, (v) to a nominee or custodian of a person or entity to whom a disposition or transfer would be permissible under clauses (i) through (iv), (vi) in the case of a corporation, partnership, limited liability company, trust or other business entity, (A) to another corporation, partnership, limited liability company, trust or other business entity that is an affiliate of the lock-up party, or to any investment fund or other entity controlling, controlled by, managing or managed by or under common control or common investment management with the lock-up party or its affiliates (including, for the avoidance of doubt, where the lock-up party is a partnership, to its general partner or a successor partnership or fund, or any other funds managed by such partnership), or (B) as part of a distribution to current or former general or limited partners, members, shareholders, equityholders or affiliates of the lock-up party, or to the estates of any of the foregoing, (vii) by operation of law, such as pursuant to a qualified domestic order, divorce settlement, divorce decree or other similar court order or separation agreement, (viii) to us from an employee, independent contractor, other service provider, or director upon death, disability or termination or cessation of employment or service, in each case, of such employee, independent contractor, service provider, or director or (B) pursuant to an agreement under which we have a right of first refusal with respect to transfers of such securities, (ix) as part of a sale of lock-up securities acquired (A) from the underwriters in this offering or (B) in open market transactions after the completion of this offering, (x) to us in connection with the vesting, settlement or exercise of RSUs, options, warrants or other rights to purchase shares of our common stock (including, in each case, by way of “net” or “cashless” exercise), including for the payment of exercise price and tax and remittance payments due as a result of the vesting, settlement, or exercise of such RSUs, options, warrants or rights, or (xi) pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction, in one transaction or a series of related transactions, that is approved by our board of directors
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and made to all shareholders involving a change in control, provided that if such transaction is not completed, all such lock-up securities would remain subject to the restrictions in the immediately preceding paragraph; (b) the exercise of the options, settlement of RSUs or other equity awards, or the exercise of warrants granted pursuant to plans described in this prospectus, provided that any lock-up securities received upon such exercise, vesting or settlement would be subject to the restrictions in the immediately preceding paragraph; (c) the conversion of outstanding preferred stock, warrants to acquire preferred stock, or convertible securities into shares of our common stock or warrants to acquire shares of our common stock, provided that any common stock or warrant received upon such conversion would be subject to the restrictions in the immediately preceding paragraph and (d) the establishment by lock-up parties of trading plans under Rule 10b5-1 under the Exchange Act or any amendments to such plans, provided that such plan or amendment does not provide for the transfer of lock-up securities during the restricted period.
The representatives, in their sole discretion, may release the securities subject to any of the lock-up agreements with the underwriters described above, in whole or in part at any time.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.
We have applied to have our common stock approved for listing/quotation on the Nasdaq Global Select Market under the symbol “BLSM.”
In connection with this offering, the underwriters may engage in stabilizing transactions, which involves making bids for, purchasing and selling shares of our common stock in the open market for the purpose of preventing or retarding a decline in the market price of the common stock while this offering is in progress. These stabilizing transactions may include making short sales of our common stock, which involves the sale by the underwriters of a greater number of shares of our common stock than they are required to purchase in this offering, and purchasing shares of our common stock on the open market to cover positions created by short sales. Short sales may be “covered” shorts, which are short positions in an amount not greater than the underwriters’ option to purchase additional shares referred to above, or may be “naked” shorts, which are short positions in excess of that amount. The underwriters may close out any covered short position either by exercising their option to purchase additional shares, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriters will consider, among other things, the price of shares available for purchase in the open market compared to the price at which the underwriters may purchase shares through the option to purchase additional shares. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market that could adversely affect investors who purchase in this offering. To the extent that the underwriters create a naked short position, they will purchase shares in the open market to cover the position.
The underwriters have advised us that, pursuant to Regulation M of the Exchange Act, they may also engage in other activities that stabilize, maintain or otherwise affect the price of the common stock, including the imposition of penalty bids. This means that if the representatives of the underwriters purchase shares of our common stock in the open market in stabilizing transactions or to cover short sales, the representatives can require the underwriters that sold those shares as part of this offering to repay the underwriting discount received by them.
These activities may have the effect of raising or maintaining the market price of the common stock or preventing or retarding a decline in the market price of the common stock, and, as a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If the underwriters commence these activities, they may discontinue them at any time. The underwriters may carry out these transactions on the Nasdaq Global Select Market, in the over—the—counter market or otherwise.
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Prior to this offering, there has been no public market for our common stock. The initial public offering price will be determined by negotiations between us and the representatives of the underwriters. In determining the initial public offering price, we and the representatives of the underwriters expect to consider a number of factors including:
| • | the information set forth in this prospectus and otherwise available to the representatives; |
| • | our prospects and the history and prospects for the industry in which we compete; |
| • | an assessment of our management; |
| • | our prospects for future earnings; |
| • | the general condition of the securities markets at the time of this offering; |
| • | the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and |
| • | other factors deemed relevant by the underwriters and us. |
Neither we nor the underwriters can assure investors that an active trading market will develop for the shares of our common stock, or that the shares will trade in the public market at or above the initial public offering price.
Certain of the underwriters and their affiliates have provided in the past to us and our affiliates and may provide from time to time in the future certain commercial banking, financial advisory, investment banking and other services for us and such affiliates in the ordinary course of their business, for which they have received and may continue to receive customary fees and commissions. In addition, from time to time, certain of the underwriters and their affiliates may effect transactions for their own account or the account of customers, and hold on behalf of themselves or their customers, long or short positions in our debt or equity securities or loans, and may do so in the future.
At our request, the underwriters have reserved for sale, at the initial public offering price, up to approximately shares of our common stock being offered hereby (approximately 1.0%) to our directors and officers and certain of our employees, business associates, investors and friends and family of our directors, officers, employees, business associates and investors. The sales will be made at our direction by J.P. Morgan Securities LLC, an underwriter of this offering, and its affiliates through a directed share program. The number of shares of common stock available for sale to the general public will be reduced to the extent such persons purchase such reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same basis as the other shares offered hereby. We have agreed to indemnify J.P. Morgan Securities LLC against certain liabilities and expenses, including liabilities under the Securities Act, in connection with the sales of the directed shares.
Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
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Notice to prospective investors in Canada
The shares of our common stock may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the shares of our common stock must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.
Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.
Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Notice to prospective investors in the European Economic Area
In relation to each Member State of the European Economic Area (each a Relevant State), no shares of our common stock have been offered or will be offered pursuant to this offering to the public in that Relevant State prior to the publication of a prospectus in relation to the shares of our common stock which has been approved by the competent authority in that Relevant State or, where appropriate, approved in another Relevant State and notified to the competent authority in that Relevant State, all in accordance with the Prospectus Regulation (as defined below), except that offers of shares of our common stock may be made to the public in that Relevant State at any time:
| (a) | to any qualified investor as defined under Article 2 of the Prospectus Regulation; |
| (b) | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the representatives; or |
| (c) | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
provided that (i) no such offer of shares of our common stock shall require us or any underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Regulation, supplement a prospectus pursuant to Article 23 of the Prospectus Regulation or publish an Annex IX document pursuant to Article 1(4) of the Prospectus Regulation.
For the purposes of this provision, the expression an “offer to the public” in relation to shares of our common stock in any Relevant State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares of our common stock to be offered so as to enable an investor to decide to purchase or subscribe for any such shares, and the expression “Prospectus Regulation” means Regulation (EU) 2017/1129.
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Notice to prospective investors in the United Kingdom
No shares of our common stock have been offered or will be offered pursuant to this offering to the public in the United Kingdom, except that such shares may be offered to the public in the United Kingdom at any time:
| (a) | where the offer is conditional on the admission of the shares of common stock to trading on the London Stock Exchange plc’s main market (in reliance on the exception in paragraph 6(a) of Schedule 1 of the POATR); |
| (b) | to any qualified investor as defined under paragraph 15 of Schedule 1 of the POATR; |
| (c) | to fewer than 150 natural or legal persons (other than qualified investors as defined under paragraph 15 of Schedule 1 of the POATR), subject to obtaining the prior consent of the underwriters for any such offer; or |
| (d) | in any other circumstances falling within Schedule 1 of the POATR. |
For the purposes of this provision, the expression an “offer to the public” in relation to the shares of common stock in the United Kingdom means the communication to any person which presents sufficient information on: (a) the shares of common stock to be offered; and (b) the terms on which they are to be offered, to enable an investor to decide to buy or subscribe for the shares of common stock and the expressions “POATR” means the Public Offers and Admissions to Trading Regulations 2024.
Notice to prospective investors in Switzerland
No shares of our common stock have been offered or will be offered to the public in Switzerland, except that offers of shares of our common stock may be made to the public in Switzerland at any time under the following exemptions under the Swiss Financial Services Act (FinSA):
| (a) | to any person which is a professional client as defined under the FinSA; |
| (b) | to fewer than 500 persons (other than professional clients as defined under the FinSA), subject to obtaining the prior consent of the underwriters for any such offer; or |
| (c) | in any other circumstances falling within Article 36 FinSA in connection with Article 44 of the Swiss Financial Services Ordinance, |
provided that no such offer of shares of our common stock shall require the company or any underwriter to publish a prospectus pursuant to Article 35 FinSA.
The shares of our common stock have not been and will not be listed or admitted to trading on a trading venue in Switzerland.
Neither this prospectus nor any other offering or marketing material relating to the shares of our common stock constitutes a prospectus as such term is understood pursuant to the FinSA and neither this prospectus nor any other offering or marketing material relating to the shares of our common stock may be publicly distributed or otherwise made publicly available in Switzerland.
Notice to prospective investors in Australia
This prospectus:
| (a) | does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth) (the Corporations Act); |
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| (b) | has not been, and will not be, lodged with the Australian Securities and Investments Commission (ASIC), as a disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document for the purposes of the Corporations Act; and |
| (c) | may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of the categories of investors, available under section 708 of the Corporations Act (Exempt Investors). |
The shares of our common stock may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for or buy such shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any such shares may be distributed in Australia, except where disclosure to investors is not required under Chapter 6D of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the shares of our common stock, you represent and warrant to us that you are an Exempt Investor.
As any offer of shares of our common stock under this prospectus will be made without disclosure in Australia under Chapter 6D.2 of the Corporations Act, the offer of those securities for resale in Australia within 12 months may, under section 707 of the Corporations Act, require disclosure to investors under Chapter 6D.2 if none of the exemptions in section 708 applies to that resale. By applying for the shares of our common stock, you undertake to us that you will not, for a period of 12 months from the date of issue of such shares, offer, transfer, assign or otherwise alienate such shares to investors in Australia except in circumstances where disclosure to investors is not required under Chapter 6D.2 of the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.
Notice to prospective investors in Japan
The shares of our common stock have not been and will not be registered pursuant to Article 4, Paragraph 1 of the Financial Instruments and Exchange Act of Japan. Accordingly, none of the shares of our common stock nor any interest therein may be offered or sold, directly or indirectly, in Japan or to, or for the benefit of, any “resident” of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organized under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to or for the benefit of a resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Financial Instruments and Exchange Act of Japan and any other applicable laws, regulations and ministerial guidelines of Japan in effect at the relevant time.
Notice to prospective investors in Hong Kong
The shares of our common stock have not been offered or sold and will not be offered or sold in Hong Kong, by means of any document, other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (the SFO) of Hong Kong and any rules made thereunder; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong) (the CO) or which do not constitute an offer to the public within the meaning of the CO. No advertisement, invitation or document relating to the shares of our common stock has been or may be issued or has been or may be in the possession of any person for the purposes of issue, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to shares of our common stock which are or are
264
intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made thereunder.
Notice to prospective investors in Singapore
Each book-running manager has acknowledged that this prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each book-running manager has represented and agreed that it has not offered or sold any shares of our common stock or caused such shares to be made the subject of an invitation for subscription or purchase and will not offer or sell any shares of our common stock or cause such shares to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, this prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares of our common stock, whether directly or indirectly, to any person in Singapore other than:
| (a) | to an institutional investor (as defined in Section 4A of the Securities and Futures Act (Chapter 289) of Singapore, as modified or amended from time to time (the SFA)) pursuant to Section 274 of the SFA; |
| (b) | to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA; or |
| (c) | otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. |
Where the shares of our common stock are subscribed or purchased under Section 275 of the SFA by a relevant person which is:
| (a) | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
| (b) | a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, |
securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares of our common stock pursuant to an offer made under Section 275 of the SFA except:
| (i) | to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(c)(ii) of the SFA; |
| (ii) | where no consideration is or will be given for the transfer; |
| (iii) | where the transfer is by operation of law; |
| (iv) | as specified in Section 276(7) of the SFA; or |
| (v) | as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018. |
Notice to prospective investors in China
This prospectus will not be circulated or distributed in the People’s Republic of China (PRC) and the shares of our common stock will not be offered or sold, and will not be offered or sold to any person for re-offering or
265
resale directly or indirectly to any residents of the PRC (for such purposes, not including the Hong Kong and Macau Special Administrative Regions or Taiwan), except pursuant to any applicable laws and regulations of the PRC. Neither this prospectus nor any advertisement or other offering material may be distributed or published in the PRC, except under circumstances that will result in compliance with applicable laws and regulations.
Notice to prospective investors in Korea
The shares of our common stock have not been and will not be registered under the Financial Investments Services and Capital Markets Act of Korea and the decrees and regulations thereunder (the FSCMA), and such shares have been and will be offered in Korea as a private placement under the FSCMA. None of the shares of our common stock may be offered, sold or delivered directly or indirectly, or offered or sold to any person for re-offering or resale, directly or indirectly, in Korea or to any resident of Korea except pursuant to the applicable laws and regulations of Korea, including the FSCMA and the Foreign Exchange Transaction Law of Korea and the decrees and regulations thereunder (the FETL). Furthermore, the purchaser of the shares of our common stock shall comply with all applicable regulatory requirements (including but not limited to requirements under the FETL) in connection with the purchase of such shares. By the purchase of the shares of our common stock, the relevant holder thereof will be deemed to represent and warrant that if it is in Korea or is a resident of Korea, it purchased such shares pursuant to the applicable laws and regulations of Korea.
Notice to prospective investors in Taiwan
The shares of our common stock have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the shares of our common stock in Taiwan.
Notice to prospective investors in Bermuda
Shares of our common stock may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act of 2003 of Bermuda which regulates the sale of securities in Bermuda. Additionally, non-Bermudian persons (including companies) may not carry on or engage in any trade or business in Bermuda unless such persons are permitted to do so under applicable Bermuda legislation.
Notice to prospective investors in Saudi Arabia
This prospectus may not be distributed in the Kingdom of Saudi Arabia except to such persons as are permitted under the Rules on the Offer of Securities and Continuing Obligations Regulations as issued by the board of the Saudi Arabian Capital Market Authority (the CMA) pursuant to resolution number 3-123-2017 dated 27 December 2017, as amended (the CMA Regulations). The CMA does not make any representation as to the accuracy or completeness of this prospectus and expressly disclaims any liability whatsoever for any loss arising from, or incurred in reliance upon, any part of this prospectus. Prospective purchasers of the securities offered hereby should conduct their own due diligence on the accuracy of the information relating to the securities. If you do not understand the contents of this prospectus, you should consult an authorized financial adviser.
Notice to prospective investors in the Dubai International Financial Centre (DIFC)
This prospectus relates to an Exempt Offer in accordance with and as defined in the Markets Law, DIFC Law No. 1 of 2012, as amended. This prospectus is intended for distribution only to persons of a type specified in the
266
Markets Law, DIFC Law No. 1 of 2012, as amended. It must not be delivered to, or relied on by, any other person. The Dubai Financial Services Authority (DFSA) has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for this prospectus. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.
In relation to its use in the DIFC, this prospectus is strictly private and confidential and is being distributed to a limited number of investors and must not be provided to any person other than the original recipient, and may not be reproduced or used for any other purpose. The interests in the securities may not be offered or sold directly or indirectly to the public in the DIFC.
Notice to prospective investors in the United Arab Emirates
The shares of our common stock have not been, and are not being, publicly offered, sold, promoted or advertised in the United Arab Emirates (including the DIFC) other than in compliance with the laws of the United Arab Emirates (and the DIFC) governing the issue, offering and sale of securities. Further, this prospectus does not constitute a public offer of securities in the United Arab Emirates (including the DIFC) and is not intended to be a public offer. This prospectus has not been approved by or filed with the Central Bank of the United Arab Emirates, the Securities and Commodities Authority, Financial Services Regulatory Authority or the DFSA.
Notice to prospective investors in the Abu Dhabi Global Market
The Abu Dhabi Global Market (ADGM), including the Financial Services Regulatory Authority and the Registration Authority does not accept any responsibility for the content of the information included in this prospectus, including the accuracy or completeness of such information. The liability for the content of this prospectus lies with the company and other persons, such as experts, whose opinions are included in this prospectus with their consent. The ADGM has also not assessed the suitability of the securities to which this prospectus relates to any particular investor or type of investor. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this prospectus or are unsure whether the securities to which this prospectus relates are suitable for your individual investment objectives and circumstances, you should consult an authorized financial adviser.
Notice to prospective investors in the British Virgin Islands
The shares of our common stock are not being, and may not be offered to the public or to any person in the British Virgin Islands for purchase or subscription by or on behalf of the company. The shares of our common stock may be offered to companies incorporated under the BVI Business Companies Act, 2004 (British Virgin Islands), but only where the offer will be made to, and received by, the relevant BVI Company entirely outside of the British Virgin Islands.
Notice to prospective investors in Bahamas
Shares of our common stock may not be offered or sold in The Bahamas via a public offer. Shares of our common stock may not be offered or sold or otherwise disposed of in any way to any person(s) deemed “resident” for exchange control purposes by the Central Bank of The Bahamas.
267
Notice to prospective investors in South Africa
Due to restrictions under the securities laws of South Africa, no “offer to the public” (as such term is defined in the South African Companies Act, No. 71 of 2008 (as amended or re-enacted) (the South African Companies Act)) is being made in connection with the issue of shares of our common stock in South Africa. Accordingly, this prospectus does not, nor is it intended to, constitute a “registered prospectus” (as defined in the South African Companies Act) prepared and registered under the South African Companies Act and has not been approved by, and/or filed with, the South African Companies and Intellectual Property Commission or any other regulatory authority in South Africa. The shares of our common stock are not offered, and the offer shall not be transferred, sold, renounced or delivered, in South Africa or to a person with an address in South Africa, unless one or other of the following exemptions stipulated in section 96 (1) applies:
Section 96 (1) (a): the offer, transfer, sale, renunciation or delivery is to:
| (i) | persons whose ordinary business, or part of whose ordinary business, is to deal in securities, as principal or agent; |
| (ii) | the South African Public Investment Corporation; |
| (iii) | persons or entities regulated by the Reserve Bank of South Africa; |
| (iv) | authorized financial service providers under South African law; |
| (v) | financial institutions recognized as such under South African law; |
| (vi) | a wholly-owned subsidiary of any person or entity contemplated in (c), (d) or (e), acting as agent in the capacity of an authorized portfolio manager for a pension fund, or as manager for a collective investment scheme (in each case duly registered as such under South African law); or |
| (vii) | any combination of the persons in (i) to (vi); or |
Section 96 (1) (b): the total contemplated acquisition cost of the securities, for any single addressee acting as principal is equal to or greater than ZAR1,000,000 or such higher amount as may be promulgated by notice in the Government Gazette of South Africa pursuant to section 96(2)(a) of the South African Companies Act.
Information made available in this prospectus should not be considered as “advice” as defined in the South African Financial Advisory and Intermediary Services Act, 2002.
Notice to prospective investors in Israel
This prospectus does not constitute a prospectus under the Israeli Securities Law, 5728-1968 (the Israeli Securities Law), and has not been filed with or approved by the Israel Securities Authority. In Israel, this prospectus is being distributed only to, and is directed only at, and any offer of the shares is directed only at, (i) a limited number of persons in accordance with the Israeli Securities Law and (ii) investors listed in the first addendum (the Addendum), to the Israeli Securities Law, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals,” each as defined in the Addendum (as it may be amended from time to time), or, collectively referred to as qualified investors (in each case, purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors are required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.
268
The validity of the shares of our common stock being offered by this prospectus will be passed upon for us by Cooley LLP, San Diego, California. Certain legal matters relating to this offering will be passed upon for the underwriters by Latham & Watkins LLP, San Diego, California. As of the date of this prospectus, GC&H Investments, LLC, an entity comprised of partners and associates of Cooley LLP, beneficially owns an aggregate of 66,438 shares of our capital stock.
The financial statements of BlossomHill Therapeutics, Inc. as of December 31, 2024 and 2025, and for each of the two years in the period ended December 31, 2025, included in this prospectus, have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report. Such financial statements are included in reliance upon the report of such firm given their authority as experts in accounting and auditing.
Where you can find more information
We have filed with the SEC a registration statement on Form S-1, including exhibits and schedules, under the Securities Act, with respect to the shares of our common stock being offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information in the registration statement and its exhibits. For further information with respect to us and the common stock offered by this prospectus, we refer you to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each of these statements is qualified in all respects by this reference.
You can read our SEC filings, including the registration statement, over the internet at the SEC’s website at www.sec.gov.
Upon the closing of this offering, we will be subject to the information reporting requirements of the Exchange Act, and we will file reports, proxy statements and other information with the SEC. These reports, proxy statements and other information will be available for inspection at the website of the SEC referred to above. We also maintain a website at www.bhtherapeutics.com, at which, following the closing of this offering, you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained in or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.
269
| Audited financial statements as of and for the years ended December 31, 2024 and 2025 |
||||
| F-2 | ||||
| F-3 | ||||
| F-4 | ||||
| Statements of convertible preferred stock and stockholders’ deficit |
F-5 | |||
| F-6 | ||||
| F-7 | ||||
| Unaudited condensed financial statements as of and for the three months ended March 31, 2025 and 2026: |
||||
| F-25 | ||||
| F-26 | ||||
| Condensed statements of convertible preferred stock and stockholders’ deficit |
F-27 | |||
| F-28 | ||||
| F-29 | ||||
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the shareholders and the Board of Directors of BlossomHill Therapeutics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of BlossomHill Therapeutics, Inc. (the “Company”) as of December 31, 2024 and 2025, the related statements of operations, convertible preferred stock and stockholders’ deficit, and cash flows , for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2025, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Substantial doubt about the company’s ability to continue as a going concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has incurred net losses and negative cash flows from operations since inception, has a significant accumulated deficit and expects to continue to incur net losses for the foreseeable future which are factors that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ Deloitte & Touche LLP
San Diego, California
April 24, 2026
We have served as the Company’s auditor since 2024.
F-2
BlossomHill Therapeutics, Inc.
Balance sheets
(in thousands, except share and par value data)
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 100,147 | $ | 136,682 | ||||
| Prepaid expenses and other current assets |
4,025 | 2,144 | ||||||
|
|
|
|||||||
| Total current assets |
104,172 | 138,826 | ||||||
| Property and equipment, net |
1,100 | 1,726 | ||||||
| Operating lease right-of-use assets |
486 | 19,921 | ||||||
| Other assets |
1,017 | 2,495 | ||||||
|
|
|
|||||||
| Total assets |
$ | 106,775 | $ | 162,968 | ||||
|
|
|
|||||||
| Liabilities, convertible preferred stock and stockholders’ deficit |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 849 | $ | 2,314 | ||||
| Accrued expenses |
2,938 | 8,431 | ||||||
| Accrued compensation |
2,461 | 4,730 | ||||||
| Operating lease liability, current |
525 | 5 | ||||||
|
|
|
|||||||
| Total current liabilities |
6,773 | 15,480 | ||||||
| Operating lease liability, non-current |
— | 22,393 | ||||||
|
|
|
|||||||
| Total liabilities |
6,773 | 37,873 | ||||||
| Commitments and contingencies (Note 8) |
||||||||
| Convertible preferred stock, $0.0001 par value; 63,188,793 and 85,552,612 shares authorized at December 31, 2024 and 2025, respectively; 63,188,768 and 85,552,612 shares issued and outstanding at December 31, 2024 and 2025, respectively; $173,000 and $257,153 aggregate liquidation preference at December 31, 2024 and December 31, 2025, respectively |
172,885 | 256,823 | ||||||
| Stockholders’ deficit: |
||||||||
| Common stock, $0.0001 par value; 79,726,375 and 110,000,000 shares authorized at December 31, 2024 and 2025, respectively; 11,157,743 and 11,941,827 shares issued and outstanding at December 31, 2024 and 2025, respectively |
1 | 1 | ||||||
| Additional paid-in capital |
1,590 | 3,300 | ||||||
| Accumulated deficit |
(74,474 | ) | (135,029 | ) | ||||
|
|
|
|||||||
| Total stockholders’ deficit |
(72,883 | ) | (131,728 | ) | ||||
|
|
|
|||||||
| Total liabilities, convertible preferred stock and stockholders’ deficit |
$ | 106,775 | $ | 162,968 | ||||
See accompanying notes to financial statements
F-3
BlossomHill Therapeutics, Inc.
Statements of operations
(in thousands, except share and per share data)
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Operating expenses: |
||||||||
| Research and development |
$ | 31,810 | $ | 56,138 | ||||
| General and administrative |
4,591 | 7,886 | ||||||
|
|
|
|||||||
| Total operating expenses |
36,401 | 64,024 | ||||||
|
|
|
|||||||
| Loss from operations |
(36,401 | ) | (64,024 | ) | ||||
| Other income (expense), net: |
||||||||
| Interest income, net |
5,706 | 3,480 | ||||||
| Other expense |
— | (11 | ) | |||||
|
|
|
|||||||
| Total other income, net |
5,706 | 3,469 | ||||||
|
|
|
|||||||
| Net loss |
$ | (30,695 | ) | $ | (60,555 | ) | ||
|
|
|
|||||||
| Net loss per share, basic and diluted |
$ | (2.86 | ) | $ | (5.30 | ) | ||
|
|
|
|||||||
| Weighted-average common shares outstanding, basic and diluted |
10,730,731 | 11,424,996 | ||||||
See accompanying notes to financial statements
F-4
BlossomHill Therapeutics, Inc.
Statements of convertible preferred stock and stockholders’ deficit
(in thousands, except share data)
| Convertible preferred stock | Common stock | Additional paid-in capital |
Accumulated deficit |
Total stockholders’ deficit |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
| Balance at December 31, 2023 |
60,172,481 | $ | 161,545 | 10,498,164 | $ | 1 | $ | 666 | $ | (43,779 | ) | $ | (43,112 | ) | ||||||||||||||
| Issuance of convertible preferred stock, net of issuance costs |
3,016,287 | 11,340 | — | — | — | — | — | |||||||||||||||||||||
| Exercise of stock options |
— | — | 659,579 | — | 420 | — | 420 | |||||||||||||||||||||
| Stock-based compensation expense |
— | — | — | — | 504 | — | 504 | |||||||||||||||||||||
| Net loss |
— | — | — | — | — | (30,695 | ) | (30,695 | ) | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
| Balance at December 31, 2024 |
63,188,768 | 172,885 | 11,157,743 | 1 | 1,590 | (74,474 | ) | (72,883 | ) | |||||||||||||||||||
| Issuance of convertible preferred stock, net of issuance costs |
22,363,844 | 83,938 | — | — | — | — | — | |||||||||||||||||||||
| Exercise of stock options |
— | — | 784,084 | — | 620 | — | 620 | |||||||||||||||||||||
| Stock-based compensation expense |
— | — | — | — | 1,090 | — | 1,090 | |||||||||||||||||||||
| Net loss |
— | — | — | — | — | (60,555 | ) | (60,555 | ) | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
| Balance at December 31, 2025 |
85,552,612 | $ | 256,823 | 11,941,827 | $ | 1 | $ | 3,300 | $ | (135,029 | ) | $ | (131,728 | ) | ||||||||||||||
See accompanying notes to financial statements
F-5
BlossomHill Therapeutics, Inc.
Statements of cash flows
(in thousands)
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (30,695 | ) | $ | (60,555 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations: |
||||||||
| Depreciation expense |
350 | 441 | ||||||
| Non-cash lease expense |
697 | 1,288 | ||||||
| Stock-based compensation expense |
504 | 1,090 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Prepaid expenses and other assets |
(4,547 | ) | 1,912 | |||||
| Other assets |
931 | (1,478 | ) | |||||
| Accounts payable |
(1,138 | ) | 1,465 | |||||
| Accrued compensation |
986 | 2,269 | ||||||
| Accrued expenses |
2,221 | 5,493 | ||||||
| Operating lease liabilities |
(725 | ) | 1,150 | |||||
|
|
|
|||||||
| Net cash used in operating activities |
(31,416 | ) | (46,925 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(92 | ) | (1,067 | ) | ||||
|
|
|
|||||||
| Net cash used in investing activities |
(92 | ) | (1,067 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from the exercise of stock options |
420 | 589 | ||||||
| Proceeds from the issuance of convertible preferred stock, net of issuance costs |
17,140 | 83,938 | ||||||
|
|
|
|||||||
| Net cash provided by financing activities |
17,560 | 84,527 | ||||||
| Net increase (decrease) in cash and cash equivalents |
(13,948 | ) | 36,535 | |||||
| Cash and cash equivalents at the beginning of period |
114,095 | 100,147 | ||||||
|
|
|
|||||||
| Cash and cash equivalents at the end of period |
$ | 100,147 | $ | 136,682 | ||||
|
|
|
|||||||
| Supplemental disclosure of noncash activities: |
||||||||
|
Right-of-use asset obtained in exchange for operating lease liability |
$ | — | $ | 20,946 | ||||
See accompanying notes to financial statements
F-6
BlossomHill Therapeutics, Inc.
As of and for the years ended December 31, 2024 and 2025
1. Organization, liquidity and going concern, and basis of presentation
Organization
BlossomHill Therapeutics, Inc. (the “Company”) is a clinical-stage biopharmaceutical company applying its intentional, chemistry-based approach to develop innovative small molecule medicines that address significant unmet medical needs in cancer treatment. The Company was incorporated in the State of Delaware on June 22, 2020, and its principal operations are in San Diego, California.
From its inception to December 31, 2025, the Company has devoted substantially all of its resources to conducting research and development, staffing the Company, establishing and protecting the Company’s intellectual property portfolio, scaling up manufacturing processes and supplying product candidates and other materials for the Company’s preclinical studies and clinical trials, leasing office and laboratory space, raising capital, business planning, and providing general and administrative support for these activities. The Company’s operations to date have been funded primarily through the issuance of convertible preferred stock.
Liquidity and going concern
In accordance with Accounting Standards Codification (ASC) Topic 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date that these financial statements are issued.
The Company has incurred net losses and negative cash flows from operations since inception, has a significant accumulated deficit and expects to continue to incur net losses for the foreseeable future. The Company has never generated any revenue from product sales and does not expect to generate any revenues from product sales unless and until it successfully completes development of and obtains regulatory approval for its product candidates, which will not be for several years, if ever.
As the Company continues to pursue its business plan, it expects to finance its operations through a combination of public or private equity or debt financings or other capital sources, which may include strategic collaborations and other strategic arrangements with third parties. However, there can be no assurance that any additional financing or strategic transactions will be available to the Company on acceptable terms, if at all.
As of April 24, 2026, the issuance date of the financial statements as of and for the year ended December 31, 2025, there is uncertainty about whether the Company’s cash and cash equivalents will be sufficient to fund operations beyond twelve months from the issuance date of these financial statements and therefore the Company concluded that substantial doubt exists about the Company’s ability to continue as a going concern.
The accompanying financial statements have been prepared on a going- concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
Basis of presentation
The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) and the U.S. Securities and Exchange Commission rules under
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Regulation S-X. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the ASC and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).
2. Summary of significant accounting policies
Use of estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Accounting estimates and management judgments reflected in the financial statements include: the accrual of research and development expenses, common stock valuation, stock-based compensation, and the determination of right-of-use assets under lease transactions and related lease obligations, and income tax uncertainties. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may materially differ from these estimates and assumptions.
Concentration of credit risk
Financial instruments which potentially subject the Company to significant concentration of credit risk consist of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts, and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held.
Segment reporting
The Company operates and manages its business as one operating segment and one reportable segment. The Company’s Chief Executive Officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for allocating resources and evaluating financial performance. All long-lived assets are maintained in the United States.
Cash and cash equivalents
Cash and cash equivalents are considered to be highly liquid investments with maturities of three months or less at the date of purchase. Cash equivalents primarily represent funds invested in readily available money market accounts. As of December 31, 2025, the Company had cash and cash equivalents balances deposited at multiple major financial institutions.
Property and equipment, net
Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets (generally three to seven years, or the remaining term of the lease). The Company capitalizes laboratory equipment used for research and development if it has alternative future use in research and development or otherwise. Upon retirement or sale, the cost of assets disposed and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is included in the statements of operations.
Leases
At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use
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of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use (“ROU”) asset upon commencement of the lease. The Company additionally evaluates leases at their inception to determine if they are to be accounted for as an operating lease or a finance lease.
Operating lease assets represent a right to use an underlying asset for the lease term (“ROU assets”) and operating lease liabilities represent an obligation to make lease payments arising from the lease. Operating lease liabilities with a term greater than twelve months and their corresponding ROU assets are recognized in the balance sheets at the commencement date of the lease based on the present value of lease payments over the expected lease term. The Company excludes short-term leases having initial terms of twelve months or less at lease commencement as an accounting policy election. Certain adjustments to the ROU assets may be required for items such as initial direct costs paid or incentives received. As the Company’s leases do not typically provide an implicit rate, the Company utilizes the appropriate incremental borrowing rate, determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term and in a similar economic environment. Lease cost is recognized on a straight-line basis over the lease term and variable lease payments are recognized as operating expenses in the period in which the obligation for those payments is incurred. Variable lease payments primarily include common area maintenance, utilities, real estate taxes, insurance and other operating costs that are passed on from the lessor in proportion to the space leased by the Company. The Company has elected the practical expedient to not separate lease and non-lease components.
Fair value of financial instruments
Cash equivalents are recognized and measured at fair value. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. A framework is used for measuring fair value utilizing a three-tier hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.
Level 1—Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2—Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3—Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).
Money market funds are highly liquid investments and are classified as Level 1. The pricing information for these assets is readily available and can be independently validated as of the measurement date.
Impairment of long-lived assets
The Company reviews its long-lived assets, including property and equipment and right-of-use assets, for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be fully recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset group, including the proceeds from the eventual disposition of the asset, is compared to the carrying value of the asset group to determine whether impairment exists. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the asset group, the assets
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within the group are written-down to their estimated fair values. The Company has not recognized any impairment charges for the years ended December 31, 2024 and 2025.
Convertible preferred stock
The Company records convertible preferred stock at fair value on the date of issuance, net of issuance costs. Upon the occurrence of certain events that are outside the Company’s control, including a deemed liquidation event, holders of the convertible preferred stock can cause redemption for cash. Therefore, convertible preferred stock is classified outside of stockholders’ deficit on the balance sheets as events triggering the redemption are not solely within the Company’s control. The carrying values of the convertible preferred stock are adjusted to their liquidation preferences if and when it becomes probable that such a redemption event will occur.
Research and development expenses and accrued research and development costs
Research and development expenses consist of costs to third-party contractors to perform research and development activities, internal related salaries, benefits, stock-based compensation charges for those individuals involved in research and development efforts, and associated overhead expenses. Research and development costs are expensed as incurred. Nonrefundable advance payments for goods and services, including fees for process development, are deferred and recognized as expenses in the period that the related goods are consumed or services are performed.
The Company is required to estimate expenses resulting from its obligations under contracts with vendors, consultants, and contract research organizations, in connection with conducting research and development activities. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company reflects research and development expenses in its financial statements by matching those expenses with the period in which services and efforts are expended, as measured by the timing of various aspects of the preclinical study or clinical trial or related activities. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and payments made in advance of or after the performance are reflected in the accompanying balance sheets as prepaid expenses or accrued liabilities, respectively. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the services, including the phase or completion of events, invoices received and contracted costs. The Company holds discussions with relevant employees and outside service providers as to the progress of preclinical or clinical efforts, or the services completed. Significant judgments and estimates may be made in determining the prepaid or accrued balances at the end of any reporting period. Actual results could differ from the Company’s estimates. As of December 31, 2025, the Company has had no material differences between its estimates of such expenses and the amounts actually incurred.
General and administrative expenses
General and administrative expenses consist of compensation, employee benefits, stock-based compensation of employees, consulting, legal and other expenses not associated with research and development expenses.
Interest income, net
Interest income, net consists primarily of interest income earned on money market funds classified as cash and cash equivalents.
Patent costs
All patent-related costs incurred in connection with filing and prosecuting patent applications such as direct application fees, and legal and consulting expenses are expensed as incurred due to the uncertainty about the
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recovery of the expenditure. Patent-related costs are classified as general and administrative expenses within the Company’s statements of operations.
Stock-based compensation
Stock-based compensation is accounted for in accordance with ASC Topic 718, Compensation—Stock Compensation, and is measured at the grant date fair value for employee, officer, director and non-employee equity awards and is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. Forfeitures are recognized as they occur. Stock-based compensation is classified in the statements of operations in the same manner in which the recipient’s payroll or fees are classified.
The fair value of stock options is estimated using a Black-Scholes option pricing model on the date of grant. This method requires certain assumptions to be used as inputs, such as the fair value of the underlying common stock, expected term of the option before exercise, expected volatility of the Company’s common stock, risk-free interest rate and expected dividend yield. Options granted have a maximum contractual term of ten years. The Company has limited historical stock option activity and therefore estimates the expected term of stock options granted using the simplified method, which represents the arithmetic average of the original contractual term of the stock option and its weighted-average vesting term. The expected volatility of stock options is based upon the historical volatility of a number of publicly traded companies in similar stages of clinical development, as there is no active trading market for the Company’s common stock. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. The risk-free interest rates used are based on the U.S. Treasury yield in effect at the time of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the expected term of the stock options. The Company has historically not declared or paid any dividends and does not currently expect to do so in the foreseeable future, and therefore has estimated the dividend yield to be zero.
Common stock valuation
Due to the absence of an active market for the Company’s common stock, the Company utilized methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. In determining the exercise prices for options granted, the Company has considered the fair value of the common stock as of the grant date. The estimated fair value of the common stock has been determined based upon a variety of factors, including:
| • | the Company’s stage of development and forecast of its financial results; |
| • | external market conditions and trends affecting the early-stage biotech pharmaceutical industry; |
| • | a comparison of the financial positions and market prices of similar public companies within the biotech pharmaceutical industry; |
| • | analysis of recent acquisitions and initial public offerings of companies within the biotech pharmaceutical industry; |
| • | the Company’s financial position, including cash on hand, and its historical and forecasted performance and operating results; and |
| • | the value implied by the Company’s recent fundraising transactions. |
The Company’s common stock valuation was prepared using a market approach to estimate the enterprise value and an option pricing method (“OPM”) to allocate value to the common stock. Under the OPM, shares are
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valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class. The value of the common stock is inferred by analyzing these options.
Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.
Commitments and contingencies
The Company recognizes a liability with regard to loss contingencies when it believes it is probable a liability has been incurred, and the amount can be reasonably estimated. If some amount within a range of loss appears at the time to be a better estimate than any other amount within the range, the Company accrues that amount. When no amount within the range is a better estimate than any other amount, the Company accrues the minimum amount in the range. The Company had not recorded any such liabilities as of December 31, 2024 or 2025.
Income taxes
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
As of December 31, 2024 and 2025, the Company maintained full valuation allowances against its deferred tax assets as the Company concluded it had not met the “more likely than not” to be realized threshold. Changes in the valuation allowance when they are recognized in the provision for income taxes may result in a change in the estimated annual effective tax rate.
The Company records uncertain tax positions on the basis of a two-step process whereby (i) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions that meet the more likely than not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority.
The Company recognizes interest and penalties related to unrecognized tax benefits within the provision for income taxes in the statements of operations. Any accrued interest and penalties are included within the related tax liability in the balance sheets. As of December 31, 2025, the Company had no accrued interest or penalties.
Comprehensive loss
The Company is required to report all components of comprehensive loss, including net loss, in the accompanying financial statements in the period in which they are recognized. Comprehensive loss is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. Net loss and comprehensive loss were the same for all periods presented.
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Net loss per share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities include outstanding convertible preferred stock, as well as outstanding stock options under the Company’s 2020 Equity Incentive Plan and have been excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The following table summarizes the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because their inclusion in the calculation would be anti-dilutive:
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Convertible preferred stock |
63,188,768 | 85,552,612 | ||||||
| Outstanding options under the Company’s 2020 Equity Incentive Plan |
3,448,757 | 5,520,829 | ||||||
|
|
|
|||||||
| Total |
66,637,525 | 91,073,441 | ||||||
|
|
||||||||
Emerging growth company status
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. However, the Company may elect to early adopt any new or revised accounting standards whenever such early adoption is permitted for non-public companies. The Company may take advantage of these exemptions up until the time that it is no longer an emerging growth company.
Recently adopted accounting pronouncements
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280)—Improvements to Reportable Segment Disclosures (“ASU 2023-07”). The update requires entities to disclose their significant segment expense categories and amounts for each reportable segment. Significance is assessed using both quantitative and qualitative factors depending on the facts and circumstances. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The Company adopted this standard for the fiscal year 2025 annual financial statements and interim financial statements thereafter and has applied this standard retrospectively for all prior periods presented in the financial statements. See Note 9 for further details on segment information.
Issued accounting pronouncements not yet adopted
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). The amendments in ASU No. 2023-09 address investor requests for enhanced
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income tax information primarily through changes to disclosure regarding rate reconciliation and income taxes paid both in the United States and foreign jurisdictions. This guidance is effective for fiscal years beginning after December 15, 2025, on a prospective basis, with the options to apply the standard retrospectively, and early adoption is permitted. The Company is currently evaluating this guidance to determine the impact it may have on its financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”). In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date, to clarify the effective date of ASU 2024-03. These amendments are intended to provide more information about certain costs and expenses on an interim and annual basis. The amendments are effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The new standards are expected to be applied prospectively, but retrospective application is permitted. The Company is currently evaluating the impact on its financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements (“ASU 2025-11”), which clarifies interim disclosure requirements and the applicability of Topic 270. The objective of the amendments is to provide further clarity about the current interim disclosure requirements. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Adoption of this ASU can be applied using either a prospective or a retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 and does not expect the adoption of this guidance to have a material impact on its financial statements.
3. Fair value measurements
The following tables show the Company’s cash equivalents measured at fair value as of December 31, 2024 and 2025 (in thousands):
| December 31, 2024 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Cash equivalents |
||||||||||||||||
| Money market funds |
$ | 99,582 | $ | — | $ | — | $ | 99,582 | ||||||||
|
|
|
|||||||||||||||
| Total |
$ | 99,582 | $ | — | $ | — | $ | 99,582 | ||||||||
|
|
||||||||||||||||
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Cash equivalents |
||||||||||||||||
| Money market funds |
$ | 135,227 | $ | — | $ | — | $ | 135,227 | ||||||||
|
|
|
|||||||||||||||
| Total |
$ | 135,227 | $ | — | $ | — | $ | 135,227 | ||||||||
|
|
||||||||||||||||
The carrying amounts of the Company’s accounts payable, accrued expenses and accrued compensation approximate fair value due to their short maturities. None of the Company’s non-financial assets or liabilities are recorded at fair value on a non-recurring basis. There were no transfers between Levels 1, 2 or 3 for any of the periods presented.
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4. Property and equipment, net
Property and equipment, net consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Laboratory equipment |
$ | 1,563 | $ | 1,580 | ||||
| Computer equipment |
180 | 496 | ||||||
| Office furniture and equipment |
124 | 544 | ||||||
| Leasehold improvements |
103 | 268 | ||||||
| Software |
89 | 89 | ||||||
|
|
|
|||||||
| 2,059 | 2,977 | |||||||
| Less: accumulated depreciation and amortization |
(959 | ) | (1,251 | ) | ||||
|
|
|
|||||||
| Property and equipment, net |
$ | 1,100 | $ | 1,726 | ||||
|
|
||||||||
The Company recognized depreciation and amortization expense of $0.4 million during each of the years ended December 31, 2024 and 2025.
5. Accrued expenses
Accrued expenses consisted of the following (in thousands):
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Accrued research and development expenses |
$ | 2,610 | $ | 8,297 | ||||
| Other |
328 | 134 | ||||||
|
|
|
|||||||
| Total accrued expenses |
$ | 2,938 | $ | 8,431 | ||||
|
|
||||||||
6. Convertible preferred stock and stockholders’ deficit
Stockholders’ deficit
Under the Company’s amended and restated certificate of incorporation, the Company had a total of 195,552,612 shares of capital stock authorized for issuance, consisting of 110,000,000 shares of common stock, par value of $0.0001 per share, and 85,552,612 shares of convertible preferred stock, par value of $0.0001 per share, as of December 31, 2025.
Convertible preferred stock
As of December 31, 2024, issued and outstanding convertible preferred stock consisted of the following (in thousands, except share amounts and per share amounts):
| Series | Shares authorized |
Shares outstanding |
Original issue price |
Liquidation preference |
Carrying value |
|||||||||||||||
| Series Angel |
10,000,000 | 10,000,000 | $ | 0.2000 | $ | 2,000 | $ | 2,000 | ||||||||||||
| Series A |
26,613,546 | 26,613,546 | 2.6678 | 71,000 | 70,981 | |||||||||||||||
| Series B |
26,575,247 | 26,575,222 | 3.7629 | 100,000 | 99,904 | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
63,188,793 | 63,188,768 | $ | 173,000 | $ | 172,885 | ||||||||||||||
|
|
||||||||||||||||||||
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As of December 31, 2025, issued and outstanding convertible preferred stock consisted of the following (in thousands, except share amounts and per share amounts):
| Series | Shares authorized |
Shares outstanding |
Original issue price |
Liquidation preference |
Carrying value |
|||||||||||||||
| Series Angel |
10,000,000 | 10,000,000 | $ | 0.2000 | $ | 2,000 | $ | 2,000 | ||||||||||||
| Series A |
26,613,546 | 26,613,546 | 2.6678 | 71,000 | 70,981 | |||||||||||||||
| Series B |
48,939,066 | 48,939,066 | 3.7629 | 184,153 | 183,842 | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
85,552,612 | 85,552,612 | $ | 257,153 | $ | 256,823 | ||||||||||||||
|
|
||||||||||||||||||||
In December 2020, the Company issued 10,000,000 shares of its Series Angel convertible preferred stock at a price of $0.20 per share, resulting in aggregate gross proceeds of $2.0 million, and incurred immaterial issuance costs.
In March 2021, the Company issued 26,613,546 shares of its Series A convertible preferred stock at a price of approximately $2.67 per share, resulting in aggregate gross proceeds of $71.0 million, and incurred immaterial issuance costs.
The Company entered into the Series B Preferred Stock Purchase Agreement dated December 28, 2023, whereby the Company agreed to issue and sell, and certain investors agreed to purchase an aggregate of 26,575,247 shares of the Company’s Series B convertible preferred stock, in one or more closings. In December 2023, the Company issued 23,558,935 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $88.7 million, and incurred immaterial issuance costs. Through December 31, 2023, the Company received $82.8 million in proceeds and recorded a receivable for the remaining $5.8 million. Cash proceeds related to this receivable were received in 2024. In January 2024, the Company issued 3,016,287 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $11.3 million, and incurred immaterial issuance costs.
The Company entered into a subsequent Series B Preferred Stock Purchase Agreement dated November 25, 2025, whereby the Company agreed to issue and sell, and certain investors agreed to purchase an aggregate of 22,363,844 shares of the Company’s Series B convertible preferred stock. Between November and December 2025, the Company issued 22,363,844 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $84.2 million, and incurred $0.1 million of issuance costs.
As of December 31, 2025, the Company’s Series Angel, Series A and Series B convertible preferred stock has been classified as temporary equity in the accompanying balance sheets given that the holders of the convertible preferred stock could cause certain events to occur that are outside of the Company’s control whereby the Company could be obligated to redeem the convertible preferred stock. The carrying value of the convertible preferred stock is not adjusted to the redemption value until the contingent redemption events are considered to be probable of occurring.
The Company’s convertible preferred stock has the following rights, preferences and privileges:
Dividends
The Company shall not declare or pay any dividends on shares of any class of capital stock of the Company unless the holders of the Series Angel, Series A or Series B convertible preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of such convertible preferred stock equal to an amount as defined in the Company’s amended and restated certificate of incorporation. No such dividends have been declared or paid through December 31, 2025.
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Preferences on liquidation
The holders of the Series A and Series B convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series A and Series B convertible preferred stock have priority and are made in preference to any payments to the holders of Series Angel convertible preferred stock and common stock. If assets available to be distributed are insufficient to pay Series A and Series B convertible preferred stock holders, amounts available will be distributed on a pro-rata basis.
After full payment of the liquidation preference to the holders of the Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of the Series Angel convertible preferred stock. The holders of the Series Angel convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution, or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series Angel convertible preferred stock have priority and are made in preference to any payments to the holders of common stock. If assets available to be distributed are insufficient to pay Series Angel convertible preferred stockholders, amounts available will be distributed on a pro-rata basis.
After full payment of the liquidation preference to the holders of the Series Angel, Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of common stock, pro rata based on the number of shares held by each holder.
Conversion rights
The shares of Series Angel, Series A, and Series B convertible preferred stock are convertible into common stock at the option of the holder. The conversion rate for the convertible preferred stock is determined by dividing the original issue price by the conversion price. The conversion price is initially the original issue price, but is subject to adjustment for dividends, stock splits, and other distributions. The conversion rate on December 31, 2025, for the Series Angel, Series A, and Series B convertible preferred stock was 1:1.
Each share of Series Angel, Series A, and Series B convertible preferred stock will be automatically converted into common stock at the then effective conversion rate upon: (i) the closing of the sale of common stock to the public (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the common stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at least $50.0 million of gross proceeds to the Company; or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the majority of holders of the outstanding shares of Series Angel, Series A and Series B convertible preferred stock.
Voting
The holders of Series Angel convertible preferred stock shall be entitled to cast the number of votes equal to ten times the number of shares of Common Stock into which the shares of Series Angel convertible preferred stock held by such holder are then convertible. The holders of Series A and Series B convertible preferred stock shall be entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series A and Series B convertible preferred stock held by such holder are then convertible. The holders of Series Angel, Series A and Series B convertible preferred stock generally vote together with the
F-17
shares of common stock as a single class, but also have class vote approval rights as provided by the Company’s amended and restated certificate of incorporation or as required by applicable law.
The holders of shares of Series Angel convertible preferred stock, exclusively and as a separate class, shall be entitled to elect one member of the board of directors. The holders of shares of Series A convertible preferred stock, exclusively and as a separate class, shall be entitled to elect three members of the board of directors. The holders of shares of Series B convertible preferred stock, exclusively and as a separate class, shall be entitled to elect two members of the board of directors. The holders of shares of common stock, exclusively and as a separate class, shall be entitled to elect at least one member of the board of directors. The holders of Series Angel, Series A and Series B convertible preferred stock voting together as a single class, shall be entitled to elect all remaining members of the board of directors.
Common stock
The voting, dividend, and liquidation rights of the holders of the common stock are subject to, and qualified by, the rights, preferences and privileges of the holders of the Series Angel, Series A and Series B convertible preferred stock. The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders.
Common stock reserved for future issuance consisted of the following:
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Common stock options granted and outstanding |
3,448,757 | 5,520,829 | ||||||
| Shares available for issuance under the 2020 equity incentive plan |
1,931,082 | 1,540,690 | ||||||
|
|
|
|||||||
| Total common stock reserved for future issuance |
5,379,839 | 7,061,519 | ||||||
|
|
||||||||
Stock options
In June 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”). The Plan provides for the grant of incentive stock options (“ISO”), non-statutory stock options (“NSO”), stock bonus awards, and restricted stock awards. A total of 1,500,000 shares of common stock were initially reserved for issuance under the 2020 Plan. The 2020 Plan was subsequently amended in February 2021, July 2023 and, March 2025 to increase the total number of shares available under the 2020 Plan to 3,240,000, 6,537,582, and 9,003,346, respectively.
Options granted under the Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant. The exercise price of each option shall be determined by the board of directors based on the estimated fair value of the Company’s stock on the date of the option grant. The exercise price shall not be less than 100% of the fair market value of the Company’s common stock at the time the option is granted. The stock option awards generally include service condition vesting terms of four years, with 25% of the award vesting one year from the vesting commencement date and then ratably over the following 36 months, though some vest over shorter periods, vesting monthly from grant date.
F-18
A summary of the Company’s stock option activity under the 2020 Plan is as follows:
| Options | Weighted-average exercise price |
Weighted- average remaining contractual term (years) |
Aggregate intrinsic value (in thousands) |
|||||||||||||
| Outstanding at December 31, 2024 |
3,448,757 | $ | 0.86 | 8.7 | $ | 1,167 | ||||||||||
| Granted |
3,313,657 | $ | 1.28 | |||||||||||||
| Exercised |
(784,084 | ) | $ | 0.79 | ||||||||||||
| Forfeited |
(457,501 | ) | $ | 0.90 | ||||||||||||
| Expired |
— | $ | — | |||||||||||||
|
|
|
|||||||||||||||
| Outstanding at December 31, 2025 |
5,520,829 | $ | 1.12 | 8.6 | $ | 2,526 | ||||||||||
|
|
|
|||||||||||||||
| Exercisable at December 31, 2025 |
957,809 | $ | 0.83 | 7.4 | $ | 723 | ||||||||||
|
|
|
|||||||||||||||
| Vested and expected to vest at December 31, 2025 |
5,520,829 | $ | 1.12 | 8.6 | $ | 2,526 | ||||||||||
The weighted-average grant date fair value of options granted for the years ended December 31, 2024 and 2025, was $0.87 and $0.94 per share, respectively. As of December 31, 2025, the Company recorded a receivable for amounts related to option exercises, of approximately $31 thousand. These amounts were received in 2026. The total intrinsic value of options exercised during the years ended December 31, 2024 and 2025 was $0.3 million and $0.4 million, respectively.
Stock-based compensation expense
Stock-based compensation expense recognized for all equity awards has been included in the statements of operations as follows (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Research and development |
428 | 859 | ||||||
| General and administrative |
76 | 231 | ||||||
|
|
|
|||||||
| Total stock-based compensation expense |
$ | 504 | $ | 1,090 | ||||
The fair value of stock options granted during the year ended December 31, 2024 and 2025 was estimated using the following assumptions:
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Risk-free interest rate |
3.48% - 4.32% | 3.74% - 4.41% | ||||||
| Expected term (years) |
5.04 - 6.12 | 5.04 - 6.12 | ||||||
| Expected stock price volatility |
80.90% - 81.74% | 82.39% - 83.69% | ||||||
| Expected dividend yield |
— | — | ||||||
As of December 31, 2025, the unrecognized compensation cost related to outstanding employee and non-employee options was $3.4 million and is expected to be recognized as expense over a weighted-average period of approximately 3.1 years.
F-19
7. Income taxes
The following is a reconciliation between the provision for income taxes and income taxes computed using the U.S. federal statutory corporate tax rate for the years ended December 31, 2024 and 2025 (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Income tax benefit at statutory federal rate |
$ | (6,446 | ) | $ | (12,716 | ) | ||
| State and local taxes, net of federal benefit(1) |
(37 | ) | (265 | ) | ||||
| Research and development credits |
(868 | ) | (3,038 | ) | ||||
| Changes in valuation allowance |
9,326 | 16,674 | ||||||
| Nontaxable or nondeductible items: |
||||||||
| Stock-based compensation |
104 | 207 | ||||||
| Other adjustments: |
||||||||
| Return to provision |
(2,144 | ) | (664 | ) | ||||
| Other |
65 | (198 | ) | |||||
|
|
|
|||||||
| Provision for income taxes |
$ | — | $ | — | ||||
A reconciliation of the Company’s effective tax rate and federal statutory rate is comprised of permanent and temporary differences. The Company’s effective tax rate differs from the statutory rate due to current research and development credits, return to provision adjustments, and changes in the valuation allowance.
The Company did not record any income tax expense or benefit during the years ended December 31, 2024 and 2025 and no income taxes were paid. The Company’s pretax loss is all domestic. Deferred income taxes reflect the net tax effects of loss and credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred income taxes are as follows (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Deferred tax assets: |
||||||||
| Net operating losses |
$ | 5,354 | $ | 16,798 | ||||
| Section 174 research and experimentation capitalized costs |
11,127 | 11,645 | ||||||
| Lease liability |
111 | 4,797 | ||||||
| Accrued liabilities |
443 | 926 | ||||||
| Tax credits |
1,632 | 5,334 | ||||||
| Others |
17 | 28 | ||||||
|
|
|
|||||||
| Total deferred tax assets |
18,684 | 39,528 | ||||||
|
|
|
|||||||
| Valuation allowance |
(18,523 | ) | (35,198 | ) | ||||
|
|
|
|||||||
| Total deferred tax assets net of valuation allowance |
161 | 4,330 | ||||||
| Deferred tax liabilities: |
||||||||
| Right-of-use assets, operating |
(102 | ) | (4,266 | ) | ||||
| Plant and equipment |
(59 | ) | (64 | ) | ||||
|
|
|
|||||||
| Total deferred tax liabilities |
(161 | ) | (4,330 | ) | ||||
|
|
|
|||||||
| Net deferred tax asset (liability) |
$ | — | $ | — | ||||
F-20
A valuation allowance of 100% has been established with respect to the net deferred income tax assets due to the uncertainty of the Company’s realization of such deferred tax assets for U.S. Federal and State on the Company’s balance sheets as of December 31, 2024 and 2025. The increase in the valuation allowance is approximately $9.3 million and $16.7 million for the year ended December 31, 2024 and 2025, respectively.
As of December 31, 2025, the Company had net operating loss carryforwards for federal income tax purposes of approximately $72.3 million, which will not expire but can only be used to offset 80% of future taxable income. As of December 31, 2025, the Company had net operating loss carryforwards for state income tax purposes of approximately $23.5 million, which expire beginning in the year 2040.
As of December 31, 2025, the Company had research and development tax credit carryforwards for federal income tax purposes of approximately $4.8 million which expire beginning in the year 2041. As of December 31, 2025, the Company had research and development tax credit carryforwards for state income tax purposes of approximately $2.6 million which expire beginning in the year 2039.
Under Section 382 of the Internal Revenue Code, as amended (“IRC”), substantial changes in the Company’s ownership may limit the amount of net operating loss carryover that could be used annually in the future to offset taxable income. The tax benefits related to future utilization of federal and state net operating loss carryforward may be limited or lost if cumulative changes in ownership exceed 50% within any three-year period. The Company has not completed an IRC Section 382 analysis regarding the limitation of net operating loss, and therefore, the ability of the Company to utilize its net operating loss carryover may be limited.
The Company is subject to taxation in the United States and in various states. The Company’s U.S. federal income tax returns remain subject to examination by the Internal Revenue Service. The Company’s state income tax returns remain subject to examination by the state authorities. Due to net operating losses, research and development credits and other tax credit carryforwards that may be utilized in future years, all U.S. federal and state tax years are open to examination. The Company is not currently under examination by any tax authority.
The following table summarizes the changes to the Company’s gross unrecognized tax benefits for the years ended December 31, 2024 and 2025, respectively (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Gross unrecognized tax benefits at the beginning of the year |
$ | — | $ | 706 | ||||
| Increases (decreases) related to current year positions |
435 | 710 | ||||||
| Increases (decreases) related to prior year positions |
271 | 283 | ||||||
| Expiration of unrecognized tax benefits |
— | — | ||||||
|
|
|
|||||||
| Gross unrecognized tax benefits at the end of the year |
$ | 706 | $ | 1,699 | ||||
Due to the existence of the valuation allowance, future changes in unrecognized tax benefits would have no effect on the Company’s effective tax rate. The Company’s policy is to recognize interest and penalties related to income tax matters in income tax expense. For the year ended December 31, 2025, the Company has not recorded any interest and penalties related to income tax matters. The Company does not foresee any material changes to unrecognized tax benefits within the next twelve months.
On July 4, 2025, the U.S. President signed into law H.R.1, the legislation commonly known as the One Big Beautiful Bill Act (the “OBBBA”). This legislation extended, modified, or made permanent many of the tax provisions which were initially enacted as part of the Tax Cuts and Jobs Act of 2017. The OBBBA contains a number of tax provisions including, but not limited to, immediate expensing of domestic research and experimental expenditures, modifications to the limitation on business interest, bonus depreciation
F-21
modifications, as well as international tax provision modifications. The Company has reflected the effect of OBBBA within the provision for income taxes and the deferred taxes as of December 31, 2025.
Cash amounts paid for income taxes, net of refunds received, were immaterial in both 2024 and 2025.
8. Commitments and contingencies
The Company has operating leases for its office and laboratory space in San Diego, California.
In March 2021, the Company entered into a lease agreement for 10,867 square feet of office and laboratory space in San Diego, California (the “JHC Lease”). The JHC Lease commenced on March 9, 2021, with an initial term of five years and included aggregate monthly payments to the lessor of approximately $0.1 million. The JHC Lease provided for rent abatements and scheduled increases in base rent. In June 2024, the JHC Lease was amended to reduce the remaining lease term by approximately two years, in connection with the Company’s entry into a new facility lease. As a result of the modification, the Company reduced the right-of-use asset and corresponding lease liability by $0.7 million, assuming a modified remaining lease term of 15 months and a modified discount rate of 7.6%, based on the Company’s incremental borrowing rate at the date of the lease modification. The JHC Lease expired in July 2025.
In June 2024, the Company entered into a lease agreement for approximately 46,353 square feet of office and laboratory space in San Diego, California (the “Science Center Lease”). The construction and design of the space was the primary responsibility of the lessor. The Science Center Lease is accounted for as an operating lease and commenced in June 2025, with a ten-year initial term through June 2035. The Science Center Lease includes aggregate monthly rent payments to the lessor of approximately $0.3 million, with a rent escalation clause providing for annual increases in base rent of 3%, and a free rent period for the first 12 months following the lease commencement date. Additionally, the Company is obligated to remit to the lessor its allocable portion of real estate taxes, maintenance costs, and other operating expenses attributable to the leased premises, which are variable in nature. The Company shall remain fully liable for such costs throughout the duration of any free rent period. The Company paid a cash security deposit of $0.9 million, which is refundable at the end of the lease term and is included in other long-term assets in the Company’s balance sheet as of December 31, 2025. The Science Center Lease includes one option to renew for either five or two additional years, at the Company’s election, at fair market value. The Company has not yet determined whether it will exercise the renewal option.
Cash paid for amounts included in the measurement of lease liabilities was $0.8 million and $0.5 million for the years ended December 31, 2024 and 2025, respectively.
The components of lease expense include operating and variable lease costs. Amortization is recorded within research and development and general and administrative expenses in the statements of operations. Components of lease cost for the years ended December 31, 2024 and 2025, respectively, were as follows (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Operating lease cost |
$ | 781 | $ | 2,703 | ||||
| Short-term lease cost |
301 | 146 | ||||||
| Variable lease cost |
380 | 373 | ||||||
|
|
|
|||||||
| Total lease cost |
$ | 1,462 | $ | 3,222 | ||||
F-22
Maturities of lease liabilities, weighted-average remaining term and weighted-average discount rate were as follows (in thousands):
| Year ending December 31, |
||||
| 2026 |
$ | 2,289 | ||
| 2027 |
3,910 | |||
| 2028 |
4,024 | |||
| 2029 |
4,141 | |||
| 2030 |
4,265 | |||
| Thereafter |
20,577 | |||
|
|
|
|||
| Total future minimum lease payments |
39,206 | |||
| Less: amount representing interest |
(16,808 | ) | ||
|
|
|
|||
| Present value of operating lease liabilities |
22,398 | |||
| Less: operating lease liabilities, current |
(5 | ) | ||
|
|
|
|||
| Operating lease liabilities, non-current |
$ | 22,393 | ||
| As of December 31, | ||||||||
| 2024 | 2025 | |||||||
| Weighted-average remaining lease term (years) |
0.7 | 9.5 | ||||||
| Weighted-average incremental borrowing rate |
7.60% | 11.80% | ||||||
9. Segment information
The Company operates and manages its business as one reportable and operating segment, which is the business of designing and developing novel small molecule product candidates. The Company’s chief operating decision maker is the Chief Executive Officer, who assesses performance of the segment based on net loss, which includes evaluating the progress of ongoing clinical trials. The measure of segment assets is reported on the balance sheet as total assets. All long-lived assets are maintained in the United States. The following table contains information on segment profit or loss, including significant segment expenses (in thousands):
| Year ended December 31, | ||||||||
| 2024 | 2025 | |||||||
| Operating expenses: |
||||||||
| Research and development expenses |
||||||||
| BH-30643 |
$ | 5,958 | $ | 20,648 | ||||
| BH-30236 |
3,841 | 6,829 | ||||||
| BH-501284 |
— | 891 | ||||||
| Other projects |
2,829 | 1,764 | ||||||
| Nonproject specific research and development expenses |
19,182 | 26,006 | ||||||
| General and administrative expense |
4,591 | 7,886 | ||||||
| Other income |
5,706 | 3,469 | ||||||
|
|
|
|||||||
| Net loss |
$ | 30,695 | $ | 60,555 | ||||
F-23
10. Subsequent events
Management has reviewed and evaluated material subsequent events through April 24, 2026, which is the date the financial statements were available for issuance. No material subsequent events were identified that require adjustment to or disclosure in these financial statements, other than as described herein.
Stock option issuance
During the period from December 31, 2025 to the date that these financial statements were issued, the Company granted stock options to employees to purchase an aggregate of 959,500 shares of common stock at a weighted-average exercise price of $2.31 per share under the 2020 Plan.
F-24
BlossomHill Therapeutics, Inc.
Condensed balance sheets (unaudited)
(in thousands, except share and par value data)
| December 31, 2025 |
March 31, 2026 |
|||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 136,682 | $ | 116,003 | ||||
| Prepaid expenses and other current assets |
2,144 | 3,720 | ||||||
|
|
|
|||||||
| Total current assets |
138,826 | 119,723 | ||||||
| Property and equipment, net |
1,726 | 1,614 | ||||||
| Operating lease right-of-use assets |
19,921 | 19,596 | ||||||
| Other assets |
2,495 | 2,477 | ||||||
|
|
|
|||||||
| Total assets |
$ | 162,968 | $ | 143,410 | ||||
|
|
|
|||||||
| Liabilities, convertible preferred stock and stockholders’ deficit |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 2,314 | $ | 5,380 | ||||
| Accrued expenses |
8,431 | 8,180 | ||||||
| Accrued compensation |
4,730 | 2,125 | ||||||
| Operating lease liability, current |
5 | 493 | ||||||
|
|
|
|||||||
| Total current liabilities |
15,480 | 16,178 | ||||||
| Operating lease liability, non-current |
22,393 | 22,529 | ||||||
|
|
|
|||||||
| Total liabilities |
37,873 | 38,707 | ||||||
| Commitments and contingencies (Note 6) |
||||||||
| Convertible preferred stock, $0.0001 par value; 85,552,612 shares authorized at December 31, 2025 and March 31, 2026; 85,552,612 shares issued and outstanding at December 31, 2025 and March 31, 2026; $257,153 aggregate liquidation preference at December 31, 2025 and March 31, 2026 |
256,823 | 256,823 | ||||||
| Stockholders’ deficit: |
||||||||
| Common stock, $0.0001 par value; 110,000,000 shares authorized at December 31, 2025 and March 31, 2026; 11,941,827 and 12,390,078 shares issued and outstanding as of December 31, 2025 and March 31, 2026, respectively |
1 | 1 | ||||||
| Additional paid-in capital |
3,300 | 3,916 | ||||||
| Accumulated deficit |
(135,029 | ) | (156,037 | ) | ||||
|
|
|
|||||||
| Total stockholders’ deficit |
(131,728 | ) | (152,120 | ) | ||||
|
|
|
|||||||
| Total liabilities, convertible preferred stock and stockholders’ deficit |
$ | 162,968 | $ | 143,410 | ||||
See accompanying notes to unaudited condensed financial statements
F-25
BlossomHill Therapeutics, Inc.
Condensed statements of operations (unaudited)
(in thousands, except share and per share data)
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Operating expenses: |
||||||||
| Research and development |
$ | 9,572 | $ | 19,901 | ||||
| General and administrative |
1,882 | 2,206 | ||||||
|
|
|
|||||||
| Total operating expenses |
11,454 | 22,107 | ||||||
|
|
|
|||||||
| Loss from operations |
(11,454 | ) | (22,107 | ) | ||||
| Other income (expense), net: |
||||||||
| Interest income, net |
976 | 1,102 | ||||||
| Other expense |
— | (3 | ) | |||||
|
|
|
|||||||
| Total other income, net |
976 | 1,099 | ||||||
|
|
|
|||||||
| Net loss |
$ | (10,478 | ) | $ | (21,008 | ) | ||
|
|
|
|||||||
| Net loss per share, basic and diluted |
$ | (0.94 | ) | $ | (1.74 | ) | ||
|
|
|
|||||||
| Weighted-average common shares outstanding, basic and diluted |
11,181,337 | 12,084,191 | ||||||
See accompanying notes to unaudited condensed financial statements
F-26
BlossomHill Therapeutics, Inc.
Condensed statements of convertible preferred stock and stockholders’ deficit (unaudited)
(in thousands, except share data)
| Convertible preferred stock | Common stock | Additional paid-in capital |
Accumulated deficit |
Total stockholders’ deficit |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
| Balance at December 31, 2024 |
63,188,768 | $ | 172,885 | 11,157,743 | $ | 1 | $ | 1,590 | $ | (74,474 | ) | $ | (72,883 | ) | ||||||||||||||
| Exercise of stock options |
— | — | 61,460 | — | 39 | — | 39 | |||||||||||||||||||||
| Stock-based compensation expense |
— | — | — | — | 231 | — | 231 | |||||||||||||||||||||
| Net loss |
— | — | — | — | — | (10,478 | ) | (10,478 | ) | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
| Balance at March 31, 2025 |
63,188,768 | $ | 172,885 | 11,219,203 | $ | 1 | $ | 1,860 | $ | (84,952 | ) | $ | (83,091 | ) | ||||||||||||||
| Convertible preferred stock | Common stock | Additional paid-in capital |
Accumulated deficit |
Total stockholders’ deficit |
||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
| Balance at December 31, 2025 |
85,552,612 | $ | 256,823 | 11,941,827 | $ | 1 | $ | 3,300 | $ | (135,029 | ) | $ | (131,728 | ) | ||||||||||||||
| Exercise of stock options |
— | — | 448,251 | — | 293 | — | 293 | |||||||||||||||||||||
| Stock-based compensation expense |
— | — | — | — | 323 | — | 323 | |||||||||||||||||||||
| Net loss |
— | — | — | — | — | (21,008 | ) | (21,008 | ) | |||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||
| Balance at March 31, 2026 |
85,552,612 | $ | 256,823 | 12,390,078 | $ | 1 | $ | 3,916 | $ | (156,037 | ) | $ | (152,120 | ) | ||||||||||||||
See accompanying notes to unaudited condensed financial statements
F-27
BlossomHill Therapeutics, Inc.
Condensed statements of cash flows (unaudited)
(in thousands)
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Cash flows from operating activities: |
||||||||
| Net loss |
$ | (10,478 | ) | $ | (21,008 | ) | ||
| Adjustments to reconcile net loss to net cash used in operations |
||||||||
| Depreciation expense |
85 | 125 | ||||||
| Non-cash lease expense |
179 | 325 | ||||||
| Stock-based compensation expense |
231 | 323 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Prepaid expenses and other current assets |
1,766 | (1,106 | ) | |||||
| Other assets |
(1,566 | ) | 18 | |||||
| Accounts payable |
654 | 3,066 | ||||||
| Accrued compensation |
(895 | ) | (2,605 | ) | ||||
| Accrued expenses |
(762 | ) | (702 | ) | ||||
| Operating lease liabilities |
(193 | ) | 624 | |||||
|
|
|
|||||||
| Net cash used in operating activities |
(10,979 | ) | (20,940 | ) | ||||
| Cash flows from investing activities: |
||||||||
| Purchases of property and equipment |
(402 | ) | (13 | ) | ||||
|
|
|
|||||||
| Net cash used in investing activities |
(402 | ) | (13 | ) | ||||
| Cash flows from financing activities: |
||||||||
| Proceeds from the exercise of stock options |
39 | 274 | ||||||
|
|
|
|||||||
| Net cash provided by financing activities |
39 | 274 | ||||||
| Net increase (decrease) in cash and cash equivalents |
(11,342 | ) | (20,679 | ) | ||||
| Cash and cash equivalents at the beginning of period |
100,147 | 136,682 | ||||||
|
|
|
|||||||
| Cash and cash equivalents at the end of period |
$ | 88,805 | $ | 116,003 | ||||
|
|
|
|||||||
| Supplemental disclosure of noncash activities: |
||||||||
| Deferred offering costs in accounts payable and accrued expenses |
$ | — | $ | (451 | ) | |||
See accompanying notes to unaudited condensed financial statements
F-28
BlossomHill Therapeutics, Inc.
Notes to condensed financial statements (unaudited)
1. Organization, liquidity and going concern and basis of presentation
Organization
BlossomHill Therapeutics, Inc. (the “Company”) is a clinical-stage biopharmaceutical company applying its intentional, chemistry-based approach to develop innovative small molecule medicines that address significant unmet medical needs in cancer treatment. The Company was incorporated in the State of Delaware on June 22, 2020, and its principal operations are in San Diego, California.
From its inception to March 31, 2026, the Company has devoted substantially all of its resources to conducting research and development, staffing the Company, establishing and protecting the Company’s intellectual property portfolio, scaling up manufacturing processes and supplying product candidates and other materials for the Company’s preclinical studies and clinical trials, leasing office and laboratory space, raising capital, business planning and providing general and administrative support for these activities. The Company’s operations to date have been funded primarily through the issuance of convertible preferred stock.
Liquidity and going concern
In accordance with Accounting Standards Codification (“ASC”) Topic 205-40, Going Concern, the Company evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date that these financial statements are issued.
The Company has incurred net losses and negative cash flows from operations since inception, has a significant accumulated deficit and expects to continue to incur net losses for the foreseeable future. The Company has never generated any revenue from product sales and does not expect to generate any revenues from product sales unless and until it successfully completes development of and obtains regulatory approval for its product candidates, which will not be for several years, if ever.
As the Company continues to pursue its business plan, it expects to finance its operations through a combination of public or private equity or debt financings or other capital sources, which may include strategic collaborations and other strategic arrangements with third parties. However, there can be no assurance that any additional financing or strategic transactions will be available to the Company on acceptable terms, if at all.
As of June 11, 2026, the issuance date of the financial statements as of and for the three months ended March 31, 2026, there is uncertainty about whether the Company’s cash and cash equivalents will be sufficient to fund operations beyond twelve months from the issuance date of these financial statements and therefore the Company concluded that substantial doubt exists about the Company’s ability to continue as a going concern.
The accompanying financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that might result from the outcome of the uncertainties described above.
Basis of presentation
The accompanying unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to rules and regulations of
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the Securities and Exchange Commission for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. These unaudited condensed financial statements include only normal and recurring adjustments that the Company believes are necessary to fairly state the Company’s financial position and the results of its operations and cash flows. The results for the three months ended March 31, 2026 are not necessarily indicative of the results expected for the full fiscal year or any subsequent interim period. The unaudited condensed balance sheet as of December 31, 2025 has been derived from the audited financial statements as of that date but does not include all disclosures required by GAAP for complete financial statements. As all of the disclosures required by GAAP for complete financial statements are not included herein, these unaudited condensed financial statements and the notes accompanying herein should be read in conjunction with the Company’s audited financial statements as of and for the years ended December 31, 2024 and 2025. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the ASC and Accounting Standards Updates (“ASU”) promulgated by the Financial Accounting Standards Board (“FASB”).
2. Summary of significant accounting policies
The Company’s significant accounting policies are disclosed in the audited financial statements as of and for the years ended December 31, 2024 and 2025, included elsewhere in this prospectus. Since the date of those financial statements, there have been no changes to its significant accounting policies, except where noted below.
Common stock valuation
Due to the absence of an active market for the Company’s common stock, the Company utilized methodologies, approaches and assumptions consistent with the American Institute of Certified Public Accountants’ Audit and Accounting Practice Guide: Valuation of Privately-Held Company Equity Securities Issued as Compensation to estimate the fair value of its common stock. In determining the exercise prices for options granted, the Company has considered the fair value of the common stock as of the grant date. The estimated fair value of the common stock has been determined based upon a variety of factors, including:
| • | the prices at which the Company sold shares of its convertible preferred stock and the superior rights, preferences and privileges of the convertible preferred stock relative to the Company’s common stock at the time of each grant; |
| • | the progress of the Company’s research and development programs; |
| • | the Company’s stage of development and its business strategy; |
| • | external market conditions affecting the biotechnology industry and trends within the biotechnology industry; |
| • | the Company’s financial position, including cash on hand, and its historical and forecasted performance and operating results; |
| • | the lack of an active public market for the Company’s common stock and its convertible preferred stock; |
| • | the likelihood of achieving a liquidity event, such as an initial public offering or sale of the Company in light of prevailing market conditions; and |
| • | the analysis of IPOs and the valuations and market performance of similar companies in the biotechnology industry. |
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Based on the Company’s early stage of development and other relevant factors, options granted prior to February 11, 2026, were valued using an option pricing method (“OPM”) as an OPM was the most appropriate method for allocating the enterprise value to determine the estimated fair value of the common stock. For options granted after February 11, 2026, the Company determined that a hybrid method that combines both OPM and probability-weighted expected return method (“PWERM”) was the most appropriate method to determine the estimated fair value of the Company’s common stock.
Significant changes to the key assumptions underlying the factors used could result in different fair values of common stock at each valuation date.
Deferred offering costs
The Company capitalizes costs that are directly associated with in-process equity financings until such financings are consummated, at which time such costs are recorded against the gross proceeds of the offering. Should an in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the statements of operations. As of March 31, 2026, the Company had deferred offering costs of $0.5 million, recorded as a component of prepaid expenses and other current assets. There were no deferred offering costs as of December 31, 2025.
Net loss per share
Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock and common stock equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities include outstanding convertible preferred stock, as well as outstanding stock options under the Company’s 2020 Equity Incentive Plan and have been excluded from the computation of diluted net loss per share as their inclusion would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position.
The following table summarizes the outstanding potentially dilutive securities that have been excluded from the calculation of diluted net loss per share because their inclusion in the calculation would be anti-dilutive:
| As of March 31, | ||||||||
| 2025 | 2026 | |||||||
| Convertible preferred stock |
63,188,768 | 85,552,612 | ||||||
| Outstanding options under the Company’s 2020 Equity Incentive Plan |
4,637,327 | 5,286,828 | ||||||
|
|
|
|||||||
| Total |
67,826,095 | 90,839,440 | ||||||
|
|
||||||||
Emerging growth company status
The Company is an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies. The Company may take advantage of these exemptions up until the last day of the fiscal year following the fifth anniversary of an offering or such earlier time that the Company is no longer an “emerging growth company.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards. The Company has elected to use the extended transition period for complying with new or revised accounting standards and as a result of this election, its financial statements may not be comparable to companies that comply with public company effective dates. However, the Company may elect to early adopt any new or revised accounting
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standards whenever such early adoption is permitted for non-public companies. The Company may take advantage of these exemptions up until the time that it is no longer an emerging growth company.
Recently issued accounting pronouncements
There were no significant updates not already disclosed in the Company’s audited financial statements for the years ended December 31, 2024 and 2025 to the recently issued accounting standards for the three months ended March 31, 2026. Although there are several other new accounting pronouncements issued by the FASB, the Company does not believe any of those accounting pronouncements have had or will have a material impact on its financial position or operating results.
3. Fair value measurements
The following tables show the Company’s cash equivalents measured at fair value as of December 31, 2025 and March 31, 2026 (in thousands):
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Cash equivalents |
||||||||||||||||
| Money market funds |
$ | 135,227 | $ | — | $ | — | $ | 135,227 | ||||||||
|
|
|
|||||||||||||||
| Total |
$ | 135,227 | $ | — | $ | — | $ | 135,227 | ||||||||
|
|
||||||||||||||||
| March 31, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets: |
||||||||||||||||
| Cash equivalents |
||||||||||||||||
| Money market funds |
$ | 113,729 | $ | — | $ | — | $ | 113,729 | ||||||||
|
|
|
|||||||||||||||
| Total |
$ | 113,729 | $ | — | $ | — | $ | 113,729 | ||||||||
|
|
||||||||||||||||
The carrying amounts of the Company’s accounts payable, accrued expenses and accrued compensation approximate fair value due to their short maturities. None of the Company’s non-financial assets or liabilities are measured at fair value on a non-recurring basis. There were no transfers between Levels 1, 2 or 3 for any of the periods presented.
4. Accrued expenses
Accrued expenses consisted of the following (in thousands):
| As of December 31, 2025 |
As of March 31, 2026 |
|||||||
| Accrued research and development expenses |
$ | 8,297 | $ | 7,614 | ||||
| Other |
134 | 566 | ||||||
|
|
|
|||||||
| Total accrued expenses |
$ | 8,431 | $ | 8,180 | ||||
|
|
||||||||
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5. Convertible preferred stock and stockholders’ deficit
Stockholders’ deficit
As of March 31, 2026, under the Company’s Amended and Restated Certificate of Incorporation, the Company had a total of 195,552,612 shares of capital stock authorized for issuance, consisting of 110,000,000 shares of common stock, par value of $0.0001 per share, and 85,552,612 shares of convertible preferred stock, par value of $0.0001 per share.
Convertible preferred stock
As of December 31, 2025 and March 31, 2026, issued and outstanding convertible preferred stock consisted of the following (in thousands, except share and per share amounts):
| Series | Shares authorized |
Shares outstanding |
Original issue price |
Liquidation preference |
Carrying value |
|||||||||||||||
| Series Angel |
10,000,000 | 10,000,000 | $ | 0.2000 | $ | 2,000 | $ | 2,000 | ||||||||||||
| Series A |
26,613,546 | 26,613,546 | 2.6678 | 71,000 | 70,981 | |||||||||||||||
| Series B |
48,939,066 | 48,939,066 | 3.7629 | 184,153 | 183,842 | |||||||||||||||
|
|
|
|
|
|||||||||||||||||
| Total |
85,552,612 | 85,552,612 | $ | 257,153 | $ | 256,823 | ||||||||||||||
|
|
||||||||||||||||||||
In December 2020, the Company issued 10,000,000 shares of its Series Angel convertible preferred stock at a price of $0.20 per share, resulting in aggregate gross proceeds of $2.0 million, and incurred immaterial issuance costs.
In March 2021, the Company issued 26,613,546 shares of its Series A convertible preferred stock at a price of approximately $2.67 per share, resulting in aggregate gross proceeds of $71.0 million, and incurred immaterial issuance costs.
The Company entered into the Series B Preferred Stock Purchase Agreement dated December 28, 2023, whereby the Company agreed to issue and sell, and certain investors agreed to purchase an aggregate of 26,575,247 shares of the Company’s Series B convertible preferred stock, in one or more closings. In December 2023, the Company issued 23,558,935 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $88.7 million, and incurred immaterial issuance costs. Through December 31, 2023, the Company received $82.8 million in proceeds and recorded a receivable for the remaining $5.8 million. Cash proceeds related to this receivable were received in 2024. In January 2024, the Company issued 3,016,287 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $11.3 million, and incurred immaterial issuance costs.
The Company entered into a subsequent Series B Preferred Stock Purchase Agreement dated November 25, 2025, whereby the Company agreed to issue and sell, and certain investors agreed to purchase an aggregate of 22,363,844 shares of the Company’s Series B convertible preferred stock. Between November and December 2025, the Company issued 22,363,844 shares of its Series B convertible preferred stock at a price of approximately $3.76 per share, resulting in aggregate gross proceeds of $84.2 million, and incurred $0.1 million of issuance costs.
As of March 31, 2026, the Company’s Series Angel, Series A and Series B convertible preferred stock have been classified as temporary equity in the accompanying balance sheets given that the holders of the convertible preferred stock could cause certain events to occur that are outside of the Company’s control whereby the Company could be obligated to redeem the convertible preferred stock. The carrying value of the convertible
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preferred stock is not adjusted to the redemption value until the contingent redemption events are considered to be probable of occurring.
The Company’s convertible preferred stock has the following rights, preferences and privileges:
Dividends
The Company shall not declare or pay any dividends on shares of any class of capital stock of the Company unless the holders of the Series Angel, Series A or Series B convertible preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of such convertible preferred stock equal to an amount as defined in the Company’s Amended and Restated Certificate of Incorporation. No such dividends have been declared or paid through March 31, 2026.
Preferences on liquidation
The holders of the Series A and Series B convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series A and Series B convertible preferred stock have priority and are made in preference to any payments to the holders of Series Angel convertible preferred stock and common stock. If assets available to be distributed are insufficient to pay Series A and Series B convertible preferred stockholders, amounts available will be distributed on a pro-rata basis.
After full payment of the liquidation preference to the holders of the Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of the Series Angel convertible preferred stock. The holders of the Series Angel convertible preferred stock are entitled to receive liquidation preferences, in the event of a change in control, liquidation, dissolution or winding up, at an amount per share equal to the greater of (i) the original issuance price, plus any dividends declared but unpaid or (ii) the amount per share that would be payable had the share been converted to shares of common stock immediately prior to the liquidation event. Liquidation payments to the holders of the Series Angel convertible preferred stock have priority and are made in preference to any payments to the holders of common stock. If assets available to be distributed are insufficient to pay Series Angel convertible preferred stockholders, amounts available will be distributed on a pro-rata basis.
After full payment of the liquidation preference to the holders of the Series Angel, Series A and Series B convertible preferred stock, the remaining assets, if any, will be distributed to the holders of common stock, pro rata based on the number of shares held by each holder.
Conversion rights
The shares of Series Angel, Series A and Series B convertible preferred stock are convertible into common stock at the option of the holder. The conversion rate for the convertible preferred stock is determined by dividing the original issue price by the conversion price. The conversion price is initially the original issue price, but is subject to adjustment for dividends, stock splits and other distributions. The conversion rate on March 31, 2026, for the Series Angel, Series A and Series B convertible preferred stock was 1:1.
Each share of Series Angel, Series A and Series B convertible preferred stock will be automatically converted into common stock at the then effective conversion rate upon: (i) the closing of the sale of common stock to the public (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the common stock), in a firm-commitment underwritten public offering pursuant to an effective registration statement under the Securities Act of 1933, as amended, resulting in at
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least $50.0 million of gross proceeds to the Company; or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the majority of holders of the outstanding shares of Series Angel, Series A and Series B convertible preferred stock.
Voting
The holders of Series Angel convertible preferred stock shall be entitled to cast the number of votes equal to ten times the number of shares of Common Stock into which the shares of Series Angel convertible preferred stock held by such holder are then convertible. The holders of Series A and Series B convertible preferred stock shall be entitled to cast the number of votes equal to the number of shares of common stock into which the shares of Series A and Series B convertible preferred stock held by such holder are then convertible. The holders of Series Angel, Series A and Series B convertible preferred stock generally vote together with the shares of common stock as a single class, but also have class vote approval rights as provided by the Company’s amended and restated certificate of incorporation or as required by applicable law.
The holders of shares of Series Angel convertible preferred stock, exclusively and as a separate class, shall be entitled to elect one member of the board of directors. The holders of shares of Series A convertible preferred stock, exclusively and as a separate class, shall be entitled to elect three members of the board of directors. The holders of shares of Series B convertible preferred stock, exclusively and as a separate class, shall be entitled to elect two members of the board of directors. The holders of shares of common stock, exclusively and as a separate class, shall be entitled to elect at least one member of the board of directors. The holders of Series Angel, Series A and Series B convertible preferred stock voting together as a single class, shall be entitled to elect all remaining members of the board of directors.
