PRDS Pardes Biosciences Inc

ITEM 1.

SUMMARY TERM SHEET.

ITEM 2.

SUBJECT COMPANY INFORMATION.

ITEM 3.

IDENTITY AND BACKGROUND OF FILING PERSON.

ITEM 4.

TERMS OF THE TRANSACTION.

ITEM 5.

PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

ITEM 6.

PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

ITEM 7.

SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

ITEM 8.

INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

ITEM 9.

PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.

ITEM 10.

FINANCIAL STATEMENTS.

ITEM 11.

ADDITIONAL INFORMATION.

ITEM 12.

EXHIBITS.

*

Filed herewith.

ITEM 13.

INFORMATION REQUIRED BY SCHEDULE 13E-3.

ITEM 2.

SUBJECT COMPANY INFORMATION.

ITEM 4.

TERMS OF THE TRANSACTION.

ITEM 5.

PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

ITEM 6.

PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

ITEM 7.

PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.

ITEM 8.

FAIRNESS OF THE TRANSACTION.

ITEM 9.

REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.

ITEM 10.

SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.

ITEM 12.

THE SOLICITATION OR RECOMMENDATION.

ITEM 14.

PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

ITEM 15.

ADDITIONAL INFORMATION.

•

Purchaser, a wholly owned subsidiary of Parent, is offering to buy your securities. Purchaser has been organized in connection with this Offer and has not carried on any activities other than entering into the Merger Agreement and activities in connection with the Offer. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.” Certain obligations of Parent and Purchaser under the Merger Agreement have been guaranteed by the Guarantors, pursuant to the Limited Guaranty.

•

Parent is MediPacific, Inc. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

Purchaser is MediPacific Sub, Inc. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

The Guarantors are Foresite Capital Opportunity Fund V, L.P., Foresite Capital Fund V, L.P. and FS Development Holdings II, LLC. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

This is a tender offer by affiliated parties. The Purchaser parties are MediPacific Sub, Inc. (Purchaser), MediPacific, Inc. (Parent), FS Development Holdings II, LLC, Foresite Capital Management V, LLC, Foresite Capital Opportunity Fund V, L.P., Foresite Capital Opportunity Management V, LLC, Foresite Capital Fund V, L.P. and James Tananbaum. FS Development Holdings II, LLC and its affiliates (collectively, the “Foresite Stockholders”) collectively own 16,813,146 Shares of Pardes, or 27.1% of the outstanding Shares of Pardes. James Tananbaum is a director of Pardes and also the founder and Chief Executive Officer of Foresite Capital and President, Chief Executive Officer and Director of Purchaser and Parent. Dr. Tananbaum personally holds In-the-Money Options to purchase 37,500 Shares of Pardes. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

In deciding whether to tender your Shares, you should consider the potential conflict of interest that exists as a result of the above factors. The rules of the SEC require the Purchaser parties to express their belief as to the fairness of the Offer and the Merger to the Unaffiliated Stockholders. The Purchaser Parties reasonably believe that the Offer Price (regardless of the final amount of the Additional Price Per Share or whether the CVR results in any payments to Unaffiliated Stockholders) to be received by the Unaffiliated Stockholders is fair to such Unaffiliated Stockholders and that the Offer and the Merger are procedurally fair to such Unaffiliated Stockholders. See “Special Factors—Section 3. Position of Parent and Purchaser Regarding Fairness of the Offer and the Merger” for a list of factors, each of which, in the Purchaser parties’ judgment, support their views as to the fairness of the Offer and Merger.

•

Purchaser is seeking to purchase all of the outstanding Shares of Pardes. See the Introduction and “The Tender Offer—Section 1. Terms of the Offer.”

•

Purchaser is offering to pay a Cash Amount equal to $2.13 per Share to you, consisting of a Base Price Per Share equal to $2.02 per Share and an Additional Price Per Share equal to $0.11 per Share, plus

•

Pursuant to the Merger Agreement, the total Cash Amount is the Base Price Per Share plus the Additional Price Per Share. The Additional Price Per Share was determined on August 17, 2023 based on Pardes’ expected Closing Net Cash as of immediately prior to the Expiration Date (the “Cash Determination Time”) of approximately $132.31 million. As used herein, “Closing Net Cash” means, without duplication, the sum of (i) Pardes’ cash and cash equivalents and marketable securities as of immediately prior to the Cash Determination Time, minus (ii) Pardes’ consolidated short-term and long-term contractual obligations and liabilities (including indebtedness) accrued or incurred by or on behalf of Pardes as of the Cash Determination Time, minus (iii) to the extent unpaid as of the Cash Determination Time, all fees and expenses incurred or payable by Pardes in connection with the transactions contemplated by the Merger Agreement and the CVR Agreement, minus (iv) Pardes’ good faith estimate of the fees, costs and expenses owned or borne by Pardes in connection with or related to the winding down of Pardes’ research and development activities, minus (v) $400,000, which amount represents the expense cap under the CVR Agreement, minus (vi) $12,000,000.

