Cartesian Therapeutics, Inc PRE 14A, filed Jan 31, 2024

Cartesian Therapeutics, Inc. (RNAC)

PRE 14A 2024-01-31 For: 2024-01-31

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			Page
PROXY STATEMENT			1
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING			2
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS			6
RISK FACTOR SUMMARY			7
DESCRIPTION OF THE TRANSACTIONS			8
THE MERGER AGREEMENT			10
BACKGROUND AND REASONS FOR THE TRANSACTIONS			21
THE BOARD OF DIRECTORS’ REASONS FOR APPROVAL OF THE MERGER			28
COMPARISON OF RIGHTS OF OLD CARTESIAN STOCKHOLDERS AND COMPANY STOCKHOLDERS			30
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS OF THE MERGER AND THE ISSUANCE OF THE CVRS			39
RISK FACTORS			41
BUSINESS			72
OLD CARTESIAN’S MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			92
MARKET PRICE AND DIVIDEND INFORMATION			100
PROPOSAL NO. 1—CONVERSION PROPOSAL			101
PROPOSAL NO. 2—REVERSE STOCK SPLIT PROPOSAL			104
PROPOSAL NO. 3—APPROVAL OF ADJOURNMENT OF THE SPECIAL MEETING			111
DESCRIPTION OF CAPITAL STOCK			112
MANAGEMENT AND DIRECTORS			117
PRINCIPAL STOCKHOLDERS			119
WHERE YOU CAN FIND ADDITIONAL INFORMATION			121
INFORMATION INCORPORATED BY REFERENCE			121
HOUSEHOLDING			123
STOCKHOLDER PROPOSALS			124
OTHER MATTERS			124
ANNEX A			A-1
ANNEX B			B-1
ANNEX C			C-1
ANNEX D			D-1

Old Cartesian			The Company
ORGANIZATIONAL DOCUMENTS

The rights of Old Cartesian stockholders were governed by the Old Cartesian Certificate of Incorporation, the Old Cartesian Bylaws and the DGCL.			The rights of Company stockholders are currently governed by the Current Charter, Bylaws and the DGCL.

AUTHORIZED CAPITAL STOCK

The total authorized capital stock that Old Cartesian had the authority to issue was (a) 3,200 shares of common stock, $0.01 par value per share and (b) 602 shares of preferred stock, $0.01 par value per share.			The total authorized capital stock that the Company has the authority to issue is 360,000,000 shares, consisting of (a) 350,000,000 shares of Common Stock, $0.0001 par value per share, and (b) 10,000,000 shares of preferred stock, $0.0001 par value per share.

COMMON STOCK

The common stock of Old Cartesian was not divided into any class.			The Common Stock is not divided into any class.

Voting. Each holder of a share of Old Cartesian common stock was entitled to one vote to per share of common stock held at meetings of stockholders. Each holder of Old Cartesian common stock was not entitled to vote on any amendment to the Old Cartesian Certificate of Incorporation that related solely to the terms of or one or more outstanding series of Old Cartesian preferred stock.			Voting. Each holder of a share of Common Stock has voting rights at all meetings of the stockholders and is entitled to one vote for each share of Common Stock held by such holder. Except as otherwise required by law, each holder of Common Stock is not entitled to vote on any amendment to the Current Charter that relates solely to the terms of or one or more outstanding series of Company preferred stock if the holders of such affected series are entitled to vote thereon pursuant to the Current Charter or the DGCL.

Authorized Shares. The number of authorized shares of common stock could be increased or decreased by the affirmative vote of the holders of shares of Old Cartesian capital stock representing a majority of the votes			Authorized Shares. The number of authorized shares of Common Stock may be increased or decreased by the affirmative vote of a majority of Company capital stock entitled to vote.

Old Cartesian			The Company
represented by all outstanding shares of Cartesian capital stock entitled to vote.

Dividends. Old Cartesian could not declare, pay or set aside any dividends on shares of any other class or series of capital stock unless the holders of Old Cartesian preferred stock then outstanding first received, or simultaneously received, certain dividends on each of the outstanding shares within a series of Old Cartesian preferred stock, as specified in the Old Cartesian Certificate of Incorporation for such series of preferred stock.			Dividends. Subject to applicable law and any preferential dividend or other rights of any then outstanding preferred stock of the Company, dividends may be declared or paid to holders of Common Stock if, as and when determined by the Board of Directors.

Liquidation. In the event of a voluntary or involuntary liquidation or dissolution of Old Cartesian, the holders of shares of Old Cartesian preferred stock then outstanding were entitled to be paid out of the assets of Old Cartesian available for distribution to its stockholders before any distribution or payment would be made to any other class or series of capital stock that ranked junior to the Old Cartesian preferred stock (which junior class would have included the shares of common stock of Old Cartesian).			Liquidation. Subject to applicable law and any preferential dividend or other rights of any outstanding preferred stock of the Company, upon the voluntary or involuntary dissolution or liquidation of the Company, holders of Common Stock will be entitled to receive all assets of the Company available for distribution to its stockholders.