Common stock
The voting, dividend and liquidation rights of the holders of the common stock are subject to, and qualified by, the rights, preferences and privileges of the holders of the Series Angel, Series A and Series B convertible preferred stock. The holders of the common stock are entitled to one vote for each share of common stock held at all meetings of stockholders.
Common stock reserved for future issuance consisted of the following:
| As of December 31, 2025 |
As of March 31, |
|||||||
| Common stock options granted and outstanding |
5,520,829 | 5,286,828 | ||||||
| Shares available for issuance under the 2020 equity incentive plan |
1,540,690 | 1,326,440 | ||||||
|
|
|
|||||||
| Total common stock reserved for future issuance |
7,061,519 | 6,613,268 | ||||||
|
|
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Stock options
In June 2020, the Company adopted the 2020 Equity Incentive Plan (the “2020 Plan”). The Plan provides for the grant of incentive stock options (“ISO”), non-statutory stock options (“NSO”), stock bonus awards and restricted stock awards. A total of 1,500,000 shares of common stock were initially reserved for issuance under the 2020 Plan. The 2020 Plan was subsequently amended in February 2021, July 2023 and March 2025 to increase the total number of shares available under the 2020 Plan to 3,240,000, 6,537,582, and 9,003,346, respectively.
Options granted under the Plan are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant. The exercise price of each option shall be determined by the board of directors based on the estimated fair value of the Company’s stock on the date of the option grant. The
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exercise price shall not be less than 100% of the fair market value of the Company’s common stock at the time the option is granted. The stock option awards generally include service condition vesting terms of four years, with 25% of the award vesting one year from the vesting commencement date and then ratably over the following 36 months, though some vest over shorter periods, vesting monthly from grant date.
A summary of the Company’s stock option activity under the 2020 Plan is as follows:
| Options | Weighted-average exercise price |
Weighted- average remaining contractual term |
Aggregate intrinsic value (in thousands) |
|||||||||||||
| Outstanding at December 31, 2025 |
5,520,829 | $ | 1.12 | 8.6 | $ | 2,526 | ||||||||||
| Granted |
220,500 | $ | 1.58 | |||||||||||||
| Exercised |
(448,251 | ) | $ | 0.65 | ||||||||||||
| Forfeited |
(6,250 | ) | $ | 0.62 | ||||||||||||
| Expired |
— | $ | — | |||||||||||||
|
|
|
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| Outstanding at March 31, 2026 |
5,286,828 | $ | 1.18 | 8.6 | $ | 2,105 | ||||||||||
|
|
|
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| Exercisable at March 31, 2026 |
1,500,492 | $ | 1.04 | 8.1 | $ | 812 | ||||||||||
|
|
|
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| Vested and expected to vest at March 31, 2026 |
5,286,828 | $ | 1.18 | 8.6 | $ | 2,105 | ||||||||||
|
|
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The weighted-average grant date fair value of options granted for the three months ended March 31, 2025 and 2026, was $0.87 and $1.15 per share, respectively. As of December 31, 2025 and March 31, 2026, the Company recorded receivables for amounts related to option exercises of approximately $31 thousand and $19 thousand, respectively. These amounts were received subsequent to the respective period end. The total intrinsic value of options exercised during the three months ended March 31, 2025 and 2026 was less than $0.1 million and $0.4 million, respectively.
Stock-based compensation expense
Stock-based compensation expense recognized for all equity awards has been included in the statements of operations as follows (in thousands):
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Research and development |
210 | 241 | ||||||
| General and administrative |
21 | 82 | ||||||
|
|
|
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| Total stock-based compensation expense |
$ | 231 | $ | 323 | ||||
|
|
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The fair value of stock options granted during the three months ended March 31, 2025 and 2026 was estimated using the following assumptions:
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Risk-free interest rate |
4.23% - 4.41% | 3.85% - 3.85% | ||||||
| Expected term (years) |
6.00 | 5.96 - 5.98 | ||||||
| Expected stock price volatility |
82.39% - 83.30% | 83.29% - 83.31% | ||||||
| Expected dividend yield |
— | — | ||||||
|
|
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As of March 31, 2026, the unrecognized compensation cost related to outstanding employee and non-employee options was $3.3 million and is expected to be recognized as expense over a weighted-average period of approximately 2.8 years.
6. Commitments and contingencies
The Company has operating leases for its office and laboratory space in San Diego, California.
In March 2021, the Company entered into a lease agreement for 10,867 square feet of office and laboratory space in San Diego, California (the “JHC Lease”). The JHC Lease commenced on March 9, 2021, with an initial term of five years and included aggregate monthly payments of approximately $0.1 million. The JHC Lease provided for rent abatements and scheduled increases in base rent. In June 2024, the JHC Lease was amended to reduce the remaining lease term by approximately two years, in connection with the Company’s entry into a new facility lease. As a result of the modification, the Company reduced the right-of-use asset and corresponding lease liability by $0.7 million, assuming a modified remaining lease term of 15 months and a modified discount rate of 7.6%, based on the Company’s incremental borrowing rate at the date of the lease modification. The JHC Lease expired in July 2025.
In June 2024, the Company entered into a lease agreement for approximately 46,353 square feet of office and laboratory space in San Diego, California (the “Science Center Lease”). The construction and design of the space was the primary responsibility of the lessor. The Science Center Lease is accounted for as an operating lease and commenced in June 2025, with a ten-year initial term through June 2035. The Science Center Lease includes aggregate monthly rent payments of approximately $0.3 million, with a rent escalation clause providing for annual increases in base rent of 3%, and a free rent period for the first 12 months following the lease commencement date. Additionally, the Company is obligated to remit to the lessor its allocable portion of real estate taxes, maintenance costs, and other operating expenses attributable to the leased premises, which are variable in nature. The Company shall remain fully liable for such costs throughout the duration of any free rent period. The Company paid a cash security deposit of $0.9 million, which is refundable at the end of the lease term and is included in other long-term assets in the Company’s balance sheet as of March 31, 2026. The Science Center Lease includes one option to renew for either five or two additional years, at the Company’s election, at fair market value. The Company has not yet determined whether it will exercise the renewal option.
Cash paid for amounts included in the measurement of lease liabilities was $0.2 million and $29 thousand for the three months ended March 31, 2025 and 2026, respectively.
The components of lease expense include operating and variable lease costs. Amortization is recorded within research and development and general and administrative expenses in the statements of operations. Components of lease cost for the three months ended March 31, 2025 and 2026, respectively, were as follows (in thousands):
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Operating lease cost |
$ | 188 | $ | 990 | ||||
| Short-term lease cost |
77 | 1 | ||||||
| Variable lease cost |
27 | 353 | ||||||
|
|
|
|||||||
| Total lease cost |
$ | 292 | $ | 1,344 | ||||
|
|
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Maturities of lease liabilities, weighted-average remaining term and weighted-average discount rate were as follows (in thousands):
| Year ending December 31, |
||||
| 2026 (remaining nine months) |
$ | 2,256 | ||
| 2027 |
3,903 | |||
| 2028 |
4,020 | |||
| 2029 |
4,141 | |||
| 2030 |
4,265 | |||
| Thereafter |
20,577 | |||
|
|
|
|||
| Total future minimum lease payments |
39,162 | |||
| Less: amount representing interest |
(16,140 | ) | ||
|
|
|
|||
| Present value of operating lease liabilities |
23,022 | |||
| Less: operating lease liabilities, current |
(493 | ) | ||
|
|
|
|||
| Operating lease liabilities, non-current |
$ | 22,529 | ||
|
|
||||
| As of December 31, 2025 |
As of March 31, 2026 |
|||||||
| Weighted-average remaining lease term (years) |
9.5 | 9.3 | ||||||
| Weighted-average incremental borrowing rate |
11.80% | 11.80% | ||||||
|
|
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7. Segment information
The Company operates and manages its business as one reportable and operating segment, which is the business of designing and developing novel small molecule product candidates. The Company’s chief operating decision maker is its Chief Executive Officer, who assesses performance of the segment based on net loss, which includes evaluating the progress of ongoing clinical trials. The measure of segment assets is reported on the balance sheet as total assets. All long-lived assets are maintained in the United States. The following table contains information on segment profit or loss, including significant segment expenses (in thousands):
| Three months ended March 31, | ||||||||
| 2025 | 2026 | |||||||
| Operating expenses: |
||||||||
| Research and development expenses: |
||||||||
| BH-30643 |
$ | 1,782 | $ | 9,550 | ||||
| BH-30236 |
1,048 | 1,747 | ||||||
| BH-501284 |
— | 585 | ||||||
| Other projects |
1,007 | 10 | ||||||
| Non project specific research and development expenses |
5,735 | 8,009 | ||||||
| General and administrative expenses |
1,882 | 2,206 | ||||||
| Other income |
976 | 1,099 | ||||||
|
|
|
|||||||
| Net loss |
$ | 10,478 | $ | 21,008 | ||||
|
|
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8. Subsequent events
Management has reviewed and evaluated material subsequent events through July 16, 2026, which is the date the financial statements were available for issuance. During the period from March 31, 2026 to the date that these financial statements were available for issuance, the Company granted stock options to employees and consultants to purchase an aggregate of 1,590,784 shares of common stock at a weighted-average exercise price of $2.73 per share under the 2020 Plan.
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shares
Common stock
Prospectus
| J.P. Morgan | Leerink Partners | Guggenheim Securities | LifeSci Capital | H.C. Wainwright & Co. |
, 2026
Part II information not required in prospectus
Item 13. Other expenses of issuance and distribution.
The following table indicates the expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts and commissions, all of which will be paid by us. All amounts are estimated except the U.S. Securities and Exchange Commission (SEC) registration fee, the Financial Industry Regulatory Authority, Inc. (FINRA) filing fee and the exchange listing fee.
| Amount paid or to be paid |
||||
| SEC registration fee |
$ | 13,810 | ||
| FINRA filing fee |
15,500 | |||
| Nasdaq listing fee |
* | |||
| Accountants’ fees and expenses |
* | |||
| Legal fees and expenses |
* | |||
| Transfer agent’s fees and expenses |
* | |||
| Printing and engraving expenses |
* | |||
| Miscellaneous |
* | |||
|
|
|
|||
| Total expenses |
$ | * | ||
|
|
|
|
||
| * | To be provided by amendment. |
Item 14. Indemnification of directors and officers.
As permitted by Sections 102 and 145 of the Delaware General Corporation Law (DGCL), we have adopted provisions in our certificate of incorporation and bylaws that limit or eliminate the personal liability of our directors for a breach of their fiduciary duty of care as a director. The duty of care generally requires that, when acting on behalf of the corporation, directors exercise an informed business judgment based on all material information reasonably available to them. Consequently, a director will not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except for liability for:
| • | any breach of the director’s duty of loyalty to us or our stockholders; |
| • | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
| • | any act related to unlawful stock repurchases, redemptions or other distributions or payment of dividends; or |
| • | any transaction from which the director derived an improper personal benefit. |
These limitations of liability do not affect the availability of equitable remedies such as injunctive relief or rescission. Our certificate of incorporation also authorizes us to indemnify our officers, directors and other agents to the fullest extent permitted under Delaware law.
As permitted by Section 145 of the DGCL, our bylaws provide that:
| • | we may indemnify our directors, officers, employees and other agents to the fullest extent permitted by the DGCL, subject to limited exceptions; |
| • | we may advance expenses to our directors, officers and employees in connection with a legal proceeding, subject to limited exceptions; and |
| • | the rights provided in our bylaws are not exclusive. |
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Our certificate of incorporation and our bylaws provide for the indemnification provisions described above and elsewhere herein. We have entered or will enter into, and intend to continue to enter into, separate indemnification agreements with our directors and officers that may be broader than the specific indemnification provisions contained in the DGCL. These indemnification agreements generally require us, among other things, to indemnify our officers and directors against certain liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct. These indemnification agreements also generally require us to advance any expenses incurred by the directors or officers as a result of any proceeding against them as to which they could be indemnified. These indemnification provisions and the indemnification agreements may be sufficiently broad to permit indemnification of our officers and directors for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended (Securities Act).
We have purchased and currently intend to maintain insurance on behalf of each and every person who is one of our directors or officers, within the limits and subject to the terms and conditions thereof, against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity, subject to certain exclusions.
The form of underwriting agreement to be entered into in connection with this initial public offering provides for indemnification by the underwriters of us and our officers and directors who sign this registration statement for specified liabilities, including matters arising under the Securities Act.
Item 15. Recent sales of unregistered securities.
Set forth below is information regarding unregistered securities issued by us since January 1, 2023 to the date of this registration statement. Also included is the consideration received by us for such securities and information relating to the section of the Securities Act, or rule of the SEC, under which exemption from registration was claimed.
(1) In December 2023, in connection with our Series B convertible preferred stock private placement financing, we issued and sold to investors an aggregate of 23,558,935 shares of our Series B Preferred, at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $88.7 million.
(2) In January 2024, we issued and sold to investors an additional 3,016,287 shares of our Series B Preferred, at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $11.3 million.
(3) In November 2025, we issued and sold to investors an additional 21,845,628 shares of our Series B Preferred, at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $82.2 million.
(4) In December 2025, we issued and sold to investors an additional 518,216 shares of our Series B Preferred, at a purchase price of $3.7629 per share for aggregate cash proceeds of approximately $2 million.
(5) From January 2023 through the date of this registration statement, we granted under our 2020 Equity Incentive Plan (2020 Plan) stock options to purchase an aggregate of 8,693,941 shares of our common stock at a weighted average exercise price of $1.40 per share. From January 2023 through the date of this registration statement, we have issued an aggregate of 4,029,651 shares of our common stock upon exercise of stock options for an approximate aggregate consideration of $4.2 million.
The offers, sales and issuances of the securities described in paragraphs (1) through (4) were deemed to be exempt from registration under the Securities Act in reliance on Section 4(a)(2) (or Regulation D promulgated
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thereunder) or Regulation S promulgated under the Securities Act. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was able to bear the investment’s economic risk and had access to the type of information normally provided in a prospectus for a registered securities offering.
The offers, sales and issuances of the securities described in paragraph (5) were deemed to be exempt from registration under the Securities Act in reliance on Rule 701 in that the transactions were under compensatory benefit plans and contracts relating to compensation as provided under Rule 701 or Section 4(a)(2). The recipients of such securities were our employees, directors or bona fide consultants and received the securities under our 2020 Plan.
All of the foregoing securities are deemed restricted securities for purposes of the Securities Act. All certificates representing the issued shares of capital stock described in this Item 15 included appropriate legends setting forth that the securities had not been registered and the applicable restrictions on transfer.
Item 16. Exhibits and financial statement schedules.
(a) Exhibits.
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| Exhibit number |
Description of exhibit | |
| 10.10^# | Lease, dated June 14, 2024, by and between the Registrant and BMR-10255 Science Center LP. | |
| 10.11+ | Executive Employment Agreement, between the Registrant and J. Jean Cui, which will be effective upon the effectiveness of this registration statement. | |
| 10.12+ | Executive Employment Agreement, between the Registrant and Y. Peter Li, which will be effective upon the effectiveness of this registration statement. | |
| 10.13+ | Executive Employment Agreement, between the Registrant and Jason Keyes, which will be effective upon the effectiveness of this registration statement. | |
| 10.14+ | Executive Employment Agreement, between the Registrant and Vincent Liptak, which will be effective upon the effectiveness of this registration statement. | |
| 10.15+ | Executive Employment Agreement, between the Registrant and Geoffrey Oxnard, which will be effective upon the effectiveness of this registration statement. | |
| 23.1 | Consent of Deloitte & Touche LLP, independent registered public accounting firm. | |
| 23.2+ | Consent of Cooley LLP (included in Exhibit 5.1). | |
| 24.1 | Power of Attorney (included on signature page). | |
| 107 | Filing Fee Table. | |
|
| ||
| + | To be filed by amendment. |
| * | Indicates a management contract or any compensatory plan, contract or arrangement. |
| ^ | Pursuant to Item 601(b)(10)(iv) of Regulation S-K promulgated by the SEC, certain portions of this exhibit have been redacted because they are both not material and are the type that the Registrant treats as private or confidential. The Registrant hereby agrees to furnish supplementally to the SEC, upon its request, an unredacted copy of this exhibit. |
| # | Certain schedules or exhibits to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
(b) Financial statement schedules.
All financial statement schedules are omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or the notes thereto.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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The undersigned Registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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Signatures
Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Diego, California, on July 16, 2026.
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ J. Jean Cui, Ph.D. | |
| J. Jean Cui, Ph.D. President and Chief Executive Officer | ||
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jason Keyes, MBA and Vincent Liptak, J.D., Ph.D., MBA and each of them, as his or her true and lawful attorneys-in-fact and agents, and each of them, with the full power of substitution, for him or her and in his or her name, place or stead, in any and all capacities, to sign any and all amendments to this registration statement (including post-effective amendments), and to sign any registration statement for the same offering covered by this registration statement that is to be effective upon filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Title | Date | ||
| /s/ J. Jean Cui, Ph.D. J. Jean Cui, Ph.D. |
President, Chief Executive Officer and Director (Principal Executive Officer) |
July 16, 2026 | ||
| /s/ Jason Keyes, MBA Jason Keyes, MBA |
Chief Financial Officer (Principal Financial and Accounting Officer) |
July 16, 2026 | ||
| /s/ Y. Peter Li, Ph.D. Y. Peter Li, Ph.D. |
Executive Chairman | July 16, 2026 | ||
| /s/ Sundeep Agrawal, M.D. Sundeep Agrawal, M.D. |
Director | July 16, 2026 | ||
| /s/ Bihua Chen, MBA Bihua Chen, MBA |
Director | July 16, 2026 | ||
| /s/ Carl L. Gordon, Ph.D., CFA Carl L. Gordon, Ph.D., CFA |
Director | July 16, 2026 | ||
|
| ||||
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| Signature | Title | Date | ||
| /s/ Sheila Gujrathi, M.D. Sheila Gujrathi, M.D. |
Director | July 16, 2026 | ||
| /s/ John Schmid, MBA John Schmid, MBA |
Director | July 16, 2026 | ||
| /s/ Timothy Stubbs, M.D. Timothy Stubbs, M.D. |
Director | July 16, 2026 | ||
|
| ||||
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Exhibit 3.1
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BLOSSOMHILL THERAPEUTICS, INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
BlossomHill Therapeutics, Inc., a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”),
DOES HEREBY CERTIFY:
1. The date of filing the original Certificate of Incorporation of this corporation with the Secretary of State of the State of Delaware was June 22, 2020, the Amended and Restated Certificate of Incorporation of this corporation was filed with the Secretary of State of the State of Delaware on December 28, 2020, and the Second Amended and Restated Certificate of Incorporation of this corporation was filed with the Secretary of State of the State of Delaware on February 26, 2021.
2. That the Board of Directors of this corporation (the “Board”) duly adopted resolutions proposing to amend and restate the Second Amended and Restated Certificate of Incorporation of this corporation, declaring said amendment and restatement to be advisable and in the best interests of this corporation and its stockholders, and authorizing the appropriate officers of this corporation to solicit the consent of the stockholders therefor, which resolution setting forth the proposed amendment and restatement is as follows:
RESOLVED: That the Second Amended and Restated Certificate of Incorporation of this corporation as heretofore amended, restated or supplemented is hereby further amended and restated to read as follows:
I.
The name of this corporation is BLOSSOMHILL THERAPEUTICS, INC. (the “Company”).
II.
The address of the registered office of the Company in the State of Delaware is 16192 Coastal Highway, City of Lewes, County of Sussex, Zip Code 19958, and the name of the registered agent of the Company in the State of Delaware at such address is Harvard Business Services, Inc.
III.
The purpose of the Company is to engage in any lawful act or activity for which a corporation may be organized under the DGCL.
IV.
Immediately upon the filing of this Third Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, the total number of shares of all classes of stock which the Company shall have authority to issue is (i) 79,726,375 shares of Common Stock, $0.0001 par value per share (“Common Stock”) and (ii) 63,188,793 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”). The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Company.
A. The holders of Common Stock are entitled to one (1) vote for each share of Common Stock held at all meetings of stockholders (and written actions in lieu of meetings). The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights, powers and preferences of the holders of the Preferred Stock set forth herein.
B. The number of authorized shares of Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares of Common Stock or Preferred Stock, as applicable, then outstanding) by the affirmative vote of the holders of a majority of the stock of the Company entitled to vote (voting together as a single class), irrespective of the provisions of Section 242(b)(2) of the DGCL.
C. 10,000,000 of the authorized shares of Preferred Stock are hereby designated “Series Angel Preferred Stock” (the “Series Angel Preferred”). 26,613,546 of the authorized shares of Preferred Stock are hereby designated “Series A Preferred Stock” (the “Series A Preferred”). 26,575,247 of the authorized shares of Preferred Stock are hereby designated “Series B Preferred Stock” (the “Series B Preferred”).
D. The rights, preferences, privileges, restrictions and other matters relating to the Preferred Stock are as follows:
1. DIVIDEND RIGHTS.
(a) Holders of Preferred Stock, in preference to the holders of Common Stock, shall be entitled to receive, but only out of funds that are legally available therefor, cash dividends at the rate of 5% of the Original Issue Price (as defined below) per annum on each outstanding share of Preferred Stock. Such dividends shall be payable, only when, as and if declared by the Board and shall be non-cumulative.
(b) The “Original Issue Price” shall mean, with respect to the Series Angel Preferred, $0.20, with respect to the Series A Preferred, $2.6678141, and with respect to the Series B Preferred $3.7629 (each as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof).
(c) So long as any shares of Preferred Stock are outstanding, the Company shall not pay or declare any dividend (whether in cash or property), or make any other distribution on the Common Stock, or purchase, redeem or otherwise acquire for value any shares of Common Stock, until all dividends as set forth in Section 1(a) above on the Preferred Stock shall have been paid or declared and set apart, except for:
(i) acquisitions of Common Stock by the Company pursuant to agreements that permit the Company to repurchase such shares at no more than cost upon termination of services to the Company;
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(ii) with the approval of the Board, acquisitions of Common Stock in exercise of the Company’s right of first refusal to repurchase such shares; or
(iii) distributions to holders of Common Stock in accordance with Section 3.
(d) In the event dividends are paid on any share of Common Stock, the Company shall also pay dividends on all outstanding shares of Preferred Stock in a per share amount equal (on an as-if-converted to Common Stock basis) to the amount paid or set aside for each share of Common Stock.
(e) The provisions of Sections 1(c) and 1(d) shall not apply to a dividend payable solely in Common Stock to which the provisions of Section 4(g) hereof are applicable.
2. VOTING RIGHTS.
(a) General Rights. Each holder of shares of (i) the Series Angel Preferred shall be entitled the number of votes equal to ten (10) times the number of shares of Common Stock into which such shares of Series Angel Preferred could be converted (pursuant to Section 4 hereof), (ii) the Series A Preferred shall be entitled the number of votes equal to one (1) times the number of shares of Common Stock into which such shares of Series A Preferred could be converted (pursuant to Section 4 hereof), and (iii) the Series B Preferred shall be entitled the number of votes equal to one (1) times the number of shares of Common Stock into which such shares of Series B Preferred could be converted (pursuant to Section 4 hereof). For purposes of the immediately preceding sentence, the number of shares of common Stock into which such shares of Series Angel Preferred, Series A Preferred, and Series B Preferred, respectively, are convertible shall be determined as of immediately after the close of business on the record date fixed for such meeting or the effective date of such written consent and shall have the voting rights and powers equal to the voting rights and powers of the Common Stock and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Company. Except as otherwise provided herein or as required by law, the Preferred Stock shall vote together with the Common Stock at any annual or special meeting of the stockholders and not as a separate class, and may act by written consent in the same manner as the Common Stock.
(b) Separate Vote of Series Angel Preferred. At any time when at least 2,000,000 shares of Series Angel Preferred (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series Angel Preferred) are outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization, reclassification or otherwise, do any of the following without (in addition to any other vote required by law or this Third Amended and
3
Restated Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the Series Angel Preferred given in writing or by vote at a meeting, consenting or voting (as the case may be) separately as a class, and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect: amend, alter, waive or repeal any provision of the Third Amended and Restated Certificate of Incorporation or Bylaws of the Company that alters or changes the voting or other powers, preferences, or other special rights, privileges or restrictions of the Series Angel Preferred.
(c) Separate Vote of Series A Preferred and Series B Preferred. At any time when at least 5,322,710 shares of Series A Preferred and 5,324,496 shares of Series B Preferred (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred and Series B Preferred, respectively) are outstanding, the Company shall not, either directly or indirectly by amendment, merger, consolidation, recapitalization, reclassification or otherwise, do any of the following without (in addition to any other vote required by law or this Third Amended and Restated Certificate of Incorporation) the written consent or affirmative vote of the holders of at least a majority of the Series A Preferred and Series B Preferred, voting together as a class, given in writing or by vote at a meeting, consenting or voting (as the case may be), and any such act or transaction entered into without such consent or vote shall be null and void ab initio, and of no force or effect: amend, alter, waive or repeal any provision of the Third Amended and Restated Certificate of Incorporation or Bylaws of the Company that alters or changes the voting or other powers, preferences, or other special rights, privileges or restrictions of the Series A Preferred or the Series B Preferred.
(d) Election of Board of Directors.
(i) For so long as 2,000,000 shares of Series Angel Preferred (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series Angel Preferred) remain outstanding, the holders of Series Angel Preferred, voting as a separate class, shall be entitled to elect one member of the Board (the “Series Angel Director”) at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such director in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such director.
(ii) For so long as 5,322,710 shares of Series A Preferred (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred) remain outstanding, the holders of Series A Preferred, voting as a separate class, shall be entitled to elect three members of the Board (the “Series A Directors”) at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office any such director in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such director.
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(iii) For so long as 5,324,496 shares of Series B Preferred (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred) remain outstanding, the holders of Series B Preferred shall be entitled to elect two members of the Board (the “Series B Directors” and together with the Series Angel Director and the Series A Directors, the “Preferred Directors” and each, a “Preferred Director”), pursuant to and in accordance with Sections 1.2(e) and (f) of the Third Amended and Restated Voting Agreement, at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office any such director in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such director. For purposes of this Third Amended & Restated Certificate of Incorporation, the “Requisite Directors” shall mean approval by the Board of Directors including the approval of a majority of the Preferred Directors then seated.
(iv) The holders of Common Stock, voting as a separate class, shall be entitled to elect at least one member of the Board at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such directors.
(v) The holders of Common Stock and Preferred Stock, voting together as a single class, shall be entitled to elect all remaining members of the Board, if any, at each meeting or pursuant to each consent of the Company’s stockholders for the election of directors, and to remove from office such directors in accordance with applicable law and to fill any vacancy caused by the resignation, death or removal of such directors.
(vi) Notwithstanding the provisions of Section 223(a)(1) and 223(a)(2) of the DGCL, any vacancy, including newly created directorships resulting from any increase in the authorized number of directors or amendment of this Third Amended and Restated Certificate of Incorporation, and vacancies created by removal or resignation of a director, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and the directors so chosen shall hold office until the next annual election and until their successors are duly elected and shall qualify, unless sooner displaced; provided, however, that where such vacancy occurs among the directors elected by the holders of a class or series of stock, the holders of shares of such class or series may override the Board’s action to fill such vacancy by (A) voting for their own designee to fill such vacancy at a meeting of the Company’s stockholders or (B) written consent, if the consenting stockholders hold a sufficient number of shares to elect their designee at a meeting of the stockholders in which all members of such class or series are present and voted. Any director may be removed during his or her term of office without cause, by, and only by, the affirmative vote of the holders of the shares of the class or series of stock entitled to elect such director or directors, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of stockholders, and any vacancy thereby created may be filled by the holders of that class or series of stock represented at the meeting or pursuant to written consent. At any meeting held for the purpose of electing a director, the presence in person or by proxy of the holders of a majority of the outstanding shares of the class or series entitled to elect such director shall constitute a quorum for the purpose of electing such director.
(vii) No person entitled to vote at an election for directors may cumulate votes to which such person is entitled unless required by applicable law at the time of such election.
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3. LIQUIDATION RIGHTS.
(a) Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (a “Liquidation Event”), before any distribution or payment shall be made to the holders of any Common Stock, subject to the right of any series of Preferred Stock that may from time to time come into existence, the holders of Preferred Stock shall be entitled to be paid out of the assets of the Company legally available for distribution (or the consideration received by the Company or its stockholders in an Acquisition) as follows:
(i) First, to holders of Series A Preferred and Series B Preferred, pari passu, an amount per share equal to the greater of (a) the applicable Original Issue Price of the Series A Preferred and the Original Issue Price of the Series B Preferred, respectively, plus any dividends declared but unpaid thereon, or (b) such amount per share, pari passu, as would have been payable had all then outstanding shares of Series A Preferred and Series B Preferred, respectively, been converted into shares of Common Stock pursuant to Section 4 immediately prior to such Liquidation Event. If upon any such Liquidation Event, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of Series A Preferred and Series B Preferred, respectively, the full amount to which they shall be entitled under this Subsection, the holders of Series A Preferred and Series B Preferred shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
(ii) Second, to holders of Series Angel Preferred an amount per share equal to the greater of (a) the Original Issue Price of the Series Angel Preferred, plus any dividends declared but unpaid thereon, or (b) such amount per share as would have been payable had all then outstanding shares of Series Angel Preferred been converted into shares of Common Stock pursuant to Section 4 immediately prior to such Liquidation Event. If upon any such Liquidation Event, the assets of the Company available for distribution to its stockholders shall be insufficient to pay the holders of Series Angel Preferred the full amount to which they shall be entitled under this Subsection, the holders of Series Angel Preferred shall share ratably in any distribution of the assets available for distribution in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.
(b) After the payment of the full liquidation preference of the Preferred Stock as set forth in Section 3(a) above, the remaining assets of the Company legally available for distribution (or the consideration received by the Company or its stockholders in an Acquisition), if any, shall be distributed ratably to the holders of the Common Stock.
(c) An Asset Transfer or Acquisition (each as defined below) shall be deemed a Liquidation Event for purposes of this Section 3.
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(i) For the purposes of this Section 3: (A) “Acquisition” shall mean (I) any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, other than any such consolidation, merger or reorganization in which the shares of capital stock of the Company immediately prior to such consolidation, merger or reorganization, continue to represent a majority of the voting power of the surviving entity (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization, (provided that, for the purpose of this Section 3(c)(i), all shares of Common Stock issuable upon exercise of options outstanding immediately prior to such consolidation or merger or upon conversion of Preferred Stock or Convertible Securities) outstanding immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of capital stock are converted or exchanged); or (II) any transaction or series of related transactions to which the Company is a party in which in excess of 50% of the Company’s voting power is transferred; provided that an Acquisition shall not include any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; and (B) “Asset Transfer” shall mean a sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.
(ii) In any Acquisition or Asset Transfer, if the consideration to be received is securities of a corporation or other property other than cash, its value will be deemed its fair market value as determined in good faith by the Board on the date such determination is made.
(iii) The Company shall not have the power to effect an Acquisition or Asset Transfer unless the definitive agreement for such transaction (the “Agreement”) provides that the consideration payable to the stockholders of the Company in connection therewith shall be allocated among the holders of capital stock of the Company in accordance with this Section 3.
(iv) In the event of a Liquidation Event (including an Acquisition or Asset Transfer), if any portion of the consideration payable to the stockholders of the Company is placed into escrow or subject to contingencies, the Agreement shall provide that (x) the total consideration actually paid to the stockholders of the Company shall be allocated among the holders of capital stock of the Company in accordance with Sections 3(a) and 3(b) (excluding, for the absence of doubt, the portion of such consideration that is placed in escrow or subject to contingencies until such time as any such amounts are paid to the stockholders of the Company).
4. CONVERSION RIGHTS.
The holders of the Preferred Stock shall have the following rights with respect to the conversion of the Preferred Stock into shares of Common Stock (the “Conversion Rights”):
(a) Optional Conversion. Subject to and in compliance with the provisions of this Section 4, any shares of Preferred Stock may, at the option of the holder, be converted at any time into fully-paid and nonassessable shares of Common Stock. The number of shares of Common Stock to which a holder of Preferred Stock shall be entitled upon conversion shall be the product obtained by multiplying the Preferred Conversion Rate then in effect (determined as provided in Section 4(b)) by the number of shares of Preferred Stock being converted. In the event of a Liquidation Event, the Conversion Rights shall terminate at the close of business on the last full day preceding the date fixed for the payment of any such amounts distributable on such event to the holders of Preferred Stock.
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(b) Preferred Conversion Rate. The conversion rate in effect at any time for conversion of the Preferred Stock (the “Preferred Conversion Rate”) shall be the quotient obtained by dividing the applicable Original Issue Price of the series of Preferred Stock by the applicable Preferred Conversion Price of such series of Preferred Stock, calculated as provided in Section 4(c), as in effect at the time of conversion.
(c) Preferred Conversion Price. The conversion price (the “Preferred Conversion Price”) for (i) the Series Angel Preferred shall initially be the Original Issue Price of the Series Angel Preferred, (ii) the Series A Preferred shall initially be the Original Issue Price of the Series A Preferred, and (iii) the Series B Preferred shall initially be the Original Issue Price of the Series B Preferred. Such initial Preferred Conversion Price shall be adjusted from time to time in accordance with this Section 4. All references to the Preferred Conversion Price herein shall mean the Preferred Conversion Price as so adjusted.
(d) Mechanics of Optional Conversion. Each holder of Preferred Stock who desires to convert the same into shares of Common Stock pursuant to this Section 4 shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Company or any transfer agent for the Preferred Stock, and shall give written notice to the Company at such office that such holder elects to convert the same. Such notice shall state the number of shares of Preferred Stock being converted. Thereupon, the Company shall promptly issue and deliver at such office to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled and a certificate for the number (if any) of the shares of Preferred Stock represented by the surrendered certificate that were not converted into Common Stock and shall promptly pay (i) in cash or, to the extent sufficient funds are not then legally available therefor, in Common Stock (at the Common Stock’s fair market value determined by the Board as of the date of such conversion), any declared and unpaid dividends on the shares of Preferred Stock being converted and (ii) in cash (at the Common Stock’s fair market value determined by the Board as of the date of conversion) the value of any fractional share of Common Stock otherwise issuable to any holder of Preferred Stock. Such conversion shall be deemed to have been made at the close of business on the date of such surrender of the certificates representing the shares of Preferred Stock to be converted, and the person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder of such shares of Common Stock on such date.
(e) Adjustments to Preferred Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this Section 4, the following definitions shall apply:
(A) “Additional Shares of Common Stock” means all shares of Common Stock issued (or, pursuant to Section 4(e)(iii) below, deemed to be issued) by the Company after the Original Issue Date, other than the Exempted Securities (as such term is defined in the Third Amended and Restated Investors Rights Agreement, dated as of even date herewith, by and between the Company and the other parties thereto.
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(B) “Convertible Securities” means any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.
(C) “Option” means any rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.
(D) “Original Issue Date” means the date on which the first share of Series B Preferred Stock is issued.
(ii) No Adjustment of Preferred Conversion Price. No adjustment in the Preferred Conversion Price of any series of Preferred Stock shall be made as the result of the issuance or deemed issuance of Additional Shares of Common Stock if the Company receives written notice from the holders of a majority of the then outstanding shares of such series of Preferred Stock, agreeing that no such adjustment shall be made as the result of the issuance or deemed issuance of such Additional Shares of Common Stock.
(iii) Deemed Issuance of Additional Shares of Common Stock.
(A) If the Company at any time or from time to time after the Original Issue Date shall issue any Options or Convertible Securities (excluding Options or Convertible Securities which are themselves Exempted Securities) or shall fix a record date for the determination of holders of any class of securities entitled to receive any such Options or Convertible Securities, then the maximum number of shares of Common Stock (as set forth in the instrument relating thereto, assuming the satisfaction of any conditions to exercisability, convertibility or exchangeability but without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or, in the case of Convertible Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall be deemed to be Additional Shares of Common Stock issued as of the time of such issue or, in case such a record date shall have been fixed, as of the close of business on such record date.
(B) If the terms of any Option or Convertible Security, the issuance of which resulted in an adjustment to the Preferred Conversion Price of any series of Preferred Stock pursuant to the terms of Section 4(e)(iv), are revised as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (1) any increase or decrease in the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any such Option or Convertible Security or (2) any increase or decrease in the consideration payable to the Company upon such exercise, conversion and/or exchange, then, effective upon such increase or decrease becoming effective, the Preferred Conversion Price of such series of Preferred Stock computed upon the original issue of such Option or Convertible Security (or upon the occurrence of a record date with respect thereto) shall be readjusted to such
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Preferred Conversion Price for such series of Preferred Stock as would have obtained had such revised terms been in effect upon the original date of issuance of such Option or Convertible Security. Notwithstanding the foregoing, no readjustment pursuant to this Section 4(e)(iv)(B) shall have the effect of increasing the Preferred Conversion Price applicable to a series of Preferred Stock an amount which exceeds the lower of (1) the Preferred Conversion Price for such series of Preferred Stock in effect immediately prior to the original adjustment made as a result of the issuance of such Option or Convertible Security, or (2) the Preferred Conversion Price for such series of Preferred Stock that would have resulted from any issuances of Additional Shares of Common Stock (other than deemed issuances of Additional Shares of Common Stock as a result of the issuance of such Option or Convertible Security) between the original adjustment date and such readjustment date.
(C) If the terms of any Option or Convertible Security (excluding Options or Convertible Securities which are themselves Exempted Securities), the issuance of which did not result in an adjustment to the Preferred Conversion Price of a series of Preferred Stock pursuant to the terms of Section 4(e)(iv) (either because the consideration per share (determined pursuant to Section 4(e)(v)) of the Additional Shares of Common Stock subject thereto was equal to or greater than the applicable Preferred Conversion Price then in effect, or because such Option or Convertible Security was issued before the Original Issue Date), are revised after the Original Issue Date as a result of an amendment to such terms or any other adjustment pursuant to the provisions of such Option or Convertible Security (but excluding automatic adjustments to such terms pursuant to anti-dilution or similar provisions of such Option or Convertible Security) to provide for either (I) any increase in the number of shares of Common Stock issuable upon the exercise, conversion or exchange of any such Option or Convertible Security or (II) any decrease in the consideration payable to the Company upon such exercise, conversion or exchange, then such Option or Convertible Security, as so amended or adjusted, and the Additional Shares of Common Stock subject thereto determined in the manner provided in Section 4(e)(iii)(A) shall be deemed to have been issued effective upon such increase or decrease becoming effective.
(D) Upon the expiration or termination of any unexercised Option or unconverted or unexchanged Convertible Security (or portion thereof) which resulted (either upon its original issuance or upon a revision of its terms) in an adjustment to the Preferred Conversion Price of any series of Preferred Stock pursuant to the terms of Section 4(e)(iv), the Preferred Conversion Price of such series of Preferred Stock shall be readjusted to such Preferred Conversion Price for such series of Preferred Stock as would have obtained had such Option or Convertible Security (or portion thereof) never been issued.
(E) If the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, is calculable at the time such Option or Convertible Security is issued or amended but is potentially subject to adjustment based upon subsequent events, any adjustment to the Preferred Conversion Price of a series of Preferred Stock provided for in this Section 4(e)(iii) shall be effected at the time of such issuance or amendment based on such number of shares or amount of consideration without regard to any provisions for subsequent adjustments (and any subsequent adjustments shall be treated as provided in clauses (B) and (C) of this Section 4(e)(iii). If the number of shares of
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Common Stock issuable upon the exercise, conversion and/or exchange of any Option or Convertible Security, or the consideration payable to the Company upon such exercise, conversion and/or exchange, cannot be calculated at all at the time such Option or Convertible Security is issued or amended, any adjustment to the Preferred Conversion Price of a series of Preferred Stock that would result under the terms of this Section 4(e)(iii) at the time of such issuance or amendment shall instead be effected at the time such number of shares and/or amount of consideration is first calculable (even if subject to subsequent adjustments), assuming for purposes of calculating such adjustment to the Preferred Conversion Price for such series of Preferred Stock that such issuance or amendment took place at the time such calculation can first be made. In the event an Option or Convertible Security contains alternative conversion terms, such as a cap on the valuation of the Company at which such conversion will be effected, or circumstances where the Option or Convertible Security may be repaid in lieu of conversion, then the number of shares of Common Stock issuable upon the exercise, conversion and/or exchange of such Option or Convertible Security shall be deemed not calculable until such time as the applicable conversion terms are determined.
(iv) Adjustment of Preferred Conversion Price Upon Issuance of Additional Shares of Common Stock. In the event the Company shall at any time after the Original Issue Date issue Additional Shares of Common Stock (including Additional Shares of Common Stock deemed to be issued pursuant to Section 4(e)(iii)), without consideration or for a consideration per share less than the Preferred Conversion Price of a series of Preferred Stock in effect immediately prior to such issuance or deemed issuance, then the Preferred Conversion Price for such series of Preferred Stock shall be reduced, concurrently with such issue, to a price (calculated to the nearest one-hundredth of a cent) determined in accordance with the following formula:
CP2 = CP1* (A + B) / (A + C).
For purposes of the foregoing formula, the following definitions shall apply:
(A) “CP2” shall mean the Preferred Conversion Price of such series of Preferred Stock in effect immediately after such issuance or deemed issuance of Additional Shares of Common Stock;
(B) “CP1” shall mean the Preferred Conversion Price of such series of Preferred Stock in effect immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock;
(C) “A” shall mean the number of shares of Common Stock outstanding immediately prior to such issuance or deemed issuance of Additional Shares of Common Stock (treating for this purpose as outstanding all shares of Common Stock issuable upon exercise of Options outstanding immediately prior to such issuance or deemed issuance or upon conversion or exchange of Convertible Securities (including the Preferred Stock) outstanding (assuming exercise of any outstanding Options therefor) immediately prior to such issue);
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(D) “B” shall mean the number of shares of Common Stock that would have been issued if such Additional Shares of Common Stock had been issued or deemed issued at a price per share equal to CP1 (determined by dividing the aggregate consideration received by the Company in respect of such issue by CP1); and
(E) “C” shall mean the number of such Additional Shares of Common Stock issued in such transaction.
(v) Determination of Consideration. For purposes of this Section 4(e), the consideration received by the Company for the issuance or deemed issuance of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(I) insofar as it consists of cash, be computed at the aggregate amount of cash received by the Company, excluding amounts paid or payable for accrued interest;
(II) insofar as it consists of property other than cash, be computed at the fair market value thereof at the time of such issue, as determined in good faith by the Board of Directors, including the Requisite Directors; and
(III) in the event Additional Shares of Common Stock are issued together with other shares or securities or other assets of the Company for consideration which covers both, be the proportion of such consideration so received, computed as provided in clauses (I) and (II) above, as determined in good faith by the Board of Directors, including the Requisite Directors.
(B) Options and Convertible Securities. The consideration per share received by the Company for Additional Shares of Common Stock deemed to have been issued pursuant to Section 4(e)(iii), relating to Options and Convertible Securities, shall be determined by dividing:
(I) The total amount, if any, received or receivable by the Company as consideration for the issue of such Options or Convertible Securities, plus the minimum aggregate amount of additional consideration (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such consideration) payable to the Company upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities, by
(II) the maximum number of shares of Common Stock (as set forth in the instruments relating thereto, without regard to any provision contained therein for a subsequent adjustment of such number) issuable upon the exercise of such Options or the conversion or exchange of such Convertible Securities, or in the case of Options for Convertible Securities, the exercise of such Options for Convertible Securities and the conversion or exchange of such Convertible Securities.
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(vi) Multiple Closing Dates. In the event the Company shall issue on more than one date Additional Shares of Common Stock that are a part of one transaction or a series of related transactions and that would result in an adjustment to the Preferred Conversion Price of a series of Preferred Stock pursuant to the terms of Section 4(e)(iv), and such issuance dates occur within a period of no more than six (6)-months from the first such issuance to the final such issuance, then, upon the final such issuance, the Preferred Conversion Price for such series of Preferred Stock shall be readjusted to give effect to all such issuances as if they occurred on the date of the first such issuance (and without giving effect to any additional adjustments as a result of any such subsequent issuances within such period).
(f) Adjustment for Stock Splits and Combinations. If the Company shall at any time or from time to time after the Original Issue Date effect a subdivision of the outstanding Common Stock, the Preferred Conversion Price of each series of Preferred Stock in effect immediately before that subdivision shall be proportionately decreased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase in the aggregate number of shares of Common Stock outstanding. If the Company shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Preferred Conversion Price of each series of Preferred Stock in effect immediately before the combination shall be proportionately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in the aggregate number of shares of Common Stock outstanding. Any adjustment under this Section 4(f) shall become effective at the close of business on the date the subdivision or combination becomes effective.
(g) Adjustment for Certain Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable on the Common Stock in additional shares of Common Stock, then and in each such event the Preferred Conversion Price of each series of Preferred Stock in effect immediately before such event shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Preferred Conversion Price of each such series of Preferred Stock then in effect by a fraction:
(i) the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.
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Notwithstanding the foregoing, (A) if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Preferred Conversion Price of each series of Preferred Stock shall be recomputed accordingly as of the close of business on such record date and thereafter the Preferred Conversion Price of each series of Preferred Stock shall be adjusted pursuant to this Section 4(g) as of the time of actual payment of such dividends or distributions; and (B) no such adjustment shall be made if the holders of such series of Preferred Stock simultaneously receive a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would have received if all outstanding shares of such series of Preferred Stock had been converted into Common Stock on the date of such event.
(h) Adjustments for Other Dividends and Distributions. In the event the Company at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Company (other than a distribution of shares of Common Stock in respect of outstanding shares of Common Stock) or in other property and the provisions of Section 1 do not apply to such dividend or distribution, then and in each such event the holders of Preferred Stock shall receive, simultaneously with the distribution to the holders of Common Stock, a dividend or other distribution of such securities or other property in an amount equal to the amount of such securities or other property as they would have received if all outstanding shares of Preferred Stock had been converted into Common Stock on the date of such event.
(i) Adjustment for Merger or Reorganization, etc. If there shall occur any reorganization, recapitalization, reclassification, consolidation or merger involving the Company in which the Common Stock (but not the Preferred Stock) is converted into or exchanged for securities, cash or other property (other than a transaction covered by Sections 4(e), (g) or (h)), then, following any such reorganization, recapitalization, reclassification, consolidation or merger, each share of Preferred Stock shall thereafter be convertible in lieu of the Common Stock into which it was convertible prior to such event into the kind and amount of securities, cash or other property which a holder of the number of shares of Common Stock of the Company issuable upon conversion of one share of such Preferred Stock immediately prior to such reorganization, recapitalization, reclassification, consolidation or merger would have been entitled to receive pursuant to such transaction; and, in such case, appropriate adjustment (as determined in good faith by the Board of Directors) shall be made in the application of the provisions in Sections 4(a) through (k) with respect to the rights and interests thereafter of the holders of the Preferred Stock, to the end that the provisions set forth in Sections 4(a) through (k) (including provisions with respect to changes in and other adjustments of the Preferred Conversion Price of each series of Preferred Stock) shall thereafter be applicable, as nearly as reasonably may be, in relation to any securities or other property thereafter deliverable upon the conversion of the Preferred Stock.
(j) Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment of the Preferred Conversion Price of a series of Preferred Stock pursuant to Sections 4(a) through (k), the Company at its expense shall, as promptly as reasonably practicable but in any event not later than ten days thereafter, compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of such series of Preferred Stock a certificate setting forth such adjustment or readjustment (including the kind and amount of securities, cash or other property into which such series of Preferred Stock is convertible) and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, as promptly as reasonably practicable after the written request at any time of any holder of Preferred Stock (but in any event not later than 10 days thereafter), furnish or cause to be furnished to such holder a certificate setting forth (i) the Preferred Conversion Price then in effect for each series of Preferred Stock held by such holder, and (ii) the number of shares of Common Stock and the amount, if any, of other securities, cash or property which then would be received upon the conversion of each such series of Preferred Stock.
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(k) Notice of Record Date. In the event:
(i) the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon conversion of the Preferred Stock) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any right to subscribe for or purchase any shares of capital stock of any class or series or any other securities, or to receive any other security; or
(ii) of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, or any Liquidation Event or event deemed to be a Liquidation Event under Section 3; or
(iii) of the voluntary or involuntary dissolution, liquidation or winding-up of the Company,
then, and in each such case, the Company will send or cause to be sent to the holders of the Preferred Stock a notice specifying, as the case may be, (A) the record date for such dividend, distribution or right, and the amount and character of such dividend, distribution or right, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up is proposed to take place, and the time, if any is to be fixed, as of which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon the conversion of the Preferred Stock) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Preferred Stock and the Common Stock. Such notice shall be sent at least 10 days prior to the record date or effective date for the event specified in such notice.
(l) Automatic Conversion.
(i) Each share of Preferred Stock shall automatically be converted into shares of Common Stock, based on the then-effective Preferred Conversion Price, (A) at any time upon the affirmative election of (I) the holders of at least a majority of the outstanding shares of the Series B Preferred, (II) the holders of at least a majority of the outstanding shares of the Series A Preferred, and (III) the holders of at least a majority of the outstanding shares of the Series Angel Preferred, or (B) immediately upon the closing of a firm-commitment underwritten public offering pursuant to an effective registration statement filed with the Securities and Exchange Commission under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Company in which (I) the per share price is at least four (4) times the Original Issue Price of each of the Series A Preferred and the Series B Preferred (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to such shares after the filing date hereof) and (II) the gross cash proceeds to the Company (before underwriting discounts, commissions and fees) are at least $50,000,000 (a “Qualified IPO”). Upon such automatic conversion, any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(d).
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(ii) Upon the occurrence of either of the events specified in Section 4(j)(i) above, the outstanding shares of Preferred Stock shall be converted automatically without any further action by the holders of such shares and whether or not the certificates representing such shares are surrendered to the Company or its transfer agent; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon such conversion unless the certificates evidencing such shares of Preferred Stock are either delivered to the Company or its transfer agent as provided below, or the holder notifies the Company or its transfer agent that such certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any loss incurred by it in connection with such certificates. Upon the occurrence of such automatic conversion of the Preferred Stock, the holders of Preferred Stock shall surrender the certificates representing such shares at the office of the Company or any transfer agent for the Preferred Stock. Thereupon, there shall be issued and delivered to such holder promptly at such office and in its name as shown on such surrendered certificate or certificates, a certificate or certificates for the number of shares of Common Stock into which the shares of Preferred Stock surrendered were convertible on the date on which such automatic conversion occurred, and any declared and unpaid dividends shall be paid in accordance with the provisions of Section 4(d).
(m) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of any Preferred Stock. All shares of Common Stock (including fractions thereof) issuable upon conversion of more than one share of Preferred Stock by a holder thereof shall be aggregated for purposes of determining whether the conversion would result in the issuance of any fractional share. If after the aforementioned aggregation the conversion would result in the issuance of any fractional share, the Company shall, in lieu of issuing any fractional share, pay cash equal to the product of such fraction multiplied by the fair market value of one share of Common Stock (as determined by the Board) on the date of conversion.
(n) Reservation of Stock Issuable Upon Conversion. The Company shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Preferred Stock. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Preferred Stock, the Company will take such corporate action as may be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.
(o) Notices. Any notice required by the provisions of this Section 4 shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by electronic transmission in compliance with the provisions of the DGCL if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with verification of receipt. All notices shall be addressed to each holder of record at the address of such holder appearing on the books of the Company.
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(p) Payment of Taxes. The Company will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Common Stock upon conversion of shares of Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Preferred Stock so converted were registered.
5. NO REISSUANCE OF PREFERRED STOCK.
Any shares or shares of Preferred Stock redeemed, purchased, converted or exchanged by the Company shall be cancelled and retired and shall not be reissued or transferred.
V.
A. To the fullest extent permitted by law, a director of the Company shall not be personally liable to the Company or its stockholders for monetary damages for breach of fiduciary duty as a director. If the DGCL or any other law of the State of Delaware is amended after approval by the stockholders of this Article V(A) to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Company shall be eliminated or limited to the fullest extent permitted by the General Corporation Law as so amended. Any repeal or modification of the foregoing provisions of this
B. To the fullest extent permitted by applicable law, the Company is authorized to provide indemnification of (and advancement of expenses to) directors, officers and agents of the Company (and any other persons to which applicable law permits the Company to provide indemnification) through Bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. If applicable law is amended after approval by the stockholders of this Article V(B) to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to the Company shall be eliminated or limited to the fullest extent permitted by applicable law as so amended.
C. Any amendment, repeal modification or elimination of the foregoing provisions of Article V(B) shall not (a) adversely affect any right or protection of any director, officer or other agent of the Company existing at the time of such amendment, repeal, modification or elimination; or (b) increase the liability of any director, officer or agent of the Company with respect to any acts or omissions of such director, officer or agent occurring prior to such amendment, repeal, modification or elimination.
D. Subject to any additional vote required by this Third Amended and Restated Certificate of Incorporation or the Bylaws of the Company, in furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the Bylaws of the Company.
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E. Subject to any additional vote required by this Third Amended and Restated Certificate of Incorporation, the number of directors of the Company shall seven (7). Each director shall be entitled to one (1) vote on each matter presented to the Board of Directors; provided, however, that, so long as the holders of any series of Preferred Stock are entitled to elect a Preferred Director, the affirmative vote of the Requisite Directors shall be required for the authorization by the Board of Directors of any of the matters set forth in the Third Amended and Restated Investor Rights Agreement, dated on or about the date hereof, by and among the Company and the other parties thereto, as such agreement may be amended from time to time, to the extent required by such provision and if a sufficient number of such Preferred Directors are then serving.
F. Elections of directors need not be by written ballot unless the Bylaws of the Company shall so provide.
G. Meetings of stockholders may be held within or outside of the State of Delaware, as the Bylaws of the Company may provide. The books of the Company may be kept (subject to any provision of applicable law) outside of the State of Delaware at such place or places or in such manner or manners as may be designated from time to time by the Board of Directors or in the Bylaws of the Company.
H. The Company renounces, to the fullest extent permitted by law, any interest or expectancy of the Company in, or in being offered an opportunity to participate in, any Excluded Opportunity. An “Excluded Opportunity” is any matter, transaction or interest that is presented to, or acquired, created or developed by, or which otherwise comes into the possession of (i) any director of the Company who is not an employee of the Company or any of its subsidiaries, or (ii) any holder of Preferred Stock or any partner, member, director, stockholder, employee, affiliate or agent of any such holder, other than someone who is an employee of the Company or any of its subsidiaries (collectively, the persons referred to in clauses (i) and (ii) are “Covered Persons”), unless such matter, transaction or interest is presented to, or acquired, created or developed by, or otherwise comes into the possession of, a Covered Person expressly and solely in such Covered Person’s capacity as a director of the Company while such Covered Person is performing services in such capacity. Any repeal or modification of this Article V will only be prospective and will not affect the rights under this Article V in effect at the time of the occurrence of any actions or omissions to act giving rise to liability. Notwithstanding anything to the contrary contained elsewhere in this Third Amended and Restated Certificate of Incorporation, the affirmative vote of the holders of at least a majority of the shares of Series A Preferred and Series B Preferred outstanding, separately, will be required to amend or repeal, or to adopt any provisions inconsistent with this Article V.
I. If any provision or provisions of this Third Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any person or entity or circumstance for any reason whatsoever, then, to the fullest extent permitted by law, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of this Third Amended and Restated Certificate of Incorporation (including, without limitation, each portion of any sentence of this Third Amended and Restated Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) and the application of such provision to other persons or entities and circumstances shall not in any way be affected or impaired thereby.
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J. For purposes of Section 500 of the California Corporations Code (to the extent applicable), in connection with any repurchase of shares of Common Stock permitted under this Third Amended and Restated Certificate of Incorporation from employees, officers, directors or consultants of the Company in connection with a termination of employment or services pursuant to agreements or arrangements approved by the Board of Directors (in addition to any other consent required under this Third Amended and Restated Certificate of Incorporation), such repurchase may be made without regard to any “preferential dividends arrears amount” or “preferential rights amount” (as those terms are defined in Section 500 of the California Corporations Code). Accordingly, for purposes of making any calculation under California Corporations Code Section 500 in connection with such repurchase, the amount of any “preferential dividends arrears amount” or “preferential rights amount” (as those terms are defined therein) shall be deemed to be zero.
* * * *
3. This Third Amended and Restated Certificate of Incorporation was approved by the holders of the requisite number of shares of the Company in accordance with Section 228 of the DGCL.
4. This Third Amended and Restated Certificate of Incorporation has been duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL by the stockholders of the Company.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Third Amended and Restated Certificate of Incorporation has been executed by a duly authorized officer of the Company as of December 27, 2023.
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| By: | /s/ Jingrong Jean Cui | |
| Name: Jingrong Jean Cui | ||
| Its: President and Chief Executive Officer | ||
[SIGNATURE PAGE TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION]
CERTIFICATE OF AMENDMENT TO THE
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BLOSSOMHILL THERAPEUTICS, INC.
BlossomHill Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), hereby certifies that:
FIRST: The original name of this corporation is BlossomHill Therapeutics, Inc. and the date of filing the original Certificate of Incorporation of this corporation with the Secretary of State of the State of Delaware was June 22, 2020.
SECOND: The Board of Directors of the Company (the “Board”), acting in accordance with the applicable provisions of Sections 141 and 242 of the DGCL, duly adopted resolutions setting forth proposed amendments to the Third Amended and Restated Certificate of Incorporation of the Company (the “Amended and Restated Certificate”), declaring said amendments to be advisable and in the best interests of the Company and its stockholders and authorizing the appropriate officers of the Company to solicit the consent of the stockholders therefor, which resolutions setting forth the proposed amendments are as follows:
1. The preamble to Article IV shall be amended and restated to read in its entirety as follows:
“The total number of shares of all classes of stock which the Company shall have authority to issue is (i) 83,000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”), and (ii) 63,188,793 shares of Preferred Stock, $0.0001 par value per share (“Preferred Stock”). The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Company.”
THIRD: Thereafter pursuant to a resolution of the Board, this Certificate of Amendment was submitted to the stockholders of the Company for their approval, and was duly adopted by unanimous written consent in accordance with the applicable provisions of Sections 228 and 242 of the DGCL.
FOURTH: All other provisions of the Amended and Restated Certificate as currently on file with the Secretary of State of the State of Delaware shall remain in full force and effect.
[Remainder of this Page Intentionally Left Blank]
IN WITNESS WHEREOF, the Company has caused this Certificate of Amendment to be signed by its President and Chief Executive Officer on this 21st day of March, 2025.
| /s/ Jingrong Jean Cui |
| JINGRONG JEAN CUI |
| President and Chief Executive Officer |
CERTIFICATE OF AMENDMENT TO
THE THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
BLOSSOMHILL THERAPEUTICS, INC.
BlossomHill Therapeutics, Inc. (the “Company”), a corporation organized and existing under and by virtue of the provisions of the General Corporation Law of the State of Delaware (the “DGCL”),
DOES HEREBY CERTIFY:
1. That the name of this corporation is BlossomHill Therapeutics, Inc. and that this corporation was originally incorporated pursuant to the DGCL on June 22, 2020.
2. That the Board of Directors of the Company, acting in accordance with the provisions of Sections 141 and 242 of the DGCL, adopted resolutions amending the Company’s Third Amended and Restated Certificate of Incorporation (the “Restated Certificate”), as follows:
A. The first paragraph of Article IV of the Restated Certificate is hereby amended and restated to read in its entirety as follows:
“The total number of shares of all classes of stock which the Company shall have authority to issue is (i) 110,000,000 shares of Common Stock, $0.0001 par value per share (“Common Stock”), and (ii) 85,552,612 shares of Preferred Stock, $0.0001 par value per share ‹“Preferred Stock”). The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Company.”
B. Article IV(C) of the Restated Certificate is hereby amended and restated to read in its entirety as follows:
“10,000,000 of the authorized shares of Preferred Stock are hereby designated “Series Angel Preferred Stock” (the “Series Angel Preferred”). 26,613,546 of the authorized shares of Preferred Stock are hereby designated “Series A Preferred Stock” (the “Series A Preferred”). 48,939,066 of the authorized shares of Preferred Stock are hereby designated “Series B Preferred Stock” (the “Series B Preferred”).”
3. This Certificate of Amendment was approved by the holders of the requisite number of shares of said Company in accordance with Section 228 of the DGCL. This Certificate of Amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL by the stockholders of the Company.
* * * *
This Certificate of Amendment has been executed by a duly authorized officer of this Company on this 24th day of November, 2025.
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| By: | /s/ Jingrong Jean Cui | |
| Jingrong Jean Cui | ||
| President and Chief Executive Officer | ||
Signature Page to Certificate of Amendment to
Third Amended and Restated Certificate of Incorporation
Exhibit 3.2
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BLOSSOMHILL THERAPEUTICS, INC.
BlossomHill Therapeutics, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that:
ONE: The name of this corporation is BlossomHill Therapeutics, Inc. The date of filing of the original certificate of incorporation of this corporation with the Secretary of State of the State of Delaware was June 22, 2020.
TWO: This certificate of incorporation was duly adopted in accordance with the provisions of Sections 242 and 245 of the DGCL, and has been duly approved by the written consent of the stockholders of this corporation in accordance with Section 228 of the DGCL.
THREE: Pursuant to Sections 242 and 245 of the DGCL, the certificate of incorporation of this corporation, as heretofore amended, is hereby amended, integrated and restated to read in its entirety as follows:
SECTION 1.
The name of this corporation is BlossomHill Therapeutics, Inc. (the “Corporation”).
SECTION 2.
The address of the registered office of the Corporation in the State of Delaware is 16192 Coastal Highway, City of Lewes, County of Sussex, Zip Code 19958, and the name of the registered agent of the Corporation in the State of Delaware at such address is Harvard Business Services, Inc.
SECTION 3.
The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware (the “DGCL”).
SECTION 4.
Section 4.1 The Corporation is authorized to issue two classes of stock to be designated, respectively, “Common Stock” and “Preferred Stock.” The total number of shares that the Corporation is authorized to issue is 710,000,000 shares, consisting of 700,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of Preferred Stock, par value $0.0001 per share.
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Section 4.2 The Preferred Stock may be issued from time to time in one or more series. The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized to provide for the issue of all or any of the unissued and undesignated shares of the Preferred Stock, in one or more series, and to fix the number of shares of such series and to determine for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be set forth in a certificate of designation adopted by the Board and filed in accordance with the DGCL.
Section 4.3 Irrespective of the provisions of Section 242(b)(2) of the DGCL, but subject to the terms of any certificate of designation filed with respect to any series of Preferred Stock, the holders of Preferred Stock and Common Stock shall vote together, and not as separate classes, on any amendment to this Certificate of Incorporation to increase or decrease the number of authorized shares of Preferred Stock or Common Stock.
Section 4.4 Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the Corporation for their vote; provided, however, that, except as otherwise required by applicable law, holders of Common Stock shall not be entitled to vote on any amendment to this certificate of incorporation (as amended from time to time, the “Certificate of Incorporation”) (including any certificate of designation filed with respect to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series of Preferred Stock are entitled, either separately or together as a class with the holders of one or more other affected series of Preferred Stock, to vote thereon pursuant to applicable law or the Certificate of Incorporation (including any certificate of designation filed with respect to any series of Preferred Stock).
SECTION 5.
For the management of the business and for the conduct of the affairs of the Corporation, and in further definition, limitation and regulation of the powers of the Corporation, of its directors and stockholders, or any class thereof, as the case may be, it is further provided that:
Section 5.1 MANAGEMENT OF THE BUSINESS.
Except as otherwise provided by the DGCL or the Certificate of Incorporation, the business and affairs of the Corporation shall be managed by or under the direction of the Board. Subject to any rights of the holders of shares of any one or more series of Preferred Stock then outstanding to elect additional directors under specified circumstances, the number of directors that shall constitute the Board shall be fixed exclusively by the Board.
Section 5.2 BOARD OF DIRECTORS.
Subject to the rights of the holders of any one or more series of Preferred Stock to elect additional directors under specified circumstances, the directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. The Board is authorized to assign members of the Board already in office to such classes at the time the classification becomes effective. At the first annual meeting of stockholders following the filing of the Certificate of Incorporation (the “Filing Date”), the initial term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following the Filing Date, the initial term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following the Filing Date, the initial term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting.
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Notwithstanding the foregoing provisions of this section, each director shall serve until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation or removal. No decrease in the number of directors constituting the Board shall remove or shorten the term of any incumbent director.
Section 5.3 REMOVAL OF DIRECTORS.
Subject to the rights of the holders of any one or more series of Preferred Stock to remove directors elected by such series of Preferred Stock, any individual director or the entire Board may be removed from office at any time, but only for cause, and only by the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all the then-outstanding shares of the capital stock of the Corporation entitled to vote generally at an election of directors, voting together as a single class.
Section 5.4 VACANCIES.
Subject to any limitations imposed by applicable law and subject to the rights of the holders of any one or more series of Preferred Stock to elect additional directors or fill vacancies in respect of such directors, any vacancies on the Board resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors, shall be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board, or by a sole remaining director, and not by the stockholders. Any director elected to fill a newly created directorship or vacancy in accordance with the preceding sentence shall hold office until the next annual meeting of stockholders held to elect the class of directors to which such director is elected and until such director’s successor shall have been elected and qualified or such director’s earlier death, resignation or removal.
Section 5.5 PREFERRED STOCKHOLDERS ELECTION RIGHTS.
Whenever the holders of any one or more series of Preferred Stock shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 5.1 hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly. Except as otherwise provided by the Board in the resolution or resolutions establishing such series, whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant to the provisions of such stock, the terms of office of all such additional directors elected by the holders of such stock, or elected to fill any vacancies resulting from the death, resignation, disqualification or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced accordingly.
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Section 5.6 BYLAW AMENDMENTS.
The Board is expressly authorized and empowered to adopt, amend or repeal any provisions of the bylaws of the Corporation (as amended from time to time, the “Bylaws”) without the assent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or the Certificate of Incorporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class.
Section 5.7 STOCKHOLDER ACTIONS.
a. The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.
b. Subject to any rights of the holders of shares of any one or more series of Preferred Stock then outstanding, any action required or permitted to be taken by the stockholders of the Corporation must be effected at an annual or special meeting of the stockholders and may not be effected by consent in lieu of a meeting, unless taking such action by consent in lieu of a meeting is approved by all directors of the Corporation then in office.
c. Subject to any rights of the holders of shares of any series of Preferred Stock then outstanding, special meetings of stockholders of the Corporation may be called only by the Chairperson of the Board, the Chief Executive Officer or the request of a majority of the directors then in office, but a special meeting may not be called by any other person or persons and any power of stockholders to call a special meeting of stockholders is specifically denied. Only such business shall be considered at a special meeting of stockholders as shall have been stated in the notice for such meeting.
SECTION 6.
No director or officer of the Corporation shall be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL, as the same exists or may hereafter be amended. Any amendment, modification or repeal of the foregoing sentence shall not adversely affect any right or protection of a director or officer of the Corporation hereunder in respect of any act or omission occurring prior to the time of such amendment, modification or repeal. Solely for purposes of this Section 6, “officer” shall have the meaning provided in Section 102(b)(7) of the DGCL.
SECTION 7.
Section 7.1 Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware and any appellate court therefrom shall be the sole and exclusive forum for: (A) any derivative claim or cause of action brought on behalf of the Corporation; (B) any claim or cause of action that is based upon a violation of a duty owed by any current or former director, officer, other employee or stockholder of the Corporation, to the Corporation or the Corporation’s stockholders; (C) any claim or cause of action against the Corporation or any current or former director, officer or other employee of the Corporation, arising out of or pursuant to any provision of the DGCL, the Certificate of Incorporation or the Bylaws; (D) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of the Certificate of Incorporation or the Bylaws (including any right, obligation, or remedy thereunder); (E) any claim or cause of action as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; and (F) any claim or cause of action against the Corporation or any current or former director, officer or other employee of the Corporation, governed by the internal-affairs doctrine or otherwise related to the Corporation’s internal affairs, in all cases to the fullest extent permitted by applicable law; provided, however, that if such court does not have, or declines to accept, jurisdiction over such a claim or cause of action, then the United States District Court for the District of Delaware shall be the sole and exclusive forum for such claim or cause of action.
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Section 7.2 Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by applicable law, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, including all causes of action asserted against any defendant named in such complaint. For the avoidance of doubt, this provision is intended to benefit and may be enforced by the Corporation, its officers and directors, the underwriters for any offering giving rise to such complaint, and any other professional entity whose profession gives authority to a statement made by that person or entity and who has prepared or certified any part of the documents underlying the offering.
Section 7.3 This Section 7 has been adopted under the provisions of Section 115 of the DGCL that were effective on August 2, 2025. If Section 115 of the DGCL is amended, restated or repealed after such date, the Bylaws may be amended to adopt any bylaw authorized by the DGCL as so amended, restated or repealed. The provisions of this Section 7 shall become inoperative from and after the date any such bylaw is adopted.
SECTION 8.
Section 8.1 Any person or entity holding, owning, or otherwise acquiring any interest in any security of the Corporation shall be deemed to have notice of and consented to the provisions of the Certificate of Incorporation.
Section 8.2 The Corporation reserves the right to amend, alter, change or repeal, at any time and from time to time, any provision contained in the Certificate of Incorporation and all rights, preferences and privileges of whatsoever nature conferred upon the stockholders, directors or any other persons whomsoever by and pursuant to the Certificate of Incorporation are granted subject to this reservation. For the avoidance of doubt, but subject to the rights of the holders of any outstanding series of Preferred Stock, Section 242(d) of the DGCL shall apply to amendments to the Certificate of Incorporation.
Section 8.3 Notwithstanding any other provisions of the Certificate of Incorporation or any provision of applicable law that might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of capital stock of the Corporation required by applicable law or by the Certificate of Incorporation or any certificate of designation filed with respect to a series of Preferred Stock, the affirmative vote of the holders of at least 66-2/3% of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class, shall be required to alter, amend or repeal, or adopt any provision inconsistent with, Sections 5, 6, 7 and this Section 8.
SECTION 9.
Section 9.1 If any provision or provisions of the Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, the validity, legality and enforceability of such provisions in any other circumstance and of the remaining provisions of the Certificate of Incorporation (including, without limitation, each portion of any paragraph of the Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not, to the fullest extent permitted by applicable law, in any way be affected or impaired thereby.
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The Corporation has caused this certificate of incorporation to be signed by a duly authorized officer of the Corporation on [ ], 2026.
| BlossomHill Therapeutics, Inc. | ||
| By: | ||
| J. Jean Cui, Ph.D. | ||
| President and Chief Executive Officer | ||
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Exhibit 3.3
THIRD AMENDED AND RESTATED BYLAWS
OF
BLOSSOMHILL THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
(As ADOPTED ON DECEMBER 19, 2023)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of BlossomHill Therapeutics, Inc. (the “Corporation”) in the State of Delaware shall be in the City of Lewes, County of Sussex.
Section 2. Other Offices. The Corporation shall also have and maintain an office or principal place of business at such place as may be fixed by the Board of Directors of the Corporation (the “Board”), and may also have offices at such other places, both within and without the State of Delaware, as the Board may from time to time determine or the business of the Corporation may require.
ARTICLE II
CORPORATE SEAL
Section 3. Corporate Seal. The Board may adopt a corporate seal. The corporate seal shall consist of a die bearing the name of the Corporation and the inscription, “Corporate Seal-Delaware.” Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE III
STOCKHOLDERS’ MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders of the Corporation may be held at such place, either within or without the State of Delaware, as may be determined from time to time by the Board. The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the Delaware General Corporation Law (“DGCL”).
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Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board. Nominations of persons for election to the Board and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders: (i) pursuant to the Corporation’s notice of meeting of stockholders; (ii) by or at the direction of the Board; or (iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with the notice procedures set forth in Section 5.
(b) At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 5(a) of these Third Amended and Restated Bylaws (“Bylaws”), (i) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation, (ii) such other business must be a proper matter for stockholder action under the DGCL, (iii) if the stockholder, or the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice (as defined in this Section 5(b)), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage of the Corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice, and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this section, the stockholder or beneficial owner proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation Notice under this Section 5. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 30 days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a stockholder’s notice as described above. Such stockholder’s notice shall set forth: (A) as to each person whom the stockholder proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and Rule 14a-4(d) thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the
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stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the Corporation’s voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number of holders of the Corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation Notice”).
(c) Notwithstanding anything in the second sentence of Section 5(b) of these Bylaws to the contrary, in the event that the number of directors to be elected to the Board is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least 100 days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 5 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the Corporation.
(d) Only such persons who are nominated in accordance with the procedures set forth in this Section 5 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 5. Except as otherwise provided by law, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded.
(e) Notwithstanding the foregoing provisions of this Section 5, in order to include information with respect to a stockholder proposal in the proxy statement and form of proxy for a stockholders’ meeting, stockholders must provide notice as required by the regulations promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.
(f) For purposes of this Section 5, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
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Section 6. Special Meetings.
(a) Special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, by (i) the Chairman of the Board of Directors, (ii) the Chief Executive Officer, (iii) the Board pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board for adoption) or (iv) by the holders of shares entitled to cast not less than 20% of the votes at the meeting, and shall be held at such place, on such date, and at such time as the Board shall fix.
At any time or times that the Corporation is subject to Section 2115(b) of the California General Corporation Law (“CGCL”), stockholders holding 5% or more of the outstanding shares shall have the right to call a special meeting of stockholders as set forth in Section 18(b) herein.
(b) If a special meeting is properly called by any person or persons other than the Board, the request shall be in writing, specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by certified or registered mail, return receipt requested, or by telegraphic or other facsimile transmission to the Chairman of the Board of Directors, the Chief Executive Officer, or the Secretary of the Corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The Board shall determine the time and place of such special meeting, which shall be held not less than 35 nor more than 120 days after the date of the receipt of the request. Upon determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders entitled to vote, in accordance with the provisions of Section 7 of these Bylaws. Nothing contained in this paragraph (b) shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board may be held.
Section 7. Notice of Meetings. Except as otherwise provided by law, notice, given in writing or by electronic transmission, of each meeting of stockholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting, such notice to specify the place, if any, date and hour, in the case of special meetings, the purpose or purposes of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting. If mailed, notice is given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the Corporation. Notice of the time, place, if any, and purpose of any meeting of stockholders may be waived in writing, signed by the person entitled to notice thereof or by electronic transmission by such person, either before or after such meeting, and will be waived by any stockholder by his attendance thereat in person, by remote communication, if applicable, or by proxy, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Any stockholder so waiving notice of such meeting shall be bound by the proceedings of any such meeting in all respects as if due notice thereof had been given.
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Section 8. Quorum. At all meetings of stockholders, except where otherwise provided by statute or by the Corporation’s Third Amended and Restated Certificate of Incorporation, as may be amended from time to time, (the “Charter”), or by these Bylaws, the presence, in person, by remote communication, if applicable, or by proxy duly authorized, of the holders of a majority of the outstanding shares of stock entitled to vote shall constitute a quorum for the transaction of business. In the absence of a quorum, any meeting of stockholders may be adjourned, from time to time, either by the chairman of the meeting or by vote of the holders of a majority of the shares represented thereat, but no other business shall be transacted at such meeting. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Except as otherwise provided by statute, or by the Charter or these Bylaws, in all matters other than the election of directors, the affirmative vote of a majority of shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the subject matter shall be the act of the stockholders. Except as otherwise provided by statute, the Charter or these Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Where a separate vote by a class or classes or series is required, except where otherwise provided by the statute or by the Charter or these Bylaws, a majority of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy duly authorized, shall constitute a quorum entitled to take action with respect to that vote on that matter. Except where otherwise provided by statute or by the Charter or these Bylaws, the affirmative vote of the majority (plurality, in the case of the election of directors) of shares of such class or classes or series present in person, by remote communication, if applicable, or represented by proxy at the meeting shall be the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairman of the meeting or by the vote of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time and place, if any, thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting, the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.
Section 10. Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders, except as otherwise provided by law, only persons in whose names shares stand on the stock records of the Corporation on the record date, as provided in Section 12 of these Bylaws, shall be entitled to vote at any meeting of stockholders. Every person entitled to vote or execute consents shall have the right to do so either in person, by remote communication, if applicable, or by an agent or agents authorized by a proxy granted in accordance with Delaware law. An agent so appointed need not be a stockholder. No proxy shall be voted after three years from its date of creation unless the proxy provides for a longer period.
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Section 11. Joint Owners of Stock. If shares or other securities having voting power stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety, or otherwise, or if two or more persons have the same fiduciary relationship respecting the same shares, unless the Secretary is given written notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, their acts with respect to voting shall have the following effect: (a) if only one votes, his act binds all; (b) if more than one votes, the act of the majority so voting binds all; (c) if more than one votes, but the vote is evenly split on any particular matter, each faction may vote the securities in question proportionally, or may apply to the Delaware Court of Chancery for relief as provided in the DGCL, Section 217(b). If the instrument filed with the Secretary shows that any such tenancy is held in unequal interests, a majority or even-split for the purpose of subsection (c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. The list shall be open to examination of any stockholder during the time of the meeting as provided by law.
Section 13. Action Without Meeting.
(a) Unless otherwise provided in the Charter, any action required by statute to be taken at any annual or special meeting of the stockholders, or any action which may be taken at any annual or special meeting of the stockholders, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, or by electronic transmission setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted.
(b) Every written consent or electronic transmission shall bear the date of signature of each stockholder who signs the consent, and no written consent or electronic transmission shall be effective to take the corporate action referred to therein unless, within 60 days of the earliest dated consent delivered to the Corporation in the manner herein required, written consents or electronic transmissions signed by a sufficient number of stockholders to take action are delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.
(c) Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing or by electronic transmission and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take action were delivered
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to the Corporation as provided in Section 228(c) of the DGCL. If the action which is consented to is such as would have required the filing of a certificate under any section of the DGCL if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written consent has been given in accordance with Section 228 of the DGCL.
(d) A telegram, cablegram or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this section, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (i) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder and (ii) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is reproduced in paper form and until such paper form shall be delivered to the Corporation by delivery to its registered office in the state of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to a Corporation’s registered office shall be made by hand or by certified or registered mail, return receipt requested. Notwithstanding the foregoing limitations on delivery, consents given by telegram, cablegram or other electronic transmission may be otherwise delivered to the principal place of business of the Corporation or to an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded if, to the extent and in the manner provided by resolution of the Board. Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or, if the President is absent, a chairman of the meeting chosen by a majority in interest of the stockholders entitled to vote, present in person or by proxy, shall act as chairman. The Secretary, or, in his absence, an Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the Corporation and their
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duly authorized and constituted proxies and such other persons as the chairman shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters which are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Term of Office. The authorized number of directors of the Corporation shall consist of no more than eight (8) directors. Directors need not be stockholders unless so required by the Charter. If for any cause, the directors shall not have been elected at an annual meeting, they may be elected as soon thereafter as convenient.
Section 16. Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as may be otherwise provided by statute or by the Charter.
Section 17. Term of Directors.
(a) Subject to the rights of the holders of any class or series of capital stock to elect additional directors under specified circumstances, directors shall be elected at each annual meeting of stockholders for a term of one year. Each director shall serve until his successor is duly elected and qualified or until his death, resignation or removal. No decrease in the number of directors constituting the Board shall shorten the term of any incumbent director.
(b) No person entitled to vote at an election for directors may cumulate votes to which such person is entitled, unless, at the time of such election, the Corporation is subject to Section 2115(b) of the CGCL. During such time or times that the Corporation is subject to Section 2115(b) of the CGCL, every stockholder entitled to vote at an election for directors may cumulate such stockholder’s votes and give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which such stockholder’s shares are otherwise entitled, or distribute the stockholder’s votes on the same principle among as many candidates as such stockholder thinks fit. No stockholder, however, shall be entitled to so cumulate such stockholder’s votes unless (i) the names of such candidate or candidates have been placed in nomination prior to the voting and (ii) the stockholder has given notice at the meeting, prior to the voting, of such stockholder’s intention to cumulate such stockholder’s votes. If any stockholder has given proper notice to cumulate votes, all stockholders may cumulate their votes for any candidates who have been properly placed in nomination. Under cumulative voting, the candidates receiving the highest number of votes, up to the number of directors to be elected, are elected.
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Section 18. Vacancies.
(a) Unless otherwise provided in the Charter, and subject to the rights of the holders of any class or series of capital stock, any vacancies on the Board resulting from death, resignation, disqualification, removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board, or by a sole remaining director, provided, however, that whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Charter, vacancies and newly created directorships of such class or classes or series shall, unless the Board determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Any director elected in accordance with the preceding sentence shall hold office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s successor shall have been elected and qualified. A vacancy in the Board shall be deemed to exist under this Bylaw in the case of the death, removal or resignation of any director.
(b) At any time or times that the Corporation is subject to §2115(b) of the CGCL, if, after the filling of any vacancy, the directors then in office who have been elected by stockholders shall constitute less than a majority of the directors then in office, then
(i) any holder or holders of an aggregate of 5% or more of the total number of shares at the time outstanding having the right to vote for those directors may call a special meeting of stockholders; or
(ii) the Superior Court of the proper county shall, upon application of such stockholder or stockholders, summarily order a special meeting of the stockholders, to be held to elect the entire board, all in accordance with Section 305(c) of the CGCL, the term of office of any director shall terminate upon that election of a successor.
Section 19. Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the pleasure of the Board. If no such specification is made, it shall be deemed effective at the pleasure of the Board. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until his successor shall have been duly elected and qualified.
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Section 20. Removal.
(a) Subject to any limitations imposed by applicable law (and assuming the Corporation is not subject to Section 2115 of the CGCL), the Board or any director may be removed from office at any time (i) with cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the Corporation entitled to vote generally at an election of directors or (ii) without cause by the affirmative vote of the holders of a majority of the voting power of all then-outstanding shares of capital stock of the Corporation entitled to elect such director.
(b) During such time or times that the Corporation is subject to Section 2115(b) of the CGCL, the Board or any individual director may be removed from office at any time without cause by the affirmative vote of the holders of at least a majority of the outstanding shares entitled to vote on such removal; provided, however, that unless the entire Board is removed, no individual director may be removed when the votes cast against such director’s removal, or not consenting in writing to such removal, would be sufficient to elect that director if voted cumulatively at an election which the same total number of votes were cast (or, if such action is taken by written consent, all shares entitled to vote were voted) and the entire number of directors authorized at the time of such director’s most recent election were then being elected.
Section 21. Meetings
(a) Regular Meetings. Unless otherwise restricted by the Charter, regular meetings of the Board may be held at any time or date and at any place within or without the State of Delaware which has been designated by the Board and publicized among all directors, either orally or in writing, including a voice-messaging system or other system designated to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means. No further notice shall be required for a regular meeting of the Board.
(b) Special Meetings. Unless otherwise restricted by the Charter, special meetings of the Board may be held at any time and place within or without the State of Delaware whenever called by the Chairman of the Board, the President or any director.
(c) Meetings by Electronic Communications Equipment. Any member of the Board, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place of all special meetings of the Board shall be orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, facsimile, telegraph or telex, or by electronic mail or other electronic means, during normal business hours, at least 24 hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid at least three days before the date of the meeting. Notice of any meeting may be waived in writing or by electronic transmission at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
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(e) Waiver of Notice. The transaction of all business at any meeting of the Board, or any committee thereof, however called or noticed, or wherever held, shall be as valid as though had at a meeting duly held after regular call and notice, if a quorum be present and if, either before or after the meeting, each of the directors not present who did not receive notice shall sign a written waiver of notice or shall waive notice by electronic transmission. All such waivers shall be filed with the corporate records or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Charter requires a greater number, a quorum of the Board shall consist of a majority of the exact number of directors fixed from time to time by the Board in accordance with the Charter; provided, however, at any meeting, whether a quorum be present or otherwise, a majority of the directors present may adjourn from time to time until the time fixed for the next regular meeting of the Board, without notice other than by announcement at the meeting.
(b) At each meeting of the Board at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by law, the Charter or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise restricted by the Charter or these Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission, and such writing or writings or transmission or transmissions are filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 24. Fees and Compensation. Directors shall be entitled to such compensation for their services as may be approved by the Board, including, if so approved, by resolution of the Board, a fixed sum and expenses of attendance, if any, for attendance at each regular or special meeting of the Board and at any meeting of a committee of the Board. Nothing herein contained shall be construed to preclude any director from serving the Corporation in any other capacity as an officer, agent, employee, or otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board may appoint an Executive Committee to consist of one or more members of the Board. The Executive Committee, to the extent permitted by law and provided in the resolution of the Board shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any bylaw of the Corporation.
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(b) Other Committees. The Board may, from time to time, appoint such other committees as may be permitted by law. Such other committees appointed by the Board shall consist of one or more members of the Board and shall have such powers and perform such duties as may be prescribed by the resolution or resolutions creating such committees, but in no event shall any such committee have the powers denied to the Executive Committee in these Bylaws.
(c) Term. The Board, subject to any requirements of any outstanding series of Preferred Stock and the provisions of subsections (a) or (b) of this Bylaw may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of his death or voluntary resignation from the committee or from the Board. The Board may at any time for any reason remove any individual committee member and the Board may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board shall otherwise provide, regular meetings of the Executive Committee or any other committee appointed pursuant to this Section 25 shall be held at such times and places as are determined by the Board, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special meeting given in the manner provided for the giving of notice to members of the Board of the time and place of special meetings of the Board. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Unless otherwise provided by the Board in the resolutions authorizing the creation of the committee, a majority of the authorized number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those present at any meeting at which a quorum is present shall be the act of such committee.
Section 26. Organization. At every meeting of the directors, the Chairman of the Board of Directors, or, if a Chairman has not been appointed or is absent, the President, or if the President is absent, the most senior Vice President, (if a director) or, in the absence of any such person, a chairman of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in his absence, any Assistant Secretary directed to do so by the President, shall act as secretary of the meeting.
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ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the Corporation shall include, if and when designated by the Board, the Chief Executive Officer, the President, the Executive Chairman, one or more Vice Presidents, the Secretary, the Chief Financial Officer, the Treasurer and the Controller, all of whom shall be elected at the annual organizational meeting of the Board. The Board may also appoint one or more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and such other officers and agents with such powers and duties as it shall deem necessary. The Board may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by law. The salaries and other compensation of the officers of the Corporation shall be fixed by or in the manner designated by the Board.
Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board and until their successors shall have been duly elected and qualified, unless sooner removed. Any officer elected or appointed by the Board may be removed at any time by the Board. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board.
(b) Duties of Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings of the stockholders and the Board. The Chairman of the Board of Directors shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board shall designate from time to time. If there is no President, then the Chairman of the Board of Directors shall also serve as the Chief Executive Officer of the Corporation and shall have the powers and duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all meetings of the stockholders and at all meetings of the Board, unless the Chairman of the Board of Directors has been appointed and is present. Unless some other officer has been elected Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and shall, subject to the control of the Board, have general supervision, direction and control of the business and officers of the Corporation. The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board shall designate from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
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(e) Duties of Secretary. The Secretary shall attend all meetings of the stockholders and of the Board and shall record all acts and proceedings thereof in the minute book of the Corporation. The Secretary shall give notice in conformity with these Bylaws of all meetings of the stockholders and of all meetings of the Board and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in these Bylaws and other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board shall designate from time to time. The President may direct any Assistant Secretary to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
(f) Duties of Chief Financial Officer. The Chief Financial Officer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board or the President. The Chief Financial Officer, subject to the order of the Board, shall have the custody of all funds and securities of the Corporation. The Chief Financial Officer shall perform other duties commonly incident to his office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time. The President may direct the Treasurer or any Assistant Treasurer, or the Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer and each Controller and Assistant Controller shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the President shall designate from time to time.
Section 29. Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 30. Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission notice to the Board or to the President or to the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a majority of the directors in office at the time, or by the unanimous written or electronic consent of the directors in office at the time, or by any committee or superior officers.
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ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instruments. The Board may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the Corporation.
All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons as the Board shall authorize so to do.