•

The total Cash Amount payable by the Purchaser pursuant to the Offer and the Merger Agreement will equal the quotient derived by dividing (A) the sum of the Closing Net Cash as of the Cash Determination Time and the aggregate exercise price of all In-the-Money Options (as defined below) that are outstanding as of the Expiration Date and entitled to receive the Company Stock Option Cash Consideration (as defined below) (the “Aggregate Exercise Price”) by (B) the total number of Shares, including each Share granted pursuant to Pardes’ 2021 Stock Option and Incentive Plan (the “Company Stock Plan”) that are unvested or are subject to a repurchase option or risk of forfeiture under any applicable restricted stock purchase agreement or other similar agreement with Pardes (the “Company Restricted Shares”), that are issued and outstanding as of immediately prior to the Offer Closing Time, and assuming the exercise of all In-the-Money Options outstanding as of the Effective Time (the “Company Outstanding Shares”). The Additional Price Per Share is equal to the Cash Amount as determined pursuant to the immediately preceding sentence, minus the Base Price Per Share. See the Introduction and “The Tender Offer—Section 1. Terms of the Offer.”

•

Immediately prior to the execution of the Merger Agreement, Pardes’ reasonable estimate of the Closing Net Cash was approximately $130.8 million as of the Cash Determination Time, assuming an expiration of the Offer of one minute after 11:59 p.m. Eastern Time on August 25, 2023, which would result in a Cash Amount of $2.12. Using Pardes’ reasonable projected cash expenditures between the period of the execution of the Merger Agreement and the Cash Determination Time, the Closing Net Cash would not reasonably decrease below $125 million nor increase above $135 million (such range, the “Projected Cash Range”). The bottom of the Projected Cash Range, which is an amount of Closing Net Cash equal to $125 million, results in a Cash Amount of approximately $2.02. This amount is the Base Price Per Share. The bottom of the Projected Cash Range is the amount of Closing Net Cash required for the Minimum Cash Condition. The top of the Projected Cash Range, which is an amount of Closing Net Cash equal to $135 million, results in a Cash Amount of approximately $2.19. This amount minus the Base Price Per Share results in an Additional Price Per Share of $0.17.

•

In making a decision to tender your Shares in the Offer, you should understand that Parent, Purchaser and Pardes made a final determination that the Additional Price Per Share is $0.11 and no Additional Price Per Share above $0.11 will be payable. Accordingly, the total Cash Amount that Purchaser will pay pursuant to the terms of the Offer and the Merger Agreement is $2.13 per Share.

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If your Shares are registered in your name and you tender your Shares, you will not be obligated to pay brokerage fees or commissions or similar expenses. If you hold your Shares through a broker, dealer, commercial bank, trust company or other nominee and your broker, dealer, commercial bank, trust company or other nominee tenders your Shares on your behalf, your broker, dealer, commercial bank, trust company or other nominee may charge a fee for doing so. You should consult your broker, dealer, commercial bank, trust company or other nominee to determine whether any charges will apply. See the Introduction and “The Tender Offer—Section 3. Procedures for Tendering Shares.”

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At or prior to the Offer Closing Time, Pardes, Continental Stock Transfer & Trust Company, as rights agent (the “Rights Agent”) and Fortis Advisors LLC, as representative of the holders of the CVRs (the “Representative”) will enter into the CVR Agreement, governing the terms of the CVRs. Each CVR will represent a contractual right to receive contingent cash payments (“CVR Proceeds”) equal to a pro rata share of 80% of the Net Proceeds (as defined in the CVR Agreement), if any, payable to or received by Parent, Pardes or any of their respective affiliates, that arise from the sale, transfer, license or other disposition (each, a “Disposition”) of Pardes’ assets associated with Pardes’ antiviral drug development programs and related assets as of the Merger closing date (collectively, the “CVR Products”) which Disposition occurs within five years of the Merger closing date (the “Closing Date,” and such period, the “Disposition Period”).

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Any payments made in connection with the CVRs would be calculated and payable based on a distribution of Net Proceeds from Dispositions and we cannot predict whether Dispositions will occur