RIGHTS OF PREFERRED STOCK

Designation of Preferred Stock. The Old Cartesian Certificate of Incorporation contemplated and authorized the designation of 220 shares of Series A preferred stock, 110 shares of Series B preferred stock, 77 shares of Series B-1 preferred stock and 195 shares of Series B-2 preferred stock. The powers, privileges and rights, and the qualifications, limitations or restrictions on such shares of preferred stock were set forth in the Old Cartesian Certificate of Incorporation, including certain specified dividend rights with respect to each such series, the payments due upon such shares of preferred stock upon a liquidation or certain fundamental transactions involving Old Cartesian, certain general and specific voting rights of such shares, and a right of conversion of such shares into shares of common stock of Old Cartesian and the mechanics applicable thereto.			Designation of Preferred Stock. The Current Charter permits the Board of Directors to provide out of the unissued shares of preferred stock for one or more series of preferred stock and to establish from time to time the number of shares to be included in each such series, to fix the voting rights, if any, powers, designations, preferences and relative, participating, optional, special and other rights, if any, of each such series and any qualifications, limitations and restrictions thereof. The rights of each series of preferred stock will be stated in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such series of preferred stock and included in a certificate of designation filed pursuant to the DGCL.

The Old Cartesian Certificate of Incorporation did not expressly permit the Old Cartesian board of directors (the “Old Cartesian Board”) to create or authorize the creation of any additional series of preferred stock. Further, the creation or authorization or issuance of any securities with rights, preferences or privileges senior to or on parity with the shares of preferred stock of Old Cartesian described above, or the increase in the authorized number of such shares of preferred stock, could only be effected if holders of at least 51% of the then-outstanding shares of preferred stock of Old Cartesian provided their written consent or affirmative vote in respect of such action.

Old Cartesian			The Company
CERTAIN DIRECTOR MATTERS

Number of Directors. The number of directors was to be determined by resolution of the Old Cartesian Board or the stockholders of Old Cartesian, but in no event was to be less than one.			Number of Directors. The number of directors is established by the Board of Directors from time to time by resolution and the Board of Directors is to consist of at least one member.

Election of Directors. The holders of record of shares of Old Cartesian preferred stock, exclusively and as a separate class, were entitled to elect one director of Old Cartesian and the holders of record of the shares of Old Cartesian common stock, exclusively and as a separate class, were entitled to elect two directors of Old Cartesian.			Election of Directors. Subject to the rights of holders of any series of Company preferred stock to elect directors, at all duly called or convened meetings of stockholders, at which a quorum is present, a plurality of the stockholder votes cast are sufficient to elect a director.

Classes and Terms of Directors. The directors that sat on the Old Cartesian Board were not divided into classes. Each director was to hold office until the next annual meeting and until a successor was elected and qualified, or until such director’s earlier death, resignation or removal.			Classes and Terms of Directors. Subject to the rights of holders of any series of Company preferred stock to elect directors, the Board of Directors is divided into three classes, designated as Class I, Class II, and Class III. Each class consists, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors. Each director serves for a term ending on the date of the third annual meeting of stockholders at which such director was elected. The Board of Directors is authorized to assign members of the Board of Directors to Class I, Class II or Class III.

Quorum and Action at a Meeting. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors constituting the entire Old Cartesian Board constituted a quorum. At any meeting of the Old Cartesian Board at which a quorum was present, the vote of a majority of those present was sufficient to take any action, unless a different vote was specified by law or the Old Cartesian Certificate of Incorporation.			Quorum and Action at a Meeting. Subject to applicable law, the greater of (a) a majority of the number of directors at any time in office and (b) one-third of the number of directors constituting the entire Board of Directors constitutes a quorum of the Board of Directors. Each act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present is regarded as an act of the Board of Directors, except otherwise specifically provided by law, the Current Charter or the Bylaws.

Removal of Directors. Except as otherwise provided by applicable law, any one or more or all of the directors could be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors, except that the directors elected by the holders of a particular class or series of stock could be removed without cause only by vote of the holders of a majority of the outstanding shares of such class or series.			Removal of Directors. Subject to the rights of holders of any series of Company preferred stock, directors may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of Company entitled to vote at an election of directors.

Old Cartesian			The Company
Vacancies. Unless and until filled by the stockholders, any vacancy on the Old Cartesian Board, could be filled by vote of a majority of the directors then in office (although less than a quorum) or by a sole remaining director, as the case may be.			Vacancies. Subject to the rights of holders of preferred stock of the Company, any vacancy or newly created directorship in the Board of Directors will be filled only by vote of a majority of the directors then in office (although less than a quorum) or by a sole remaining director, as the case may be, unless the Board of Directors determines by resolution that any such vacancy or newly created directorship will be filled by the stockholders.