Unless authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed, by the person authorized so to do by resolution of the Board, or, in the absence of such authorization, by the Chairman of the Board of Directors, the Chief Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates. The shares of the Corporation shall be represented by certificates, or shall be uncertificated. Certificates for the shares of stock, if any, shall be in such form as is consistent with the Charter and applicable law. Every holder of stock in the Corporation represented by certificate shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of the Board of Directors, or the President or any Vice President and by the Treasurer or Assistant Treasurer or the Secretary or Assistant Secretary, certifying the number of shares owned by him in the Corporation. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
Section 35. Lost Certificates. A new certificate or certificates shall be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to agree to indemnify the Corporation in such manner as it shall require or to give the Corporation a surety bond in such form and amount as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed.
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Section 36. Transfers.
(a) Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.
Section 37. Fixing Record Dates.
(a) In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, subject to applicable law, not be more than 60 nor less than 10 days before the date of such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
(b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than 10 days after the date upon which the resolution fixing the record date is adopted by the Board. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board to fix a record date. The Board shall promptly, but in all events within 10 days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board within 10 days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.
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(c) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.
Section 38. Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
ARTICLE VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock certificates (covered in Section 34), may be signed by the Chairman of the Board of Directors, the President or any Vice President, or such other person as may be authorized by the Board, and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Charter and applicable law, if any, may be declared by the Board pursuant to law at any regular or special meeting. Dividends may be paid in cash, in property, or in shares of the capital stock, subject to the provisions of the Charter and applicable law.
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Section 41. Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Board shall think conducive to the interests of the Corporation, and the Board may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.
(a) Directors and Executive Officers. The Corporation shall indemnify its directors and executive officers (for the purposes of this Article XI, “executive officers” shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest extent not prohibited by the DGCL or any other applicable law; provided, however, that the Corporation may modify the extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the Corporation shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by such person unless (i) such indemnification is expressly required to be made by law, (ii) the proceeding was authorized by the Board, (iii) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the powers vested in the Corporation under the Delaware General Corporation Law or any other applicable law or (iv) such indemnification is required to be made under subsection (d).
(b) Other Officers, Employees and Other Agents. The Corporation shall have power to indemnify its other officers, employees and other agents as set forth in the DGCL or any other applicable law. The Board shall have the power to delegate the determination of whether indemnification shall be given to any such person except executive officers to such officers or other persons as the Board shall determine.
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(c) Expenses. The Corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or executive officer of the Corporation, or is or was serving at the request of the Corporation as a director or executive officer of another Corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such proceeding, provided, however, that, if the DGCL requires, an advancement of expenses incurred by a director or officer in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section 43 or otherwise.
Notwithstanding the foregoing, unless otherwise determined pursuant to paragraph (e) of this Bylaw, no advance shall be made by the Corporation to an executive officer of the Corporation (except by reason of the fact that such executive officer is or was a director of the Corporation, in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative, if a determination is reasonably and promptly made (i) by a majority vote of a quorum consisting of directors who were not parties to the proceeding, even if not a quorum, or (ii) by a committee of such directors designated by a majority of such directors, even though less than a quorum, or (iii) if there are no such directors, or such directors so direct, by independent legal counsel in a written opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation.
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors and executive officers under this Bylaw shall be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Corporation and the director or executive officer. Any right to indemnification or advances granted by this Bylaw to a director or executive officer shall be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if (i) the claim for indemnification or advances is denied, in whole or in part, or (ii) no disposition of such claim is made within 90 days of request therefor. The claimant in such enforcement action, if successful in whole or in part, shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the Corporation shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible under the DGCL or any other applicable law for the Corporation to indemnify the claimant for the amount claimed. In connection with any claim by an executive officer of the Corporation (except in any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such executive officer is or was a director of the Corporation) for advances, the Corporation shall be entitled to raise a defense as to any such action clear and convincing evidence that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or with respect to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the
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applicable standard of conduct set forth in the DGCL or any other applicable law, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct. In any suit brought by a director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, the burden of proving that the director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this Article XI or otherwise shall be on the Corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Bylaw shall not be exclusive of any other right which such person may have or hereafter acquire under any applicable statute, provision of the Charter, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL or any other applicable law.
(f) Survival of Rights. The rights conferred on any person by this Bylaw shall continue as to a person who has ceased to be a director, executive officer, other officer, employee or other agent and shall inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL, or any other applicable law, the Corporation, upon approval by the Board, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw shall only be prospective and shall not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against any agent of the Corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable portion of this Bylaw that shall not have been invalidated, or by any other applicable law. If this Section 43 shall be invalid due to the application of the indemnification provisions of another jurisdiction, then the Corporation shall indemnify each director and executive officer to the full extent under applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the following definitions shall apply:
(1) The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.
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(2) The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding.
(3) The term the “Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under the provisions of this Bylaw with respect to the resulting or surviving corporation as he would have with respect to such constituent corporation if its separate existence had continued.
(4) References to a “director,” “executive officer,” “officer,” “employee,” or “agent” of the Corporation shall include, without limitation, situations where such person is serving at the request of the Corporation as, respectively, a director, executive officer, officer, employee, trustee or agent of another Corporation, partnership, joint venture, trust or other enterprise.
(5) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Written notice to stockholders of stockholder meetings shall be given as provided in Section 7 herein. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by law, written notice to stockholders for purposes other than stockholder meetings may be sent by United States mail or nationally recognized overnight courier, or by facsimile, telegraph or telex or by electronic mail or other electronic means.
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(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a), or as provided for in Section 21 of these Bylaws. If such notice is not delivered personally, it shall be sent to such address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known post office address of such director.
(c) Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person with Whom Communication Is Unlawful. Whenever notice is required to be given, under any provision of law or of the Charter or Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting which shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under DGCL, any notice given under the provisions of DGCL, the Charter or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the corporation within 60 days of having been given notice by the corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the corporation.
ARTICLE XIII
AMENDMENTS
Section 45. Amendments. The Board is expressly empowered to adopt, amend or repeal Bylaws of the Corporation. The stockholders shall also have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Charter, such action by stockholders shall require the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.
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ARTICLE XIV
RIGHT OF FIRST REFUSAL
Section 46. Right of First Refusal. No stockholder shall sell, assign, pledge, or in any manner transfer any of the shares of Common Stock of the Corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift or otherwise, except by a transfer which meets the requirements hereinafter set forth in this bylaw:
(a) If the stockholder desires to sell or otherwise transfer any of his shares of Common Stock, then the stockholder shall first give written notice thereof to the Corporation. The notice shall name the proposed transferee and state the number of shares to be transferred, the proposed consideration, and all other terms and conditions of the proposed transfer.
(b) For 30 days following receipt of such notice, the Corporation shall have the option to purchase the shares specified in the notice at the price and upon the terms set forth in such notice; provided, however, that the Corporation in its sole discretion shall have the option to purchase a lesser portion of the shares specified in said notice at the price and upon the terms set forth therein. In the event of a gift, property settlement or other transfer in which the proposed transferee is not paying the full price for the shares, and that is not otherwise exempted from the provisions of this Section 46, the price shall be deemed to be the fair market value of the stock at such time as determined in good faith by the Board. In the event the Corporation elects to purchase all of the shares or a lesser portion of the shares, it shall give written notice to the transferring stockholder of its election and settlement for said shares shall be made as provided below in paragraph (d).
(c) The Corporation may assign its rights hereunder.
(d) In the event the Corporation and/or its assignee(s) elect to acquire any of the shares of the transferring stockholder as specified in said transferring stockholder’s notice, the Secretary of the Corporation shall so notify the transferring stockholder and settlement thereof shall be made in cash within 30 days after the Secretary of the Corporation receives said transferring stockholder’s notice; provided that if the terms of payment set forth in said transferring stockholder’s notice were other than cash against delivery, the Corporation and/or its assignee(s) shall pay for said shares on the same terms and conditions set forth in said transferring stockholder’s notice.
(e) In the event the Corporation and/or its assignees(s) do not elect to acquire all of the shares specified in the transferring stockholder’s notice, said transferring stockholder may, within the 60-day period following the expiration of the option rights granted to the Corporation and/or its assignees(s) herein, transfer the shares specified in said transferring stockholder’s notice which were not acquired by the Corporation and/or its assignees(s) as specified in said transferring stockholder’s notice. All shares so sold by said transferring stockholder shall continue to be subject to the provisions of this bylaw in the same manner as before said transfer.
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(f) Anything to the contrary contained herein notwithstanding, the following transactions shall be exempt from the provisions of this bylaw:
(1) A stockholder’s transfer of any or all shares held either during such stockholder’s lifetime or on death by will or intestacy to such stockholder’s immediate family or to any custodian or trustee for the account of such stockholder or such stockholder’s immediate family or to any limited partnership of which the stockholder, members of such stockholder’s immediate family or any trust for the account of such stockholder or such stockholder’s immediate family will be the general or limited partner(s) of such partnership. “Immediate family” as used herein shall mean spouse, lineal descendant, father, mother, brother, or sister of the stockholder making such transfer.
(2) A stockholder’s bona fide pledge or mortgage of any shares with a commercial lending institution, provided that any subsequent transfer of said shares by said institution shall be conducted in the manner set forth in this bylaw.
(3) A stockholder’s transfer of any or all of such stockholder’s shares to the Corporation or to any other stockholder of the Corporation.
(4) A stockholder’s transfer of any or all of such stockholder’s shares to a person who, at the time of such transfer, is an officer or director of the Corporation.
(5) A corporate stockholder’s transfer of any or all of its shares pursuant to and in accordance with the terms of any merger, consolidation, reclassification of shares or capital reorganization of the corporate stockholder, or pursuant to a sale of all or substantially all of the stock or assets of a corporate stockholder.
(6) A corporate stockholder’s transfer of any or all of its shares to any or all of its stockholders.
(7) A transfer by a stockholder which is a limited or general partnership to any or all of its partners or former partners in accordance with partnership interests.
In any such case, the transferee, assignee, or other recipient shall receive and hold such stock subject to the provisions of this Section 46 and the transfer restrictions in Section 36, and there shall be no further transfer of such stock except in accord with this bylaw and the transfer restrictions in Section 36.
(g) The provisions of this bylaw may be waived with respect to any transfer either by the Corporation, upon duly authorized action of its Board, or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the Corporation (excluding the votes represented by those shares to be transferred by the transferring stockholder). This bylaw may be amended or repealed either by a duly authorized action of the Board or by the stockholders, upon the express written consent of the owners of a majority of the voting power of the Corporation.
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(h) Any sale or transfer, or purported sale or transfer, of securities of the Corporation shall be null and void unless the terms, conditions, and provisions of this bylaw are strictly observed and followed.
(i) The foregoing right of first refusal shall terminate upon the date securities of the Corporation are first offered to the public pursuant to a registration statement filed with, and declared effective by, the United States Securities and Exchange Commission under the Securities Act of 1933, as amended.
(j) The certificates representing shares of stock of the Corporation shall bear on their face the following legend so long as the foregoing right of first refusal remains in effect:
“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION IN FAVOR OF THE CORPORATION AND/OR ITS ASSIGNEE(S), AS PROVIDED IN THE BYLAWS OF THE CORPORATION.”
ARTICLE XV
LOANS TO OFFICERS
Section 47. Loans to Officers. Except as otherwise prohibited under applicable law, the Corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the Corporation or of its subsidiaries, including any officer or employee who is a director of the Corporation or its subsidiaries, whenever, in the judgment of the Board, such loan, guarantee or assistance may reasonably be expected to benefit the Corporation. The loan, guarantee or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board shall approve, including, without limitation, a pledge of shares of stock of the Corporation. Nothing in these Bylaws shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the Corporation at common law or under any statute.
ARTICLE XVI
MISCELLANEOUS
Section 48. Annual Report.
(a) Subject to the provisions of paragraph (b) of this Bylaw, the Board shall cause an annual report to be sent to each stockholder of the Corporation not later than 120 days after the close of the Corporation’s fiscal year. Such report shall include a balance sheet as of the end of such fiscal year and an income statement and statement of changes in financial position for such fiscal year, accompanied by any report thereon of independent accountants or, if there is no such report, the certificate of an authorized officer of the Corporation that such statements were prepared without audit from the books and records of the Corporation. When there are more than 100 stockholders of record of the Corporation’s shares, as determined by Section 605 of the CGCL, additional information as required by Section 1501(b) of the CGCL shall also be contained in such report, provided that if the Corporation has a class of securities registered under Section 12 of the 1934 Act, the 1934 Act shall take precedence. Such report shall be sent to stockholders at least 15 days prior to the next annual meeting of stockholders after the end of the fiscal year to which it relates.
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(b) If and so long as there are fewer than 100 holders of record of the Corporation’s shares, the requirement of sending of an annual report to the stockholders of the Corporation is hereby expressly waived.
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Exhibit 3.4
AMENDED AND RESTATED BYLAWS
OF
BLOSSOMHILL THERAPEUTICS, INC.
(A DELAWARE CORPORATION)
SECTION 1.
OFFICES
Section 1.1 Registered Office. The registered office of BlossomHill Therapeutics, Inc. (the “Corporation”) in the State of Delaware and the name of the Corporation’s registered agent at such address shall be as set forth in the certificate of incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”).
Section 1.2 Other Offices. The Corporation may at any time establish other offices both within and without the State of Delaware.
SECTION 2.
CORPORATE SEAL
Section 2.1 Corporate Seal. The Board of Directors of the Corporation (the “Board”) may adopt a corporate seal. Said seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise.
SECTION 3.
STOCKHOLDERS’ MEETINGS
Section 3.1 Place of Meetings. Meetings of the stockholders of the Corporation may be held at such place, if any, either within or without the State of Delaware, as may be determined from time to time by the Board (or its designee). The Board may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as provided under the General Corporation Law of the State of Delaware (“DGCL”) and Section 3.9 below.
Section 3.2 Annual Meetings.
(a) The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business as may properly come before it, shall be held on such date and time as may be determined from time to time by the Board (or its designee). Any annual meeting of stockholders may be postponed, rescheduled or cancelled by the Board, or any director or officer of the Corporation to whom the Board delegates such authority, at any time before or after notice of such meeting has been given to stockholders. Nominations of persons for election to the Board and proposals of other business to be considered by the stockholders may be made at an annual meeting of stockholders:
(i) pursuant to the Corporation’s notice of meeting of stockholders (or any supplement thereto);
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(ii) by or at the direction of the Board (or a duly authorized committee thereof); or
(iii) by any stockholder of the Corporation who was a stockholder of record at the time of giving the stockholder’s notice provided for in Section 3.2(b) of these bylaws (as may be amended and/or restated from time to time, the “Bylaws”) and who is a stockholder of record at the time of the annual meeting of stockholders, who is entitled to vote at the meeting and who complied with the procedures and requirements set forth in this Section 3.2.
For the avoidance of doubt, clause (iii) above shall be the exclusive means for a stockholder to make nominations and submit other business before an annual meeting of stockholders.
(b) At an annual meeting of the stockholders, only such business shall be conducted as is a proper matter for stockholder action under the DGCL, the Certificate of Incorporation and the Bylaws, and only such nominations shall be made and such other business shall be conducted as shall have been properly brought before the meeting in accordance with the procedures below.
| (1) | For nominations for the election to the Board to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in Section 3.2(b)(3) and must update and supplement the information contained in such written notice on a timely basis as set forth in Section 3.2(c). In addition to all of the information required by Section 3.2(b)(4), such stockholder’s notice shall include as to each nominee such stockholder proposes to nominate at the meeting: |
(A) the name, age, business address and residence address of such nominee,
(B) the principal occupation or employment of such nominee,
(C) the class or series and number of shares of each class or series of capital stock of the Corporation that are owned of record and beneficially by such nominee and list of any pledge of or encumbrances on such shares,
(D) the date or dates on which such shares were acquired and the investment intent of such acquisition,
(E) the questionnaire, representation and agreement required by Section 3.2(e), completed and signed by such nominee, and
(F) all other information concerning such nominee as would be required to be disclosed in a proxy statement soliciting proxies for the election of such nominee as a director in an election contest (even if an election contest is not involved and whether or not proxies are being or will be solicited), or that is otherwise required to be disclosed or provided to the Corporation pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (including such person’s written consent to being named in a proxy statement, associated proxy card and other filings as a nominee and to serving as a director if elected).
The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Corporation or to serve on any committee or sub-committee of the Board, in either case under any applicable stock exchange listing requirements, applicable law or the Policies (as defined below). The number of nominees a stockholder may nominate for election at an annual
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meeting on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at an annual meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such annual meeting. A stockholder may not designate any substitute or alternate nominees unless the stockholder provides timely notice of such substitute or alternate nominee(s) in accordance with this Section 3.2, in the case of an annual meeting, or Section 3.3, in the case of a special meeting (and such notice contains all of the information, representations, questionnaires and certifications with respect to such substitute or alternate nominee(s) that are required by the Bylaws with respect to nominees for director).
| (2) | For business other than nominations for the election to the Board to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of Section 3.2(a), the stockholder must deliver written notice to the Secretary at the principal executive offices of the Corporation on a timely basis as set forth in Section 3.2(b)(3), and must update and supplement the information contained in such written notice on a timely basis as set forth in Section 3.2(c). In addition to all of the information required by Section 3.2(b)(4), such stockholder’s notice shall include as to each matter such stockholder proposes to bring before the meeting: |
(A) a brief description of the business desired to be brought before the meeting,
(B) the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the Bylaws, the language of the proposed amendment),
(C) the reasons for conducting such business at the meeting, and
(D) any material interest (including any anticipated benefit of such business to any Proponent (as defined below) other than solely as a result of its ownership of the Corporation’s capital stock, that is material to any Proponent individually, or to the Proponents in the aggregate) in such business of any Proponent.
| (3) | To be timely, the written notice required by Section 3.2(b)(1) or 3.2(b)(2) must be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the 90th day, nor earlier than the 120th day, prior to the first anniversary of the immediately preceding year’s annual meeting (for purposes of notice required for action to be taken at the Corporation’s first annual meeting of stockholders after its initial public offering of common stock, the date of the immediately preceding year’s annual meeting shall be deemed to have occurred on June 15th in such immediately preceding calendar year); provided, however, that, subject to the last sentence of this Section 3.2(b)(3), in the event that the date of the annual meeting is advanced more than 30 days prior to or delayed by more than 70 days after the anniversary of the preceding year’s annual meeting, or if no annual meeting was held (or deemed to have been held), notice by the stockholder to be timely must be so received not earlier than the 120th day prior to such annual meeting and not later than the later of the close of business on (i) the 90th day prior to such annual meeting or (ii) the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation. |
In no event shall an adjournment or postponement (or the public announcement thereof) of an annual meeting for which notice has been given, or for which a public announcement of the date of the meeting has been made by the Corporation, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
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| (4) | The written notice required by Sections 3.2(b)(1) or 3.2(b)(2) shall also include, as of the date of the notice and as to the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made and any affiliate who controls (as such term is defined in Rule 405 under the Securities Act of 1933, as amended (the “1933 Act”) either of the foregoing stockholder or beneficial owner, directly or indirectly (each, a “Proponent” and collectively, the “Proponents”): |
(A) the name and address of each Proponent, including, if applicable, such name and address as they appear on the Corporation’s books and records;
(B) the class, series and number of shares of each class or series of the capital stock of the Corporation that are, directly or indirectly, owned of record or beneficially (within the meaning of Rule 13d-3 under the 1934 Act) by each Proponent (provided, that for purposes of this Section 3.2(b)(4), such Proponent shall in all events be deemed to beneficially own all shares of any class or series of capital stock of the Corporation as to which such Proponent or any of its affiliates or associates has a right to acquire beneficial ownership whether immediately or at any time in the future);
(C) a description of any agreement, arrangement or understanding (whether oral or in writing) with respect to such nomination or proposal (and/or the voting of shares of any class or series of capital stock of the Corporation, other than a revocable proxy given in response to a proxy solicitation made to 10 or more persons) between or among any Proponent and any of its affiliates or associates, and/or any other persons (including their names) including without limitation, any agreements, arrangements or understandings required to be disclosed pursuant to Item 5 or Item 6 of 1934 Act Schedule 13D, regardless of whether the requirement to file a Schedule 13D is applicable;
(D) a representation that the stockholder is a holder of record of shares of the Corporation at the time of giving notice, will be entitled to vote at the meeting, and that such stockholder (or a qualified representative thereof) intends to appear at the meeting to nominate the person or persons specified in the notice (with respect to a notice under Section 3.2(b)(1)) or to propose the business that is specified in the notice (with respect to a notice under Section 3.2(b)(2));
(E) a representation whether any Proponent or any other participant (as defined in Item 4 of Schedule 14A under the 1934 Act) will engage in a solicitation with respect to such nomination or proposal and, if so, the name of each participant in such solicitation and the amount of the cost of solicitation that has been and will be borne, directly or indirectly, by each participant in such solicitation, and a representation as to whether the Proponents intend or are part of a group which intends to:
(x) deliver, or make available, a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s voting shares required to approve or adopt the proposal or elect the nominee,
(y) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination and/or
(z) solicit proxies in support of any proposed nominee in accordance with Rule 14a-19 promulgated under the 1934 Act;
(F) a description of all Derivative Transactions (as defined below) by each Proponent during the previous 12-month period, including the date of the transactions and the class, series and number of securities involved in, and the material economic or voting terms of, such Derivative Transactions;
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(G) a certification regarding whether each Proponent has complied with all applicable federal, state and other legal requirements in connection with such Proponent’s acquisition of shares of capital stock or other securities of the Corporation and/or such Proponent’s acts or omissions as a stockholder or beneficial owner of the Corporation; and
(H) any other information relating to each Proponent required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14 of the 1934 Act and the rules and regulations promulgated thereunder.
(c) A stockholder providing the written notice required by Section 3.2(b)(1) or (2) shall update and supplement such notice in writing, if necessary, so that the information (other than the representations required by Section 3.2(b)(4)(E)) provided or required to be provided in such notice is true and correct in all material respects as of (i) the record date for the determination of stockholders entitled to notice of the meeting and (ii) the date that is five Business Days (as defined below) prior to the meeting and, in the event of any adjournment or postponement thereof, five Business Days prior to such adjourned or postponed meeting; provided, that no such update or supplement shall cure or affect the accuracy (or inaccuracy) of any representations made by any Proponent, any of its affiliates or associates, or a nominee or the validity (or invalidity) of any nomination or proposal that failed to comply with this Section 3.2 or is rendered invalid as a result of any inaccuracy therein.
In the case of an update and supplement pursuant to clause (i) of this Section 3.2(c), such update and supplement must be received by the Secretary at the principal executive offices of the Corporation not later than five Business Days after the later of the record date for the determination of stockholders entitled to notice of the meeting or the public announcement of such record date. In the case of an update and supplement pursuant to clause (ii) of this Section 3.2(c), such update and supplement shall be received by the Secretary at the principal executive offices of the Corporation not later than two Business Days prior to the date for the meeting, and, in the event of any adjournment or postponement thereof, two Business Days prior to such adjourned or postponed meeting (or if there are fewer than two Business Days between the date for the meeting, or the date of the immediately preceding adjournment or postponement thereof, and the date for the adjourned or postponed meeting, not later than the day prior to such adjourned or postponed meeting).
(d) Notwithstanding anything in Section 3.2(b)(3) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 10 days before the last day a stockholder may deliver a notice of nomination in accordance with Section 3.2(b)(3), a stockholder’s notice required by this Section 3.2 and that complies with the requirements in Section 3.2(b)(1), other than the timing requirements in Section 3.2(b)(3), shall also be considered timely, but only with respect to nominees for the new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which such public announcement is first made by the Corporation.
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(e) To be eligible to be a nominee for election or re-election as a director of the Corporation pursuant to a nomination under clause (iii) of Section 3.2(a) or clause (ii) of Section 3.3(c), each Proponent must deliver (in accordance with the time periods prescribed for delivery of notice under Sections 3.2(b)(3), 3.2(d) or 3.3(c), as applicable) to the Secretary at the principal executive offices of the Corporation a completed written questionnaire with respect to the background, qualifications, stock ownership and independence of such proposed nominee (in the form provided by the Secretary within 10 days following a written request therefor by a stockholder of record) and a written representation and agreement (in the form provided by the Secretary within 10 days following written request therefor by a stockholder of record) that such person:
(i) is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question that (x) has not been disclosed in the questionnaire or (y) could limit or interfere with such person’s ability to comply with such person’s fiduciary duties under applicable law;
(ii) is not and will not become a party to any agreement, arrangement or understanding (whether oral or in writing) with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director of the Corporation or a nominee that has not been disclosed in such questionnaire;
(iii) would be in compliance, if elected as a director of the Corporation (and a statement as to whether such person, if elected, intends to comply with), all applicable corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation that are publicly disclosed or which were provided by the Secretary with the written representation and agreement required by this Section 3.2(e) (together, the “Policies”); and
(iv) if elected as a director of the Corporation, intends to serve the entire term until the next meeting at which such candidate would face re-election.
(f) Notwithstanding anything to the contrary in the Bylaws, unless otherwise required by applicable law, in the event that any Proponent (i) provides notice pursuant to Rule 14a-19(b) promulgated under the 1934 Act with respect to one or more proposed nominees and (ii) subsequently fails to
(x) comply with the requirements of Rule 14a-19 promulgated under the 1934 Act (or fails to timely provide reasonable evidence sufficient to satisfy the Corporation that such Proponent has met the requirements of Rule 14a-19(a)(3) promulgated under the 1934 Act in accordance with the next sentence) or
(y) inform the Corporation that they no longer plan to solicit proxies in accordance with the requirements of Rule 14a-19 under the 1934 Act by delivering a written notice to the Secretary at the principal executive offices of the Corporation within two (2) Business Days after the occurrence of such change,
then the nomination of each such proposed nominee shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that the nominee is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any stockholder meeting (or any supplement thereto) and notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Corporation (which proxies and votes shall be disregarded).
If any Proponent provides notice pursuant to Rule 14a-19(b) promulgated under the 1934 Act, such Proponent shall deliver to the Corporation, no later than five (5) Business Days prior to the applicable meeting, reasonable evidence sufficient to demonstrate that it has met the requirements of Rule 14a-19(a)(3) promulgated under the 1934 Act.
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Notwithstanding anything to the contrary set forth herein, and for the avoidance of doubt, the nomination of any person whose name is included (as applicable) as a nominee in the Corporation’s proxy statement, notice of meeting or other proxy materials for any stockholder meeting (or any supplement thereto) as a result of any notice provided by any Proponent pursuant to Rule 14a-19(b) promulgated under the 1934 Act with respect to such proposed nominee and whose nomination is not made by or at the direction of the Board or any authorized committee thereof shall not be deemed (for purposes of clause (i) of Section 3.2(a) or otherwise) to have been made pursuant to the Corporation’s notice of meeting (or any supplement thereto) and any such nominee may only be nominated by a Proponent pursuant to clause (iii) of Section 3.2(a) and, in the case of a special meeting of stockholders, pursuant to and to the extent permitted under Section 3.3(c).
A person shall not be eligible for election or re-election as a director at an annual meeting unless the person is nominated in accordance with clause (ii) or (iii) of Section 3.2(a) and in accordance with the procedures and requirements set forth in Section 3.2(b), Section 3.2(c), Section 3.2(d), Section 3.2(e) and Section 3.2(f), as applicable. Only such business shall be conducted at any annual meeting of the stockholders of the Corporation as shall have been brought before the meeting in accordance with Section 3.2(a) and in accordance with the procedures and requirements set forth in Section 3.2(b), Section 3.2(c) and Section 3.2(f), as applicable. Except as otherwise required by applicable law, and subject to the supervision, direction and control of the Board of Directors, the chairperson of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be, in accordance with the procedures and requirements set forth in the Bylaws (including, without limitation, compliance with Rule 14a-19 promulgated under the 1934 Act) and, if any proposed nomination or business is not in compliance with the Bylaws, or the Proponent does not act in accordance with the representations required in this Section 3.2, to declare that such proposal or nomination shall not be presented for stockholder action at the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), or that such business shall not be transacted, notwithstanding that such proposal or nomination is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination or such business may have been solicited or received.
Notwithstanding the foregoing provisions of this Section 3.2, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election) and such proposed business shall not be transacted, notwithstanding that such nomination or proposed business is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such vote may have been solicited or received by the Corporation.
(g) For purposes of Sections 3.2 and 3.3,
| (1) | “affiliates” and “associates” shall have the meanings set forth in Rule 405 under the 1933 Act; |
| (2) | “Business Day” means any day other than Saturday, Sunday or a day on which banks are closed in New York City, New York; |
| (3) | “close of business” means 6:00 p.m. local time at the principal executive offices of the Corporation on any calendar day, whether or not the day is a Business Day; |
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| (4) | “Derivative Transaction” means any agreement, arrangement, interest or understanding entered into by, or on behalf or for the benefit of, any Proponent or any of its affiliates or associates, whether record or beneficial: |
(A) the value of which is derived in whole or in part from the value of any class or series of shares or other securities of the Corporation;
(B) that otherwise provides any direct or indirect opportunity to gain or share in any gain derived from a change in the value of securities of the Corporation;
(C) the effect or intent of which is to mitigate loss, manage risk or benefit from changes in value or price with respect to any securities of the Corporation; or
(D) that provides the right to vote (other than a revocable proxy given in response to a proxy solicitation made to 10 or more persons) or increase or decrease the voting power of, such Proponent, or any of its affiliates or associates, directly or indirectly, with respect to any securities of the Corporation,
which agreement, arrangement, interest or understanding may include, without limitation, any option, warrant, debt position, note, bond, convertible security, swap, stock appreciation or similar right, short position, profit interest, hedge, right to dividends, voting agreement, performance-related fee or arrangement to borrow or lend shares (whether or not subject to payment, settlement, exercise or conversion in any such class or series), and any proportionate interest of such Proponent in the securities of the Corporation held by any general or limited partnership, or any limited liability company, of which such Proponent is, directly or indirectly, a general partner or managing member; and
| (5) | “public announcement” means disclosure in a press release reported by the Dow Jones News Service, Associated Press, Business Wire, GlobeNewswire or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act or by such other means reasonably designed to inform the public or security holders in general of such information, including, without limitation, posting on the Corporation’s investor relations website. |
| (6) | a “qualified representative” of a stockholder shall mean (A) a duly authorized officer, manager, trustee or partner of such stockholder or (B) a person authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders, and such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, shall be provided to the Secretary of the Corporation at least five Business Days prior to the meeting of stockholders. |
Section 3.3 Special Meetings.
(a) Special meetings of the stockholders of the Corporation may only be called in the manner provided in the Certificate of Incorporation. Any special meeting of stockholders previously scheduled by the Board may be postponed, rescheduled or cancelled by the Board, or any director or officer to whom the Board has delegated such authority, at any time before or after notice of such meeting has been given to stockholders.
(b) The Board (or its designee) shall determine the date and time of such special meeting. Upon determination of the date, time and place, if any, of the meeting, the Secretary shall cause a notice of meeting to be given to the stockholders entitled to vote, in accordance with the provisions of Section 3.4.
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(c) Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected
(i) by or at the direction of the Board or a duly authorized committee thereof or
(ii) by any stockholder of the Corporation who is a stockholder of record at the time of giving notice provided for in this paragraph and who is a stockholder of record at the time of the special meeting, who is entitled to vote at the meeting and who complies with Sections 3.2(b)(1), 3.2(b)(4), 3.2(c), 3.2(e) and 3.2(f).
The number of nominees a stockholder may nominate for election at a special meeting on its own behalf (or in the case of a stockholder giving the notice on behalf of a beneficial owner, the number of nominees a stockholder may nominate for election at a special meeting on behalf of such beneficial owner) shall not exceed the number of directors to be elected at such special meeting. In the event the Corporation calls a special meeting of stockholders for the purpose of submitting a proposal to stockholders for the election of one or more directors, any such stockholder of record entitled to vote in such election of directors may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation’s notice of meeting, if written notice setting forth the information required by Sections 3.2(b)(1) and 3.2(b)(4) shall be received by the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of (i) the 90th day prior to such meeting or (ii) the tenth day following the day on which the Corporation first makes a public announcement of the date of the special meeting at which directors are to be elected. The stockholder shall also update and supplement such information as required under Section 3.2(c).
In no event shall an adjournment or a postponement (or the public announcement thereof) of a special meeting for which notice has been given, or for which a public announcement of the date of the meeting has been made by the Corporation, commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(d) A person shall not be eligible for election or re-election as a director at the special meeting unless the person is nominated either in accordance with clause (i) or clause (ii) of Section 3.3(c). Except as otherwise required by applicable law, and subject to the supervision, direction and control of the Board of Directors, the chairperson of the meeting shall have the power and duty to determine whether a nomination was made in accordance with the procedures and requirements set forth in the Bylaws and, if any proposed nomination is not in compliance with the Bylaws (including, without limitation, compliance with Rule 14a-19 under the 1934 Act), or if the Proponent does not act in accordance with the representations required in Section 3.2, to declare that such nomination shall not be presented for stockholder action at the meeting and shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that such nomination is set forth in (as applicable) the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received.
Notwithstanding the foregoing provisions of this Section 3.3, unless otherwise required by applicable law, if the stockholder (or a qualified representative of the stockholder) does not appear at the special meeting of stockholders of the Corporation to present a nomination, such nomination shall be disregarded (and such nominee disqualified from standing for election or re-election), notwithstanding that the nomination is set forth (as applicable) in the Corporation’s proxy statement, notice of meeting or other proxy materials and notwithstanding that proxies or votes in respect of such nomination may have been solicited or received by the Corporation.
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(e) Notwithstanding the foregoing provisions of Sections 3.2 and 3.3, a stockholder must also comply with all applicable requirements of the 1934 Act and the rules and regulations promulgated thereunder with respect to the matters set forth in Sections 3.2 and 3.3, and any failure to comply with such requirements shall be deemed a failure to comply with Sections 3.2 or 3.3, as applicable; provided, however, that, to the fullest extent not prohibited by applicable law, any references in the Bylaws to the 1934 Act or the rules and regulations promulgated thereunder are not intended to and shall not limit the requirements applicable to proposals and/or nominations to be considered pursuant to Sections 3.2(a)(iii) and 3.3(c). Nothing in the Bylaws shall be deemed to affect any rights of holders of any class or series of preferred stock to nominate and elect directors pursuant to and to the extent provided in any applicable provision of the Certificate of Incorporation.
Section 3.4 Notice of Meetings. Except as otherwise provided by applicable law, the Certificate of Incorporation or the Bylaws, notice of each meeting of stockholders shall be given not less than ten nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting as of the record date for determining the stockholders entitled to notice of such meeting. Such notice shall specify the date, time and place, if any, of the meeting, the record date for determining stockholders entitled to vote at the meeting, if such record date is different from the record date for determining stockholders entitled to notice of the meeting, and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at any such meeting, and, in the case of special meetings, the purpose or purposes of the meeting. Notice shall be deemed given as provided in Section 232 of the DGCL.
Section 3.5 Quorum and Vote Required. At all meetings of stockholders, except where otherwise required by law or by the Certificate of Incorporation, or by the Bylaws, the presence, in person, by remote communication, if applicable, or by proxy, of the holders of a majority of the voting power of the outstanding shares of stock entitled to vote at the meeting shall constitute a quorum for the transaction of business. The stockholders present at a duly called or convened meeting, at which a quorum is present, may continue to transact business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum.
Unless a different or minimum vote is provided by law or by applicable stock exchange rules, or by the Certificate of Incorporation or the Bylaws, in which case such different or minimum vote shall be the applicable vote on the matter, in all matters other than the election of directors, the affirmative vote of a majority of the votes cast on such matter, voting affirmatively or negatively (excluding abstentions and broker non-votes) shall be the act of the stockholders. Except as otherwise required by law, the Certificate of Incorporation or the Bylaws, directors shall be elected by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy at the meeting and entitled to vote in the election of directors. Where a separate vote by a class or classes or series is required, except as required by law or by the Certificate of Incorporation or the Bylaws, the holders of a majority of the voting power of the outstanding shares of such class or classes or series, present in person, by remote communication, if applicable, or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.
Unless a different or minimum vote is provided by law or by the Certificate of Incorporation or the Bylaws or any applicable stock exchange rules, in which case such different or minimum vote shall be the applicable vote on the matter, the affirmative vote of the holders of a majority (or plurality, in the case of the election of directors) of the votes cast on such matter, voting affirmatively or negatively (excluding abstentions and broker non-votes) shall be the act of such class or classes or series.
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Section 3.6 Adjournment and Notice of Adjourned Meetings. Any meeting of stockholders, whether annual or special, may be adjourned from time to time either by the chairperson of the meeting or by the stockholders by the affirmative vote of a majority of the votes cast, voting affirmatively or negatively (excluding abstentions and broker non-votes). When a meeting is adjourned to another time or place, if any, (including an adjournment taken to address a technical failure to convene or continue a meeting using remote communication) notice need not be given of the adjourned meeting if the time and place, if any, thereof and the means of remote communication, if any, by which stockholders and proxyholders may be deemed present in person and may vote at such meeting are announced at the meeting at which the adjournment is taken or are:
(i) displayed, during the time scheduled for the meeting, on the same electronic network used to enable stockholders and proxy holders to participate in the meeting by means of remote communication; or
(ii) set forth in the notice of meeting given in accordance with Section 3.4.
At the adjourned meeting, the Corporation may transact any business that might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for determination of stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix as the record date for determining stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote at the adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date so fixed for notice of such adjourned meeting.
Section 3.7 Voting Rights. For the purpose of determining those stockholders entitled to vote at any meeting of the stockholders or adjournment thereof, except as otherwise provided by applicable law, only persons in whose names shares stand on the stock records of the Corporation on the record date shall be entitled to vote at any meeting of stockholders. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy. No proxy shall be voted after three years from its date of creation unless the proxy provides for a longer period. Voting at meetings of stockholders need not be by written ballot. Any stockholder directly or indirectly soliciting proxies from other stockholders must use a proxy card color other than white, which shall be reserved for the exclusive use by the Board.
Section 3.8 List of Stockholders. The Corporation shall prepare, no later than the tenth day before each meeting of stockholders, a complete list of the stockholders entitled to vote at said meeting, arranged in alphabetical order, showing the address of each stockholder and the number of shares registered in the name of each stockholder; provided, however, if the record date for determining the stockholders entitled to vote is less than ten days before the meeting date, the list shall reflect all of the stockholders entitled to vote as of the tenth day before the meeting date. Nothing in this Section 3.8 shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting for a period of ten days ending on the day before the meeting date:
(a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or
(b) during ordinary business hours, at the principal place of business of the Corporation.
In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation.
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Section 3.9 Remote Communication; Delivery to the Corporation.
(a) If authorized by the Board in its sole discretion, and subject to such guidelines and procedures as the Board may adopt, stockholders and proxyholders not physically present at a stockholder meeting may, by means of remote communication:
| (1) | participate in a meeting of stockholders; and |
| (2) | be deemed present in person and vote at a meeting of stockholders whether such meeting is to be held at a designated place or solely by means of remote communication, provided that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (ii) the Corporation shall implement reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation. |
(b) Whenever Section 3.2 or 3.3 requires one or more persons (including a record or beneficial owner of capital stock) to deliver a document or information to the Corporation or any officer, employee or agent thereof (including any notice, request, questionnaire, revocation, representation or other document or agreement), such document or information shall be in writing exclusively (and not in an electronic transmission) and shall be delivered exclusively by hand (including, without limitation, overnight courier service) or by certified or registered mail, return receipt requested and the Corporation shall not be required to accept delivery of any document not in such written form or so delivered.
Section 3.10 Organization.
(a) At every meeting of stockholders, a person designated by the Board shall act as chairperson of the meeting of stockholders. If no chairperson of the meeting of stockholders is so designated, then the Chairperson of the Board, or if no Chairperson has been appointed, is absent or refuses to act, the Chief Executive Officer, or if no Chief Executive Officer is then serving or the Chief Executive Officer is absent or refuses to act, the President, or, if the President is absent or refuses to act, a chairperson of the meeting chosen by the stockholders by the affirmative vote of a majority of the votes cast, voting affirmatively or negatively (excluding abstentions and broker non-votes), shall act as chairperson of the meeting of stockholders. A person designated by the Board shall act as secretary of the meeting. If no secretary of the meeting is designated, then the Secretary, or, in the Secretary’s absence, an Assistant Secretary or other officer or other person directed to do so by the chairperson of the meeting, shall act as secretary of the meeting.
(b) The Board shall be entitled to make such rules or regulations for the conduct of meetings of stockholders as it shall deem necessary, appropriate or convenient. Subject to such rules and regulations of the Board, if any, the chairperson of the meeting shall have the right and authority to convene and (for any or no reason) to recess and/or adjourn the meeting, to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairperson, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, establishing an agenda or order of business for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to stockholders of record of the Corporation and their duly authorized and constituted proxies and such other persons as the chairperson shall permit, restrictions on entry to the meeting after the time fixed for the commencement thereof, limitations on the time allotted to
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questions or comments by participants and regulation of the opening and closing of the polls for balloting on matters that are to be voted on by ballot. The date and time of the opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting. Unless and to the extent determined by the Board or the chairperson of the meeting, meetings of stockholders shall not be required to be held in accordance with rules of parliamentary procedure.
(c) The Corporation may and shall, if required by applicable law, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more persons as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairperson of the meeting shall appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of the duties of inspector, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspectors shall:
(1) ascertain the number of shares outstanding and the voting power of each;
(2) determine the shares represented at a meeting and the validity of proxies and ballots;
(3) count all votes and ballots;
(4) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; and
(5) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots.
The inspectors may appoint or retain other persons or entities to assist the inspectors in the performance of the duties of the inspectors. In determining the validity and counting of proxies and ballots, the inspectors shall be limited to an examination of the proxies, any envelopes submitted with those proxies, any information provided in accordance with Sections 211(e) or 212(c)(2) of the DGCL, or any information provided pursuant to Sections 211(a)(2)b.(i) or (iii) of the DGCL, ballots and the regular books and records of the Corporation, except that the inspectors may consider other reliable information for the limited purpose of reconciling proxies and ballots submitted by or on behalf of banks, brokers, their nominees or similar persons which represent more votes than the holder of a proxy is authorized by the record owner to cast or more votes than the stockholder holds of record. If the inspectors consider other reliable information for the limited purpose permitted herein, the inspectors at the time they make their certification pursuant to Section 231(b)(5) of the DGCL shall specify the precise information considered by them including the person or persons from whom they obtained the information, when the information was obtained, the means by which the information was obtained and the basis for the inspectors’ belief that such information is accurate and reliable.
SECTION 4.
DIRECTORS
Section 4.1 Number. The authorized number of directors of the Corporation shall be fixed in accordance with the Certificate of Incorporation.
Section 4.2 Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board, except as may be otherwise provided by the Certificate of Incorporation or the DGCL.
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Section 4.3 Terms. The terms of directors shall be as set forth in the Certificate of Incorporation.
Section 4.4 Vacancies; Newly Created Directorships. Vacancies and newly created directorships on the Board shall be filled as set forth in the Certificate of Incorporation, except as otherwise required by applicable law.
Section 4.5 Resignation. Any director may resign at any time by delivering such director’s notice in writing or by electronic transmission to the Board or the Secretary. Such resignation shall take effect at the time of delivery of the notice or at any later time specified therein. Acceptance of such resignation shall not be necessary to make it effective. When one or more directors shall resign from the Board, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the director whose place shall be vacated and until such director’s successor shall have been duly elected and qualified or until such director’s earlier death, resignation or removal.
Section 4.6 Removal. Directors shall be removed as set forth in the Certificate of Incorporation.
Section 4.7 Meetings.
(a) Regular Meetings. Unless otherwise restricted by the Certificate of Incorporation, regular meetings of the Board may be held at any time or date and at any place, if any, within or outside of the State of Delaware that has been designated by the Board and publicized among all directors, either orally or in writing, by telephone, including a voice-messaging system or other system designed to record and communicate messages, facsimile or by electronic mail or other electronic means. No further notice shall be required for regular meetings of the Board.
(b) Special Meetings. Unless otherwise restricted by the Certificate of Incorporation, special meetings of the Board may be held at any time and place, if any, within or without the State of Delaware as designated and called by the Chairperson of the Board, the Chief Executive Officer or by a majority of the directors then in office.
(c) Meetings by Electronic Communications Equipment. Any member of the Board, or of any committee thereof, may participate in a meeting by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting by such means shall constitute presence in person at such meeting.
(d) Notice of Special Meetings. Notice of the time and place, if any, of all special meetings of the Board shall be given orally or in writing, by telephone, including a voice messaging system or other system or technology designed to record and communicate messages, or by electronic mail or other means of electronic transmission at least 24 hours before the date and time of the meeting. If notice is sent by U.S. mail, it shall be sent by first class mail, postage prepaid, at least three days before the date of the meeting. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board need be specified in any such notice.
Section 4.8 Quorum and Voting.
(a) Except as otherwise required by the DGCL, the Certificate of Incorporation or the Bylaws, a quorum of the Board shall consist of a majority of the authorized number of directors fixed from time to time by the Board in accordance with the Certificate of Incorporation; provided, however, at any meeting whether a quorum be present or otherwise, a majority of the directors present may adjourn the meeting to another time, without notice other than by announcement at the meeting.
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(b) At each meeting of the Board at which a quorum is present, all questions and business shall be determined by the affirmative vote of a majority of the directors present, unless a different vote be required by applicable law, the Certificate of Incorporation or the Bylaws.
Section 4.9 Action without Meeting. Unless otherwise restricted by the Certificate of Incorporation or the Bylaws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting, if all members of the Board or committee, as the case may be, consent thereto in writing or by electronic transmission. After an action is taken, such consent or consents shall be filed with the minutes of proceedings of the Board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 4.10 Fees and Compensation. Unless otherwise restricted by the Certificate of Incorporation or the Bylaws, the Board, or any duly authorized committee thereof, shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
Section 4.11 Committees.
(a) Committees. The Board may, from time to time, appoint such committees as may be permitted by applicable law. Such committees appointed by the Board shall consist of one or more members of the Board and to the extent permitted by applicable law and provided in the resolution of the Board shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers that may require it; but no such committee shall have the power or authority in reference to (i) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval, or (ii) adopting, amending or repealing any Bylaw of the Corporation.
(b) Term. The Board, subject to any requirements of any outstanding series of preferred stock and the provisions of subsection (a) of this Section 4.11, may at any time increase or decrease the number of members of a committee or terminate the existence of a committee. The membership of a committee member shall terminate on the date of such committee member’s death, such person’s resignation from the committee or on such date that the committee member, for any reason, is no longer a member of the Board. The Board may at any time for any reason remove any individual committee member and the Board may fill any committee vacancy created by death, resignation, removal or increase in the number of members of the committee. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee, and, in addition, in the absence or disqualification of any member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member.
(c) Meetings. Unless the Board shall otherwise provide, regular meetings of any committee appointed pursuant to this Section 4.11 shall be held at such times and places, if any, as are determined by the Board, or by any such committee, and when notice thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special meetings of any such committee may be held at such place, if any, that has been determined from time to time by such committee, and may
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be called by any director who is a member of such committee, upon notice to the members of such committee of the time and place, if any, of such special meeting given in the manner provided for the giving of notice to members of the Board of the time and place, if any, of special meetings of the Board. Unless otherwise provided by the Board in the resolutions authorizing the creation of the committee, the presence of at least a majority of the members of the committee then serving shall be necessary to constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by the affirmative vote of a majority of the members present at a meeting of the committee at which a quorum is present.
Section 4.12 Duties of Chairperson of the Board. The Board shall elect from its ranks a Chairperson of the Board. The Chairperson of the Board shall perform such other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time. The Chairperson of the Board, when present, shall preside at all meetings of the Board in accordance with Section 4.13 of the Bylaws.
Section 4.13 Organization. At every meeting of the directors, the Chairperson of the Board shall act as chairperson of the meeting. If a Chairperson has not been appointed or is absent, the Chief Executive Officer (if a director), or, if no Chief Executive Officer is then serving or the Chief Executive Officer is absent, the President (if a director), or, in the absence of any such person, a chairperson of the meeting chosen by a majority of the directors present, shall preside over the meeting. The Secretary, or in the Secretary’s absence, any Assistant Secretary or other officer, director or other person directed to do so by the person presiding over the meeting, shall act as secretary of the meeting.
SECTION 5.
OFFICERS
Section 5.1 Officers Designated. The officers of the Corporation shall include, if and when designated by the Board, the Chief Executive Officer, the President, the Secretary and the Treasurer. The Board may also appoint one or more Assistant Secretaries and Assistant Treasurers and such other officers and agents with such powers and duties as it shall deem appropriate or necessary. The Board may assign such additional titles to one or more of the officers as it shall deem appropriate. Any one person may hold any number of offices of the Corporation at any one time unless specifically prohibited therefrom by applicable law, the Certificate of Incorporation or the Bylaws.
Section 5.2 Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure of the Board and until their successors shall have been duly elected and qualified, subject to such officer’s earlier death, resignation or removal. If the office of any officer becomes vacant for any reason, the vacancy may be filled by the Board or by a committee thereof to which the Board has delegated such responsibility.
(b) Duties of Chief Executive Officer. The Chief Executive Officer shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board has been appointed and is present thereat. The Chief Executive Officer shall be the chief executive officer of the Corporation and, subject to the supervision, direction and control of the Board, shall have the general powers and duties of supervision, direction, management and control of the business and officers of the Corporation as are customarily associated with the position of Chief Executive Officer. To the extent that a Chief Executive Officer has been appointed and no President has been appointed, all references in the Bylaws to the President shall be deemed references to the Chief Executive Officer. The Chief Executive Officer shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board shall designate from time to time.
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(c) Duties of President. The President shall preside, if a director, at all meetings of the Board, unless a Chairperson of the Board or Chief Executive Officer has been appointed and is present and willing to act. Unless another officer has been appointed Chief Executive Officer of the Corporation, the President shall be the chief executive officer of the Corporation and, subject to the supervision, direction and control of the Board, shall have the general powers and duties of supervision, direction, management and control of the business and officers of the Corporation as are customarily associated with the position of chief executive officer. The President shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board (or the Chief Executive Officer, if the Chief Executive Officer and President are not the same person and the Board has delegated the designation of the President’s duties to the Chief Executive Officer) shall designate from time to time.
(d) Duties of Secretary and Assistant Secretary. The Secretary shall attend all meetings of the stockholders and of the Board and shall record, or cause to be recorded, all acts, votes and proceedings thereof in the minute books of the Corporation. The Secretary shall give, or cause to be given, notice in conformity with the Bylaws of all meetings of the stockholders and of all meetings of the Board and any committee thereof requiring notice. The Secretary shall perform all other duties provided for in the Bylaws and other duties customarily associated with the office and shall also perform such other duties and have such other powers, as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Secretary or other officer to assume and perform the duties of the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
(e) Duties of Treasurer and Assistant Treasurer. The Treasurer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board, the Chief Executive Officer or the President. The Treasurer, subject to the order of the Board, shall have the custody of all funds and securities of the Corporation. The Treasurer shall perform other duties customarily associated with the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time. The Chief Executive Officer, or if no Chief Executive Officer is then serving, the President may direct any Assistant Treasurer or other officer to assume and perform the duties of the Treasurer in the absence or disability of the Treasurer, and each Assistant Treasurer shall perform other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board or the Chief Executive Officer, or if no Chief Executive Officer is then serving, the President shall designate from time to time.
Section 5.3 Delegation of Authority. The Board may from time to time delegate the powers or duties of any officer to any other officer or agent, notwithstanding any provision hereof.
Section 5.4 Resignations. Any officer may resign at any time by giving notice in writing or by electronic transmission to the Board, the Chairperson of the Board, the Chief Executive Officer, the President or the Secretary. Any such resignation shall be effective when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract with the resigning officer.
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Section 5.5 Removal. Any officer may be removed from office at any time, either with or without cause, by the Board, or by any duly authorized committee thereof or any officer upon whom such power of removal may have been conferred by the Board.
SECTION 6.
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING OF SECURITIES OWNED BY THE CORPORATION
Section 6.1 Execution of Corporate Instruments. The Board may, in its discretion, determine the method and designate the signatory officer or officers, or other person or persons, to execute, sign or endorse on behalf of the Corporation any corporate instrument or document, or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation, except where otherwise provided by applicable law or the Bylaws, and such execution or signature shall be binding upon the Corporation.
(a) All checks and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall be signed by such person or persons as the Board shall from time to time authorize so to do.
(b) Unless otherwise specifically determined by the Board or otherwise required by applicable law, the execution, signing or endorsement of any corporate instrument or document by or on behalf of the Corporation may be effected manually, by facsimile or (to the extent not prohibited by applicable law and subject to such policies and procedures as the Corporation may have in effect from time to time) by electronic signature.
(c) Unless authorized or ratified by the Board or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
Section 6.2 Voting of Securities Owned by the Corporation. All stock and other securities of or interests in other corporations or entities owned or held by the Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies and consents with respect thereto shall be executed, by the person authorized so to do by resolution of the Board, or, in the absence of such authorization, by the Chairperson of the Board, the Chief Executive Officer, or the President.
SECTION 7.
SHARES OF STOCK
Section 7.1 Form and Execution of Certificates. The shares of the Corporation shall be represented by certificates, or shall be uncertificated if so provided by resolution or resolutions of the Board. Certificates for the shares of stock of the Corporation, if any, shall be in such form as is consistent with the Certificate of Incorporation and applicable law. Every holder of stock in the Corporation represented by certificates shall be entitled to have a certificate signed by or in the name of the Corporation by any two authorized officers of the Corporation (including, without limitation, the Chairperson of the Board, the Chief Executive Officer, the President, the Treasurer, any Assistant Treasurer, the Secretary and any Assistant Secretary), certifying the number, and the class or series, of shares owned by such holder in the
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Corporation in certificated form. Any or all of the signatures on the certificate may be facsimiles. In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued with the same effect as if he were such officer, transfer agent, or registrar at the date of issue.
Section 7.2 Lost Certificates. The Corporation may issue a new certificate or certificates or uncertificated shares in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen, or destroyed. The Corporation may require, as a condition precedent to the issuance of a new certificate or certificates, the owner of such lost, stolen, or destroyed certificate or certificates, or the owner’s legal representative, to give the Corporation a bond (or other adequate security) sufficient to indemnify the Corporation against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen, or destroyed or the issuance of such new certificate(s) or uncertificated shares.
Section 7.3 Transfers.
(a) Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly endorsed certificate or certificates for a like number of shares.
(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes or series of stock of the Corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes or series owned by such stockholders in any manner not prohibited by the DGCL.
Section 7.4 Fixing Record Dates.
(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, subject to applicable law, not be more than 60 nor less than ten days before the date of such meeting. If the Board so fixes a record date for determining the stockholders entitled to notice of any meeting of stockholders, such date shall also be the record date for determining the stockholders entitled to vote at such meeting, unless the Board determines, at the time it fixes the record date for determining the stockholders entitled to notice of such meeting, that a later date on or before the date of the meeting shall be the record date for determining the stockholders entitled to vote at such meeting. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determining the stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determining the stockholders entitled to vote in accordance with the provisions of this Section 7.4(a).
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(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than 60 days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating to such action.
Section 7.5 Registered Stockholders. The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, and to vote as such owner, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 7.6 Additional Powers of the Board. In addition to, and without limiting, the powers set forth in the Bylaws, the Board shall have power and authority to make all such rules and regulations as it shall deem expedient concerning the issue, transfer, and registration of certificates for shares of stock of the Corporation, including the use of uncertificated shares of stock, subject to the provisions of the DGCL, other applicable law, the Certificate of Incorporation and the Bylaws. The Board may appoint and remove transfer agents and registrars of transfers, and may require all stock certificates to bear the signature of any such transfer agent and/or any such registrar of transfers.
SECTION 8.
OTHER SECURITIES OF THE CORPORATION
Section 8.1 Execution of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock certificates (covered in Section 7.1), may be signed by the Chairperson of the Board, the Chief Executive Officer, or the President, or such other person as may be authorized by the Board; provided, however, that where any such bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature, of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be authorized by the Board, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of the Corporation.
SECTION 9.
DIVIDENDS
Section 9.1 Declaration of Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and applicable law, if any, may be declared by the Board. Dividends may be paid in cash, in property, or in shares of capital stock or other securities of the Corporation, subject to the provisions of the Certificate of Incorporation and applicable law.
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Section 9.2 Dividend Reserve. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board from time to time, in its absolute discretion, determines proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose or purposes as the Board shall determine to be conducive to the interests of the Corporation, and the Board may modify or abolish any such reserve in the manner in which it was created.
SECTION 10.
FISCAL YEAR
Section 10.1 Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board and may be changed by the Board.
SECTION 11.
INDEMNIFICATION
Section 11.1 Indemnification of Directors, Executive Officers, Other Officers, Employees and Other Agents.
(a) Directors and Executive Officers. The Corporation shall indemnify to the fullest extent permitted by the DGCL as it presently exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), any person who was or is made or is threatened to be made a party or is otherwise involved in a Proceeding, by reason of the fact that such person is or was a director or executive officer (for the purposes of this Section 11.1, “executive officer” has the meaning defined in Rule 3b-7 promulgated under the 1934 Act) of the Corporation, or while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, whether the basis of such Proceeding is alleged action in an official capacity as a director or executive officer or in any other capacity while serving as a director or executive officer, against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation will not be required to indemnify or advance expenses to any director or executive officer in connection with any Proceeding (or part thereof) initiated by such person unless (i) the Proceeding (or part thereof) was authorized by the Board or (ii) the Proceeding (or part thereof) is initiated to enforce rights to indemnification or advancement of expenses as provided under subsection (d) of this Section 11.1 or is a compulsory counterclaim brought by such person.
(b) Other Officers, Employees and Other Agents. The Corporation shall have power to indemnify and advance expenses to its other officers, employees and other agents to the fullest extent permitted by the DGCL.
(c) Expenses. The Corporation shall advance to any current or former director or executive officer of the Corporation, or to any person, who while serving as a director or executive officer of the Corporation, is or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, prior to the final disposition of the Proceeding, promptly following request therefor, all expenses incurred by such person in defending (or participating as a witness in) any Proceeding referred to in Section 11.1(a), or in connection with a Proceeding (or part thereof) brought to establish or enforce a right to indemnification or advancement of expenses under
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subsection (d) of this Section 11.1, provided, however, that any advancement of expenses incurred by a current or former director or executive officer will be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it is ultimately determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified or entitled to advancement for such expenses under this Section 11.1 or otherwise.
(d) Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to current and former directors and executive officers under this Section 11.1 will be deemed to be contractual rights and be effective to the same extent and as if provided for in a contract between the Corporation and such director or executive officer. Any right to indemnification or advancement of expenses granted by this Section 11.1 to a current or former director or executive officer will be enforceable by or on behalf of the person holding such right in any court of competent jurisdiction if
(i) the claim for indemnification or advancement of expenses is denied, in whole or in part,
(ii) no disposition of a claim for indemnification is made within 60 days of request therefor, or
(iii) no disposition of a claim for an advance is made within 30 days of request therefor.
The indemnitee in such enforcement action, if successful in whole or in part, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, will be entitled to be paid also the expense of prosecuting or defending the claim to the fullest extent permitted by the DGCL.
In (i) any suit brought to enforce a right to indemnification hereunder (but not in a suit brought to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL.
Neither the failure of the Corporation (including its Board, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the indemnitee is proper in the circumstances because such person has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board, independent legal counsel or its stockholders) that the indemnitee has not met such applicable standard of conduct, will be a defense to the action or create a presumption that the indemnitee has not met the applicable standard of conduct. In any suit brought by a current or former director or executive officer to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the director or executive officer is not entitled to be indemnified, or to such advancement of expenses, under this Section 11.1 or otherwise is on the Corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any person by this Section 11.1 are not exclusive of any other right that such person may have or hereafter acquire under any applicable law, provision of the Certificate of Incorporation, Bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person’s official capacity and as to action in another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the DGCL.
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(f) Survival of Rights. The rights conferred on any person by this Section 11.1 will continue as to a person who has ceased to be a director or executive officer and will inure to the benefit of the heirs, executors and administrators of such a person.
(g) Insurance. To the fullest extent permitted by the DGCL, the Corporation may purchase insurance on behalf of any person required or permitted to be indemnified pursuant to this Section 11.1.
(h) Amendments. Any repeal or modification of this Section 11.1 is only prospective and does not affect the rights under this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any Proceeding against any current or former director or executive officer of the Corporation.
(i) Saving Clause. If this Section 11 or any portion hereof is invalidated on any ground by any court of competent jurisdiction, then the Corporation will nevertheless indemnify and advance expenses to each director and executive officer to the full extent not prohibited by any applicable portion of this Section 11 that has not been invalidated, or by any applicable law. If this Section 11 is invalid due to the application of the indemnification and advancement provisions of another jurisdiction, then the Corporation will indemnify and advance expenses to each director and executive officer to the full extent under applicable law.
(j) Certain Definitions. For the purposes of this Section 11, the following definitions apply:
| (1) | The term “Proceeding” is to be broadly construed and includes, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative. |
| (2) | The term “expenses” is to be broadly construed and includes, without limitation, court costs, attorneys’ fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection with any proceeding. |
| (3) | The term the “Corporation” includes, in addition to the resulting corporation, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger that, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, stands in the same position under the provisions of this Section 11 with respect to the resulting or surviving corporation as such person would have with respect to such constituent corporation if its separate existence had continued. |
| (4) | References to “fines” include any excise taxes assessed on a person with respect to an employee benefit plan. |
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SECTION 12.
NOTICES
Section 12.1 Notices.
(a) Notice to Stockholders. Notice to stockholders of stockholder meetings shall be given as provided in Section 3.4. Without limiting the manner by which notice may otherwise be given effectively to stockholders under any agreement or contract with such stockholder, and except as otherwise required by applicable law, notice to stockholders for purposes other than stockholder meetings may be sent by U.S. mail or courier service, facsimile or by electronic mail or other means of electronic transmission in accordance with Section 232 of the DGCL.
(b) Notice to Directors. Any notice required to be given to any director may be given by the method stated in subsection (a) or as otherwise provided in the Bylaws, with notice other than one that is delivered personally to be sent to such address or electronic mail address as such director shall have filed in writing with the Secretary, or, in the absence of such filing, to the last known address or electronic mail address of such director.
(c) Affidavit of Mailing. An affidavit of notice, executed by a duly authorized and competent employee of the Corporation or its transfer agent appointed with respect to the class of stock affected, or other agent, specifying the name and address or the names and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
(d) Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be employed in respect of any other or others.
(e) Notice to Person with Whom Communication is Unlawful. Whenever notice is required to be given, under applicable law or any provision of the Certificate of Incorporation or Bylaws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate under any provision of the DGCL, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.
(f) Notice to Stockholders Sharing an Address. Except as otherwise prohibited under the DGCL, any notice given under the provisions of the DGCL, the Certificate of Incorporation or the Bylaws shall be effective if given by a single written notice to stockholders who share an address if consented to by the stockholders at that address to whom such notice is given. Such consent shall have been deemed to have been given if such stockholder fails to object in writing to the Corporation within 60 days of having been given notice by the Corporation of its intention to send the single notice. Any consent shall be revocable by the stockholder by written notice to the Corporation.
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(g) Waiver. Whenever notice is required to be given under any provision of the DGCL, the Certificate of Incorporation or the Bylaws, a written waiver, signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice or any waiver by electronic transmission unless so required by the Certificate of Incorporation or the Bylaws.
SECTION 13.
AMENDMENTS
Section 13.1 Amendments. Subject to the limitations set forth in Section 11.1(h) or the Certificate of Incorporation, the Board is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation; provided, however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock (as defined in the Certificate of Incorporation)), such action by stockholders shall require the affirmative vote of the holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote thereon, voting together as a single class.
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Exhibit 4.2
CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
BLOSSOMHILL THERAPEUTICS, INC.
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
THIS THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (the “Agreement”) is entered into as of December 28, 2023, by and among BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) and the investors listed on EXHIBIT A hereto (referred to hereinafter as the “Investors” and each individually as an “Investor”).
RECITALS
WHEREAS, the Company entered into that certain Second Amended and Restated Investor Rights Agreement, dated as of March 1, 2021 (the “Prior IRA”);
WHEREAS, certain investors are purchasing shares of the Company’s Series B Preferred Stock pursuant to the Purchase Agreement;
WHEREAS, the obligations in the Purchase Agreement are conditioned upon the parties executing and delivering this Agreement;
WHEREAS, pursuant to Section 5.5 of the Prior IRA, the Company and the holders of at least a majority of the Registrable Securities (as defined in the Prior IRA) desire to amend and restate the Prior IRA in its entirety and to accept the rights created pursuant to this Agreement in lieu of the rights granted under the Prior IRA; and
WHEREAS, in connection with the consummation of the purchase and sale of the Series B Preferred, the parties desire to enter into this Agreement in order to grant registration, information rights and other rights to the Investors as set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. GENERAL.
1.1 Definitions. As used in this Agreement the following terms shall have the following respective meanings:
(a) “Common Stock” means the Company’s Common Stock, par value $0.0001 per share.
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(b) “Convertible Securities” means any evidences of indebtedness, shares or other securities directly or indirectly convertible into or exchangeable for Common Stock, but excluding Options.
(c) “Equity Securities” shall mean (i) any Common Stock, Preferred Stock or other equity security of the Company, (ii) any security convertible into or exercisable or exchangeable for, with or without consideration, any Common Stock, Preferred Stock or other security (including any option to purchase such a convertible security), (iii) any security carrying any warrant or right to subscribe to or purchase any Common Stock, Preferred Stock or other security or (iv) any such warrant or right.
(d) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(e) “Exempted Securities” means (1) the following shares of Common Stock and (2) shares of Common Stock deemed issued pursuant to the following Options and Convertible Securities:
(i) as to any series of Preferred Stock, shares of Common Stock, Options or Convertible Securities issued as a dividend or distribution on such series of Preferred Stock (including dividends payable in connection with dividends on other classes or series of stock);
(ii) shares of Common Stock, Options or Convertible Securities issued by reason of a dividend, stock split, split-up, reclassification, exchange, substitution, reorganization, merger, or consolidation;
(iii) shares of Common Stock, Options or Convertible Securities issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by a majority of the Board of Directors, including a majority of the Preferred Directors;
(iv) shares of Common Stock or Options issued to employees or directors of, or consultants or advisors to, the Corporation or any of its subsidiaries pursuant to a plan, agreement or arrangement approved by a majority of the Board of Directors, including a majority of the Preferred Directors;
(v) shares of Common Stock or Convertible Securities actually issued upon the exercise of Options or shares of Common Stock actually issued upon the conversion or exchange of Convertible Securities, in each case provided such issuance is pursuant to the terms of such Option or Convertible Security; or
(vi) shares of Common Stock issued in connection with an Initial Offering; or
(vii) shares of Common Stock, Options or Convertible Securities issued in connection with sponsored research, collaboration, technology license, development, OEM, marketing or other similar agreements or strategic partnerships approved by a majority of the Board of Directors, including a majority of the Preferred Directors.
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(f) “Form S-3” means such form under the Securities Act as in effect on the date hereof or any successor or similar registration form under the Securities Act subsequently
adopted by the SEC which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC.
(g) “GAAP” means generally accepted accounting principles in the United States as in effect from time to time.
(h) “Holder” means any person owning of record Registrable Securities that have not been sold to the public or any assignee of record of such Registrable Securities in accordance with Section 2.9 hereof.
(i) “Initial Offering” means the Company’s first firm commitment underwritten public offering of its Common Stock registered under the Securities Act.
(j) “Major Investor” means (1) an Investor that holds shares of Series Angel Preferred, (2) an Investor that holds at least 4,000,000 shares of Series A Preferred, and (3) an Investor that holds at least 4,000,000 shares of Series B Preferred (as adjusted for stock splits, combinations, reclassifications or the like).
(k) “Option” means any rights, options or warrants to subscribe for, purchase or otherwise acquire Common Stock or Convertible Securities.
(l) “Preferred A Director” means any director of the Company that the holders of the Series A Preferred are entitled to elect, exclusively and as a separate class, pursuant to the Restated Charter.
(m) “Preferred Angel Director” means the director of the Company that the holders of the Series Angel Preferred are entitled to elect, exclusively and as a separate class, pursuant to the Restated Charter.
(n) “Preferred B Director” means any director of the Company that the holders of the Series B Preferred are entitled to elect, exclusively and as a separate class, pursuant to the Restated Charter.
(o) “Preferred Directors” means, collectively, the Preferred A Director, the Preferred Angel Director, and the Preferred B Director.
(p) “Preferred Stock” means, collectively, the Series Angel Preferred, the Series A Preferred, and the Series B Preferred.
(q) “Purchase Agreement” means that certain Series B Preferred Stock Purchase Agreement, dated as of even date herewith.
(r) “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document.
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(s) “Registrable Securities” means (a) Common Stock issuable or issued upon conversion of the Shares and (b) any Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, such above-described securities. Notwithstanding the foregoing, Registrable Securities shall not include any securities (i) sold by a person to the public either pursuant to a registration statement or Rule 144 or (ii) sold in a private transaction in which the transferor’s rights under Section 2 of this Agreement are not assigned.
(t) “Registrable Securities then outstanding” shall be the number of shares of the Company’s Common Stock that are Registrable Securities and either (a) are then issued and outstanding or (b) are issuable pursuant to then exercisable or convertible securities.
(u) “Registration Expenses” shall mean all expenses incurred by the Company in complying with Sections 2.2, 2.3, and 2.4 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and disbursements of a single special counsel for the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company which shall be paid in any event by the Company).
(v) “Rule 144” shall mean Rule 144 promulgated under the Securities Act.
(w) “SEC” or “Commission” means the Securities and Exchange Commission.
(x) “Securities Act” shall mean the Securities Act of 1933, as amended.
(y) “Selling Expenses” shall mean all underwriting discounts and selling commissions applicable to the sale.
(z) “Series A Preferred” means the Company’s Series A Preferred Stock, par value $0.0001 per share.
(aa) “Series Angel Preferred” means the Company’s Series Angel Preferred Stock, par value $0.0001 per share.
(bb) “Series B Preferred” means the Company’s Series B Preferred Stock, par value $0.0001 per share.
(cc) “Shares” shall mean the Preferred Stock held from time to time by the Investors listed on EXHIBIT A hereto and their permitted assigns.
(dd) “Special Registration Statement” shall mean (i) a registration statement relating to any employee benefit plan or (ii) with respect to any corporate reorganization or transaction under Rule 145 of the Securities Act, any registration statements related to the issuance or resale of securities issued in such a transaction or (iii) a registration related to stock issued upon conversion of debt securities.
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SECTION 2. REGISTRATION; RESTRICTIONS ON TRANSFER.
2.1 Restrictions on Transfer.
(a) Each Holder agrees not to make any disposition of all or any portion of the Shares or Registrable Securities unless and until:
(i) there is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound by the terms of this Agreement, (B) such Holder shall have notified the Company of the proposed disposition and shall have furnished the Company with a reasonably detailed statement of the circumstances surrounding the proposed disposition, and (C) if reasonably requested by the Company, such Holder shall have furnished the Company with an opinion of counsel, reasonably satisfactory to the Company, that such disposition will not require registration of such shares under the Securities Act. It is agreed that the Company will not require opinions of counsel for transactions made pursuant to Rule 144, except in unusual circumstances. After its Initial Offering, the Company will not require any transferee pursuant to Rule 144 to be bound by the terms of this Agreement if the shares so transferred do not remain Registrable Securities hereunder following such transfer.
(b) Notwithstanding the provisions of subsection (a) above, no such restriction shall apply to a transfer by a Holder that is (A) a partnership transferring to its (i) partners or former partners in accordance with partnership interests or (ii) affiliated partnerships or funds managed by it or any of their respective directors, officers or partners, (B) a corporation transferring to a wholly-owned subsidiary or a parent corporation that owns all of the capital stock of the Holder, (C) a limited liability company transferring to its members or former members in accordance with their interest in the limited liability company, or (D) an individual transferring to the Holder’s family member or trust for the benefit of an individual Holder; provided that in each case the transferee will agree in writing to be subject to the terms of this Agreement to the same extent as if he were an original Holder hereunder.
(c) Each certificate representing Shares or Registrable Securities shall be stamped or otherwise imprinted with legends substantially similar to the following (in addition to any legend required under applicable state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR THERE IS A VALID EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN INVESTOR RIGHTS AGREEMENT BY AND BETWEEN THE STOCKHOLDER AND THE COMPANY. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE COMPANY.
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(d) The Company shall be obligated to reissue promptly unlegended certificates at the request of any Holder thereof if the Company has completed its Initial Offering and the Holder shall have obtained an opinion of counsel (which counsel may be counsel to the Company) reasonably acceptable to the Company to the effect that the securities proposed to be disposed of may lawfully be so disposed of without registration, qualification and legend, provided that the second legend listed above shall be removed only at such time as the Holder of such certificate is no longer subject to any restrictions hereunder.
(e) Any legend endorsed on an instrument pursuant to applicable state securities laws and the stop-transfer instructions with respect to such securities shall be removed upon receipt by the Company of an order of the appropriate blue sky authority authorizing such removal.
2.2 Demand Registration.
(a) Subject to the conditions of this Section 2.2, if the Company shall receive a written request from the Holders of at least 70% of the Registrable Securities (the “Initiating Holders”) that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities with an aggregate offering price to the public of not less than $15,000,000, then the Company shall, within 30 days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.2, use best efforts to effect, as expeditiously as reasonably possible, the registration under the Securities Act of all Registrable Securities that all Holders request to be registered.
(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 or any request pursuant to Section 2.4 and the Company shall include such information in the written notice referred to in Section 2.2(a) or Section 2.4(a), as applicable. In such event, the right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Holders of at least a majority of the Registrable Securities held by all Initiating Holders (which underwriter or underwriters shall be reasonably acceptable to the Company). Notwithstanding any other provision of this Section 2.2 or Section 2.4, if the underwriter advises the Company that marketing factors require a limitation of the number of securities to be underwritten (including Registrable Securities) then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such Registrable Securities on a pro rata basis based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall the number of Registrable Securities underwritten in such registration be limited unless and until all shares held by persons other than Holders, including the Company, are completely excluded from such offering. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration.
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(c) The Company shall not be required to effect a registration pursuant to this Section 2.2:
(i) prior to the earlier of (A) the sixth anniversary of the date of this Agreement or (B) of the expiration of the restrictions on transfer set forth in Section 2.11 following the Initial Offering;
(ii) after the Company has effected two registrations pursuant to this Section 2.2, and such registrations have been declared or ordered effective;
(iii) during the period starting with the date of filing of, and ending on the date 180 days following the effective date of the registration statement pertaining to the Initial Offering (or such longer period as may be determined pursuant to Section 2.11 hereof); provided that the Company makes reasonable good faith efforts to cause such registration statement to become effective;
(iv) if within 30 days of receipt of a written request from Initiating Holders pursuant to Section 2.2(a), the Company gives notice to the Holders of the Company’s intention to file a registration statement for its Initial Offering within 90 days;
(v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2 a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board of Directors of the Company (the “Board”), it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than 180 days after receipt of the request of the Initiating Holders; provided that such right to delay a request shall be exercised by the Company not more than twice in any 12-month period;
(vi) if the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or
(vii) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
2.3 Piggyback Registrations. The Company shall notify all Holders of Registrable Securities in writing at least 15 days prior to the filing of any registration statement under the Securities Act for purposes of a public offering of securities of the Company (including, but not limited to, registration statements relating to secondary offerings of securities of the Company, but excluding Special Registration Statements) and will afford each such Holder an opportunity to include in such registration statement all or part of such Registrable Securities held by such Holder.
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Each Holder desiring to include in any such registration statement all or any part of the Registrable Securities held by it shall, within 15 days after the above-described notice from the Company, so notify the Company in writing. Such notice shall state the intended method of disposition of the Registrable Securities by such Holder. If a Holder decides not to include all of its Registrable Securities in any registration statement thereafter filed by the Company, such Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent registration statement or registration statements as may be filed by the Company with respect to offerings of its securities, all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement of which the Company gives notice under this Section 2.3 is for an underwritten offering, the Company shall so advise the Holders of Registrable Securities. In such event, the right of any such Holder to include Registrable Securities in a registration pursuant to this Section 2.3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Securities through such underwriting shall enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the Company determines in good faith, based on consultation with the underwriter, that marketing factors require a limitation of the number of shares to be underwritten, the number of shares that may be included in the underwriting shall be allocated, first, to the Company; second, to the Holders on a pro rata basis based on the total number of Registrable Securities held by the Holders; and third, to any stockholder of the Company (other than a Holder) on a pro rata basis; provided, however, that no such reduction shall reduce the amount of securities of the selling Holders included in the registration below 25% of the total amount of securities included in such registration, unless such offering is the Initial Offering and such registration does not include shares of any other selling stockholders, in which event any or all of the Registrable Securities of the Holders may be excluded in accordance with the immediately preceding clause. In no event will shares of any other selling stockholder be included in such registration that would reduce the number of shares which may be included by Holders without the written consent of Holders of not less than a majority of the Registrable Securities proposed to be sold in the offering. If any Holder disapproves of the terms of any such underwriting, such Holder may elect to withdraw therefrom by written notice to the Company and the underwriter, delivered at least 10 business days prior to the effective date of the registration statement. Any Registrable Securities excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Holder which is a partnership, limited liability company or corporation, the partners, retired partners, members, retired members and stockholders of such Holder, or the estates and family members of any such partners, retired partners, members and retired members and any trusts for the benefit of any of the foregoing person shall be deemed to be a single “Holder,” and any pro rata reduction with respect to such “Holder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “Holder,” as defined in this sentence.
(b) Right to Terminate Registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 whether or not any Holder has elected to include securities in such registration. The Registration Expenses of such withdrawn registration shall be borne by the Company in accordance with Section 2.5 hereof.
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2.4 Form S-3 Registration. If at any time when it is eligible to use a Form S-3 registration statement, the Company receives a request from Holders of at least thirty percent (30%) of the Registrable Securities then outstanding (or any successor to Form S-3) or any similar short-form registration statement and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holders, the Company will:
(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders of Registrable Securities; and
(b) as soon as practicable, effect such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 2.4:
(i) if Form S-3 is not available for such offering by the Holders;
(ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less than $1,000,000;
(iii) if within 30 days of receipt of a written request from any Holders pursuant to this Section 2.4, the Company gives notice to such Holders of the Company’s intention to make a public offering within 90 days, other than pursuant to a Special Registration Statement;
(iv) if the Company shall furnish to the Holders a certificate signed by the Chairman of the Board stating that in the good faith judgment of the Board, it would be materially detrimental to the Company and its stockholders for such Form S-3 registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the request of the Holders under this Section 2.4; provided, that such right to delay a request shall be exercised by the Company not more than twice in any 12-month period;
(v) if the Company has already effected three registrations on Form S-3 for the Holders pursuant to this Section 2.4;
(vi) if the Company has, within the 12-month period preceding the date of such request, already effected two registrations on Form S-3 for the Holders pursuant to this Section 2.4; or
(vii) in any particular jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance.
(c) Subject to the foregoing, the Company shall file a Form S-3 registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the requests of the Holders. Registrations effected pursuant to this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Section 2.2.
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2.5 Expenses of Registration. Except as specifically provided herein, all Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2.2, 2.3, or 2.4 herein shall be borne by the Company. All Selling Expenses incurred in connection with any registrations hereunder, shall be borne by the holders of the securities so registered pro rata on the basis of the number of shares so registered. The Company shall not, however, be required to pay for expenses of any registration proceeding begun pursuant to Sections 2.2 or 2.4, the request of which has been subsequently withdrawn by the Initiating Holders unless (a) the withdrawal is based upon material adverse information concerning the Company of which the Initiating Holders were not aware at the time of such request or (b) the Holders of at least a majority of Registrable Securities agree to deem such registration to have been effected as of the date of such withdrawal for purposes of determining whether the Company shall be obligated pursuant to Sections 2.2 or 2.4, as applicable, to undertake any subsequent registration, in which event such right shall be forfeited by all Holders. If the Holders are required to pay the Registration Expenses, such expenses shall be borne by the holders of securities (including Registrable Securities) requesting such registration in proportion to the number of shares for which registration was requested. If the Company is required to pay the Registration Expenses of a withdrawn offering pursuant to clause (a) above, then such registration shall not be deemed to have been effected for purposes of determining whether the Company shall be obligated pursuant to Sections 2.2 or 2.4, as applicable, to undertake any subsequent registration.
2.6 Obligations of the Company. Whenever required to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:
(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of at least a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 30 days or, if earlier, until the Holder or Holders have completed the distribution related thereto; provided, however, that at any time, upon written notice to the participating Holders and for a period not to exceed 60 days thereafter (the “Suspension Period”), the Company may delay the filing or effectiveness of any registration statement or suspend the use or effectiveness of any registration statement (and the Initiating Holders hereby agree not to offer or sell any Registrable Securities pursuant to such registration statement during the Suspension Period) if the Company reasonably believes that there is or may be in existence material nonpublic information or events involving the Company, the failure of which to be disclosed in the prospectus included in the registration statement could result in a Violation (as defined below). In the event that the Company shall exercise its right to delay or suspend the filing or effectiveness of a registration hereunder, the applicable time period during which the registration statement is to remain effective shall be extended by a period of time equal to the duration of the Suspension Period. The Company may extend the Suspension Period for an additional consecutive 60 days with the consent of the holders of at least a majority of the Registrable Securities registered under the applicable registration statement, which consent shall not be unreasonably withheld. If so directed by the Company, all Holders registering shares under such registration statement shall (i) not offer to sell any
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Registrable Securities pursuant to the registration statement during the period in which the delay or suspension is in effect after receiving notice of such delay or suspension; and (ii) use their best efforts to deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holders’ possession, of the prospectus relating to such Registrable Securities current at the time of receipt of such notice. Notwithstanding the foregoing, the Company shall not be required to file, cause to become effective or maintain the effectiveness of any registration statement other than a registration statement on Form S-3 that contemplates a distribution of securities on a delayed or continuous basis pursuant to Rule 415 under the Securities Act.
(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for the period set forth in subsection (a) above.
(c) Furnish to the Holders such number of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.
(d) Use commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders; provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions.
(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.
(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing. The Company will use commercially reasonable efforts to amend or supplement such prospectus in order to cause such prospectus not to include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing.
(g) Use commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a letter, dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering addressed to the underwriters.
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2.7 Delay of Registration; Furnishing Information.
(a) No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.
(b) It shall be a condition precedent to the obligations of the Company to take any action pursuant to Sections 2.2, 2.3, or 2.4 that the selling Holders shall furnish to the Company such information regarding themselves, the Registrable Securities held by them and the intended method of disposition of such securities as shall be required to effect the registration of their Registrable Securities.
(c) The Company shall have no obligation with respect to any registration requested pursuant to Section 2.2 or Section 2.4 if the number of shares or the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the number of shares or the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in Section 2.2 or Section 2.4, whichever is applicable.
2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under Sections 2.2, 2.3, or 2.4:
(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers and directors of each Holder, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “Violation”) by the Company: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law in connection with the offering covered by such registration statement; and the Company will reimburse each such Holder, partner, member, officer, director, underwriter or controlling person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Company,
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which consent shall not be unreasonably withheld, nor shall the Company be liable in any such case for any such loss, claim, damage, liability or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such Holder, partner, member, officer, director, underwriter or controlling person of such Holder.
(b) To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration qualifications or compliance is being effected, indemnify and hold harmless the Company, each of its directors, its officers and each person, if any, who controls the Company within the meaning of the Securities Act, any underwriter and any other Holder selling securities under such registration statement or any of such other Holder’s partners, directors or officers or any person who controls such Holder, against any losses, claims, damages or liabilities (joint or several) to which the Company or any such director, officer, controlling person, underwriter or other such Holder, or partner, director, officer or controlling person of such other Holder may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages or liabilities (or actions in respect thereto) arise out of or are based upon any of the following statements: (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement or incorporated reference therein, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act (collectively, a “Holder Violation”), in each case to the extent (and only to the extent) that such Holder Violation occurs in reliance upon and in conformity with written information furnished by such Holder under an instrument duly executed by such Holder and stated to be specifically for use in connection with such registration; and each such Holder will reimburse any legal or other expenses reasonably incurred by the Company or any such director, officer, controlling person, underwriter or other Holder, or partner, officer, director or controlling person of such other Holder in connection with investigating or defending any such loss, claim, damage, liability or action if it is judicially determined that there was such a Holder Violation; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld; provided further, that in no event shall any indemnity under this Section 2.8 exceed the net proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party shall have the right to retain its own counsel, with the fees and expenses thereof to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The
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failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.8 to the extent, and only to the extent, prejudicial to its ability to defend such action, but the omission so to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.8.
(d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any losses, claims, damages or liabilities referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall to the extent permitted by applicable law contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the Violation(s) or Holder Violation(s) that resulted in such loss, claim, damage or liability, as well as any other relevant equitable considerations. The relative fault of the indemnifying party and of the indemnified party shall be determined by a court of law by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission; provided, that in no event shall any contribution by a Holder hereunder exceed the net proceeds from the offering received by such Holder.
(e) The obligations of the Company and Holders under this Section 2.8 shall survive completion of any offering of Registrable Securities in a registration statement and, with respect to liability arising from an offering to which this Section 2.8 would apply that is covered by a registration filed before termination of this Agreement, such termination. No indemnifying party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation.
2.9 Assignment of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned by a Holder to a transferee or assignee of Registrable Securities (for so long as such shares remain Registrable Securities) that (a) is a subsidiary, parent, general partner, limited partner, former partner, member or former member of a Holder that is a corporation, partnership or limited liability company, (b) is a Holder’s family member or trust for the benefit of an individual Holder, (c) acquires at least 50,000 shares of Registrable Securities (as adjusted for stock splits and combinations) or (d) is a fund that is controlled by or under common control with one or more current or former general partners or managing members of, or shares the same management company with, the Holder; provided, however, (i) the transferor shall, promptly furnish to the Company written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned and (ii) such transferee shall agree to be subject to all restrictions set forth in this Agreement.
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2.10 Limitation on Subsequent Registration Rights. Other than as provided in Section 5.10, after the date of this Agreement, the Company shall not, without the written consent of Holders of at least a majority of the Registrable Securities then outstanding, enter into any agreement with any holder or prospective holder of any securities of the Company that would grant such holder rights to demand the registration of shares of the Company’s capital stock, or to include such shares in a registration statement that would reduce the number of shares includable by the Holders.
2.11 “Market Stand-Off” Agreement. Each Holder hereby agrees that such Holder shall not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock (or other securities of the Company) held by such Holder immediately before the effective date of the registration statement for the Initial Offering (other than those included in the registration) during the 180-day period following the effective date of the Initial Offering (or such longer period as the underwriters or the Company shall request in order to facilitate compliance with NASD Rule 2711 or NYSE Member Rule 472 or any successor or similar rule or regulation); provided, that all officers and directors of the Company and holders of at least 1% of the Company’s voting securities are bound by and have entered into similar agreements. The foregoing provisions of this Section 2.11 shall apply only to the Initial Offering and shall not apply to the establishment of a trading plan pursuant to Rule 10b5-1, provided that such plan does not permit transfers during the restricted period. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply pro rata to all Company stockholders that are subject to such agreements, based on the number of shares subject to such agreements.