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Pardes has agreed that neither Pardes nor any of its affiliates will take any action in bad faith with respect to, or with the primary purpose of avoiding, the payment of amounts required by the CVR Agreement, including by making any dividend, distribution or other transfer of Net Proceeds in a manner materially adverse to Pardes’ obligations in respect of Net Proceeds pursuant to the CVR Agreement. Additionally, during the Disposition Period, Pardes has agreed to use commercially reasonable efforts to enter into one or more agreements providing for a Disposition (a “Disposition Agreement”) and effectuate the completion of the transactions contemplated thereby as promptly as practicable after the Effective Time, subject to certain limitations set forth in the CVR Agreement. Pardes has also agreed that Pardes and its subsidiaries will use commercially reasonable efforts to continue to maintain and manage the CVR Products, subject to certain qualifications, including the absence of any requirement to develop any CVR Product or any other products or assets or to commence, defend or otherwise pursue any litigation, regulatory action or other proceeding relating to any CVR Product or any other products or assets. Pardes and its affiliates are not required or obligated to incur costs, fees or expenses in excess of $400,000 in the aggregate (the “Expense Cap”) pursuant to the CVR Agreement, and upon (i) the incurrence of fees and expenses by or on behalf of Pardes or its affiliates equal to or in excess of the Expense Cap or (ii) the termination of any consulting or contractor agreement between Pardes, on the one hand, and any of Pardes’ current or former officers or directors, on the other hand, prior to the incurrence of fees and expenses in such amount (which termination is by such current or former officer or director within the initial term of such agreement, which shall not be longer than six months), Pardes, Parent and their affiliates will not have any liability or obligation to any person for any breach of or failure to comply with, and shall not be required to expend any additional amounts in connection with, the covenants in the CVR Agreement with respect to entry into Disposition Agreements (or the completion of transactions contemplated thereby) or maintenance or management of the CVR Products.

•

Pardes’ and the Guarantors’ financial condition could deteriorate such that they would not have the necessary cash or cash equivalents to make the required payments pursuant to the CVR Agreement. The CVR holders will have no greater rights against Pardes under the CVR Agreement, or the Guarantors under the Limited Guaranty, than those of general unsecured creditors of Pardes or the Guarantors, as applicable, including in the event of any bankruptcy. The CVRs would be effectively junior in right of payment to all of Pardes’ and the Guarantors’ secured obligations to the extent of the collateral securing such obligations, and the CVRs would be pari passu with all of Pardes’ and the Guarantors’ unsecured obligations, including trade payables, pursuant to the CVR Agreement and the Limited Guaranty, as applicable. The Guarantors’ obligations under the Limited Guaranty are subject to a cap of $400,000 with respect to the obligations to the holders of CVRs arising under or in connection with the CVR Agreement.

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It is currently anticipated that up to an aggregate of 63,990,164 CVRs will be issued, representing CVRs to be issued as part of the consideration for each of the issued and outstanding Shares, as well as Shares underlying each outstanding In-the-Money Option and Shares held by the Foresite Stockholders immediately prior to the Effective Time. For more information regarding the CVR Agreement, see “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.”

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Yes. You will only receive payments with respect to your CVRs if a Disposition Agreement entered into during the Disposition Period results in CVR Proceeds, and such CVR Proceeds, if any, would depend upon various factors, including market conditions, whether the CVR Products would potentially be efficacious against any then circulating strain of coronavirus or other virus, the conclusions reached by potential acquirers after conducting due diligence with respect to the CVR Products, and Pardes’ ability to negotiate and consummate any Dispositions with third parties. Pardes believes there is currently no market opportunity for the CVR Products in light of the results from the pomotrelvir Phase 2 clinical trial, the evolution of COVID-19 from a pandemic to an endemic and the feedback received by Pardes from potential partners over the last several months. Even if market conditions were to change, there would still be significant uncertainty regarding Pardes’ ability to attract a potential acquirer for the CVR Products and, even if Pardes were to be successful in negotiating transaction terms with a potential acquirer of the CVR Products, whether any potential acquirer of the CVR Products would be able to (i) initiate and complete successful nonclinical studies and clinical trials for any product related to or based upon the CVR Products, (ii) conduct sufficient clinical trials or other studies to support the approval and commercialization of any product related to the CVR Products, (iii) demonstrate to the satisfaction of the U.S. Food and Drug Administration and similar foreign regulatory authorities the safety and efficacy and acceptable risk-to-benefit profile of any product related to the CVR Products, (iv) seek and obtain regulatory marketing approvals for any product related to the CVR Products, (v) establish and maintain supply and manufacturing relationships with third parties to ensure adequate and legally compliant manufacturing of bulk drug substances and drug products to maintain that supply, (vi) launch and commercialize any product candidates that were to obtain marketing approval and, if launched, successfully establish a sales, marketing and distribution infrastructure, (vii) demonstrate the necessary safety data post-approval to ensure continued regulatory approval, (viii) demonstrate the actual and perceived benefits of any product related to the CVR Products, if approved, relative to existing and future alternative therapies for COVID-19 based upon availability, cost, risk and safety profile, drug-drug interactions, ease of administration, side effects and efficacy, (ix) obtain coverage and adequate product reimbursement from third-party payors, including government payors, (x) achieve market acceptance for any approved products, (xi) address any competing technological and market developments, (xii) negotiate favorable terms in any collaboration, licensing or other arrangements into which such acquirer may enter in the future and perform its obligations under such collaborations, (xiii) establish, maintain, protect and enforce intellectual property rights related to the CVR Products and (xiv) attract, hire and retain qualified personnel, among other unknowns, and therefore Pardes’ estimate as to the amount that is expected to be payable under the CVRs is $0.00. For more information regarding the CVR Agreement, see “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.”