CERTAIN STOCKHOLDER MATTERS

Special Meetings. Special meetings of stockholders for any purpose or purposes could be called at any time by the Old Cartesian Board, the chairman of the Old Cartesian Board, the chief executive officer or the president, but not by any other person or persons. Business transacted at any special meeting of stockholders was limited to matters relating to the purpose or purposes stated in the notice of meeting.			Special Meetings. Special meetings of the stockholders of the Company for any purpose or purposes may be called at any time only by the Board of Directors, the chairperson of the Board of Directors, the chief executive officer, or the president (in the absence of the chief executive officer). Matters to be brought before the proposed special meeting are limited to those matters stated in the notice of the special meeting.

Action without a Meeting. Any action required or permitted to be taken at any annual or special meeting of stockholders of Old Cartesian could be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, was 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 on such action were present and voted.			Action without a Meeting. No action that is required or permitted to be taken by the stockholders of the Company at any annual or special meeting of stockholders may be effected by written consent of stockholders in lieu of a meeting.

Notice of Stockholder Meetings. Except as otherwise provided by the Old Cartesian Bylaws or the DGCL, all notices of meetings of Old Cartesian stockholders were to be delivered not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice could be delivered by mail or by electronic transmission and had to specify the place, if any, date and time of the meeting and the means of remote communications, if any, by which stockholders and proxyholders were to be deemed to be present in person and vote at such meeting and the purpose or purposes for which the meeting was called.			Notice of Stockholder Meetings. Except as otherwise provided by the Bylaws or the DGCL, all notices of meetings of Company stockholders may be delivered not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Notice can be delivered by mail or by electronic transmission, and shall specify the place, if any, date and hour of the meeting and the record date for determining the stockholders entitled to vote at the meeting.

Advance Notice for Stockholder Nominations of Directors. Not Applicable.			Advance Notice for Stockholder Nominations of Directors. The nomination of any person for election to the Board of Directors may be made at an annual or special meeting of stockholders where notice has been provided in writing to the secretary of the Company. Notice is required to be delivered to, or mailed and received by the secretary of the Company at the principal executive officer of the

By order of the board of directors,

Carsten Brunn, Ph.D.
President and Chief Executive Officer, Director

Old Cartesian			The Company
			Company not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that if the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by such stockholder to be timely must be so received, not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the later of (x) the close of business on the 90^th day prior to such annual meeting and (y) the close of business on the 10^th day following the day on which public disclosure of the date of such annual meeting was first made by the Company (with any notice delivered within such time frames being deemed to be “timely notice”). Any such notice may only be provided by a stockholder who is a stockholder of record or beneficial owner of Common Stock, as the case may be, both at the time of giving such notice and the time of the applicable meeting. The stockholder’s notice to the secretary of the Company must be in proper form, including all information required by the Bylaws and in compliance with all applicable requirements of the Exchange Act.

Advance Notice for Stockholder Proposals (Other than Nomination of Directors). Not Applicable.			Advance Notice for Stockholder Proposals (Other than Nomination of Directors). In order for a stockholder to bring a matter before the annual meeting, a stockholder will be required to give timely notice to the secretary of the Company, as described above. Any such notice may only be provided by a stockholder who is a stockholder of record or beneficial owner of Common Stock, as the case may be, both at the time of giving such notice and the time of the applicable meeting. The stockholder’s notice to the secretary of the Company must be in proper form, including all information required by the Bylaws and in compliance with all applicable requirements of the Exchange Act.

BYLAW AMENDMENTS

Subject to any additional vote required by the Old Cartesian Certificate of Incorporation or Old Cartesian Bylaws, the Old Cartesian Board was expressly authorized to make, repeal, alter, amend and rescind any or all of the Old Cartesian Bylaws. The Old Cartesian stockholders also had the power to adopt, amend or repeal the Old Cartesian Bylaws by affirmative vote of the holders of a majority of the shares of the capital stock of Old Cartesian issued and outstanding and entitled to vote at any regular meeting or special meeting of			Subject to limitations otherwise set forth in the Bylaws or the Current Charter, the Board of Directors is expressly empowered to adopt, amend, or repeal the Bylaws. The Company’s stockholders also have the power to adopt, amend or repeal the Bylaws by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of Company capital stock entitled to vote thereon.

Old Cartesian			The Company
stockholders (provided that in the case of a special meeting, notice of such adoption, amendment or repeal should have been stated in the notice of such special meeting). Further, the written consent or affirmative vote of the holders of at least 51% of the then outstanding shares of preferred stock of Old Cartesian was required in order to amend, alter or repeal any provision of the Old Cartesian Bylaws in a manner that would adversely affect the powers, preferences or rights of such preferred stock.