2.12 Agreement to Furnish Information. Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the managing underwriters that are consistent with the Holder’s obligations under Section 2.11 or that are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities of the Company), each Holder shall provide, within 10 days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in Section 2.11 and this Section 2.12 shall not apply to a Special Registration Statement. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to such shares of Common Stock (or other securities of the Company) until the end of such period. Each Holder agrees that any transferee of any shares of Registrable Securities shall be bound by Sections 2.11 and 2.12. The underwriters of the Company’s stock are intended third party beneficiaries of Sections 2.11 and 2.12 and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
2.13 Rule 144 Reporting. With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which may permit the sale of the Registrable Securities to the public without registration, the Company agrees to use commercially reasonable efforts to:
(a) Make and keep public information available, as those terms are understood and defined in Rule 144 or any similar or analogous rule promulgated under the Securities Act, at all times after the effective date of the first registration filed by the Company for an offering of its securities to the general public;
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(b) File with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act; and
(c) So long as a Holder owns any Registrable Securities, furnish to such Holder forthwith upon request: a written statement by the Company as to its compliance with the reporting requirements of Rule 144 and of the Exchange Act (at any time after it has become subject to such reporting requirements); a copy of the most recent annual or quarterly report of the Company filed with the Commission; and such other reports and documents as a Holder may reasonably request in connection with availing itself of any rule or regulation of the SEC allowing it to sell any such securities without registration.
2.14 Termination of Registration Rights. The right of any Holder to request registration or inclusion of Registrable Securities in any registration pursuant to Section 2.2, Section 2.3, or Section 2.4 hereof shall terminate upon the earlier of: (i) the date three years following an Initial Offering that results in the conversion of all outstanding shares of Preferred Stock; (ii) as to any particular Holder, following the Qualified IPO (as defined in the Company’s Third Amended and Restated Certificate of Incorporation (the “Restated Charter”)) (a “Qualified IPO”), at such time as all Registrable Securities issuable or issued upon conversion of the Shares held by and issuable to such Holder (and its affiliates) may be sold pursuant to Rule 144 during any 90-day period, or (iii) the closing of a Liquidation Event, as such term is defined in the Restated Charter. Upon such termination, such shares shall cease to be “Registrable Securities” hereunder for all purposes.
SECTION 3. COVENANTS.
3.1 Basic Financial Information and Reporting.
(a) The Company will maintain true books and records of account in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP (except as noted therein or as disclosed to the recipients thereof), and will set aside on its books all such proper accruals and reserves as shall be required under GAAP.
(b) To the extent requested by a Major Investor, as soon as practicable after the end of each fiscal year of the Company, and in any event within 90 days thereafter, the Company will furnish such Major Investor a balance sheet of the Company, as at the end of such fiscal year, and a statement of income, shareholders’ equity and a statement of cash flows of the Company, for such year, all prepared in accordance with GAAP (except as noted therein or as disclosed to the recipients thereof) and setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail. Such financial statements shall be audited by independent public accountants of national standing selected by the Board.
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(c) To the extent requested by a Major Investor, the Company will furnish each Major Investor, as soon as practicable after the end of each half year accounting period in each fiscal year of the Company, and in any event within 60 days thereafter, a balance sheet of the Company as of the end of each such period, and a statement of income and a statement of cash flows of the Company for such period, each prepared in accordance with GAAP (except as noted therein or as disclosed to the recipients thereof), with the exception that no notes need be attached to such statements and year-end audit adjustments may not have been made.
(d) To the extent requested by a Major Investor, the Company will furnish each such Major Investor, as soon as practicable prior to the end of each fiscal year of the Company, and in any event at least 45 days prior to the beginning of the next fiscal year, an annual budget and operating plans for the next fiscal year (and as soon as available, any subsequent written revisions thereto).
(e) To the extent requested by a Major Investor no more than once per each quarter of each fiscal year of the Company, the Company will provide such Major Investor a detailed capitalization table.
3.2 Inspection Rights. Each Major Investor shall have the right to visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review such information as is reasonably requested all at such reasonable times and as often as may be reasonably requested; provided, however, that the Company shall not be obligated under this Section 3.2 to provide access to any information that it reasonably and in good faith considers to be a trade secret or confidential information or the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel.
3.3 Confidentiality of Records. Each Investor agrees to use the same degree of care as such Investor uses to protect its own confidential information to keep confidential any information furnished to such Investor that the Company identifies as being confidential or proprietary (so long as such information is not in the public domain), except that such Investor may disclose such proprietary or confidential information (i) to any current, former or prospective partner, subsidiary or parent of such Investor as long as such partner, subsidiary or parent is advised of and agrees or has agreed to be bound by the confidentiality provisions of this Section 3.3 or comparable restrictions; (ii) at such time as it enters the public domain through no fault of such Investor; (iii) that is communicated to it free of any obligation of confidentiality; (iv) that is developed by Investor or its agents independently of and without reference to any confidential information communicated by the Company; or (v) as required by applicable law. .
3.4 Observer Right.
(a) As long as Vivo Innovation Fund II Holdings, L.P. (“Vivo”) and OrbiMed Private Investments VIII, LP (“OrbiMed”) collectively continue to maintain a right to designate at least one member of the Board, the Company shall invite a representative of designated by the mutual agreement of Vivo and Orbimed to attend all meetings of the Board (or any committee thereof) in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that such representative shall agree to hold in confidence all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or create a conflict of interest.
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(b) As long as Cormorant Private Healthcare Fund III, LP, Cormorant Global Healthcare Master Fund, LP, and CRMA SPV, L.P. (collectively, “Cormorant”) collectively continue to maintain a right to designate at least one member of the Board, the Company shall invite a representative of designated by Cormorant to attend all meetings of the Board (or any committee thereof) in a nonvoting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents, and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that such representative shall agree to hold in confidence all information so provided; and provided further, that the Company reserves the right to withhold any information and to exclude such representative from any meeting or portion thereof if access to such information or attendance at such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or create a conflict of interest.
3.5 Reservation of Common Stock. The Company will at all times reserve and keep available, solely for issuance and delivery upon the conversion of the Preferred Stock, all Common Stock issuable from time to time upon such conversion.
3.6 Stock Vesting. Unless otherwise approved by the Board, all stock options and other stock equivalents issued after the date of this Agreement to employees, directors, consultants and other service providers shall be subject to vesting as follows: (a) 25% of such stock shall vest at the end of the first year following the earlier of the date of issuance or such person’s services commencement date with the Company, and (b) 75% of such stock shall vest over the next three years. Employees purchasing shares pursuant to early exercise stock purchase agreements shall be subject to a repurchase option which will provide that upon termination of the employment of the stockholder, the Company has the option to repurchase at cost any unvested shares held by such stockholder.
3.7 Employment Agreements. Within a reasonable time following the Initial Closing (as defined in the Purchase Agreement), the Board will establish an performance based incentive package for the Company’s President and Chief Executive Officer, Jingrong Jean Cui, and the Company’s Executive Chairman, which consists of equity options (up to a maximum of 100,000 shares each) and cash bonuses (up to a maximum of $100,000 each) in line with biotech industry benchmark.
3.8 Director and Officer Insurance. The Company will use commercially reasonable efforts to obtain and maintain in full force and effect director and officer liability insurance in an amount customary for similarly situated companies and acceptable to the Board.
3.9 Proprietary Information and Inventions Agreement. The Company shall require all current officers, employees and consultants to execute and deliver a Proprietary Information and Inventions Agreement substantially in a form approved by the Board.
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3.10 Approval of Preferred Directors. The Company shall not, without the prior approval of the Board, including approval of the Preferred Angel Director, a majority of the Preferred A Directors, and at least one (1) Preferred B Director:
(a) except as provided herein, redeem any Common Stock or Preferred Stock or repay any debt other than bank debt or debt incurred in the ordinary course of business;
(b) repurchase any shares of the Company, except from the current or former employees, directors or consultants of the Company under the terms of any stock option plans in effect, and except in accordance with the Restated Charter;
(c) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other entity (other than a wholly owned subsidiary corporation) or effect any transaction or series of related transactions in which more than 50% of the voting power of the Company is disposed of;
(d) amend the Restated Charter or Bylaws of the Company, or change the authorized size of the Company’s Board of Directors; or
(e) liquidate or dissolve the Company;
(f) sell any shares held by the Company in any of its subsidiaries;
(g) make any loans or advances to employees in excess of $10,000 (other than in the ordinary course of business as part of travel advances or salary);
(h) make guarantees in excess of $25,000 (other than in the ordinary course of business);
(i) mortgage or pledge, or create a security interest in, or permit any subsidiary to mortgage, pledge or create a security interest in, all or substantially all of the property of the corporation or such subsidiary of the Company;
(j) remove, destroy, lease, transfer, assign, sell or license any intellectual property of the company or subsidiaries (other than in the ordinary course of business);
(k) acquire substantially all the assets, intellectual property, or business of another subsidiary, company or corporation;
(l) own, or permit any subsidiary of the corporation to own, any stock or other securities of any subsidiary of the Company or other corporation, partnership or entity unless it is wholly owned by the corporation;
(m) sell any shares held by the Company in any of its subsidiaries;
(n) make any material changes to the Company’s existing lines of business;
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(o) hire, appoint, terminate, remove, or change the compensation of the executive officers, including approving any option grants or stock awards to executive officers;
(p) increase or decrease the authorized number of directors constituting the Board of Directors; provided, however, that this Section 3.9(p) shall not apply to an increase in the authorized number of directors that occurs in accordance with Section 1.2(h) of that certain Third Amended and Restated Voting Agreement of the Company, dated of even date herewith;
(q) enter into any transaction between or involving (x) the Company (or any affiliate thereof) and (y) any officer, director, employee, consultant, or stockholder of the Company (or any affiliate of any such party), other than commercially reasonable employment and equity incentive agreements;
(r) amend the Restated Charter or Bylaws of the Company; or
(s) commit to any of the foregoing.
3.11 Directors’ Liability and Indemnification. The Restated Charter and Bylaws shall provide (a) for elimination of the liability of directors to the maximum extent permitted by law and (b) for indemnification of directors for acts on behalf of the Company to the maximum extent permitted by law. In addition, the Company shall enter into and use commercially reasonable efforts to at all times maintain indemnification agreements in a form approved by the Board. The Company hereby acknowledges that one (1) or more of the directors nominated to serve on the Board of Directors by one (1) or more Investors may have certain rights to indemnification, advancement of expenses and/or insurance provided by one (1) or more of the Investors and certain of their Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such director are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such director and shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such director to the extent legally permitted and as required by the Restated Charter or Bylaws of the Company (or any agreement between the Company and such director), without regard to any rights such director may have against the Investor Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Investor Indemnitors from any and all claims against the Investor Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Investor Indemnitors on behalf of any such director with respect to any claim for which such director has sought indemnification from the Company shall affect the foregoing and the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Preferred Director against the Company. If the Company or any of its successors or assignees consolidates with or merges into any other entity and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Restated Charter, or elsewhere, as the case may be. The directors and the Investor Indemnitors are intended third-party beneficiaries of this Section 3.10 and shall have the right, power and authority to enforce the provisions of this Section 3.10 as though they were a party to this Agreement.
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3.12 Board Matters. The Company shall reimburse the nonemployee directors for all reasonable out-of-pocket travel expenses incurred (consistent with the Company’s travel policy) in connection with attending meetings of the Board. The Company shall cause to be established, as soon as practicable after such request, and will maintain, an audit and compensation committee, each of which shall consist solely of non-management directors. Each non-employee director shall be entitled in such person’s discretion to be a member of each committee of the Board of Directors.
3.13 RESERVED.
3.14 Waiver of Statutory Information Rights. Each Investor hereby acknowledges and agrees that until the consummation of the Initial Offering, such Investor shall hereby be deemed to have unconditionally and irrevocably, to the fullest extent permitted by law, on behalf of such Investor and all beneficial owners of the shares of Common Stock or Preferred Stock owned by such Investor (a “Beneficial Owner”), waived, and does hereby so waive, any rights such Investor or a Beneficial Owner might otherwise have had under Section 220 of the DGCL (as defined below) (or under similar rights under other applicable law) to inspect for any proper purpose and to make copies and extracts from the Company’s stock ledger, a list of its stockholders and its other books and records or the books and records of any subsidiary. This waiver applies only in such Investor’s capacity as a stockholder and does not affect any other information and inspection rights such Investor may expressly have pursuant to Sections 3.1, or 3.2 of this Agreement. Each Investor hereby further warrants and represents that such Investor has reviewed this waiver with its legal counsel, and that such Investor knowingly and voluntarily waives its rights as a stockholder otherwise provided by Section 220 of the DGCL (or under similar rights under other applicable law).
3.15 Termination of Covenants. All covenants contained in Section 3 of this Agreement (other than the provisions of Sections 3.3, and 3.10 shall expire and terminate as to each Investor upon the earlier of (i) the effective date of the registration statement pertaining to a Qualified IPO or (ii) upon an Acquisition, Asset Transfer or other Liquidation Event (each as defined in the Restated Charter) pursuant to which the stockholders of the Company receive only cash or marketable securities.
SECTION 4. RIGHTS OF FIRST REFUSAL.
4.1 Subsequent Offerings.
(a) Subject to Section 4.1(b) and applicable securities laws, each Major Investor shall have a right of first refusal to purchase its pro rata share of all Equity Securities, as defined below, that the Company may, from time to time, propose to sell and issue after the date of this Agreement, other than the Equity Securities excluded by Section 4.6 hereof. Each Major Investor’s pro rata share is equal to the ratio of (i) the number of shares of the Common Stock (including all shares of Common Stock issuable or issued upon conversion of the Shares or upon the exercise of outstanding warrants or options) of which such Major Investor is deemed to be a holder immediately prior to the issuance of such Equity Securities to (ii) the total number of shares of Common Stock outstanding (including all shares of Common Stock issued or issuable upon conversion of the Shares or upon the exercise of any outstanding warrants or options) immediately prior to the issuance of the Equity Securities.
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(b) Notwithstanding Section 4.1(a), each Investor holding at least 3,748,387 shares of Series A Preferred or 3,778,940 shares of Series B Preferred (each as adjusted for stock splits, combinations, reclassifications or the like) shall have the right of first refusal to purchase a number of shares of Equity Securities that the Company may propose to sell and issue in the next equity financing after the date of this Agreement that results in aggregate gross proceeds to the Company of not less than $75,000,000, other than the Equity Securities excluded by Section 4.6 hereof, equal to (i) $15,000,000 divided by (ii) the price per share of the Equity Securities being sold in such equity financing.
4.2 Exercise of Rights. If the Company proposes to issue any Equity Securities, it shall give each Major Investor written notice of its intention, describing the Equity Securities, the price and the terms and conditions upon which the Company proposes to issue the same. Each Major Investor shall have 15 days from the giving of such notice to agree to purchase its pro rata share of the Equity Securities for the price and upon the terms and conditions specified in the notice by giving written notice to the Company and stating therein the quantity of Equity Securities to be purchased. Notwithstanding the foregoing, the Company shall not be required to offer or sell such Equity Securities to any Major Investor who would cause the Company to be in violation of applicable federal securities laws by virtue of such offer or sale.
4.3 Issuance of Equity Securities to Other Persons. If not all of the Major Investors elect to purchase their pro rata share of the Equity Securities, then the Company shall promptly notify in writing the Major Investors who do so elect and shall offer such Major Investors the right to acquire such unsubscribed shares on a pro rata basis. The Major Investors shall have five days after receipt of such notice to notify the Company of its election to purchase all or a portion thereof of the unsubscribed shares. The Company shall have 90 days thereafter to sell the Equity Securities in respect of which the Major Investor’s rights were not exercised, at a price not lower and upon general terms and conditions not materially more favorable to the purchasers thereof than specified in the Company’s notice to the Major Investors pursuant to Section 4.2 hereof. If the Company has not sold such Equity Securities within 90 days of the notice provided pursuant to Section 4.2, the Company shall not thereafter issue or sell any Equity Securities, without first offering such securities to the Major Investors in the manner provided above.
4.4 Termination and Waiver of Participation. The rights of first refusal established by this Section 4 shall not apply to, and shall terminate upon the earlier of (i) the effective date of the registration statement pertaining to a the Initial Offering, (ii) an Acquisition, Asset Transfer or other Liquidation Event in which the consideration paid to the Company’s stockholders is solely cash and/or marketable securities or (iii) solely with respect to any Major Investor, the date on which such Major Investor is offered a right of first refusal in accordance with Section 4.2 and elects not to exercise such right. Notwithstanding Section 5.5 hereof, the rights of first refusal established by this Section 4 may be amended, or any provision waived with and only with the written consent of the Company and the Major Investors holding at least a majority of the Registrable Securities held by all Major Investors, excluding any such Major Investor who is participating with respect to the offering to which such wavier relates.
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4.5 Assignment of Rights of First Refusal. The rights of first refusal of each Major Investor under this Section 4 may be assigned to the same parties, subject to the same restrictions as any transfer of registration rights pursuant to Section 2.9.
4.6 Excluded Securities. The rights of first refusal in this Section 4 shall not be applicable to Exempted Securities.
4.7 Post-Closing Notice. Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 4, the Company may elect to give notice to the Major Investors within thirty (30) days after the issuance of Equity Securities. Such notice shall describe the type, price, and terms of the Equity Securities. Each Major Investor shall have twenty (20) days from the date notice is given to elect to purchase up to the number of Equity Securities that would, if purchased by such Major Investor, maintain such Major Investor’s percentage- ownership position, calculated as set forth in Section 4.1 before giving effect to the issuance of such Equity Securities. The rights of first refusal established by this Section 4 shall have no application to the Exempted Securities.
SECTION 5. MISCELLANEOUS.
5.1 Governing Law.
(a) This Agreement shall be governed by and construed under the laws of the State of Delaware in all respects as such laws are applied to agreements among California residents entered into and to be performed entirely within Delaware, without reference to conflicts of laws or principles thereof.
(b) The parties agree that any action brought by either party under or in relation to this Agreement, including without limitation to interpret or enforce any provision of this Agreement, shall be brought in, and each party agrees to and does hereby submit to the jurisdiction and venue of, any state or federal court located in the County of San Diego, State of California.
(c) WAIVER OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
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5.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors, assigns, heirs, executors, and administrators and shall inure to the benefit of and be enforceable by each person who shall be a holder of Registrable Securities from time to time; provided, however, that prior to the receipt by the Company of adequate written notice of the transfer of any Registrable Securities specifying the full name and address of the transferee, the Company may deem and treat the person listed as the holder of such shares in its records as the absolute owner and holder of such shares for all purposes, including the payment of dividends or any redemption price.
5.3 Entire Agreement. This Agreement, the Exhibits and Schedules hereto, the Purchase Agreement and the other documents delivered pursuant thereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any oral or written representations, warranties, covenants and agreements except as specifically set forth herein and therein. Each party expressly represents and warrants that it is not relying on any oral or written representations, warranties, covenants or agreements outside of this Agreement. Upon the effectiveness of this Agreement, the Prior IRA shall be deemed amended and restated and superseded and replaced in its entirety by this Agreement, and shall be of no further force or effect.
5.4 Severability. In the event one or more of the provisions of this Agreement should, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
5.5 Amendment and Waiver.
(a) Except as otherwise expressly provided, this Agreement may be amended or modified, and the obligations of the Company and the rights of the Holders or Investors (as the case may be) under this Agreement may be waived, only upon the written consent of the Company and the holders of at least 75% of the Registrable Securities then outstanding; provided however that (i) Section 3.4(a) shall not be amended or waived without the consent of Vivo and OrbiMed and (ii) Section 3.4(b) shall not be amended or waived without the consent of Cormorant; and provided further that, in addition to any other approval requirement hereunder, the amendment or waiver of any right or obligation of the Major Investor shall require the approval of a the holders of a majority of the Registrable Securities held by the Major Investors. Notwithstanding the foregoing this Agreement may not be amended, modified or terminated and the observance of any term hereof may not be waived with respect to any Investor without the written consent of such Investor, unless such amendment, modification, termination, or waiver applies to all similarly situated Investors in the same fashion.
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(b) For the purposes of determining the number of Holders or Investors entitled to vote or exercise any rights hereunder, the Company shall be entitled to rely solely on the list of record holders of its stock as maintained by or on behalf of the Company.
5.6 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power, or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power, or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent, or approval of any kind or character on any party’s part of any breach, default or noncompliance under the Agreement or any waiver on such party’s part of any provisions or conditions of this Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, by law, or otherwise afforded to any party, shall be cumulative and not alternative.
5.7 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the party to be notified at the address as set forth on the signature pages hereof or Exhibit A hereto or at such other address or electronic mail address as such party may designate by 10 days advance written notice to the other parties hereto. Each Investor consents to the delivery of any stockholder notice pursuant to the Delaware General Corporation Law (the “DGCL”), as amended or superseded from time to time, by electronic transmission pursuant to Section 232 of the DGCL (or any successor thereto) at the e-mail address set forth below such Investor’s name on the signature page or EXHIBIT A, as updated from time to time by notice to the Company. To the extent that any notice given by means of electronic transmission is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected e-mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each Investor agrees to promptly notify the Company of any change in its e-mail address, and that failure to do so shall not affect the foregoing.
5.8 Attorneys’ Fees. In the event that any suit or action is instituted under or in relation to this Agreement, including without limitation to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all reasonable fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals.
5.9 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.
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5.10 Additional Investors. Notwithstanding anything to the contrary contained herein, if the Company shall issue additional shares of its Preferred Stock pursuant to the Purchase
Agreement, any purchaser of such shares of Preferred Stock shall become a party to this Agreement by executing and delivering an additional counterpart signature page to this Agreement and shall be deemed an “Investor,” a “Holder” and a party hereunder.
5.11 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
5.12 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated entities or persons or persons or entities under common management or control shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
5.13 Pronouns. All pronouns contained herein, and any variations thereof, shall be deemed to refer to the masculine, feminine or neutral, singular or plural, as to the identity of the parties hereto may require.
5.14 Termination. Except with respect to the sections hereof which have specific termination terms, this Agreement shall terminate and be of no further force or effect upon the earlier of: (i) an Acquisition, Asset Transfer or other Liquidation Event in which the consideration paid to the Company’s stockholders is solely cash and/or marketable securities; or (ii) the date three years following the Qualified IPO.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
| COMPANY: | ||
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| Signature: | /s/ Jingrong Jean Cui | |
| Print Name: Jingrong Jean Cui | ||
| Title: President and Chief Executive Officer | ||
| Address: | 3525 John Hopkins Court, Suite 100 San Diego, CA 92121 | |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date set forth in the first paragraph hereof.
| INVESTOR(S): | ||
| THE LI AND CUI FAMILY TRUST | ||
| Signature: | /s/ Yishan Li | |
| Print Name: Yishan Li | ||
| Title: Trustee
| ||
| (if applicable) | ||
| THE CATHERINE ZHINAN LI GST EXEMPT TRUST | ||
| Signature: | /s/ Jianian Zhang | |
| Print Name: Jianian Zhang | ||
| Title: Trustee
| ||
| (if applicable) | ||
| THE JACQUELINE ZHISHAN LI GST EXEMPT TRUST | ||
| Signature: | /s/ Jianian Zhang | |
| Print Name: Jianian Zhang | ||
| Title: Trustee
| ||
| (if applicable) | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| VIVO INNOVATION FUND II HOLDINGS, L.P. | ||
| By: |
Vivo Innovation II, LLC, General Partner | |
| By: | /s/ Hongbo Lu | |
| Name: Hongbo Lu | ||
| Title: Managing Member | ||
| Address for Notices: | ||
| [***] | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| OrbiMed Private Investments VIII, LP | ||
| By: | OrbiMed Capital GP VIII LLC,its General Partner | |
| By: | OrbiMed Advisors LLC,its Managing Member | |
| By: | /s/ Carl Gordon | |
| Name: Carl Gordon | ||
| Title: Member | ||
| Address for Notices: | ||
| [***] | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| CORMORANT PRIVATE HEALTHCARE FUND III, LP | ||
| By: | Cormorant Private Healthcare GP III, LLC | |
| By: | /s/ Bihua Chen | |
| Name: Bihua Chen | ||
| Title: Managing Member | ||
| CORMORANT PRIVATE HEALTHCARE FUND V, LP | ||
| By: |
Cormorant Private Healthcare GP V, LLC | |
| By: | /s/ Bihua Chen | |
| Name: Bihua Chen | ||
| Title: Managing Member | ||
| CORMORANT GLOBAL HEALTHCARE MASTER FUND, LP | ||
| By: | Cormorant Global Healthcare GP, LLC | |
| By: | /s/ Bihua Chen | |
| Name: Bihua Chen | ||
| Title: Managing Member | ||
| CRMA SPV, L.P. | ||
| By: | Cormorant Asset Management, LP | |
| By: | /s/ Bihua Chen | |
| Name: Bihua Chen | ||
| Title: Attorney-in-fact | ||
| Address for Notices to above Cormorant Entities: | ||
| [***] | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| HERCULES BIOVENTURE, L.P. | ||
| By: | /s/ George Lee | |
| Name: George Lee | ||
| Title: General Partner | ||
| HERCULES BIOVENTURE II, L.P. | ||
| By: | /s/ George Lee | |
| Name: George Lee | ||
| Title: General Partner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| JACK INVESTMENT CO., LTD. | ||
| By: | /s/ Fu-Lung Hsu | |
| Name: Fu-Lung Hsu | ||
| Title: CEO | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| CHAICO INVESTMENT CORPORATION | ||
| By: | /s/ Kevin Liao | |
| Name: Kevin Liao | ||
| Title: Director | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| BIO INTECH, LTD. | ||
| By: | /s/ Ya-Huei Chen-Huang | |
| Name: Ya-Huei Chen-Huang | ||
| Title: Director | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| MONEF VENTURES, LLC | ||
| By: | /s/ Kimberly L. Chu | |
| Name: Kimberly L. Chu | ||
| Title: Manager | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| HONG TAI ELECTRIC INDUSTRIAL CO. LTD. | ||
| By: | /s/ Lawrence Li Chen | |
| Name: Lawrence Li Chen | ||
| Title: Vice President | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| EUREKA BIOVENTURE PARTNERS | ||
| By: | /s/ George Lee | |
| Name: George Lee | ||
| Title: General Partner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Chieh-Chih Chen | ||
| Name: | Chieh-Chih Chen | |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Hsiu-Hui Chang | ||
| Name: | Hsiu-Hui Chang | |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Ju-Yin Chang | ||
| Name: | Ju-Yin Chang | |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Chun-I Lee | ||
| Name: | Chun-I Lee | |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Megan S. Lee |
| Name: Megan S. Lee |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| KENSON VENTURES, LLC | ||
| By: | /s/ Kenneth Fong | |
| Name: Kenneth Fong | ||
| Title: Chairman | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| ISABELLA FONG AND ELENA FONG TRUSTS | ||
| By: | /s/ Kenneth Fong | |
| Name: Kenneth Fong | ||
| Title: Chairman | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Jingxiao Cui |
| Name: Jingxiao Cui |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Jingwei Cui |
| Name: Jingwei Cui |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Han Zhang |
| Name: Han Zhang |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Shengxin Zhang |
| Name: Shengxin Zhang |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Sai-Hong Ignatius Ou |
| Name: Sai-Hong Ignatius Ou |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Haiyan (George) Dai |
| Name: Haiyan (George) Dai |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Li Shen |
| Name: Li Shen |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| JUSO LLC | ||
| By: | /s/ Kraig Kayser | |
| Name: Kraig Kayser | ||
| Title: Owner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| COLT BLOSSOM HILL, LLC | ||
| By: | /s/ Sundeep Agrawal | |
| Name: Sundeep Agrawal | ||
| Title: General Partner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| FS VENTURE LTD. | ||
| By: | /s/ Liang, Hsiao-Chen | |
| Name: Liang, Hsiao-Chen | ||
| Title: Director | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| H&D ASSET MANAGEMENT CO., LTD. | ||
| By: | /s/ Ping-Yu Chu | |
| Name: Ping-Yu Chu | ||
| Title: Chairman | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| H&D NO. 3 INVESTMENT HOLDING LIMITED | ||
| By: | /s/ Cheng-Wei Chu | |
| Name: Cheng-Wei Chu | ||
| Title: Director | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Hsiu-Yueh Chen |
| Name: Hsiu-Yueh Chen |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| CDIB CAPITAL HEALTHCARE VENTURES II LIMITED PARTNERSHIP | ||
| By: | CDIB Capital Management Corporation its General Partner | |
| By: | /s/ James C. Ho | |
| Name: James C. Ho | ||
| Title: Chairman | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| HARBINGER VIII VENTURE CAPITAL CORP. | ||
| By: | /s/ TC Chou | |
| Name: TC Chou | ||
| Title: President | ||
| HARBINGER RUYI VENTURE LIMITED | ||
| By: | /s/ TC Chou | |
| Name: TC Chou | ||
| Title: President | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Ping-Yu Chu |
| Name: Ping-Yu Chu |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| RONGSHAN, LLC | ||
| By: | /s/ Yishan Li | |
| Name: Yishan Li | ||
| Title: Manager | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| KBD GROUP LLC | ||
| By: | /s/ Kenneth Fong | |
| Name: Kenneth Fong | ||
| Title: Chairman | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| HOLLY SPIRIT COMPANY, LTD. | ||
| By: | /s/ Chun Chien Shih | |
| Name: Chun Chien Shih | ||
| Title: | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| LION CREST LIMITED | ||
| By: | /s/ Lawrence Li Chen | |
| Name: Lawrence Li Chen | ||
| Title: Vice President | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Den-Nan Fu |
| Name: Den-Nan Fu |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Zhengtian Gu |
| Name: Zhengtian Gu |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ I-Hui Chen |
| Name: I-Hui Chen |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Szu-Jou Chen |
| Name: Szu-Jou Chen |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Wan-Hua Lee |
| Name: Wan-Hua Lee |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Chi-Chen Lee |
| Name: Chi-Chen Lee |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Jung-Min Liao |
| Name: Jung-Min Liao |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Abel Po-Hao Huang |
| Name: Abel Po-Hao Huang |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| MASTER LINK (ASIA) COMPANY LIMITED | ||
| By: | /s/ Anan Shi | |
| Name: Anan Shi | ||
| Title: Director | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Chih-Ming Chen |
| Name: Chih-Ming Chen |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| PRIMER VENTURES I, LP | ||
| By: | Primer Ventures I GP, LLC its General Partner | |
| By: | /s/ Alexis Ji | |
| Name: Alexis Ji | ||
| Title: Managing Member | ||
| Email: [***] | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Jingwei Cui |
| Name: Jingwei Cui |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| /s/ Meijuan Zhou |
| Name: Meijuan Zhou |
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| HOFFMAN FAMILY 2020 TRUST | ||
| By: | /s/ Lin Sun Hoffman | |
| Name: Lin Sun Hoffman | ||
| Title: Trustee | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| WALTER T. LIPTAK REVOCABLE TRUST | ||
| By: | /s/ Walter Liptak | |
| Name: Walter Liptak | ||
| Title: Owner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed this THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT as of the date first above written.
| PLAISANCE VENTURE FUND II L.P. | ||
| By: | /s/ Wen Zhang | |
| Name: Wen Zhang | ||
| Title: Managing Partner | ||
THIRD AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
SIGNATURE PAGE
JOINDER AGREEMENT AND COUNTERPART SIGNATURE PAGE
March 6, 2025
The undersigned delivers this Joinder Agreement and Counterpart Signature Page (this “Agreement”) in connection with the transfer to the undersigned of shares of capital stock (the “Shares”) of BlossomHill Therapeutics, Inc. (the “Company”) on the date hereof.
By execution and delivery of this Agreement, the undersigned hereby agrees to become a party to and be bound by the terms and conditions of each of the following agreements, or to the extent the undersigned is currently a party to such agreements, confirms that the undersigned remains bound by the terms and conditions of each, in each case in the same manner and same capacity as the transferor of the Shares is bound with respect to the Shares: that certain Third Amended and Restated Investors’ Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; that certain Third Amended and Restated Voting Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; and that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time;.
The undersigned further authorizes this signature page to be attached to the above-referenced agreements, or counterparts thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
| /s/ Jia-De Chu |
| Jia-De Chu |
MINOR TRANSFEREE’S PARENT OR LEGAL GUARDIAN:
I have read, understand, and on behalf of the Transferee, a minor for whom I have legal authority, I accept this Agreement and acknowledge having been given the opportunity to review it with independent legal counsel.
| /s/ Ping-Yu Chu |
March 6, 2025 | |
| Parent/Guardian Signature |
Date | |
| Ping-Yu Chu | ||
| Printed Name |
||
| /s/ Yuli Zhou |
March 6, 2025 | |
| Parent/Guardian Signature |
Date | |
| Yuli Zhou |
||
| Printed Name |
||
Agreed and Accepted:
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ Jingrong Jean Cui | |
| Name: | Jingrong Jean Cui | |
| Title: | President and Chief Executive Officer | |
JOINDER AGREEMENT AND COUNTERPART SIGNATURE PAGE
March 6, 2025
The undersigned delivers this Joinder Agreement and Counterpart Signature Page (this “Agreement”) in connection with the transfer to the undersigned of shares of capital stock (the “Shares”) of BlossomHill Therapeutics, Inc. (the “Company”) on the date hereof.
By execution and delivery of this Agreement, the undersigned hereby agrees to become a party to and be bound by the terms and conditions of each of the following agreements, or to the extent the undersigned is currently a party to such agreements, confirms that the undersigned remains bound by the terms and conditions of each, in each case in the same manner and same capacity as the transferor of the Shares is bound with respect to the Shares: that certain Third Amended and Restated Investors’ Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; that certain Third Amended and Restated Voting Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; and that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time;.
The undersigned further authorizes this signature page to be attached to the above-referenced agreements, or counterparts thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
| /s/ Yuli Zhou |
| Yuli Zhou |
Agreed and Accepted:
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ Jingrong Jean Cui | |
| Name: | Jingrong Jean Cui | |
| Title: | President and Chief Executive Officer | |
JOINDER AGREEMENT AND COUNTERPART SIGNATURE PAGE
March 6, 2025
The undersigned delivers this Joinder Agreement and Counterpart Signature Page (this “Agreement”) in connection with the transfer to the undersigned of shares of capital stock (the “Shares”) of BlossomHill Therapeutics, Inc. (the “Company”) on the date hereof.
By execution and delivery of this Agreement, the undersigned hereby agrees to become a party to and be bound by the terms and conditions of each of the following agreements, or to the extent the undersigned is currently a party to such agreements, confirms that the undersigned remains bound by the terms and conditions of each, in each case in the same manner and same capacity as the transferor of the Shares is bound with respect to the Shares: that certain Third Amended and Restated Investors’ Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; that certain Third Amended and Restated Voting Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; and that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time;.
The undersigned further authorizes this signature page to be attached to the above-referenced agreements, or counterparts thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
| /s/ Zi-Yi Chu |
| Zi-Yi Chu |
MINOR TRANSFEREE’S PARENT OR LEGAL GUARDIAN:
I have read, understand, and on behalf of the Transferee, a minor for whom I have legal authority, I accept this Agreement and acknowledge having been given the opportunity to review it with independent legal counsel.
| /s/ Ping-Yu Chu |
March 6, 2025 | |
| Parent/Guardian Signature |
Date | |
| Ping-Yu Chu | ||
| Printed Name |
||
| /s/ Yuli Zhou |
March 6, 2025 | |
| Parent/Guardian Signature |
Date | |
| Yuli Zhou |
||
| Printed Name |
||
Agreed and Accepted:
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ Jingrong Jean Cui | |
| Name: | Jingrong Jean Cui | |
| Title: | President and Chief Executive Officer | |
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| ALPHA PORTSIDE LIMITED | ||
| By: |
Glorious Harvest Holdings Limited | |
| Its: |
Corporate Director | |
| By: | /s/ HAN Jianchiu | |
| Name: HAN Jianchiu | ||
| Title: Director | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| BIOTRACK CAPITAL FUND II, LP | ||
| By: | /s/ Penghui Chen | |
| Name: Penghui Chen | ||
| Title: Authorized Signatory | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| BRAHMA BLOSSOMHILL PARTNERS, LLC | ||
| By: | /s/ Sundeep Agrawal | |
| Name: Sundeep Agrawal | ||
| Title: Authorized Representative | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| CORMORANT PRIVATE HEALTHCARE FUND VI, LP | ||
| By: |
Cormorant Private Healthcare GP VI, LP | |
| By: | /s/ Bihua Chen | |
| Name: Bihua Chen | ||
| Title: Managing Member | ||
| Address for Notice: | ||
| [***] | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| FENG SHEN HSIAO | ||
| By: | /s/ Feng Shen Hsiao | |
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| FRANK SHEN | ||
| By: | /s/ Frank Shen | |
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
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IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| FS VENTURE L.P. | ||
| By: | /s/ Hsiao-Chen Liang | |
| Name: Hsiao-Chen Liang | ||
| Title: Authorized Signatory | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| GC&H INVESTMENTS, L.P. | ||
| By: | GC&H Investment Management, LLC Its General Partner | |
| By: | /s/ Elzbieta Gibbons | |
| Name: Elzbieta Gibbons or Melissa Roque | ||
| Title: Authorized Signatory | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
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IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| HARBINGER IX VENTURE CAPITAL CORP. | ||
| By: | /s/ TC Chou | |
| Name: TC Chou | ||
| Title: Chief Executive Officer | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| JANUS HENDERSON BIOTECH INNOVATION MASTER FUND LIMITED | ||
| By: | Janus Henderson Investors US LLC, its investment advisor | |
| By: | /s/ Agustin Mohedas | |
| Name: Agustin Mohedas | ||
| Title: Authorized Signatory | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| JOHN C. FONG REVOCABLE TRUST U/A/D 2/9/2022 | ||
| By: | /s/ John C. Fong | |
| Name: John C. Fong | ||
| Title: Trustee | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
|
MARK HILDERBRAND | ||
| By: | /s/ Mark Hilderbrand | |
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| THE LUO-CHEN FAMILY TRUST | ||
| By: | /s/ Yuling Luo | |
| Name: Yuling Luo | ||
| Title: Trustee | ||
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
JOINDER AGREEMENT AND COUNTERPART SIGNATURE PAGE
December 16, 2025
The undersigned delivers this Joinder Agreement and Counterpart Signature Page (this “Agreement”) in connection with the transfer to the undersigned of shares of capital stock (the “Shares”) of BlossomHill Therapeutics, Inc. (the “Company”) on the date hereof.
By execution and delivery of this Agreement, the undersigned hereby agrees to become a party to and be bound by the terms and conditions of each of the following agreements, or to the extent the undersigned is currently a party to such agreements, confirms that the undersigned remains bound by the terms and conditions of each, in each case in the same manner and same capacity as the transferor of the Shares is bound with respect to the Shares: that certain Third Amended and Restated Investors’ Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; that certain Third Amended and Restated Voting Rights Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time; and that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated as of December 28, 2023, by and among the Company and the other parties thereto, as may be amended or amended and restated from time to time;.
The undersigned further authorizes this signature page to be attached to the above-referenced agreements, or counterparts thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set forth above.
| /s/ Walter S. Liptak | ||
| Walter S. Liptak
| ||
| Agreed and Accepted:
| ||
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ Jingrong Jean Cui | |
| Name: Jingrong Jean Cui | ||
| Title: President and Chief Executive Officer | ||
COUNTERPART SIGNATURE PAGE TO
BLOSSOMHILL THERAPEUTICS, INC.
RELATED AGREEMENTS
November 25, 2025
The undersigned desires to purchase shares of Series B Preferred Stock (the “Series B Preferred”) of BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”) in the Closing, as defined in that certain Series B Preferred Stock Purchase Agreement, dated November 25, 2025, by and among the Company and the investors listed on Exhibit A thereto (the “Purchase Agreement”).
In connection with the Closing, the undersigned hereby agrees to become a party to, subject to and bound by the terms and conditions of (i) that certain Third Amended and Restated Investor Rights Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A thereto (the “Investor Rights Agreement”), (ii) that certain Third Amended and Restated Right of First Refusal and Co-Sale Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Co-Sale Agreement”), and (iii) that certain Third Amended and Restated Voting Agreement, dated December 28, 2023, by and among the Company and the parties listed on Exhibit A and on Exhibit B thereto (the “Voting Agreement” and, together with the Investor Rights Agreement and the Co-Sale Agreement, each as amended from time to time, the “Related Agreements”). Upon the execution and delivery of this counterpart signature page and payment to the Company of the purchase price of the shares of Series B Preferred being purchased by the undersigned at the Closing, the undersigned shall be deemed an “Investor” and a party for all purposes under each of the Investor Rights Agreement and the Co-Sale Agreement, and an “Investor,” a “Stockholder” and a party for all purposes under the Voting Agreement.
The undersigned hereby certifies that the undersigned has read and understands each of the Related Agreements.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned has executed this Counterpart Signature Page to the Related Agreements as of the date first written above.
| WILLIAM G. FRIEDMAN | ||
| By: | /s/ William G. Friedman | |
[Signature Page to BlossomHill Therapeutics, Inc. Counterpart Signature Page to the Related Agreements]
EXHIBIT A
SCHEDULE OF INVESTORS
[***]
Exhibit 10.1
INDEMNIFICATION AGREEMENT
This Indemnification Agreement is dated as of _________, 2026 (this “Agreement”) and is between BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”), and [Name] (“Indemnitee”).
Background
The Company believes that in order to attract and retain highly competent persons to serve as directors or in other capacities, including as officers, it must provide such persons with adequate protection through indemnification against the risks of claims and actions against them arising out of their services to and activities on behalf of the Company.
The Company desires and has requested Indemnitee to serve as a director and/or officer of the Company and, in order to induce the Indemnitee to serve in such capacity, the Company is willing to grant the Indemnitee the indemnification provided for herein. Indemnitee is willing to so serve on the basis that such indemnification be provided.
The parties by this Agreement desire to set forth their agreement regarding indemnification and the advancement of expenses.
In consideration of Indemnitee’s service to the Company, the covenants and agreements set forth below and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Indemnification.
To the fullest extent permitted by the General Corporation Law of the State of Delaware (the “DGCL”):
(a) The Company shall indemnify Indemnitee if Indemnitee was or is made or is threatened to be made a party to, or is otherwise involved in, as a witness or otherwise, any threatened, pending or completed action, suit or proceeding (brought in the right of the Company or otherwise), whether civil, criminal, administrative, regulatory or investigative and whether formal or informal, including appeals, by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in any such capacity, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement or advancement of expenses can be provided under this Agreement.
(b) The indemnification provided by this Section 1 shall be from and against all loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding, including any appeals.
(c) If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for a portion of any expenses, losses, liabilities, judgments, fines and amounts paid in settlement incurred by Indemnitee, but not for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for such portion.
Section 2. Advance Payment of Expenses. To the fullest extent permitted by the DGCL, expenses (including attorneys’ fees) incurred by Indemnitee in appearing at, participating in or defending any action, suit or proceeding or in connection with an enforcement action as contemplated by Section 3(e), shall be paid by the Company in advance of the final disposition of such action, suit or proceeding within 30 days after receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances (including any invoices received by Indemnitee, which invoices may be redacted as necessary to avoid the waiver of any privilege accorded by applicable law) from time to time. The Indemnitee hereby undertakes to repay any amounts advanced (without interest) to the extent that it is ultimately determined that Indemnitee is not entitled under this Agreement to be indemnified by the Company in respect thereof. Such repayment obligation shall be unsecured and shall not bear interest. The Company shall not impose on Indemnitee additional conditions to advancement or require from Indemnitee additional undertakings regarding repayment other than the execution of this Agreement. The Company agrees that for the purposes of any advancement of expenses for which Indemnitee has made a written demand in accordance with this Agreement, all expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable. This Section 2 shall be subject to Section 3(b) and shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 6 and Section 7.
Section 3. Procedure for Indemnification; Notification and Defense of Claim.
(a) Promptly after receipt by Indemnitee of notice of the commencement of any action, suit or proceeding, Indemnitee shall, if a claim in respect thereof is to be made against the Company hereunder, notify the Company in writing of the commencement thereof. The failure to promptly notify the Company of the commencement of the action, suit or proceeding, or of Indemnitee’s request for indemnification, will not relieve the Company from any liability that it may have to Indemnitee hereunder, except to the extent the Company is actually and materially prejudiced in its defense of such action, suit or proceeding as a result of such failure. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request therefor including such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to enable the Company to determine whether and to what extent Indemnitee is entitled to indemnification.
(b) With respect to any action, suit or proceeding of which the Company is so notified as provided in this Agreement, the Company shall, subject to the last two sentences of this paragraph, be entitled to assume the defense of such action, suit or proceeding, with counsel reasonably acceptable to Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any subsequently-incurred fees of separate counsel engaged by Indemnitee with respect to the same action, suit or proceeding unless the employment of separate counsel by Indemnitee has been previously authorized in writing by the Company. Notwithstanding the foregoing, if Indemnitee, based on the advice of his or her counsel, shall have reasonably concluded (with written notice being given to the Company setting forth the basis for such conclusion) that, in the conduct of any such defense, there is or is reasonably likely to be a conflict of interest or position between the Company and Indemnitee with respect to a significant issue, then the Company will not be entitled, without the written consent of Indemnitee, to assume such defense. In addition, the Company will not be entitled, without the written consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Company.
(c) To the fullest extent permitted by the DGCL, the Company’s assumption of the defense of an action, suit or proceeding in accordance with paragraph 3(b) will constitute an irrevocable acknowledgement by the Company that any loss and liability suffered by Indemnitee and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement by or for the account of Indemnitee incurred in connection therewith are indemnifiable by the Company under Section 1 of this Agreement.
(d) The determination whether to grant Indemnitee’s indemnification request shall be made promptly and in any event within 30 days following the Company’s receipt of a request for indemnification in accordance with Section 3(a). If the Company determines that Indemnitee is entitled to such indemnification or, as contemplated by paragraph 3(c) the Company has acknowledged such entitlement, the Company will make
2
payment to Indemnitee of the indemnifiable amount within such 30 day period. If the Company is not deemed to have so acknowledged such entitlement or the Company’s determination of whether to grant Indemnitee’s indemnification request shall not have been made within such 30 day period, the requisite determination of entitlement to indemnification shall, subject to Section 6, nonetheless be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under the DGCL.
(e) In the event that (i) the Company determines in accordance with this Section 3 that Indemnitee is not entitled to indemnification, in whole or in part, under this Agreement, (ii) the Company fails to respond or make a determination of entitlement to indemnification within 30 days following receipt of a request for indemnification as described above, (iii) payment of indemnification is not made within such 30 day period, (iv) advancement of expenses is not timely made in accordance with Section 2, or (v) the Company or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or proceeding designed to deny, or to recover from, the Indemnitee the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication in any court of competent jurisdiction of his or her entitlement to such indemnification or advancement of expenses. Indemnitee’s expenses (including attorneys’ fees) incurred in connection with successfully establishing Indemnitee’s right to indemnification or advancement of expenses, in whole or in part, in any such proceeding or otherwise shall also be indemnified by the Company to the fullest extent permitted by the DGCL.
(f) Indemnitee shall be presumed to be entitled to indemnification and advancement of expenses under this Agreement upon submission of a request therefor in accordance with Section 2 or Section 3 of this Agreement, as the case may be. The Company shall have the burden of proof in overcoming such presumption, and such presumption shall be used as a basis for a determination of entitlement to indemnification and advancement of expenses unless the Company overcomes such presumption by clear and convincing evidence.
Section 4. Insurance and Subrogation.
(a) The Company may purchase and maintain a policy or policies of insurance, providing Indemnitee with coverage for any liability asserted against, and incurred by, Indemnitee or on Indemnitee’s behalf by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, fiduciary, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or arising out of Indemnitee’s status as such, whether or not the Company would have the power to indemnify Indemnitee against such liability under the provisions of this Agreement. If the Company has such insurance in effect at the time the Company receives from Indemnitee any notice of the commencement of an action, suit or proceeding, the Company shall give prompt notice of the commencement of such action, suit or proceeding to the insurers in accordance with the procedures set forth in the policy. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policy.
(b) In the event of any payment by the Company under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy. Indemnitee shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.
(c) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder (including, but not limited to, judgments, fines and amounts paid in settlement) if and to the extent that Indemnitee has otherwise actually received such payment under this Agreement or any insurance policy, contract, agreement or otherwise.
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Section 5. Certain Definitions. For purposes of this Agreement, the following definitions shall apply:
(a) The term “action, suit or proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation, prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed claim, action, suit, arbitration, alternative dispute mechanism or proceeding, whether civil, criminal, administrative or investigative.
(b) The term “by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise” shall be broadly construed and shall include, without limitation, any actual or alleged act or omission to act.
(c) The term “expenses” shall be broadly construed and shall include, without limitation, all direct and indirect costs of any type or nature whatsoever (including, without limitation, all attorneys’ fees and related disbursements, appeal bonds, other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which Indemnitee is not otherwise compensated by the Company or any third party), actually and reasonably incurred by Indemnitee in connection with either the investigation, defense or appeal of an action, suit or proceeding or establishing or enforcing a right to indemnification under this Agreement or otherwise incurred in connection with a claim that is indemnifiable hereunder.
(d) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and shall include, without limitation, all direct and indirect payments of any type or nature whatsoever, as well as any penalties or excise taxes assessed on a person with respect to an employee benefit plan).
Section 6. Limitation on Indemnification. Notwithstanding any other provision herein to the contrary, the Company shall not be obligated pursuant to this Agreement:
(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to an action, suit or proceeding (or part thereof), however denominated, initiated by Indemnitee, except with respect to any compulsory counterclaim brought by Indemnitee or an action, suit or proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Agreement (which shall be governed by the provisions of Section 6(b) of this Agreement), unless such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Company (the “Board”).
(b) Action for Indemnification. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, unless Indemnitee is successful in such action, suit or proceeding in establishing Indemnitee’s right, in whole or in part, to indemnification or advancement of expenses hereunder (in which case such indemnification or advancement shall be to the fullest extent permitted by the DGCL), or unless and to the extent that the court in such action, suit or proceeding shall determine that, despite Indemnitee’s failure to establish their right to indemnification, Indemnitee is entitled to indemnification for such expenses; provided, however, that nothing in this Section 6(b) is intended to limit the Company’s obligations with respect to the advancement of expenses to Indemnitee in connection with any such action, suit or proceeding instituted by Indemnitee to enforce or interpret this Agreement, as provided in Section 2 hereof.
(c) Certain Exchange Act Claims. To indemnify Indemnitee in connection with any action, suit or proceeding made against Indemnitee for (i) an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or similar provisions of state statutory law or common law, (ii) any reimbursement of the Company by the Indemnitee of any bonus or other incentive-based
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or equity-based compensation or of any profits realized by the Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements that arise from an accounting restatement of the Company pursuant to Section 304 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), or the payment to the Company of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act) or (iii) any reimbursement of the Company by Indemnitee of any compensation pursuant to any compensation recoupment or clawback policy adopted by the Board or the compensation committee of the Board, including but not limited to any such policy adopted to comply with stock exchange listing requirements implementing Section 10D of the Exchange Act.
(d) Fraud or Willful Misconduct. To indemnify Indemnitee on account of conduct by Indemnitee where such conduct has been determined by a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal or the time within which an appeal must be filed has expired without such filing to have been knowingly fraudulent or constitute willful misconduct.
(e) Prohibited by Law. To indemnify Indemnitee in any circumstance where such indemnification has been determined by a final (not interlocutory) judgment or other adjudication of a court or arbitration or administrative body of competent jurisdiction as to which there is no further right or option of appeal, or the time within which an appeal must be filed has expired without such filing having been made, to be prohibited by law.
Section 7. Certain Settlement Provisions. The Company shall have no obligation to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any action, suit or proceeding without the Company’s prior written consent. The Company shall not settle any action, suit or proceeding in any manner that would impose any fine or other obligation on Indemnitee without Indemnitee’s prior written consent. Neither the Company nor Indemnitee will unreasonably withhold his, her, its or their consent to any proposed settlement.
Section 8. Savings Clause. If any provision or provisions (or portion thereof) of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee if Indemnitee was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding (brought in the right of the Company or otherwise), whether civil, criminal, administrative or investigative and whether formal or informal, including appeals, by reason of the fact that Indemnitee is or was or has agreed to serve as a director and/or officer of the Company, or, while serving in such capacity, is or was serving or has agreed to serve at the request of the Company as a director, officer, employee or agent (which, for purposes hereof, shall include a trustee, partner or manager or similar capacity) of another corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, from and against all loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding, including any appeals, to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated.
Section 9. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for herein is held by a court of competent jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event, the Company shall, to the fullest extent permitted by law, contribute to the payment of all of Indemnitee’s loss and liability suffered and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement reasonably incurred by or on behalf of Indemnitee in connection with any action, suit or proceeding, including any appeals, in an amount that is just and equitable in the circumstances; provided that, without limiting the generality of the foregoing, such contribution shall not be required where such holding by the court is due to any limitation on indemnification set forth in Section 4(c), 6 (other than clause (e)) or 7 hereof.
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Section 10. Form and Delivery of Communications. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand, upon receipt by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier, one day after deposit with such courier and with written verification of receipt, or (d) sent by email or facsimile transmission, with receipt of oral confirmation that such transmission has been received. Notice to the Company shall be directed to BlossomHill Therapeutics, Inc., Attention: General Counsel, or if no individual holds such position, then the Company’s Chief Executive Officer or Chief Financial Officer (or his or her designee) at [XXX@XXX.com], [XXX@XXX.com] or [XXX@XXX.com]. Notice to Indemnitee shall be directed to [XXXXXX], email: [XXX@XXX.com].
Section 11. Nonexclusivity. The provisions for indemnification and advancement of expenses set forth in this Agreement shall not be deemed exclusive of any other rights which Indemnitee may have under any provision of law, in any court in which a proceeding is brought, the Company’s certificate of incorporation or by-laws, other agreements or otherwise, and Indemnitee’s rights hereunder shall inure to the benefit of the heirs, executors and administrators of Indemnitee. No amendment or alteration of the Company’s certificate of incorporation or by-laws or any other agreement shall adversely affect the rights provided to Indemnitee under this Agreement.
Section 12. No Construction as Employment Agreement. Nothing contained herein shall be construed as giving Indemnitee any right to be retained as a director of the Company or in the employ of the Company. For the avoidance of doubt, the indemnification and advancement of expenses provided under this Agreement shall continue as to the Indemnitee even though Indemnitee may have ceased to be a director or officer of the Company.
Section 13. Interpretation of Agreement. It is understood that the parties hereto intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee to the fullest extent now or hereafter permitted by the DGCL.
Section 14. Entire Agreement. This Agreement and the documents expressly referred to herein constitute the entire agreement between the parties hereto with respect to the matters covered hereby, and any other prior or contemporaneous oral or written understandings or agreements with respect to the matters covered hereby are expressly superseded by this Agreement.
Section 15. Modification and Waiver. No supplement, modification, waiver or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver. For the avoidance of doubt, this Agreement may not be terminated by the Company without Indemnitee’s prior written consent.
Section 16. Successor and Assigns. All of the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company shall require and cause any direct or indirect successor (whether by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company, by written agreement in form and substance reasonably satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place.
Section 17. Service of Process and Venue. The Company and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably Harvard Business Services, Inc. located at 16192 Coastal Highway, City of Lewes, County of Sussex 19958 as its agent in the State of Delaware as such party’s agent
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for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (d) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (e) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
Section 18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. If a court of competent jurisdiction shall make a final determination that the provisions of the law of any state other than Delaware govern indemnification by the Company of Indemnitee, then the indemnification provided under this Agreement shall in all instances be enforceable to the fullest extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.
Section 19. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument, notwithstanding that both parties are not signatories to the original or same counterpart.
Section 20. Headings and Section References. The section and subsection headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Section references are to this Agreement unless otherwise specified.
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This Indemnification Agreement has been duly executed and delivered to be effective as of the date stated above.
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| By | ||
| Name: |
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| Title: |
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| INDEMNITEE: |
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| Name: |
Exhibit 10.2
BLOSSOMHILL THERAPEUTICS, INC.
2026 EQUITY INCENTIVE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: JUNE 25, 2026
APPROVED BY THE STOCKHOLDERS: [ ]
| 1. | GENERAL. |
(a) Successor to and Continuation of Prior Plan. The Plan is the successor to and continuation of the Prior Plan. As of the Effective Date, (i) no additional awards may be granted under the Prior Plan; (ii) the Prior Plan’s Available Reserve plus any Returning Shares will become available for issuance pursuant to Awards granted under this Plan; and (iii) all outstanding awards granted under the Prior Plan will remain subject to the terms of the Prior Plan (except to the extent such outstanding Awards result in Returning Shares that become available for issuance pursuant to Awards granted under this Plan). All Awards granted under this Plan will be subject to the terms of this Plan.
(b) Plan Purpose. The Company, by means of the Plan, seeks to secure and retain the services of Employees, Directors and Consultants, to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and to provide a means by which such persons may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Awards.
(c) Available Awards. The Plan provides for the grant of the following Awards: (i) Incentive Stock Options; (ii) Nonstatutory Stock Options; (iii) SARs; (iv) Restricted Stock Awards; (v) RSU Awards; (vi) Performance Awards; and (vii) Other Awards.
(d) Adoption Date; Effective Date. The Plan will come into existence on the Adoption Date, but no Award may be granted prior to the Effective Date.
| 2. | SHARES SUBJECT TO THE PLAN. |
(a) Share Reserve. Subject to adjustment in accordance with Section 2(c) and any adjustments as necessary to implement any Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Awards will be equal to the sum of (i)[ ] shares, plus (ii) the Prior Plan’s Available Reserve, plus (iii) the number of Returning Shares, if any, as such shares become available from time to time. In addition, subject to any adjustments as necessary to implement any Capitalization Adjustments, such aggregate number of shares of Common Stock will automatically increase on January 1 of each year for a period of ten years commencing on January 1, 2027 and ending on (and including) January 1, 2036, in an amount equal to five percent (5%) of the total number of shares of Share Reserve Increase Stock outstanding on December 31 of the preceding year; provided, however, that the Board may act prior to January 1 of a given year to provide that the increase for such year will be a lesser number of shares of Common Stock.
(b) Aggregate Incentive Stock Option Limit. Notwithstanding anything to the contrary in Section 2(a) and subject to any adjustments as necessary to implement any Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is three times the Share Reserve.
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(c) Share Reserve Operation.
(i) Limit Applies to Common Stock Issued Pursuant to Awards. For clarity, the Share Reserve is a limit on the number of shares of Common Stock that may be issued pursuant to Awards and does not limit the granting of Awards, except that the Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy its obligations to issue shares pursuant to such Awards. Shares may be issued in connection with a merger or acquisition as permitted by, as applicable, Nasdaq Listing Rule 5635(c)(3), NYSE Listed Company Manual Section 303A.08, NYSE American Company Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan.
(ii) Actions that Do Not Constitute Issuance of Common Stock and Do Not Reduce Share Reserve. The following actions do not result in an issuance of shares under the Plan and accordingly do not reduce the number of shares subject to the Share Reserve and available for issuance under the Plan: (1) the expiration or termination of any portion of an Award without the shares covered by such portion of the Award having been issued; (2) the settlement of any portion of an Award in cash (i.e., the Participant receives cash rather than Common Stock); (3) the withholding of shares that would otherwise be issued by the Company to satisfy the exercise, strike or purchase price of an Award; or (4) the withholding of shares that would otherwise be issued by the Company to satisfy a tax withholding obligation in connection with an Award.
(iii) Reversion of Previously Issued Shares of Common Stock to Share Reserve. The following shares of Common Stock previously issued pursuant to an Award and accordingly initially deducted from the Share Reserve will be added back to the Share Reserve and again become available for issuance under the Plan: (1) any shares that are forfeited back to or repurchased by the Company because of a failure to meet a contingency or condition required for the vesting of such shares; (2) any shares that are reacquired by the Company to satisfy the exercise, strike or purchase price of an Award; and (3) any shares that are reacquired by the Company to satisfy a tax withholding obligation in connection with an Award.
| 3. | ELIGIBILITY AND LIMITATIONS. |
(a) Eligible Award Recipients. Subject to the terms of the Plan, Employees, Directors and Consultants are eligible to receive Awards.
(b) Specific Award Limitations.
(i) Limitations on Incentive Stock Option Recipients. Incentive Stock Options may be granted only to Employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code).
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(ii) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of the shares of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds $100,000 (or such other limit established in the Code) or any Incentive Stock Options otherwise do not comply with the rules governing Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Award Agreement(s).
(iii) Limitations on Incentive Stock Options Granted to Ten Percent Stockholders. A Ten Percent Stockholder may not be granted an Incentive Stock Option unless (1) the exercise price of such Option is at least 110% of the Fair Market Value on the date of grant of such Option and (2) the Option is not exercisable after the expiration of five years from the date of grant of such Option.
(iv) Limitations on Nonstatutory Stock Options and SARs. Nonstatutory Stock Options and SARs may not be granted to Employees, Directors and Consultants who are providing Continuous Service only to any “parent” of the Company (as such term is defined in Rule 405) unless the stock underlying such Awards is treated as “service recipient stock” under Section 409A because the Awards are granted pursuant to a corporate transaction (such as a spin off transaction) or unless such Awards otherwise comply with the distribution requirements of Section 409A.
(c) Aggregate Incentive Stock Option Limit. The aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options is the number of shares specified in Section 2(b).
(d) Non-Employee Director Compensation Limit. The aggregate value of all compensation granted or paid, as applicable, to any individual for service as a Non-Employee Director with respect to any fiscal year, including Awards granted and cash fees paid by the Company to such Non-Employee Director, will not exceed (1) $750,000 in total value or (2) in the event such Non-Employee Director is first appointed or elected to the Board during such fiscal year, $1,000,000 in total value, in each case, calculating the value of any equity awards based on the grant date fair value of such equity awards for financial reporting purposes. For avoidance of doubt, compensation will count towards this limit for the fiscal year in which it was granted or earned, and not later when distributed, in the event it is deferred.
| 4. | OPTIONS AND STOCK APPRECIATION RIGHTS. |
Each Option and SAR will have such terms and conditions as determined by the Board. Each Option will be designated in writing as an Incentive Stock Option or Nonstatutory Stock Option at the time of grant; provided, however, that if an Option is not so designated or if an Option designated as an Incentive Stock Option fails to qualify as an Incentive Stock Option, then such Option will be a Nonstatutory Stock Option, and the shares purchased upon exercise of each type of Option will be separately accounted for. Each SAR will be denominated in shares of Common Stock equivalents. The terms and conditions of separate Options and SARs need not be identical; provided, however, that each applicable Award Agreement will conform (through incorporation of provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(a) Term. Subject to Section 3(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration of ten years from the date of grant of such Award or such shorter period specified in the Award Agreement.
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(b) Exercise or Strike Price. Subject to Section 3(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SAR will not be less than 100% of the Fair Market Value on the date of grant of such Award. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than 100% of the Fair Market Value on the date of grant of such Award if such Award is granted pursuant to an assumption of or substitution for another option or stock appreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Sections 409A and, if applicable, 424(a) of the Code.
(c) Exercise Procedure and Payment of Exercise Price for Options. In order to exercise an Option, the Participant must provide notice of exercise to the Plan Administrator in accordance with the procedures specified in the applicable Award Agreement or otherwise provided by the Company. The Board has the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The exercise price of an Option may be paid, to the extent permitted by Applicable Law and as determined by the Board, by one or more of the following methods of payment to the extent set forth in the applicable Award Agreement:
(i) by cash or check, bank draft or money order payable to the Company;
(ii) pursuant to a “cashless exercise” program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the Common Stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the exercise price to the Company from the sales proceeds;
(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock that are already owned by the Participant free and clear of any liens, claims, encumbrances or security interests, with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) at the time of exercise the Common Stock is publicly traded, (2) any remaining balance of the exercise price not satisfied by such delivery is paid by the Participant in cash or other permitted form of payment, (3) such delivery would not violate any Applicable Law or agreement restricting the redemption of the Common Stock, (4) any certificated shares are endorsed or accompanied by an executed assignment separate from certificate, and (5) such shares have been held by the Participant for any minimum period necessary to avoid adverse accounting treatment as a result of such delivery;
(iv) if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value on the date of exercise that does not exceed the exercise price, provided that (1) such shares used to pay the exercise price will not be exercisable thereafter and (2) any remaining balance of the exercise price not satisfied by such net exercise is paid by the Participant in cash or other permitted form of payment; or
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(v) in any other form of consideration that may be acceptable to the Board and permissible under Applicable Law.
(d) Exercise Procedure and Payment of Appreciation Distribution for SARs. In order to exercise any SAR, the Participant must provide notice of exercise to the Plan Administrator in accordance with the applicable Award Agreement. The appreciation distribution payable to a Participant upon the exercise of a SAR will not be greater than an amount equal to the excess of (i) the aggregate Fair Market Value on the date of exercise of a number of shares of Common Stock equal to the number of Common Stock equivalents that are vested and being exercised under such SAR, over (ii) the strike price of such SAR. Such appreciation distribution may be paid to the Participant in the form of Common Stock or cash (or any combination of Common Stock and cash) or in any other form of payment, as determined by the Board and specified in the applicable Award Agreement.
(e) Transferability. Options and SARs may not be transferred to third party financial institutions for value. The Board may impose such additional limitations on the transferability of an Option or SAR as it determines. In the absence of any such determination by the Board, the following restrictions on the transferability of Options and SARs will apply, provided that except as explicitly provided herein, neither an Option nor a SAR may be transferred for consideration and provided, further, that if an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer:
(i) Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution, and will be exercisable during the lifetime of the Participant only by the Participant; provided, however, that the Board may permit transfer of an Option or SAR in a manner that is not prohibited by applicable tax and securities laws upon the Participant’s request, including to a trust if the Participant is considered to be the sole beneficial owner of such trust (as determined under Section 671 of the Code and applicable state law) while such Option or SAR is held in such trust, provided that the Participant and the trustee enter into a transfer and other agreements required by the Company.
(ii) Domestic Relations Orders. Notwithstanding the foregoing, subject to the execution of transfer documentation in a format acceptable to the Company and subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferred pursuant to a domestic relations order.
(f) Vesting. The Board may impose such restrictions on or conditions to the vesting and/or exercisability of an Option or SAR as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Options and SARs will cease upon termination of the Participant’s Continuous Service.
(g) Termination of Continuous Service for Cause. Except as explicitly otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Options and SARs will terminate and be forfeited immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising any portion (including any vested portion) of such Awards on and after the date of such termination of Continuous Service and the Participant will have no further right, title or interest in such forfeited Award, the shares of Common Stock subject to the forfeited Award, or any consideration in respect of the forfeited Award.
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(h) Post-Termination Exercise Period Following Termination of Continuous Service for Reasons Other than Cause. Subject to Section 4(i), if a Participant’s Continuous Service terminates for any reason other than for Cause, the Participant may exercise his or her Option or SAR to the extent vested, but only within the following period of time or, if applicable, such other period of time provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)):
(i) three months following the date of such termination if such termination is a termination without Cause (other than any termination due to the Participant’s Disability or death);
(ii) 12 months following the date of such termination if such termination is due to the Participant’s Disability;
(iii) 18 months following the date of such termination if such termination is due to the Participant’s death; or
(iv) 18 months following the date of the Participant’s death if such death occurs following the date of such termination but during the period such Award is otherwise exercisable (as provided in (i) or (ii) above).
Following the date of such termination, to the extent the Participant does not exercise such Award within the applicable Post-Termination Exercise Period (or, if earlier, prior to the expiration of the maximum term of such Award), such unexercised portion of the Award will terminate, and the Participant will have no further right, title or interest in the terminated Award, the shares of Common Stock subject to the terminated Award, or any consideration in respect of the terminated Award.
(i) Restrictions on Exercise; Extension of Exercisability. A Participant may not exercise an Option or SAR at any time that the issuance of shares of Common Stock upon such exercise would violate Applicable Law. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason other than for Cause and, at any time during the last thirty days of the applicable Post-Termination Exercise Period: (i) the exercise of the Participant’s Option or SAR would be prohibited solely because the issuance of shares of Common Stock upon such exercise would violate Applicable Law; or (ii) the immediate sale of any shares of Common Stock issued upon such exercise would violate the Company’s Trading Policy, then the applicable Post-Termination Exercise Period will be extended to the last day of the calendar month that commences following the date the Award would otherwise expire, with an additional extension of the exercise period to the last day of the next calendar month to apply if any of the foregoing restrictions apply at any time during such extended exercise period, generally without limitation as to the maximum permitted number of extensions; provided, however, that in no event may such Award be exercised after the expiration of its maximum term (as set forth in Section 4(a)).
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(j) Non-Exempt Employees. No Option or SAR, whether or not vested, granted to an Employee who is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of such Award. Notwithstanding the foregoing, in accordance with the provisions of the Worker Economic Opportunity Act, any vested portion of such Award may be exercised earlier than six months following the date of grant of such Award in the event of (i) such Participant’s death or Disability, (ii) a Corporate Transaction in which such Award is not assumed, continued or substituted, (iii) a Change in Control, or (iv) such Participant’s retirement (as such term may be defined in the Award Agreement or another applicable agreement or, in the absence of any such definition, in accordance with the Company’s then current employment policies and guidelines). This Section 4(j) is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of an Option or SAR will be exempt from his or her regular rate of pay.
(k) Whole Shares. Options and SARs may be exercised only with respect to whole shares of Common Stock or their equivalents.
| 5. | AWARDS OTHER THAN OPTIONS AND STOCK APPRECIATION RIGHTS. |
(a) Restricted Stock Awards and RSU Awards. Each Restricted Stock Award and RSU Award will have such terms and conditions as determined by the Board; provided, however, that each applicable Award Agreement will conform (through incorporation of the provisions hereof by reference in the Award Agreement or otherwise) to the substance of each of the following provisions:
(i) Form of Award.
(1) Restricted Stock Awards: To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock subject to a Restricted Stock Award may be (A) held in book entry form subject to the Company’s instructions until such shares become vested or any other restrictions lapse, or (B) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. Unless otherwise determined by the Board, a Participant will have voting and other rights as a stockholder of the Company with respect to any shares subject to a Restricted Stock Award.
(2) RSU Awards: An RSU Award represents a Participant’s right to be issued on a future date the number of shares of Common Stock that is equal to the number of restricted stock units subject to the RSU Award. As a holder of an RSU Award, a Participant is an unsecured creditor of the Company with respect to the Company’s unfunded obligation, if any, to issue shares of Common Stock in settlement of such Award and nothing contained in the Plan or any applicable Award Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between a Participant and the Company or an Affiliate or any other person. A Participant will not have voting or any other rights as a stockholder of the Company with respect to any RSU Award (unless and until shares are actually issued in settlement of a vested RSU Award).
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(ii) Consideration.
(1) Restricted Stock Awards: A Restricted Stock Award may be granted in consideration for (A) cash or check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of consideration (including future services) as the Board may determine and permissible under Applicable Law.
(2) RSU Awards: Unless otherwise determined by the Board at the time of grant, an RSU Award will be granted in consideration for the Participant’s services to the Company or an Affiliate, such that the Participant will not be required to make any payment to the Company (other than such services) with respect to the grant or vesting of the RSU Award, or the issuance of any shares of Common Stock pursuant to the RSU Award. If, at the time of grant, the Board determines that any consideration must be paid by the Participant (in a form other than the Participant’s services to the Company or an Affiliate) upon the issuance of any shares of Common Stock in settlement of the RSU Award, such consideration may be paid in any form of consideration as the Board may determine and permissible under Applicable Law.
(iii) Vesting. The Board may impose such restrictions on or conditions to the vesting of a Restricted Stock Award or RSU Award as determined by the Board. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, vesting of Restricted Stock Awards and RSU Awards will cease upon termination of the Participant’s Continuous Service.
(iv) Termination of Continuous Service. Except as otherwise provided in the Award Agreement or other written agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates for any reason, (1) the Company may receive through a forfeiture condition or a repurchase right any or all of the shares of Common Stock held by the Participant under his or her Restricted Stock Award that have not vested as of the date of such termination as set forth in the applicable Award Agreement, (2) any portion of his or her RSU Award that has not vested will be forfeited upon such termination, and (3) the Participant will have no further right, title or interest in the Restricted Stock Award or RSU Award, the shares of Common Stock subject to or issuable pursuant to the Restricted Stock Award or RSU Award, or any consideration in respect of the Restricted Stock Award or RSU Award.
(v) Dividends and Dividend Equivalents. Dividends or dividend equivalents may be paid or credited, as applicable, with respect to any shares of Common Stock subject to a Restricted Stock Award or RSU Award, as determined by the Board and specified in the Award Agreement.
(vi) Settlement of RSU Awards. An RSU Award may be settled by the issuance of shares of Common Stock or cash (or any combination thereof) or in any other form of payment, as determined by the Board and specified in the applicable Award Agreement. At the time of grant, the Board may determine to impose such restrictions or conditions that delay such delivery to a date following the vesting of the RSU Award.
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(b) Performance Awards. With respect to any Performance Award, the length of any Performance Period, the Performance Goals to be achieved during the Performance Period, the other terms and conditions of such Award, and the measure of whether and to what degree such Performance Goals have been attained will be determined by the Board.
(c) Other Awards. Other forms of Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with an exercise price or strike price less than 100% of the Fair Market Value at the time of grant) may be granted either alone or in addition to Awards provided for under Section 4 and the preceding provisions of this Section 5. Subject to the provisions of the Plan, the Board will have sole and complete discretion to determine the persons to whom and the time or times at which such Other Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such Other Awards and all other terms and conditions of such Other Awards.
| 6. | ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS. |
(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board shall appropriately and proportionately adjust: (i) the class(es) and maximum number of shares of Common Stock subject to the Plan and the maximum number of shares by which the Share Reserve may annually increase pursuant to Section 2(a); (ii) the class(es) and maximum number of shares that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 2(b); and (iii) the class(es) and number of securities and exercise price, strike price or purchase price of Common Stock subject to outstanding Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. Notwithstanding the foregoing, no fractional shares or rights for fractional shares of Common Stock shall be created in order to implement any Capitalization Adjustment. The Board shall determine an appropriate equivalent benefit, if any, for any fractional shares or rights to fractional shares that might be created by the adjustments referred to in the preceding provisions of this Section.
(b) Dissolution or Liquidation. Except as otherwise provided in the Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Awards (other than Awards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such Award is providing Continuous Service, provided, however, that the Board may determine to cause some or all Awards to become fully vested, exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.
(c) Corporate Transaction. The following provisions will apply to Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Award or any other written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly provided by the Board at the time of grant of an Award.
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(i) Awards May Be Assumed. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Awards outstanding under the Plan or may substitute similar awards for Awards outstanding under the Plan (including but not limited to, awards to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to Awards may be assigned by the Company to the successor of the Company (or the successor’s parent company, if any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation (or its parent) may choose to assume or continue only a portion of an Award or substitute a similar award for only a portion of an Award, or may choose to assume, continue or substitute the Awards held by some, but not all Participants. The terms of any assumption, continuation or substitution will be set by the Board.
(ii) Awards Held by Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Current Participants”), the vesting of such Awards (and, with respect to Options and Stock Appreciation Rights, the time when such Awards may be exercised) will be accelerated in full to a date prior to the effective time of such Corporate Transaction (contingent upon the effectiveness of the Corporate Transaction) as the Board determines (or, if the Board does not determine such a date, to the date that is five days prior to the effective time of the Corporate Transaction), and such Awards will terminate if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Awards will lapse (contingent upon the effectiveness of the Corporate Transaction). With respect to the vesting of Performance Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and that have multiple vesting levels depending on the level of performance, unless otherwise provided in the Award Agreement, the vesting of such Performance Awards will accelerate at 100% of the target level upon the occurrence of the Corporate Transaction. With respect to the vesting of Awards that will accelerate upon the occurrence of a Corporate Transaction pursuant to this subsection (ii) and are settled in the form of a cash payment, such cash payment will be made no later than 30 days following the occurrence of the Corporate Transaction or such later date as required to comply with Section 409A of the Code.
(iii) Awards Held by Persons other than Current Participants. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Awards or substitute similar awards for such outstanding Awards, then with respect to Awards that have not been assumed, continued or substituted and that are held by persons other than Current Participants, such Awards will terminate if not exercised (if applicable) prior to the occurrence of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Awards will not terminate and may continue to be exercised notwithstanding the Corporate Transaction.
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(iv) Payment for Awards in Lieu of Exercise. Notwithstanding the foregoing, in the event an Award will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole discretion, that the holder of such Award may not exercise such Award but will receive a payment, in such form as may be determined by the Board, equal in value, at the effective time, to the excess, if any, of (1) the value of the property the Participant would have received upon the exercise of the Award (including, at the discretion of the Board, any unvested portion of such Award), over (2) any exercise price payable by such holder in connection with such exercise.
(d) Appointment of Stockholder Representative. As a condition to the receipt of an Award under this Plan, a Participant will be deemed to have agreed that the Award will be subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on the Participant’s behalf with respect to any escrow, indemnities and any contingent consideration.
(e) No Restriction on Right to Undertake Transactions. The grant of any Award under the Plan and the issuance of shares pursuant to any Award does not affect or restrict in any way the right or power of the Company, the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any Change in Control, any Corporate Transaction, any merger or consolidation of the Company, any issue of stock or of options, rights or options to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.
| 7. | ADMINISTRATION. |
(a) Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in subsection (c) below.
(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine from time to time (1) which of the persons eligible under the Plan will be granted Awards; (2) when and how each Award will be granted; (3) what type or combination of types of Award will be granted; (4) the provisions of each Award granted (which need not be identical), including the time or times when a person will be permitted to receive an issuance of Common Stock or other payment pursuant to an Award; (5) the number of shares of Common Stock or cash equivalent with respect to which an Award will be granted to each such person; (6) the Fair Market Value applicable to an Award; and (7) the terms of any Performance Award that is not valued in whole or in part by reference to, or otherwise based on, the Common Stock, including the amount of cash payment or other property that may be earned and the timing of payment.
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(ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a manner and to the extent it deems necessary or expedient to make the Plan or Award fully effective.
(iii) To settle all controversies regarding the Plan and Awards granted under it.
(iv) To accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest, notwithstanding the provisions in the Award Agreement stating the time at which it may first be exercised or the time during which it will vest.
(v) To prohibit the exercise of any Option, SAR or other exercisable Award during a period of up to 30 days prior to the consummation of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock, including any Corporate Transaction, for reasons of administrative convenience.
(vi) To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not Materially Impair rights and obligations under any Award granted while the Plan is in effect except with the written consent of the affected Participant.
(vii) To amend the Plan in any respect the Board deems necessary or advisable; provided, however, that stockholder approval will be required for any amendment to the extent required by Applicable Law. Except as provided above, rights under any Award granted before amendment of the Plan will not be Materially Impaired by any amendment of the Plan unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(viii) To submit any amendment to the Plan for stockholder approval.
(ix) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more Awards, including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided, however, that a Participant’s rights under any Award will not be Materially Impaired by any such amendment unless (1) the Company requests the consent of the affected Participant, and (2) such Participant consents in writing.
(x) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Awards.
(xi) To adopt such procedures and sub-plans as are necessary or appropriate to permit and facilitate participation in the Plan by, or take advantage of specific tax treatment for Awards granted to, Employees, Directors or Consultants who are non-U.S. nationals or employed outside the United States (provided that Board approval will not be necessary for immaterial modifications to the Plan or any Award Agreement to ensure or facilitate compliance with the laws of the relevant non-U.S. jurisdiction).
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(xii) To effect, at any time and from time to time, subject to the consent of any Participant whose Award is Materially Impaired by such action, (1) the reduction of the exercise price (or strike price) of any outstanding Option or SAR; (2) the cancellation of any outstanding Option or SAR and the grant in substitution therefor of (A) a new Option, SAR, Restricted Stock Award, RSU Award or Other Award, under the Plan or another equity plan of the Company, covering the same or a different number of shares of Common Stock, (B) cash and/or (C) other valuable consideration (as determined by the Board); or (3) any other action that is treated as a repricing under generally accepted accounting principles.
(c) Delegation to Committee.
(i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to another Committee or a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Each Committee may retain the authority to concurrently administer the Plan with the Committee or subcommittee to which it has delegated its authority hereunder and may, at any time, revest in such Committee some or all of the powers previously delegated. The Board may retain the authority to concurrently administer the Plan with any Committee and may, at any time, revest in the Board some or all of the powers previously delegated.
(ii) Rule 16b-3 Compliance. To the extent an Award is intended to qualify for the exemption from Section 16(b) of the Exchange Act that is available under Rule 16b-3 of the Exchange Act, the Award will be granted by the Board or a Committee that consists solely of two or more Non-Employee Directors, as determined under Rule 16b-3(b)(3) of the Exchange Act and thereafter any action establishing or modifying the terms of the Award will be approved by the Board or a Committee meeting such requirements to the extent necessary for such exemption to remain available.
(d) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board or any Committee in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
(e) Delegation to Other Person or Body. The Board or any Committee may delegate to one or more persons or bodies the authority to do one or more of the following to the extent permitted by Applicable Law: (i) designate recipients, other than Officers, of Awards, provided that no person or body may be delegated authority to grant an Award to themself; (ii) determine the number of shares subject to such Awards; and (iii) determine the terms of such Awards; provided, however, that the Board or Committee action regarding such delegation will fix the terms of such delegation in accordance with Applicable Law, including without limitation Sections 152
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and 157 of the Delaware General Corporation Law. Unless provided otherwise in the Board or Committee action regarding such delegation, each Award granted pursuant to this section will be granted on the applicable form of Award Agreement most recently approved for use by the Board or the Committee, with any modifications necessary to incorporate or reflect the terms of such Award. Notwithstanding anything to the contrary herein, neither the Board nor any Committee may delegate to any person or body (who is not a Director or that is not comprised solely of Directors, respectively) the authority to determine the Fair Market Value.
| 8. | TAX WITHHOLDING. |
(a) Withholding Authorization. As a condition to acceptance of any Award under the Plan, a Participant authorizes withholding from payroll and any other amounts payable to such Participant, and otherwise agrees to make adequate arrangements to satisfy, any Tax-Related Item withholding obligations, if any, of the Company and/or an Affiliate that arise in connection with the grant, vesting, exercise or settlement of such Award, as applicable. Accordingly, a Participant may not be able to exercise an Award even though the Award is vested, and the Company shall have no obligation to issue shares of Common Stock subject to an Award, unless and until such obligations are satisfied.
(b) Satisfaction of Withholding Obligation. To the extent permitted by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any Tax-Related Item withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Award; (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; (v) by allowing a Participant to effectuate a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board; (vi) allowing the Participant to enter into a “same day sale” commitment with a broker-dealer (including, without limitation, a commitment under a previously established written trading plan that meets the requirements of Rule 10b5-1 under the Exchange Act); or (vii) by such other method as may be set forth in the Award Agreement.
(c) No Obligation to Notify or Minimize Taxes; No Liability to Claims. Except as required by Applicable Law, the Company has no duty or obligation to any Participant to advise such holder as to the time or manner of exercising such Award. Furthermore, the Company has no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of an Award to the holder of such Award and will not be liable to any holder of an Award for any adverse tax consequences to such holder in connection with an Award. As a condition to accepting an Award under the Plan, each Participant (i) agrees to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from such Award or other Company compensation and (ii) acknowledges that such Participant was advised to consult with his or her own personal tax, financial and other legal advisors regarding the tax consequences of the Award and has either done so or knowingly and voluntarily declined to do so. Additionally, each Participant acknowledges any Option or SAR granted under the Plan is exempt from Section 409A only if the exercise or strike price is at least equal to the “fair market value” of the Common
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Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Award. Additionally, as a condition to accepting an Option or SAR granted under the Plan, each Participant agrees not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise price or strike price is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
(d) Withholding Indemnification. The Company and/or its Affiliate may withhold or account for Tax-Related Items by considering statutory or other withholding rates, including minimum or maximum rates applicable in a Participant’s jurisdiction. In the event of overwithholding, the Participant may receive a refund of any over-withheld amount in cash (with no entitlement to the equivalent in Common Stock) or, if not refunded, the Participant may seek a refund from the local tax authorities. In the event of underwithholding, the Participant may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or its Affiliate. As a condition to accepting an Award under the Plan, in the event that the amount of the Company’s and/or its Affiliate’s withholding obligation in connection with such Award was greater than the amount actually withheld by the Company and/or its Affiliates, each Participant agrees to indemnify and hold the Company and/or its Affiliates harmless from any failure by the Company and/or its Affiliates to withhold the proper amount. Further, if the obligation for Tax-Related Items is satisfied by withholding in shares of Common Stock, for tax purposes, the Participant will be deemed to have been issued the full number of shares subject to the Award, notwithstanding that a number of the shares is held back solely for the purpose of paying the Tax-Related Items.
| 9. | MISCELLANEOUS. |
(a) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
(b) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Awards will constitute general funds of the Company.
(c) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents, resolutions or minutes) documenting the corporate action approving the grant contain terms (e.g., exercise price, vesting schedule or number of shares) that are inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the Award Agreement or related grant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement or related grant documents.
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(d) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until (i) such Participant has satisfied all requirements for exercise of the Award pursuant to its terms, if applicable, and (ii) the issuance of the Common Stock subject to such Award is reflected in the records of the Company.
(e) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted or affect the right of the Company or an Affiliate to terminate at will (unless otherwise required under Applicable Law) and without regard to any future vesting opportunity that a Participant may have with respect to any Award (i) the employment of an Employee with or without notice and with or without Cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the U.S. state or non-U.S. jurisdiction in which the Company or the Affiliate is incorporated, as the case may be. Further, nothing in the Plan, any Award Agreement or any other instrument executed thereunder or in connection with any Award will constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or service or confer any right or benefit under the Award or the Plan unless such right or benefit has specifically accrued under the terms of the Award Agreement and/or Plan.
(f) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for the Company and any Affiliates is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, the Board may determine, to the extent permitted by Applicable Law, to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Award that is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction, extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to any portion of the Award that is so reduced or extended.
(g) Execution of Additional Documents. As a condition to accepting an Award under the Plan, the Participant agrees to execute any additional documents or instruments necessary or desirable, as determined in the Plan Administrator’s sole discretion, to carry out the purposes or intent of the Award, or facilitate compliance with securities and/or other regulatory requirements, in each case at the Plan Administrator’s request.
(h) Electronic Delivery and Participation. Any reference herein or in an Award Agreement to a “written” agreement or document will include any agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the Participant has access). By accepting any Award the Participant consents to receive documents by electronic delivery and to participate in the Plan through any on-line electronic system established and maintained by the Plan Administrator or another third party selected by the Plan Administrator. The form of delivery of any Common Stock (e.g., a stock certificate or electronic entry evidencing such shares) shall be determined by the Company.
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(i) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other Applicable Law and any clawback policy that the Company otherwise adopts, to the extent applicable and permissible under Applicable Law. In addition, the Board may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a Participant’s right to voluntarily terminate employment upon a “resignation for good reason,” or for a “constructive termination” or any similar term under any plan of or agreement with the Company.
(j) Securities Law Compliance. A Participant will not be issued any shares in respect of an Award unless either (i) the shares are registered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act. Each Award also must comply with other Applicable Law governing the Award, and a Participant will not receive such shares if the Company determines that such receipt would not be in material compliance with Applicable Law.
(k) Transfer or Assignment of Awards; Issued Shares. Except as expressly provided in the Plan or the form of Award Agreement, Awards granted under the Plan may not be transferred or assigned by the Participant. After the vested shares subject to an Award have been issued, or in the case of a Restricted Stock Award and similar awards, after the issued shares have vested, the holder of such shares is free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such shares provided that any such actions are in compliance with the provisions herein, the terms of the Trading Policy and Applicable Law.
(l) Effect on Other Employee Benefit Plans. The value of any Award granted under the Plan, as determined upon grant, vesting or settlement, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating any Participant’s benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.
(m) Deferrals. To the extent permitted by Applicable Law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may also establish programs and procedures for deferral elections to be made by Participants. Deferrals will be made in accordance with the requirements of Section 409A.
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(n) Section 409A. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpreted to the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A, and, to the extent not so exempt, in compliance with the requirements of Section 409A. If the Board determines that any Award granted hereunder is not exempt from and is therefore subject to Section 409A, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent an Award Agreement is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreement specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferred compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A without regard to alternative definitions thereunder) will be issued or paid before the date that is six months and one day following the date of such Participant’s “separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred will be paid in a lump sum on the day after such six month period elapses, with the balance paid thereafter on the original schedule.