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In the event that a Disposition of CVR Products does not occur within the Disposition Period and no other contingent payment condition is achieved, holders of the CVRs will not receive any payment pursuant to the CVR Agreement. In addition, only with respect to CVRs issued in exchange for Company Stock Options, CVR Proceeds will only be payable if the CVR Payment Date (as defined in the CVR Agreement) in respect of such CVR Proceeds occurs either during the Disposition Period or on or before March 15 of the calendar year in which such Disposition occurs, whichever date is later. If the CVR Payment Date with respect to such CVR Proceeds issued in exchange for Company Stock Options, if any, occurs after the later of the Disposition period or March 15 of the calendar year in which the Disposition occurred, the amount of CVR Proceeds will be reallocated to holders of CVRs entitled to receive CVR Proceeds on such CVR Payment Date. In considering whether to tender your Shares in the Offer, you should consider that it is entirely possible that no cash will be distributed to the holders of a CVR under the terms of the CVR Agreement.

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The CVRs will not be transferable except: (i) upon death of the holder by will or intestacy; (ii) by instrument to an inter vivos or testamentary trust in which the CVRs are to be passed to beneficiaries upon the death of the trustee; (iii) pursuant to a court order; (iv) by operation of law (including a consolidation or merger) or without consideration in connection with the dissolution, liquidation or termination of any corporation, limited liability company, partnership or other entity; (v) to an affiliate

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In addition to the terms and conditions described above, the CVRs will not have any voting or dividend rights and will not represent any equity or ownership in Parent, Pardes or Purchaser. No interest will accrue or become payable in respect of any of the amounts that may become payable on the CVRs. For more information regarding the CVR Agreement, see “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.”

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Parent, through Purchaser, has undertaken to acquire control of, and the entire equity interest in, Pardes because (i) the market value of the Shares was, prior to the execution of the Merger Agreement, below Pardes’ liquidation value (based on Parent and Purchaser’s reasonable determination of Pardes’ net cash balance), and (ii) of the ability to expedite the return of cash to Pardes’ stockholders in connection with Pardes’ wind-down and liquidation process. See “Special Factors—Section 2. Purpose of the Offer and Plans for Pardes” and “The Tender Offer—Section 1. Terms of the Offer.”

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Pursuant to the Merger Agreement, Purchaser’s obligation to accept Shares tendered in the Offer is subject to the satisfaction or waiver of certain conditions. Purchaser will not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (relating to Purchaser’s obligation to pay for or return tendered Shares promptly after the termination or withdrawal of the Offer), to pay for any Shares tendered pursuant to the Offer and, subject to the terms of the Merger Agreement, may delay the acceptance for payment of or payment for Shares or may terminate or amend the Offer, if:

(i)

prior to the Expiration Date, there shall not have been validly tendered (and not properly withdrawn) a number of Shares that would represent at least a majority of the Shares owned by Unaffiliated Stockholders (the “Minimum Tender Condition”); or

(ii)

any of the following conditions shall exist or shall have occurred and be continuing at the Expiration Date:

(A)

there shall be any Legal Restraint (as defined below) in effect preventing or prohibiting the consummation of the Offer or the Merger;

(B)

(1) any representation or warranty of Pardes set forth in Article IV of the Merger Agreement (other than those set forth in Sections 4.01 (Organization, Standing and Power) (but only with respect to the first and second sentences thereof), 4.02 (Capital Structure), 4.04 (Authority; Execution and Delivery; Enforceability), 4.05(a)(i) (No Conflicts); 4.08(a) (No Material Adverse Effect), 4.13 (Brokers and Other Advisors), 4.15 (Opinion of Financial Advisors) and 4.16 (No Vote Required)) shall not be true and correct at and as of such time, except to the extent such representation or warranty expressly relates to a specified date (in which case on and as of such specified date), other than for such failures to be true and correct that have not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (as defined in the Merger Agreement) (for purposes of determining the satisfaction of this condition, without regard to any qualifications or exceptions contained therein as to “materiality” or “Company Material Adverse Effect”), (2) any representation or warranty of Pardes set forth in Sections 4.01 (Organization, Standing

(C)

Pardes shall have failed to perform in all material respects the obligations to be performed by it under the Merger Agreement;

(D)

Parent shall have failed to receive from Pardes a certificate, dated as of the date on which the Offer expires and signed by an executive officer of Pardes, certifying to the effect that the Offer Conditions set for in clauses (B) and (C) above have been satisfied as of immediately prior to the expiration of the Offer;

(E)

the Merger Agreement shall have been terminated in accordance with its terms (the “Termination Condition”); or

(F)

the Closing Net Cash as finally determined is less than $125,000,000 (the “Minimum Cash Condition”).

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Yes. Pardes, Parent and Purchaser have entered into the Merger Agreement. The Merger Agreement provides, among other things, for the terms and conditions of the Offer and, following consummation of the Offer, the Merger. See “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.” Additionally, the obligations of Parent and Purchaser under the Merger Agreement have been guaranteed by the Guarantors pursuant to the Limited Guaranty, subject to the terms and conditions set forth therein.