CHARTER AMENDMENT

The Old Cartesian Certificate of Incorporation could be amended as permitted under the DGCL, except that the written consent or affirmative vote of the holders of at least 51% of the then outstanding shares of preferred stock of Old Cartesian was required in order to amend, alter or repeal any provision of the Old Cartesian Certificate of Incorporation in a manner that would adversely affect the powers, preferences or rights of such preferred stock. Except as otherwise required by law, holders of common stock, as such, were not entitled to vote on any amendment to the Old Cartesian Certificate of Incorporation that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series were entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to the Old Cartesian Certificate of Incorporation or pursuant to DGCL.			The Current Charter may be amended as permitted under the DGCL. In addition to the affirmative vote of holders of any particular class or series of Company capital stock of the Company that is required by law or the Current Charter, the affirmative vote of two-thirds of the outstanding shares of capital stock of the Company entitled to vote thereon shall be required to amend or repeal, or to adopt any provisions of the Current Charter relating to (i) amendments to the Bylaws, (ii) powers, election, classes, quorum, actions, removal and vacancies of or in the Board of Directors, (iii) the absence of the stockholders’ right to act by written consent, (iv) the right to call a special meeting of the Company’s stockholders and (v) the exclusive forum provisions whereby certain actions relating to the Company may only be brought before the Court of Chancery of the State of Delaware.Except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to the Current Charter that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Current Charter or DGCL.

ANTI-TAKEOVER PROVISIONS

DGCL Anti-Takeover Provision. Old Cartesian did not have any class of voting stock listed on any national securities exchange or held of record by 2,000 or more stockholders. The Old Cartesian Certificate of Incorporation did not contain a provision electing to be governed by Section 203 of DGCL. Thus, Section 203 of the DGCL was inapplicable to Old Cartesian.			DGCL Anti-Takeover Provision. Under the Current Charter, the Company has not opted out of Section 203 of the DGCL, which generally prohibits a Delaware corporation with a class of voting stock listed on a national securities exchange or held of record by 2,000 or more stockholders from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that such stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner.

Old Cartesian			The Company
			A “business combination” includes, among other things, a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s voting stock.

			Under Section 203, a “business combination” between a corporation and an “interested stockholder” is prohibited unless it satisfies one of the following conditions: (i) before such stockholder became interested, the Board of Directors approved either the business combination or the transaction which resulted in such stockholder becoming an interested stockholder; (ii) upon consummation of the transaction which resulted in such stockholder becoming an interested stockholder, such 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, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or (iii) on or subsequent to the time such stockholder became interested, the business combination was approved by the Board of Directors of the corporation and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by such interested stockholder.

			The DGCL permits a corporation to opt out of, or choose not to be governed by, its anti-takeover statute by expressly stating so in its original certificate of incorporation (or subsequent amendment to its certificate of incorporation or bylaws approved by its stockholders). The Current Charter does not contain a provision expressly opting out of the application of Section 203 of the DGCL. Therefore, the Company is subject to Section 203 of the DGCL.

LIMITATION OF LIABILITY OF DIRECTORS

To the fullest extent permitted by law, a director of Old Cartesian was not personally liable to Cartesian or its stockholders for monetary damages for breach of fiduciary duty as a director.			To the fullest extent permitted by the DGCL, no director of the Company shall be personally liable to the Company or its stockholders for monetary damages for any breach of fiduciary duty as a director.

Old Cartesian			The Company
INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

The Old Cartesian Certificate of Incorporation provided, to the fullest extent permitted under applicable law, authorization to provide indemnification of (and advancement of expenses to) the directors, officers and agents of Old Cartesian (and any other persons the DGCL permitted Old Cartesian to provide indemnification) through the provisions of the Old Cartesian Bylaws, agreements with such agents or other persons, vote of the stockholders or disinterested directors or otherwise.			The Bylaws provide that the Company will indemnify each person who was or is a party or threatened to be made party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Company, is or was serving, or has agreed to serve, at the request of the Company, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (each an “Indemnitee”), or by reason of any action alleged to have been take or omitted in such capacity, against all expenses, liabilities, losses, 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 and any appeal therefrom, if Indemnitee acted in good faith and in a manner which Indemnitee reasonably believed to be in, or not opposed to, the best interest of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.