(o) Choice of Law. This Plan and any controversy arising out of or relating to this Plan shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without regard to conflict of law principles that would result in any application of any law other than the law of the State of Delaware.
| 10. | COVENANTS OF THE COMPANY. |
The Company will seek to obtain from each regulatory commission or agency, as may be deemed to be necessary, having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise or vesting of the Awards; provided, however, that this undertaking will not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable pursuant to any such Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary or advisable for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise or vesting of such Awards unless and until such authority is obtained. A Participant is not eligible for the grant of an Award or the subsequent issuance of Common Stock pursuant to the Award if such grant or issuance would be in violation of any Applicable Law.
| 11. | SEVERABILITY. |
If all or any part of the Plan or any Award Agreement is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of the Plan or such Award Agreement not declared to be unlawful or invalid. Any Section of the Plan or any Award Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
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| 12. | TERMINATION OF THE PLAN. |
The Board may suspend or terminate the Plan at any time. No Incentive Stock Options may be granted after the tenth anniversary of the earlier of: (i) the Adoption Date; or (ii) the date the Plan is approved by the Company’s stockholders. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
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| 13. | DEFINITIONS. |
As used in the Plan, the following definitions apply to the capitalized terms indicated below:
(a) “Adoption Date” means the date the Plan is first approved by the Board or Compensation Committee, as applicable.
(b) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(c) “Applicable Law” means the Code and any applicable U.S. and non-U.S. securities, exchange control, tax, federal, state, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (including under the authority of any applicable self-regulating organization such as the Nasdaq Stock Market, New York Stock Exchange, or the Financial Industry Regulatory Authority).
(d) “Award” means any right to receive Common Stock, cash or other property granted under the Plan (including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, an RSU Award, a SAR, a Performance Award or any Other Award).
(e) “Award Agreement” means a written or electronic agreement between the Company and a Participant evidencing the terms and conditions of an Award. The Award Agreement generally consists of the Grant Notice and the agreement containing the written summary of the general terms and conditions applicable to the Award and which is provided, including through electronic means, to a Participant along with the Grant Notice. Each Award Agreement will be subject to the terms and conditions of the Plan.
(f) “Board” means the Board of Directors of the Company (or its designee). Any decision or determination made by the Board shall be a decision or determination that is made in the sole discretion of the Board (or its designee), and such decision or determination shall be final and binding on all Participants.
(g) “Capital Stock” means each and every class of common stock of the Company, regardless of the number of votes per share.
(h) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Award after the Effective Date without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
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(i) “Cause” has the meaning ascribed to such term in any written agreement between the Participant and the Company defining such term and, in the absence of such agreement, such term means, with respect to a Participant, the Company has determined in its sole discretion that any one or more of the following has occurred: (i) the Participant’s conviction of, or plea of no contest with respect to, any felony or to any misdemeanor involving dishonesty or moral turpitude; (ii) the Participant’s participation in a fraud or act of dishonesty (or an attempted fraud or act of dishonesty) against the Company, or that results in (or could result in) material harm to the Company, including but not limited to material harm to reputational interests; (iii) the Participant’s violation of a fiduciary duty or a duty of loyalty owed to the Company; (iv) the Participant’s material breach of any agreement between the Participant and the Company, including but not limited to any employment, confidential information and invention assignment agreement, or of any applicable written Company policies; (v) persistent, unsatisfactory performance or neglect of the Participant’s job duties, which is not cured within thirty (30) business days after the Participant is provided written notice by the Company (provided, that, such written notice and opportunity to cure are not required if the Company determines that the Participant’s performance or neglect is not reasonably susceptible to being cured); or (vi) the Participant’s gross misconduct or material failure to comply with a written instruction of the Company. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Board with respect to Participants who are executive officers of the Company and by the Company’s Chief Executive Officer with respect to Participants who are not executive officers of the Company. Any determination by the Company that the Continuous Service of a Participant was terminated for Cause or without Cause for the purposes of outstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.
(j) “Change in Control” or “Change of Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A) on account of the acquisition of securities of the Company directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur;
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(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;
(iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than 50% of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or
(iv) individuals who, on the Effective Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Change in Control shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
(k) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
(l) “Committee” means the Compensation Committee and any other committee of one or more Directors to whom authority has been delegated by the Board or Compensation Committee in accordance with the Plan.
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(m) “Common Stock” means the common stock of the Company.
(n) “Company” means BlossomHill Therapeutics, Inc., a Delaware corporation.
(o) “Compensation Committee” means the Compensation Committee of the Board.
(p) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the Company’s securities to such person.
(q) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participant is rendering services ceases to qualify as an Affiliate, as determined by the Board, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by Applicable Law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by Applicable Law. In addition, to the extent required for exemption from or compliance with Section 409A, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of “separation from service” as defined under Treasury Regulations Section 1.409A-1(h) (without regard to any alternative definition thereunder).
(r) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale or other disposition of all or substantially all, as determined by the Board, of the consolidated assets of the Company and its Subsidiaries;
(ii) a sale or other disposition of at least 50% of the outstanding securities of the Company;
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(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
Notwithstanding the foregoing or any other provision of this Plan, (A) the term Corporate Transaction shall not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, (B) the definition of Corporate Transaction (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Awards subject to such agreement; provided, however, that if no definition of Corporate Transaction or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply, and (C) with respect to any nonqualified deferred compensation that becomes payable on account of the Corporate Transaction, the transaction or event described in clause (i), (ii), (iii), or (iv) also constitutes a Section 409A Change in Control if required in order for the payment not to violate Section 409A of the Code.
(s) “determine” or “determined” means as determined by the Board or the Committee (or its designee) in its sole discretion.
(t) “Director” means a member of the Board.
(u) “Disability” means, with respect to a Participant, such Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months, as provided in Section 22(e)(3) of the Code, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.
(v) “Effective Date” means the IPO Date, provided this Plan is approved by the Company’s stockholders prior to the IPO Date.
(w) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(x) “Entity” means a corporation, partnership, limited liability company or other entity.
(y) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
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(z) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities.
(aa) “Fair Market Value” means, as of any date, unless otherwise determined by the Board, the value of the Common Stock (as determined on a per share or aggregate basis, as applicable) determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable.
(ii) If there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling price on the last preceding date for which such quotation exists.
(iii) In the absence of such markets for the Common Stock, or if otherwise determined by the Board, the Fair Market Value will be determined by the Board in good faith and in a manner that complies with Sections 409A and 422 of the Code.
(bb) “Governmental Body” means any: (i) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or other government; (iii) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or Entity and any court or other tribunal, and for the avoidance of doubt, any tax authority) or other body exercising similar powers or authority; or (iv) self-regulatory organization (including the Nasdaq Stock Market, New York Stock Exchange, and the Financial Industry Regulatory Authority).
(cc) “Grant Notice” means the notice provided to a Participant that he or she has been granted an Award under the Plan and which includes the name of the Participant, the type of Award, the date of grant of the Award, number of shares of Common Stock subject to the Award or potential cash payment right (if any), the vesting schedule for the Award (if any) and other key terms applicable to the Award.
(dd) “Incentive Stock Option” means an option granted pursuant to Section 4 of the Plan that is intended to be, and qualifies as, an “incentive stock option” within the meaning of Section 422 of the Code.
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(ee) “IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering.
(ff) “Materially Impair” means any amendment to the terms of the Award that materially adversely affects the Participant’s rights under the Award. A Participant’s rights under an Award will not be deemed to have been Materially Impaired by any such amendment if the Board, in its sole discretion, determines that the amendment, taken as a whole, does not materially impair the Participant’s rights. For example, the following types of amendments to the terms of an Award do not Materially Impair the Participant’s rights under the Award: (i) imposition of reasonable restrictions on the minimum number of shares subject to an Option or SAR that may be exercised; (ii) to maintain the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iii) to change the terms of an Incentive Stock Option in a manner that disqualifies, impairs or otherwise affects the qualified status of the Award as an Incentive Stock Option under Section 422 of the Code; (iv) to clarify the manner of exemption from, or to bring the Award into compliance with or qualify it for an exemption from, Section 409A; or (v) to comply with other Applicable Laws.
(gg) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-employee director” for purposes of Rule 16b-3.
(hh) “Nonstatutory Stock Option” means any option granted pursuant to Section 4 of the Plan that does not qualify as an Incentive Stock Option.
(ii) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act.
(jj) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.
(kk) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(ll) “Other Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms and conditions of Section 5(c).
(mm) “Own,” “Owned,” “Owner,” “Ownership” means that a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
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(nn) “Participant” means an Employee, Director or Consultant to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
(oo) “Performance Award” means an Award that may vest or may be exercised or a cash award that may vest or become earned and paid contingent upon the attainment during a Performance Period of certain Performance Goals and which is granted under the terms and conditions of Section 5(b) pursuant to such terms as are approved by the Board. In addition, to the extent permitted by Applicable Law and set forth in the applicable Award Agreement, the Board may determine that cash or other property may be used in payment of Performance Awards. Performance Awards that are settled in cash or other property are not required to be valued in whole or in part by reference to, or otherwise based on, the Common Stock.
(pp) “Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, the following as determined by the Board: earnings (including earnings per share and net earnings); earnings before interest, taxes and depreciation; earnings before interest, taxes, depreciation and amortization; total stockholder return; return on equity or average stockholder’s equity; return on assets, investment, or capital employed; stock price; margin (including gross margin); income (before or after taxes); operating income; operating income after taxes; pre-tax profit; operating cash flow; sales or revenue targets; increases in revenue or product revenue; expenses and cost reduction goals; improvement in or attainment of working capital levels; economic value added (or an equivalent metric); market share; cash flow; cash flow per share; share price performance; debt reduction; customer satisfaction; stockholders’ equity; capital expenditures; debt levels; operating profit or net operating profit; growth of net income or operating income; billings; financing; stockholder liquidity; corporate governance and compliance; intellectual property; personnel matters; progress of internal research; progress of partnered programs; partner satisfaction; budget management; partner or collaborator achievements; internal controls, including those related to the Sarbanes-Oxley Act of 2002; investor relations, analysts and communication; implementation or completion of projects or processes; employee retention; strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property); establishing relationships with respect to the marketing, distribution and sale of the Company’s products; supply chain achievements; co-development, co-marketing, profit sharing, joint venture or other similar arrangements; individual performance goals; corporate development and planning goals; and other measures of performance selected by the Board or Committee whether or not listed herein.
(qq) “Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or more relevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document setting forth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculating the attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to exclude exchange rate effects;
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(3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustments to corporate tax rates; (5) to exclude the effects of items that are “unusual” in nature or occur “infrequently” as determined under generally accepted accounting principles; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achieved performance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regular cash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costs incurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11) to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition, the Board may establish or provide for other adjustment items in the Award Agreement at the time the Award is granted or in such other document setting forth the Performance Goals at the time the Performance Goals are established. The Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define the manner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in the payment or vesting corresponding to the degree of achievement as specified in the Award Agreement or the written terms of a Performance Award.
(rr) “Performance Period” means the period of time selected by the Board over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to vesting or exercise of an Award. Performance Periods may be of varying and overlapping duration, at the sole discretion of the Board.
(ss) “Plan” means this BlossomHill Therapeutics, Inc. 2026 Equity Incentive Plan, as amended from time to time.
(tt) “Plan Administrator” means the person, persons, and/or third-party administrator designated by the Company to administer the day-to-day operations of the Plan and the Company’s other equity incentive programs.
(uu) “Post-Termination Exercise Period” means the period following termination of a Participant’s Continuous Service within which an Option or SAR is exercisable, as specified in Section 4(h).
(vv) “Prior Plan” means the BlossomHill Therapeutics, Inc. 2020 Equity Incentive Plan, as amended from time to time.
(ww) “Prior Plan’s Available Reserve” means the number of shares available for the grant of new awards under the Prior Plan as of the Effective Date.
(xx) “Prospectus” means the document containing the Plan information specified in Section 10(a) of the Securities Act.
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(yy) “Restricted Stock Award” or “RSA” means an Award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(zz) “Returning Shares” means shares subject to outstanding stock awards granted under the Prior Plan and that following the Effective Date: (A) are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by such stock award having been issued; (B) are not issued because such stock award or any portion thereof is settled in cash; (C) are forfeited back to or repurchased by the Company because of the failure to meet a contingency or condition required for the vesting of such shares; (D) are withheld or reacquired to satisfy the exercise, strike or purchase price; or (E) are withheld or reacquired to satisfy a tax withholding obligation.
(aaa) “RSU Award” or “RSU” means an Award of restricted stock units representing the right to receive an issuance of shares of Common Stock which is granted pursuant to the terms and conditions of Section 5(a).
(bbb) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
(ccc) “Rule 405” means Rule 405 promulgated under the Securities Act.
(ddd) “Section 409A” means Section 409A of the Code and the regulations and other guidance thereunder.
(eee) “Section 409A Change in Control” means a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the Company’s assets, as provided in Section 409A(a)(2)(A)(v) of the Code and Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder).
(fff) “Securities Act” means the Securities Act of 1933, as amended.
(ggg) “Share Reserve” means the number of shares available for issuance under the Plan as set forth in Section 2(a).
(hhh) “Share Reserve Increase Stock” means the number of shares of Capital Stock, determined as of the applicable date of measurement, equal to the sum of (i) the number of shares of Capital Stock issued and outstanding and (ii) the number of shares of Capital Stock issuable upon the exercise, conversion, or exchange of all then-outstanding pre-funded warrants, convertible capital stock or indebtedness, exchangeable Capital Stock or indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or indirectly, shares of Capital Stock (whether vested or unvested), but excluding the number of shares of Capital Stock issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under the Company’s then-existing equity incentive plan(s) and employee stock purchase plan(s), if any.
(iii) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 4.
(jjj) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than 50%.
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(kkk) “Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising out of or in relation to a Participant’s participation in the Plan and legally applicable or deemed applicable to the Participant.
(lll) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any Affiliate.
(mmm) “Trading Policy” means the Company’s policy permitting certain individuals to sell Company shares only during certain “window” periods and/or otherwise restricts the ability of certain individuals to transfer or encumber Company shares, as in effect from time to time.
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Exhibit 10.3
BLOSSOMHILL THERAPEUTICS, INC.
STOCK OPTION GRANT NOTICE
(2026 EQUITY INCENTIVE PLAN)
BlossomHill Therapeutics, Inc. (the “Company”), pursuant to its 2026 Equity Incentive Plan (the “Plan”), has granted to you (“Optionholder”) an option to purchase the number of shares of Common Stock set forth below (the “Option”). Your Option is subject to all of the terms and conditions as set forth herein and in the Plan, and the Stock Option Agreement and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Stock Option Agreement shall have the meanings set forth in the Plan or the Stock Option Agreement, as applicable.
| Optionholder: |
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| Date of Grant: |
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| Vesting Commencement Date: |
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Number of Shares of Common Stock Subject to Option: |
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| Exercise Price (Per Share): |
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| Total Exercise Price: |
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| Expiration Date: |
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| Type of Grant: | [Incentive Stock Option] OR [Nonstatutory Stock Option] | |
| Exercise and | ||
| Vesting Schedule: | Subject to the Optionholder’s Continuous Service through each applicable vesting date, the Option will vest as follows: | |
| [__________________________________________________________] | ||
Optionholder Acknowledgements: By your signature below or by electronic acceptance or authentication in a form authorized by the Company, you understand and agree that:
| • | The Option is governed by this Stock Option Grant Notice (this “Grant Notice”), and the provisions of the Plan and the Stock Option Agreement and the Notice of Exercise, all of which are made a part of this document. Unless otherwise provided in the Plan, this Grant Notice and the Stock Option Agreement (together, the “Option Agreement”) may not be modified, amended or revised except in a writing signed by you and a duly authorized officer of the Company. |
| • | [If the Option is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options granted to you) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.] |
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| • | You consent to receive this Grant Notice, the Stock Option Agreement, the Plan, the Prospectus and any other Plan-related documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. |
| • | You have read and are familiar with the provisions of the Plan, the Stock Option Agreement, the Notice of Exercise and the Prospectus. In the event of any conflict between the provisions in this Grant Notice, the Stock Option Agreement, the Notice of Exercise, or the Prospectus and the terms of the Plan, the terms of the Plan shall control. |
| • | The Plan and the Option Agreement set forth the entire understanding between you and the Company regarding the acquisition of Common Stock and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of other equity awards previously granted to you and any written employment agreement, offer letter, severance agreement, written severance plan or policy, or other written agreement between the Company and you in each case that specifies the terms that should govern this Option. |
| • | Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes. |
| BLOSSOMHILL THERAPEUTICS, INC. | OPTIONHOLDER: | |||||||
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| Signature | Signature | |||||||
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Date: |
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ATTACHMENTS: Stock Option Agreement, 2026 Equity Incentive Plan, Notice of Exercise, Prospectus
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ATTACHMENT I
BLOSSOMHILL THERAPEUTICS, INC.
STOCK OPTION AGREEMENT
(2026 EQUITY INCENTIVE PLAN)
As reflected by your Stock Option Grant Notice (“Grant Notice”), BlossomHill Therapeutics, Inc. (the “Company”) has granted you an option under its 2026 Equity Incentive Plan (the “Plan”) to purchase a number of shares of Common Stock at the exercise price indicated in your Grant Notice (the “Option”). Capitalized terms not explicitly defined in this Stock Option Agreement but defined in the Grant Notice or the Plan shall have the meanings set forth in the Grant Notice or Plan, as applicable.
The general terms and conditions applicable to your Option are as follows:
1. GOVERNING PLAN DOCUMENT. Your Option is subject to all the provisions of the Plan, including but not limited to the provisions in:
(a) Section 6 regarding the impact of a Capitalization Adjustment, dissolution, liquidation, or Corporate Transaction on your Option;
(b) Section 9(e) regarding the Company’s retained rights to terminate your Continuous Service notwithstanding the grant of the Option; and
(c) Section 8 regarding certain tax consequences of your Option.
Your Option is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. In the event of any conflict between the Option Agreement and the provisions of the Plan, the provisions of the Plan shall control.
2. VESTING. Your Option will vest as provided in your Grant Notice, subject to the provisions contained herein and the terms of the Plan. Vesting will cease upon the termination of your Continuous Service.
3. EXERCISE.
(a) You may generally exercise the vested portion of your Option for whole shares of Common Stock at any time during its term by delivery of payment of the exercise price and applicable withholding taxes and other required documentation to the Plan Administrator in accordance with the exercise procedures established by the Plan Administrator, which may include an electronic submission. Please review Sections 4(i), 4(j) and 7(b)(v) of the Plan, which may restrict or prohibit your ability to exercise your Option during certain periods.
(b) To the extent permitted by Applicable Law, you may pay your Option exercise price as follows:
(i) cash, check, bank draft or money order;
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(ii) subject to Company and/or Committee consent at the time of exercise, pursuant to a “cashless exercise” program as further described in Section 4(c)(ii) of the Plan if, at the time of exercise, the Common Stock is publicly traded;
(iii) subject to Company and/or Committee consent at the time of exercise, by delivery of previously owned shares of Common Stock as further described in Section 4(c)(iii) of the Plan; or
(iv) subject to Company and/or Committee consent at the time of exercise, if the Option is a Nonstatutory Stock Option, by a “net exercise” arrangement as further described in Section 4(c)(iv) of the Plan.
(c) By accepting your Option, you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this Section 3(c) will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 3(c). The underwriters of the Company’s stock are intended third party beneficiaries of this Section 3(c) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
4. TERM. You may not exercise your Option before the commencement of its term or after its term expires. The term of your Option commences on the Date of Grant and expires upon the earliest of the following:
(a) immediately upon the termination of your Continuous Service for Cause;
(b) three months after the termination of your Continuous Service for any reason other than Cause, Disability or death;
(c) 12 months after the termination of your Continuous Service due to your Disability;
(d) 18 months after your death if you die during your Continuous Service;
(e) immediately upon a Corporate Transaction if the Board has determined that the Option will terminate in connection with a Corporate Transaction;
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(f) the Expiration Date indicated in your Grant Notice; or
(g) the day before the 10th anniversary of the Date of Grant.
Notwithstanding the foregoing, if you die during the period provided in Section 4(b) or 4(c) above, the term of your Option shall not expire until the earlier of (i) 18 months after your death, (ii) upon any termination of the Option in connection with a Corporate Transaction, (iii) the Expiration Date indicated in your Grant Notice, or (iv) the day before the tenth anniversary of the Date of Grant. Additionally, the Post-Termination Exercise Period of your Option may be extended as provided in Section 4(i) of the Plan.
To obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the date of grant of your Option and ending on the day three months before the date of your Option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. If the Company provides for the extended exercisability of your Option under certain circumstances for your benefit, your Option will not necessarily be treated as an Incentive Stock Option if you exercise your Option more than three months after the date your employment terminates.
5. WITHHOLDING OBLIGATIONS. As further provided in Section 8 of the Plan: (a) you may not exercise your Option unless the applicable tax withholding obligations are satisfied; and (b) at the time you exercise your Option, in whole or in part, or at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “cashless exercise” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the federal, state, local and foreign tax withholding obligations, if any, which arise in connection with the exercise of your Option in accordance with the withholding procedures established by the Company. Accordingly, you may not be able to exercise your Option even though the Option is vested, and the Company shall have no obligation to issue shares of Common Stock subject to your Option, unless and until such obligations are satisfied. In the event that the amount of the Company’s withholding obligation in connection with your Option was greater than the amount actually withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount.
6. INCENTIVE STOCK OPTION DISPOSITION REQUIREMENT. If your Option is an Incentive Stock Option, you must notify the Company in writing within 15 days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your Option that occurs within two years after the date of your Option grant or within one year after such shares of Common Stock are transferred upon exercise of your Option.
7. TRANSFERABILITY. Except as otherwise provided in Section 4(e) of the Plan, your Option is not transferable, except by will or by the applicable laws of descent and distribution, and is exercisable during your life only by you.
8. CORPORATE TRANSACTION. Your Option is subject to the terms of any agreement governing a Corporate Transaction involving the Company, including, without limitation, a provision for the appointment of a stockholder representative that is authorized to act on your behalf with respect to any escrow, indemnities and any contingent consideration.
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9. NO LIABILITY FOR TAXES. As a condition to accepting the Option, you hereby (a) agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from the Option or other Company compensation and (b) acknowledge that you were advised to consult with your own personal tax, financial and other legal advisors regarding the tax consequences of the Option and have either done so or knowingly and voluntarily declined to do so. Additionally, you acknowledge that the Option is exempt from Section 409A only if the exercise price is at least equal to the “fair market value” of the Common Stock on the date of grant as determined by the Internal Revenue Service and there is no other impermissible deferral of compensation associated with the Option. Additionally, as a condition to accepting the Option, you agree to not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates in the event that the Internal Revenue Service asserts that such exercise is less than the “fair market value” of the Common Stock on the date of grant as subsequently determined by the Internal Revenue Service.
10. SEVERABILITY. If any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.
11. OTHER DOCUMENTS. You hereby acknowledge receipt of or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Prospectus. In addition, you acknowledge receipt of the Company’s Trading Policy.
12. QUESTIONS. If you have questions regarding these or any other terms and conditions applicable to your Option, including a summary of the applicable federal income tax consequences, please see the Prospectus.
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ATTACHMENT II
2026 EQUITY INCENTIVE PLAN
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ATTACHMENT III
BLOSSOMHILL THERAPEUTICS, INC.
NOTICE OF EXERCISE
(2026 EQUITY INCENTIVE PLAN)
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| 10255 Science Center Dr., Suite 200 | ||
| San Diego, CA 92121 | Date of Exercise: _____________________________________ |
This constitutes notice to BlossomHill Therapeutics, Inc. (the “Company”) that I elect to purchase the below number of shares of Common Stock of the Company (the “Shares”) by exercising my Option for the price set forth below. Capitalized terms not explicitly defined in this Notice of Exercise but defined in the Stock Option Grant Notice, Stock Option Agreement or 2026 Equity Incentive Plan (the “Plan”) shall have the meanings set forth in the Stock Option Grant Notice, Stock Option Agreement or Plan, as applicable. Use of certain payment methods is subject to Company and/or Committee consent and certain additional requirements set forth in the Stock Option Agreement and the Plan.
| Type of Option (check one): | Incentive ☐ | Nonstatutory ☐ | ||||||
| Date of Grant: |
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| Number of Shares as to which Option is exercised: |
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| Certificates to be issued in name of: |
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| Total exercise price: |
$ | ______________ | ||||||
| Cash, check, bank draft or money order delivered herewith: |
$ | ______________ | ||||||
| Value of ________ Shares delivered herewith: |
$ | ______________ | ||||||
| Regulation T Program (cashless exercise): |
$ | _____________ | ||||||
| Value of _______ Shares pursuant to net exercise: |
$ | _____________ | ||||||
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By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Plan, (ii) to satisfy the tax withholding obligations, if any, relating to the exercise of this Option as set forth in the Stock Option Agreement, and (iii) if this exercise relates to an Incentive Stock Option, to notify you in writing within 15 days after the date of any disposition of any of the Shares issued upon exercise of this Option that occurs within two years after the Date of Grant or within one year after such Shares are issued upon exercise of this Option.
I further agree that I will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale with respect to any shares of Common Stock or other securities of the Company that I hold, for a period of 180 days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2241 or any successor or similar rules or regulation (the “Lock-Up Period”); provided, however, that nothing contained in this paragraph will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. I further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. I further agree that in order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to shares of Common Stock that I hold until the end of such period. I also agree that any transferee of any shares of Common Stock (or other securities) of the Company that I hold will be bound by this paragraph. The underwriters of the Company’s stock are intended third party beneficiaries of this paragraph and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.
| Very truly yours, | ||
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ATTACHMENT IV
PROSPECTUS
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Exhibit 10.4
BLOSSOMHILL THERAPEUTICS, INC.
2026 EMPLOYEE STOCK PURCHASE PLAN
ADOPTED BY THE BOARD OF DIRECTORS: JUNE 25, 2026
APPROVED BY THE STOCKHOLDERS: [ ]
| 1. | GENERAL; PURPOSE. |
(a) The Plan provides a means by which Eligible Employees of the Company and certain Designated Companies may be given an opportunity to purchase shares of Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan. In addition, the Plan permits the Company to grant a series of Purchase Rights to Eligible Employees that do not meet the requirements of an Employee Stock Purchase Plan.
(b) The Plan includes two components: a 423 Component and a Non-423 Component. The Company intends (but makes no undertaking or representation to maintain) the 423 Component to qualify as an Employee Stock Purchase Plan. The provisions of the 423 Component, accordingly, will be construed in a manner that is consistent with the requirements of Section 423 of the Code. In addition, this Plan authorizes grants of Purchase Rights under the Non-423 Component that do not meet the requirements of an Employee Stock Purchase Plan. Except as otherwise provided in the Plan or determined by the Board, the Non-423 Component will operate and be administered in the same manner as the 423 Component. In addition, the Company may make separate Offerings which vary in terms (provided that such terms are not inconsistent with the provisions of the Plan or the requirements of an Employee Stock Purchase Plan to the extent the Offering is made under the 423 Component), and the Company will designate which Designated Company is participating in each separate Offering.
(c) The Company, by means of the Plan, seeks to retain the services of Eligible Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.
| 2. | ADMINISTRATION. |
(a) The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c). References herein to the Board shall be deemed to refer to the Committee except where context dictates otherwise.
(b) The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:
(i) To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).
(ii) To designate from time to time (A) which Related Corporations will be eligible to participate in the Plan as Designated 423 Companies, (B) which Related Corporations or Affiliates will be eligible to participate in the Plan as Designated Non-423 Companies, (C) which Affiliates or Related Corporations may be excluded from participation in the Plan, and (D) which Designated Companies will participate in each separate Offering (to the extent that the Company makes separate Offerings).
(iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.
(iv) To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.
(v) To suspend or terminate the Plan at any time as provided in Section 12.
(vi) To amend the Plan at any time as provided in Section 12.
(vii) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan with respect to the 423 Component.
(viii) To adopt such rules, procedures and sub-plans as are necessary or appropriate to permit or facilitate participation in the Plan by Employees who are foreign nationals or employed or located outside the United States. Without limiting the generality of, and consistent with, the foregoing, the Board specifically is authorized to adopt rules, procedures, and sub-plans regarding, without limitation, eligibility to participate in the Plan, the definition of eligible “earnings,” handling and making of Contributions, establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of share issuances, any of which may vary according to applicable requirements, and which, if applicable to a Designated Non-423 Company, do not have to comply with the requirements of Section 423 of the Code.
(c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan and any applicable Offering Document to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. Further, to the extent not prohibited by Applicable Law, the Board or Committee may, from time to time, delegate some or all of its authority under the Plan to one or more officers of the Company or other persons or groups of persons as it deems necessary, appropriate or advisable under conditions or limitations that it may set at or after the time of the delegation. The Board may retain the authority to concurrently administer the Plan with the Committee (or its delegate) and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee (or a delegate of the Committee), the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.
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(d) All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.
| 3. | SHARES OF COMMON STOCK SUBJECT TO THE PLAN. |
(a) Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Common Stock that may be issued under the Plan will not exceed [ ] shares of Common Stock, plus the number of shares of Common Stock that are automatically added on January 1st of each year for a period of up to ten years, commencing on January 1, 2027 and ending on (and including) January 1, 2036 in an amount equal to the lesser of (x) one percent (1%) of the total number of shares of Share Reserve Increase Stock outstanding on December 31st of the preceding calendar year, and (y) [ ] shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that there will be no January 1st increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence. For the avoidance of doubt, up to the maximum number of shares of Common Stock reserved under this Section 3(a) may be used to satisfy purchases of Common Stock under the 423 Component and any remaining portion of such maximum number of shares may be used to satisfy purchases of Common Stock under the Non-423 Component.
(b) If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.
(c) The stock purchasable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market.
| 4. | GRANT OF PURCHASE RIGHTS; OFFERING. |
(a) The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and with respect to the 423 Component, will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.
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(b) If a Participant has more than one Purchase Right outstanding under the Plan, unless such Participant otherwise indicates in forms delivered to the Company or a third party designated by the Company (each, a “Company Designee”): (i) each form will apply to all of such Participant’s Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.
(c) The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.
| 5. | ELIGIBILITY. |
(a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation or an Affiliate. Except as provided in Section 5(b) or as required by Applicable Law, an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company, the Related Corporation or the Affiliate, as the case may be, for such continuous period preceding such Offering Date as the Board may (unless prohibited by Applicable Law) require, but in no event will the required period of continuous employment be equal to or greater than two years. In addition, the Board may provide (unless prohibited by Applicable Law) that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company, the Related Corporation or the Affiliate is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code with respect to the 423 Component. The Board may also exclude (unless prohibited by Applicable Law) from participation in the Plan or any Offering Employees who are “highly compensated employees” (within the meaning of Section 423(b)(4)(D) of the Code) of the Company, a Related Corporation or an Affiliate, or a subset of such highly compensated employees.
(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:
(i) the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;
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(ii) the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, such individual will not receive any Purchase Right under that Offering.
(c) No Employee will be eligible for the grant of any Purchase Rights under the 423 Component if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options will be treated as stock owned by such Employee.
(d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the 423 Component only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to accrue at a rate which, when aggregated, exceeds $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.
(e) Officers of the Company and any Designated Company, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may (unless prohibited by Applicable Law) provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.
(f) Notwithstanding anything in this Section 5 to the contrary, in the case of an Offering under the Non-423 Component, an Eligible Employee (or group of Eligible Employees) may be excluded from participation in the Plan or an Offering if the Board has determined, in its sole discretion, that participation of such Eligible Employee(s) is not advisable or practical for any reason.
| 6. | PURCHASE RIGHTS; PURCHASE PRICE. |
(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of shares of Common Stock purchasable either with a percentage of earnings (as defined by the Board in each Offering) or with a maximum dollar amount, as designated by the Board, but in either case not exceeding 15% of such Employee’s earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.
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(b) The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Common Stock will be purchased in accordance with such Offering.
(c) In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the shares of Common Stock (rounded down to the nearest whole share) available will be made in as nearly a uniform manner as will be practicable and equitable.
(d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights will be no less than the lesser of:
(i) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or
(ii) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.
| 7. | PARTICIPATION; WITHDRAWAL; TERMINATION. |
(a) An Eligible Employee may elect to participate in an Offering and authorize payroll deductions as the means of making Contributions by completing and delivering to the Company or a Company Designee, within the time specified in the Offering, an enrollment form provided by the Company or Company Designee. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where Applicable Law requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. If required under Applicable Law or if specifically provided in the Offering and to the extent permitted by Section 423 of the Code with respect to the 423 Component, in addition to or instead of making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash, check or wire transfer prior to a Purchase Date.
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(b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company or a Company Designee a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing. Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute as soon as practicable to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.
(c) Unless otherwise required by Applicable Law, Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by Applicable Law) or (ii) is otherwise no longer eligible to participate. The Company will distribute as soon as practicable to such individual all of his or her accumulated but unused Contributions.
(d) Unless otherwise determined by the Board, a Participant whose employment transfers or whose employment terminates with an immediate rehire (with no break in service) by or between the Company and a Designated Company or between Designated Companies will not be treated as having terminated employment for purposes of participating in the Plan or an Offering; however, if a Participant transfers from an Offering under the 423 Component to an Offering under the Non-423 Component, the exercise of the Participant’s Purchase Right will be qualified under the 423 Component only to the extent such exercise complies with Section 423 of the Code. If a Participant transfers from an Offering under the Non-423 Component to an Offering under the 423 Component, the exercise of the Purchase Right will remain non-qualified under the Non-423 Component. The Board may establish different and additional rules governing transfers between separate Offerings within the 423 Component and between Offerings under the 423 Component and Offerings under the Non-423 Component.
(e) During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.
(f) Unless otherwise specified in the Offering or required by Applicable Law, the Company will have no obligation to pay interest on Contributions.
| 8. | EXERCISE OF PURCHASE RIGHTS. |
(a) On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of shares of Common Stock, up to the maximum number of shares of Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares will be issued unless specifically provided for in the Offering.
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(b) Unless otherwise provided in the Offering, if any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock and such remaining amount is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining amount will be held in such Participant’s account for the purchase of shares of Common Stock under the next Offering under the Plan, unless such Participant withdraws from or is not eligible to participate in such next Offering, in which case such amount will be distributed to such Participant after the final Purchase Date without interest (unless the payment of interest is otherwise required by Applicable Law). If the amount of Contributions remaining in a Participant’s account after the purchase of shares of Common Stock is at least equal to the amount required to purchase one (1) whole share of Common Stock on the final Purchase Date of an Offering, then such remaining amount will be distributed in full to such Participant after the final Purchase Date of such Offering without interest (unless the payment of interest is otherwise required by Applicable Law).
(c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable U.S. federal and state, foreign and other securities, exchange control and other laws applicable to the Plan. If on a Purchase Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and, subject to Section 423 of the Code with respect to the 423 Component, the Purchase Date will be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than 27 months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in material compliance with all Applicable Laws, as determined by the Company in its sole discretion, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest (unless the payment of interest is otherwise required by Applicable Law).
| 9. | COVENANTS OF THE COMPANY. |
The Company will seek to obtain from each U.S. federal or state, foreign or other regulatory commission, agency or other Governmental Body having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Common Stock thereunder unless the Company determines, in its sole discretion, that doing so is not practical or would cause the Company to incur costs that are unreasonable. If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Stock under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Stock upon exercise of such Purchase Rights.
| 10. | DESIGNATION OF BENEFICIARY. |
(a) The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Common Stock and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.
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(b) If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any shares of Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or Contributions, without interest (unless the payment of interest is otherwise required by Applicable Law), to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
| 11. | ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS. |
(a) In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.
(b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the stockholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase shares of Common Stock (rounded down to the nearest whole share) within ten business days (or such other period specified by the Board) prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.
| 12. | AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN. |
(a) The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, stockholder approval will be required for any amendment of the Plan for which stockholder approval is required by Applicable Law. If the Plan is terminated, the Board, in its discretion, may elect to terminate all outstanding Offerings either immediately or upon completion of the purchase of shares of Common Stock on the next Purchase Date (which may be sooner than originally scheduled, if determined by the Board in its discretion), or may elect to permit Offerings to expire in accordance with their terms.
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(b) The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.
(c) Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to facilitate compliance with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code with respect to the 423 Component or with respect to other Applicable Laws. Notwithstanding anything in the Plan or any Offering Document to the contrary, the Board will be entitled to: (i) establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars; (ii) permit Contributions in excess of the amount designated by a Participant in order to adjust for mistakes in the Company’s processing of properly completed Contribution elections; (iii) establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant’s Contributions; (iv) amend any outstanding Purchase Rights or clarify any ambiguities regarding the terms of any Offering to enable the Purchase Rights to qualify under and/or comply with Section 423 of the Code with respect to the 423 Component; and (v) establish other limitations or procedures as the Board determines in its sole discretion advisable that are consistent with the Plan. The actions of the Board pursuant to this paragraph will not be considered to alter or impair any Purchase Rights granted under an Offering as they are part of the initial terms of each Offering and the Purchase Rights granted under each Offering.
| 13. | TAX QUALIFICATION; TAX WITHHOLDING. |
(a) Although the Company may endeavor to (i) qualify a Purchase Right for special tax treatment under the laws of the United States or jurisdictions outside of the United States or (ii) avoid adverse tax treatment, the Company makes no representation to that effect and expressly disavows any covenant to maintain special or to avoid unfavorable tax treatment, notwithstanding anything to the contrary in this Plan. The Company will be unconstrained in its corporate activities without regard to the potential negative tax impact on Participants.
(b) Each Participant will make arrangements, satisfactory to the Company and any applicable Related Corporation, to enable the Company or the Related Corporation to fulfill any withholding obligation for Tax-Related Items. Without limitation to the foregoing, in the Company’s sole discretion and subject to Applicable Law, such withholding obligation may be satisfied in whole or in part by (i) withholding from the Participant’s salary or any other cash payment due to the Participant from the Company or a Related Corporation; (ii) withholding from the proceeds of the sale of shares of Common Stock acquired under the Plan, either through a voluntary sale or a mandatory sale arranged by the Company; or (iii) any other method deemed acceptable by the Board. The Company shall not be required to issue any shares of Common Stock under the Plan until such obligations are satisfied.
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(c) The 423 Component is exempt from the application of Section 409A of the Code, and any ambiguities herein shall be interpreted to so be exempt from Section 409A of the Code. The Non-423 Component is intended to be exempt from the application of Section 409A of the Code under the short-term deferral exception and any ambiguities shall be construed and interpreted in accordance with such intent. In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Committee determines that an option granted under the Plan may be subject to Section 409A of the Code or that any provision in the Plan would cause an option under the Plan to be subject to Section 409A, the Committee may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Committee determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Section 409A of the Code, but only to the extent any such amendments or action by the Committee would not violate Section 409A of the Code. Notwithstanding the foregoing, the Company shall have no liability to a Participant or any other party if the option under the Plan that is intended to be exempt from or compliant with Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee with respect thereto.
| 14. | EFFECTIVE DATE OF PLAN. |
The Plan will become effective immediately prior to and contingent upon the IPO Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the stockholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.
| 15. | MISCELLANEOUS PROVISIONS. |
(a) Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights will constitute general funds of the Company.
(b) A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).
(c) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participant’s employment or amend a Participant’s employment contract, if applicable, or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation or an Affiliate, or on the part of the Company, a Related Corporation or an Affiliate to continue the employment of a Participant.
(d) The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules.
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(e) If any particular provision of the Plan is found to be invalid or otherwise unenforceable, such provision will not affect the other provisions of the Plan, but the Plan will be construed in all respects as if such invalid provision were omitted.
(f) If any provision of the Plan does not comply with Applicable Law, such provision shall be construed in such a manner as to comply with Applicable Law.
| 16. | DEFINITIONS. |
As used in the Plan, the following definitions will apply to the capitalized terms indicated below:
(a) “423 Component” means the part of the Plan, which excludes the Non-423 Component, pursuant to which Purchase Rights that satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(b) “Affiliate” means any entity, other than a Related Corporation, whether now or subsequently established, which is at the time of determination, a “parent” or “subsidiary” of the Company as such terms are defined in Rule 405 promulgated under the Securities Act. The Board may determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(c) “Applicable Law” means the Code and any applicable securities, federal, state, foreign, material local or municipal or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, listing rule, regulation, judicial decision, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Body (or under the authority of the New York Stock Exchange, Nasdaq Stock Market or the Financial Industry Regulatory Authority).
(d) “Board” means the Board of Directors of the Company.
(e) “Capital Stock” means each and every class of common stock of the Company, regardless of the number of votes per share.
(f) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.
(g) “Code” means the U.S. Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
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(h) “Committee” means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).
(i) “Common Stock” means, as of the IPO Date, the common stock of the Company.
(j) “Company” means BlossomHill Therapeutics, Inc., a Delaware corporation.
(k) “Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions and, with respect to the 423 Component, to the extent permitted by Section 423.
(l) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:
(i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its subsidiaries;
(ii) a sale or other disposition of more than 50% of the outstanding securities of the Company;
(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(m) “Designated 423 Company” means any Related Corporation selected by the Board as participating in the 423 Component.
(n) “Designated Company” means any Designated Non-423 Company or Designated 423 Company, provided, however, that at any given time, a Related Corporation participating in the 423 Component shall not be a Related Corporation participating in the Non-423 Component.
(o) “Designated Non-423 Company” means any Related Corporation or Affiliate selected by the Board as participating in the Non-423 Component.
(p) “Director” means a member of the Board.
(q) “Eligible Employee” means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.
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(r) “Employee” means any person, including an Officer or Director, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation or solely with respect to the Non-423 Component, an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.
(s) “Employee Stock Purchase Plan” means a plan that grants purchase rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.
(t) “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
(u) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows:
(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in such source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.
(ii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with Applicable Laws and regulations and, to the extent applicable as determined in the sole discretion of the Board, in a manner that complies with Sections 409A of the Code.
(iii) Notwithstanding the foregoing, for any Offering that commences on the IPO Date, the Fair Market Value of the shares of Common Stock on the Offering Date will be the price per share at which shares are first sold to the public in the Company’s initial public offering as specified in the final prospectus for that initial public offering.
(v) “Governmental Body” means any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or regulatory body, or quasi-governmental body of any nature (including any governmental division, department, administrative agency or bureau, commission, authority, instrumentality, official, ministry, fund, foundation, center, organization, unit, body or entity and any court or other tribunal, and for the avoidance of doubt, any tax authority) or other body exercising similar powers or authority; or (d) self-regulatory organization (including the New York Stock Exchange, the Nasdaq Stock Market and the Financial Industry Regulatory Authority).
(w) “IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering.
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(x) “Non-423 Component” means the part of the Plan, which excludes the 423 Component, pursuant to which Purchase Rights that are not intended to satisfy the requirements for an Employee Stock Purchase Plan may be granted to Eligible Employees.
(y) “Offering” means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “Offering Document” approved by the Board for that Offering.
(z) “Offering Date” means a date selected by the Board for an Offering to commence.
(aa) “Officer” means a person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.
(bb) “Participant” means an Eligible Employee who holds an outstanding Purchase Right.
(cc) “Plan” means this BlossomHill Therapeutics, Inc. 2026 Employee Stock Purchase Plan, as amended from time to time, including both the 423 Component and the Non-423 Component.
(dd) “Purchase Date” means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Common Stock will be carried out in accordance with such Offering.
(ee) “Purchase Period” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.
(ff) “Purchase Right” means an option to purchase shares of Common Stock granted pursuant to the Plan.
(gg) “Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(hh) “Securities Act” means the U.S. Securities Act of 1933, as amended.
(ii) “Share Reserve Increase Stock” means the number of shares of Capital Stock, determined as of the applicable date of measurement, equal to the sum of (i) the number of shares of Capital Stock issued and outstanding and (ii) the number of shares of Capital Stock issuable upon the exercise, conversion, or exchange of all then-outstanding pre-funded warrants, convertible capital stock or indebtedness, exchangeable Capital Stock or indebtedness, or other rights exercisable for or convertible or exchangeable into, directly or indirectly, shares of Capital Stock (whether vested or unvested), but excluding the number of shares of Capital Stock issuable upon the exercise of then-outstanding options and the shares reserved and available for issuance under the Company’s then-existing equity incentive plan(s) and employee stock purchase plan(s), if any.
(jj) “Tax-Related Items” means any income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items arising out of or in relation to a Participant’s participation in the Plan, including, but not limited to, the exercise of a Purchase Right and the receipt of shares of Common Stock or the sale or other disposition of shares of Common Stock acquired under the Plan.
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(kk) “Trading Day” means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including but not limited to the New York Stock Exchange, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.
16
Exhibit 10.5
AMENDMENT NO. 3
TO THE
2020 EQUITY INCENTIVE PLAN
This AMENDMENT No. 3 TO 2020 EQUITY INCENTIVE PLAN is made as of March 21, 2025, by BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”).
RECITALS
WHEREAS, 6,537,582 shares of Common Stock of the Company have been reserved for issuance under the 2020 Equity Incentive Plan, as amended by Amendment No. 1, dated as of February 26, 2021, and Amendment No. 2, dated as of July 12, 2023 (the “Plan”);
WHEREAS, to further the growth and success of the Company by providing compensation commensurate with maintaining a competitive position in the market to attract and retain key personnel, the Board and the requisite number of stockholders, having acted by written consent, approved an increase in the aggregate number of shares available for issuance under the Plan to 9,003,346 total shares of Common Stock; and
WHEREAS, all capitalized terms not defined herein shall have the same meanings as set forth in the Plan.
AGREEMENT
NOW, THEREFORE, pursuant to Section 12 of the Plan, the following amendments and modifications are hereby made a part of the Plan:
1. Amendment to Section 4(a). Section 4(a) shall be amended in its entirety to read as follows:
“(a) Share Reserve. Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Nine Million Three Thousand Three Hundred Forty-Six (9,003,346) shares of Common Stock (the “Share Reserve”).”
2. Amendment to Section 4(b). Section 4(b) shall be amended in its entirety to read as follows:
“(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, or if any shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or repurchased by the Company because of or in connection with the failure to meet a contingency or condition required to vest such shares in the Participant, the shares of Common Stock that have not been acquired, as well as the shares of Common Stock that have been forfeited or
1
repurchased under such Stock Award shall revert to and again become available for issuance under the Plan; provided, however, that subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be a number of shares of Common Stock equal to three multiplied by the Share Reserve.”
3. In all other respects, the Plan, as amended, is hereby ratified and confirmed and shall remain in full force and effect.
2
The Company has executed this Amendment No. 3 to 2020 Equity Incentive Plan as of the date first written above.
| COMPANY: |
| BLOSSOMHILL THERAPEUTICS, INC. |
| /s/ Jingrong Jean Cui |
| Name: Jingrong Jean Cui |
| Title: President and Chief Executive Officer |
2.
AMENDMENT NO. 2
TO THE
2020 EQUITY INCENTIVE PLAN
This AMENDMENT NO. 2 TO 2020 EQUITY INCENTIVE PLAN (the “Amendment”) is made as of July 12, 2023 (the “Effective Date”), by BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”).
RECITALS
WHEREAS, 3,240,000 shares of Common Stock of the Company have been reserved for issuance under the 2020 Equity Incentive Plan, as amended by Amendment No. 1, dated as of February 26, 2021 (as amended, “Plan”);
WHEREAS, to further the growth and success of the Company by providing compensation commensurate with maintaining a competitive position in the market to attract and retain key personnel, the Board and the requisite number of stockholders, having acted by written consent, approved an increase in the aggregate number of shares available for issuance under the Plan to 6,537,582 total shares of Common Stock; and
WHEREAS, all capitalized terms not defined herein shall have the same meanings as set forth in the Plan;
AGREEMENT
NOW, THEREFORE, pursuant to Section 12 of the Plan, the following amendments and modifications are hereby made a part of the Plan:
1. Amendment to Section 4(a). Section 4(a) shall be amended in its entirety to read as follows:
(a) Share Reserve. Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Six Million Five Hundred Thirty Seven Thousand Five Hundred Eighty Two (6,537,582) shares of Common Stock.
2. Amendment to Section 4(b). Section 4(b) shall be amended in its entirety to read as follows:
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, or if any shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or repurchased by the Company because of or in connection with the failure to meet a contingency or condition required to vest such shares in the Participant, the shares of Common Stock that have not been acquired, as well as
3.
the shares of Common Stock that have been forfeited or repurchased under such Stock Award shall revert to and again become available for issuance under the Plan; provided, however, that subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued as Incentive Stock Options shall be Six Million Five Hundred Thirty Seven Thousand Five Hundred Eighty Two (6,537,582) shares of Common Stock.
3. In all other respects, the Plan, as amended, is hereby ratified and confirmed and shall remain in full force and effect.
The Company has executed this Amendment No. 2 to 2020 Equity Incentive Plan as of the date first above written.
| COMPANY: |
| BLOSSOMHILL THERAPEUTICS, INC. |
| /s/ Jingrong Jean Cui |
| Name: Jingrong Jean Cui |
| Title: Chief Executive Officer |
4.
AMENDMENT NO. 1
TO THE
2020 EQUITY INCENTIVE PLAN
This AMENDMENT NO. 1 TO 2020 EQUITY INCENTIVE PLAN (the “Amendment”) is made as of February 26, 2021 (the “Effective Date”), by BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (the “Company”).
RECITALS
WHEREAS, 1,000,000 shares of Common Stock of the Company are currently available for issuance under the 2020 Equity Incentive Plan (the “Plan”).
WHEREAS, to further the growth and success of the Company by providing compensation commensurate with maintaining a competitive position in the market to attract and retain key personnel, the Board and the requisite number of stockholders, having acted by written consent, approved an increase in the number of shares available for issuance under the Plan to 3,240,000 total shares of Common Stock.
WHEREAS, all capitalized terms not defined herein shall have the same meanings as set forth in the Plan.
AGREEMENT
NOW, THEREFORE, pursuant to Section 12 of the Plan, the following amendments and modifications are hereby made a part of the Plan:
1. Amendment to Section 4(a). Section 4(a) shall be amended in its entirety to read as follows:
(a) Share Reserve. Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate Three Million Two Hundred Forty Thousand (3,240,000) shares of Common Stock.
2. Amendment to Section 4(b). Section 4(b) shall be amended in its entirety to read as follows:
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, or if any shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or repurchased by the Company because of or in connection with the failure to meet a contingency or condition required to vest such shares in the Participant, the shares of Common Stock that have not been acquired, as well as the shares of Common
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Stock that have been forfeited or repurchased under such Stock Award shall revert to and again become available for issuance under the Plan; provided, however, that subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued as Incentive Stock Options shall be Three Million Two Hundred Forty Thousand (3,240,000) shares of Common Stock.
3. In all other respects, the Plan, as amended, is hereby ratified and confirmed and shall remain in full force and effect.
The Company has executed this Amendment No. 1 to 2020 Equity Incentive Plan as of the date first above written.
| COMPANY: |
| BLOSSOMHILL THERAPEUTICS, INC. |
| /s/ Jingrong Jean Cui |
| Jingrong Jean Cui, Chief Executive Officer |
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BLOSSOMHILL THERAPEUTICS, INC.
A DELAWARE CORPORATION
2020 EQUITY INCENTIVE PLAN
ADOPTED: JUNE 30, 2020
APPROVED BY STOCKHOLDERS: JUNE 30, 2020
1. Purposes.
(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are the Employees, Directors and Consultants of the Company and its Affiliates.
(b) Available Stock Awards. The purpose of the Plan is to provide a means by which eligible recipients of Stock Awards may be given an opportunity to benefit from increases in value of the Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.
(c) General Purpose. The Company, by means of the Plan, seeks to retain the services of the group of persons eligible to receive Stock Awards, to secure and retain the services of new members of this group and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Affiliates.
2. DEFINITIONS.
(a) “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether now or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.
(b) “Board” means the Board of Directors of the Company.
(c) “Capitalization Adjustment” has the meaning ascribed to that term in Section 11(a).
(d) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction;
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there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction;
the stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur; or
there is consummated a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the Company immediately prior to such sale, lease, license or other disposition.
Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards subject to such agreement (it being understood, however, that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition shall apply).
(e) “Code” means the Internal Revenue Code of 1986, as amended.
(f) “Committee” means a committee of one or more members of the Board appointed by the Board in accordance with Section 3(c).
(g) “Common Stock” means the common stock of the Company.
(h) “Company” means BlossomHill Therapeutics, Inc., a Delaware corporation.
(i) “Consultant” means any person, including an advisor, (i) engaged by the Company or an Affiliate to render consulting or advisory services and who is compensated for such services or (ii) serving as a member of the Board of Directors of an Affiliate and who is compensated for such services. However, the term “Consultant” shall not include Directors who are not compensated by the Company for their services as Directors, and the payment of a director’s fee by the Company for services as a Director shall not cause a Director to be considered a “Consultant” for purposes of the Plan.
(j) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with
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the Company or an Affiliate, shall not terminate a Participant’s Continuous Service. For example, a change in status from an Employee of the Company to a Consultant of an Affiliate or a Director shall not constitute an interruption of Continuous Service. The Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy or in the written terms of the Participant’s leave of absence.
(k) “Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:
a sale or other disposition of all or substantially all, as determined by the Board in its discretion, of the consolidated assets of the Company and its Subsidiaries;
a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;
a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or
a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.
(l) “Director” means a member of the Board of Directors of the Company.
(m) “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.
(n) “Employee” means any person employed by the Company or an Affiliate. Service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or an Affiliate.
(o) “Entity” means a corporation, partnership or other entity.
(p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(q) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (A) the Company or any Subsidiary of the Company, (B) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (C) an underwriter temporarily holding securities pursuant to an offering of such securities, or (D) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company.
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(r) “Fair Market Value” means, as of any date, the value of the Common Stock determined in good faith by the Board.
(s) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder.
(t) “Listing Date” means the first date upon which any security of the Company is listed (or approved for listing) upon notice of issuance on any securities exchange or designated (or approved for designation) upon notice of issuance as a national market security on an interdealer quotation system.
(u) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option.
(v) “Officer” means any person designated by the Company as an officer.
(w) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant to the Plan.
(x) “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan.
(y) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
(z) “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(aa) “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.
(bb) “Plan” means this BlossomHill Therapeutics, Inc. 2020 Equity Incentive Plan.
(cc) “Securities Act” means the Securities Act of 1933, as amended.
(dd) “Stock Award” means any right granted under the Plan, including an Option, a stock bonus and a right to acquire restricted stock.
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(ee) “Stock Award Agreement” means a written agreement between the Company and a holder of a Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock Award Agreement shall be subject to the terms and conditions of the Plan.
(ff) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%).
(gg) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.
3. ADMINISTRATION.
(a) Administration by Board. The Board shall administer the Plan unless and until the Board delegates administration to a Committee, as provided in Section 3(c).
(b) Powers of Board. The Board shall have the power, subject to, and within the limitations of, the express provisions of the Plan:
To determine from time to time which of the persons eligible under the Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or combination of types of Stock Award shall be granted; the provisions of each Stock Award granted (which need not be identical), including the time or times when a person shall be permitted to receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with respect to which a Stock Award shall be granted to each such person.
To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.
To amend the Plan or a Stock Award as provided in Section 12.
To terminate or suspend the Plan as provided in Section 13.
Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan.
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(c) Delegation to Committee. The Board may delegate administration of the Plan to a Committee or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan.
(d) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons.
4. SHARES SUBJECT TO THE PLAN.
(a) Share Reserve. Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the aggregate One Million and Five Hundred Thousand (1,500,000) shares of Common Stock.
(b) Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, or if any shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or repurchased by the Company because of or in connection with the failure to meet a contingency or condition required to vest such shares in the Participant, the shares of Common Stock that have not been acquired, as well as the shares of Common Stock that have been forfeited or repurchased under such Stock Award shall revert to and again become available for issuance under the Plan; provided, however, that subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued as Incentive Stock Options shall be One Million and Five Hundred Thousand (1,500,000) shares of Common Stock.
(c) Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or reacquired shares, bought on the market or otherwise.
5. ELIGIBILITY.
(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.
(b) Ten Percent Stockholders. A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant.
(c) Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or the sale of the Company’s securities to such Consultant is not exempt under Rule 701 of the Securities Act (“Rule 701”) because of the nature of the services that the Consultant is providing to the Company, because the Consultant is not a natural person, or because of some other provision of Rule 701, unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions.
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6. OPTION PROVISIONS.
Each Option shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. All Options shall be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates shall be issued for shares of Common Stock purchased on exercise of each type of Option. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:
(a) Term. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no Incentive Stock Option granted shall be exercisable after the expiration of ten (10) years from the date on which it was granted.
(b) Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.
(c) Exercise Price of a Nonstatutory Stock Option. The exercise price of each Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock Option may be granted with an exercise price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 424(a) of the Code.
(d) Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with the Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board. Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). At any time that the Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by deferred payment.
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In the case of any deferred payment arrangement, interest shall be compounded at least annually and shall be charged at the minimum rate of interest necessary to avoid (1) the treatment as interest, under any applicable provisions of the Code, of any amounts other than amounts stated to be interest under the deferred payment arrangement and (2) the treatment of the Option as a variable award for financial accounting purposes.
(e) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
(f) Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall be transferable to the extent provided in the Option Agreement. If the Nonstatutory Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
(g) Vesting Generally. The total number of shares of Common Stock subject to an Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 6(g) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.
(h) Termination of Continuous Service. In the event that an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (i) the date three (3) months following the termination of the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Option Agreement, the Option shall terminate. Notwithstanding above, any options with supplemental bonus that are paid to employees, consultants and board members in lieu of cash as compensation shall be excluded from this clause.
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(i) Extension of Termination Date. An Optionholder’s Option Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the Optionholder’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the term of the Option set forth in Section 6(a) or (ii) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements.
(j) Disability of Optionholder. In the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination (or such longer or shorter period specified in the Option Agreement) or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein, the Option shall terminate.
(k) Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the option upon the Optionholder’s death pursuant to Section 6(e) or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement) or (2) the expiration of the term of such Option as set forth in the Option Agreement. If, after death, the Option is not exercised within the time specified herein, the Option shall terminate.
(l) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option.
(m) Right of Repurchase. The Option may, but need not, include a provision whereby the Company may elect, prior to the Listing Date, to repurchase all or any part of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the Option. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option.
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(n) Right of First Refusal. The Option may, but need not, include a provision whereby the Company may elect, prior to the Listing Date, to exercise a right of first refusal following receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option.
7. PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.
(a) Stock Bonus Awards. Each stock bonus agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of stock bonus agreements may change from time to time, and the terms and conditions of separate stock bonus agreements need not be identical, but each stock bonus agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
Consideration. A stock bonus may be awarded in consideration for past services actually rendered to the Company or an Affiliate for its benefit.
Vesting. Shares of Common Stock awarded under the stock bonus agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.
Termination of Participant’s Continuous Service. In the event that a Participant’s Continuous Service terminates, the Company may reacquire any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination under the terms of the stock bonus agreement.
Transferability. Rights to acquire shares of Common Stock under the stock bonus agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the stock bonus agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the stock bonus agreement remains subject to the terms of the stock bonus agreement.
(b) Restricted Stock Awards. Each restricted stock purchase agreement shall be in such form and shall contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of the restricted stock purchase agreements may change from time to time, and the terms and conditions of separate restricted stock purchase agreements need not be identical, but each restricted stock purchase agreement shall include (through incorporation of provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:
Purchase Price. The purchase price of restricted stock awards shall not be less than eighty-five percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or at the time the purchase is consummated.
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Consideration. The purchase price of Common Stock acquired pursuant to the restricted stock purchase agreement shall be paid either: (i) in cash at the time of purchase; (ii) at the discretion of the Board, according to a deferred payment or other similar arrangement with the Participant; or (iii) in any other form of legal consideration that may be acceptable to the Board in its discretion; provided, however, that at any time that the Company is incorporated in Delaware, then payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by deferred payment.
Vesting. Shares of Common Stock acquired under the restricted stock purchase agreement may, but need not, be subject to a share repurchase option in favor of the Company in accordance with a vesting schedule to be determined by the Board.
Termination of Participant’s Continuous Service. In the event that a Participant’s Continuous Service terminates, the Company may repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant that have not vested as of the date of termination under the terms of the restricted stock purchase agreement.
Transferability. Rights to acquire shares of Common Stock under the restricted stock purchase agreement shall be transferable by the Participant only upon such terms and conditions as are set forth in the restricted stock purchase agreement, as the Board shall determine in its discretion, so long as Common Stock awarded under the restricted stock purchase agreement remains subject to the terms of the restricted stock purchase agreement.
8. COVENANTS OF THE COMPANY.
(a) Availability of Shares. During the terms of the Stock Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Stock Awards.
(b) Securities Law Compliance. The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.
9. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds of the Company.
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10. MISCELLANEOUS.
(a) Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.
(b) Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms.
(c) No Employment or other Service Rights. Nothing in the Plan or any instrument executed or Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
(d) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of any Stock Award Agreement.
(e) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1) the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act or (2) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.
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(f) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid variable award accounting); or (iii) delivering to the Company owned and unencumbered shares of Common Stock.
11. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) Capitalization Adjustments. If any change is made in, or other event occurs with respect to, the Common Stock subject to the Plan or subject to any Stock Award without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of consideration by the Company (each a “Capitalization Adjustment”), the Plan will be appropriately adjusted in the class(es) and maximum number of securities subject to the Plan pursuant to Sections 4(a) and 4(b) and the maximum number of securities subject to award to any person pursuant to Section 5(c), and the outstanding Stock Awards will be appropriately adjusted in the class(es) and number of securities and price per share of Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (The conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)
(b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, then all outstanding Stock Awards shall terminate immediately prior to the completion of such dissolution or liquidation.
(c) Corporate Transaction. In the event of a Corporate Transaction, any surviving corporation or acquiring corporation may assume any or all Stock Awards outstanding under the Plan or may substitute similar stock awards for Stock Awards outstanding under the Plan (it being understood that similar stock awards include, but are not limited to, awards to acquire the same consideration paid to the stockholders or the Company, as the case may be, pursuant to the Corporate Transaction). In the event that any surviving corporation or acquiring corporation does not assume any or all such outstanding Stock Awards or substitute similar stock awards for such outstanding Stock Awards, then with respect to Stock Awards that have been neither assumed nor substituted and that are held by Participants whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction, the vesting of such Stock Awards (and, if applicable, the time at which such Stock Awards may be exercised) shall (contingent upon the
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effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and the Stock Awards shall terminate if not exercised (if applicable) at or prior to such effective time. With respect to any other Stock Awards outstanding under the Plan that have been neither assumed nor substituted, the vesting of such Stock Awards (and, if applicable, the time at which such Stock Award may be exercised) shall not be accelerated unless otherwise provided in a written agreement between the Company or any Affiliate and the holder of such Stock Award, and such Stock Awards shall terminate if not exercised (if applicable) prior to the effective time of the Corporate Transaction.
(d) Change in Control. A Stock Award held by any Participant whose Continuous Service has not terminated prior to the effective time of a Change in Control may be subject to additional acceleration of vesting and exercisability upon or after such event as may be provided in the Stock Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration shall occur.
12. AMENDMENT OF THE PLAN AND STOCK AWARDS.
(a) Amendment of Plan. The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 11(a) relating to Capitalization Adjustments, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary to satisfy the requirements of Section 422 of the Code.
(b) Stockholder Approval. The Board, in its sole discretion, may submit any other amendment to the Plan for stockholder approval.
(c) Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or Incentive Stock Options granted under it into compliance therewith.
(d) No Impairment of Rights. Rights under any Stock Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.
(e) Amendment of Stock Awards. The Board at any time, and from time to time, may amend the terms of any one or more Stock Awards; provided, however, that the rights under any Stock Award shall not be impaired by any such amendment unless (i) the Company requests the consent of the Participant and (ii) the Participant consents in writing.
13. TERMINATION OR SUSPENSION OF THE PLAN.
(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the Plan is adopted by the Board or approved by the stockholders of the Company, whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
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(b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the Participant.
14. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no Stock Award shall be exercised (or, in the case of a stock bonus, shall be granted) unless and until the Plan has been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board.
15. CHOICE OF LAW.
The law of the State of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.
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Exhibit 10.6
BLOSSOMHILL THERAPEUTICS, INC.
2020 EQUITY INCENTIVE PLAN
STOCK OPTION GRANT NOTICE
BlossomHill Therapeutics, Inc. (the “Company”) hereby grants to you an Option (the “Option”) to purchase shares of the Company’s Common Stock under the Company’s 2020 Equity Incentive Plan (the “Plan”). The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this “Grant Notice”), in the Stock Option Agreement and in the Plan, which are attached to and incorporated into this Grant Notice in their entirety.
| Participant: | [______] | |
| Grant Date: | [______] | |
| Vesting Commencement Date: | [______] | |
| Number of Shares Subject to Option: | [______] | |
| Exercise Price (per Share): | $[______] [generally, FMV on date of grant as determined by independent appraiser/409A valuation] | |
| Option Expiration Date: | [______] (subject to earlier termination in accordance with the terms of the Plan and the Stock Option Agreement) | |
| Type of Option: | ☐ Incentive Stock Option* ☐ Nonstatutory Stock Option | |
| Vesting and Exercisability Schedule: | The Option shall vest as follows: (a) 25% of the Option shall vest on the first anniversary of the Vesting Commencement Date and (b) 75% of the Option shall vest over the three-year period following the first anniversary of the Vesting Commencement Date, ratably as of the last date of each month.
[Alternative vesting terms may be applied. If accelerated vesting is intended to occur in the event of a corporate transaction resulting in a termination of employment (i.e., double trigger) it should be stated.]
The vested portion of the Option may be exercised at any time on or before the Option Expiration Date. [The Plan also permits “early exercise” if so desired.] | |
[Signature Page Follows]
| * | See Sections 3, 4 and 5 of the Stock Option Agreement. May only be issued to employees. |
Additional Terms/Acknowledgement: You acknowledge receipt of, and understand and agree to, this Grant Notice, the Stock Option Agreement and the Plan. You further acknowledge that as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire understanding between you and the Company regarding the Option and supersede all prior oral and written agreements on the subject. You hereby acknowledge and agree that this Option is being issued to you in full satisfaction of all of the Company’s obligations to issue securities to you as of the date hereof.
| BlossomHill Therapeutics, Inc. | Participant | |||||||
| By: | ||||||||
| Its: |
President and CEO | Signature | ||||||
| Date: | ||||||||
| Attachments: | Address: | |||||||
| 1. Stock Option Agreement | ||||||||
| 2. 2020 Equity Incentive Plan | ||||||||
| Tax ID: |
BLOSSOMHILL THERAPEUTICS, INC.
2020 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
Pursuant to your Stock Option Grant Notice (the “Grant Notice”) and this Stock Option Agreement (this “Agreement”), BlossomHill Therapeutics, Inc. (the “Company”) has granted you an Option under its 2020 Equity Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice (the “Shares”) at the exercise price indicated in your Grant Notice (subject to adjustment for stock splits and similar events as provided in the Plan). Capitalized terms not defined in this Agreement but defined in the Plan have the same definitions as in the Plan.
The details of the Option are as follows:
1. Vesting and Exercisability. Subject to the limitations contained herein, the Option will vest and become exercisable as provided in your Grant Notice, provided that vesting will cease upon your termination of Continuous Service and the unvested portion of the Option will terminate.
2. Securities Law Compliance. Notwithstanding any other provision of this Agreement, you may not exercise the Option unless the Shares issuable upon exercise are registered under the Securities Act or, if such Shares are not then so registered, the Company has determined that such exercise and issuance would be exempt from the registration requirements of the Securities Act and applicable state securities laws. The exercise of the Option must also comply with other applicable laws and regulations governing the Option, including, to the extent applicable, Code Section 409A, and you may not exercise the Option if the Company determines that such exercise would not be in material compliance with such laws and regulations. To the extent applicable, this Agreement and the Plan are intended to comply with Section 25102(o) of the California Corporations Code. Any provision of this Agreement or the Plan which is inconsistent with Section 25102(o), including without limitation any provision of this Agreement or the Plan that is more restrictive than would be permitted by Section 25102(o) as amended from time to time, shall, without further act or amendment by the Board, be reformed to comply with the provisions of Section 25102(o). If at any time the Committee determines that the delivery of Common Stock under this Agreement or the Plan is or may be unlawful under the laws of any applicable jurisdiction, or federal or state securities laws, the right to exercise a Stock Award or receive shares of Common Stock pursuant to a Stock Award shall be suspended until the Committee determines that such delivery is lawful. The Company shall have no obligation to effect any registration or qualification of the Common Stock under federal or state laws.
3. Incentive Stock Option Qualification. If so designated in your Grant Notice, all or a portion of the Option is intended to qualify as an Incentive Stock Option under federal income tax law, but the Company does not represent or guarantee that the Option qualifies as such.
If the Option has been designated as an Incentive Stock Option and the aggregate Fair Market Value (determined as of the Grant Date) of the shares of Common Stock subject to the portions of the Option and all other Incentive Stock Options you hold that first become exercisable during any calendar year exceeds $100,000, any excess portion will be treated as a Nonstatutory Stock Option, unless the Internal Revenue Service changes the rules and regulations governing the $100,000 limit for Incentive Stock Options. A portion of the Option may be treated as a Nonstatutory Stock Option if certain events cause exercisability of the Option to accelerate.
4. Notice of Disqualifying Disposition. To the extent the Option has been designated as an Incentive Stock Option, to obtain certain tax benefits afforded to Incentive Stock Options, you must hold the Shares issued upon the exercise of the Option for two years after the Grant Date and one year after the date of exercise. By accepting the Option, you agree to promptly notify the Company if you dispose of any of the Shares within one year from the date you exercise all or part of the Option or within two years from the Grant Date.
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5. Alternative Minimum Tax. You may be subject to the alternative minimum tax at the time of exercise of an Incentive Stock Option.
6. Independent Tax Advice. You should obtain your own tax advice when exercising the Option and prior to the disposition of the Shares. Neither the Company nor any of its Affiliates, nor any of their respective officers, directors, agents or advisors, makes any representation (except for the terms and conditions expressly set forth in this Agreement) or recommendation with respect to the Option. Except for the Company’s right to withhold any taxes required by applicable law, you are solely responsible for any and all tax liability that may arise with respect to the Option and any shares that may be acquired upon exercise of the Option.
7. Method of Exercise. Subject to the terms of the Stock Option Grant Notice, you may exercise the [vested portion of the Option] at any time by giving written notice to the Company, in form and substance satisfactory to the Company, which will state your election to exercise the Option and the number of Shares for which you are exercising the Option. The written notice must be accompanied by full payment of the exercise price for the number of Shares you are purchasing. The purchase price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company of other Common Stock, (2) according to a deferred payment or other similar arrangement with you or (3) in any other form of legal consideration that may be acceptable to the Board. Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). At any time that the Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by deferred payment.
8. Stockholders’ Agreement; Voting Restrictions. So long as the Common Stock is not registered under the Exchange Act, the Committee may, in its sole discretion at the time of exercise, require you to sign a stock purchase agreement, a stockholders’ agreement and/or any other similar agreement, in the form designated by the Committee, including but not limited to the Second Amended and Restated Voting Agreement of the Company, as amended from time to time and acknowledgement of the terms Bylaws of the Company, pursuant to which you will grant to the Company and/or its stockholders certain rights, including, but not limited to, co-sale and/or first refusal rights, and agree to certain voting restrictions, with respect to the Shares acquired by you upon exercise of the Option. Upon request to the Company, you may review a current form of any such agreement(s) prior to exercise of the Option.
9. Market Standoff. You agree that any Shares received upon exercise of the Option will be subject to the market standoff restrictions on transfer set forth herein. You hereby agree (and shall cause any holder of the Shares who receives his or her Shares pursuant to a private transfer from you to agree) that it will not, without the prior written consent of the managing underwriter, during the period commencing on the date of the final prospectus relating to the Company’s initial public offering and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days or such other period as may be requested by the Company or an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution of research reports and (ii) analyst recommendations and opinions, including, but not limited to, the restrictions contained in NASD Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any successor provisions or amendments thereto (the “180 Day Period”) (a) lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock held
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immediately prior to the effectiveness of the registration statement for such offering, or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Shares, whether any such transaction described in clause (a) or (b) above is to be settled by delivery of Shares or other securities, in cash or otherwise. The foregoing provisions of this Section shall apply only to the Company’s initial public offering. The underwriters in connection with the Company’s initial public offering are intended third-party beneficiaries of this Section and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. You agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with the foregoing or which are necessary to give further effect thereto. The Company shall use its best efforts to ensure that all Shares shall be subject to a market stand-off at least as restrictive as the obligations set forth in this Section. Any discretionary waiver or termination of restrictions of any or all of such agreements or of this Section by the Company or the underwriters shall apply to all participants subject to such agreements pro rata based on the number of shares subject to such agreements. In addition, if requested by the Company or the representative of the underwriters of Shares of the Company, you shall provide, within ten (10) days of such request, such information as may be reasonably required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities Act. The obligations described in this Section shall not apply to a registration relating solely to employee benefit plans on Form S-8 or similar form that may be promulgated in the future, or a registration relating solely to a Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the Shares (or other securities) subject to the foregoing restriction until the end of said 180 Day Period. “Initial public offering” means an underwritten public offering of shares of stock of the Company or of equity securities of a successor to the Company pursuant to the Securities Act of 1933, as amended.
10. Treatment upon Termination of Employment or other Service. The unvested portion of the Option will terminate automatically and without further notice immediately upon your termination of Continuous Service. You may exercise the vested portion of the Option as follows:
(a) Termination for Cause. If your Continuous Service terminates for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. Cause shall have the meaning set forth in your employment agreement or any other agreement between you and the Company; provided, however, that if Cause is not defined in any agreement between you and the Company, Cause shall mean any of the following: (i) your gross misconduct, fraud, dishonesty, theft, embezzlement, commission of an illegal act or any other conduct that is detrimental to the Company’s best interests or that damages or impugns the reputation or standing of the Company in its industry or the community; (ii) breach of your duty of loyalty or other fiduciary duty to the Company, including without limitation, misappropriation of corporate assets or self-dealing; or (iii) your failure, refusal or inability to (A) perform the duties and services related to your position with the Company (unless such inability to perform duties is due to your death or Disability), (B) comply with rules, regulations and policies of the Company which may be established from time to time, or (C) carry out the reasonable orders or directives of the Board. [Confirm this definition reflects intent.]
(b) Termination of Continuous Service. If your Continuous Service terminates (other than for Cause or upon your death or Disability), you may exercise your Option (to the extent that you were entitled to exercise such Option as of the date of Termination of Continuous Service) but only within such period of time ending on the earlier of (a) the date three months following the termination of Continuous Service of your Continuous Service or (b) the Option Expiration Date.
(c) Disability. If your Continuous Service terminates as a result of your Disability, you may exercise your Option (to the extent that you were entitled to exercise such Option as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (a) the date 12 months following such Termination of Continuous Service or (b) the Option Expiration Date.
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(d) Death. If your Continuous Service terminates as a result of your death, then the Option may be exercised (to the extent that you would be entitled to exercise such Option as of the date of your death) by your estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon your death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the Option Expiration Date.
(e) If, after your termination of Continuous Service, the Option is not exercised within the time specified herein, the Option shall terminate.
(f) If early exercise of the Option is permitted by the Committee, the unvested Shares acquired pursuant to the unvested portion of the Option may be repurchased by the Company at your original cost.
IT IS YOUR RESPONSIBILITY TO BE AWARE OF THE DATE THE OPTION TERMINATES.
11. Limited Transferability. During your lifetime, only you can exercise the Option. The Option is not transferable except by will or by the applicable laws of descent and distribution (and, in the case of a Nonstatutory Stock Option, in accordance with the Plan).
12. Withholding Taxes. As a condition to the exercise of any portion of the Option, you must make such arrangements as the Company may require for the satisfaction of any federal, state, local or foreign tax withholding obligations that may arise in connection with such exercise.
13. Right of First Refusal. The Company shall have a right of first refusal to purchase the Shares acquired upon exercise of the Option before the Shares (or any interest in them) can be validly transferred to any other person or entity, consistent with the applicable terms of the Bylaws of the Company (or any other applicable document of the Company), as amended from time to time, which are hereby incorporated by reference.
14. Notices. Any notice to be given under the terms of this Agreement shall be in writing and addressed to the Company at its principal office to the attention of the Secretary, and to you at the address reflected or last reflected on the Company’s payroll records. Any notice shall be delivered in person or shall be enclosed in a properly sealed envelope, addressed as aforesaid, registered or certified, and deposited (postage and registry or certification fee prepaid) in a post office or branch post office regularly maintained by the United States Government. Any such notice shall be given only when received, but if you are no longer an Employee, Consultant or Director, shall be deemed to have been duly given five business days after the date mailed in accordance with the foregoing provisions of this Section 14.
15. Option Not an Employment or Service Contract. Nothing in the Plan or this Agreement will be deemed to constitute an employment contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Affiliate or limit in any way the right of the Company or any Affiliate to terminate your employment or other relationship at any time, with or without Cause.
16. No Right to Damages. You will have no right to bring a claim or to receive damages if you are required to exercise the vested portion of the Option within three months (one year in the case of Disability or death) of your Termination of Continuous Service or if any portion of the Option is canceled or expires unexercised. The loss of existing or potential profit in the Option will not constitute an element of damages in the event of your Termination of Continuous Service for any reason even if the termination is in violation of an obligation of the Company or an Affiliate to you.
17. Binding Effect. This Agreement will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns.
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18. Section 409A Compliance. Notwithstanding any provision in the Plan or this Agreement to the contrary, the Committee may, at any time and without your consent, modify the terms of the Option as it determines appropriate to avoid the imposition of interest or penalties under Section 409A of the Code; provided, however, that the Committee makes no representations that the Option shall be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the Option.
19. Arbitration. Any controversy arising out of or relating to this Agreement or the Plan, their enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of their provisions, or any other controversy arising out of or related to the Option, including, but not limited to, any state or federal statutory claims, shall be submitted to arbitration in San Diego, California before a sole arbitrator selected from Judicial Arbitration and Mediation Services, Inc., or its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration Association, and shall be conducted in accordance with the provisions of applicable law as the exclusive forum for the resolution of such dispute; provided, however, that provisional injunctive relief may, but need not, be sought by either party to this Agreement in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court shall remain effective until the matter is finally determined by the arbitrator. Final resolution of any dispute through arbitration may include any remedy or relief which the arbitrator deems just and equitable, including any and all remedies provided by applicable state or federal statutes. At the conclusion of the arbitration, the arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based. Any award or relief granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. The parties acknowledge and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the matters referenced in the first sentence above. The parties agree that the Company shall be responsible for payment of the forum costs of any arbitration hereunder, including the arbitrator’s fee. The parties further agree that in any proceeding with respect to such matters, each party shall bear its own attorney’s fees and costs (other than forum costs associated with the arbitration) incurred by it or him or her in connection with the resolution of the dispute.
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Option Exercise Agreement
This Option Exercise Agreement (this “Exercise Agreement”) is made and entered into as of by and between BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”) and the Participant named below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Option Agreement between the Company and the Participant dated (“Option Agreement”), and BlossomHill Therapeutics, Inc. 2020 Equity Incentive Plan, as amended (the “Plan”).
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Participant Name: |
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| Social Security Number: |
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| Date: | ||||
1. Option. The Participant was granted an option (the “Option”) to purchase Shares of Common Stock of the Company pursuant to the terms of the Plan and the Option Agreement, as follows:
| Type of Option (check one): |
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| ____ Incentive Stock Option |
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| ____ Nonstatutory Stock Option |
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Grant Date: |
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Number of Shares: |
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| Options Price per share: $[ ] |
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Expiration Date: |
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2. Exercise of Option. The Participant hereby elects to exercise the Option to purchase Shares of Common Stock, [all of which are vested] pursuant to the terms of the Option Agreement and the Plan.
The total purchase price (“Purchase Price”) to be paid for the Shares is $ (total Shares times Option Price per Share).
3. Payment of the Purchase Price; Delivery of Required Documents. The Participant encloses payment in full of the Purchase Price for the Shares in the following form(s) (check and complete as appropriate):
[ ] (a) Cash
[ ] (b) Certified or bank check payable to the Company
| OPTIONS EXERCISE AGREEMENT | PAGE 1 |
[ ] (c) Other (as referenced in the Option Agreement and the Plan (please describe) .
The Participant will deliver any other documents that the Company requires.
4. Tax Withholding. If the Participant is an employee or former employee of the Company, the Participant authorizes payroll withholding and will make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Participant understands that ownership of the Shares will not be transferred to the Participant until the total Purchase Price and all applicable withholding taxes have been paid.
5. Notice of Disqualifying Disposition. If the Option is an Incentive Stock Option, the Participant agrees to promptly notify the CFO of the Company if he or she transfers any of the Shares purchased pursuant to this Exercise Agreement within one (1) year from the date of exercise of the Option or within two (2) years from the Grant Date.
6. Investment Representation and Agreement. The Participant represents and warrants that any Shares to be issued in satisfaction of this Option will be acquired by the Participant for its own account for investment and not with a view to or for sale in connection with any distribution thereof. The Participant agree that it will not, directly or indirectly, offer, transfer, sell, pledge, convey, gift, assign, encumber, alienate, hypothecate or otherwise dispose of all or any Shares (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of all or any of the Shares) except in compliance with any agreements with the Company to which the Participant is a party, the Exchange Act and the rules and regulations of the Securities Exchange Commission thereunder, and in compliance with applicable state securities or “blue sky” laws.
7. Tax Consequences. The Participant understands that there may be adverse federal or state tax consequences as a result of his or her purchase or disposition of the Shares. The Participant also acknowledges that he or she has been advised to consult with a tax advisor in connection with the purchase or disposition of the Shares. The Participant is not relying on the Company for tax advice.
8. Compliance with Law. The issuance and transfer of the Shares will be subject to, and conditioned upon compliance by the Company and the Participant with, all applicable federal, state and local laws and regulations and all applicable requirements of any stock exchange or automated quotation system on which the Shares may be listed or quoted at the time of such issuance or transfer.
9. Successors and Assigns; Binding Effect. The Company may assign any of its rights under this Exercise Agreement. This Exercise Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. This Exercise Agreement will be binding upon the Participant and the Participant’s heirs, executors, legal representatives, successors and assigns.
10. Governing Law. This Exercise Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.
| OPTIONS EXERCISE AGREEMENT | PAGE 2 |
11. Severability. The invalidity or unenforceability of any provision of this Exercise Agreement shall not affect the validity or enforceability of any other provision, and each provision of this Exercise Agreement shall be severable and enforceable to the extent permitted by law.
12. Counterparts. This Exercise Agreement may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
13. Notice. Any notice required to be delivered to the Company under this Exercise Agreement shall be in writing and addressed to the [Insert Officer] of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Exercise Agreement shall be in writing and addressed to the Participant at the Participant’s address as set forth above. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
14. Acknowledgement. The Participant understands that he or she is purchasing the Shares pursuant to the terms and conditions of the Plan and the Option Agreement, copies of which the Participant has read and understands.
15. Provisions Applicable Only to the Early Exercise of Unvested Options. These provisions are only applicable in the event of early exercise of unvested Options if permitted by the Committee. Participant hereby acknowledges that all or a portion of the Shares being purchased under this Exercise Agreement are not vested as of the date of exercise according to the vesting schedule contained in the Option Agreement(s). Any Shares purchased hereunder pursuant to the exercise of any portion of an Option that is unvested as of the date of exercise will be considered unvested shares (the “Unvested Shares”). The Unvested Shares will vest (and to the extent so vested cease to be Unvested Shares) in accordance with the vesting schedule contained in the applicable Option Agreement, including as a result of any accelerated vesting provided for in the applicable Option Agreement (the “Vested Shares”). The Participant acknowledges that the Company has a right to repurchase the Unvested Shares (the “Repurchase Right for Unvested Shares”) as specified in the Option Agreement (and other Company documents referenced therein).
The Participant acknowledges that he or she has sole responsibility to determine whether to file an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), in connection with the exercise of the Option for Unvested Shares, as discussed herein.
The Participant authorizes and directs the Company’s Secretary (or other authorized officer) or transfer agent to transfer to the Company or its assignee any Unvested Shares as to which the Repurchase Right for Unvested Shares is exercised.
The Company may at any time require the Participant to deposit any certificate or certificates evidencing the Unvested Shares with an agent designated by the Company under the terms and conditions of escrow and security agreements approved by the Company.
| OPTIONS EXERCISE AGREEMENT | PAGE 3 |
If the Option is exercised for Unvested Shares, the Participant understands that under Section 83(a) of the Code, the excess of the Fair Market Value of the Unvested Shares on the date the forfeiture restrictions lapse over the exercise price paid for such Shares will be taxed, on the date such forfeiture restrictions lapse, as ordinary compensation income, subject to payroll and withholding tax and tax reporting, as applicable. For this purpose, the term “forfeiture restrictions” means the right of the Company to buy back the Unvested Shares pursuant to the Repurchase Right for Unvested Shares. The Participant understands that he or she may elect under Section 83(b) of the Code to be taxed at the time the Unvested Shares are acquired upon exercise of the Option, rather than when and as the Unvested Shares cease to be subject to the forfeiture restrictions. Such election (an “83(b) Election”) must be filed with the Internal Revenue Service within 30 days from the date the Option is exercised. Even if the Fair Market Value of the Unvested Shares on the date the Option is exercised equals the exercise price (and thus no tax is payable), the Participant must file the election within the 30 day period to avoid the risk of adverse tax consequences in the future.
The Participant understands that there is a risk the Internal Revenue Service might challenge the Plan Administrator’s determination of the Fair Market Value of the Shares. The Participant also understands that (a) the Participant will not be entitled to a deduction for any income previously recognized as a result of the 83(b) Election if the Unvested Shares are subsequently forfeited to the Company, and (b) the 83(b) Election may cause the Participant to recognize more income than the Participant would have otherwise recognized if the Internal Revenue Service determines that the value of the Unvested Shares on the date the Option is exercised is higher than the Fair Market Value of the Shares on that date as determined by the Plan Administrator and/or the value of the Unvested Shares subsequently declines.
The Participant acknowledges that the foregoing is only a summary of the federal income tax laws that apply to the purchase of the Unvested Shares under this Agreement and does not purport to be complete. THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE COMPANY HAS DIRECTED THE PARTICIPANT TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH THE PARTICIPANT MAY RESIDE, AND THE TAX CONSEQUENCES OF THE PARTICIPANT’S DEATH.
The Participant agrees that he or she will execute and deliver to the Company with this Agreement a copy of the 83(b) Election (for federal income tax purposes in connection with the early exercise of a Nonqualified Stock Option) if the Participant chooses to make such an election.
| OPTIONS EXERCISE AGREEMENT | PAGE 4 |
IN WITNESS WHEREOF, the parties have executed this Exercise Agreement as of the date first above written.
| [NAME] |
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| OPTIONS EXERCISE AGREEMENT | PAGE 5 |
BLOSSOMHILL THERAPEUTICS, INC.
EARLY EXERCISE STOCK PURCHASE AGREEMENT
UNDER THE 2020 EQUITY INCENTIVE PLAN
This Agreement is made by and between BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”), and the individual designated on the signature page hereto as a Purchaser (“Purchaser”).
Recitals:
A. Purchaser holds a stock option, granted on , to purchase shares of common stock (“Common Stock”) of the Company (the “Option”) pursuant to the Company’s 2020 Equity Incentive Plan (as amended and/or restated, the “Plan”).
B. The Option is evidenced by a Stock Option Grant Notice and a Stock Option Agreement (collectively, the “Option Agreement”).
C. Purchaser desires to exercise the Option on the terms and conditions contained herein.
D. Purchaser wishes to take advantage of the early exercise feature of Purchaser’s Option and therefore to enter into this Agreement.