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Yes. Parent expects to (i) pay cash consideration for all Shares accepted for payment in the Offer with Pardes’ Closing Net Cash as finally determined pursuant to the Merger Agreement, and (ii) make any payments of CVR Proceeds with the Net Proceeds from the applicable Disposition of CVR Products, if any. In connection with the execution of the Merger Agreement, the Guarantors have agreed to guarantee certain of Parent’s and Purchaser’s obligations under the Merger Agreement and certain of Pardes’ obligations under the CVR Agreement, subject to the terms and conditions set forth in the Limited Guaranty. The Guarantors’ obligations under the Limited Guaranty are subject to a cap of $7.5 million with respect to obligations to Pardes arising under or in connection with the Merger

•

No, we do not believe it is relevant for the reasons set forth herein. The funds to pay for all Shares accepted for payment in the Offer will be funded by Pardes’ Closing Net Cash as finally determined pursuant to the Merger Agreement. Any payments of CVR Proceeds will be paid from the Net Proceeds from the applicable Disposition of CVR Products, if any. In addition, in connection with the execution of the Merger Agreement, the Guarantors have agreed to guarantee the obligations of Parent and Purchaser to Pardes under the Merger Agreement up to $7.5 million and, with respect to the obligations of Parent and Purchaser to the holders of CVRs under the CVR Agreement, up to $400,000, subject to the terms and conditions set forth in the Limited Guaranty.

•

Purchaser has been organized solely in connection with the Merger Agreement and this Offer and has not carried on any activities other than in connection with the Merger Agreement and this Offer. Because the form of payment consists solely of cash (which is supported by Pardes’ Closing Net Cash as finally determined in accordance with the Merger Agreement and the Limited Guaranty) and CVRs (which will be supported by the Net Proceeds from the Disposition(s) of CVR Products, if any), the Offer is not subject to any financing conditions, the Offer is for all outstanding Shares of Pardes, and because of the lack of any relevant historical information concerning Purchaser, Purchaser’s financial condition is not relevant to your decision to tender in the Offer. See “The Tender Offer—Section 8. Source and Amount of Funds.”

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Pursuant to the terms of the Merger Agreement, Purchaser has extended the Expiration Date so that the Offer and withdrawal rights will expire at one minute past 11:59 p.m. Eastern Time on August 30, 2023. You will have until one minute after 11:59 p.m. Eastern Time on August 30, 2023, to tender your Shares in the Offer, unless Purchaser further extends the Offer, in which event you will have until the Expiration Date of the Offer as so extended. See also “The Tender Offer—Section 1. Terms of the Offer.”

•

Yes, the Offer can be further extended. We have agreed in the Merger Agreement, subject to our rights to terminate the Merger Agreement in accordance with its terms, if on any then-scheduled expiration of the Offer the Minimum Tender Condition has not been satisfied or any Offer Condition (as defined in the Merger Agreement) has not been satisfied or waived by Purchaser (set forth in “The Tender Offer—Section 9. Conditions of the Offer”), Purchaser may, in its discretion, or at the request of Pardes, Purchaser shall, extend the Offer (i) for periods of up to 10 business days per extension to permit such Offer Condition to be satisfied or (ii) for any period required by any rule, regulation, interpretation or position of the Securities and Exchange Commission (the “SEC”) or the staff thereof or the rules of The Nasdaq Stock Market LLC (“Nasdaq”) applicable to the Offer; provided, that, in no event shall Parent or Purchaser be permitted or required to extend the Offer beyond December 16, 2023 (the “Outside Date”). Extensions of the Offer will have no effect on the Additional Price Per Share, which has been finally determined as of the Cash Determination Time in accordance with the terms of the Merger Agreement.

•

If Purchaser further extends the Offer, we will inform Continental Stock Transfer & Trust Company, the depositary and paying agent for this Offer (the “Depositary and Paying Agent”), of that fact and will issue a press release giving the new Expiration Date no later than 9:00 a.m. Eastern Time on the next business day after the day on which the Offer was previously scheduled to expire. See “The Tender Offer—Section 1. Terms of the Offer.”

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If you hold your Shares directly as the registered owner, you can: (i) tender your Shares in the Offer by delivering the certificates representing your Shares, together with a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, to the Depositary and Paying Agent; or (ii) tender your Shares by following the procedure for book-entry set forth in “The Tender Offer—Section 3. Procedures for Tendering Shares,” not later than the expiration of the Offer. See “The Tender Offer—Section 3. Procedures for Tendering Shares.” The Letter of Transmittal is enclosed with this Offer to Purchase.

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If you hold your Shares in street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee), you must contact the institution that holds your Shares and give instructions that your Shares be tendered. You should contact the institution that holds your Shares for more details.

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In all cases, payment for tendered Shares will be made only after timely receipt by the Depositary and Paying Agent of certificates for such Shares (or of a confirmation of a book-entry transfer of such Shares as described in “The Tender Offer—Section 3. Procedures for Tendering Shares”) and a properly completed and duly executed Letter of Transmittal and any other required documents for such Shares. See also “The Tender Offer—Section 2. Acceptance for Payment and Payment for Shares.”