			The Bylaws further provide that the Company will indemnify an Indemnitee to the fullest extent permitted by law against all expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with the Indemnitee’s successful defense of any action, suit or proceeding according to the Bylaws, subject to certain limitations in specific circumstances. In the case of threatened or pending actions, suits, proceedings or investigations, the Company is required to pay to the Indemnitee, in advance of the final disposition of such matter, but subject to certain limitations set forth in the Bylaws, any expenses incurred by or on behalf of Indemnitee in defending such action, suit, proceeding or investigation or any appeal therefrom, to the fullest extent permitted by law, but subject to receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined by final judicial decision from which there is no further right to appeal that Indemnitee is not entitled to be indemnified or if it is determined that the Indemnitee did not act in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Corporation, or, with respect to any criminal action

Old Cartesian			The Company
			or proceeding, Indemnitee had reasonable cause to believe his or her conduct was unlawful.

EXCLUSIVE FORUM

Unless Old Cartesian consented in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware was the sole and exclusive forum to bring (a) any derivative action or proceeding brought on behalf of Old Cartesian, (b) any action asserting a claim of breach of fiduciary duty owed by any director, officer, or other employee of Old Cartesian to Old Cartesian or Old Cartesian stockholders, (c) any action asserting a claim against Old Cartesian, its directors, officers or employees arising pursuant to any provision of the DGCL, the Old Cartesian Certificate of Incorporation or the Old Cartesian Bylaws, or (d) any action asserting a claim against Old Cartesian, its directors, officers or employees governed by the internal affairs doctrine, except for, as to each of (a) through (d) above, any claim as to which the Court of Chancery determined there was an indispensable party not subject to the jurisdiction of the Court of Chancery, which was vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery, or for which the Court of Chancery did not have subject matter jurisdiction.			Unless the Company consents in writing to the selection of an alternative forum, the Current Charter designates that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (a) any derivative action or proceeding brought on behalf of the Company, (b) any action asserting a claim of breach of fiduciary duty owed by any director, officer, employee or stockholder of the Company to the Company or the Company’s stockholders, (c) any action asserting a claim arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, or (d) any action asserting a claim governed by the internal affairs doctrine, in each case subject to said Court of Chancery having personal jurisdiction over the indispensable parties named as defendants therein; provided that, if and only if the Court of Chancery of the State of Delaware dismisses any such action for lack of subject matter jurisdiction, such action may be brought in another state or federal court sitting in the State of Delaware.

			The affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock of the Company entitled to vote thereon will be required to amend or repeal, or to adopt any provision inconsistent with the foregoing.

	Nine Months Ended September 30,
	2023	2022	Change	% Change
Grant revenue:	$—	$1,035	$(1,035)	-100%

Operating expenses:
Research and development	6,965	5,273	1,692	32%
General and administrative	1,286	1,069	217	20%
Total operating expenses	8,251	6,342	1,909	30%
Loss from operations	(8,251)	(5,307)	(2,944)	55%
Other income, net:
Interest income	311	20	291	1455%
Other income, net	176	101	75	74%
Total other income	487	121	366	302%
Net loss	$(7,764)	$(5,186)	(2,578)	50%

	Year Ended December 31,
	2022	2021	Change	% Change
Grant revenue:	$1,449	$3,337	$(1,888)	-57%

Operating expenses:
Research and development	6,841	6,090	751	12%
General and administrative	1,244	1,006	238	24%
Total operating expenses	8,085	7,096	989	14%
Loss from operations	(6,636)	(3,759)	(2,877)	77%
Other income, net:
Interest income	35	3	32	1067%
Other income, net	146	116	30	26%
Total other income	181	119	62	52%
Net loss	$(6,455)	$(3,640)	(2,815)	77%

	Year Ended December 31,		Nine Months Ended September 30,
(In thousands)	2022	2021	2023	2022
Cash (used in) and provided by:
Operating activities	$(3,463)	$(4,801)	$(6,501)	$(1,856)
Investing activities	(151)	—	(50)	(151)
Financing activities	10,880	4,207	1,425	—
Net change in cash, cash equivalents, and restricted cash	$7,266	$(594)	$(5,126)	$(2,007)

	Series A Preferred Stock Issued and Outstanding	Common Stock (as converted)
Merger	384,930.724	384,930,724
Financing	149,330.115	149,330,115
Total	498,260.839	498,260,839

Name	Age	Position(s)
Carsten Brunn, Ph.D.	53	President and Chief Executive Officer, Director
Blaine Davis	50	Chief Financial Officer
Metin Kurtoglu, MD, Ph.D.	45	Chief Operating Officer
Milos Miljkovic, MD, Ph.D.	40	Chief Medical Officer
Chris Jewell, Ph.D.	42	Chief Scientific Officer
Carrie S. Cox	66	Chairman of the Board
Timothy C. Barabe	70	Director
Nishan de Silva, MD	50	Director
Murat Kalayoglu, MD, Ph.D.	50	Director
Aymeric Sallin	50	Director
Michael Singer, MD, Ph.D.	50	Director
Timothy Springer, Ph.D.	75	Director
Patrick Zenner	76	Director