The parties agree as follows:
1. Incorporation of Plan and Option by Reference. This Agreement is subject to all of the terms and conditions as set forth in the Plan and the Option Agreement. If there is a conflict between the terms of this Agreement and/or the Option Agreement and the terms of the Plan, the terms of the Plan will control. If there is a conflict between the terms of this Agreement and the terms of the Option Agreement, the terms of the Option Agreement will control. Capitalized terms not explicitly defined in this Agreement but defined in the Plan will have the same definitions as in the Plan. Capitalized terms not explicitly defined in this Agreement or the Plan but defined in the Option Agreement will have the same definitions as in the Option Agreement.
2. Purchase and Sale of Common Stock.
(a) Agreement to Purchase and Sell Common Stock. Purchaser hereby agrees to purchase from the Company, and the Company hereby agrees to sell to Purchaser, shares of the Common Stock of the Company in accordance with the Notice of Exercise duly executed by Purchaser and attached hereto as Exhibit A.
(b) Closing. The closing hereunder, including payment for and delivery of the Common Stock, will occur at the offices of the Company immediately following the execution of this Agreement, or at such other time and place as the parties may mutually agree; provided, however, that if stockholder approval of the Plan is required before the Option may be exercised, then the Option may not be exercised, and the closing will be delayed, until such stockholder approval is obtained. If such stockholder approval is not obtained within the time limit specified in the Plan, then this Agreement is null and void.
3. Unvested Share Repurchase Option.
(a) Repurchase Option. In the event Purchaser’s Continuous Service terminates, then the Company has an irrevocable option (the “Repurchase Option”) for a period of six months after said termination (or in the case of shares issued upon exercise of the Option after such date of termination, within
six months after the date of the exercise), or such longer period as may be agreed to by the Company and Purchaser (the “Repurchase Period”), to repurchase from Purchaser or Purchaser’s personal representative, as the case may be, those shares that Purchaser received pursuant to the exercise of the Option that have not as yet vested as of such termination date in accordance with the Vesting Schedule indicated on Purchaser’s Stock Option Grant Notice (the “Unvested Shares”).
(b) Share Repurchase Price. Notwithstanding Section 10(f) of the Option Agreement, the Company may repurchase all or any of the Unvested Shares at a price per share equal to the lower of (i) the Fair Market Value of such shares (as determined under the Plan) on the date of repurchase, or (ii) the Exercise Price for such shares as indicated on Purchaser’s Stock Option Grant Notice.
4. Exercise of Repurchase Option. The Repurchase Option will be exercised by written notice signed by such person as designated by the Company, and delivered or mailed as provided herein. Such notice will identify the number of shares of Common Stock to be purchased and will notify Purchaser of the time, place and date for settlement of such purchase, which will be scheduled by the Company within the term of the Repurchase Option set forth above. In addition, the Company will be deemed to have exercised the Repurchase Option as of the last day of the Repurchase Period, unless an officer of the Company notifies the holder of the Unvested Shares during the Repurchase Period in writing (delivered or mailed as provided herein) that the Company expressly declines to exercise its Repurchase Option for some or all of the Unvested Shares. The Company will be entitled to pay for any shares of Common Stock purchased pursuant to its Repurchase Option at the Company’s option in cash or by offset against any indebtedness owing to the Company by Purchaser (including without limitation any promissory note given in payment for the Common Stock), or by a combination of both. Upon exercise of the Repurchase Option and payment of the purchase price in any of the ways described above, the Common Stock being repurchased will be immediately retired and resume the status of authorized and unissued shares of the capital stock of the Company, without further action by Purchaser.
5. Capitalization Adjustments to Common Stock. In the event of a Capitalization Adjustment, then any and all new, substituted or additional securities or other property to which Purchaser is entitled by reason of Purchaser’s ownership of Common Stock will be immediately subject to the Repurchase Option and be included in the word “Common Stock” for all purposes of the Repurchase Option with the same force and effect as the shares of the Common Stock presently subject to the Repurchase Option, but only to the extent the Common Stock is, at the time, covered by such Repurchase Option. While the total Exercise Price will remain the same after each such event, the price per share payable upon exercise of the Repurchase Option will be appropriately adjusted.
6. Corporate Transactions. In the event of a Corporate Transaction, then the Company may (i) arrange for the assignment of the Repurchase Option held by the Company to the successor of the Company (or such successor’s parent company), if any, in connection with such Corporate Transaction or (ii) arrange for the lapse, in whole or in part, of the Repurchase Option held by the Company. To the extent the Repurchase Option remains in effect following such Corporate Transaction, it will apply to the new capital stock or other property received in exchange for the Common Stock in consummation of the Corporate Transaction, but only to the extent the Common Stock was at the time covered by such right. Appropriate adjustments will be made to the price per share payable upon exercise of the Repurchase Option to reflect the Corporate Transaction upon the Company’s capital structure; provided, however, that the aggregate price payable upon exercise of the Repurchase Option remains the same.
7. Escrow of Unvested Common Stock. As security for Purchaser’s faithful performance of the terms of this Agreement and to insure the availability for delivery of Purchaser’s Common Stock upon exercise of the Repurchase Option herein provided for, Purchaser agrees, at the closing hereunder, to deliver to and deposit with the Secretary of the Company or the Secretary’s designee (“Escrow Agent”), as Escrow
2.
Agent in this transaction, three stock assignments duly endorsed (with date and number of shares blank) in the form attached hereto as Exhibit B, together with a certificate or certificates evidencing all of the Common Stock subject to the Repurchase Option; said documents are to be held by the Escrow Agent and delivered by said Escrow Agent pursuant to the Joint Escrow Instructions of the Company and Purchaser set forth in Exhibit C, attached hereto and incorporated by this reference, which instructions also will be delivered to the Escrow Agent at the closing hereunder.
8. Rights of Purchaser. Subject to the provisions of the Option Agreement, Purchaser will exercise all rights and privileges of a stockholder of the Company with respect to the Unvested Shares. Purchaser will be deemed to be the holder of the shares for purposes of receiving any dividends that may be paid with respect to such shares and for purposes of exercising any voting rights relating to such shares, even if some or all of such shares have not yet vested and been released from the Company’s Repurchase Option.
9. Limitations on Transfer. In addition to any other limitation on transfer created by applicable securities laws, Purchaser will not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the Common Stock while the Common Stock is subject to the Repurchase Option. After any Common Stock has been released from the Repurchase Option, Purchaser will not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the Common Stock except in compliance with the provisions herein and applicable securities laws. Furthermore, the Common Stock is subject to any right of first refusal in favor of the Company or its assignees or other transfer restrictions that may be contained in the Company’s Bylaws.
10. Restrictive Legends. All certificates representing the Common Stock will have endorsed thereon legends in substantially the following forms (in addition to any other legend which may be required by other agreements between the parties hereto):
(a) “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A REPURCHASE OPTION AND OTHER RESTRICTIONS AND CONDITIONS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED TRANSFER OF ANY SHARES SUBJECT TO SUCH REPURCHASE OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF THE COMPANY.”
(b) “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
(c) “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S) AS PROVIDED IN THE BYLAWS OF THE COMPANY AND IN AN AGREEMENT WITH THE COMPANY.”
(d) “THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO THE EXERCISE OF [AN INCENTIVE STOCK OPTION/ A NONSTATUTORY STOCK OPTION].”
3.
(e) “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A TRANSFER RESTRICTION, AS PROVIDED IN THE BYLAWS OF THE COMPANY.”
(f) Any legend required by appropriate blue sky officials.
11. Investment Representations. In connection with the purchase of the Common Stock, Purchaser represents to the Company the following:
(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Common Stock. Purchaser is acquiring the Common Stock for investment for Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act.
(b) Purchaser understands that the Common Stock has not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.
(c) Purchaser further acknowledges and understands that the Common Stock must be held indefinitely unless the Common Stock is subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the Common Stock. Purchaser understands that the certificate evidencing the Common Stock will be imprinted with a legend that prohibits the transfer of the Common Stock unless the Common Stock is registered or such registration is not required in the opinion of counsel for the Company.
(d) Purchaser is familiar with the provisions of Rules 144 and 701, under the Securities Act, as in effect from time to time, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities, such issuance will be exempt from registration under the Securities Act. In the event the Company becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the securities exempt under Rule 701 may be sold by Purchaser 90 days thereafter, subject to the satisfaction of certain of the conditions specified by Rule 144 and the market stand-off provision described in Purchaser’s Stock Option Agreement.
(e) In the event that the sale of the Common Stock does not qualify under Rule 701 at the time of purchase, then the Common Stock may be resold by Purchaser in certain limited circumstances subject to the provisions of Rule 144, which requires, among other things: (i) the availability of certain public information about the Company, and (ii) the resale occurring following the required holding period under Rule 144 after Purchaser has purchased, and made full payment of (within the meaning of Rule 144), the securities to be sold.
(f) Purchaser further understands that at the time Purchaser wishes to sell the Common Stock there may be no public market upon which to make such a sale, and that, even if such a public market then exists, the Company may not be satisfying the current public current information requirements of Rule 144 or 701, and that, in such event, Purchaser would be precluded from selling the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been satisfied.
4.
(g) Purchaser further warrants and represents that Purchaser has either (i) preexisting personal or business relationships, with the Company or any of its officers, directors or controlling persons, or (ii) the capacity to protect Purchaser’s own interests in connection with the purchase of the Common Stock by virtue of the business or financial expertise of Purchaser or of professional advisors to Purchaser who are unaffiliated with and who are not compensated by the Company or any of its affiliates, directly or indirectly. Purchaser further warrants and represents that Purchaser’s purchase the Common Stock was not accomplished by the publication of any advertisement.
12. Section 83(b) Election. Purchaser understands that Section 83(a) of the Code taxes as ordinary income the difference between the amount paid for the Common Stock and the fair market value of the Common Stock as of the date any restrictions on the Common Stock lapse. In this context, “restriction” includes the right of the Company to buy back the Common Stock pursuant to the Repurchase Option set forth above. Purchaser understands that Purchaser may elect to be taxed at the time the Common Stock is purchased, rather than when and as the Repurchase Option lapses, by filing an election under Section 83(b) (an “83(b) Election”) of the Code with the Internal Revenue Service within 30 days of the date of purchase, a copy of which is included as Exhibit D. Even if the fair market value of the Common Stock at the time of the execution of this Agreement equals the amount paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in the future. Purchaser understands that failure to file such an 83(b) Election in a timely manner may result in adverse tax consequences for Purchaser. Purchaser acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Common Stock hereunder, and does not purport to be complete. Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death. Purchaser assumes all responsibility for filing an 83(b) Election and paying all taxes resulting from such election or the lapse of the restrictions on the Common Stock.
13. Refusal to Transfer. The Company is not required (a) to transfer on its books any shares of Common Stock of the Company which have been transferred in violation of any of the provisions set forth in this Agreement, or (b) to treat as owner of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares have been so transferred.
14. No Employment Rights. This Agreement is not an employment contract and nothing in this Agreement affects in any manner whatsoever the right or power of the Company or its Affiliates to terminate Purchaser’s employment for any reason at any time, with or without cause and with or without notice.
15. Miscellaneous.
(a) Notices. All notices required or permitted hereunder will be in writing and will be deemed effectively given: (i) upon personal delivery, including delivery by express courier, or delivery by electronic means, to the party to be notified, (ii) when sent by confirmed facsimile if sent during normal business hours of the recipient, and if not sent during normal business hours of the recipient, then on the next business day, (iii) five calendar days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications will be sent to the other party to this Agreement at such party’s address set forth on the signature page hereof, or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto.
(b) Successors and Assigns. This Agreement will inure to the benefit of the successors and assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding upon Purchaser, Purchaser’s successors, and assigns. The Company may assign the Repurchase Option hereunder at any time or from time to time, in whole or in part.
5.
(c) Attorneys’ Fees; Specific Performance. Purchaser will reimburse the Company for all costs incurred by the Company in enforcing the performance of, or protecting its rights under, any part of this Agreement, including reasonable costs of investigation and attorneys’ fees. Furthermore, it is expressly agreed between the parties that money damages are inadequate to compensate the Company for the Common Stock and that the Company will, upon proper exercise of the Repurchase Option, be entitled to specific enforcement of its rights to purchase said Common Stock.
(d) Governing Law; Venue. This Agreement will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles. The parties agree that any action brought by either party to interpret or enforce any provision of this Agreement will be brought in, and each party agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate state or federal court for the district encompassing the Company’s principal place of business.
(e) Further Execution. The parties agree to take all such further action(s) as may reasonably be necessary to carry out and consummate this Agreement as soon as practicable, and to take whatever steps may be necessary to obtain any governmental approval in connection with or otherwise qualify the issuance of the securities that are the subject of this Agreement. Purchaser further agrees to execute, to the extent requested by the Company, at any time or from time to time, any agreements entered into with holders of capital stock of the Company, including without limitation a right of first refusal and co-sale agreement, stockholders agreement and/or a voting agreement.
(f) Independent Counsel. Purchaser acknowledges that this Agreement and the attachments hereto have been prepared on behalf of the Company by Cooley LLP, counsel to the Company and that Cooley LLP does not represent, and is not acting on behalf of, Purchaser in any capacity. Purchaser has been provided with an opportunity to consult with Purchaser’s own counsel with respect to this Agreement and the attachments hereto.
(g) Entire Agreement; Amendment. This Agreement, together with the Plan and the Option Agreement, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes and merges all prior agreements or understandings, whether written or oral. This Agreement may not be amended, modified or revoked, in whole or in part, except by an agreement in writing signed by each of the parties hereto.
(h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, 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 (i) such provision will be excluded from this Agreement, (ii) the balance of the Agreement will be interpreted as if such provision were so excluded and (iii) the balance of the Agreement will be enforceable in accordance with its terms.
(i) Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Remainder of page intentionally left blank]
6.
The parties hereto have executed this Agreement as of .
| COMPANY: | ||||
| BLOSSOMHILL THERAPEUTICS, INC. | ||||
| By: |
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| Name: |
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| Title: |
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| Address: |
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| Email: |
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| PURCHASER:
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(Signature) | ||||
Name (Please Print) | ||||
Address | ||||
ATTACHMENTS:
| Exhibit A | Notice of Exercise |
| Exhibit B | Assignment Separate from Certificate |
| Exhibit C | Joint Escrow Instructions |
| Exhibit D | Form of 83(b) Election |
[Signature Page to Early Exercise Stock Purchase Agreement]
EXHIBIT A
NOTICE OF EXERCISE
Notice of Exercise
This Notice of Exercise (this “Notice”) is made and entered into as of by and between BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”) and the Participant named below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Option Agreement between the Company and the Participant dated (“Option Agreement”), and BlossomHill Therapeutics, Inc. 2020 Equity Incentive Plan, as amended (the “Plan”).
Participant Name:
Address:
Social Security Number:
Date:
1. Option. The Participant was granted an option (the “Option”) to purchase Shares of Common Stock of the Company pursuant to the terms of the Plan and the Option Agreement, as follows:
Type of Option (check one):
Incentive Stock Option
Nonstatutory Stock Option
Grant Date:
Number of Shares:
Exercise Price per share: $[ ]
Expiration Date:
2. Exercise of Option. The Participant hereby elects to exercise the Option to purchase Shares of Common Stock, [all of which are vested] pursuant to the terms of the Option Agreement and the Plan.
The total purchase price (“Purchase Price”) to be paid for the Shares is $ (total Shares times Exercise Price per Share).
3. Payment of the Purchase Price; Delivery of Required Documents. The Participant encloses payment in full of the Purchase Price for the Shares in the following form(s) (check and complete as appropriate):
[ ] (a) Cash
[ ] (b) Certified or bank check payable to the Company
[ ] (c) Other (as referenced in the Option Agreement and the Plan) (please describe)
.
The Participant will deliver any other documents that the Company requires.
4. Tax Withholding. If the Participant is an employee or former employee of the Company, the Participant authorizes payroll withholding and will make arrangements satisfactory to the Company to pay or provide for any applicable federal, state and local withholding obligations of the Company. The Participant understands that ownership of the Shares will not be transferred to the Participant until the total Purchase Price and all applicable withholding taxes have been paid.
5. Notice of Disqualifying Disposition. If the Option is an Incentive Stock Option, the Participant agrees to promptly notify the General Counsel of the Company if he or she transfers any of the Shares purchased pursuant to this Notice within one (1) year from the date of exercise of the Option or within two (2) years from the Grant Date.
6. Tax Consequences. The Participant understands that there may be adverse federal or state tax consequences as a result of his or her purchase or disposition of the Shares. The Participant also acknowledges that he or she has been advised to consult with a tax advisor in connection with the purchase or disposition of the Shares. The Participant is not relying on the Company for tax advice.
7. Compliance with Law. The issuance and transfer of the Shares will be subject to, and conditioned upon compliance by the Company and the Participant with, all applicable federal, state and local laws and regulations and all applicable requirements of any stock exchange or automated quotation system on which the Shares may be listed or quoted at the time of such issuance or transfer.
8. Successors and Assigns; Binding Effect. The Company may assign any of its rights under this Notice. This Notice will be binding upon and inure to the benefit of the successors and assigns of the Company. This Notice will be binding upon the Participant and the Participant’s heirs, executors, legal representatives, successors and assigns.
9. Governing Law. This Notice will be construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles.
10. Severability. The invalidity or unenforceability of any provision of this Notice shall not affect the validity or enforceability of any other provision, and each provision of this Notice shall be severable and enforceable to the extent permitted by law.
11. Counterparts. This Notice may be executed in counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.
12. Notice. Any notice required to be delivered to the Company under this Notice shall be in writing and addressed to the General Counsel of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Notice shall be in writing and addressed to the Participant at the Participant’s address as set forth above. Either party may designate another address in writing (or by such other method approved by the Company) from time to time.
13. Acknowledgement. The Participant understands that he or she is purchasing the Shares pursuant to the terms and conditions of the Plan, the Option Agreement and an Early Exercise Stock Purchase Agreement under the Plan, copies of which the Participant has read and understands.
2.
IN WITNESS WHEREOF, the parties have executed this Notice as of the date first above written.
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| [NAME] |
| BLOSSOMHILL THERAPEUTICS, INC. | ||
| By: |
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| Name: |
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| Title: |
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EXHIBIT B
STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE
For Value Received, the undersigned hereby sells, assigns and transfers unto BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”), pursuant to the Repurchase Option under that certain Early Exercise Stock Purchase Agreement, dated [ ], by and between the undersigned and the Company (the “Agreement”) shares of Common Stock of the Company standing in the undersigned’s name on the books of the Company represented by Certificate No[s] and does hereby irrevocably constitute and appoint both the Company’s Secretary and the Company’s attorney, or either of them, to transfer said stock on the books of the Company with full power of substitution in the premises. This Assignment may be used only in accordance with and subject to the terms and conditions of the Agreement, in connection with the repurchase of shares of Common Stock issued to the undersigned pursuant to the Agreement, and only to the extent that such shares remain subject to the Company’s Repurchase Option under the Agreement.
| Dated: | ||
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| Name (Please Print) |
Instruction: Please do not fill in any blanks other than the signature line. Do not fill in the date line. The purpose of this Assignment is to enable the Company to exercise its Repurchase Option set forth in the Agreement without requiring additional signatures on the part of Purchaser.
EXHIBIT C
JOINT ESCROW INSTRUCTIONS
JOINT ESCROW INSTRUCTIONS
, 20
Secretary
BlossomHill Therapeutics, Inc.
10255 Science Center Drive
San Diego, California 92121
As Escrow Agent for both BlossomHill Therapeutics, Inc., a Delaware corporation (“Company”) and the purchaser listed on the signature page hereto (“Purchaser”), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Early Exercise Stock Purchase Agreement dated as of (“Agreement”), to which a copy of these Joint Escrow Instructions is attached as an Exhibit, in accordance with the following instructions:
1. In the event Company or an assignee elects to exercise the Repurchase Option set forth in the Agreement, the Company or its assignee will give to Purchaser and you a written notice specifying the number of shares of stock to be acquired and the time for a closing thereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.
2. At the closing, you are directed (a) to date the stock assignments necessary for the transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver the same, together with the certificate evidencing the shares of stock to be transferred, to the Company.
3. Purchaser irrevocably authorizes the Company to deposit with you any certificates evidencing shares of stock to be held by you hereunder and any additions and substitutions to said shares as specified in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser’s attorney-in-fact and agent for the term of this escrow to execute with respect to such securities all documents necessary or appropriate to make such securities negotiable and complete any transaction herein contemplated, including but not limited to any appropriate filing with state or government officials or bank officials. Subject to the provisions of this paragraph 3, Purchaser will exercise all rights and privileges of a stockholder of the Company while the stock is held by you.
4. This escrow terminates and the shares of stock held hereunder are released in full upon the exercise or expiration in full of the Repurchase Option, whichever occurs first.
5. If at the time of termination of this escrow under Section 4 herein you should have in your possession any documents, securities, or other property belonging to Purchaser, you will deliver all of the same to Purchaser and will be discharged of all further obligations hereunder; provided, however, that if at the time of termination of this escrow you are advised by the Company that any property subject to this escrow is the subject of a pledge or other security agreement, you will deliver all such property to the pledgeholder or other person designated by the Company.
6. Except as otherwise provided in these Joint Escrow Instructions, your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.
7. You are obligated only for the performance of such duties as are specifically set forth herein and may rely and are protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You are not
personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith and in the exercise of your own good judgment, and any act done or omitted by you pursuant to the advice of your own attorneys is conclusive evidence of such good faith.
8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or entity, excepting only orders or process of courts of law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree of any court, you are not liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.
9. You are not liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver these Joint Escrow Instructions documents or papers deposited or called for hereunder.
10. You are not liable for the outlawing of any rights under any statute of limitations with respect to these Joint Escrow Instructions or any documents deposited with you.
11. Your responsibilities as Escrow Agent hereunder terminate if you cease to be Secretary of the Company or if you resign by written notice to the Company. In the event of any such termination, the Secretary of the Company will automatically become the successor Escrow Agent unless the Company appoints another successor Escrow Agent, and Purchaser hereby confirms the appointment of such successor as Purchaser’s attorney-in-fact and agent to the full extent of your appointment.
12. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto will join in furnishing such instruments.
13. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such dispute has been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you will be under no duty whatsoever to institute or defend any such proceedings.
14. All notices required or permitted hereunder will be in writing and will be deemed effectively given: (a) upon personal delivery, including delivery by express courier, or delivery by electronic means, to the party to be notified, (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, and if not sent during normal business hours of the recipient, then on the next business day, (c) five calendar days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications will be sent to the other party hereto at such party’s address set forth below, or at such other address as such party may designate by 10 days’ advance written notice to the other party hereto.
| Company: | BlossomHill Therapeutics, Inc. | |
| 10255 Science Center Drive | ||
| San Diego, California 92121 Attn: Chief Executive Officer | ||
2.
| Purchaser: |
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| Escrow Agent: | BlossomHill Therapeutics, Inc. | |
| 10255 Science Center Drive | ||
| San Diego, California 92121 Attn: Secretary | ||
15. By signing these Joint Escrow Instructions, you become a party hereto only for the purpose of said Joint Escrow Instructions; you do not become a party to the Agreement.
16. You are entitled to employ such legal counsel and other experts (including, without limitation, the firm of Cooley LLP) as you may deem necessary properly to advise you in connection with your obligations hereunder. You may rely upon the advice of such counsel, and you may pay such counsel reasonable compensation therefor.
17. This instrument is binding upon and inures to the benefit of the parties hereto and their respective successors and permitted assigns. It is understood and agreed that references to “you” and “your” herein refer to the original Escrow Agents and to any and all successor Escrow Agents. It is understood and agreed that the Company may at any time or from time to time assign its rights under the Agreement and these Joint Escrow Instructions in whole or in part.
18. These Joint Escrow Instructions are construed and interpreted in accordance with the laws of the State of Delaware without regard to conflict of law principles. The parties hereby expressly consent to the personal jurisdiction of the state and federal courts located in the county in which the Company has its principal offices for any lawsuit arising from or related to these Joint Escrow Instructions.
[Remainder of page intentionally left blank]
3.
Very truly yours,
| COMPANY: | ||||
| BlossomHill Therapeutics, Inc. | ||||
| By: |
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| Name: |
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| Title: |
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| PURCHASER:
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(Signature) | ||||
Name (Please Print) | ||||
Escrow Agent:
[ ], Secretary
[Signature Page to Joint Escrow Instructions]
EXHIBIT D
83(b) ELECTION
[This Form is designed for Individual purchasers. Corporate or Trust purchasers should contact
their Tax Professional to review before submitting.]
Instructions for Filing Section 83(b) Election
Attached is a form of election under Section 83(b) of the Internal Revenue Code and an accompanying IRS cover letter. Please fill in your [social security number][taxpayer identification number] and sign the election and cover letter, then proceed as follows:
| (a) | Make three copies of the completed election form and one copy of the IRS cover letter. |
| (b) | Send the signed election form and cover letter, the copy of the cover letter, and a self-addressed stamped return envelope to the Internal Revenue Service Center where you would otherwise file your tax return1. Even if an address for an Internal Revenue Service Center is already included in the forms below, it is your obligation to verify such address. This can be done by searching for the term “where to file” on www.irs.gov or by calling 1 (800) 829-1040. If you are signing the election form by hand, be sure to send the original signed form to the IRS. |
Sending the election via certified mail, requesting a return receipt, with the certified mail number written on the cover letter is also recommended.
| (c) | Deliver one copy of the completed election form to the Company. |
| (d) | Applicable state law may require that you attach a copy of the completed election form to your state personal income tax return(s) when you file it for the year (assuming you file a state personal income tax return).2 |
Please consult your personal tax advisor(s) to determine whether or not a copy of this Section 83(b) election should be filed with your state personal income tax return(s).
| (e) | Retain one copy of the completed election form for your personal permanent records. |
Note: An additional copy of the completed election form must be delivered to the transferee (recipient) of the property if the service provider and the transferee are not the same person.
| 1 | Note: Per Treasury Regulation § 1.83-2(c), the Section 83(b) election must be filed with the IRS office where the person otherwise files such person’s tax return. As of September 2022, if you live in a foreign country or are a dual status alien (foreigners that will have lived both in their home country and the United States during the year in which they make the election) you should send the 83(b) election to Austin, TX 73301-0215. You can verify this is still the correct address at: http://www.irs.gov/uac/Where-to-File-Addresses-for—Taxpayers-and—Tax-Professionals-Filing-Form-1040. |
| 2 | Note: Pursuant to Treasury Regulations finalized in July 2016 (Treas. Reg. § 1.83-2(c); T.D. 9779), taxpayers are no longer required to submit a copy of a Code Sec. 83(b) election with their federal personal income tax returns for the year in which the property subject to the election was transferred. However, you are strongly encouraged to retain a copy of the completed election form and the IRS filed-stamped copy of your cover letter along with a copy of the federal personal income tax return for the year in which the property subject to the election was transferred for your personal permanent records in case you ever need to demonstrate proper and timely filing (a common requirement imposed by acquirers in M&A transactions). |
Please note that the election must be filed with the IRS within 30 days of the date of your restricted stock grant. Failure to file within that time will render the election void and you may recognize ordinary taxable income as your vesting restrictions lapse. The Company and its counsel cannot assume responsibility for failure to file the election in a timely manner under any circumstances.
SECTION 83(b) ELECTION
, 20_
Department of the Treasury
Internal Revenue Service
[City, State Zip]3[Austin, TX 73301-0215
USA]4
Re: Election Under Section 83(b)
To Whom It May Concern:
The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, to include in gross income as compensation for services the excess (if any) of the fair market value of the shares described below over the amount paid for those shares. The following information is supplied in accordance with Treasury Regulation § 1.83-2:
| 1. | The name, [social security number][taxpayer identification number], address of the undersigned, and the taxable year for which this election is being made are: |
| Name: | ||
| [Social Security Number][Tax Identification Number]: 5 | ||
| Address: | ||
Taxable year: Calendar year 20_.6
| 2. | The property that is the subject of this election: [#] shares of common stock of BlossomHill Therapeutics, Inc., a Delaware corporation (the “Company”). |
| 3. | The property was transferred on: [●], 20_. |
| 3 | Note: Per Treasury Regulation § 1.83-2(c), the Section 83(b) election must be filed with the IRS office where the person otherwise files such person’s tax return. Assuming these are individual taxpayers who would file a Form 1040, see http://www.irs.gov/uac/Where-to-File-Addresses-for—Taxpayers-and—Tax-Professionals-Filing-Form-1040. Use the address in the row which includes the state in which the service provider lives and in the column entitled “And you ARE NOT enclosing a payment”. |
| 4 | Note: Per Treasury Regulation § 1.83-2(c), the Section 83(b) election must be filed with the IRS office where the person otherwise files such person’s tax return. As of September 2022, if you live in a foreign country or are a dual status alien (foreigners that will have lived both in their home country and the United States during the year in which they make the election) you should send the 83(b) election to Austin, TX 73301-0215. You can verify this is still the correct address at: http://www.irs.gov/uac/Where-to-File-Addresses-for—Taxpayers-and—Tax-Professionals-Filing-Form-1040. |
| 5 | Note: If you do not have a taxpayer ID number (TIN), put “None –non-US taxpayer” and include in the cover letter to the IRS a statement explaining that the Section 83(b) election is being filed because the individual may become a US taxpayer before the stock vests. If the individual is applying for a TIN, instead include “applied for” and enclose a copy of the W-7 application. Note that there may be important factors to consider before applying for a TIN, including immigration status, etc. |
| 6 | Note: If an entity is the service provider, instead use “Fiscal year ending .” |
| 4. | The property is subject to the following restrictions: Some or all of the shares are subject to forfeiture or repurchase at less than their fair market value if the undersigned does not continue to provide services for the Company for a designated period of time. The risk of forfeiture or repurchase lapses over a specified vesting period. |
| 5. | The fair market value of the property at the time of transfer (determined without regard to any restriction other than a nonlapse restriction as defined in Treasury Regulation § 1.83-3(h)): $[●] per share x [#] shares = $[●]. |
| 6. | For the property transferred, the undersigned paid: $[●] per share x [#] shares = $[●]. |
| 7. | The amount to include in gross income is: $[●].7 |
The undersigned taxpayer will file this election with the Internal Revenue Service office with which taxpayer files taxpayer’s annual income tax return not later than 30 days after the date of transfer of the property. A copy of the election also will be furnished to the person for whom the services were performed and the transferee of the property. The undersigned is the person performing the services in connection with which the property was transferred.
| Very truly yours, |
| [Name] |
| 7 | Note: This should equal the amount in Item 5 minus the amount in Item 6, and in many cases will be $0.00. |
RETURN SERVICE REQUESTED
Department of the Treasury
Internal Revenue Service
[City, State, ZIP][Austin, TX 73301-0215 USA]
| Re: | Election Under Section 83(b) of the Internal Revenue Code |
To Whom It May Concern:
Enclosed please find an executed form of election under Section 83(b) of the Internal Revenue Code of 1986, as amended, filed with respect to an interest in BlossomHill Therapeutics, Inc.
[Please note, the undersigned does not currently have a Tax Identification Number because the undersigned is not a U.S. taxpayer, but may become a U.S. resident before the stock vests.]
Also enclosed is a copy of this letter and a stamped, self-addressed envelope. Please acknowledge receipt of these materials by marking the copy when received and returning it to the undersigned.
Thank you very much for your assistance.
| Very truly yours, |
| [Name] |
Enclosures
Exhibit 10.8
BLOSSOMHILL THERAPEUTICS, INC.
SEVERANCE PLAN
AND
SUMMARY PLAN DESCRIPTION
APPROVED BY THE BOARD OF DIRECTORS: JUNE 25, 2026
1. Introduction. The purpose of this BlossomHill Therapeutics, Inc. Severance Plan (the “Plan”) is to provide specified severance benefits to eligible employees of the Company (as defined below) whose employment is terminated by the Company or a successor under certain circumstances. This Plan is an “employee welfare benefit plan,” as defined in Section 3(1) of ERISA (as defined below). This Plan shall supersede any existing severance plan or individual agreement between the Company and any Covered Employee (as defined below) and any other plan, policy or practice, whether written or unwritten, maintained by the Company with respect to a Covered Employee, in each case to the extent that such agreement, plan, policy or practice provides for equity acceleration or severance benefits upon the Covered Employee’s separation from the Company. This document constitutes both the written instrument under which the Plan is maintained and the required summary plan description for the Plan.
2. Definitions. For purposes of the Plan, the terms below are defined as follows:
2.1. “Administrator” means the Board or Compensation Committee prior to a Change in Control (as defined below); or, after a Change in Control, one or more members of the successor Board or Compensation Committee or other persons designated by the Company’s Board or Compensation Committee prior to such Change in Control.
2.2. “Board” means the Board of Directors of the Company.
2.3. “Cause” has the meaning ascribed to such term in any written agreement between a Covered Employee and the Company or any affiliate of the Company defining such term and, in the absence of such agreement, such term means, with respect to a Covered Employee, the occurrence of any one or more of the following: (i) the Covered Employee’s conviction of, or plea of no contest with respect to, any felony or to any misdemeanor involving dishonesty or moral turpitude; (ii) the Covered Employee’s participation in a fraud or act of dishonesty (or an attempted fraud or act of dishonesty) against the Company, or that results in (or could result in) material harm to the Company, including but not limited to material harm to reputational interests; (iii) the Covered Employee’s violation of a fiduciary duty or a duty of loyalty owed to the Company; (iv) the Covered Employee’s material breach of any agreement between the Covered Employee and the Company, including but not limited to the Employment, Confidential Information and Invention Assignment Agreement, or of any applicable written Company policies; (v) persistent, unsatisfactory performance or neglect of the Covered Employee’s job duties, which is not cured within thirty (30) business days after the Covered Employee is provided written notice by the Company (provided, that, such written notice and opportunity to cure are not required if the Company determines that the Covered Employee’s performance or neglect is not reasonably susceptible to being cured); or (vi) the Covered Employee’s gross misconduct or material failure to comply with a written instruction of the Company.
2.4. “Change in Control” has the meaning ascribed to such term in the Equity Plan.
2.5. “Change in Control Period” means the period beginning three (3) months prior to and ending twelve (12) months following the effective date of a Change in Control.
2.6. “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
2.7. “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder.
2.8. “Company” means BlossomHill Therapeutics, Inc. and any successor.
2.9. “Compensation Committee” means the Compensation Committee of the Board, or if no such committee has been established or is then constituted, the Board; provided that, upon the establishment of a Compensation Committee of the Board, all references herein to the “Compensation Committee” shall refer to such committee.
2.10. “Covered Employee” means an employee of the Company who (i) is the Company’s Chief Executive Officer or has been designated by the Administrator to participate in the Plan, and (ii) has timely and properly executed and delivered a Participation Agreement to the Company.
2.11. “Covered Termination” means a Covered Employee’s termination of employment by the Company (or any parent or subsidiary of the Company) without Cause or as a result of a Covered Employee’s resignation for Good Reason; provided, that, in either case, such termination is not due to the Covered Employee’s death or disability.
2.12. “Effective Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Company’s common stock, pursuant to which the Company’s common stock is priced for the initial public offering.
2.13. “Equity Plan” means the Company’s 2026 Equity Incentive Plan, as amended from time to time, or any successor thereto.
2.14. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
2.15. “Good Reason” has the meaning ascribed to such term in any written agreement between the Covered Employee and the Company defining such term and, in the absence of such agreement, such term means: (i) a material reduction of the Covered Employee’s base compensation, which shall mean a reduction of at least ten percent (10%), unless such reduction is consistent with and generally applicable to similarly-situated Company employees; (ii) a material reduction of the Covered Employee’s authority, responsibilities or duties with the Company; or (iii) the Covered Employee being required by the Company to relocate the Covered Employee’s principal place of employment with the Company as of the Effective Date to a principal place of employment more than fifty (50) miles from the Company’s San Diego, California, office in each case without the Covered Employee’s prior consent; provided, however, that the Covered Employee’s termination shall only be for Good Reason if: (i) the Covered Employee gives the Board written notice of the intent to terminate for Good Reason within thirty (30) days following the first occurrence of the condition(s) that the Covered Employee believes constitutes Good Reason, which notice shall describe such condition(s), and (ii) the Board has a period of not less than thirty (30) days to materially cure the Good Reason resignation triggering condition following its receipt of such notice (the “Cure Period”), (iii) the Good Reason resignation triggering condition is not materially cured prior to expiration of the Cure Period, and (iv) the Covered Employee resigns from all positions with the Company within the thirty (30) day period following the expiration of the Cure Period.
2.16. “Participation Agreement” means an agreement between a Covered Employee and the Company in substantially the form of Appendix A attached hereto, and which may include such other terms as the Administrator deems necessary or advisable in the administration of the Plan.
2.17. “Severance Benefits” means, as the context requires, the Standard Severance Benefits and/or the CIC Severance Benefits the Covered Employee will be provided pursuant to Section 4.
2.18. “Termination Date” means the Covered Employee’s last day of employment with the Company.
3. Eligibility for Severance Benefits. An individual is eligible for Severance Benefits under the Plan, in the amounts set forth in Section 4, only if such individual is a Covered Employee on the date such individual experiences a Covered Termination.
4. Severance Benefits.
4.1. Covered Termination Outside the Change in Control Period. If, at any time outside of the Change in Control Period, a Covered Employee experiences a Covered Termination, then, subject to the Covered Employee’s compliance with Section 5 and the conditions set forth in this Plan, the Covered Employee shall receive the following Severance Benefits from the Company (the “Standard Severance Benefits”):
4.1.1. Cash Severance Benefits. The Covered Employee shall receive cash severance in an amount equal to the Covered Employee’s base salary (as in effect immediately prior to any reduction giving rise to Good Reason, if applicable) for the applicable number of months set forth in the Covered Employee’s Participation Agreement (such cash amount, the “Cash Severance,” and such number of months, the “Standard Severance Period”). The Cash Severance shall be paid, less applicable tax withholdings, in equal installments on the Company’s regular payroll schedule over the Standard Severance Period, provided, that no payment of Cash Severance shall be made prior to the first payroll date following the effective date of the Release (the “Initial Payment Date”). On the Initial Payment Date, the Company shall pay the Covered Employee in a lump sum the portion of the Cash Severance that the Covered Employee would have received on or prior to the Initial Payment Date under the original schedule but for the delay while waiting for the Initial Payment Date in compliance with Section 409A (as defined below) and the effectiveness of the Release (as defined below), with the balance of the Cash Severance being paid as originally scheduled. Notwithstanding the foregoing, the Company may, in its sole discretion, pay the Cash Severance in the form of a lump sum, which amount will be paid on the Initial Payment Date, but such lump sum payment of the Cash Severance shall be made only if the Company, in consultation with its advisors, determines that such payment will not result in adverse taxation under Section 409A.
4.1.2. COBRA Premiums. Provided that the Covered Employee is eligible for and timely makes the necessary elections for continuation coverage pursuant to COBRA, the Company shall pay the applicable premiums (inclusive of premiums for the Covered Employee’s dependents) for such coverage following the date of the Covered Employee’s Covered Termination for the Standard Severance Period (such period of months, the “Standard COBRA Payment Period”) (but in no event after such time as the Covered Employee is eligible for coverage under a health, dental or vision insurance plan of a subsequent employer or as the Covered Employee and the Covered Employee’s dependents are no longer eligible for COBRA coverage). The Covered Employee shall notify the Company immediately if the Covered Employee becomes covered by a health, dental, or vision insurance plan of a subsequent employer or if the Covered Employee’s dependents are no longer eligible for COBRA coverage. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under
applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums on the Covered Employee’s behalf, the Company will instead pay such Covered Employee on the last day of each remaining month of the Standard COBRA Payment Period a fully taxable cash payment equal to the COBRA premium for that month, subject to applicable tax withholding (such amount, the “Special Severance Payment”), such Special Severance Payment to be made without regard to the Covered Employee’s election of COBRA coverage or payment of COBRA premiums and without regard to such Covered Employee’s continued eligibility for COBRA coverage during the Standard COBRA Payment Period. Such Special Severance Payment shall end upon expiration of the Standard COBRA Payment Period.
4.2. Covered Termination During the Change in Control Period. If, at any time during the Change in Control Period, a Covered Employee experiences a Covered Termination, then, subject to the Covered Employee’s compliance with Section 5 and the conditions set forth in this Plan, the Covered Employee shall receive the following Severance Benefits from the Company (the “CIC Severance Benefits”):
4.2.1. Cash Severance Benefits. The Covered Employee shall receive cash severance in an amount equal to the Covered Employee’s base salary (as in effect immediately prior to any reduction giving rise to Good Reason, if applicable) for the applicable number of months set forth in the Covered Employee’s Participation Agreement (such cash amount, the “CIC Cash Severance,” and such number of months, the “CIC Severance Period”). The CIC Cash Severance shall be paid, less applicable tax withholdings, in a lump sum on the later of (i) the Initial Payment Date and (ii) the first payroll date following the Change in Control.
4.2.2. Target Annual Bonus Entitlement. The Covered Employee will additionally receive a multiple of such Covered Employee’s target annual bonus, as established by the Board for the year in which the Covered Termination occurs and as set forth in the Covered Employee’s Participation Agreement (the “CIC Target Bonus”). Such payment of the CIC Target Bonus shall be made, less applicable tax withholdings, in a lump sum on the later of (i) the Initial Payment Date and (ii) the first payroll date following the Change in Control.
4.2.3. COBRA Premiums. Provided that the Covered Employee is eligible for and timely makes the necessary elections for continuation coverage pursuant to COBRA, the Company shall pay the applicable premiums (inclusive of premiums for the Covered Employee’s dependents) for such coverage following the date of the Covered Employee’s Covered Termination for up to the CIC Severance Period (such period of months, the “CIC COBRA Payment Period”) (but in no event after such time as the Covered Employee is eligible for coverage under a health, dental or vision insurance plan of a subsequent employer or as the Covered Employee and the Covered Employee’s dependents are no longer eligible for COBRA coverage). The Covered Employee shall notify the Company immediately if the Covered Employee becomes covered by a health, dental, or vision insurance plan of a subsequent employer or if the Covered Employee’s dependents are no longer eligible for COBRA coverage. Notwithstanding the foregoing, if at any time the Company determines, in its sole discretion, that it cannot provide the COBRA premium benefits without potentially incurring financial costs or penalties under applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then in lieu of paying COBRA premiums on the Covered Employee’s behalf, the Company will instead pay such Covered Employee on the last day of each remaining month of the CIC COBRA Payment Period a Special Severance Payment to be made without regard to the Covered Employee’s election of COBRA coverage or payment of COBRA premiums and without regard to such Covered Employee’s continued eligibility for COBRA coverage during the CIC COBRA Payment Period. Such Special Severance Payment shall end upon expiration of the CIC COBRA Payment Period.
4.2.4. Equity Vesting. Each of the Covered Employee’s then-outstanding equity awards that are subject solely to time-based vesting shall accelerate and become vested and exercisable, as to the applicable percentage set forth in the Covered Employee’s Participation Agreement, of the unvested shares subject to the equity award, with the exception of any award granted after the Effective Date that explicitly overrides this provision in writing. Any awards that vest upon the satisfaction of performance criteria shall be subject to the vesting and acceleration terms, if any, as set forth in the individual agreement governing such award. Subject to Section 5, the accelerated vesting described in this section shall be effective as of the Termination Date. Notwithstanding anything herein to the contrary, nothing in the Plan shall limit the Company’s ability to accelerate vesting and/or exercisability of outstanding equity awards pursuant to the terms of the applicable equity incentive plan of the Company. In order to give effect to the intent of the foregoing provision, notwithstanding anything to the contrary set forth in the applicable equity incentive plan of the Company or the applicable equity award agreements that provide that any then-unvested portion of the Covered Employee’s award will immediately expire upon such Covered Employee’s termination of service, such Covered Employee’s equity awards shall remain outstanding following such Covered Employee’s Covered Termination to give effect to such acceleration as necessary.
5. Conditions to Receipt of Severance.
5.1. Release Agreement. As a condition to receiving any Severance Benefits described in Section 4 herein, a Covered Employee must sign a separation agreement containing among other provisions, a release of all claims in favor of the Company and its subsidiaries and affiliates (the “Release”) in such form as may be provided by the Company. The Release must become effective in accordance with its terms, which must occur in no event more than sixty (60) days following the date of the applicable Covered Termination. Unless specifically requested otherwise by the Company, the Covered Employee must also resign from all offices and positions held with the Company, as of the Termination Date. In no event shall payment of any benefits under the Plan be made prior to the Termination Date or prior to the effective date of the Release. If the Company determines that any payments or benefits provided under the Plan constitute “deferred compensation” under Section 409A, and the Termination Date occurs at a time during the calendar year when the Release could become effective in the calendar year following the calendar year in which the Covered Employee’s “separation from service” within the meaning of Section 409A of the Code and the final regulations and any guidance promulgated thereunder (“Section 409A”) occurs, then regardless of when the Release is returned to the Company and becomes effective, the Release will not be deemed effective any earlier than the latest permitted effective date; provided, that except to the extent that payments may be delayed in accordance with Section 8, on the first regular payroll date following the effective date of a Covered Employee’s Release, the Company shall (i) pay the Covered Employee a lump sum amount equal to the sum of the applicable Severance Benefits that the Covered Employee would otherwise have received through such payroll date but for the delay in payment related to the effectiveness of the Release and (ii) commence paying the balance, if any, of the Severance Benefits in accordance with the applicable payment schedule.
5.2. Other Requirements. A Covered Employee’s receipt of Severance Benefits pursuant to Section 4 will be subject to such Covered Employee’s continued material compliance with the terms of the Release, the Participation Agreement, the non-disparagement provisions of a separation agreement provided by the Company, and any confidential information agreement, proprietary information and inventions agreement and any other agreement between the Covered Employee and the Company. Severance Benefits under this Plan shall terminate immediately for a Covered Employee, and any previously paid Severance Benefits shall be subject to recoupment by the Company, if such Covered Employee is in material violation, at any time, of any legal or contractual obligation owed to the Company.
5.3. Section 280G. Any provision of the Plan to the contrary notwithstanding, if any payment or benefit a Covered Employee would receive from the Company and its subsidiaries or an acquiror pursuant to the Plan or otherwise (a “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment will be equal to the Higher Amount. The “Higher Amount” will be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Covered Employee’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” within the meaning of Section 280G of the Code is necessary so that the Payment equals the Higher Amount, reduction will occur in the manner that results in the greatest economic benefit for a Covered Employee and, to the extent applicable, complies with Section 409A. In no event will the Company, any subsidiary or any stockholder be liable to any Covered Employee for any amounts not paid as a result of the operation of this Section 5.3. The Company will use commercially reasonable efforts to cause the accounting, law or valuation firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to a Covered Employee and the Company within fifteen (15) calendar days after the date on which such Covered Employee’s right to a Payment is triggered (if requested at that time by such Covered Employee or the Company) or such other time as requested by such Covered Employee or the Company.
6. Non-Duplication of Benefits. The Severance Benefits provided to a Covered Employee are intended to be and are exclusive and in lieu of any other severance benefits or payments to which such Covered Employee may otherwise be eligible, either at law, tort, or contract, in equity, or under the Plan, in the event of any termination of such Covered Employee’s employment. The Covered Employee will not be eligible to receive severance benefits or payments upon a termination of employment that constitutes a Covered Termination other than those benefits expressly set forth herein and those benefits required to be provided by applicable law or as negotiated in accordance with applicable law (including any severance benefits that may be included in a severance agreement, employment agreement or similar contract between the Company or a subsidiary of the Company and the Covered Employee). Notwithstanding the foregoing, if a Covered Employee is eligible to receive any benefits other than the benefits under the Plan by operation of applicable law or as negotiated in accordance with applicable law, such Covered Employee’s benefits under the Plan shall be provided only to the extent more favorable than such other arrangement. The Administrator, in its sole discretion, shall have the authority to reduce or otherwise adjust a Covered Employee’s benefits under the Plan, in whole or in part, by any other severance benefits, pay and benefits in lieu of notice, or other similar benefits payable to such Covered Employee under the Plan that become payable in connection with the Covered Employee’s termination of employment pursuant to (i) any applicable legal requirement, including the Worker Adjustment and Retraining Notification Act, or any other similar state law, or (ii) any policy or practice of the Company providing for the Covered Employee to remain on payroll for a limited period of time after being given notice of termination. The benefits provided under the Plan are intended to satisfy, in whole or in part, any and all statutory obligations of the Company that may arise out of a Covered Employee’s termination of employment, and the Administrator shall so construe and implement the terms of the Plan. In no event shall a Covered Employee receive both Standard Severance Benefits and CIC Severance Benefits hereunder.
7. Clawback; Recovery. All payments and Severance Benefits provided under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Administrator may impose such other clawback, recovery or recoupment provisions as the Administrator determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of common stock of the Company or other cash or property upon the occurrence of a termination of employment for Cause. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for Good Reason, constructive termination, or any similar term under any plan of or agreement with the Company.
8. Section 409A. Notwithstanding anything to the contrary in the Plan, no severance payments or benefits will become payable until the Covered Employee has a “separation from service” within the meaning of Section 409A. Further, if some or all of the Covered Employee’s Severance Benefits are subject to Section 409A and such Covered Employee is a “specified employee” within the meaning of Section 409A at the time of such Covered Employee’s separation from service (other than due to death), then such Severance Benefits otherwise due to such Covered Employee on or within the six-month period following such Covered Employee’s separation from service will accrue during such six-month period and will become payable in a lump sum payment (less applicable withholding taxes) on the date six months and one day following the date of the Covered Employee’s separation from service if necessary to avoid adverse taxation under Section 409A. All subsequent payments, if any, will be payable in accordance with the payment schedule applicable to each payment or benefit. Notwithstanding anything herein to the contrary, if the Covered Employee dies following such Covered Employee’s separation from service but prior to the six-month anniversary of such Covered Employee’s date of separation, then any payments delayed in accordance with this paragraph will be payable in a lump sum (less applicable withholding taxes) to the Covered Employee’s estate as soon as administratively practicable after the date of such Covered Employee’s death and all other benefits will be payable in accordance with the payment schedule applicable to each payment or benefit. Each payment and benefit payable under the Plan is intended to constitute a separate payment for purposes of Section 409A. It is the intent of this Plan to comply with or be exempt from the requirements of Section 409A so that none of the severance payments and benefits to be provided hereunder will be subject to the additional tax imposed under Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under the Plan comply with Section 409A, and in no event shall the Company or any of its representatives be liable for all or any portion of any taxes, penalties, interest, or other expenses that may be incurred by the Covered Employee on account of non-compliance with Section 409A.
9. Withholding. The Company will withhold from any Severance Benefits all federal, state, local and other taxes required to be withheld therefrom and any other required payroll deductions.
10. Administration. The Plan will be administered and interpreted by the Administrator (in the Administrator’s sole discretion). The Administrator is the “named fiduciary” of the Plan for purposes of ERISA and will be subject to the fiduciary standards of ERISA when acting in such capacity. Any decision made or other action taken by the Administrator with respect to the Plan, and any interpretation by the Administrator of any term or condition of the Plan, or any related document, will be conclusive and binding on all persons and be given the maximum possible deference allowed by law. Any decision made or other action taken by the Administrator with respect to the Plan, and any interpretation by the Administrator of any term or condition of the Plan, or any related document that (i) does not affect the benefits payable under the Plan shall not be subject to review unless found to be arbitrary and capricious or (ii) does affect the benefits payable under the Plan shall not be subject to review unless found to be unreasonable or not to have been made in good faith.
11. Amendment or Termination. The Company, by action of the Administrator, reserves the right to amend or terminate the Plan at any time, without advance notice to any Covered Employee and without regard to the effect of the amendment or termination on any Covered Employee or on any other individual. Any amendment or termination of the Plan will be in writing. Notwithstanding the foregoing, a Covered Employee’s rights to receive payments and benefits pursuant to this Plan under an effective Participation Agreement may not be adversely affected, without the Covered Employee’s written consent, by an amendment or termination of this Plan.
12. Claims Procedure. Claims for benefits under the Plan shall be administered in accordance with Section 503 of ERISA and the Department of Labor Regulations thereunder. Any employee or other person who believes they are entitled to any payment under the Plan (a “claimant”) may submit a claim in writing to the Administrator within ninety (90) days of the earlier of (i) the date the claimant learned the amount of such claimant’s Severance Benefits under the Plan and (ii) the date the claimant learned that they will not be eligible for any benefits under the Plan. In determining claims for benefits, the Administrator or its delegate has the authority to interpret the Plan, to resolve ambiguities, to make factual determinations, and to resolve questions relating to eligibility for and amount of benefits. If the claim is denied (in full or in part), the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice will also describe any additional information or material that the Administrator needs to complete the review and an explanation of why such information or material is necessary and the Plan’s procedures for appealing the denial (including a statement of the applicant’s right to bring a civil action under Section 502(a) of ERISA following a denial on review of the claim, as described below). The denial notice will be provided within ninety (90) days after the claim is received. If special circumstances require an extension of time (up to ninety (90) days), written notice of the extension will be given to the claimant (or representative) within the initial 90-day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the Administrator expects to render its decision on the claim. If the extension is provided due to a claimant’s failure to provide sufficient information, the time frame for rendering the decision will be tolled from the date the notification is sent to the claimant about the failure to the date on which the claimant responds to the request for additional information. The Administrator has delegated the claims review responsibility to the Company’s Chief Financial Officer or such other individual designated by the Administrator, except in the case of a claim filed by or on behalf of the Company’s Chief Financial Officer or such other individual designated by the Administrator, in which case, the claim will be reviewed by the Company’s Chief Executive Officer.
13. Appeal Procedure. If the claimant’s claim is denied, the claimant (or such claimant’s authorized representative) may apply in writing to an appeals official appointed by the Administrator (which may be a person, committee or other entity) for a review of the decision denying the claim. Review must be requested within sixty (60) days following the date the claimant received the written notice of a claim denial or else the claimant will lose the right to such review. A request for review must set forth all the grounds on which such request is based, all facts in support of the request, and any other matters that the claimant feels are pertinent. In connection with the request for review, the claimant (or representative) has the right to review and obtain copies of all documents and other information relevant to the claim, upon request and at no charge, and to submit written comments, documents, records and other information relating to such claimant’s claim. The review shall take into account all comments, documents, records and other information submitted by the claimant (or representative) relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The appeals official will provide written notice of its decision on review within sixty (60) days after it receives a review request. If special circumstances require an extension of time (up to sixty (60) days), written notice of the extension will be given to the claimant (or representative) within the initial 60-day period. This notice of extension will indicate the special circumstances requiring the extension of time and the date by which the appeals official expects to render its decision. If the extension is provided due to a claimant’s failure to provide sufficient information, the time frame for rendering the decision on review is tolled from the date the notification is sent to the claimant about the failure to the date on which the claimant responds to the request for additional information. If the claim is denied (in full or in part) upon review, the claimant will be provided a written notice explaining the specific reasons for the denial and referring to the provisions of the Plan on which the denial is based. The notice shall also include a statement that the claimant will be
provided, upon request and free of charge, reasonable access to, and copies of, all documents and other information relevant to the claim and a statement regarding the claimant’s right to bring an action under Section 502(a) of ERISA. The Administrator has delegated the appeals review responsibility to the Company’s Chief Financial Officer, except in the case of an appeal filed by or on behalf of the Company’s Chief Financial Officer, in which case, the appeal will be reviewed by the Company’s Chief Executive Officer.
14. Arbitration. No arbitration proceeding shall be brought to recover benefits under the Plan until the claims procedures described in Sections 12 and 13 have been exhausted and the Plan benefits requested have been denied in whole or in part. Notwithstanding any other provision of the Plan, to ensure the timely and economical resolution of disputes, all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance or interpretation of this Plan, and any related Participation Agreement, will be resolved to the fullest extent permitted by law by final, binding and confidential arbitration, by a single arbitrator, in San Diego, CA, conducted by JAMS, Inc. (“JAMS”) under the then-applicable JAMS rules (currently available at the following web address: https://www.jamsadr.com/rules-employment). By agreeing to this arbitration procedure, each Covered Employee and the Company waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. Covered Employees will have the right to be represented by legal counsel at any arbitration proceeding. In addition, all claims, disputes, or causes of action under this Section, whether by a Covered Employee or the Company, must be brought in an individual capacity, and shall not be brought as a plaintiff (or claimant) or class member in any purported class or representative proceeding, nor joined or consolidated with the claims of any other person or entity. The arbitrator may not consolidate the claims of more than one person or entity, and may not preside over any form of representative or class proceeding. To the extent that the preceding sentences regarding class claims or proceedings are found to violate applicable law or are otherwise found unenforceable, any claim(s) alleged or brought on behalf of a class shall proceed in a court of law rather than by arbitration. This paragraph shall not apply to any action or claim that cannot be subject to mandatory arbitration as a matter of law or any claims alleging sexual harassment or a nonconsensual sexual action or sexual contact, to the extent such claims are not permitted by applicable law(s) to be submitted to mandatory arbitration and the applicable law(s) are not preempted by the Federal Arbitration Act or otherwise invalid. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized to award any or all remedies that a Covered Employee or the Company would be eligible to seek in a court of law. The Company shall pay all JAMS’ arbitration fees in excess of the amount of court fees that would be required of a Covered Employee if the dispute were decided in a court of law. Nothing in this paragraph is intended to prevent either a Covered Employee or the Company from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction. Any arbitration must be commenced within one year after the Covered Employee’s receipt of notification that their appeal was denied. The foregoing provisions shall apply to the extent consistent with and permitted by ERISA.
15. Source of Payments. All Severance Benefits will be paid in cash from the general funds of the Company; no separate fund will be established under the Plan; and the Plan will have no assets. No right of any person to receive any payment under the Plan will be any greater than the right of any other general unsecured creditor of the Company.
16. Inalienability. In no event may any current or former employee of the Company or any of its subsidiaries or affiliates sell, transfer, anticipate, assign or otherwise dispose of any right or interest under the Plan. At no time will any such right or interest be subject to the claims of creditors nor liable to attachment, execution or other legal process.
17. No Enlargement of Employment Rights. Neither the establishment nor maintenance of the Plan, any amendment of the Plan, nor the making of any benefit payment hereunder, will be construed to confer upon any individual any right to be continued as an employee of the Company. The Company expressly reserves the right to discharge any of its employees at any time, with or without Cause. However, as described in the Plan, a Covered Employee may be eligible to benefits under the Plan depending upon the circumstances of such Covered Employee’s termination of employment.
18. Successors. Any successor to the Company of all or substantially all of the Company’s business or assets (whether direct or indirect and whether by purchase, merger, consolidation, liquidation or otherwise) will assume the obligations under the Plan and agree expressly to perform the obligations under the Plan in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a succession. For all purposes under the Plan, the term “Company” will include any successor to the Company’s business or assets which become bound by the terms of the Plan by operation of law, or otherwise.
19. Applicable Law. The provisions of the Plan will be construed, administered and enforced in accordance with ERISA and, to the extent applicable, the internal substantive laws of the State of California (except its conflict of laws provisions).
20. Severability. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.
21. Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.
22. Additional Information.
| Plan Name: | BlossomHill Therapeutics, Inc. Severance Plan | |
| Plan Sponsor: | BlossomHill Therapeutics, Inc. | |
| Identification Numbers: | EIN: 46-3826166 Plan Number: | |
| Plan Year: | Fiscal year ending December 31 | |
| Plan Administrator: | BlossomHill Therapeutics, Inc. | |
| Attention: Administrator of the BlossomHill Therapeutics, Inc. Severance Plan | ||
| Agent for Service of | BlossomHill Therapeutics, Inc. | |
| Legal Process: | Attention: Administrator of the BlossomHill Therapeutics, Inc. Severance Plan | |
| Service of process may also be made upon the Administrator. | ||
| Type of Plan: | Severance Plan/Employee Welfare Benefit Plan | |
| Plan Costs: | The cost of the Plan is paid by the Company. | |
23. Statement of ERISA Rights.
As a Covered Employee under the Plan, you have certain rights and protections under ERISA:
(a) You may examine (without charge) all Plan documents, including any amendments and copies of all documents filed with the U.S. Department of Labor. These documents are available for your review in the office of the Company’s Chief Financial Officer.
(b) You may obtain copies of all Plan documents and other Plan information upon written request to the Administrator. A reasonable charge may be made for such copies.
In addition to creating rights for Covered Employees, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan (called “fiduciaries”) have a duty to do so prudently and in the interests of you and the other Covered Employees. No one, including the Company or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit under the Plan or exercising your rights under ERISA. If your claim for a severance benefit is denied, in whole or in part, you have a right to know why it was denied, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. The claim review procedure is explained in Sections 12 and 13, above.
Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents and do not receive them within thirty (30) days, you may file suit in a federal court. In such a case, the court may require the Administrator to provide the materials and to pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator. If you have a claim which is denied or ignored, in whole or in part, you may file suit in a federal court. If it should happen that you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.
If you have any questions regarding the Plan, please contact the Administrator. If you have any questions about this statement or about your rights under ERISA, you may contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor (listed in your telephone directory) or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration at 1-866-444-3272.
APPENDIX A
BLOSSOMHILL THERAPEUTICS, INC.
SEVERANCE PLAN
Participation Agreement
BlossomHill Therapeutics, Inc. (the “Company”) is pleased to inform you, [ ], that you have been selected to participate in the Company’s Severance Plan (the “Plan”) as a Covered Employee. A copy of the Plan was delivered to you with this Participation Agreement. Your participation in the Plan is subject to all of the terms and conditions of the Plan. The capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan.
In order to become a Covered Employee under the Plan, you must complete and sign this Participation Agreement and return it to [ ] no later than [ ].
The Plan describes in detail certain circumstances under which you may become eligible for Severance Benefits and the amount of those benefits. As described more fully in the Plan, you may become eligible for certain Severance Benefits if you experience a Covered Termination.
If you become eligible for Standard Severance Benefits under Section 4.1 of the Plan, then subject to the terms and conditions of the Plan, you will receive:
| Cash Severance |
[ ]1 months | |||
| COBRA Premiums |
[ ] months2 |
If you become eligible for CIC Severance Benefits under Section 4.2 of the Plan, then subject to the terms and conditions of the Plan, you will receive:
| Cash Severance |
[ ]3 months | |
| CIC Target Bonus |
[ ]x4 | |
| COBRA Premiums |
[ ]5 months | |
| Equity Acceleration |
100% |
If (x) you experience a Covered Termination prior to a Change in Control and become eligible to receive Standard Severance Benefits under Section 4.1 of the Plan and (y) a Change in Control subsequently occurs within three (3) months following such Covered Termination and you therefore become eligible to receive CIC Severance Benefits under Section 4.2 of the Plan, then (i) you will cease receiving the Standard Severance Benefits under Section 4.1 of the Plan and (ii) you will commence receiving the CIC Severance Benefits under Section 4.2 of the Plan, which will be offset by the corresponding Standard Severance Benefits you previously received prior to becoming eligible for the CIC Severance Benefits.
| 1 | NTD: To be 15 months for CEO and Executive Chairman and 9 months for C-Suite. |
| 2 | NTD: To be 15 months for CEO and Executive Chairman and 9 months for C-Suite. |
| 3 | NTD: To be 18 months for CEO and Executive Chairman and 12 months for C-Suite. |
| 4 | NTD: To be 1.5x for CEO and Executive Chairman and 1.0x for C-Suite. |
| 5 | NTD: To be 18 months for CEO and Executive Chairman and 12 months for C-Suite. |
In order to receive any Severance Benefits for which you otherwise become eligible under the Plan, you must sign and deliver to the Company the Release, which must have become effective and irrevocable, and otherwise comply with the requirements under Section 5 of the Plan.
In accordance with Section 6 of the Plan, the benefits, if any, provided under the Plan are intended to be the exclusive benefits for you related to your termination of employment and will supersede and replace any similar severance benefits to which you otherwise would be eligible to participate in any other Company severance policy, plan, agreement or other arrangement (whether or not subject to ERISA), including, without limitation, the BlossomHill Therapeutics, Inc. Severance Benefit Plan, effective October 21, 2024.
By your signature below, you and the Company agree that your participation in the Plan is governed by this Participation Agreement and the provisions of the Plan. Your signature below confirms that: (i) you have received a copy of the Plan; (ii) you have carefully read this Participation Agreement and the Plan and you acknowledge and agree to its terms, including, but not limited to, Section 6 of the Plan; (iii) you agree that this Participation Agreement and the provisions of the Plan supersede any individual agreement between you and the Company and any other plan, policy or practice, whether written or unwritten, maintained by the Company with respect to equity acceleration or severance benefits upon your separation from the Company; and (iv) decisions and determinations by the Administrator under the Plan will be final and binding on you and your successors.
| BLOSSOMHILL THERAPEUTICS, INC. | COVERED EMPLOYEE | |||||||
|
| ||||||||
| Signature | Signature | |||||||
| Name: |
Name: |
|||||||
| Title: |
Title: |
|||||||
| Date: |
Date: |
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Attachment: BlossomHill Therapeutics, Inc. Severance Plan
Exhibit 10.9
CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
BLOSSOMHILL THERAPEUTICS, INC.
CONSULTING AGREEMENT
Effective Date: August 15, 2025
This Consulting Agreement (the “Agreement”) is made as of the Effective Date set forth above by and between BlossomHill Therapeutics, Inc., a Delaware corporation (“Client”) and the consultant named on the signature page hereto (“Consultant”).
1. Engagement of Services. Client may issue Project Assignments to Consultant in the form attached to this Agreement as Exhibit A (each, a “Project Assignment”). Subject to the terms of this Agreement, Consultant will render the services set forth in Project Assignment(s) accepted by Consultant (the “Services”) by the completion dates set forth therein. Except as otherwise provided in the applicable Project Assignment, Consultant will be free of control and direction from the Client (other than general oversight and control over the results of the Services), and will have exclusive control over the manner and means of performing the Services, including the choice of place and time. Consultant will provide, at Consultant’s own expense, a place of work and all equipment, tools and other materials necessary to complete the Services; however, to the extent necessary to facilitate performance of the Services, Client may, in its discretion, make certain of its equipment or facilities available to Consultant at Consultant’s request. While on the Client’s premises, Consultant agrees to comply with Client’s then-current access rules and procedures, including those related to safety, security and confidentiality. Consultant agrees and acknowledges that Consultant has no expectation of privacy with respect to Client’s telecommunications, networking or information processing systems (including stored computer files, email messages and voice messages) and that Consultant’s activities, including the sending or receiving of any files or messages, on or using those systems may be monitored, and the contents of such files and messages may be reviewed and disclosed, at any time, without notice.
2. Compensation. Client will pay Consultant as set forth in each Project Assignment for Services rendered pursuant to this Agreement as Consultant’s sole compensation for such Services. Upon termination of this Agreement for any reason, Consultant will be compensated on the basis stated in the Project Assignment(s) for work that has been completed.
3. Ownership of Work Product. Consultant hereby irrevocably assigns to Client all right, title and interest worldwide in and to any deliverables specified in a Project Assignment and to any ideas, concepts, processes, discoveries, inventions, developments, formulae, information, materials, improvements, designs, artwork, content, software programs, other works of authorship, and any other work product created, conceived or developed by Consultant (whether alone or jointly with others) for Client during or before the term of this Agreement, including all copyrights, patents, trademarks, trade secrets, and other intellectual property rights therein (including all rights to priority and rights to file patent applications and/or registered designs) (collectively, the “Work Product”). Consultant retains no rights to use the Work Product and agrees not to challenge the validity of Client’s ownership of, or intellectual property rights in, the Work Product. Consultant agrees to execute, at Client’s request and expense, all documents and other instruments necessary or desirable to confirm such assignment, including without limitation, any copyright assignment or patent assignment provided by the Client. Consultant hereby irrevocably appoints Client as Consultant’s attorney-in-fact for the purpose of executing such documents on Consultant’s behalf, which appointment is coupled with an interest. At Client’s request, Consultant will promptly record any such patent assignment with the United States Patent and Trademark Office. Consultant will deliver each item of Work Product specified in each Project Assignment and disclose promptly in writing to Client all other Work Product.
1.
4. Other Rights. If Consultant has any rights, including without limitation “artist’s rights” or “moral rights,” in the Work Product that cannot be assigned, Consultant hereby unconditionally and irrevocably grants to Client an exclusive (even as to Consultant), worldwide, fully paid and royalty-free, irrevocable, perpetual license, with rights to sublicense through multiple tiers of sublicensees, to use, reproduce, distribute, create derivative works of, publicly perform and publicly display the Work Product in any medium or format, whether now known or later developed. In the event that Consultant has any rights in the Work Product that cannot be assigned or licensed, Consultant unconditionally and irrevocably waives the enforcement of such rights, and all claims and causes of action of any kind against Client or Client’s customers and channel partners.
5. License to Preexisting IP. Consultant agrees not to use or incorporate into Work Product any intellectual property developed by any third party or by Consultant other than in the course of performing services for Client (“Preexisting IP”) unless the Preexisting IP has been specifically identified and described in the applicable Project Assignment. In the event Consultant uses or incorporates Preexisting IP into Work Product, Consultant hereby grants to Client a non-exclusive, worldwide, fully-paid and royalty-free, irrevocable, perpetual license, with the right to sublicense through multiple tiers of sublicensees, to use, reproduce, distribute, digitally transmit, create derivative works of, publicly perform and publicly display in any medium or format, whether now known or later developed, such Preexisting IP incorporated or used in Work Product.
6. Representations and Warranties. Consultant represents and warrants that: (a) the Services will be performed in a professional manner and in accordance with the industry standards and the Work Product will comply with the requirements and specifications set forth in the applicable Project Assignment, (b) the Work Product will be an original work of Consultant, (c) Consultant has the right and unrestricted ability to assign the ownership of Work Product to Client as set forth in Section 3 (including without limitation the right to assign the ownership of any Work Product created by Consultant’s employees or contractors), (d) neither the Work Product nor any element thereof will infringe upon or misappropriate any copyright, patent, trademark, trade secret, right of publicity or privacy, or any other proprietary right of any person, whether contractual, statutory or common law, (e) Consultant has an unqualified right to grant to Client the license to Preexisting IP set forth in Section 5, (f) none of the Work Product incorporates any software code licensed under the GNU General Public License, Lesser General Public License, Affero General Public License, “copyleft” license or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Client, except as expressly agreed by the Client in writing, and (g) Consultant will comply with all applicable federal, state, local and foreign laws governing self-employed individuals, including laws requiring the payment of taxes, such as income and employment taxes, and social security, disability, and other contributions. Consultant further represents and warrants that Consultant is self-employed in an independently established trade, occupation, or business; maintains and operates a business that is separate and independent from Client’s business; holds themself out to the public as independently competent and available to provide applicable services similar to the Services; has obtained and/or expects to obtain clients or customers other than Client for whom Consultant performs services; and will perform work for Client that Consultant understands is outside the usual course of Client’s business. Consultant agrees to indemnify and hold Client harmless from any and all damages, costs, claims, expenses or other liability (including reasonable attorneys’ fees) arising from or relating to the breach or alleged breach by Consultant of this Agreement, including any of the representations and warranties set forth in this Section 6.
7. Independent Contractor Relationship. Consultant’s relationship with Client is that of an independent contractor, and nothing in this Agreement is intended to, or should be construed to, create a partnership, agency, joint venture or employment relationship between Client and any of Consultant’s employees or agents. Consultant is not authorized to make any representation, contract or commitment on behalf of Client. Consultant (if Consultant is an individual) and Consultant’s employees will not be entitled
2.
to any of the benefits that Client may make available to its employees, including, but not limited to, group health or life insurance, profit-sharing or retirement benefits. Because Consultant is an independent contractor, Client will not withhold or make payments for social security, make unemployment insurance or disability insurance contributions, or obtain workers’ compensation insurance on behalf of Consultant. Consultant is solely responsible for, and will file, on a timely basis, all tax returns and payments required to be filed with, or made to, any federal, state or local tax authority with respect to the performance of Services and receipt of compensation under this Agreement. Consultant is solely responsible for, and must maintain adequate records of, expenses incurred in the course of performing Services under this Agreement. No part of Consultant’s compensation will be subject to withholding by Client for the payment of any social security, federal, state or any other employee payroll taxes. As needed, Client will regularly report amounts paid to Consultant by filing Form 1099-NEC with the Internal Revenue Service as required by law. If, notwithstanding the foregoing, Consultant is reclassified as an employee of Client, or any affiliate of Client, by the U.S. Internal Revenue Service, the U.S. Department of Labor, or any other federal or state or foreign agency as the result of any administrative or judicial proceeding, Consultant agrees that Consultant will not, as the result of such reclassification, be entitled to or eligible for, on either a prospective or retrospective basis, any employee benefits under any plans or programs established or maintained by Client.
8. Confidential Information. During the term of this Agreement and thereafter Consultant (i) will not use or permit the use of Client’s Confidential Information in any manner or for any purpose not expressly set forth in this Agreement, (ii) will hold such Confidential Information in confidence and protect it from unauthorized use and disclosure, and (iii) will not disclose such Confidential Information to any third parties except as set forth in this section and in Section 9 below. Consultant will protect Client’s Confidential Information from accidental loss and unauthorized use, access or disclosure in the same manner as Consultant protects its own confidential information of a similar nature, but in no event will it exercise less than reasonable care. Notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between Client and Consultant, nothing in this Agreement shall limit Consultant’s right to report possible violations of law or regulation with any federal, state, or local government agency. “Confidential Information” as used in this Agreement means all information disclosed by Client to Consultant, whether during or before the term of this Agreement, that is not generally known in the Client’s trade or industry and will include, without limitation: (a) concepts and ideas relating to the development and distribution of content in any medium or to the current, future and proposed products or services of Client or its subsidiaries or affiliates; (b) trade secrets, drawings, inventions, know-how, software programs, and software source documents; (c) information regarding plans for research, development, new service offerings or products, marketing and selling, business plans, business forecasts, budgets and unpublished financial statements, licenses and distribution arrangements, prices and costs, suppliers and customers; (d) existence of any business discussions, negotiations or agreements between the parties; and (e) any information regarding the skills and compensation of employees, contractors or other agents of Client or its subsidiaries or affiliates. Confidential Information also includes proprietary or confidential information of any third party who may disclose such information to Client or Consultant in the course of Client’s business. Confidential Information does not include information that (x) is or becomes a part of the public domain through no act or omission of Consultant, (y) is disclosed to Consultant by a third party without restrictions on disclosure, or (z) was in Consultant’s lawful possession without obligation of confidentiality prior to the disclosure and was not obtained by Consultant either directly or indirectly from Client. In addition, this section will not be construed to prohibit disclosure of Confidential Information to the extent that such disclosure is required by law or valid order of a court or other governmental authority; provided, however, that Consultant will first have given notice to Client and will have made a reasonable effort to obtain a protective order requiring that the Confidential Information so disclosed be used only for the purposes for which the order was issued. All Confidential Information furnished to Consultant by Client is the sole and exclusive property of Client or its suppliers or customers. Upon request by Client, Consultant agrees to promptly deliver to Client the original and any copies of the Confidential Information. Notwithstanding the foregoing nondisclosure obligations, pursuant to 18 U.S.C.
3.
Section 1833(b), Consultant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
8.1 Personal Information. With respect to any information that Consultant collects, receives, stores, processes, generates, uses, transfers, discloses, makes accessible, protects, secures, disposes of, and transmits (collectively, processes) in connection with the Services that relates to an identified or identifiable natural person or which otherwise constitutes personal data, personal information, personally identifiable information or similar information under applicable privacy or data security laws (collectively, “Personal Information”), Consultant shall not (i) sell or share Personal Information, (ii) retain, use or disclose Personal Information for any purpose other than the business purpose specified in this Agreement, (iii) retain, use, or disclose the Personal Information outside of the direct business relationship between Consultant and Client, or (iv) combine the Personal Information Consultant receives from, or on behalf of, Client with Personal Information that it receives from, or on behalf of, another person or persons, or collects from its own interaction with consumers. For the avoidance of doubt, the foregoing prohibits Consultant from “selling” Personal Information, as defined in the California Consumer Privacy Act of 2018 (as amended, the “CCPA”), and from retaining, using, or disclosing Personal Information outside of the direct business relationship between Consultant and Client or for a “commercial purpose” (as defined in the CCPA). Client retains the right to take reasonable and appropriate steps to ensure that Consultant uses the Personal Information transferred in a manner consistent with Client’s obligations under the CCPA. Client retains the right to, upon notice, take reasonable and appropriate steps to stop and remediate unauthorized use of Personal Information. Consultant hereby certifies that it understands the obligations under this Section 8.1 and will comply with them, and agrees to notify Client if Consultant is no longer able to meet the obligations under this Section 8.1.
(a) Consultant shall comply with applicable obligations under the CCPA, as amended, and provide the same level of privacy protection as required for Client.
(b) Consultant shall use reasonable security measures appropriate to the nature of any Personal Information in its possession or control to protect the Personal Information from unauthorized access, destruction, use, modification, or disclosure.
(c) The parties acknowledge and agree that Consultant’s access to Personal Information is not part of the consideration exchanged by the parties in respect of the Agreement.
(d) If any individual contacts Consultant to make a request pertaining to their Personal Information, Consultant shall promptly forward the request to Client and shall not respond to the individual except as instructed by Client. Consultant shall promptly take such actions and provide such information as Client may request to help Client fulfill requests of individuals to exercise their rights under the applicable privacy or data security laws, including, without limitation, requests to access, delete, opt-out of the sale of, or receive information about the processing of, Personal Information pertaining to them. Consultant agrees to cooperate with Client to further amend the Agreement as may be necessary to address compliance with applicable privacy or data security laws.
9. Consultant’s Employees, Consultants and Agents. Consultant shall have the right to disclose Confidential Information only to those of its employees, consultants, and agents who have a need to know such information for the purpose of performing Services and who have entered into a binding written agreement that is expressly for the benefit of Client and protects Client’s rights and interests in and to the Confidential Information to at least the same degree as this Agreement. Client reserves the right to refuse or limit Consultant’s use of any employee, consultant or agent or to require Consultant to remove any employee, consultant or agent already engaged in the performance of the Services. Client’s exercise of such right will in no way limit Consultant’s obligations under this Agreement.
4.
10. Term and Termination.
10.1 Term. The initial term of this Agreement is from the Effective Date set forth above and continue for a period of one (1) year, unless earlier terminated as provided in this Agreement. The term of this Agreement may be extended by a period of one (1) year as mutually agreed to between the Client and the Consultant, provided that such extension is agreed to in writing.
10.2 Termination Without Cause. Either party may terminate this Agreement with or without cause, at any time upon 15 days’ prior written notice to the other party.
10.3 Termination for Cause. Either party may terminate this Agreement immediately in the event the other party has materially breached the Agreement and failed to cure such breach within 3 days after notice by the non-breaching party is given.
10.4 Survival. The rights and obligations contained in Sections 3 (“Ownership of Work Product”), 4 (“Other Rights”), 5 (“License to Preexisting IP”), 6 (“Representations and Warranties”), 8 (“Confidential Information”) and 12 (“Non-solicitation”) will survive any termination or expiration of this Agreement.
11. No Conflicts. Consultant will refrain from any activity, and will not enter into any agreement or make any commitment, that is inconsistent or incompatible with Consultant’s obligations under this Agreement, including Consultant’s ability to perform the Services. Consultant represents and warrants that Consultant is not subject to any contract or duty that would be breached by Consultant’s entering into or performing Consultant’s obligations under this Agreement or that is otherwise inconsistent with this Agreement.
12. Non-solicitation. Consultant agrees that during the Term of this Agreement, and for one (1) year thereafter, Consultant will not either directly or indirectly, solicit or attempt to solicit any employee, independent contractor, or consultant of Client to terminate their relationship with Client in order to become an employee, consultant, or independent contractor to or for any other person or entity.
13. Successors and Assigns. Consultant may not subcontract or otherwise delegate or assign this Agreement or any of its obligations under this Agreement without Client’s prior written consent. Any attempted assignment in violation of the foregoing will be null and void. Subject to the foregoing, this Agreement will be for the benefit of Client’s successors and assigns, and will be binding on Consultant’s assignees.
14. Notices. Any notice required or permitted by this Agreement will be in writing and will be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by email (provided, however, if the sender receives an automatically generated notification that such email was not delivered, such attempted email notice shall be ineffective and deemed to not have been given); or (iv) by certified or registered mail, return receipt requested, upon verification of receipt. Notice will be sent to the addresses set forth below or such other address as either party may specify in writing.
5.
15. Governing Law. This Agreement will be governed in all respects by the laws of the United States of America and by the laws of the State of New York, without giving effect to any conflicts of laws principles that require the application of the law of a different jurisdiction.
16. Severability. Should any provisions of this Agreement be held by a court of law to be illegal, invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement will not be affected or impaired thereby.
17. Waiver. The waiver by Client of a breach of any provision of this Agreement by Consultant will not operate or be construed as a waiver of any other or subsequent breach by Consultant.
18. Injunctive Relief for Breach. Consultant’s obligations under this Agreement are of a unique character that gives them particular value; breach of any of such obligations will result in irreparable and continuing damage to Client for which there will be no adequate remedy at law; and, in the event of such breach, Client will be entitled to injunctive relief and/or a decree for specific performance, and such other and further relief as may be proper (including monetary damages if appropriate).
19. Entire Agreement. This Agreement constitutes the entire agreement between the parties relating to this subject matter and supersedes all prior or contemporaneous oral or written agreements concerning such subject matter (other than that certain Separation Agreement and General Release of All Claims by and between Consultant and Client entered on or about the date hereof). The terms of this Agreement will govern all services undertaken by Consultant for Client; provided, however, that in the event of any conflict between the terms of this Agreement and any Project Assignment, the terms of the applicable Project Assignment will control, provided that the Project Assignment specifically calls out the applicable Section number of this Agreement to be superseded and has been signed by an authorized officer of Client. This Agreement may only be changed or amended by mutual agreement of authorized representatives of the parties in writing. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act or other applicable law) or other transmission method and any counterpart so delivered will be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Remainder of page intentionally left blank]
6.
The parties have executed this Agreement as of the Effective Date.
| CLIENT: | ||
| BlossomHill Therapeutics, Inc. | ||
| By: | /s/ Vincent P. Liptak | |
| Name: Vincent P. Liptak | ||
| Title: EVP & General Counsel | ||
| Email: [***] | ||
| Address: | 10255 Science Center Drive | |
| Suite 200 | ||
| San Diego, California 92121 | ||
| CONSULTANT: | ||
| Sundeep Agrawal, MD | ||
| Name of Consultant | ||
| /s/ Sundeep Agrawal, MD | ||
| Signature | ||
| [***] | ||
7.
EXHIBIT A
Project Assignment #1 Under Consulting Agreement Dated: August 15, 2025
Project:
Consultant will render general advisory services in the field of business development and investor relations to Client.
Compensation:
Subject to the approval of the Client’s Board of Directors (the “Board”) and to Consultant’s execution and delivery of the Client’s applicable standard form of NSO agreement, Consultant shall receive 50,000 Non-qualified Stock Options (“NSOs”) for each year of Consulting Service provided to the Client in accordance with this Agreement. Such NSOs shall be governed in all respects by the Client’s 2020 Equity Incentive Plan, as amended. The Board of Directors will grant NSOs, at fair market value, vesting monthly until the end of the term of this Agreement as provided in Section 10. [***].
[Remainder of page intentionally left blank]
The parties have executed this Project Assignment as of the date first written above.
| CLIENT: | ||||
| BLOSSOMHILL THERAPEUTICS, INC. | ||||
| By: |
/s/ Vincent P. Liptak | |||
| Name: |
Vincent P. Liptak | |||
| Title: |
EVP & General Counsel | |||
| CONSULTANT: | ||||
| Sundeep Agrawal, MD | ||||
| Name of Consultant | ||||
| /s/ Sundeep Agrawal, MD | ||||
| Signature | ||||
Exhibit 10.10
CERTAIN INFORMATION CONTAINED IN THIS EXHIBIT, MARKED BY [***], HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE THE REGISTRANT HAS DETERMINED THAT IT IS BOTH NOT MATERIAL AND IS THE TYPE THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.
LEASE
by and between
BMR-10255 SCIENCE CENTER LP,
a Delaware limited partnership
and
BLOSSOMHILL THERAPEUTICS, INC.,
a Delaware corporation
BioMed Realty form dated 11/18/20
Table of Contents
| 1. |
LEASE OF PREMISES | 1 | ||||
| 2. |
BASIC LEASE PROVISIONS | 1 | ||||
| 3. |
TERM | 3 | ||||
| 4. |
POSSESSION AND COMMENCEMENT DATE | 4 | ||||
| 5. |
CONDITION OF PREMISES | 7 | ||||
| 6. |
RENTABLE AREA | 7 | ||||
| 7. |
RENT | 8 | ||||
| 8. |
RENT ADJUSTMENTS | 9 | ||||
| 9. |
OPERATING EXPENSES | 9 | ||||
| 10. |
TAXES ON TENANT’S PROPERTY | 13 | ||||
| 11. |
SECURITY DEPOSIT | 14 | ||||
| 12. |
USE | 16 | ||||
| 13. |
RULES AND REGULATIONS, CC&RS, PARKING FACILITIES AND COMMON AREA | 19 | ||||
| 14. |
PROJECT CONTROL BY LANDLORD | 21 | ||||
| 15. |
QUIET ENJOYMENT | 22 | ||||
| 16. |
UTILITIES AND SERVICES | 23 | ||||
| 17. |
ALTERATIONS | 26 | ||||
| 18. |
REPAIRS AND MAINTENANCE | 29 | ||||
| 19. |
LIENS | 30 | ||||
| 20. |
ESTOPPEL CERTIFICATE | 31 | ||||
| 21. |
HAZARDOUS MATERIALS | 31 | ||||
| 22. |
ODORS AND EXHAUST | 34 | ||||
| 23. |
INSURANCE | 35 | ||||
| 24. |
DAMAGE OR DESTRUCTION | 39 | ||||
| 25. |
EMINENT DOMAIN | 42 | ||||
| 26. |
SURRENDER | 43 | ||||
| 27. |
HOLDING OVER | 43 | ||||
| 28. |
INDEMNIFICATION AND EXCULPATION | 44 | ||||
| 29. |
ASSIGNMENT OR SUBLETTING | 45 | ||||
| 30. |
SUBORDINATION AND ATTORNMENT | 49 | ||||
| 31. |
DEFAULTS AND REMEDIES | 50 | ||||
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| 32. |
BANKRUPTCY | 55 | ||||
| 33. |
BROKERS | 56 | ||||
| 34. |
DEFINITION OF LANDLORD | 56 | ||||
| 35. |
LIMITATION OF LANDLORD’S LIABILITY | 56 | ||||
| 36. |
JOINT AND SEVERAL OBLIGATIONS | 57 | ||||
| 37. |
REPRESENTATIONS | 57 | ||||
| 38. |
CONFIDENTIALITY | 58 | ||||
| 39. |
NOTICES | 58 | ||||
| 40. |
MISCELLANEOUS | 59 | ||||
| 41. |
ROOFTOP INSTALLATION AREA | 62 | ||||
| 42. |
OPTION TO EXTEND TERM | 63 | ||||
| 43. |
3525 JOHN HOPKINS LEASE | 65 | ||||
| 44. |
10240 SCIENCE CENTER LEASE | 65 | ||||
| 45. |
COMMON AREA JANITORIAL | 65 | ||||
| 46. |
TENANT SERVICE YARD PREMISES | 65 | ||||
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LEASE
THIS LEASE (this “Lease”) is entered into as of this 14th day of June, 2024 (the “Execution Date”), by and between BMR-10255 SCIENCE CENTER LP, a Delaware limited partnership (“Landlord”), and BLOSSOMHILL THERAPEUTICS, INC., a Delaware corporation (“Tenant”).