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You may withdraw previously tendered Shares any time prior to one minute after 11:59 p.m. Eastern Time on August 30, 2023, unless Purchaser further extends the Offer. See “The Tender Offer—Section 4. Withdrawal Rights.”

•

In addition, pursuant to Section 14(d)(5) of the Securities Exchange Act of 1934, as amended, Shares may be withdrawn at any time after September 26, 2023, which is the 60th day after the date of the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer.

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To withdraw previously tendered Shares, you must deliver a written or facsimile notice of withdrawal with the required information to the Depositary and Paying Agent while you still have the right to withdraw. If you tendered Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct the broker, dealer, commercial bank, trust company or other nominee to arrange for the withdrawal of your Shares. See “The Tender Offer—Section 4. Withdrawal Rights.”

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After careful consideration and upon the unanimous recommendation of a Special Committee (the “Special Committee”) of the Pardes’ board of directors (the “Pardes Board”), the non-recused members of the Pardes Board have unanimously recommended that you accept the Offer. Pardes’ full statement on the Offer is set forth in its Amended and Restated Solicitation/Recommendation Statement on Schedule 14D-9, which it has filed with the SEC on the date hereof. See also the “Introduction” below.

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If we accept Shares for payment pursuant to the Offer, then the Minimum Tender Condition will have been satisfied and we will hold a sufficient number of Shares to effect the Merger without a vote by Pardes stockholders under the General Corporation Law of the State of Delaware (the “DGCL”). If the Merger occurs, then Pardes will become a wholly owned subsidiary of Parent and each issued and then outstanding Share (other than any Company Restricted Shares, any Shares held by or in treasury by Pardes, any Shares owned, directly or indirectly, by Parent, Purchaser or any subsidiary of Parent (including Shares held by the Foresite Stockholders at the commencement of the Offer, which shall be contributed to Parent prior to the Effective Time), any Shares irrevocably accepted for purchase in the

•

Because the Merger will be governed by Section 251(h) of the DGCL, no stockholder vote will be required to consummate the Merger. As required by Section 251(h) of the DGCL, the Merger Agreement provides that the Merger shall be effected as soon as practicable following the consummation of the Offer. See “Special Factors—Section 2. Purpose of the Offer and Plans for Pardes” and “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.”

•

No. Immediately following consummation of the Offer and satisfaction or waiver (to the extent permitted by applicable law) of the conditions to the Merger, we expect to complete the Merger pursuant to applicable provisions of the DGCL, after which the Surviving Corporation will be a wholly owned subsidiary of Parent, and the Shares will be delisted from Nasdaq and Pardes’ obligations to file periodic reports under the Exchange Act will be suspended, and Pardes will be privately held. See “Special Factors—Section 6. Possible Effects of the Offer on the Market for the Shares; Nasdaq Listing; Exchange Act Registration and Margin Regulations.”

•

If you decide not to tender your Shares in the Offer and the Merger occurs as described above, you will receive in the Merger the right to receive the Offer Price as if you had tendered your Shares in the Offer.

•

If you decide not to tender your Shares in the Offer and the Merger does not occur, you will remain a stockholder of Pardes. Subject to limited conditions, if we purchase Shares in the Offer, we are obligated under the Merger Agreement to cause the Merger to occur. See “Special Factors—Section 6. Possible Effects of the Offer on the Market for the Shares; Nasdaq Listing; Exchange Act Registration and Margin Regulations.”

•

Following the Offer, the Shares may no longer constitute “margin securities” for purposes of the margin regulations of the Federal Reserve Board, in which case your Shares may no longer be used as collateral for loans made by brokers. See “Special Factors—Section 6. Possible Effects of the Offer on the Market for the Shares; Nasdaq Listing; Exchange Act Registration and Margin Regulations.”

•

On August 16, 2023, the last full trading day prior to the date of this Offer to Purchase, the last reported closing price per Share reported on Nasdaq was $2.10, which is lower than the Cash Amount of $2.13 per Share. See “Special Factors—Section 5. Price Range of Shares; Dividends.”

•

If the conditions to the Offer as set forth in the Introduction and “The Tender Offer—Section 9. Conditions of the Offer” are satisfied or waived and Purchaser consummates the Offer and accepts your Shares for payment, we will pay you a dollar amount in cash equal to the number of Shares you tendered multiplied by the Cash Amount, plus one CVR per Share, in each case, without interest and subject to any applicable tax withholding, promptly following the time at which Purchaser accepts for payment Shares tendered in the Offer (and in any event within three business days). See “The Tender Offer—Section 1. Terms of the Offer” and “The Tender Offer—Section 2. Acceptance for Payment and Payment for Shares.”

•

We will pay to the holders of CVRs the applicable CVR Proceeds, if any, within 30 days following the receipt of proceeds from a Disposition during the Disposition Period.