	No Conversion of Series A Preferred		Full Conversion of Series A Preferred
Name and address of beneficial owner	Number of Shares Beneficially Owned	Percentage of Shares Beneficially Owned	Number of Shares Beneficially Owned	Percentage of Shares Beneficially Owned
5% Stockholders:
Entities affiliated with Timothy A. Springer, Ph.D.⁽¹⁾	44,242,842	26.2%	192,953,330	31.3 %
Entities affiliated with Murat Kalayoglu, MD, Ph.D.⁽²⁾	3,574,104	2.2%	121,267,076	19.9%
Entities affiliated with Schooner Century Fund LLC⁽³⁾	1,554,064	1.0%	90,524,422	14.9%
Entities affiliated with Armistice Capital, LLC⁽⁴⁾	9,375,000	5.5%	9,375,000	1.5%
Named Executive Officers and Directors:
Carsten Brunn, Ph.D.⁽⁵⁾	261,956	*	261,956	*
Blaine Davis	—	*	—	*
Chris Jewell, Ph.D.⁽⁶⁾	—	*	2,717,358	*
Metin Kurtoglu, MD, Ph.D.⁽⁷⁾	—	*	7,056,150	1.1%
Milos Miljkovic, MD⁽⁸⁾	—	*	1,282,936	*
Carrie S. Cox⁽⁹⁾	259,498	*	259,498	*
Timothy C. Barabe⁽¹⁰⁾	262,679	*	262,679	*
Nishan de Silva, M.D., M.B.A.⁽¹¹⁾	19,666	*	19,666	*
Murat Kalayoglu, MD, Ph.D.⁽²⁾	3,574,104	2.2%	121,267,076	19.9%
Aymeric Sallin⁽¹²⁾	12,666	*	12,666	*
Michael Singer, MD, Ph.D.⁽¹³⁾	460,060	*	23,073,593	3.8%
Timothy A. Springer, Ph.D.⁽¹⁾	44,242,842	26.2%	192,953,330	31.3%
Patrick Zenner⁽¹⁴⁾	67,914	*	67,914	*
All executive officers, directors and director nominees as a group (13 persons)	49,161,385	29.2%	349,234,822	56.9%


			Cartesian Therapeutics, Inc.
			Name: Carsten Brunn, Ph.D.
			Title: President and Chief Executive Officer

	December 31, 2022	December 31, 2021
Assets
Current assets:
Cash and cash equivalents	$12,001	$4,735
Accounts receivable	994	3,129
Payroll tax credit receivable	351	225
Prepaid expenses and other current assets	59	50
Total current assets	$13,405	$8,139
Non-current assets:
Property and equipment, net	197	309
Right-of-use asset, net	983	1,195
Security deposit	25	25
Total assets	$14,610	$9,668
Liabilities, preferred stock and stockholders’ deficit
Current liabilities:
Lease liability	$228	$172
Deferred revenue	—	117
NIH liability	461	—
Accrued expenses and other current liabilities	949	978
Total current liabilities	$1,638	$1,267
Non-current liabilities:
NIH liability	—	345
Lease liability, net of current	880	1,108
Total liabilities	$2,518	$2,720
Commitments and contingencies (Note 11)
Series A Preferred Stock; $0.01 par value, 220 authorized, 219.125 issued and outstanding as of December 31, 2022 and December 31, 2021	9,623	9,623
Series B Preferred Stock; $0.01 par value, 110 authorized, 109.267 issued and outstanding as of December 31, 2022 and December 31, 2021	7,128	7,128
Series B-1 Preferred Stock; $0.01 par value, 77 authorized, 65.017 issued and outstanding as of December 31, 2022 and December 31, 2021	3,162	3,162
Series B-2 Preferred Stock; $0.01 par value, 195 authorized, 193.644 issued and outstanding as of December 31, 2022 and none authorized, issued and outstanding as of December 31, 2021	12,144	—
Series B-2 Preferred Stock Subscription Receivable	(1,333)	—
Stockholders’ deficit:
Common stock, $0.01 par value, 3,200 authorized, 1,240.625 issued and outstanding as of December 31, 2022 and 1,237.625 issued and outstanding as of December 31, 2021	—	—
Additional paid-in capital	7,432	6,644
Accumulated deficit	(26,064)	(19,609)
Total stockholders’ deficit	$(18,632)	$(12,965)
Total liabilities, preferred stock and stockholders’ deficit	$14,610	$9,668