RECITALS
A. WHEREAS, Landlord owns certain real property (the “Property”) and the improvements on the Property located at 10255 Science Center Drive, San Diego, California, including the building located thereon (the “Building”);
B. WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease from Landlord, certain premises (the “Premises”) located on the first (1st) and second (2nd) floors of the Building, pursuant to the terms and conditions of this Lease, as detailed below.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as follows:
1. Lease of Premises.
1.1 Effective on the Term Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises, as shown on Exhibit A attached hereto, for use by Tenant in accordance with the Permitted Use (as defined below) and no other uses. The Property and all landscaping, parking facilities, private drives and other improvements and appurtenances related thereto, including the Building, are hereinafter collectively referred to as the “Project.” All portions of the Project that are for the non-exclusive use of tenants of the Building, including driveways, sidewalks, parking areas, landscaped areas, service corridors, stairways, elevators, conference/training rooms, kitchen, breakrooms, bicycle room, Fitness Center (as defined below), public restrooms and public lobbies, are hereinafter referred to as “Common Area.” Tenant acknowledges that Landlord is in the process of constructing certain redevelopment work at the Project (such work, the “Landlord’s Work”), including (without limitation) the work described on Exhibit G attached hereto.
2. Basic Lease Provisions. For convenience of the parties, certain basic provisions of this Lease are set forth herein. The provisions set forth herein are subject to the remaining terms and conditions of this Lease and are to be interpreted in light of such remaining terms and conditions.
2.1 This Lease shall take effect upon the Execution Date and, except as specifically otherwise provided within this Lease, each of the provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the date of execution and delivery hereof by all parties hereto.
2.2 In the definitions below, Rentable Area (as defined below) is expressed in square feet. Rentable Area and “Tenant’s Pro Rata Share” are both subject to adjustment as provided in this Lease.
| Definition or Provision |
Means the Following | |
| Approximate Rentable Area of Premises | 46,353 square feet | |
| Approximate Rentable Area of Building | 60,984 square feet | |
| Tenant’s Pro Rata Share of Building | 76.01% | |
2.3 Initial monthly and annual installments of Base Rent for the Premises (“Base Rent”) as of the Rent Commencement Date (as defined below), subject to adjustment under this Lease, will be as follows:
| Dates |
Square Feet of Rentable Area |
Base Rent per Square Foot of Rentable Area |
Monthly Base Rent |
Annual Base Rent |
||||||||||||
| Rent Commencement Date - 1st Anniversary of Term Commencement Date |
46,353 | $ | 6.50 monthly | $ | 301,294.50 | $ | 3,615,534 | |||||||||
| * | Base Rent is subject to (a) the Free Rent Period (as defined in Section 8.2), and (b) annual increases as set forth in Section 8.1. |
2.4 Estimated Term Commencement Date: The date that is twelve (12) months after the Execution Date.
2.5 Early Occupancy Period: For the avoidance of doubt, during the period commencing on the Term Commencement Date (as defined below) and ending on the day immediately prior to the Rent Commencement Date (as defined below) (the “Early Occupancy Period”), Tenant shall be permitted to use the Premises for the Permitted Use (as defined below), subject to all of the terms, conditions and provisions of this Lease; provided, however, that Tenant’s obligations with respect to Base Rent, Operating Expenses and the Property Management Fee (as such terms are defined below) shall not commence until the Rent Commencement Date. During the Early Occupancy Period, Tenant shall be required to pay all utility costs with respect to the Premises in accordance with Article 16 below.
2.6 Security Deposit: $903,883.50
2.7 Permitted Use: Office and laboratory use in conformity with all federal, state, municipal and local laws, codes, ordinances, rules and regulations of Governmental Authorities (as defined below), committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises, the Building, the Property, the Project, Landlord or Tenant, including both statutory and common law and hazardous waste rules and regulations (“Applicable Laws”).
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2.8 Address for Rent Payment:
[***]
2.9 Address for Notices to Landlord:
[***]
2.10 Address for Notices to Tenant:
[***]
2.11 Address for Invoices to Tenant:
BlossomHill Therapeutics, Inc.
10255 Science Center Drive
San Diego, California 92121
2.12 The following Exhibits are attached hereto and incorporated herein by reference:
| Exhibit A | Premises | |
| Exhibit B | Tenant Improvements | |
| Exhibit B-1 | Tenant Work Insurance Schedule | |
| Exhibit C | Acknowledgement of Term Commencement Date and Term Expiration Date | |
| Exhibit D | ROFR | |
| Exhibit E | Form of Letter of Credit | |
| Exhibit F | Rules and Regulations | |
| Exhibit G | Landlord’s Work | |
| Exhibit H | Tenant’s Personal Property | |
| Exhibit I | Form of Estoppel Certificate | |
| Exhibit J | Monument Signage | |
| Exhibit K | Reserved Parking | |
| Exhibit L | Expansion Option | |
| Exhibit M | 3525 John Hopkins Lease Amendment | |
| Exhibit N | 10240 Science Center Lease Amendment | |
| Exhibit O | Service Yard | |
| Exhibit P | Haz Mat Shed |
3. Term. The term of the leasehold granted by this Lease (as the same may be extended pursuant to Article 42 hereof, and as the same may be earlier terminated in accordance with this Lease, the “Term”) shall commence on the actual Term Commencement Date (as defined in Article 4) and end on the date (the “Term Expiration Date”) that is one hundred twenty (120) months after the actual Term Commencement Date, subject to extension or earlier termination of this Lease as provided herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
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4. Possession and Commencement Date.
4.1 Landlord shall use commercially reasonable efforts to tender possession of the Premises to Tenant on the Estimated Term Commencement Date, with the work (the “Tenant Improvements”) required of Landlord described on Exhibit B attached hereto (the “Tenant Improvement Plans”) Substantially Complete (as defined below). Except as expressly set forth in Section 4.1.2 below, Tenant agrees that in the event such work is not Substantially Complete on or before the Estimated Term Commencement Date for any reason, then (a) this Lease shall not be void or voidable, (b) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and (c) the Term Expiration Date shall be extended accordingly. The term “Substantially Complete” or “Substantial Completion” means, with respect to the Tenant Improvements, that (y) the Tenant Improvements are substantially complete in accordance with the Tenant Improvement Plans, except for punch list items, which (at Landlord’s election) may be conclusively established by delivery of a Certificate of Substantial Completion in the form of the American Institute of Architects document G704, executed by the project architect and the general contractor, and (z) the Premises may be legally occupied pursuant to a temporary certificate of occupancy or its substantial equivalent (such as sign-off on the building permit by the Governmental Authority that issued such permit), to the extent required by Applicable Laws for occupancy of the Premises. Notwithstanding anything in this Lease to the contrary, Landlord’s obligation to timely achieve Substantial Completion shall be subject to extension on a day-for-day basis as a result of Force Majeure (as defined below).
4.1.1 Punchlist. Concurrently with Landlord’s delivery of the Premises to Tenant, a representative of Landlord and a representative of Tenant shall perform a walk-through inspection of the Tenant Improvements in the Premises to identify any “punchlist” items (i.e., minor defects or conditions in such Tenant Improvements that do not impair Tenant’s ability to utilize the Premises for the purposes permitted hereunder), which items Landlord shall repair or correct no later than thirty (30) days after the date of such walk-through (unless the nature of such repair or correction is such that more than thirty (30) days are required for completion, in which case Landlord shall commence such repair or correction work within such thirty (30) day period and diligently prosecute the same to completion).
4.1.2 [***].
4.2 The “Term Commencement Date” shall be the day Landlord tenders possession of the Premises to Tenant with the Tenant Improvements Substantially Complete. If possession is delayed as a result of a Tenant Delay (as defined below), then the Term Commencement Date shall be the date that the Term Commencement Date would have occurred but for such Tenant Delay. Tenant shall execute and deliver to Landlord written acknowledgment of the actual Term Commencement Date and the Term Expiration Date within ten (10) days after Tenant takes occupancy of the Premises, in the form attached as Exhibit C hereto. Failure to execute and deliver such acknowledgment, however, shall not affect the Term Commencement Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant to obtain any governmental licensing or similar governmental approval of the Premises required for the Permitted Use by Tenant shall not serve
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to extend the Term Commencement Date. The term “Tenant Delay” shall mean any actual delay in the Substantial Completion of the Tenant Improvements caused by any act or omission by Tenant, including any time required to evaluate or implement any Tenant Changes or Tenant Change Request (as such terms are defined below) and the failure of Tenant to furnish within the time provided in this Lease any information required by this Lease to be furnished by Tenant to Landlord in connection with the Tenant Improvements.
4.3 Landlord shall permit Tenant to enter upon the Premises during the sixty (60)-day period immediately prior to the Term Commencement Date for the purpose of installing improvements or the placement of personal property; provided, however, that, prior to any such entry, Tenant shall furnish to Landlord evidence satisfactory to Landlord in advance that insurance coverages required of Tenant under the provisions of Article 23 are in effect, and such entry shall be subject to all the terms and conditions of this Lease; and provided, further, that if the Term Commencement Date is delayed due to such early access, then the Term Commencement Date shall be the date that the Term Commencement Date would have occurred but for such delay. In no event shall Tenant be permitted to conduct business in the Premises prior to the Term Commencement Date.
4.4 Landlord shall cause the Tenant Improvements to be constructed in the Premises pursuant to the Tenant Improvement Plans at Landlord’s sole cost and expense (subject to the terms, conditions and provisions of this Article 4). The Tenant Improvements will be constructed using Project standard materials and finishes (which Project standard materials and finishes shall be at least equal in quality to the materials and finishes used by Landlord in the initial Tenant Improvements constructed by Landlord under the 3525 John Hopkins Lease (as defined below)) as reasonably determined by Landlord in consultation with Tenant. All costs incurred by Landlord in connection with the Tenant Improvements including, without limitation, costs of (a) construction, (b) project management by Landlord (which fee shall equal three percent (3%) of the Tenant Improvements), (c) commissioning of mechanical, electrical and plumbing systems by a licensed, qualified commissioning agent hired by Landlord, (d) space planning, architect, engineering and other related services performed by third parties unaffiliated with Tenant, (e) building permits and other taxes, fees, charges and levies by Governmental Authorities (as defined below) for permits or for inspections of the Tenant Improvements, and (f) costs and expenses for labor, material, equipment and fixtures, shall be referred to in this Lease as the “Tenant Improvement Costs.” In the event that Tenant fails to comply with any of its obligations under this Lease and such failure causes Landlord to incur additional Tenant Improvement Costs, Tenant shall pay to Landlord as Additional Rent (as defined below) the amount of any such additional costs within thirty (30) days of receiving an invoice from Landlord.
Landlord shall be permitted to make changes to the Tenant Improvement Plans (any such changes, “Landlord Permitted Changes”) to the extent such changes are (x) required to comply with Applicable Laws or the direction of any Governmental Authorities (as defined below) or (y) necessary to address unanticipated field conditions encountered during the course of construction of the Tenant Improvements; provided, however, that, prior to implementing any such Landlord Permitted Change, Landlord shall provide Tenant with written notice thereof (which notice shall include documentation reasonably satisfactory to Tenant that such change constitutes a Landlord Permitted Change). The Tenant Improvement Plans shall be automatically updated to include any Landlord Permitted Changes. With the exception of Landlord Permitted Changes, no changes to the Tenant Improvements shall be made by Landlord unless approved in writing by both parties. Tenant shall not be permitted to request any changes to the Tenant Improvement Plans, except as permitted under Section 4.5 below.
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4.5 Any changes to the Tenant Improvement Plans requested by Tenant (each, a “Tenant Change”) shall be requested and instituted in accordance with the provisions of this Section 4.5 and shall be subject to the written approval of Landlord as provided herein.
4.5.1 Tenant may request Tenant Changes by notifying Landlord in writing in substantially the same form as the AIA standard change order form (a “Tenant Change Request”), which Tenant Change Request shall detail the nature and extent of any requested Tenant Changes.
4.5.2 All Tenant Change Requests shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed (provided, however, that, in the event any Tenant Change would, in Landlord’s reasonable judgment, delay the Substantial Completion of the Tenant Improvements, Landlord may withhold its approval with respect thereto in its sole and absolute discretion). Landlord shall have five (5) business days after receipt of a Tenant Change Request to notify Tenant in writing of Landlord’s approval or rejection of the Tenant Change and any rejection shall state the reasons therefor in reasonable detail. [***].
4.5.3 Notwithstanding anything to the contrary in this Lease, Tenant shall be solely responsible for all costs and expenses related to any Tenant Changes and/or any Tenant Change Requests, including (without limitation) costs of project management by Landlord (which fee shall equal three percent (3%) of the cost of the Tenant Change). Tenant shall, within thirty (30) days of receiving an invoice therefore, pay to Landlord the amount of any such costs.
4.5.4 The Tenant Improvement Plans shall be automatically updated to include any Tenant Changes approved by Landlord in accordance with this Section 4.5.
4.6 FF&E Allowance. Subject to all of the terms, conditions and provisions of this Section 4.6, Landlord shall make available to Tenant an allowance in an amount not to exceed Two Hundred Thirty-One Thousand Seven Hundred Sixty-Five Dollars ($231,765.00) (based upon Five Dollars ($5.00) per square foot of Rentable Area of the Premises) (the “FF&E Allowance”), which FF&E Allowance may be applied to the costs of (a) furniture, fixtures and equipment to be used by Tenant within the Premises, (b) Monument Signage and Building Top Signage (as such terms are defined in Section 12.7.1 below), and/or (c) cabling and related equipment to be used by Tenant within the Premises ((a), (b) and (c), collectively, the “FF&E Allowance Items”). In the event that Tenant desires to apply all or any portion of the FF&E Allowance toward any FF&E Allowance Item(s), Tenant shall submit a written request to Landlord (a “Fund Request”), which Fund Request shall include (x) the FF&E Allowance Item(s) to which Tenant desires to apply the FF&E Allowance, (y) the cost of such FF&E Allowance Item(s), and (z) any other information with respect to such FF&E Allowance Item(s) reasonably requested by Landlord. Upon receipt of a Fund Request submitted by Tenant in accordance with the terms, conditions and provisions of this Section 4.6, Landlord shall, within thirty (30) days following receipt of such Fund Request, pay to (as elected by Landlord) the applicable contractors, subcontractors and material suppliers or Tenant (for reimbursement for payments made by Tenant to such contractors, subcontractors or material suppliers), the amount set forth in such Fund
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Request (or the remaining portion of the FF&E Allowance, if the amount set forth in such Fund Request would, in the aggregate when taken together with any previous Fund Request(s), exceed the total amount of the FF&E Allowance). Tenant shall have until the date that is twelve (12) months after the Term Commencement Date to submit Fund Requests to Landlord for disbursement of the unused portion of the FF&E Allowance, after which date Landlord’s obligation to fund any such costs for which Tenant has not submitted a Fund Request to Landlord shall expire. In no event shall any unused FF&E Allowance entitle Tenant to a credit against Rent payable under this Lease.
5. Condition of Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of the Premises, the Building or the Project, or with respect to the suitability of the Premises, the Building or the Project for the conduct of Tenant’s business. Tenant acknowledges that (a) it is fully familiar with the condition of the Premises and agrees to take the same in its condition “as is” as of the Term Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise prepare the Premises for Tenant’s occupancy or to pay for or construct any improvements to the Premises, except for the Landlord’s Work and the Tenant Improvements. Landlord shall deliver the Premises to Tenant with (x) the heating, ventilating and air conditioning, electrical, mechanical and plumbing systems serving the Premises in good working order, condition and repair, (y) the elevators serving the Premises and the roof of the Building in good working order, condition and repair for general office and laboratory purposes, and (z) the Tenant Improvements in compliance with all Applicable Laws ((x), (y) and (z), collectively, “Landlord’s Delivery Obligation”). Tenant’s taking possession of the Premises shall, except as otherwise agreed to in writing by Landlord and Tenant, conclusively establish that (aa) the Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair, (bb) the Tenant Improvements are Substantially Complete, and (cc) Landlord’s Delivery Obligation was satisfied; provided that, if Landlord fails to satisfy Landlord’s Delivery Obligation (a “Delivery Shortfall”), then Tenant may, as its sole and exclusive remedy, deliver notice of such failure to Landlord detailing the nature of such failure (a “Shortfall Notice”); provided, further, that any Shortfall Notice must be received by Landlord no later than the date (the “Shortfall Notice Deadline”) that is ninety (90) days after the Term Commencement Date. In the event that Landlord receives a Shortfall Notice on or before the Shortfall Notice Deadline, Landlord shall, at Landlord’s expense, promptly remedy the Delivery Shortfall. Landlord shall not have any obligations or liabilities in connection with a failure to satisfy Landlord’s Delivery Obligation except to the extent such failure is identified by Tenant in a Shortfall Notice delivered to Landlord on or before the Shortfall Notice Deadline.
To the extent assignable, Landlord will assign to Tenant all warranties obtained by Landlord in connection with the Tenant Improvements; provided, however, that, notwithstanding any such assignment, Landlord shall also retain the right to enforce such warranties against the applicable contractor, at Landlord’s sole option.
6. Rentable Area.
6.1 The term “Rentable Area” shall reflect such areas as reasonably calculated by Landlord’s architect, as the same may be reasonably adjusted from time to time by Landlord in consultation with Landlord’s architect to reflect changes to the Premises, the Building or the Project, as applicable.
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6.2 The Rentable Area of the Building is generally determined by making separate calculations of Rentable Area applicable to each floor within the Building and totaling the Rentable Area of all floors within the Building. The Rentable Area of a floor is computed by measuring to the outside finished surface of the permanent outer Building walls. The full area calculated as previously set forth is included as Rentable Area, without deduction for columns and projections or vertical penetrations, including stairs, elevator shafts, flues, pipe shafts, vertical ducts and the like, as well as such items’ enclosing walls.
6.3 The term “Rentable Area,” when applied to the Premises, is that area equal to the usable area of the Premises, plus an equitable allocation of Rentable Area within the Building that is not then utilized or expected to be utilized as usable area, including that portion of the Building devoted to corridors, equipment rooms, restrooms, elevator lobby, atrium and mailroom.
7. Rent.
7.1 Tenant shall pay to Landlord as Base Rent for the Premises, commencing on the date that is three (3) months after the Term Commencement Date (such date, the “Rent Commencement Date”), the sums set forth in Section 2.3, subject to the rental adjustments provided in Article 8 hereof. Base Rent shall be paid in equal monthly installments as set forth in Section 2.3, subject to the rental adjustments provided in Article 8 hereof, each in advance on the first day of each and every calendar month during the Term.
7.2 In addition to Base Rent, Tenant shall pay to Landlord as additional rent (“Additional Rent”) at times hereinafter specified in this Lease (a) Tenant’s Adjusted Share (as defined below) of Operating Expenses (as defined below), (b) the Property Management Fee (as defined below), (c) [intentionally omitted] and (d) any other amounts that Tenant assumes or agrees to pay under the provisions of this Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of this Lease to be performed by Tenant, after notice and the lapse of any applicable cure periods.
7.3 Base Rent and Additional Rent shall together be denominated “Rent.” Rent shall be paid to Landlord, without abatement (except as expressly provided herein), deduction or offset, in lawful money of the United States of America to the address set forth in Section 2.8 or to such other person or at such other place as Landlord may from time designate in writing. In the event the Term commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the basis of the number of days in the month and shall be paid at the then-current rate for such fractional month.
7.4 Tenant’s obligation to pay Rent shall not be discharged or otherwise affected by (a) any Applicable Laws now or hereafter applicable to the Premises, (b) any other restriction on Tenant’s use, (c) except as expressly provided herein, any casualty or taking or (d) any other occurrence; and Tenant waives all rights now or hereafter existing to terminate or cancel this Lease or quit or surrender the Premises or any part thereof, or to assert any defense in the nature of
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constructive eviction to any action seeking to recover rent. Tenant’s obligation to pay Rent with respect to any period or obligations arising, existing or pertaining to the period prior to the date of the expiration or earlier termination of the Term or this Lease shall survive any such expiration or earlier termination; provided, however, that nothing in this sentence shall in any way affect Tenant’s obligations with respect to any other period.
8. Rent Adjustments.
8.1 Base Rent shall be subject to an annual upward adjustment of three percent (3%) of the then-current Base Rent. The first such adjustment shall become effective commencing on the first (1st) annual anniversary of the Term Commencement Date, and subsequent adjustments shall become effective on every successive annual anniversary for so long as this Lease continues in effect.
8.2 Notwithstanding anything to the contrary contained in this Lease, and so long as no Default (as defined below) by Tenant has occurred, Tenant shall not be required to pay Base Rent during [***] of the Term (i.e., the [***] period immediately following the Rent Commencement Date) (such period, the “Free Rent Period”); provided, however, that the total amount of Base Rent abated during the Free Rent Period shall not exceed [***] (the “Free Rent Cap”). During the Free Rent Period, Tenant shall continue to be responsible for the payment of all of Tenant’s other Rent obligations under this Lease, including all Additional Rent such as Operating Expenses, the Property Management Fee, and costs of utilities for the Premises. During the Free Rent Period, the Property Management Fee shall be calculated as if Tenant were paying Base Rent in the full amount required pursuant to this Lease had the Free Rent Period not been in effect. Upon the occurrence of any Default, the Free Rent Period shall immediately expire, automatically become void and of no further force or effect, and Tenant shall no longer be entitled to any abatement of Base Rent pursuant to this Section. In the event of any Default that results in termination of this Lease, then, as part of the recovery to which Landlord is entitled pursuant to this Lease, and in addition to any other rights or remedies to which Landlord may be entitled pursuant to this Lease (including Article 31), at law or in equity, Landlord shall be entitled to the immediate recovery, as of the day immediately prior to such termination of the Lease, of the unamortized amount of Base Rent that Tenant would have paid had the Free Rent Period not been in effect.
9. Operating Expenses.
9.1 As used herein, the term “Operating Expenses” shall include:
(a) Government impositions, including property tax costs consisting of real and personal property taxes (including amounts due under any improvement bond upon the Building or the Project (including the parcel or parcels of real property upon which the Building and areas serving the Building are located)) or assessments in lieu thereof imposed by any federal, state, regional, local or municipal governmental authority, agency or subdivision (each, a “Governmental Authority”); taxes on or measured by gross rentals received from the rental of space in the Project; taxes based on the square footage of the Premises, the Building or the Project, as well as any parking charges, utilities surcharges or any other costs levied, assessed or imposed by, or at the direction of, or arising from Applicable Laws or interpretations thereof, promulgated by any Governmental Authority in connection with the use or occupancy of the Project or the
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parking facilities serving the Project; taxes on this transaction or any document to which Tenant is a party creating or transferring an interest in the Premises; any fee for a business license to operate an office building; and any expenses, including the reasonable cost of attorneys or experts, reasonably incurred by Landlord in seeking reduction by the taxing authority of the applicable taxes, less tax refunds obtained as a result of an application for review thereof; and
(b) All other costs of any kind paid or incurred by Landlord in connection with the operation or maintenance of the Building and the Project, which shall include Project office rent at fair market rental for a commercially reasonable amount of space for Project management personnel, to the extent an office used for Project operations is maintained at the Project, plus customary expenses for such office, and costs of repairs and replacements to improvements within the Project as appropriate to maintain the Project as required hereunder; costs of utilities furnished to the Common Area; sewer fees; cable television; trash collection; cleaning, including windows; heating, ventilation and air-conditioning (“HVAC”); maintenance of landscaping and grounds; snow removal; maintenance of drives and parking areas; maintenance of the roof; security services and devices; costs in connection with parking stickers or other parking identification devices; building supplies; maintenance or replacement of equipment utilized for operation and maintenance of the Project; license, permit and inspection fees; sales, use and excise taxes on goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Building or Project systems and equipment; telephone, postage, stationery supplies and other expenses incurred in connection with the operation, maintenance or repair of the Project; accounting, legal and other professional fees and expenses incurred in connection with the Project; costs of furniture, draperies, carpeting, landscaping supplies, snow removal and other customary and ordinary items of personal property provided by Landlord for use in Common Area or in the Project office; Project office rent or rental value for a commercially reasonable amount of space, to the extent an office used for Project operations is maintained at the Project, plus customary expenses for such office; capital expenditures; costs of complying with Applicable Laws (except to the extent such costs are incurred to remedy non-compliance as of the Execution Date with Applicable Laws); costs to keep the Project in compliance with, or costs or fees otherwise required under or incurred pursuant to any CC&Rs (defined below), including condominium fees; insurance premiums, including premiums for commercial general liability, property casualty, earthquake, terrorism and environmental coverages; portions of insured losses paid by Landlord as part of the deductible portion of a loss pursuant to the terms of insurance policies; service contracts; costs of services of independent contractors retained to do work of a nature referenced above; and costs of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with the day-to-day operation and maintenance of the Project, its equipment, the adjacent walks, landscaped areas, drives and parking areas, including janitors, floor waxers, window washers, watchmen, gardeners, sweepers, plow truck drivers, handymen, and engineering/maintenance/facilities personnel. Tenant’s Adjusted Share (as defined below) of Operating Expenses shall include a line item for Tenant’s Fitness Center Percentage of Fitness Center Operating Expenses (as such terms are defined below).
(c) Notwithstanding the foregoing, Operating Expenses shall not include any net income, franchise, capital stock, estate or inheritance taxes, or taxes that are the personal obligation of Tenant or of another tenant of the Project; any leasing commissions; expenses that relate to preparation of rental space for a tenant; expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair
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and replacement of the foregoing); legal expenses relating to other tenants; costs of repairs to the extent reimbursed by payment of insurance proceeds received by Landlord (or which would have been reimbursed had Landlord carried the insurance which Landlord is required to carry under this Lease); interest upon loans to Landlord or secured by a loan agreement, mortgage, deed of trust, security instrument or other loan document covering the Project or a portion thereof (collectively, “Loan Documents”) (provided that interest upon a government assessment or improvement bond payable in installments shall constitute an Operating Expense under Subsection 9.1(a)); salaries of executive officers of Landlord; depreciation claimed by Landlord for tax purposes (provided that this exclusion of depreciation is not intended to delete from Operating Expenses actual costs of repairs and replacements that are provided for in Subsection 9.1(b)); taxes that are excluded from Operating Expenses by the last sentence of Subsection 9.1(a); costs expressly excluded from Operating Expenses elsewhere in this Lease or that are charged to or paid by Tenant under other provisions of this Lease; professional fees and disbursements and other costs and expenses related to the ownership (as opposed to the use, occupancy, operation, maintenance or repair) of the Project; any item that, if included in Operating Expenses, would involve a double collection for such item by Landlord; costs of any items to the extent Landlord receives reimbursement from a third party; costs of capital improvements, to the extent the same exceed the amortized portion thereof, Landlord agreeing that all capital improvements or expenditures shall be amortized over the useful life thereof, as reasonably determined by Landlord, in accordance with generally accepted accounting principles; marketing costs, including leasing commissions, attorneys’ fees in connection with the negotiation and preparation of letters, deal memos, letters of intent, leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred in connection with lease, sublease and/or assignment negotiations and transactions with present or prospective tenants or other occupants of the Project, including attorneys’ fees and other costs and expenditures incurred in connection with disputes with present or prospective tenants or other occupants of the Project; expenses in connection with services or other benefits which are not offered to Tenant but which are provided to another tenant or occupant of the Project, without charge; overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in the Project to the extent the same exceeds the costs of such by unaffiliated third parties on a competitive basis; electric power costs or other utility costs for which any tenant directly contracts with the local public service company (but Landlord will be permitted to “gross up” such utility charges); tax penalties incurred as a result of Landlord’s failure to make payments or file returns when due; costs arising from Landlord’s charitable or political contributions; property management fees greater than three percent (3%) of the Base Rent payable by Tenant in an applicable calendar year; costs for (i) the original construction of the Project (including, but not limited to, the Landlord’s Work), or (ii) any future expansion of the Project; costs incurred in moving or relocating any tenant; amount paid as ground rental or as rental for the Project by the Landlord; costs associated with the operation of the business of the entity that constitutes the Landlord (including general corporate overhead and general administrative expenses) as the same are distinguished from other costs of operation of the Project, including entity accounting and entity legal matters; costs of defending lawsuits with any mortgagee; costs of any disputes between Landlord and its employees in Project operations; costs of selling syndicating, financing, mortgaging or hypothecating any of Landlord’s interests in the Project (provided that any tax increase or reassessment due to a transfer of any interest in the Project will be included in Operating Expenses); costs of reserves; and costs incurred in connection with modifications or upgrades to the Project to comply with Applicable Laws in existence as of the Execution Date. To the extent that Tenant uses more than Tenant’s Pro Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of Operating Expenses (such excess, together with Tenant’s Pro Rata Share, “Tenant’s Adjusted Share”).
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9.2 Commencing on the Rent Commencement Date, Tenant shall pay to Landlord on the first day of each calendar month of the Term, as Additional Rent, (a) the Property Management Fee (as defined below), (b) [intentionally omitted] and (c) Landlord’s estimate of Tenant’s Adjusted Share of Operating Expenses with respect to the Building and the Project, as applicable, for such month.
(a) The “Property Management Fee” shall equal three percent (3%) of Base Rent due from Tenant. Tenant shall pay the Property Management Fee in accordance with Section 9.2 with respect to the entire Term, including any extensions of the Term, or any holdover periods, regardless of whether Tenant is obligated to pay Base Rent, Operating Expenses or any other Rent with respect to any such period or portion thereof.
(b) [Intentionally omitted].
(c) Within ninety (90) days after the conclusion of each calendar year (or such longer period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Operating Expenses, Tenant’s Adjusted Share of Operating Expenses, and the cost of providing utilities to the Premises for the previous calendar year (“Landlord’s Statement”). Any additional sum due from Tenant to Landlord shall be due and payable within thirty (30) days after receipt of an invoice therefor. If the amounts paid by Tenant pursuant to this Section exceed Tenant’s Adjusted Share of Operating Expenses for the previous calendar year, then Landlord shall credit the difference against the Rent next due and owing from Tenant; provided that, if the Lease term has expired, Landlord shall accompany Landlord’s Statement with payment for the amount of such difference. The failure of Landlord to timely furnish the Landlord’s Statement for any calendar year shall not prejudice Landlord from enforcing its rights under this Section 9.1; [***].
(d) Any amount due under this Section for any period that is less than a full month shall be prorated for such fractional month on the basis of the number of days in the month.
9.3 Landlord or an affiliate(s) of Landlord may own other property(ies) adjacent to the Project or its neighboring properties (collectively, “Neighboring Properties”). In connection with Landlord performing services for the Project pursuant to this Lease, similar services may be performed by the same vendor(s) for Neighboring Properties. In such a case, Landlord shall reasonably allocate to each Building and the Project the costs for such services based upon the ratio that the square footage of the Building or the Project (as applicable) bears to the total square footage of all of the Neighboring Properties or buildings within the Neighboring Properties for which the services are performed, unless the scope of the services performed for any building or property (including the Building and the Project) is disproportionately more or less than for others, in which case Landlord shall equitably allocate the costs based on the scope of the services being performed for each building or property (including the Building and the Project).
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9.4 Tenant shall not be responsible for Operating Expenses with respect to any time period prior to the Rent Commencement Date; provided, however, that Landlord may annualize certain Operating Expenses incurred prior to the Rent Commencement Date over the course of the budgeted year during which the Rent Commencement Date occurs, and Tenant shall be responsible for the annualized portion of such Operating Expenses corresponding to the number of days during such year, commencing with the Rent Commencement Date, for which Tenant is otherwise liable for Operating Expenses pursuant to this Lease. Tenant’s responsibility for Tenant’s Adjusted Share of Operating Expenses shall continue to the latest of (a) the date of termination of the Lease, (b) the date Tenant has fully vacated the Premises and (c) if termination of the Lease is due to a default by Tenant, the date that is the earlier to occur of (i) the date of rental commencement of a replacement tenant or (ii) the Term Expiration Date.
9.5 Operating Expenses for the calendar year in which Tenant’s obligation to share therein commences and for the calendar year in which such obligation ceases shall be prorated on a basis reasonably determined by Landlord. Expenses such as taxes, assessments and insurance premiums that are incurred for an extended time period shall be prorated based upon the time periods to which they apply so that the amounts attributed to the Premises relate in a reasonable manner to the time period wherein Tenant has an obligation to share in Operating Expenses.
9.6 Within thirty (30) days after the end of each calendar month, Tenant shall submit to Landlord an invoice, or, in the event an invoice is not available, an itemized list, of all costs and expenses that (a) Tenant has incurred (either internally or by employing third parties) during the prior month and (b) for which Tenant reasonably believes it is entitled to reimbursements from Landlord pursuant to the terms of this Lease or that Tenant reasonably believes is the responsibility of Landlord pursuant to this Lease or Exhibit B.
9.7 In the event that the Building or Project is less than fully occupied during a calendar year, Tenant acknowledges that Landlord may extrapolate Operating Expenses that vary depending on the occupancy of the Building or Project, as applicable, to equal Landlord’s reasonable estimate of what such Operating Expenses would have been had the Building or Project, as applicable, been ninety-five percent (95%) occupied during such calendar year; provided, however, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses.
10. Taxes on Tenant’s Property.
10.1 Tenant shall be solely responsible for the payment of any and all taxes levied upon (a) personal property and trade fixtures located at the Premises and (b) any gross or net receipts of or sales by Tenant, and shall pay the same at least twenty (20) days prior to delinquency.
10.2 If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property or, if the assessed valuation of the Building, the Property or the Project is increased by inclusion therein of a value attributable to Tenant’s personal property or trade fixtures, and if Landlord, after written notice to Tenant, pays the taxes based upon any such increase in the assessed value of the Building, the Property or the Project, then Tenant shall, upon demand, repay to Landlord the taxes so paid by Landlord.
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10.3 If any improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which improvements conforming to Landlord’s building standards (the “Building Standard”) in other spaces in the Building are assessed, then the real property taxes and assessments levied against Landlord or the Building, the Property or the Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of Section 10.2. Any such excess assessed valuation due to improvements in or alterations to space in the Project leased by other tenants at the Project shall not be included in Operating Expenses. If the records of the applicable governmental assessor’s office are available and sufficiently detailed to serve as a basis for determining whether such Tenant improvements or alterations are assessed at a higher valuation than the Building Standard, then such records shall be binding on both Landlord and Tenant.
11. Security Deposit.
11.1 Tenant shall deposit with Landlord on or before the Execution Date the sum set forth in Section 2.6 (the “Security Deposit”), which sum shall be held by Landlord as security for the faithful performance by Tenant of all of the terms, covenants and conditions of this Lease to be kept and performed by Tenant. If Tenant Defaults (as defined below) with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any Rent or any other sum in default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, then Tenant shall, within ten (10) days following demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant’s failure to do so shall be a material breach of this Lease. The provisions of this Article shall survive the expiration or earlier termination of this Lease. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.
11.2 In the event of bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be applied first to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings.
11.3 Landlord may deliver to any purchaser of Landlord’s interest in the Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall be discharged from any further liability with respect to such deposit. This provision shall also apply to any subsequent transfers.
11.4 If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, then the Security Deposit, or any balance thereof, shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within sixty (60) days after the expiration or earlier termination of this Lease.
11.5 If the Security Deposit shall be in cash, Landlord shall hold the Security Deposit in an account at a banking organization selected by Landlord; provided, however, that Landlord shall not be required to maintain a separate account for the Security Deposit, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if any, accruing on the Security Deposit. Landlord shall not be required to credit Tenant with any interest for any period during which Landlord does not receive interest on the Security Deposit.
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11.6 The Security Deposit may be in the form of cash, a letter of credit or any other security instrument acceptable to Landlord in its sole discretion. Tenant may at any time, except when Tenant is in Default (as defined below), deliver a letter of credit (the “L/C Security”) as the entire Security Deposit, as follows:
(a) If Tenant elects to deliver L/C Security, then Tenant shall provide Landlord, and maintain in full force and effect throughout the Term and until the date that is four (4) months after the then-current Term Expiration Date, a letter of credit in the form of Exhibit E issued by an issuer reasonably satisfactory to Landlord, in the amount of the Security Deposit, with an initial term of at least one year. Landlord may require the L/C Security to be re-issued by a different issuer at any time during the Term if Landlord reasonably believes that the issuing bank of the L/C Security is or may soon become insolvent; provided, however, Landlord shall return the existing L/C Security to the existing issuer immediately upon receipt of the substitute L/C Security. If any issuer of the L/C Security shall become insolvent or placed into FDIC receivership, then Tenant shall immediately deliver to Landlord (without the requirement of notice from Landlord) substitute L/C Security issued by an issuer reasonably satisfactory to Landlord, and otherwise conforming to the requirements set forth in this Article. As used herein with respect to the issuer of the L/C Security, “insolvent” means the determination of insolvency as made by such issuer’s primary bank regulator (i.e., the state bank supervisor for state chartered banks; the OCC or OTS, respectively, for federally chartered banks or thrifts; or the Federal Reserve for its member banks). If, at the Term Expiration Date, any Rent remains uncalculated or unpaid, then (i) Landlord shall with reasonable diligence complete any necessary calculations, (ii) Tenant shall extend the expiry date of such L/C Security from time to time as Landlord reasonably requires and (iii) in such extended period, Landlord shall not unreasonably refuse to consent to an appropriate reduction of the L/C Security. Tenant shall reimburse Landlord’s legal costs (as reasonably estimated by Landlord’s counsel) in handling Landlord’s acceptance of L/C Security or its replacement or extension.
(b) If Tenant delivers to Landlord satisfactory L/C Security in place of the entire Security Deposit, Landlord shall remit to Tenant any cash Security Deposit Landlord previously held.
(c) Landlord may draw upon the L/C Security, and hold and apply the proceeds in the same manner and for the same purposes as the Security Deposit, if (i) an uncured Default (as defined below) exists, (ii) as of the date that is thirty (30) days before any L/C Security expires (even if such scheduled expiry date is after the Term Expiration Date) Tenant has not delivered to Landlord an amendment or replacement for such L/C Security, reasonably satisfactory to Landlord, extending the expiry date to the earlier of (1) four (4) months after the then-current Term Expiration Date or (2) the date that is one year after the then-current expiry date of the L/C Security, (iii) the L/C Security provides for automatic renewals, Landlord asks the issuer to confirm the current L/C Security expiry date, and the issuer fails to do so within ten (10) business days, (iv) Tenant fails to pay (when and as Landlord reasonably requires) any bank charges for Landlord’s transfer of the L/C Security or (v) the issuer of the L/C Security ceases, or announces that it will cease, to maintain an office in the city where Landlord may present drafts under the L/C Security (and fails to permit drawing upon the L/C Security by overnight courier or facsimile). This Section does not limit any other provisions of this Lease allowing Landlord to draw the L/C Security under specified circumstances.
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(d) Tenant shall not seek to enjoin, prevent, or otherwise interfere with Landlord’s draw under L/C Security, even if it violates this Lease. Tenant acknowledges that the only effect of a wrongful draw would be to substitute a cash Security Deposit for L/C Security, causing Tenant no legally recognizable damage. Landlord shall hold the proceeds of any draw in the same manner and for the same purposes as a cash Security Deposit. In the event of a wrongful draw, the parties shall cooperate to allow Tenant to post replacement L/C Security simultaneously with the return to Tenant of the wrongfully drawn sums, and Landlord shall upon request confirm in writing to the issuer of the L/C Security that Landlord’s draw was erroneous.
(e) If Landlord transfers its interest in the Premises, then Tenant shall at Tenant’s expense, within ten (10) business days after receiving a request from Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an amendment to the L/C Security naming Landlord’s grantee as substitute beneficiary. If the required Security Deposit changes while L/C Security is in force, then Tenant shall deliver (and, if the issuer requires, Landlord shall consent to) a corresponding amendment to the L/C Security.
12. Use.
12.1 Tenant shall use the Premises for the Permitted Use, and shall not use the Premises, or permit or suffer the Premises to be used, for any other purpose without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion. Tenant shall be prohibited from using the Premises or any portion of the Property for the sale, distribution or production of marijuana.
12.2 Tenant shall not use or occupy the Premises in violation of Applicable Laws; zoning ordinances; or the certificate of occupancy (or its substantial equivalent) issued for the Building or the Project, and shall, upon five (5) days’ written notice from Landlord, discontinue any use of the Premises that is declared or claimed by any Governmental Authority having jurisdiction to be a violation of any of the above, or that in Landlord’s reasonable opinion violates any of the above. Tenant shall take such further actions and execute such further documents in connection with this Lease as are necessary to comply with Applicable Laws relating to privacy, personal information and data security, including the California Consumer Privacy Act. Tenant acknowledges that Landlord may collect certain personal information (e.g., names, email addresses and contact information) of Tenant’s and its affiliates’ employees (and, if applicable, subcontractors and consultants), and use such information in connection with performing Landlord’s duties and obligations, and exercising its rights under this Lease. Tenant shall not retain, use or disclose any personal information received from Landlord pursuant to this Lease for any purpose other than to perform its duties and obligations, and exercise its rights under this Lease or as required by Applicable Law. In the event of a conflict between this Section and Article 38, this Section shall govern. Tenant shall comply with any direction of any Governmental Authority having jurisdiction that shall, by reason of the nature of Tenant’s use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation
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thereof, and shall indemnify, defend (at the option of and with counsel reasonably acceptable to the indemnified party(ies)), save, reimburse and hold harmless (collectively, “Indemnify,” “Indemnity” or “Indemnification,” as the case may require) Landlord and its affiliates, employees, agents and contractors; and any lender, mortgagee, ground lessor or beneficiary (each, a “Lender” and, collectively with Landlord and its affiliates, employees, agents and contractors, the “Landlord Indemnitees”) harmless from and against any and all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages, suits or judgments, and all reasonable expenses (including reasonable attorneys’ fees, charges and disbursements, regardless of whether the applicable demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in investigating or resisting the same (collectively, “Claims”) of any kind or nature that arise before, during or after the Term as a result of Tenant’s breach of this Section. In the event that any Governmental Authority requires legal compliance work to be completed in the Common Area (any such work, “Common Area Legal Compliance Work”), Landlord shall be responsible for performing such Common Area Legal Compliance Work and all costs incurred by Landlord in connection with such Common Area Legal Compliance Work (any such costs, “Common Area Legal Compliance Work Costs”) shall be included in Operating Expenses; provided, however, that if any Common Area Legal Compliance Work is triggered by, or necessitated as a result of, (a) the Tenant Improvements, (b) any Alterations (as defined below) performed by or on behalf of Tenant, or (c) Tenant’s particular use of the Premises (as opposed to general office and laboratory use), then Tenant shall be solely responsible, and shall reimburse Landlord within thirty (30) days of receiving an invoice, for all Common Area Legal Compliance Work Costs incurred by Landlord in connection with such Common Area Legal Compliance Work.
12.3 Tenant shall not do or permit to be done anything that will invalidate or increase the cost of any fire, environmental, extended coverage or any other insurance policy covering the Building or the Project, and shall comply with all rules, orders, regulations and requirements of the insurers of the Building and the Project, and Tenant shall promptly, upon demand, reimburse Landlord for any additional premium charged for such policy by reason of Tenant’s failure to comply with the provisions of this Article.
12.4 Tenant shall keep all doors opening onto public corridors closed, except when in use for ingress and egress.
12.5 No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made to existing locks or the mechanisms thereof without Landlord’s prior written consent, which consent shall not be unreasonably withheld. Tenant shall, upon termination of this Lease, return to Landlord all keys to offices and restrooms either furnished to or otherwise procured by Tenant. In the event any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change.
12.6 No awnings or other projections shall be attached to any outside wall of the Building. No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises other than Landlord’s standard window coverings. Neither the interior nor exterior of any windows shall be coated or otherwise sunscreened without Landlord’s prior written consent, nor shall any bottles, parcels or other articles be placed on the windowsills or items attached to windows that are visible from outside the Premises. No equipment, furniture or other items of personal property shall be placed on any exterior balcony without Landlord’s prior written consent.
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12.7 No sign, advertisement or notice (“Signage”) shall be exhibited, painted or affixed by Tenant on any part of the Premises (to the extent the same is visible from the exterior of the Premises) or the Building without Landlord’s prior written consent. Signage shall conform to Landlord’s design criteria established from time to time. For any Signage, Tenant shall, at Tenant’s own cost and expense, (a) acquire all permits for such Signage in compliance with Applicable Laws and (b) design, fabricate, install and maintain such Signage in a first-class condition. Tenant shall be responsible for reimbursing Landlord for costs incurred by Landlord in removing any of Tenant’s Signage upon the expiration or earlier termination of the Lease. Interior signs on entry doors to the Premises and the directory tablet and the Building monument sign shall be inscribed, painted or affixed for Tenant by Landlord at Tenant’s sole cost and expense, and shall be of a size, color and type and be located in a place designated by Landlord. The directory tablet shall be provided exclusively for the display of the name and location of tenants only. Tenant shall not place anything on the exterior of the corridor walls or corridor doors other than Landlord’s standard lettering. At Landlord’s option, Landlord may install any Tenant Signage, and Tenant shall pay all reasonable costs associated with such installation within thirty (30) days after demand therefor.
12.7.1 [***].
12.8 Tenant may only place equipment within the Premises with floor loading consistent with the Building’s structural design unless Tenant obtains Landlord’s prior written approval. Tenant may place such equipment only in a location designed to carry the weight of such equipment.
12.9 Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or vibrations therefrom from extending into the Common Area or other offices in the Project.
12.10 Tenant shall not (a) do or permit anything to be done in or about the Premises that shall in any way obstruct or interfere with the rights of other tenants or occupants of the Project, or injure or annoy them, (b) use or allow the Premises to be used for immoral, unlawful or objectionable purposes, (c) cause, maintain or permit any nuisance or waste in, on or about the Project or (d) take any other action that would in Landlord’s reasonable determination in any manner adversely affect other tenants’ quiet use and enjoyment of their space or adversely impact their ability to conduct business in a professional and suitable work environment. Notwithstanding any other provision herein to the contrary, but expressly subject to Landlord’s obligation to complete the Tenant Improvements in compliance with Applicable Laws to the extent required in order to obtain final sign off on all permits for the Tenant Improvements, Tenant shall be responsible for all liabilities, costs and expenses arising from or in connection with the compliance of the Premises with the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together with regulations promulgated pursuant thereto, the “ADA”), and Tenant shall Indemnify the Landlord Indemnitees from and against any Claims arising from any such failure of the Premises to comply with the ADA. The Premises have not undergone inspection by a Certified Access Specialist (“CASp,” as defined in California Civil Code Section 55.52). Even if not required by California
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law, the Premises may be inspected by a CASp to determine whether the Premises comply with the ADA, and Landlord may not prohibit a CASp performing such an inspection. If Tenant requests that such an inspection take place, Landlord and Tenant shall agree on the time and manner of the inspection, as well as which party will pay the cost of the inspection and the cost to remedy any defects identified by the CASp. A Certified Access Specialist can inspect the Premises and determine whether the Premises comply with all of the applicable construction-related accessibility standards under State law. Although State law does not require a Certified Access Specialist inspection of the Premises, Landlord may not prohibit Tenant from obtaining a Certified Access Specialist inspection of the Premises for the occupancy or potential occupancy of Tenant, if requested by Tenant. Landlord and Tenant shall agree on the arrangements for the time and manner of the Certified Access Specialist inspection, the payment of the fee for the Certified Access Specialist inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Premises. For the avoidance of doubt, “Lenders” shall also include historic tax credit investors and new market tax credit investors. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
13. Rules and Regulations, CC&Rs, Parking Facilities and Common Area.
13.1 Tenant shall have the non-exclusive right, in common with others, to use the Common Area in conjunction with Tenant’s use of the Premises for the Permitted Use, and such use of the Common Area and Tenant’s use of the Premises shall be subject to the rules and regulations adopted by Landlord and attached hereto as Exhibit F, together with such other reasonable and nondiscriminatory rules and regulations as are hereafter promulgated by Landlord in its sole and absolute discretion (the “Rules and Regulations”). Tenant shall and shall ensure that its contractors, subcontractors, employees, subtenants and invitees faithfully observe and comply with the Rules and Regulations. Landlord shall not be responsible to Tenant for the violation or non-performance by any other tenant or any agent, employee or invitee thereof of any of the Rules and Regulations.
13.2 This Lease is subject to any recorded covenants, conditions or restrictions on the Project or Property, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time (the “CC&Rs”). Tenant shall, at its sole cost and expense, comply with the CC&Rs.
13.3 Notwithstanding anything in this Lease to the contrary, Tenant may not install any security systems (including cameras) outside the Premises or that record sounds or images outside the Premises without Landlord’s prior written consent, which Landlord may withhold in its sole and absolute discretion.
13.4 Tenant shall have a non-exclusive, irrevocable license to use Tenant’s Pro Rata Share of parking facilities serving the Building in common on an unreserved basis with other tenants of the Building during the Term at no additional cost; [***].
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13.5 Tenant agrees not to unreasonably overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Landlord reserves the right to determine that parking facilities are becoming overcrowded and to limit Tenant’s use thereof (provided that Landlord will not voluntarily reduce the number of parking spaces allocated to Tenant by Section 13.4 above). Upon such determination, Landlord may reasonably allocate parking spaces among Tenant and other tenants of the Building or the Project (provided that Landlord will not voluntarily reduce the number of parking spaces allocated to Tenant by Section 13.4 above). Nothing in this Section, however, is intended to create an affirmative duty on Landlord’s part to monitor parking.
13.6 Subject to the other terms, conditions and provisions of this Lease (including the remainder of this Section), Tenant and its employees (in such capacity, the “Fitness Center Users”) may use the fitness center and locker rooms in the Building (the “Fitness Center”) between the hours of 6 AM and 8 PM (as such hours may be modified from time to time by Landlord upon written consent of Tenant). The Fitness Center (and any service corridors, public restrooms and public lobbies serving the Fitness Center (as determined by Landlord in its sole and absolute discretion)) shall be included as part of the Common Area, and any and all costs and expenses paid or incurred by Landlord or any affiliate of Landlord in connection with the Fitness Center (collectively, the “Fitness Center Operating Expenses”), which Fitness Center Operating Expenses shall include, without limitation, costs and expenses for maintenance, repairs and operation of the Fitness Center, a portion of property taxes allocated to the Fitness Center and insurance costs allocated to the Fitness Center, will be payable by Tenant as provided below. The Fitness Center shall be for the use of tenants of the Building only.
13.6.1 The percentage of Fitness Center Operating Expenses (such percentage, “Tenant’s Fitness Center Percentage”) payable by Tenant shall be calculated by taking the Rentable Area of the Premises, and dividing it by the total Rentable Area of all buildings owned by Landlord (and/or its affiliates) that are served by the Fitness Center. By way of example, if (a) the Rentable Area of the Premises is 20,000 square feet, and (b) the total Rentable Area of all buildings owned by Landlord (and/or its affiliates) that are served by the Fitness Center is 120,000 square feet, then Tenant’s Fitness Center Percentage would be equal to 16.67%. Tenant’s Fitness Center Percentage of Fitness Center Operating Expenses will be payable as a line item of Tenant’s Adjusted Share of Operating Expenses at the same time and in the same manner as payment of Operating Expenses under this Lease.
13.6.2 To the extent the Fitness Center is open for use by the Fitness Center Users, the Fitness Center Users may use the Fitness Center during the Term on a non-exclusive basis with any other individuals permitted by Landlord or any other affiliate of Landlord; provided that, as a condition to any Fitness Center User’s use of the Fitness Center, all Fitness Center Users shall execute Landlord’s standard waiver of liability and release form and otherwise satisfy the conditions identified below. The use of the Fitness Center shall be subject to Landlord’s rules and regulations applicable to the Fitness Center and any supplements thereto and Tenant shall (and shall cause all Fitness Center Users to) observe and comply with any such rules and regulations and avoid interference with other tenants, occupants and invitees of the Neighboring Properties (e.g., no Fitness Center Users will loiter or cause excessive noise in and around the Fitness Center or utilize common areas of the Neighboring Properties other than as necessary to access the Fitness Center). Landlord reserves the right to terminate the right of any Fitness Center User to use the Fitness Center in the event Landlord determines in its sole discretion that such Fitness Center User is not complying with the terms of this Lease or the rules and regulations relating to the Project or the Fitness Center. Any such action will have no effect on this Lease and Landlord will have no liability in connection therewith.
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13.6.3 Landlord and Tenant acknowledge that the use of the Fitness Center by the Fitness Center Users shall be at the Fitness Center Users’ own risk and Tenant will be responsible for any damage, injury or interference caused or suffered as a result of the use of the Fitness Center by the Fitness Center Users. Tenant’s indemnity obligations under Section 28.1 below will apply to the use of the Fitness Center by the Fitness Center Users or any act or omission of the Fitness Center Users.
13.6.4 Landlord shall have the right (but not the obligation), in Landlord’s sole and absolute discretion, to expand, or cause the expansion of, the Fitness Center. Landlord shall also have the right (in Landlord’s sole and absolute discretion) to close (or cause the closure of) the Fitness Center or to restrict users of the Fitness Center to exclude the Fitness Center Users. None of the actions in the foregoing sentence shall entitle Tenant to an abatement or reduction in Rent, constitute a constructive eviction, or result in a default by Landlord under this Lease; provided that, if the Fitness Center is permanently closed or all Fitness Center Users are excluded from using the Fitness Center on a permanent basis, then Tenant will no longer be responsible for Fitness Center Operating Expenses (provided that if the Fitness Center is converted to other Common Area, the costs associated with such Common Area will be included in Operating Expenses under the Lease). Notwithstanding anything to the contrary in this Lease, neither Landlord nor any other Landlord Party (as defined in Section 17.13 below) shall have responsibility or any other liability to Tenant or any other Fitness Center User for (and Tenant, on behalf of itself and any and all Fitness Center Users hereby waives and releases Landlord and all other Landlord Parties from and expressly assumes the risk of) any Claims, accidents, liens or injuries of any nature, kind or description arising from (y) Tenant’s or any other Fitness Center User’s use of the Fitness Center and/or (z) Landlord’s or any other Landlord Party’s operation and maintenance of the Fitness Center.
14. Project Control by Landlord.
14.1 Landlord reserves full control over the Building and the Project to the extent not inconsistent with Tenant’s enjoyment of the Premises as provided by this Lease. This reservation includes Landlord’s right to subdivide the Project; convert the Building to condominium units; change the size of the Project by selling all or a portion of the Project or adding real property and any improvements thereon to the Project; grant easements and licenses to third parties; maintain or establish ownership of the Building separate from fee title to the Property; make additions to or reconstruct portions of the Building and the Project; install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures, wherever located in the Premises, the Building or elsewhere at the Project; and alter or relocate any other Common Area or facility, including private drives, lobbies, entrances and landscaping; provided, however, that such rights shall be exercised in a way that does not materially adversely affect Tenant’s beneficial use and occupancy of the Premises, including the Permitted Use and Tenant’s access to the Premises. Tenant acknowledges that Landlord specifically reserves the right to allow the exclusive use of corridors and restroom facilities located on specific floors to one or more tenants occupying such floors; provided, however, that Tenant shall not be deprived of the use of the corridors reasonably required to serve the Premises or of restroom facilities serving the floor upon which the Premises are located.
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14.2 Subject to the requirements of Section 14.4 relating to any entry into the Premises, possession of areas of the Premises necessary for utilities, services, safety and operation of the Building is reserved to Landlord.
14.3 Tenant shall, at Landlord’s request, promptly execute such further documents as may be reasonably appropriate to assist Landlord in the performance of its obligations hereunder; provided that Tenant need not execute any document that creates additional liability for Tenant or that deprives Tenant of the quiet enjoyment and use of the Premises as provided for in this Lease.
14.4 Landlord may, at any and all reasonable times during business hours (or during non-business hours, if (a) with respect to Subsections 14.4(u) through 14.4(y), Tenant so requests, and (b) with respect to Subsection 14.4(z), if Landlord so requests), and upon twenty-four (24) hours’ prior notice (which may be oral or by email to the office manager or other Tenant-designated individual at the Premises; but provided that no time restrictions shall apply or advance notice be required if an emergency necessitates immediate entry), enter the Premises to (u) inspect the same and to determine whether Tenant is in compliance with its obligations hereunder, (v) supply any service Landlord is required to provide hereunder, (w) alter, improve or repair any portion of the Building other than the Premises for which access to the Premises is reasonably necessary, (x) post notices of nonresponsibility, (y) access the telephone equipment, electrical substation and fire risers and (z) show the Premises to prospective tenants during the final year of the Term and current and prospective purchasers and lenders at any time, or permit a future tenant of the Premises to inspect and measure the Premises in anticipation of such tenant’s future occupancy of the Premises. In connection with any such alteration, improvement or repair as described in Subsection 14.4(w), Landlord may erect in the Premises or elsewhere in the Project scaffolding and other structures reasonably required for the alteration, improvement or repair work to be performed. In no event shall Tenant’s Rent abate as a result of Landlord’s activities pursuant to this Section; provided, however, that all such activities shall be conducted in such a manner so as to cause as little interference to Tenant as is reasonably possible. Landlord shall at all times retain a key with which to unlock all of the doors in the Premises. If an emergency necessitates immediate access to the Premises, Landlord may use whatever force is necessary to enter the Premises, and any such entry to the Premises shall not constitute a forcible or unlawful entry to the Premises, a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof. Except in case of an emergency or in connection with the provision of services performed by Landlord under this Lease, Tenant shall have a reasonable opportunity to have a representative of Tenant accompany Landlord during any entry into the Premises pursuant to this Section; provided, however, if Tenant’s representative is not available or does not elect to accompany Landlord at the times that Landlord has requested access, then such unavailability shall not prohibit or otherwise restrict Landlord’s access, and Landlord may access the Premises with or without Tenant’s representative present.
15. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Rent and performing its obligations contained in this Lease, may peacefully and quietly have, hold and enjoy the Premises, free from any claim by Landlord or persons claiming under Landlord, but subject to all of the terms and provisions hereof, provisions of Applicable Laws and rights of record to which this Lease is or may become subordinate. This covenant is in lieu of any other quiet enjoyment covenant, either express or implied.
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16. Utilities and Services.
16.1 Commencing on the Term Commencement Date, Tenant shall pay for all water (including the cost to service, repair and replace reverse osmosis, de-ionized and other treated water), gas, heat, light, power, telephone, internet service, cable television, other telecommunications and other utilities supplied to the Premises, together with any fees, surcharges and taxes thereon. If any such utility is not separately metered to Tenant, Tenant shall pay Tenant’s Adjusted Share of all charges of such utility jointly metered with other premises as Additional Rent or, in the alternative, Landlord may, at its option, monitor the usage of such utilities by Tenant and only if the reason Landlord is installing metering equipment is due to Tenant’s overstandard use, charge Tenant with the cost of purchasing, installing and monitoring such metering equipment, which cost shall be paid by Tenant as Additional Rent. Tenant shall maintain temperature and humidity in the Premises in accordance with ASHRAE standards at all times.
16.2 Landlord may base its bills for utilities on reasonable estimates; provided that Landlord adjusts such billings as part of the next Landlord’s Statement (or more frequently, as determined by Landlord) to reflect the actual cost of providing utilities to the Premises. To the extent that Tenant uses more than Tenant’s Pro Rata Share of any utilities, then Tenant shall pay Landlord for Tenant’s Adjusted Share of such utilities to reflect such excess. In the event that the Building or Project is less than fully occupied during a calendar year, Tenant acknowledges that Landlord may extrapolate utility usage that varies depending on the occupancy of the Building or Project (as applicable) to equal Landlord’s reasonable estimate of what such utility usage would have been had the Building or Project, as applicable, been ninety-five percent (95%) occupied during such calendar year; provided, however, that Landlord shall not recover more than one hundred percent (100%) of the cost of such utilities. Tenant shall not be liable for the cost of utilities supplied to the Premises attributable to the time period prior to the Term Commencement Date; provided, however, that, if Landlord shall permit Tenant to have possession of the Premises prior to the Term Commencement Date and Tenant uses the Premises for any purpose other than placement of personal property as set forth in Section 4.3, then Tenant shall be responsible for the cost of utilities supplied to the Premises from such earlier date of possession.
16.3 Landlord shall not be liable for, nor shall any eviction of Tenant result from, the failure to furnish any utility or service, whether or not such failure is caused by Force Majeure (as defined below) or, to the extent permitted by Applicable Laws, Landlord’s negligence. In the event of such failure, Tenant shall not be entitled to termination of this Lease or any abatement or reduction of Rent, nor shall Tenant be relieved from the operation of any covenant or agreement of this Lease. Notwithstanding anything to the contrary in this Lease, if, for more than ten (10) consecutive business days following written notice to Landlord and as a direct result of Landlord’s gross negligence or willful misconduct (and except to the extent that such failure arises from any other factor, including any action or inaction of a Tenant Party (as defined below)), the provision of HVAC or other utilities to all or a material portion of the Premises that Landlord must provide pursuant to this Lease is interrupted (a “Material Services Failure”), then Base Rent (or, to the extent that less than all of the Premises are affected, a proportionate amount (based on the Rentable Area of the Premises that is rendered unusable) of Base Rent) shall thereafter be abated until the Premises are again usable by Tenant for the Permitted Use; provided, however, that, if Landlord is diligently pursuing the restoration of such HVAC and other utilities and Landlord provides substitute HVAC and other utilities reasonably suitable for Tenant’s continued use and occupancy
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of the Premises for the Permitted Use (e.g., supplying potable water or portable air conditioning equipment), then Base Rent shall not be abated. During any Material Services Failure, Tenant will cooperate with Landlord to arrange for the provision of any interrupted utility services on an interim basis via temporary measures until final corrective measures can be accomplished, and Tenant will permit Landlord the necessary access to the Premises to remedy such Material Service Failure. In the event of any interruption of HVAC or other utilities that Landlord must provide pursuant to this Lease, regardless of the cause, Landlord shall diligently pursue the restoration of such HVAC and other utilities. Notwithstanding anything in this Lease to the contrary, but subject to Article 24 (which shall govern in the event of a casualty), the provisions of this Section shall be Tenant’s sole recourse and remedy in the event of an interruption of HVAC or other utilities to the Premises, including related to Section 16.8.
16.4 Tenant shall pay for, prior to delinquency of payment therefor, any utilities and services that may be furnished to the Premises during or, if Tenant occupies the Premises after the expiration or earlier termination of the Term, after the Term, beyond those utilities provided by Landlord, including telephone, internet service, cable television and other telecommunications, together with any fees, surcharges and taxes thereon. Upon Landlord’s demand, utilities and services provided to the Premises that are separately metered shall be paid by Tenant directly to the supplier of such utilities or services.
16.5 Tenant shall not, without Landlord’s prior written consent, use any device in the Premises (including data processing machines) that will in any way (a) increase the amount of ventilation, air exchange, gas, steam, electricity or water required or consumed in the Premises based upon Tenant’s Pro Rata Share of the Building or Project (as applicable) beyond the existing capacity of the Building or the Project usually furnished or supplied for the Permitted Use or (b) exceed Tenant’s Pro Rata Share of the Building’s or Project’s (as applicable) capacity to provide such utilities or services.
16.6 If Tenant shall require utilities or services in excess of those usually furnished or supplied for tenants in similar spaces in the Building or the Project by reason of Tenant’s equipment or extended hours of business operations, then Tenant shall first procure Landlord’s consent for the use thereof, which consent Landlord may condition upon the availability of such excess utilities or services, and Tenant shall pay as Additional Rent an amount equal to the cost of providing such excess utilities and services.
16.7 Landlord shall provide water in Common Area for lavatory and landscaping purposes only, which water shall be from the local municipal or similar source; provided, however, that if Landlord determines that Tenant requires, uses or consumes water provided to the Common Area for any purpose other than ordinary lavatory purposes, Landlord may install a water meter (“Tenant Water Meter”) and thereby measure Tenant’s water consumption for all purposes. Tenant shall pay Landlord for the costs of any Tenant Water Meter and the installation and maintenance thereof during the Term. If Landlord installs a Tenant Water Meter, Tenant shall pay for water consumed, as shown on such meter, as and when bills are rendered. If Tenant fails to timely make such payments, Landlord may pay such charges and collect the same from Tenant. Any such costs or expenses incurred or payments made by Landlord for any of the reasons or purposes stated in this Section shall be deemed to be Additional Rent payable by Tenant and collectible by Landlord as such.
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16.8 Landlord reserves the right to stop service of the elevator, plumbing, ventilation, air conditioning and utility systems, when Landlord deems necessary or desirable, due to accident, emergency or the need to make repairs, alterations or improvements, until such repairs, alterations or improvements shall have been completed, and Landlord shall further have no responsibility or liability for failure to supply elevator facilities, plumbing, ventilation, air conditioning or utility service when prevented from doing so by Force Majeure (as defined below) or, to the extent permitted by Applicable Laws, Landlord’s negligence. Without limiting the foregoing, it is expressly understood and agreed that any covenants on Landlord’s part to furnish any service pursuant to any of the terms, covenants, conditions, provisions or agreements of this Lease, or to perform any act or thing for the benefit of Tenant, shall not be deemed breached if Landlord is unable to furnish or perform the same by virtue of Force Majeure or, to the extent permitted by Applicable Laws, Landlord’s negligence.
16.9 As part of the Landlord’s Work, Landlord will install a 350kW back-up generator serving the Building (the “Generator”) and will connect the Generator to the automatic transfer switches serving the Premises. Tenant shall be entitled to use up to its proportionate share (after deducting any power from the Generator required for the Common Area) of power from the Generator on a non-exclusive basis with other tenants in the Building. The cost of maintaining, repairing and replacing the Generator shall constitute Operating Expenses. Landlord expressly disclaims any warranties with regard to the Generator or the installation thereof, including any warranty of merchantability or fitness for a particular purpose. Landlord shall maintain the Generator and any equipment connecting the Generator to Tenant’s automatic transfer switches in good working condition, provided, however, that Tenant shall be solely responsible, at Tenant’s sole cost and expense, (and Landlord shall not be liable) for maintaining and operating Tenant’s automatic transfer switches and the distribution of power from Tenant’s automatic transfer switches throughout the Premises, and provided further that Landlord shall not be liable for any failure to make any repairs or to perform any maintenance of the Generator that is an obligation of Landlord unless and except to the extent that Landlord willfully fails to make such repairs or perform such maintenance and such failure persists for an unreasonable time after Tenant provides Landlord with written notice of the need for such repairs or maintenance. Upon receipt of such written notice, Landlord shall promptly commence to cure such failure and shall diligently prosecute the same to completion in accordance with Section 31.13. The provisions of Section 16.3 shall apply to the Generator.
16.10 For the Premises, Landlord shall (a) maintain (to the extent required under Article 18) and operate the HVAC systems used for the Permitted Use only (“Base HVAC”) and (b) subject to Subsection 16.10(a), furnish Base HVAC as reasonably required (except as this Lease otherwise provides) for reasonably comfortable occupancy of the Premises twenty-four (24) hours a day, every day during the Term, subject to casualty, eminent domain or as otherwise specified in this Article. Notwithstanding anything to the contrary in this Section (other than the provisions of Section 16.3 above), Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption or impairment in HVAC services.
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16.11 For any utilities serving the Premises for which Tenant is billed directly by such utility provider, Tenant agrees to furnish to Landlord within thirty (30) days after Landlord’s request (a) any invoices or statements for such utilities within thirty (30) days after Tenant’s receipt thereof, (b) any other utility usage information reasonably requested by Landlord, and (c) within thirty (30) days after each calendar year during the Term, authorization to allow Landlord to access Tenant’s usage information necessary for Landlord to complete an ENERGY STAR® Statement of Performance (or similar comprehensive utility usage report (e.g., related to Labs 21), if requested by Landlord) and any other information reasonably requested by Landlord for the immediately preceding year; and Tenant shall comply with any other energy usage or consumption requirements required by Applicable Laws. Tenant shall retain records of utility usage at the Premises, including invoices and statements from the utility provider, for at least sixty (60) months, or such other period of time as may be requested by Landlord. Tenant acknowledges that any utility information for the Premises, the Building and the Project may be shared with third parties, including Landlord’s consultants and Governmental Authorities. In the event that Tenant fails to comply with this Section and such failure is not cured within five (5) days following Landlord’s delivery to Tenant of a notice of such failure, Tenant hereby authorizes Landlord to collect utility usage information directly from the applicable utility providers, and Tenant shall pay Landlord a fee of One Thousand Dollars ($1,000) per month to collect such utility usage information. In addition to the foregoing, Tenant shall comply with all Applicable Laws related to the disclosure and tracking of energy consumption at the Premises. The provisions of this Section shall survive the expiration or earlier termination of this Lease.
17. Alterations.
17.1 Tenant shall make no alterations, additions or improvements in or to the Premises or engage in any construction, demolition, reconstruction, renovation or other work (whether major or minor) of any kind in, at or serving the Premises (“Alterations”) without Landlord’s prior written approval, which approval may be subject to the consent of one or more Lenders, if required under any applicable Loan Document, but which approval Landlord shall not otherwise unreasonably withhold; provided, however, that, in the event any proposed Alteration affects (a) any structural portions of the Building, including exterior walls, the roof, the foundation or slab, foundation or slab systems (including barriers and subslab systems) or the core of the Building, (b) the exterior of the Building or (c) any Building systems, including elevator, plumbing, HVAC, electrical, security, life safety and power, then Landlord may withhold its approval in its sole and absolute discretion. Tenant shall, in making any Alterations, use only those architects, contractors, suppliers and mechanics of which Landlord has given prior written approval, which approval shall be in Landlord’s sole and absolute discretion. In seeking Landlord’s approval, Tenant shall provide Landlord, at least sixty (60) days in advance of the desired commencement date of any proposed construction, with plans, specifications, bid proposals, certified stamped engineering drawings and calculations by Tenant’s engineer of record or architect of record (including connections to the Building’s structural system, modifications to the Building’s envelope, non-structural penetrations in slabs or walls, and modifications or tie-ins to life safety systems), work contracts, requests for laydown areas and such other information concerning the nature and cost of the Alterations as Landlord may reasonably request, provided that Tenant shall not commence any such Alterations that require Landlord’s consent unless and until Tenant has received the written approval of Landlord and any and all Lenders whose consent is required under any applicable Loan Document. In no event shall Tenant use or Landlord be required to approve any architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony or may not have sufficient experience, in Landlord’s reasonable opinion, to perform work in an occupied Class “A” laboratory research building and in tenant-occupied lab areas. Notwithstanding the foregoing, Tenant may make strictly cosmetic changes to the Premises
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that do not require any permits or more than three (3) total contractors and subcontractors (“Cosmetic Alterations”) without Landlord’s consent; provided that (y) the cost of any Cosmetic Alterations does not exceed Fifty Thousand Dollars ($50,000) annually, (z) such Cosmetic Alterations are not reasonably expected to have any material adverse effect on the Project and do not (i) require any structural or other substantial modifications to the Premises, (ii) require any changes to or adversely affect the Building systems, (iii) affect any portion of the Building or Project that is exterior to the Premises or (iv) trigger any requirement under Applicable Laws that would require Landlord to make any alteration or improvement to the Premises, the Building or the Project.
17.2 Tenant shall not construct or permit to be constructed partitions or other obstructions that might interfere with free access to mechanical installation or service facilities of the Building or with other tenants’ components located within the Building, or interfere with the moving of Landlord’s equipment to or from the enclosures containing such installations or facilities.
17.3 Tenant shall accomplish any work performed on the Premises or the Building in such a manner as to permit any life safety systems to remain fully operable at all times.
17.4 Any work performed on the Premises, the Building or the Project by Tenant or Tenant’s contractors shall be done at such times and in such manner as Landlord may from time to time reasonably designate. Tenant covenants and agrees that all work done by Tenant or Tenant’s contractors shall be performed in full compliance with Applicable Laws. Within thirty (30) days after completion of any Alterations requiring Landlord’s consent, Tenant shall provide Landlord with complete “as built” drawing print sets and electronic CADD files on disc (or files in such other current format in common use as Landlord reasonably approves or requires) showing any changes in the Premises, as well as a commissioning report prepared by a licensed, qualified commissioning agent hired by Tenant and approved by Landlord for all new or affected mechanical, electrical and plumbing systems. Any such “as built” plans shall show the applicable Alterations as an overlay on the Building as-built plans; provided that Landlord provides the Building “as built” plans to Tenant.
17.5 Before commencing any Alterations, Tenant shall (a) give Landlord at least sixty (60) days’ prior written notice of the proposed commencement of such work and the names and addresses of the persons supply labor or materials therefor so that Landlord may enter the Premises to post and keep posted thereon and therein notices or to take any further action that Landlord may reasonably deem proper for the protection of Landlord’s interest in the Project and (b) shall, if required by Landlord, secure, at Tenant’s own cost and expense, a completion and lien indemnity bond satisfactory to Landlord for such work.
17.6 Tenant shall repair any damage to the Premises arising from Tenant’s removal of any property from the Premises. During any such restoration period, Tenant shall pay Rent to Landlord as provided herein as if such space were otherwise occupied by Tenant. The provisions of this Section shall survive the expiration or earlier termination of this Lease. Notwithstanding the foregoing, (a) in the event of a casualty described in Article 24, Article 24 shall apply in lieu of this Section, and (b) in the event of eminent domain, Article 25 shall apply in lieu of this Section.
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17.7 The Premises plus any Alterations; Signage; Tenant Improvements; attached equipment, decorations, fixtures and trade fixtures; movable laboratory casework and related appliances (unless included on Exhibit H); and other additions and improvements attached to or built into the Premises made by either of the parties (including all floor and wall coverings; paneling; sinks and related plumbing fixtures; laboratory benches; exterior venting fume hoods; walk-in freezers and refrigerators; ductwork; conduits; electrical panels and circuits; attached machinery and equipment; and built-in furniture and cabinets, in each case, together with all additions and accessories thereto), shall (unless, prior to such construction or installation, Landlord elects otherwise in writing) at all times remain the property of Landlord, shall remain in the Premises and shall (unless, prior to construction or installation thereof, Landlord elects otherwise in writing) be surrendered to Landlord upon the expiration or earlier termination of this Lease. For the avoidance of doubt, the items listed on Exhibit H attached hereto (which Exhibit H may be updated by Tenant from and after the Term Commencement Date, subject to Landlord’s written consent) constitute Tenant’s property and shall be removed by Tenant upon the expiration or earlier termination of the Lease. However, all unattached trade fixtures, moveable laboratory benches, moveable furniture, moveable equipment, and other unattached personal property placed in the Premises by Tenant and not purchased by Landlord shall remain the Property of Tenant, and may be removed by Tenant.
17.8 Notwithstanding any other provision of this Article to the contrary, in no event shall Tenant remove any improvement from the Premises in which any Lender has a security interest or as to which Landlord contributed payment, including the Tenant Improvements, without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion.
17.9 If Tenant shall fail to remove any of its property from the Premises prior to the expiration or earlier termination of this Lease, then Landlord may, at its option, remove the same in any manner that Landlord shall choose and store such effects without liability to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord, upon demand, any costs and expenses incurred due to such removal and storage or Landlord may, at its sole option and without notice to Tenant, sell such property or any portion thereof at private sale and without legal process for such price as Landlord may obtain and apply the proceeds of such sale against any (a) amounts due by Tenant to Landlord under this Lease and (b) any expenses incident to the removal, storage and sale of such personal property.
17.10 Tenant shall pay to Landlord an amount equal to (i) five percent (5%) as to Alterations up to Five Hundred Thousand Dollars ($500,000) or (ii) the greater of (a) $25,000 or three percent (3%) as to Alterations over Five Hundred Thousand Dollars ($500,000), of the cost to Tenant of all Alterations requiring Landlord consent to cover Landlord’s overhead and expenses for plan review, engineering review, coordination, scheduling and supervision thereof or obtaining any required Lender consent. For purposes of payment of such sum, Tenant shall submit to Landlord copies of all bills, invoices and statements covering the costs of such charges, accompanied by payment to Landlord of the fee set forth in this Section. Tenant shall reimburse Landlord for any extra expenses incurred by Landlord by reason of faulty work done by Tenant or its contractors, or by reason of delays arising from such faulty work, or by reason of inadequate clean-up.
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17.11 Within sixty (60) days after final completion of any Alterations performed by Tenant with respect to the Premises, Tenant shall submit to Landlord documentation showing the amounts expended by Tenant with respect to such Alterations, together with supporting documentation reasonably acceptable to Landlord.
17.12 Tenant shall take, and shall cause its contractors to take, commercially reasonable steps to protect the Premises during the performance of any Alterations, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage.
17.13 Tenant shall require its contractors and subcontractors performing work on the Premises to name Landlord, BioMed Realty, L.P. and their respective officers, employees, directors, representatives, agents, contractors and subcontractors, general partners, members, subsidiaries, affiliates and Lenders (collectively with Landlord, the “Landlord Parties”) as additional insureds on their respective insurance policies.
18. Repairs and Maintenance.
18.1 Landlord shall repair and maintain the structural and exterior portions and Common Area of the Building and the Project, including roofing and covering materials; foundations (excluding any architectural slabs (i.e., non-structural slabs), but including any structural slabs); exterior walls; base Building plumbing; base Building fire sprinkler systems (if any); base Building HVAC systems up to the first damper or isolation valve that serves the Premises (for purposes of clarity, the portion of the HVAC system that includes such first damper or isolation valve and extends into and through the Premises, and any supplemental HVAC serving the Premises shall not be part of the base Building HVAC and shall be Tenant’s obligation to maintain and repair pursuant to Section 18.2 below); elevators; and base Building electrical systems installed or furnished by Landlord.
18.2 Except for services of Landlord, if any, required by Section 18.1, Tenant shall at Tenant’s sole cost and expense maintain and keep the Premises (including but not limited to the portion of the HVAC system that includes the first damper or isolation valve and extends into and through the Premises, any supplemental HVAC serving the Premises, and any other systems or equipment exclusively serving the Premises) and every part thereof in good condition and repair, within ten (10) days after receipt of written notice from Landlord, provide to Landlord any maintenance records that Landlord reasonably requests. Tenant shall, upon the expiration or sooner termination of the Term, surrender the Premises to Landlord in as good a condition as when received, ordinary wear and tear excepted; and shall, at Landlord’s request and Tenant’s sole cost and expense, remove all telephone and data systems, wiring and equipment from the Premises, and repair any damage to the Premises caused thereby. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof, other than the Tenant Improvements and other than as expressly set forth in Section 18.1 above.
[***].
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18.3 Throughout the Term of the Lease, Tenant shall, at Tenant’s sole cost and expense, maintain copies of all service contracts, service, repair and maintenance records, and inspection reports on all equipment installed by or maintained by Tenant. Tenant shall, within ten (10) days after receipt of written notice from Landlord, provide to Landlord any maintenance records, service or inspection reports that Landlord reasonably requests. Upon surrender of the Premises upon the expiration or earlier termination of this Lease, Tenant shall provide Landlord with all original equipment manufacturer (OEM) manuals for any equipment installed and not removed by Tenant. Landlord shall also have the right to perform an audit of the equipment installed or maintained by Tenant in the form of a facilities condition assessment or similar report at Landlord’s cost; provided that Tenant shall be obligated to reimburse Landlord for the cost of the same to the extent it is determined that Tenant failure to comply with Tenant’s obligations under this Article 18. To the extent such audit recommends corrective action, Tenant shall promptly perform such corrective action as part of its repair and maintenance obligations.
18.4 Landlord shall not be liable for any failure to make any repairs or to perform any maintenance that is Landlord’s obligation pursuant to this Lease unless such failure shall persist for an unreasonable time after Tenant provides Landlord with written notice of the need of such repairs or maintenance. Tenant waives its rights under Applicable Laws now or hereafter in effect to make repairs at Landlord’s expense.
18.5 If any excavation shall be made upon land adjacent to or under the Building, or shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause such excavation, license to enter the Premises for the purpose of performing such work as such person shall deem necessary or desirable to preserve and protect the Building from injury or damage and to support the same by proper foundations, without any claim for damages or liability against Landlord and without reducing or otherwise affecting Tenant’s obligations under this Lease.
18.6 This Article relates to repairs and maintenance arising in the ordinary course of operation of the Building and the Project. In the event of a casualty described in Article 24, Article 24 shall apply in lieu of this Article. In the event of eminent domain, Article 25 shall apply in lieu of this Article.
18.7 Costs incurred by Landlord pursuant to this Article shall constitute Operating Expenses.
19. Liens.
19.1 Subject to the immediately succeeding sentence, Tenant shall keep the Premises, the Building and the Project free from any liens arising from work or services performed, materials furnished to or obligations incurred by Tenant. Tenant further covenants and agrees that any mechanic’s or materialman’s lien filed against the Premises, the Building or the Project for work or services claimed to have been done for, or materials claimed to have been furnished to, or obligations incurred by Tenant shall be discharged or bonded by Tenant within ten (10) days after the filing thereof, at Tenant’s sole cost and expense.
19.2 Should Tenant fail to discharge or bond against any lien of the nature described in Section 19.1 within ten (10) days after the filing thereof, Landlord may, at Landlord’s election, pay such claim or post a statutory lien bond or otherwise provide security to eliminate the lien as a claim against title, and Tenant shall immediately reimburse Landlord for the costs thereof as Additional Rent. Tenant shall Indemnify the Landlord Indemnitees from and against any Claims arising from any such liens, including any administrative, court or other legal proceedings related to such liens.
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19.3 In the event that Tenant leases or finances the acquisition of office equipment, furnishings or other personal property of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants that any Uniform Commercial Code financing statement shall, upon its face or by exhibit thereto, indicate that such financing statement is applicable only to removable personal property of Tenant located within the Premises. In no event shall the address of the Premises, the Building or the Project be furnished on a financing statement without qualifying language as to applicability of the lien only to removable personal property located in an identified suite leased by Tenant. Should any holder of a financing statement record or place of record a financing statement that appears to constitute a lien against any interest of Landlord or against equipment that may be located other than within an identified suite leased by Tenant, Tenant shall, within ten (10) days after filing such financing statement, cause (a) a copy of the lender security agreement or other documents to which the financing statement pertains to be furnished to Landlord to facilitate Landlord’s ability to demonstrate that the lien of such financing statement is not applicable to Landlord’s interest and (b) Tenant’s lender to amend such financing statement and any other documents of record to clarify that any liens imposed thereby are not applicable to any interest of Landlord in the Premises, the Building or the Project.
20. Estoppel Certificate. Tenant shall, within ten (10) business days after receipt of written notice from Landlord, execute, acknowledge and deliver a statement in writing substantially in the form attached to this Lease as Exhibit I, or on any other form reasonably requested by a current or proposed Lender or encumbrancer or proposed purchaser, (a) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which rental and other charges are paid in advance, if any, (b) acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth such further information with respect to this Lease or the Premises as may be requested thereon. Any such statements may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Property. Tenant’s failure to deliver any such statement within such the prescribed time shall, at Landlord’s option, constitute a Default (as defined below) under this Lease, and, in any event, shall be binding upon Tenant that the Lease is in full force and effect and without modification except as may be represented by Landlord in any certificate prepared by Landlord and delivered to Tenant for execution.
21. Hazardous Materials.
21.1 Tenant shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the Premises, the Building or the Project in violation of Applicable Laws by Tenant or any of its employees, agents, contractors or invitees (collectively with Tenant, each a “Tenant Party”). If (a) Tenant breaches such obligation, (b) the presence of Hazardous Materials as a result of such a breach results in contamination of the Project, any portion thereof, or any adjacent property, (c) contamination of the Premises otherwise occurs during the Term or any extension or renewal hereof or holding over (other than (i) if such contamination results from migration of Hazardous Materials from outside the Premises not arising from the acts
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or omissions of a Tenant Party or coming from property owned or leased by a Tenant Party or (ii) to the extent such contamination arises directly and solely from Landlord’s negligence or willful misconduct) or (d) contamination of the Project occurs as a result of Hazardous Materials that are placed on or under or are released into the Project by a Tenant Party, then Tenant shall Indemnify the Landlord Indemnitees from and against any and all Claims of any kind or nature, including (w) diminution in value of the Project or any portion thereof, (x) damages for the loss or restriction on use of rentable or usable space or of any amenity of the Project, (y) damages arising from any adverse impact on marketing of space in the Project or any portion thereof and (z) sums paid in settlement of Claims that arise before, during or after the Term as a result of such breach or contamination. This Indemnification by Tenant includes costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any Governmental Authority because of Hazardous Materials for which Tenant is responsible hereunder present in the air, soil or groundwater above, on, under or about the Project. Without limiting the foregoing, if the presence of any Hazardous Materials in, on, under or about the Project, any portion thereof or any adjacent property caused or permitted by any Tenant Party results in any contamination of the Project, any portion thereof or any adjacent property, then Tenant shall promptly take all actions at its sole cost and expense as are necessary to return the Project, any portion thereof or any adjacent property to its respective condition existing prior to the time of such contamination; provided that Landlord’s written approval of such action shall first be obtained, which approval Landlord shall not unreasonably withhold; and provided, further, that it shall be reasonable for Landlord to withhold its consent if such actions could have a material adverse long-term or short-term effect on the Project, any portion thereof or any adjacent property. Tenant’s obligations under this Section shall not be affected, reduced or limited by any limitation on the amount or type of damages, compensation or benefits payable by or for Tenant under workers’ compensation acts, disability benefit acts, employee benefit acts or similar legislation.
21.2 Landlord acknowledges that it is not the intent of this Article to prohibit Tenant from operating its business for the Permitted Use. Tenant may operate its business according to the custom of Tenant’s industry so long as the use or presence of Hazardous Materials is strictly and properly monitored in accordance with Applicable Laws. As a material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business, Tenant agrees to deliver to Landlord (a) a list identifying each type of Hazardous Material to be present at the Premises that is subject to regulation under any environmental Applicable Laws in the form of a Tier II form pursuant to Section 312 of the Emergency Planning and Community Right-to-Know Act of 1986 (or any successor statute) or any other form reasonably requested by Landlord, (b) a list of any and all approvals or permits from Governmental Authorities required in connection with the presence of such Hazardous Material at the Premises and (c) correct and complete copies of (i) notices of violations of Applicable Laws related to Hazardous Materials and (ii) plans relating to the installation of any storage tanks to be installed in, on, under or about the Project (provided that installation of storage tanks shall only be permitted after Landlord has given Tenant its written consent to do so, which consent Landlord may withhold in its sole and absolute discretion) and closure plans or any other documents required by any and all Governmental Authorities for any storage tanks installed in, on, under or about the Project for the closure of any such storage tanks (collectively, “Hazardous Materials Documents”). Tenant shall deliver to Landlord updated Hazardous Materials Documents, within fourteen (14) days after receipt of a written request therefor from Landlord, not more often than once per year, unless (m) there are any changes to the Hazardous Materials Documents or (n) Tenant initiates any Alterations or changes its business, in
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either case in a way that involves any material increase in the types or amounts of Hazardous Materials, in which case Tenant shall deliver updated Hazardous Materials documents (without Landlord having to request them) before or, if not practicable to do so before, as soon as reasonably practicable after the occurrence of the events in Subsection 21.2(m) or (n). For each type of Hazardous Material listed, the Hazardous Materials Documents shall include (t) the chemical name, (u) the material state (e.g., solid, liquid, gas or cryogen), (v) the concentration, (w) the storage amount and storage condition (e.g., in cabinets or not in cabinets), (x) the use amount and use condition (e.g., open use or closed use), (y) the location (e.g., room number or other identification) and (z) if known, the chemical abstract service number. Notwithstanding anything in this Section to the contrary, Tenant shall not be required to provide Landlord with any documents containing information of a proprietary nature; provided that Tenant will disclose all Hazardous Material types and quantities used by Tenant at the Premises and such other information relating to such Hazardous Materials as is reasonably requested by Landlord and the foregoing will not be used to circumvent such disclosure requirement. Landlord may, at Landlord’s expense, cause the Hazardous Materials Documents to be reviewed by a person or firm qualified to analyze Hazardous Materials to confirm compliance with the provisions of this Lease and with Applicable Laws. In the event that a review of the Hazardous Materials Documents indicates non-compliance with this Lease or Applicable Laws, Tenant shall, at its expense, diligently take steps to bring its storage and use of Hazardous Materials into compliance. Notwithstanding anything in this Lease to the contrary or Landlord’s review into Tenant’s Hazardous Materials Documents or use or disposal of hazardous materials, however, Landlord shall not have and expressly disclaims any liability related to Tenant’s or other tenants’ use or disposal of Hazardous Materials, it being acknowledged by Tenant that Tenant is best suited to evaluate the safety and efficacy of its Hazardous Materials usage and procedures.