•

For more information regarding the CVR Agreement, see “The Tender Offer—Section 7. Summary of the Merger Agreement and Certain Other Agreements.”

•

At the Effective Time, each Company Stock Option will become immediately vested and exercisable in full and (A) each Company Stock Option that has an exercise price per share that is less than the Cash Amount (each, an “In-the-Money Option”) that is then outstanding will be cancelled, and, in exchange therefor, the holder of such cancelled In-the-Money Option will be entitled to receive, in consideration of the cancellation of such In-the-Money Option, (1) an amount in cash, without any interest thereon and subject to any withholding of taxes, equal to the product of (x) the excess of the Cash Amount over the applicable exercise price per share under such In-the-Money Option by (y) the total number of Shares underlying such In-the-Money Option as of immediately prior to the Effective Time (the “Company Stock Option Cash Consideration”) and (2) one CVR for each Share subject thereto and (B) each Company Stock Option that is not an In-the-Money Option will be cancelled for no consideration. The 37,500 In-the-Money Options held by Dr. Tananbaum will be treated in the same manner as all other In-the-Money Options.

•

Immediately prior to the Offer Closing Time, each Company Restricted Share that is then outstanding shall become immediately vested in full. At the Effective Time, each Company Restricted Share that is then outstanding shall be cancelled and the holder of such cancelled Company Restricted Share shall be entitled to receive (i) the Cash Amount, less applicable tax withholding, and (ii) one CVR.

•

CVR Proceeds with respect to CVRs issued in exchange for Company Stock Options will only be payable if the CVR Payment Date in respect of such CVR Proceeds occurs during the Disposition Period or on or before March 15 of the calendar year in which such Disposition occurs, whichever date is later. If the CVR Payment Date with respect to such CVR Proceeds, if any, occurs after the later of the Disposition period or March 15 of the calendar year in which the Disposition occurred, then such amount of CVR Proceeds will be reallocated to holders of CVRs entitled to receive CVR Proceeds on such CVR Payment Date.

•

The receipt of cash and CVRs in exchange for Shares pursuant to the Offer or the Merger will be treated for U.S. federal income tax purposes either as (1) consideration received in a sale or exchange of the Shares that you exchange in the Offer or the Merger or (2) a distribution in respect of your Shares. The amount of income, gain or loss a holder recognizes, and the timing and character of such income, gain or loss, will depend on the U.S. federal income tax treatment of the CVRs, with respect to which there is uncertainty. To the extent required to take a position, we intend to act consistently with the receipt of the CVRs as part of an “open transaction” for U.S. federal income tax purposes. Assuming such treatment is respected by the Internal Revenue Service (“IRS”), a U.S. Holder (as defined below in “Special Factors—Section 7. Certain U.S. Federal Income Tax Consequences of the Offer and the Merger”) who holds no Shares following the Offer and the Merger is expected (except to the extent any portion of such payment is required to be treated as imputed interest as defined below in “Special Factors—Section 7. Certain U.S. Federal Income Tax Consequences of the Offer and the Merger”) to recognize income, gain or loss equal to the difference between the amount of cash received (including in payments pursuant to the CVRs, but not including the amount of such payments treated as imputed interest) in exchange for the Shares sold or exchanged in the Offer or the Merger and the U.S. Holder’s adjusted tax basis in the Shares exchanged pursuant to the Offer or the Merger. We urge you to consult your own tax advisor as to the particular tax consequences to you of the Offer and the Merger (including the application and effect of any state, local or non-U.S. income and other tax laws). See “Special Factors—Section 7. Certain U.S. Federal Income Tax Consequences of the Offer and the Merger” for a more detailed discussion of certain U.S. federal income tax consequences of the Offer and the Merger.

•

No appraisal rights are available to the holders of Shares in connection with the Offer and stockholders who tender their Shares in the Offer will not have appraisal rights in connection with the Merger. However, if Purchaser purchases Shares in the Offer and the Merger is consummated, holders and beneficial owners of Shares outstanding as of immediately prior to the Effective Time who: (i) did not tender their Shares in the Offer (or, if tendered, validly and subsequently withdrew such Shares prior to the time Parent accepts properly tendered Shares for purchase); (ii) otherwise comply with the applicable procedures under Section 262 of the DGCL; and, (iii) do not thereafter withdraw their demand for appraisal of such Shares or otherwise lose their appraisal rights, in each case in accordance with the DGCL, will be entitled to demand appraisal of their Shares and receive in lieu of the consideration payable in the Merger a cash payment equal to the “fair value” of their Shares exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, in accordance with Section 262 of the DGCL plus interest, if any, on the amount determined to be the fair value.

•

The “fair value” of the Shares as determined by the Delaware Court of Chancery could be based upon considerations other than, or in addition to, the price paid in the Offer and the Merger and the market value of such Shares. Stockholders should recognize that the value determined in an appraisal proceeding of the Delaware Court of Chancery could be higher or lower than, or the same as, the Offer Price and that an investment banking opinion as to the fairness, from a financial point of view, of the consideration payable in a sale transaction, such as the Offer and the Merger, is not an opinion as to, and does not otherwise address, fair value under the DGCL. Moreover, Parent and Pardes may argue in an appraisal proceeding that, for purposes of such proceeding, the “fair value” of such Shares is less than the Offer Price.