	Series A Preferred Stock		Series B Preferred Stock		Series B-1 Preferred Stock		Series B-2 Preferred Stock		Series B-2 Preferred Stock Subscription Receivable	Series A Preferred Stock		Series B Preferred Stock		Common Stock		Additional Paid-In Capital	Accumulated Deficit	Total Stockholders’ Deficit
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount	Series B-2 Preferred Stock Subscription Receivable	Shares	Amount	Shares	Amount	Shares	Amount	Additional Paid-In Capital	Accumulated Deficit	Total Stockholders’ Deficit
Balance at December 31, 2020	—	$—	—	$—	—	$—	—	$—	$—	169.125	$—	109.267	$—	1,287.625	$—	$20,909	$(15,319)	$5,590
Issuance of Series B-1 Preferred Stock, net of $16 of issuance costs	—	—	—	—	65.017	4,207	—	—	—	—	—	—	—	—	—	—	—	—
Exchange of Common Stock to Series A Preferred Stock	50.000	2,196	—	—	—	(1,045)	—	—	—	—	—	—	—	(50.000)	—	(500)	(650)	(1,150)
Reclassification of Series A and Series B Preferred Stock	169.125	7,427	109.267	7,128	—	—	—	—	—	(169.125)	—	(109.267)	—	—	—	(14,555)	—	(14,555)
Stock-based compensation expense	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	790	—	790
Net loss	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	(3,640)	(3,640)
Balance at December 31, 2021	219.125	$9,623	109.267	$7,128	65.017	$3,162	—	$—	$—	—	$—	—	$—	1,237.625	$—	$6,644	$(19,609)	$(12,965)
Issuance of Series B-2 Preferred Stock, net of $24 of issuance costs	—	—	—	—	—	—	193.644	12,144	(1,333)	—	—	—	—	—	—	—	—	—
Stock-based compensation expense	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	719	—	719
Exercise of options to purchase common stock	—	—	—	—	—	—	—	—	—	—	—	—	—	3.000	—	69	—	69
Net loss	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	—	(6,455)	(6,455)
Balance at December 31, 2022	219.125	$9,623	109.267	$7,128	65.017	$3,162	193.644	$12,144	$(1,333)	—	$—	—	$—	1,240.625	$—	$7,432	$(26,064)	$(18,632)

	December 31, 2022
	Total	Level 1	Level 2	Level 3
Assets:
Money market funds (included in cash equivalents)	$1,004	$1,004	$—	$—
Certificates of deposit (included in cash equivalents)	25	25	—	—
Total assets	$1,029	$1,029	$—	$—

Liabilities:
Contingent payment to NIH	$461	$—	$—	$461
Total liabilities	$461	$—	$—	$461

			Total
Balance at December 31, 2020			$266
Change in fair value of contingent payment to NIH			79
Balance at December 31, 2021			$345
Change in fair value of contingent payment to NIH			116
Balance at December 31, 2022			$461

	December 31,
	2022	2021
Laboratory equipment	$779	$779
Less accumulated depreciation	(582)	(470)
Property and equipment, net	$197	$309

	Year Ended December 31,
	2022	2021
Operating lease cost	$299	$191
Variable lease cost	147	57
Total lease cost	$446	$248

			December 31, 2022
2023			$300
2024			309
2025			318
2026			328
2027			28
Thereafter			—
Total future minimum lease payments			1,283
Less imputed interest			(175)
Total operating lease liabilities			$1,108

	Number of options	Weighted-average exercise price ($)	Weighted-average remaining contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2021	153	$18,755	7.88	$650
Granted	9	$23,005
Exercised	(3)	$23,005
Forfeited	(7)	$23,005
Outstanding at December 31, 2022	152	$18,727	6.90	$425

Vested at December 31, 2022	110	$17,094	6.25	$425
Vested and expected to vest at December 31, 2022	152	$18,727	6.90	$425

	September 30, 2023	December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$6,875	$12,001
Accounts receivable	994	994
Payroll tax credit receivable	248	351
Prepaid expenses and other current assets	51	59
Total current assets	$8,168	$13,405
Non-current assets:
Property and equipment, net	228	197
Right-of-use asset, net	891	983
Security deposit	25	25
Total assets	$9,312	$14,610
Liabilities, preferred stock and stockholders’ deficit
Current liabilities:
Lease liability	$273	$228
NIH liability	569	461
Accrued expenses and other current liabilities	1,513	949
Total current liabilities	$2,355	$1,638
Non-current liabilities:
Lease liability, net of current	743	880
Total liabilities	$3,098	$2,518
Commitments and contingencies (Note 10)
Series A Preferred Stock; $0.01 par value, 220 authorized, 219.125 issued and outstanding as of September 30, 2023 and December 31, 2022	9,623	9,623
Series B Preferred Stock; $0.01 par value, 110 authorized, 109.267 issued and outstanding as of September 30, 2023 and December 31, 2022	7,128	7,128
Series B-1 Preferred Stock; $0.01 par value, 77 authorized, 65.017 issued and outstanding as of September 30, 2023 and December 31, 2022	3,162	3,162
Series B-2 Preferred Stock; $0.01 par value, 195 authorized, 193.644 issued and outstanding as of September 30, 2023 and December 31, 2022	12,144	12,144
Series B-2 Preferred Stock Subscription Receivable	—	(1,333)
Stockholders’ deficit:
Common stock, $0.01 par value, 3,200 authorized, 1,244.625 issued and outstanding as of September 30, 2023 and 1,240.625 issued and outstanding as of December 31, 2022	—	—
Additional paid-in capital	7,985	7,432
Accumulated deficit	(33,828)	(26,064)
Total stockholders’ deficit	$(25,843)	$(18,632)
Total liabilities, preferred stock and stockholders’ deficit	$9,312	$14,610