21.3 Tenant represents and warrants to Landlord that it is not nor has it been, in connection with the use, disposal or storage of Hazardous Materials, (a) subject to a material enforcement order issued by any Governmental Authority or (b) required to take any remedial action.
21.4 At any time, and from time to time, prior to the expiration of the Term, Landlord shall have the right to conduct appropriate tests of the Project or any portion thereof to demonstrate that Hazardous Materials are present or that contamination has occurred due to the acts or omissions of a Tenant Party. Tenant shall pay all reasonable costs of such tests if such tests reveal that Hazardous Materials exist at the Project in violation of this Lease.
21.5 If underground or other storage tanks storing Hazardous Materials installed or utilized by Tenant are located on the Premises, or are hereafter placed on the Premises by Tenant (or by any other party, if such storage tanks are utilized by Tenant), then Tenant shall monitor the storage tanks, maintain appropriate records, implement reporting procedures, properly close any underground storage tanks, and take or cause to be taken all other steps necessary or required under the Applicable Laws. Tenant shall have no responsibility or liability for underground or other storage tanks installed by anyone other than Tenant unless Tenant utilizes such tanks on an exclusive basis, in which case Tenant’s responsibility for such tanks shall be as set forth in this Section.
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21.6 Tenant shall promptly report to Landlord any actual or suspected presence of mold or water intrusion at the Premises.
21.7 Tenant’s obligations under this Article shall survive the expiration or earlier termination of the Lease. During any period of time needed by Tenant or Landlord after the termination of this Lease to complete the removal from the Premises of any such Hazardous Materials, Tenant shall be deemed a holdover tenant and subject to the provisions of Article 27.
21.8 As used herein, the term “Hazardous Material” means any toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous substance, material or waste that is or becomes regulated by Applicable Laws or any Governmental Authority.
21.9 Notwithstanding anything to the contrary in this Lease, Landlord shall have sole control over the equitable allocation of fire control areas (as defined in the Uniform Building Code as adopted by the city or municipality(ies) in which the Project is located (the “UBC”)) within the Project for the storage of Hazardous Materials. Notwithstanding anything to the contrary in this Lease, the quantity of Hazardous Materials allowed by this Section is specific to Tenant or a transferee pursuant to an Exempt Transfer (as defined below) and shall not run with the Lease in the event of a Transfer (as defined in Article 29). In the event of a Transfer, if the use of Hazardous Materials by such new tenant (“New Tenant”) is such that New Tenant utilizes fire control areas in the Project in excess of New Tenant’s Pro Rata Share of the Building or the Project, as applicable, then New Tenant shall, at its sole cost and expense and upon Landlord’s written request, establish and maintain a separate area of the Premises classified by the UBC as an “H” occupancy area for the use and storage of Hazardous Materials, or take such other action as is necessary to ensure that its share of the fire control areas of the Building and the Project is not greater than New Tenant’s Pro Rata Share of the Building or the Project, as applicable. Notwithstanding anything in this Lease to the contrary, Landlord shall not have and expressly disclaims any liability related to Tenant’s or other tenants’ use or disposal of fire control areas, it being acknowledged by Tenant that Tenant and other tenants are best suited to evaluate the safety and efficacy of its Hazardous Materials usage and procedures.
22. Odors and Exhaust. Tenant acknowledges that Landlord would not enter into this Lease with Tenant unless Tenant assured Landlord that under no circumstances will any other occupants of the Building or the Project (including persons legally present in any outdoor areas of the Project) be subjected to odors or fumes (whether or not noxious), and that the Building and the Project will not be damaged by any exhaust, in each case from Tenant’s operations. Landlord and Tenant therefore agree as follows:
22.1 Tenant shall not cause or permit (or conduct any activities that would cause) any release of any odors or fumes of any kind from the Premises.
22.2 If the Building has a ventilation system that, in Landlord’s judgment, is adequate, suitable, and appropriate to vent the Premises in a manner that does not release odors affecting any indoor or outdoor part of the Project, Tenant shall vent the Premises through such system. If Landlord at any time determines that any existing ventilation system is inadequate, or if no ventilation system exists, Tenant shall in compliance with Applicable Laws vent all fumes and
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odors from the Premises (and remove odors from Tenant’s exhaust stream) as Landlord requires. The placement and configuration of all ventilation exhaust pipes, louvers and other equipment shall be subject to Landlord’s approval. Tenant acknowledges Landlord’s legitimate desire to maintain the Project (indoor and outdoor areas) in an odor-free manner, and Landlord may require Tenant to abate and remove all odors in a manner that goes beyond the requirements of Applicable Laws.
22.3 Tenant shall, at Tenant’s sole cost and expense, provide odor eliminators and other devices (such as filters, air cleaners, scrubbers and whatever other equipment may in Landlord’s judgment be necessary or appropriate from time to time) to completely remove, eliminate and abate any odors, fumes or other substances in Tenant’s exhaust stream that, in Landlord’s judgment, emanate from Tenant’s Premises. Any work Tenant performs under this Section shall constitute Alterations.
22.4 Tenant’s responsibility to remove, eliminate and abate odors, fumes and exhaust shall continue throughout the Term. Landlord’s construction of the Tenant Improvements shall not preclude Landlord from requiring additional measures to eliminate odors, fumes and other adverse impacts of Tenant’s exhaust stream (as Landlord may designate in Landlord’s reasonable discretion). Tenant shall install additional equipment as Landlord reasonably requires from time to time under the preceding sentence. Such installations shall constitute Alterations.
22.5 If Tenant fails to install satisfactory odor control equipment within ten (10) business days after Landlord’s demand made at any time, then Landlord may, without limiting Landlord’s other rights and remedies, require Tenant to cease and suspend any operations in the Premises that, in Landlord’s determination, cause odors, fumes or exhaust. For example, if Landlord determines that Tenant’s production of a certain type of product causes odors, fumes or exhaust, and Tenant does not install satisfactory odor control equipment within ten (10) business days after Landlord’s request, then Landlord may require Tenant to stop producing such type of product in the Premises unless and until Tenant has installed odor control equipment satisfactory to Landlord.
23. Insurance.
23.1 Landlord shall maintain insurance for the Building and the Project in amounts equal to full replacement cost (exclusive of the costs of excavation, foundations and footings, engineering costs or such other costs to the extent the same are not incurred in the event of a rebuild and without reference to depreciation taken by Landlord upon its books or tax returns) or such lesser coverage as Landlord may elect, provided that such coverage shall not be less than the amount of such insurance Landlord’s Lender, if any, requires Landlord to maintain, providing protection against any peril generally included within the classification “Fire and Extended Coverage,” together with insurance against sprinkler damage (if applicable), vandalism and malicious mischief. Landlord, subject to availability thereof, shall further insure, if Landlord deems it appropriate, coverage against flood, environmental hazard, earthquake, loss or failure of building equipment, rental loss during the period of repairs or rebuilding, Workers’ Compensation insurance and fidelity bonds for employees employed to perform services. Notwithstanding the foregoing, Landlord may, but shall not be deemed required to, provide insurance for any improvements installed by Tenant or that are in addition to the standard improvements customarily furnished by Landlord, without regard to whether or not such are made a part of or are affixed to the Building.
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23.2 In addition, Landlord shall carry Commercial General Liability insurance with limits of not less than Two Million Dollars ($2,000,000) per occurrence and Four Million Dollars ($4,000,000) general aggregate for bodily injury (including death), or property damage with respect to the Project.
23.3 Tenant shall, at its own cost and expense, procure and maintain during the Term the following insurance for the benefit of Tenant and Landlord (as their interests may appear) with insurers financially acceptable and lawfully authorized to do business in the state where the Premises are located:
(a) Commercial General Liability insurance on a broad-based occurrence coverage form, with coverages including but not limited to bodily injury (including death), property damage (including loss of use resulting therefrom), premises/operations, personal & advertising injury, and contractual liability with limits of liability of not less than $2,000,000 for bodily injury and property damage per occurrence, $4,000,000 general aggregate, which limits may be met by use of excess and/or umbrella liability insurance; provided that such coverage is at least as broad as the primary coverages required herein.
(b) Commercial Automobile Liability insurance covering liability arising from the use or operation of any auto on behalf of Tenant or invited by Tenant (including those owned, hired, rented, leased, borrowed, scheduled or non-owned). Coverage shall be on a broad-based occurrence form in an amount not less than $2,000,000 combined single limit per accident for bodily injury and property damage. Such coverage shall apply to all vehicles and persons, whether accessing the property with active or passive consent.
(c) Commercial Property insurance covering property damage to the full replacement cost value and business interruption. Covered property shall include all tenant improvements installed by, or on behalf of Tenant (but specifically excluding the Tenant Improvements to the extent affixed to the Building), in the Premises (to the extent not insured by Landlord pursuant to Section 23.1) and Tenant’s Property including personal property, furniture, fixtures, machinery, equipment, stock, inventory and improvements and betterments, which may be owned by Tenant or Landlord and required to be insured hereunder, or which may be leased, rented, borrowed or in the care custody or control of Tenant, or Tenant’s agents, employees or subcontractors. Such insurance, with respect only to all Alterations or other work performed on the Premises by Tenant (collectively, “Tenant Work”), shall name Landlord and Landlord’s current and future mortgagees as loss payees as their interests may appear. Such insurance shall be written on an “all risk” of physical loss or damage basis including the perils of fire, extended coverage, electrical injury, mechanical breakdown, windstorm, vandalism, malicious mischief, sprinkler leakage, back-up of sewers or drains, flood, earthquake, terrorism and such other risks Landlord may from time to time reasonably designate, for the full replacement cost value of the covered items with an agreed amount endorsement with no co-insurance. [***]. Business interruption coverage shall have limits sufficient to cover Tenant’s lost profits and necessary continuing expenses, including rents due Landlord under the Lease. The minimum period of indemnity for business interruption coverage shall be twelve (12) months.
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(d) Workers’ Compensation in compliance with all Applicable Laws or as may be available on a voluntary basis. Employer’s Liability must be at least in the amount of $1,000,000 for bodily injury by accident for each employee, $1,000,000 for bodily injury by disease for each employee, and $1,000,000 bodily injury by disease for policy limit.
(e) Medical malpractice insurance at limits of not less than $1,000,000 each claim during such periods, if any, that Tenant engages in the practice of medicine or clinical trials involving human beings at the Premises.
(f) Pollution legal liability insurance is required if Tenant stores, handles, generates or treats Hazardous Materials of a type or quantity which justifies pollution legal liability insurance, as determined solely by Landlord. Such coverage shall include bodily injury, sickness, disease, death or mental anguish or shock sustained by any person; property damage including physical injury to or destruction of tangible property including the resulting loss of use thereof, clean-up costs, and the loss of use of tangible property that has not been physically injured or destroyed; and defense costs, charges and expenses incurred in the investigation, adjustment or defense of claims for such compensatory damages. Coverage shall apply to both sudden and non-sudden pollution conditions including the discharge, dispersal, release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or other irritants, contaminants or pollutants into or upon land, the atmosphere or any watercourse or body of water. Claims-made coverage is permitted, provided the policy retroactive date is continuously maintained prior to the commencement date of this agreement, and coverage is continuously maintained during all periods in which Tenant occupies the Premises. Coverage shall be maintained with limits of not less than $2,000,000 per incident with a $4,000,000 policy aggregate and for a period of two (2) years thereafter.
(g) During all construction by Tenant at the Premises, with respect to tenant improvements being constructed (including any Alterations), insurance required in Exhibit B-1 must be in place.
23.4 The insurance required of Tenant by this Article shall be with companies at all times having a current rating of not less than A- and financial category rating of at least Class VII in “A.M. Best’s Insurance Guide” current edition. Tenant shall obtain for Landlord from the insurance companies/broker or cause the insurance companies/broker to furnish certificates of insurance evidencing all coverages required herein to Landlord. Landlord reserves the right to require complete, certified copies of all required insurance policies including any endorsements. No such policy shall be cancelable or subject to reduction of coverage or other modification or cancellation except after thirty (30) days’ prior written notice to Landlord from Tenant or its insurers (except in the event of non-payment of premium, in which case ten (10) days’ written notice shall be given). All such policies shall be written as primary policies, not contributing with and not in excess of the coverage that Landlord may carry. Tenant’s required policies shall contain severability of interests clauses stating that, except with respect to limits of insurance, coverage shall apply separately to each insured or additional insured. Tenant shall, on the date of expiration of such policies, furnish Landlord with renewal certificates of insurance or binders. Tenant agrees that if Tenant does not take out and maintain such insurance, Landlord may (but shall not be required to) procure such insurance on Tenant’s behalf and at its cost to be paid by Tenant as Additional Rent. Commercial General Liability, Commercial Automobile Liability, Umbrella
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Liability and Pollution Legal Liability insurance as required above shall name the Landlord Parties as additional insureds as respects liability arising from work or operations performed by or on behalf of Tenant, Tenant’s use or occupancy of Premises, and ownership, maintenance or use of vehicles by or on behalf of Tenant. Tenant must disclose any self-insurance, including self-insurance retentions, to Landlord in writing in advance, which shall be subject to Landlord’s prior written approval in its sole discretion. If Tenant self-insures with Landlord’s prior written approval [***], Tenant is itself acting as though it were providing the insurance required under the provisions of this Lease, and Tenant shall pay those amounts due in lieu of insurance proceeds that would have been covered and payable if the insurance policies had been carried for such self-insured coverages, which amounts shall be treated as insurance proceeds for all purposes under this Lease. Any self-insurance so maintained by Tenant shall be deemed to contain all of the terms and conditions applicable to such insurance as required in this Article 23 (including a deemed waiver of subrogation (consistent with the provisions of Section 23.7)) and all amounts that Tenant pays or is required to pay and all loss or damages arising from risks for which Tenant has elected to self-insure shall not in any way limit Tenant’s Indemnification obligations under this Lease (including those set forth in Section 28.1); consequently, Landlord shall be treated, for all purposes, as if Tenant had actually purchased such insurance from a third party. If Tenant elects to so self-insure, then with respect to any loss, damage, claims, suits and/or demands which may arise from incidents occurring during the Term, such self-insurance obligation shall survive the expiration or earlier termination of this Lease to the same extent as the insurance required hereunder would survive.
23.5 In each instance where insurance is to name the Landlord Parties as additional insureds, Tenant shall, upon Landlord’s written request, also designate and furnish certificates evidencing the Landlord Parties as additional insureds to (a) any Lender of Landlord holding a security interest in the Building or the Project, (b) the landlord under any lease whereunder Landlord is a tenant of the real property upon which the Building is located if the interest of Landlord is or shall become that of a tenant under a ground lease rather than that of a fee owner and (c) any management company retained by Landlord to manage the Project.
23.6 Tenant assumes the risk of damage to any fixtures, goods, inventory, merchandise, equipment and leasehold improvements, and Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom, relative to such damage, all as more particularly set forth within this Lease. Tenant shall, at Tenant’s sole cost and expense, carry such insurance as Tenant desires for Tenant’s protection with respect to personal property of Tenant or business interruption.
23.7 Tenant, on behalf of itself and its insurers, hereby waives any and all rights of recovery against the Landlord Parties with respect to any loss, damage, claims, suits or demands, howsoever caused, that are covered, or should have been covered, by valid and collectible workers’ compensation, employer’s liability insurance and other liability insurance required to obtained and carried by Tenant pursuant to this Article, including any deductibles or self-insurance maintained thereunder. Tenant agrees to endorse the required workers’ compensation, employer’s liability and other liability insurance policies to permit waivers of subrogation as required hereunder and hold harmless and indemnify the Landlord Parties for any loss or expense incurred as a result of a failure to obtain such waivers of subrogation from insurers. Such waivers shall continue so long as Tenant’s insurers so permit. Any termination of such a waiver shall be by written notice to Landlord, containing a description of the circumstances hereinafter set forth in this Section.
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Tenant, upon obtaining the policies of workers’ compensation, employer’s liability and other liability insurance required or permitted under this Lease, shall give notice to its insurance carriers that the foregoing waiver of subrogation is contained in this Lease. If such policies shall not be obtainable with such waiver or shall be so obtainable only at a premium over that chargeable without such waiver, then Tenant shall notify Landlord of such conditions. In addition, each of Landlord and Tenant, on behalf of itself and its insurers, hereby waives all rights of subrogation against the other party or such other party’s insurers with respect to any Claims covered by any other insurance policies required to be obtained and maintained by the non-waiving party pursuant to this Lease, or that would have been covered had the non-waiving party obtained and maintained such policies, except to the extent of the non-waiving party’s gross negligence or willful misconduct.
23.8 Landlord may require insurance policy limits required under this Lease to be raised to conform with requirements of Landlord’s Lender or to bring coverage limits to levels then being required of new tenants within the Project.
23.9 In addition to other insurance required by this Lease to be carried by Tenant, if Tenant sells, merchandises, transfers, gives away or exchanges alcoholic beverages in, upon or from any part of the Premises, then Tenant shall, at Tenant’s sole cost and expense, purchase and maintain in full force and effect during the Term dram shop insurance in form and substance satisfactory to Landlord, with total limits of liability for bodily injury, loss of means of support and property damage for each occurrence in an amount and with a carrier reasonably acceptable to Landlord, and otherwise in compliance with the general provisions of this Article governing the provision of insurance by Tenant. Such policy shall name the Landlord Parties as additional insureds against any liability by virtue of Applicable Laws concerning the use, sale or giving away of alcoholic beverages. If at any time such insurance is for any reason not in force, then during all and any such times no selling, merchandising, transferring, giving away or exchanging of alcoholic beverages shall be conducted by Tenant in, upon or from any part of the Premises.
23.10 Any costs incurred by Landlord pursuant to this Article shall constitute a portion of Operating Expenses.
23.11 The provisions of this Article shall survive the expiration or earlier termination of this Lease.
24. Damage or Destruction.
24.1 In the event of a partial destruction of (a) the Premises, (b) the Building, (c) the Common Area or (d) the Project ((a)-(d) collectively, the “Affected Areas”) by fire or other perils covered by extended coverage insurance not exceeding twenty-five percent (25%) of the full insurable value thereof, and provided that (w) the damage thereto is such that the Affected Areas may be repaired, reconstructed or restored within a period of six (6) months from the date of the happening of such casualty, (x) Landlord shall receive insurance proceeds from its insurer or Lender sufficient to cover the cost of such repairs, reconstruction and restoration (except for any deductible amount provided by Landlord’s policy, which deductible amount, if paid by Landlord, shall constitute an Operating Expense), (y) the repair, reconstruction or restoration of the Affected Areas is permitted by all applicable Loan Documents or otherwise consented to by any and all Lenders whose consent is required thereunder and (z) such casualty was not intentionally caused by a Tenant Party, then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration of the Affected Areas and this Lease shall continue in full force and effect.
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24.2 In the event of any damage to or destruction of the Building or the Project other than as described in Section 24.1, Landlord may elect to repair, reconstruct and restore the Building or the Project, as applicable, in which case this Lease shall continue in full force and effect. If Landlord elects not to repair, reconstruct and restore the Building or the Project, as applicable, then this Lease shall terminate as of the date of such damage or destruction. In the event of any damage or destruction (regardless of whether such damage is governed by Section 24.1 or this Section), if (a) in Landlord’s determination as set forth in the Damage Repair Estimate (as defined below), the Affected Areas cannot be repaired, reconstructed or restored within twelve (12) months after the date of the Damage Repair Estimate, (b) subject to Section 24.6, the Affected Areas are not actually repaired, reconstructed and restored within eighteen (18) months after the date of the Damage Repair Estimate, or (c) the damage and destruction occurs within the last twelve (12) months of the then-current Term, then Tenant shall have the right to terminate this Lease, effective as of the date of such damage or destruction, by delivering to Landlord its written notice of termination (a “Termination Notice”) (y) with respect to Subsections 24.2(a) and (c), no later than fifteen (15) days after Landlord delivers to Tenant Landlord’s Damage Repair Estimate and (z) with respect to Subsection 24.2(b), no later than fifteen (15) days after such eighteen (18) month period (as the same may be extended pursuant to Section 24.6) expires. If Tenant provides Landlord with a Termination Notice pursuant to Subsection 24.2(z), Landlord shall have an additional thirty (30) days after receipt of such Termination Notice to complete the repair, reconstruction and restoration. If Landlord does not complete such repair, reconstruction and restoration within such thirty (30) day period, then Tenant may terminate this Lease by giving Landlord written notice within two (2) business days after the expiration of such thirty (30) day period. If Landlord does complete such repair, reconstruction and restoration within such thirty (30) day period, then this Lease shall continue in full force and effect. Landlord shall give written notice to Tenant within sixty (60) days following the date of damage or destruction of its election not to repair, reconstruct or restore the Building or the Project, as applicable.
24.3 As soon as reasonably practicable, but in any event within sixty (60) days following the date of damage or destruction, Landlord shall notify Tenant of Landlord’s good faith estimate of the period of time in which the repairs, reconstruction and restoration will be completed (the “Damage Repair Estimate”), which estimate shall be based upon the opinion of a contractor reasonably selected by Landlord and experienced in comparable repair, reconstruction and restoration of similar buildings. Additionally, upon any termination of this Lease under any of the provisions of this Article, the parties shall be released thereby without further obligation to the other from the date possession of the Premises is surrendered to Landlord, except with regard to (a) items occurring prior to the damage or destruction and (b) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
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24.4 In the event of repair, reconstruction and restoration as provided in this Article, all Rent to be paid by Tenant under this Lease shall be abated proportionately based on the extent to which Tenant’s use of the Premises is impaired during the period of such repair, reconstruction or restoration, unless Landlord provides Tenant with other space during the period of repair, reconstruction and restoration that, in Tenant’s reasonable opinion, is suitable for the temporary conduct of Tenant’s business; provided, however, that the amount of such abatement shall be reduced by the amount of Rent that is received by Tenant as part of the business interruption or loss of rental income with respect to the Premises from the proceeds of business interruption or loss of rental income insurance.
24.5 Notwithstanding anything to the contrary contained in this Article, (a) Landlord shall not be required to repair, reconstruct or restore any damage or destruction to the extent that Landlord is prohibited from doing so by any applicable Loan Document or any Lender whose consent is required thereunder withholds its consent, and (b) should Landlord be delayed or prevented from completing the repair, reconstruction or restoration of the damage or destruction to the Premises after the occurrence of such damage or destruction by Force Majeure (as defined below) or delays caused by a Lender or Tenant Party, then the time for Landlord to commence or complete repairs, reconstruction and restoration shall be extended on a day-for-day basis; provided, however, that, at Landlord’s election, Landlord shall be relieved of its obligation to make such repairs, reconstruction and restoration.
24.6 If Landlord is obligated to or elects to repair, reconstruct or restore as herein provided, then Landlord shall be obligated to make such repairs, reconstruction or restoration only with regard to (a) those portions of the Premises that were originally provided at Landlord’s expense and (b) the Common Area portion of the Affected Areas. The repairs, reconstruction or restoration of improvements not originally provided by Landlord or at Landlord’s expense shall be the obligation of Tenant. In the event Tenant has elected to upgrade certain improvements from the Building Standard, Landlord shall, upon the need for replacement due to an insured loss, provide only the Building Standard, unless Tenant again elects to upgrade such improvements and pay any incremental costs related thereto, except to the extent that excess insurance proceeds, if received, are adequate to provide such upgrades, in addition to providing for basic repairs, reconstruction and restoration of the Premises, the Building and the Project.
24.7 Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises if the damage resulting from any casualty covered under this Article occurs during the last twelve (12) months of the Term or any extension thereof, or to the extent that insurance proceeds are not available therefor.
24.8 Landlord’s obligation, should it elect or be obligated to repair, reconstruct or restore, shall be limited to the Affected Areas, and shall be conditioned upon Landlord receiving any permits or authorizations required by Applicable Laws. Tenant shall, at its expense, replace or fully repair all of Tenant’s personal property and any Alterations installed by Tenant existing at the time of such damage or destruction. If Affected Areas are to be repaired, reconstructed or restored in accordance with the foregoing, Landlord shall make available to Tenant any portion of insurance proceeds it receives that are allocable to the Alterations constructed by Tenant pursuant to this Lease; provided Tenant is not then in default under this Lease, and subject to the requirements of any Lender of Landlord.
24.9 This Article sets forth the terms and conditions upon which this Lease may terminate in the event of any damage or destruction. Accordingly, the parties hereby waive the provisions of California Civil Code Sections 1932(2) and 1933(4) (and any successor statutes) permitting the parties to terminate this Lease as a result of any damage or destruction.
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25. Eminent Domain.
25.1 In the event (a) the whole of all Affected Areas or (b) such part thereof as shall substantially interfere with Tenant’s use and occupancy of the Premises for the Permitted Use shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking, Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered to such authority, except with regard to (y) items occurring prior to the taking and (z) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof.
25.2 In the event of a partial taking of (a) the Building or the Project or (b) drives, walkways or parking areas serving the Building or the Project for any public or quasi-public purpose by any lawful power or authority by exercise of right of appropriation, condemnation, or eminent domain, or sold to prevent such taking, then, without regard to whether any portion of the Premises occupied by Tenant was so taken, Landlord may elect to terminate this Lease (except with regard to (a) items occurring prior to the taking and (b) provisions of this Lease that, by their express terms, survive the expiration or earlier termination hereof) as of such taking if such taking is, in Landlord’s sole opinion, of a material nature such as to make it uneconomical to continue use of the unappropriated portion for purposes of renting office or laboratory space.
25.3 To the extent permitted under all applicable Loan Documents or otherwise consented to by any and all Lenders whose consent is required thereunder, Tenant shall be entitled to any award that is specifically awarded as compensation for (a) the taking of Tenant’s personal property that was installed at Tenant’s expense and (b) the costs of Tenant moving to a new location. Except as set forth in the previous sentence, any award for such taking shall be the property of Landlord.
25.4 If, upon any taking of the nature described in this Article, this Lease continues in effect, then Landlord shall promptly proceed to restore the Affected Areas to substantially their same condition prior to such partial taking. To the extent such restoration is infeasible, as determined by Landlord in its sole and absolute discretion, the Rent shall be decreased proportionately to reflect the loss of any portion of the Premises no longer available to Tenant. Notwithstanding anything to the contrary contained in this Article, Landlord shall not be required to restore the Affected Areas to the extent that Landlord is prohibited from doing so by any applicable Loan Document or any Lender whose consent is required thereunder withholds its consent.
25.5 This Article sets forth the terms and conditions upon which this Lease may terminate in the event of any taking. Accordingly, the parties hereby waive the provisions of California Code of Civil Procedure Section 1265.130 (and any successor statutes) permitting the parties to terminate this Lease as a result of any taking.
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26. Surrender.
26.1 At least thirty (30) days prior to Tenant’s surrender of possession of any part of the Premises, Tenant shall provide Landlord with a facility decommissioning and Hazardous Materials closure plan for the Premises (“Exit Survey”) prepared by an independent third party state-certified professional with appropriate expertise, which Exit Survey must be reasonably acceptable to Landlord. The Exit Survey shall comply with the American National Standards Institute’s Laboratory Decommissioning guidelines (ANSI/AIHA Z9.11-2008) or any successor standards published by ANSI or any successor organization (or, if ANSI and its successors no longer exist, a similar entity publishing similar standards). In addition, at least ten (10) days prior to Tenant’s surrender of possession of any part of the Premises, Tenant shall (a) provide Landlord with written evidence of all appropriate governmental releases obtained by Tenant in accordance with Applicable Laws, including laws pertaining to the surrender of the Premises, (b) without limiting Tenant’s right to remove Tenant’s personal property and equipment upon the expiration or earlier termination of this Lease (except as may be limited by the terms of Section 17.7 above), place Laboratory Equipment Decontamination Forms on all decommissioned equipment to assure safe occupancy by future users and (c) conduct a site inspection with Landlord. In addition, Tenant agrees to remain responsible after the surrender of the Premises for the remediation of any recognized environmental conditions set forth in the Exit Survey and comply with any recommendations set forth in the Exit Survey. Tenant’s obligations under this Section shall survive the expiration or earlier termination of the Lease.
26.2 No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder, unless such surrender is accepted in writing by Landlord.
26.3 The voluntary or other surrender of this Lease by Tenant shall not effect a merger with Landlord’s fee title or leasehold interest in the Premises, the Building, the Property or the Project, unless Landlord consents in writing, and shall, at Landlord’s option, operate as an assignment to Landlord of any or all subleases.
26.4 The voluntary or other surrender of any ground or other underlying lease that now exists or may hereafter be executed affecting the Building or the Project, or a mutual cancellation thereof or of Landlord’s interest therein by Landlord and its lessor shall not effect a merger with Landlord’s fee title or leasehold interest in the Premises, the Building or the Property and shall, at the option of the successor to Landlord’s interest in the Building or the Project, as applicable, operate as an assignment of this Lease.
27. Holding Over.
27.1 If, with Landlord’s prior written consent, Tenant holds possession of all or any part of the Premises after the Term, Tenant shall become a tenant from month to month after the expiration or earlier termination of the Term, and in such case Tenant shall continue to pay (a) Base Rent in accordance with Article 7, as adjusted in accordance with Article 8, and (b) any amounts for which Tenant would otherwise be liable under this Lease if the Lease were still in effect, including payments for Tenant’s Adjusted Share of Operating Expenses, and all other Additional Rent. Any such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein.
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27.2 Notwithstanding the foregoing, if Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without Landlord’s prior written consent, (a) Tenant shall become a tenant at sufferance subject to the terms and conditions of this Lease, except that the monthly rent shall be equal to one hundred fifty percent (150%) of the Rent in effect during the last thirty (30) days of the Term, and (b) Tenant shall be liable to Landlord for any and all damages suffered by Landlord as a result of such holdover, including any lost rent or consequential, special and indirect damages (in each case, regardless of whether such damages are foreseeable).
27.3 Acceptance by Landlord of Rent after the expiration or earlier termination of the Term shall not result in an extension, renewal or reinstatement of this Lease.
27.4 The foregoing provisions of this Article are in addition to and do not affect Landlord’s right of reentry or any other rights of Landlord hereunder or as otherwise provided by Applicable Laws.
27.5 The provisions of this Article shall survive the expiration or earlier termination of this Lease.
28. Indemnification and Exculpation.
28.1 Tenant agrees to Indemnify the Landlord Indemnitees from and against any and all Claims of any kind or nature, real or alleged, arising from (a) injury to or death of any person or damage to any property occurring within or about the Premises, the Building, the Property or the Project, arising directly or indirectly out of (i) the presence at or use or occupancy of the Premises or Project by a Tenant Party or (ii) an act or omission on the part of any Tenant Party, (b) a breach or default by Tenant in the performance of any of its obligations hereunder (including any Claim asserted by a Lender against any Landlord Indemnitees under any Loan Document as a direct result of such breach or default by Tenant) or (c) injury to or death of persons or damage to or loss of any property, real or alleged, arising from the serving of alcoholic beverages at the Premises or Project, including liability under any dram shop law, host liquor law or similar Applicable Law, except to the extent arising directly from Landlord’s and/or Landlord Indemnitees’ negligence or willful misconduct. Tenant’s obligations under this Section shall not be affected, reduced or limited by any limitation on the amount or type of damages, compensation or benefits payable by or for Tenant under workers’ compensation acts, disability benefit acts, employee benefit acts or similar legislation. Tenant’s obligations under this Section shall survive the expiration or earlier termination of this Lease.
28.2 Notwithstanding anything in this Lease to the contrary, Landlord shall not be liable to Tenant for and Tenant assumes all risk of (a) damage or losses arising from fire, electrical malfunction, gas explosion or water damage of any type (including broken water lines, malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Landlord’s willful disregard of written notice by Tenant of need for a repair that Landlord is responsible to make for an unreasonable period of time, and (b) damage to personal property or scientific research, including loss of records kept by Tenant within the Premises (in each case, regardless of whether such damages are foreseeable). Tenant further waives any claim for injury to Tenant’s business or loss of income relating to any such damage or destruction of personal
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property as described in this Section. Notwithstanding anything in the foregoing or this Lease to the contrary, except (x) as otherwise provided herein (including Section 27.2), (y) as may be provided by Applicable Laws or (z) in the event of Tenant’s breach of Article 21 or Section 26.1, in no event shall Landlord or Tenant be liable to the other for any consequential, special or indirect damages arising from this Lease, including lost profits (provided that this Subsection 28.2(z) shall not limit Tenant’s liability for Base Rent or Additional Rent pursuant to this Lease).
28.3 Landlord shall not be liable for any damages arising from any act, omission or neglect of any other tenant in the Building or the Project, or of any other third party; provided that the foregoing will not relieve Landlord of liability for Landlord Parties to the extent such liability is imposed on Landlord by the terms of this Lease.
28.4 Tenant acknowledges that security devices and services, if any, while intended to deter crime, may not in given instances prevent theft or other criminal acts. Landlord shall not be liable for injuries or losses arising from criminal acts of third parties, and Tenant assumes the risk that any security device or service may malfunction or otherwise be circumvented by a criminal, or that Landlord may decide (in its sole and absolute discretion) not to monitor any installed security devices. If Tenant desires protection against such criminal acts, then Tenant shall, at Tenant’s sole cost and expense, obtain appropriate insurance coverage. Tenant’s security programs and equipment for the Premises shall be coordinated with Landlord and subject to Landlord’s reasonable approval.
28.5 The provisions of this Article shall survive the expiration or earlier termination of this Lease.
29. Assignment or Subletting.
29.1 Except as hereinafter expressly permitted, none of the following (each, a “Transfer”), either voluntarily or by operation of Applicable Laws, shall be directly or indirectly performed without Landlord’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed): (a) Tenant selling, hypothecating, assigning, pledging, encumbering or otherwise transferring its interest in this Lease or subletting all or a portion of the Premises, (b) a controlling interest in Tenant being sold, assigned or otherwise transferred (other than as a result of an Exempt Transfer (as defined below) or shares in Tenant being sold on a public stock exchange) or (c) the sale of all or substantially of Tenant’s assets. For purposes of the preceding sentence, “control” means (f) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person or (g) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. Notwithstanding the foregoing, Tenant shall have the right to Transfer, without Landlord’s prior written consent, Tenant’s interest in this Lease or the Premises or any part thereof to any person that (i) acquires all or substantially all of the assets of Tenant, (ii) is a successor to Tenant by merger, consolidation or reorganization, or (iii) as of the date of determination and at all times thereafter directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Tenant (any person described in (i), (ii), or (iii), a “Tenant’s Affiliate”); provided that Tenant shall notify Landlord in writing at least thirty (30) days prior to the effectiveness of such Transfer to Tenant’s Affiliate (an “Exempt Transfer”) and otherwise comply with the requirements of this Lease regarding such Transfer; and provided, further, that
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the person that will be the tenant under this Lease after the Exempt Transfer has a net worth (as of the day immediately after the Exempt Transfer) that is equal to or greater than the net worth (as of both the Execution Date and the date of the Exempt Transfer) of the transferring Tenant. For purposes of the immediately preceding sentence, “control” requires both (m) owning (directly or indirectly) more than fifty percent (50%) of the stock or other equity interests of another person and (n) possessing, directly or indirectly, the power to direct or cause the direction of the management and policies of such person. In no event shall Tenant perform a Transfer to or with an entity that is a tenant at the Project or that is in discussions or negotiations with Landlord or an affiliate of Landlord to lease premises at the Project or a property owned by Landlord or an affiliate of Landlord.
29.2 In the event Tenant desires to effect a Transfer, then, at least thirty (30) but not more than ninety (90) days prior to the date when Tenant desires the Transfer to be effective (the “Transfer Date”), Tenant shall provide written notice to Landlord (the “Transfer Notice”) containing information (including references) concerning the character of the proposed transferee, assignee or sublessee; the Transfer Date; the most recent unconsolidated financial statements of Tenant and of the proposed transferee, assignee or sublessee satisfying the requirements of Section 40.2 (“Required Financials”); any ownership or commercial relationship between Tenant and the proposed transferee, assignee or sublessee; copies of Hazardous Materials Documents for the proposed transferee, assignee or sublessee; and the consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord shall reasonably require.
29.3 Landlord, in determining whether consent should be given to a proposed Transfer, may give consideration to such factors as Landlord reasonably deems material, including (a) the financial strength of Tenant and of such transferee, assignee or sublessee (notwithstanding Tenant remaining liable for Tenant’s performance), (b) any change in use that such transferee, assignee or sublessee proposes to make in the use of the Premises and (c) Landlord’s desire to exercise its rights under Section 29.7 to recapture the Premises. In no event shall Landlord be deemed to be unreasonable for declining to consent to a Transfer if any applicable Loan Document prohibits such assignment or any Lender whose consent is required thereunder withholds its consent, or if the Transfer is to a transferee, assignee or sublessee of poor reputation, lacking financial qualifications or seeking a change in the Permitted Use, or jeopardizing directly or indirectly the status of Landlord or any of Landlord’s affiliates as a Real Estate Investment Trust under the Internal Revenue Code of 1986 (as the same may be amended from time to time, the “Revenue Code”). Notwithstanding anything contained in this Lease to the contrary, (w) no Transfer shall be consummated on any basis such that the rental or other amounts to be paid by the occupant, assignee, manager or other transferee thereunder would be based, in whole or in part, on the income or profits derived by the business activities of such occupant, assignee, manager or other transferee; (x) Tenant shall not furnish or render any services to an occupant, assignee, manager or other transferee with respect to whom transfer consideration is required to be paid, or manage or operate the Premises or any capital additions so transferred, with respect to which transfer consideration is being paid; (y) Tenant shall not consummate a Transfer with any person in which Landlord owns an interest, directly or indirectly (by applying constructive ownership rules set forth in Section 856(d)(5) of the Revenue Code); and (z) Tenant shall not consummate a Transfer with any person or in any manner that could cause any portion of the amounts received by Landlord pursuant to this Lease or any sublease, license or other arrangement for the right to use, occupy or possess any portion of the Premises to fail to qualify as “rents from real property” within the
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meaning of Section 856(d) of the Revenue Code, or any similar or successor provision thereto or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the Revenue Code. Notwithstanding anything in this Lease to the contrary, if (a) Tenant or any proposed transferee, assignee or sublessee of Tenant has been required by any prior landlord, Lender or Governmental Authority to take material remedial action in connection with Hazardous Materials contaminating a property if the contamination resulted from such party’s action or omission or use of the property in question or (b) Tenant or any proposed transferee, assignee or sublessee is subject to a material enforcement order issued by any Governmental Authority in connection with the use, disposal or storage of Hazardous Materials, then Landlord shall have the right to terminate this Lease in Landlord’s sole and absolute discretion (with respect to any such matter involving Tenant), and it shall not be unreasonable for Landlord to withhold its consent to any proposed transfer, assignment or subletting (with respect to any such matter involving a proposed transferee, assignee or sublessee).
29.4 The following are conditions precedent to a Transfer or to Landlord considering a request by Tenant to a Transfer:
(a) Tenant shall remain fully liable under this Lease. Tenant agrees that it shall not be (and shall not be deemed to be) a guarantor or surety of this Lease, however, and waives its right to claim that is it is a guarantor or surety or to raise in any legal proceeding any guarantor or surety defenses permitted by this Lease or by Applicable Laws;
(b) If Tenant or the proposed transferee, assignee or sublessee does not or cannot deliver the Required Financials, then unless otherwise agreed to in writing by Landlord in Landlord’s sole and absolute discretion, Tenant’s ultimate parent company or the proposed transferee’s, assignee’s or sublessee’s ultimate parent company will provide a guaranty of the applicable entity’s obligations under this Lease, in a form acceptable to Landlord, which guaranty shall be executed and delivered to Landlord by the applicable guarantor prior to the Transfer Date;
(c) In the case of an Exempt Transfer, Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the Transfer qualifies as an Exempt Transfer;
(d) Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the value of Landlord’s interest under this Lease shall not be diminished or reduced by the proposed Transfer. Such evidence shall include evidence respecting the relevant business experience and financial responsibility and status of the proposed transferee, assignee or sublessee;
(e) Tenant shall reimburse Landlord for Landlord’s actual costs and expenses, including reasonable attorneys’ fees, charges and disbursements incurred in connection with the review, processing and documentation of such request [***];
(f) Except in connection with an Exempt Transfer, if Tenant’s transfer of rights or sharing of the Premises provides for the receipt by, on behalf of or on account of Tenant of any consideration of any kind whatsoever (including a premium rental for a sublease or lump sum payment for an assignment, but excluding Tenant’s reasonable costs in marketing and subleasing the Premises) in excess of the rental and other charges due to Landlord under this Lease, Tenant shall (unless Landlord directs in writing otherwise) pay fifty percent (50%) of all of such excess to Landlord, after making deductions for any reasonable marketing expenses, tenant improvement funds expended by Tenant, alterations, cash concessions, brokerage commissions, attorneys’ fees actually paid by Tenant and/or free rent actually granted by Tenant. If such consideration consists of cash paid to Tenant, payment to Landlord shall be made upon receipt by Tenant of such cash payment;
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(g) The proposed transferee, assignee or sublessee shall agree that, in the event Landlord gives such proposed transferee, assignee or sublessee notice that Tenant is in default under this Lease, such proposed transferee, assignee or sublessee shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments shall be received by Landlord without any liability being incurred by Landlord, except to credit such payment against those due by Tenant under this Lease, and any such proposed transferee, assignee or sublessee shall agree to attorn to Landlord or its successors and assigns should this Lease be terminated for any reason; provided, however, that in no event shall Landlord or its Lenders, successors or assigns be obligated to accept such attornment;
(h) Landlord’s consent to any such Transfer shall be effected on Landlord’s forms;
(i) Tenant shall not then be in default hereunder in any respect;
(j) Such proposed transferee, assignee or sublessee’s use of the Premises shall be the same as the Permitted Use;
(k) Landlord shall not be bound by any provision of any agreement pertaining to the Transfer, except for Landlord’s written consent to the same;
(l) Tenant shall pay all transfer and other taxes (including interest and penalties) assessed or payable for any Transfer;
(m) Landlord’s consent (or waiver of its rights) for any Transfer shall not waive Landlord’s right to consent or refuse consent to any later Transfer;
(n) Tenant shall deliver to Landlord one executed copy of any and all written instruments evidencing or relating to the Transfer (provided that in the event any such documents contain information which is subject to a confidentiality agreement, Landlord will execute a commercially reasonable non-disclosure agreement prior to the disclosure of such documents); and
(o) Tenant shall deliver to Landlord a list of Hazardous Materials (as defined below), certified by the proposed transferee, assignee or sublessee to be true and correct, that the proposed transferee, assignee or sublessee intends to use or store in the Premises. Additionally, Tenant shall deliver to Landlord, on or before the date any proposed transferee, assignee or sublessee takes occupancy of the Premises, all of the items relating to Hazardous Materials of such proposed transferee, assignee or sublessee as described in Section 21.2.
29.5 Any Transfer that is not in compliance with the provisions of this Article or with respect to which Tenant does not fulfill its obligations pursuant to this Article shall (a) constitute a Default, (b) be voidable by Landlord and (c), at Landlord’s option, terminate this Lease, except for those provisions that, by their express terms, survive the expiration or earlier termination hereof.
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29.6 Notwithstanding any Transfer, Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due or to become due hereunder, and for the full performance of all other terms, conditions and covenants to be kept and performed by Tenant. The acceptance of Rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant or condition thereof, from any person or entity other than Tenant shall not be deemed a waiver of any of the provisions of this Lease or a consent to any Transfer.
29.7 If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this Lease to a proposed transferee, assignee or sublessee, then Landlord shall have the option, exercisable by giving notice to Tenant at any time within thirty (30) days after Landlord’s receipt of such Transfer Notice, to terminate this Lease as of the date specified in the Transfer Notice as the Transfer Date, except for those provisions that, by their express terms, survive the expiration or earlier termination hereof. If Landlord exercises such option, then Tenant shall have the right to withdraw such Transfer Notice by delivering to Landlord written notice of such election within five (5) days after Landlord’s delivery of notice electing to exercise Landlord’s option to terminate this Lease. In the event Tenant withdraws the Transfer Notice as provided in this Section, this Lease shall continue in full force and effect. No failure of Landlord to exercise its option to terminate this Lease shall be deemed to be Landlord’s consent to a proposed Transfer.
29.8 If Tenant sublets the Premises or any portion thereof, Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations under this Lease, all rent from any such subletting, and appoints Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a receiver for Tenant appointed on Landlord’s application) may collect such rent and apply it toward Tenant’s obligations under this Lease; provided that, until the occurrence of a Default (as defined below) by Tenant, Tenant shall have the right to collect such rent.
29.9 In the event that Tenant enters into a sublease for the entire Premises in accordance with this Article that expires within two (2) days of the Term Expiration Date, the term expiration date of such sublease shall, notwithstanding anything in this Lease, the sublease or any consent to the sublease to the contrary, be deemed to be the date that is two (2) days prior to the Term Expiration Date.
30. Subordination and Attornment.
30.1 This Lease shall be subject and subordinate to the lien of any mortgage, deed of trust, or lease in which Landlord is tenant now or hereafter in force against the Building or the Project and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such subordination.
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30.2 Notwithstanding the foregoing, Tenant shall execute and deliver within ten (10) business days following written request therefor, such further instrument or instruments evidencing such subordination of this Lease to the lien of any such mortgage or mortgages or deeds of trust or lease in which Landlord is tenant as may be required by Landlord. If any Lender so elects, however, Tenant’s leasehold shall be deemed prior to any such lease, mortgage, or deed of trust upon or including the Premises regardless of date and Tenant shall execute a statement in writing to such effect at Landlord’s request. If Tenant fails to execute any document required from Tenant under this Section within ten (10) business days after written request therefor, and such failure continues for a period of three (3) business days following Landlord’s delivery to Tenant of a written notice of such failure, Tenant hereby constitutes and appoints Landlord or its special attorney-in-fact to execute and deliver any such document or documents in the name of Tenant. Such power is coupled with an interest and is irrevocable. For the avoidance of doubt, “Lenders” shall also include historic tax credit investors and new market tax credit investors.
30.3 Upon written request of Landlord and opportunity for Tenant to review, Tenant agrees to execute any Lease amendments not materially altering the terms of this Lease, if required by a Lender incident to the financing of the real property of which the Premises constitute a part.
30.4 In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage or deed of trust made by Landlord covering the Premises, Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this Lease.
31. Defaults and Remedies.
31.1 Late payment by Tenant to Landlord of Rent and other sums due shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult and impracticable to ascertain. Such costs include processing and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within three (3) days after the date such payment is due, Tenant shall pay to Landlord (a) an additional sum of six percent (6%) of the overdue Rent as a late charge plus (b) interest at an annual rate (the “Default Rate”) equal to the lesser of (a) twelve percent (12%) and (b) the highest rate permitted by Applicable Laws. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord shall incur by reason of late payment by Tenant and shall be payable as Additional Rent to Landlord due with the next installment of Rent or within five (5) business days after Landlord’s demand, whichever is earlier. Landlord’s acceptance of any Additional Rent (including a late charge or any other amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity. [***].
31.2 No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of such Rent or pursue any other remedy provided in this Lease or in equity or at law.
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31.3 If Tenant fails to pay any sum of money required to be paid by it hereunder or perform any other act on its part to be performed hereunder, in each case within the applicable cure period (if any) described in Section 31.4, then Landlord may (but shall not be obligated to), without waiving or releasing Tenant from any obligations of Tenant, make such payment or perform such act; provided that such failure by Tenant unreasonably interfered with the use of the Building or the Project by any other tenant or with the efficient operation of the Building or the Project, or resulted or could have resulted in a violation of Applicable Laws or the cancellation of an insurance policy maintained by Landlord. Notwithstanding the foregoing, in the event of an emergency, Landlord shall have the right to enter the Premises and act in accordance with its rights as provided elsewhere in this Lease. In addition to the late charge described in Section 31.1, Tenant shall pay to Landlord as Additional Rent all sums so paid or incurred by Landlord, together with interest at the Default Rate, computed from the date such sums were paid or incurred.
31.4 The occurrence of any one or more of the following events shall constitute a “Default” hereunder by Tenant:
(a) Tenant vacates the Premises and makes a statement in writing (which shall include e-mail) or issues a public statement that Tenant will not continue to satisfy all other terms and conditions of this Lease or Tenant abandons the Premises;
(b) Tenant fails to make any payment of Rent (as and when due) or to satisfy its obligations under Article 19, where such failure shall continue for a period of three (3) days after written notice thereof from Landlord to Tenant;
(c) Tenant fails to observe or perform any obligation or covenant contained herein (other than described in Sections 31.4(a) and 31.4(b)) to be performed by Tenant, where such failure continues for a period of twenty (20) days after written notice thereof from Landlord to Tenant; provided that, if the nature of Tenant’s default is such that it reasonably requires more than twenty (20) days to cure, Tenant shall not be deemed to be in Default if Tenant commences such cure within such twenty (20) day period and thereafter diligently prosecutes the same to completion; and provided, further, that such cure is completed no later than sixty (60) days after Tenant’s receipt of written notice from Landlord;
(d) Tenant makes an assignment for the benefit of creditors;
(e) A receiver, trustee or custodian is appointed to or does take title, possession or control of all or substantially all of Tenant’s assets;
(f) Tenant files a voluntary petition under the United States Bankruptcy Code or any successor statute (as the same may be amended from time to time, the “Bankruptcy Code”) or an order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code;
(g) Any involuntary petition is filed against Tenant under any chapter of the Bankruptcy Code and is not dismissed within one hundred twenty (120) days;
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(h) Tenant fails to deliver an estoppel certificate in accordance with Article 20 and such failure continues for a period of three (3) business days following Landlord’s delivery to Tenant of a written notice of such failure; or
(i) Tenant’s interest in this Lease is attached, executed upon or otherwise judicially seized and such action is not released within one hundred twenty (120) days of the action.
Notices given under this Section shall specify the alleged default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice.
31.5 In the event of a Chronic Delinquency (as defined below), Landlord may, in addition to all other remedies under this Lease, at law or in equity, require that Tenant thereafter pay Rent quarterly in advance. This provision shall not limit in any way nor be construed as a waiver of Landlord’s rights and remedies contained in this Lease, at law or in equity in the event of a default. “Chronic Delinquency” means that Tenant commits a Default pursuant to Section 31.4(b) three (3) times in any twelve (12) month period.
31.6 In the event of a Default by Tenant, and at any time thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy that Landlord may have, Landlord has the right to do any or all of the following:
(a) Halt any Tenant Improvements and Alterations and order Tenant’s contractors, subcontractors, consultants, designers and material suppliers to stop work;
(b) Terminate Tenant’s right to possession of the Premises by written notice to Tenant or by any lawful means, in which case Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby; and
(c) Terminate this Lease, in which event Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby. In the event that Landlord shall elect to so terminate this Lease, then Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including:
(i) The sum of:
A. The worth at the time of award of any unpaid Rent that had accrued at the time of such termination; plus
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B. The worth at the time of award of the amount by which the unpaid Rent that would have accrued during the period commencing with termination of the Lease and ending at the time of award exceeds that portion of the loss of Landlord’s rental income from the Premises that Tenant proves to Landlord’s reasonable satisfaction could have been reasonably avoided; plus
C. The worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds that portion of the loss of Landlord’s rental income from the Premises that Tenant proves to Landlord’s reasonable satisfaction could have been reasonably avoided; plus
D. Any other amount necessary to compensate Landlord for all the detriment arising from Tenant’s failure to perform its obligations under this Lease or that in the ordinary course of things would be likely to result therefrom, including the cost of restoring the Premises to the condition required under the terms of this Lease, including any rent payments not otherwise chargeable to Tenant (e.g., during any “free” rent period or rent holiday); plus
E. At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Laws; or
(ii) [intentionally omitted]
As used in Sections 31.6(c)(i)(A) and (B), “worth at the time of award” shall be computed by allowing interest at the Default Rate. As used in Section 31.6(c)(i)(C), the “worth at the time of the award” shall be computed by taking the present value of such amount, using the Discount Rate.
31.7 In addition to any other remedies available to Landlord at law or in equity and under this Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 and may continue this Lease in effect after Tenant’s Default or abandonment and recover Rent as it becomes due, provided Tenant has the right to sublet or assign, subject only to reasonable limitations. In addition, Landlord shall not be liable in any way whatsoever for its failure or refusal to relet the Premises (provided, however, Landlord agrees that such limitation is not intended to eliminate any requirement that Landlord may have under any applicable California Laws which may require Landlord to mitigate Landlord’s damages in the event of a default by Tenant). For purposes of this Section, the following acts by Landlord will not constitute the termination of Tenant’s right to possession of the Premises:
(a) Acts of maintenance or preservation or efforts to relet the Premises, including alterations, remodeling, redecorating, repairs, replacements or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof; or
(b) The appointment of a receiver upon the initiative of Landlord to protect Landlord’s interest under this Lease or in the Premises.
Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may elect at any time to terminate this Lease and to recover damages to which Landlord is entitled.
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31.8 If Landlord does not elect to terminate this Lease as provided in Section 31.6, then Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled.
31.9 In the event Landlord elects to terminate this Lease and relet the Premises, Landlord may execute any new lease in its own name. Tenant shall have no right or authority whatsoever to collect any Rent from such tenant. The proceeds of any such reletting shall be applied as follows:
(a) First, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord, including storage charges or brokerage commissions owing from Tenant to Landlord as the result of such reletting;
(b) Second, to the payment of the costs and expenses of reletting the Premises, including (i) alterations and repairs that Landlord deems reasonably necessary and advisable and (ii) reasonable attorneys’ fees, charges and disbursements incurred by Landlord in connection with the retaking of the Premises and such reletting;
(c) Third, to the payment of Rent and other charges due and unpaid hereunder; and
(d) Fourth, to the payment of future Rent and other damages payable by Tenant under this Lease.
31.10 All of Landlord’s rights, options and remedies hereunder shall be construed and held to be nonexclusive and cumulative. Landlord shall have the right to pursue any one or all of such remedies, or any other remedy or relief that may be provided by Applicable Laws, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any acceptance by Landlord of any Rent or other payments due hereunder or any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified in such waiver. Landlord shall not be required to mitigate its damages with respect to any default by Tenant, except to the extent required by Applicable Laws. Any such obligation imposed by Applicable Laws upon Landlord to relet the Premises after any termination of this Lease shall be subject to the reasonable requirements of Landlord to (a) lease to high quality tenants on such terms as Landlord may from time to time deem appropriate in its discretion and (b) develop the Project in a harmonious manner with a mix of uses, tenants, floor areas, terms of tenancies, etc., as determined by Landlord. Landlord shall not be obligated to relet the Premises to (y) any Tenant’s Affiliate or (z) any party (i) unacceptable to a Lender, (ii) that requires Landlord to make improvements to or re-demise the Premises, (iii) that desires to change the Permitted Use, (iv) that desires to lease the Premises for more or less than the remaining Term or (v) to whom Landlord or an affiliate of Landlord may desire to lease other available space in the Project or at another property owned by Landlord or an affiliate of Landlord.
31.11 Landlord’s termination of (a) this Lease or (b) Tenant’s right to possession of the Premises shall not relieve Tenant of any liability to Landlord that has previously accrued or that shall arise based upon events that occurred prior to the later to occur of (y) the date of Lease termination and (z) the date Tenant surrenders possession of the Premises.
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31.12 To the extent permitted by Applicable Laws, Tenant waives any and all rights of redemption granted by or under any present or future Applicable Laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains possession of the Premises due to Tenant’s default hereunder or otherwise.
31.13 Landlord shall not be in default or liable for damages under this Lease unless Landlord fails to perform obligations required of Landlord within a reasonable time, but in no event shall such failure continue for more than thirty (30) days after written notice from Tenant specifying the nature of Landlord’s failure; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate or cancel this Lease or to withhold or abate rent or to set off any Claims against Rent as a result of any default or breach by Landlord of any of its covenants, obligations, representations, warranties or promises hereunder, except as may otherwise be expressly set forth in this Lease.
31.14 In the event of any default by Landlord, Tenant shall give notice by registered or certified mail to any (a) beneficiary of a deed of trust or (b) mortgagee under a mortgage covering the Premises, the Building or the Project and to any landlord of any lease of land upon or within which the Premises, the Building or the Project is located, and shall offer such beneficiary, mortgagee or landlord a reasonable opportunity to cure the default, including time to obtain possession of the Building or the Project by power of sale or a judicial action if such should prove necessary to effect a cure; provided that Landlord shall have previously furnished to Tenant in writing the names and addresses of all such persons who are to receive such notices.
32. Bankruptcy. In the event a debtor, trustee or debtor in possession under the Bankruptcy Code, or another person with similar rights, duties and powers under any other Applicable Laws, proposes to cure any default under this Lease or to assume or assign this Lease and is obliged to provide adequate assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be compensated for its damages arising from any breach of this Lease and (c) future performance of Tenant’s obligations under this Lease shall occur, then such adequate assurances shall include any or all of the following, as designated by Landlord in its sole and absolute discretion:
32.1 Those acts specified in the Bankruptcy Code or other Applicable Laws as included within the meaning of “adequate assurance,” even if this Lease does not concern a shopping center or other facility described in such Applicable Laws;
32.2 A prompt cash payment to compensate Landlord for any monetary defaults or actual damages arising directly from a breach of this Lease;
32.3 A cash deposit in an amount at least equal to the then-current amount of the Security Deposit; or
32.4 The assumption or assignment of all of Tenant’s interest and obligations under this Lease.
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33. Brokers.
33.1 Tenant represents and warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than Rich Danesi of CBRE (“Broker”), and that it knows of no other real estate broker or agent that is or might be entitled to a commission in connection with this Lease. Landlord shall compensate Broker in relation to this Lease pursuant to a separate agreement between Landlord and Broker.
33.2 Tenant represents and warrants that no broker or agent has made any representation or warranty relied upon by Tenant in Tenant’s decision to enter into this Lease, other than as contained in this Lease.
33.3 Tenant acknowledges and agrees that the employment of brokers by Landlord is for the purpose of solicitation of offers of leases from prospective tenants and that no authority is granted to any broker to furnish any representation (written or oral) or warranty from Landlord unless expressly contained within this Lease. Landlord is executing this Lease in reliance upon Tenant’s representations, warranties and agreements contained within Sections 33.1 and 33.2.
33.4 Tenant agrees to Indemnify the Landlord Indemnitees from any and all cost or liability for compensation claimed by any broker or agent, other than Broker, employed or engaged by Tenant or claiming to have been employed or engaged by Tenant.
34. Definition of Landlord. With regard to obligations imposed upon Landlord pursuant to this Lease, the term “Landlord,” as used in this Lease, shall refer only to Landlord or Landlord’s then-current successor-in-interest. In the event of any transfer, assignment or conveyance of Landlord’s interest in this Lease or in Landlord’s fee title to or leasehold interest in the Property, as applicable, Landlord herein named (and in case of any subsequent transfers or conveyances, the subsequent Landlord) shall be automatically freed and relieved, from and after the date of such transfer, assignment or conveyance, from all liability for the performance of any covenants or obligations contained in this Lease thereafter to be performed by Landlord and, without further agreement, the transferee, assignee or conveyee of Landlord’s in this Lease or in Landlord’s fee title to or leasehold interest in the Property, as applicable, shall be deemed to have assumed and agreed to observe and perform any and all covenants and obligations of Landlord hereunder during the tenure of its interest in the Lease or the Property. Landlord or any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenant’s consent.
35. Limitation of Landlord’s Liability.
35.1 If Landlord is in default under this Lease and, as a consequence, Tenant recovers a monetary judgment against Landlord, the judgment shall be satisfied only out of (a) the proceeds of sale received on execution of the judgment and levy against the right, title and interest of Landlord in the Building and the Project, (b) rent or other income from such real property receivable by Landlord or (c) the consideration received by Landlord from the sale, financing, refinancing or other disposition of all or any part of Landlord’s right, title or interest in the Building or the Project.
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35.2 Neither Landlord nor any of its affiliates, nor any of their respective partners, shareholders, directors, officers, employees, members or agents shall be personally liable for Landlord’s obligations or any deficiency under this Lease, and service of process shall not be made against any shareholder, director, officer, employee or agent of Landlord or any of Landlord’s affiliates. No partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates shall be sued or named as a party in any suit or action, and service of process shall not be made against any partner or member of Landlord except as may be necessary to secure jurisdiction of the partnership, joint venture or limited liability company, as applicable. No partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates shall be required to answer or otherwise plead to any service of process, and no judgment shall be taken or writ of execution levied against any partner, shareholder, director, officer, employee, member or agent of Landlord or any of its affiliates.
35.3 Each of the covenants and agreements of this Article shall be applicable to any covenant or agreement either expressly contained in this Lease or imposed by Applicable Laws and shall survive the expiration or earlier termination of this Lease.
36. Joint and Several Obligations. If more than one person or entity executes this Lease as Tenant, then:
36.1 Each of them is jointly and severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed or performed by Tenant, and such terms, covenants, conditions, provisions and agreements shall be binding with the same force and effect upon each and all of the persons executing this Agreement as Tenant; and
36.2 The term “Tenant,” as used in this Lease, means and includes each of them, jointly and severally. The act of, notice from, notice to, refund to, or signature of any one or more of them with respect to the tenancy under this Lease, including any renewal, extension, expiration, termination or modification of this Lease, shall be binding upon each and all of the persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted, so given or received such notice or refund, or so signed.
37. Representations. Tenant guarantees, warrants and represents that (a) Tenant is duly incorporated or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Tenant has and is duly qualified to do business in the state in which the Property is located, (c) Tenant has full corporate, partnership, trust, association or other appropriate power and authority to enter into this Lease and to perform all Tenant’s obligations hereunder, (d) each person (and all of the persons if more than one signs) signing this Lease on behalf of Tenant is duly and validly authorized to do so and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or conflict with any provision of documents or instruments under which Tenant is constituted or to which Tenant is a party. In addition, Tenant guarantees, warrants and represents that none of (x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its members, shareholders or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action.
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38. Confidentiality. Tenant shall keep the terms and conditions of this Lease and any information provided to Tenant or its employees, agents or contractors pursuant to Article 9 confidential and shall not (a) disclose to any third party any terms or conditions of this Lease or any other Lease-related document (including subleases, assignments, work letters, construction contracts, letters of credit, subordination agreements, non-disturbance agreements, brokerage agreements or estoppels) or the contents of any documents, reports, surveys or evaluations related to the Project or any portion thereof or (b) provide to any third party an original or copy of this Lease (or any Lease-related document or other document referenced in Subsection 38(a)). Landlord shall not release to any third party any non-public financial information, non-public information about Tenant’s ownership structure or other information provided to Landlord by Tenant which is marked as confidential at the time it is disclosed to Landlord that Tenant gives Landlord. Notwithstanding the foregoing, confidential information under this Section may be released by Landlord or Tenant under the following circumstances: (x) if required by Applicable Laws or in any judicial proceeding; provided that the releasing party has given the other party reasonable notice of such requirement, if feasible, (y) to a party’s attorneys, accountants, brokers, lenders, potential lenders, investors, potential investors and other bona fide consultants or advisers (with respect to this Lease only); provided such third parties agree to be bound by this Section or (z) to bona fide prospective assignees or subtenants of this Lease; provided they agree in writing to be bound by this Section.
39. Notices. Except as otherwise stated in this Lease, any notice, consent, demand, invoice, statement or other communication required or permitted to be given hereunder shall be in writing and shall be given by (a) personal delivery, (b) overnight delivery with a reputable international overnight delivery service, such as FedEx, or (c) email transmission, so long as such transmission is followed within one (1) business day by delivery utilizing one of the methods described in Subsection 39(a) or (b), provided that, for purposes of this Subsection 39(c), if delivery utilizing one of the other methods described in Subsection 39(a) or (b) is not reasonably practicable due to an event of Force Majeure (as defined below), then such requirement shall be waived for deliveries by email transmission so long as either the receiving party responds to the sending party confirming receipt of the applicable email transmission, or the sending party receives other electronic confirmation that the email transmission was received and read by the receiving party, such as a “read receipt” notice. Any such notice, consent, demand, invoice, statement or other communication shall be deemed delivered (x) upon receipt, if given in accordance with Subsection 39(a); (y) one (1) business day after deposit with a reputable international overnight delivery service, if given in accordance with Subsection 39(b); or (z) upon transmission, if given in accordance with Subsection 39(c). Except as otherwise stated in this Lease, any notice, consent, demand, invoice, statement or other communication required or permitted to be given pursuant to this Lease shall be addressed to Landlord or Tenant at the addresses shown in Sections 2.9 and 2.10 or 2.11, respectively. Either party may, by notice to the other given pursuant to this Section, specify additional or different addresses for notice purposes.
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40. Miscellaneous.
40.1 Landlord reserves the right to change the name of the Building or the Project in its sole discretion.
40.2 To induce Landlord to enter into this Lease, Tenant agrees that it shall furnish to Landlord, from time to time (but not more often than one (1) time per twelve (12) month period unless Tenant is in default or in connection with a sale or refinancing of the Project), within ten (10) business days after receipt of Landlord’s written request, the most recent year-end unconsolidated financial statements reflecting Tenant’s current financial condition audited by a nationally recognized accounting firm. Upon request from Landlord, Tenant shall, within ninety (90) days after the end of Tenant’s financial year, furnish Landlord with a certified copy of Tenant’s year-end unconsolidated financial statements for the previous year audited by a nationally recognized accounting firm. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in all respects. If audited financials are not otherwise prepared, unaudited financials complying with generally accepted accounting principles and certified by the chief financial officer of Tenant as true, correct and complete in all respects shall suffice for purposes of this Section. If Tenant fails to deliver to Landlord any financial statement within the time period required under this Section and such failure is not cured within five (5) business days following Landlord’s delivery to Tenant of a written notice of such failure, then Tenant shall be required to pay to Landlord an administrative fee equal to One Thousand Dollars ($1,000) within five (5) business days after receiving written notice from Landlord advising Tenant of such failure (provided, however, that Landlord’s acceptance of such fee shall not prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity). The provisions of this Section shall not apply at any time while Tenant is a corporation whose shares are traded on any nationally recognized stock exchange. It is agreed that the provisions of Section 38 above shall apply with respect to any financials delivered by Tenant under this Section 40.2.
40.3 Submission of this instrument for examination or signature by Tenant does not constitute a reservation of or option for a lease, and shall not be effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant.
40.4 The terms of this Lease are intended by the parties as a final, complete and exclusive expression of their agreement with respect to the terms that are included herein, and may not be contradicted or supplemented by evidence of any other prior or contemporaneous agreement.
40.5 Landlord may, but shall not be obligated to, record a short form or memorandum hereof without Tenant’s consent. Within ten (10) days after receipt of written request from Landlord, Tenant shall execute a termination of any short form or memorandum of lease recorded with respect hereto. Neither party shall record this Lease.
40.6 Where applicable in this Lease, the singular includes the plural and the masculine or neuter includes the masculine, feminine and neuter. The words “include,” “includes,” “included” and “including” mean “‘include,’ etc., without limitation.” The word “shall” is mandatory and the word “may” is permissive. The word “business day” means a calendar day other than any national or local holiday on which federal government agencies in the County of
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San Diego are closed for business, or any weekend. The section headings of this Lease are not a part of this Lease and shall have no effect upon the construction or interpretation of any part of this Lease. Landlord and Tenant have each participated in the drafting and negotiation of this Lease, and the language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for or against either Landlord or Tenant.
40.7 Except as otherwise expressly set forth in this Lease, each party shall pay its own costs and expenses incurred in connection with this Lease and such party’s performance under this Lease; provided that, if either party commences an action, proceeding, demand, claim, action, cause of action or suit against the other party arising from or in connection with this Lease, then the substantially prevailing party shall be reimbursed by the other party for all reasonable costs and expenses, including reasonable attorneys’ fees and expenses, incurred by the substantially prevailing party in such action, proceeding, demand, claim, action, cause of action or suit, and in any appeal in connection therewith (regardless of whether the applicable action, proceeding, demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn or dismissed). In addition, Landlord shall, upon demand, be entitled to all reasonable attorneys’ fees and all other reasonable costs incurred in the preparation and service of any notice or demand relating to a default by Tenant hereunder, regardless of whether a legal action is subsequently commenced, or incurred in connection with any contested matter or other proceeding in bankruptcy court concerning this Lease.
40.8 Time is of the essence with respect to the performance of every provision of this Lease.
40.9 Each provision of this Lease performable by Tenant shall be deemed both a covenant and a condition.
40.10 Notwithstanding anything to the contrary contained in this Lease, Tenant’s obligations under this Lease are independent and shall not be conditioned upon performance by Landlord.
40.11 Any provision of this Lease that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other provision hereof, and all other provisions of this Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist.
40.12 Each of the covenants, conditions and agreements herein contained shall inure to the benefit of and shall apply to and be binding upon the parties hereto and their respective heirs; legatees; devisees; executors; administrators; and permitted successors and assigns. This Lease is for the sole benefit of the parties and their respective heirs, legatees, devisees, executors, administrators and permitted successors and assigns, and nothing in this Lease shall give or be construed to give any other person or entity any legal or equitable rights. Nothing in this Section shall in any way alter the provisions of this Lease restricting assignment or subletting.
40.13 This Lease shall be governed by, construed and enforced in accordance with the laws of the state in which the Premises are located, without regard to such state’s conflict of law principles.
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40.14 Tenant guarantees, warrants and represents that the individual or individuals signing this Lease have the power, authority and legal capacity to sign this Lease on behalf of and to bind all entities, corporations, partnerships, limited liability companies, joint venturers or other organizations and entities on whose behalf such individual or individuals have signed.
40.15 This Lease may be executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document.
40.16 No provision of this Lease may be modified, amended or supplemented except by an agreement in writing signed by Landlord and Tenant.
40.17 No waiver of any term, covenant or condition of this Lease shall be binding upon Landlord or Tenant unless executed in writing by the waiving party. The waiver by either Landlord or Tenant of any breach or default of any term, covenant or condition contained in this Lease shall not be deemed to be a waiver of any preceding or subsequent breach or default of such term, covenant or condition or any other term, covenant or condition of this Lease.
40.18 To the extent permitted by Applicable Laws, the parties waive trial by jury in any action, proceeding or counterclaim brought by the other party hereto related to matters arising from or in any way connected with this Lease; the relationship between Landlord and Tenant; Tenant’s use or occupancy of the Premises; or any claim of injury or damage related to this Lease or the Premises.
40.19 A facsimile, electronic or portable document format (PDF) signature on this Lease or any other document required or permitted by this Lease to be delivered by Landlord or Tenant shall be equivalent to, and have the same force and effect as, an original signature.
40.20 For purposes of this Lease, “Force Majeure” means accidents; breakage; casualties (to the extent not caused by the party claiming Force Majeure); Severe Weather Conditions (as defined below); physical natural disasters (but excluding weather conditions that are not Severe Weather Conditions); strikes, lockouts or other labor disturbances or labor disputes (other than labor disturbances and labor disputes resulting solely from the acts or omissions of the party claiming Force Majeure); acts of terrorism; riots or civil disturbances; wars or insurrections; shortages of materials (which shortages are not unique to the party claiming Force Majeure); regulations, moratoria or other actions, inactions or delays by Governmental Authorities (including delays due to excess time in obtaining governmental permits or approvals beyond the time period normally required to obtain such permits or approvals); failures by third parties to deliver gas, oil or another suitable fuel supply, or inability of the party claiming Force Majeure, by exercise of reasonable diligence, to obtain gas, oil or another suitable fuel; or other causes beyond the reasonable control of the party claiming that Force Majeure has occurred. “Severe Weather Conditions” means weather conditions that are materially worse than those that would be reasonably anticipated for the Property at the applicable time based on historic meteorological records. Notwithstanding anything in this Lease to the contrary, events of Force Majeure shall excuse timely performance of a party hereunder (other than Tenant’s obligation to pay any amounts due hereunder or to timely vacate the Premises upon the expiration or earlier termination of this Lease, neither of which shall be excused by Force Majeure) for a period equal to the delay caused thereby and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by an event of Force Majeure.
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41. Rooftop Installation Area.
41.1 Tenant may use those portions of the Building identified by Landlord from time to time as a “Rooftop Installation Area” (any such areas, collectively, the “Rooftop Installation Area”) solely to operate, maintain, repair and replace rooftop antennae, communications antennas and other similar small-scale communications equipment installed by Tenant in the Rooftop Installation Area in accordance with this Article (“Tenant’s Rooftop Equipment”); provided such equipment is permitted by Applicable Laws. Tenant’s Rooftop Equipment shall be only for Tenant’s use of the Premises for the Permitted Use.
41.2 Tenant shall install Tenant’s Rooftop Equipment at its sole cost and expense, at such times and in such manner as Landlord may reasonably designate, and in accordance with this Article and the applicable provisions of this Lease regarding Alterations. Tenant’s Rooftop Equipment and the installation thereof shall be subject to Landlord’s prior written approval, which approval shall not be unreasonably withheld. Among other reasons, Landlord may withhold approval if the installation or operation of Tenant’s Rooftop Equipment could reasonably be expected to violate Applicable Laws, damage the structural integrity of the Building or to transmit vibrations or noise or cause other adverse effects beyond the Premises to an extent not customary in first class laboratory buildings, unless Tenant implements measures that are acceptable to Landlord in its reasonable discretion to avoid any such damage or transmission.
41.3 Tenant shall comply with any roof or roof-related warranties. Tenant shall obtain a letter from Landlord’s roofing contractor within thirty (30) days after completion of any Tenant work on the rooftop stating that such work did not affect any such warranties. Tenant, at its sole cost and expense, shall inspect the Rooftop Installation Area at least annually, and correct any loose bolts, fittings or other appurtenances and repair any damage to the roof arising from the installation or operation of Tenant’s Rooftop Equipment. Tenant shall not permit the installation, maintenance or operation of Tenant’s Rooftop Equipment to violate any Applicable Laws or constitute a nuisance. Tenant shall pay Landlord within thirty (30) days after demand (a) all applicable taxes, charges, fees or impositions imposed on Landlord by Governmental Authorities as the result of Tenant’s use of the Rooftop Installation Areas in excess of those for which Landlord would otherwise be responsible for the use or installation of Tenant’s Rooftop Equipment and (b) the amount of any increase in Landlord’s insurance premiums as a result of the installation of Tenant’s Rooftop Equipment. Upon Tenant’s written request to Landlord, Landlord shall use commercially reasonable efforts to cause other tenants to remedy any interference in the operation of Tenant’s Rooftop Equipment arising from any such tenants’ equipment installed after the applicable piece of Tenant’s Rooftop Equipment; provided, however, that Landlord shall not be required to request that such tenants waive their rights under their respective leases.
41.4 If Tenant’s Equipment (a) causes physical damage to the structural integrity of the Building, (b) interferes with any telecommunications, mechanical or other systems located at or near or servicing the Building or the Project that were installed prior to the installation of Tenant’s Rooftop Equipment, (c) interferes with any other service provided to other tenants in the Building or the Project by rooftop or penthouse installations that were installed prior to the installation of
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Tenant’s Rooftop Equipment or (d) interferes with any other tenants’ business, in each case in excess of that permissible under Federal Communications Commission regulations, then Tenant shall cooperate with Landlord to determine the source of the damage or interference and promptly repair such damage and eliminate such interference, in each case at Tenant’s sole cost and expense, within ten (10) days after receipt of notice of such damage or interference (which notice may be oral; provided that Landlord also delivers to Tenant written notice of such damage or interference within twenty-four (24) hours after providing oral notice).
41.5 Landlord reserves the right to cause Tenant to relocate Tenant’s Rooftop Equipment to comparably functional space on the roof or in the penthouse of the Building by giving Tenant prior written notice thereof. Landlord agrees to pay the reasonable costs thereof. Tenant shall arrange for the relocation of Tenant’s Rooftop Equipment within sixty (60) days after receipt of Landlord’s notification of such relocation. In the event Tenant fails to arrange for relocation within such sixty (60)-day period, Landlord shall have the right to arrange for the relocation of Tenant’s Rooftop Equipment in a manner that does not unnecessarily interrupt or interfere with Tenant’s use of the Premises for the Permitted Use.
42. Option to Extend Term. Tenant shall have one (1) option (“Option”) to extend the Term by either (a) five (5) years, or (b) two (2) years (with such election to be made by Tenant concurrently with Tenant’s delivery of the Exercise Notice pursuant to Section 42.3 below), in either case as to the entire Premises (and no less than the entire Premises) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as this Lease, except as follows:
42.1 Base Rent during the Option term shall equal the then-current fair market value for comparable office and laboratory space in the Torrey Pines submarket of comparable age, quality, level of finish and proximity to amenities and public transit, and containing the systems and improvements present in the Premises as of the date that Tenant gives Landlord written notice of Tenant’s election to exercise the Option (“FMV”). Tenant may, no more than twelve (12) months prior to the date the Term is then scheduled to expire, request Landlord’s estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option, such notice shall specify whether Tenant accepts Landlord’s proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (a) the size of the Premises, (b) the length of the Option term, (c) rent in comparable buildings in the relevant submarket, including concessions offered to new tenants, such as free rent, tenant improvement allowances and moving allowances, (d) Tenant’s creditworthiness and (e) the quality and location of the Building and the Project. In the event that the parties are unable to agree upon the FMV within thirty (30) days after Tenant notifies Landlord that Tenant is exercising the Option, then either party may request that the same be determined as follows: a senior officer of a nationally recognized leasing brokerage firm with local knowledge of the Torrey Pines laboratory/research and development leasing submarket (the “Baseball Arbitrator”) shall be selected and paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to agree upon the Baseball Arbitrator, then the same shall be designated by the local chapter of the Judicial Arbitration and Mediation Services or any successor organization thereto (the “JAMS”). The Baseball Arbitrator selected by the parties or designated by JAMS shall (y) have at least ten (10) years’ experience in the leasing of laboratory/research and development
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space in the Torrey Pines submarket and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to appointment pursuant hereto. Each of Landlord and Tenant shall submit to the Baseball Arbitrator and to the other party its determination of the FMV. The Baseball Arbitrator shall grant to Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall determine which of the two (2) FMV determinations more closely represents the actual FMV. The arbitrator may not select any other FMV for the Premises other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitrator shall be binding upon Landlord and Tenant and shall serve as the basis for determination of Base Rent payable for the Option term. If, as of the commencement date of the Option term, the amount of Base Rent payable during the Option term shall not have been determined, then, pending such determination, Tenant shall pay Base Rent equal to the Base Rent payable with respect to the last year of the then-current Term. After the final determination of Base Rent payable for the Option term, the parties shall promptly execute a written amendment to this Lease specifying the amount of Base Rent to be paid during the Option term. Any failure of the parties to execute such amendment shall not affect the validity of the FMV determined pursuant to this Section.
42.2 The Option is not assignable separate and apart from this Lease (other than as part of an Exempt Transfer).
42.3 The Option is conditional upon Tenant giving Landlord written notice of its election to exercise the Option at least twelve (12) months prior to the end of the expiration of the then-current Term (“Exercise Notice”). Time shall be of the essence as to Tenant’s exercise of the Option. Tenant assumes full responsibility for maintaining a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section. The Exercise Notice shall stipulate whether Tenant is electing to extend the Term by five (5) years or two (2) years (pursuant to the first grammatical sentence of this Article 42), and, in the event the Exercise Notice fails to make such stipulation, Tenant shall be deemed to have elected to extend the Term by five (5) years.
42.4 Notwithstanding anything contained in this Article to the contrary, Tenant shall not have the right to exercise the Option:
(a) During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in default under any provisions of this Lease and continuing until Tenant has cured the specified default to Landlord’s reasonable satisfaction; or
(b) At any time after any Default as described in Article 31 of the Lease (provided, however, that, for purposes of this Section 42.4(b), Landlord shall not be required to provide Tenant with notice of such Default) and continuing until Tenant cures any such Default, if such Default is susceptible to being cured; or
(c) In the event that Tenant has defaulted in the performance of its obligations under this Lease two (2) or more times during the twelve (12)-month period immediately prior to the date that Tenant intends to exercise the Option, whether or not Tenant has cured such defaults.
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42.5 The period of time within which Tenant may exercise the Option shall not be extended or enlarged by reason of Tenant’s inability to exercise such Option because of the provisions of Section 42.4.
42.6 All of Tenant’s rights under the provisions of the Option shall terminate and be of no further force or effect even after Tenant’s due and timely exercise of the Option if, after such exercise, but prior to the commencement date of the new term, (a) Tenant fails to pay to Landlord a monetary obligation of Tenant for a period of twenty (20) days after written notice from Landlord to Tenant, (b) Tenant fails to commence to cure a default (other than a monetary default) within thirty (30) days after the date Landlord gives notice to Tenant of such default or (c) Tenant has defaulted under this Lease two (2) or more times and a service or late charge under Section 31.1 has become payable for any such default, whether or not Tenant has cured such defaults.
43. 3525 John Hopkins Lease. [***].
44. 10240 Science Center Lease. [***].
45. Common Area Janitorial. Landlord shall provide janitorial services for the Common Area consistent with other Class A life science buildings in the Torrey Pines submarket.
46. Tenant Service Yard Premises. The Project includes service yard areas adjacent to the Building (such areas, collectively, as more particularly described on Exhibit O attached hereto, the “Service Yard”). Following the Execution Date, Landlord (in consultation with Tenant) shall designate dedicated space for Tenant within the Service Yard (any such designated spaces, collectively, the “Tenant Service Yard Premises”) for the sole purposes of (a) storing Hazardous Materials within the storage shed described on Exhibit P attached hereto (the “Haz Mat Shed”), and (b) installing, maintaining and operating Nitrogen and Carbon Dioxide storage tanks (any such tanks, collectively, the “Storage Tanks”). The portion of the Tenant Service Yard Premises designated by Landlord for the purposes set forth in Subsection 46(b) above shall be enclosed and locked. Upon such designation by Landlord, the Tenant Service Yard Premises shall become a part of the Premises for all purposes under this Lease; provided, however, that (x) Tenant shall not be required to pay any additional Base Rent in connection with the Tenant Service Yard Premises, and (y) Tenant shall only be permitted to use the Tenant Service Yard Premises for the purposes set forth in Subsections (a) and (b) above.
46.1 Condition of Tenant Service Yard Premises. As part of the Tenant Improvements, Landlord shall (a) purchase the Haz Mat Shed and place it in the Tenant Service Yard Premises, and (b) install process piping from the terminal point(s) in the lab portion of the Premises to the connection point in the Tenant Service Yard Premises (the “Process Piping”). Except as expressly set forth in the immediately preceding grammatical sentence, (x) Landlord will have no obligation to make any improvements to the Tenant Service Yard Premises, (y) the Tenant Service Yard Premises (and the Haz Mat Shed and the Process Piping) will be provided to Tenant in their then-current “as is” condition, and (z) Tenant shall be solely responsible for installing any additional improvements on the Tenant Service Yard Premises (including, without limitation, any Storage Tanks and related equipment). Landlord has not made, and does not hereby make, any representation or warranty regarding the condition of the Tenant Service Yard Premises (or the Haz Mat Shed or the Process Piping), or the suitability of the Tenant Service Yard Premises (or the Haz Mat Shed or the Process Piping) for Tenant’s intended use.
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46.2 Repair, Maintenance and Operation. Tenant shall (at Tenant’s sole cost and expense) be responsible for maintaining, repairing and operating the Tenant Service Yard Premises (including, without limitation, the Haz Mat Shed, the Process Piping and the Storage Tanks) in good working condition and in compliance with all Applicable Laws, and Landlord shall not have any obligations with respect thereto. Tenant will be solely responsible (at Tenant’s sole cost and expense) for obtaining all required permits and approvals from any Governmental Authorities having jurisdiction over the Project for use of the Tenant Service Yard Premises (and the Haz Mat Shed and the Storage Tanks) and Landlord makes no representation or warranty that such permits or approvals will be obtainable. Failure to obtain such permits and/or approvals will not affect this Lease or Tenant’s obligations hereunder. Tenant will keep and maintain the Tenant Service Yard Premises in a clean and safe condition at all times and otherwise in the condition that Tenant is required to maintain the Premises under this Lease.
46.3 Alterations. Any improvements, equipment and facilities to be located in the Tenant Service Yard Premises (including, without limitation, any Storage Tanks) shall be subject to Landlord’s prior written approval, either as a Tenant Change in connection with the Tenant Improvements (subject to the terms, conditions and provisions of Section 4.5) or, if not included as a Tenant Change, as an Alteration (subject to the terms, conditions and provisions of Article 17); provided, however, that in no event shall Landlord unreasonably withhold, condition or delay such approval provided the proposed improvements, equipment and/or facilities (as applicable) are consistent with those customarily found in service yards of Class A life science projects in the Torrey Pines submarket.
46.4 Removal. Upon the expiration or earlier termination of this Lease, Tenant shall (a) remove all of Tenant’s personal property from the Haz Mat Shed and otherwise surrender the Haz Mat Shed to Landlord in the condition the Haz Mat Shed was in on the Term Commencement Date (subject to ordinary wear and tear), (b) remove the Storage Tanks from the Tenant Service Yard Premises and repair any damage caused by such removal, and (c) surrender the Tenant Service Yard Premises to Landlord in the condition the Tenant Service Yard Premises was in on the Term Commencement Date (subject to ordinary wear and tear) and otherwise in accordance with all of the terms, conditions and provisions of this Lease applicable to the surrender of the Premises (including, without limitation, Section 26.1). The provisions of this Section shall survive the expiration or earlier termination of the Lease.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above written.
LANDLORD:
BMR-10255 SCIENCE CENTER LP,
a Delaware limited partnership
| By: | /s/ Dawn Sanders | |
| Name: | Dawn Sanders | |
| Title: | Vice President, Legal | |
| TENANT: | ||
| BLOSSOMHILL THERAPEUTICS, INC., | ||
| a Delaware corporation | ||
| By: | /s/ Vincent P. Liptak | |
| Name: | Vincent P. Liptak | |
| Title: | Executive Vice President and General Counsel | |
EXHIBIT A
PREMISES
[***]
EXHIBIT B
TENANT IMPROVEMENT PLANS
[***]
EXHIBIT B-1
TENANT WORK INSURANCE SCHEDULE
[***]
EXHIBIT C
ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE
AND TERM EXPIRATION DATE
[***]
EXHIBIT D
RIGHT OF FIRST REFUSAL
[***]
EXHIBIT E
FORM OF LETTER OF CREDIT
[***]
EXHIBIT F
RULES AND REGULATIONS
[***]
EXHIBIT G
LANDLORD’S WORK
[***]
EXHIBIT G-1
LANDLORD’S WORK
(SELECTED DEPICTIONS)
[***]
EXHIBIT H
TENANT’S PROPERTY
[***]
EXHIBIT I
FORM OF ESTOPPEL CERTIFICATE
[***]
EXHIBIT J
MONUMENT SIGNAGE
[***]
EXHIBIT K
RESERVED PARKING
[***]
EXHIBIT L
EXPANSION OPTION
[***]
EXHIBIT L-1
EXPANSION SPACE
[***]
EXHIBIT M
3525 JOHN HOPKINS LEASE AMENDMENT
[***]
EXHIBIT N
10240 SCIENCE CENTER LEASE AMENDMENT
[***]
EXHIBIT O
SERVICE YARD
[***]
EXHIBIT P
HAZ MAT SHED
[***]
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement on Form S-1 of our report dated April 24, 2026, relating to the financial statements of BlossomHill Therapeutics, Inc. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ Deloitte & Touche LLP
San Diego, California
July 16, 2026