	September 30, 2023	December 31, 2022
Laboratory equipment	$879	$779
Less accumulated depreciation	(651)	(582)
Property and equipment, net	$228	$197

	September 30, 2023	December 31, 2022
Accrued external research and development costs	$1,317	$758
Accrued professional and consulting services	48	60
Accrued payroll	42	98
Accrued equipment	50	—
Other current liabilities	56	33
Accrued expenses and other current liabilities	$1,513	$949

	September 30,
	2023	2022
Cash paid for amounts included in the measurement of lease liabilities:	$227	$187

	Number of options	Weighted-average exercise price ($)	Weighted-average remaining contractual term (in years)	Aggregate intrinsic value (in thousands)
Outstanding at December 31, 2022	152	$18,727	6.90	$425
Granted	29	$23,005
Exercised	(4)	$23,005
Forfeited	(4)	$23,005
Outstanding at September 30, 2023	173	$19,246	6.60	$425

Vested at September 30, 2023	119	$17,541	5.72	$425
Vested and expected to vest at September 30, 2023	173	$19,246	6.60	$425

	Selecta Biosciences, Inc.	Cartesian Therapeutics, Inc. (Old Cartesian)	Transaction Adjustments	Notes	Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$79,603	$6,875	$(9,423)	B	$137,305
			60,250	G
Accounts receivable	4,898	994	—		5,892
Unbilled receivables	1,875	—	—		1,875
Prepaid expenses and other current assets	3,493	299	—		3,792
Total current assets	89,869	8,168	50,827		148,864
Non-current assets:
Property and equipment, net	2,421	228	—		2,649
Right-of-use asset, net	10,339	891	—		11,230
Intangible assets	—	—	150,700	F	150,700
Goodwill	—	—	48,062	F	48,062
Other assets	3,405	25	—		3,430
TOTAL ASSETS	$106,034	$9,312	$249,589		$364,935
LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$14,012	$2,082	$4,895	A	$20,989
Lease liability	1,787	273	—		2,060
Deferred revenue	4,140	—	—		4,140
Total current liabilities	19,939	2,355	4,895		27,189
Non-current liabilities:
Lease liability	8,694	743	—		9,437
Deferred revenue	3,981	—	—		3,981
Warrant liabilities	13,091	—	—		13,091
Deferred tax liability	—	—	34,853	F	15,854
			(18,999)	J
Contingent value right obligation	—	—	340,300	H	340,300
Total liabilities	45,705	3.098	361,049		409,852
Commitments and contingencies
Convertible Preferred Stock	—	32,057	155,308	F	215,558
			60,250	G
			(32,057)	I
Stockholders’ equity (deficit):
Common stock	15	—	—	F I	15
Additional paid-in capital	501,919	7,985	6,977	B	182,372
			619	D
			13,157	F
			(340,300)	H
			(7,985)	I
Accumulated deficit	(436,989)	(33,828)	(4,895)	A	(438,246)
			(16,400)	B
			(619)	D
			35,486	I
			18,999	J
Accumulated other comprehensive loss	(4,616)	—	—		(4,616)
Total stockholders’ equity (deficit)	60,329	(25,843)	(294,961)		(260,475)
TOTAL LIABILITIES, PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)	$106,034	$9,312	$249,589		$364,935

			Amounts
Total purchase consideration
Common Stock			$2,713
Series A Preferred Stock			155,308
Assumption of Cartesian stock options			10,444
Total purchase price			$168,465

Allocation of the purchase consideration
Tangible assets			$8,000
Liabilities assumed			(3,444)
Intangible assets			150,700
Deferred tax liabilities			(34,853)
Goodwill			48,062
Total purchase price allocation			$168,465

Net income			$24,712
Less: CVR distribution to participating securities			(37,550)
Net loss allocable to shares of common stock, basic			(12,838)
Net loss per share, basic			$(0.08)
Weighted-average shares of common stock outstanding, basic			151,482,194

Net loss allocable to shares of common stock, basic			$(12,838)
Less: change in fair value of dilutive warrants			(21,029)
Net loss allocable to shares of common stock, diluted			(33,867)
Net loss per share, diluted			$(0.22)
Weighted-average shares of common stock outstanding, diluted			152,282,286