•

Any stockholder or beneficial owner of Shares who desires to exercise his, her or its appraisal rights should review carefully Section 262 of the DGCL and is urged to consult his, her or its legal advisor before electing or attempting to exercise such rights.

•

The foregoing summary of appraisal rights under the DGCL does not purport to be a statement of the procedures to be followed by stockholders or beneficial owners of Shares desiring to exercise any appraisal rights under Delaware law. The preservation and exercise of appraisal rights require strict and timely adherence to the applicable provisions of Delaware law, which are contained in Section 262 of the DGCL and will be further summarized in a notice of the availability of appraisal rights to be sent by Pardes. The foregoing discussion is not a complete statement of law pertaining to appraisal rights under Delaware law and is qualified in its entirety by reference to Delaware law, including without limitation, Section 262 of the DGCL, a copy of which may be accessed without subscription or cost at the following publicly available website: https://delcode.delaware.gov/title8/c001/sc09/index.html#262. For more information regarding appraisal rights, see “The Tender Offer—Section 11. Certain Legal Matters; Regulatory Approvals.”

•

If you tender your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares but, instead, subject to the conditions to the Offer, you will receive the Offer Price for your Shares.

•

You can call Innisfree M&A Incorporated, the Information Agent, toll-free at (877) 800-5190. See the back cover of this Offer to Purchase.

(i)

prior to the Expiration Date, the Minimum Tender Condition shall have not been satisfied; or

(ii)

any of the conditions set forth in “The Tender Offer—Section 9. Conditions of the Offer” shall exist or shall have occurred and be continuing at the Expiration Date of the Offer.

1.

BACKGROUND OF THE OFFER; CONTACTS WITH PARDES.

2.

PURPOSE OF THE OFFER AND PLANS FOR PARDES.

3.

POSITION OF PARENT AND PURCHASER REGARDING FAIRNESS OF THE OFFER AND THE MERGER.

•

The Base Price Per Share represents a premium of approximately 9.2% over the closing price of the Shares on July 14, 2023, the last trading day prior to execution of the Merger Agreement.

•

The Cash Amount (including the Base Price Per Share and the Additional Price Per Share as of the Cash Determination Date) represents a premium of approximately 15.1% over the closing price of the Shares on July 14, 2023, the last trading day prior to the execution of the Merger Agreement.

•

The Cash Amount (including the Base Price Per Share and the Additional Price Per Share as of the Cash Determination Date) represents a premium to all closing prices of the Shares on each trading day from April 3, 2023, the date Pardes announced results from the pomotrelvir Phase 2 clinical trial, to July 14, 2023, the last trading day prior to the execution of the Merger Agreement.

•

The Cash Amount (including the Base Price Per Share and the Additional Price Per Share as of the Cash Determination Date) represents a premium of approximately 42.0% over the average price per Share that certain of the Purchaser Parties paid to acquire Shares in the open market on April 5, 2023. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

Following the announcement of topline results from the pomotrelvir Phase 2 clinical trial and suspension of further clinical development of pomotrelvir, Pardes has no going concern value.

•

The Offer will provide holders with liquidity, without the brokerage and other costs typically associated with market sales.

•

Neither the Offer nor the Merger is subject to any financing condition.

•

The Offer Price (other than the CVRs) will be paid in cash promptly after the Expiration Date. Therefore, holders of Shares will receive a certain prescribed value in the Offer or the Merger compared to an unknown liquidation value that would delay delivering consideration to Unaffiliated Stockholders.

•

The Purchaser Parties considered the value of the Offer Price relative to the value that would be returned to the Unaffiliated Stockholders following a potential liquidation and determined that the value of the Offer Price would exceed the value that would be returned to Unaffiliated Stockholders following a potential liquidation.

•

The Offer is conditioned on the valid tender of at least a majority of the Shares owned by the Unaffiliated Stockholders, and such condition cannot be waived.

•

The CVRs provide the Unaffiliated Stockholders with contractual rights to receive one or more potential payments in cash, contingent upon the receipt of proceeds from the Disposition of CVR Products during the Disposition Period.

•

Dr. Tananbaum recused himself from meetings of the Pardes Board discussing the Offer and the Merger, and the Purchaser Parties conditioned the Offer on the Pardes Board establishing a special committee consisting of non-recused members of the Pardes Board who are disinterested and independent of the Purchaser Parties to negotiate the terms of the Offer and the Merger. The Special Committee determined the terms of the Offer and the Merger are fair and in the best interests of the Unaffiliated Stockholders.

•

The non-recused members of the Pardes Board made the recommendation to the Unaffiliated Stockholders to tender their Shares as described in the Schedule 14D-9 filed by Pardes with the SEC.

•

The non-recused members of the Pardes Board, at the recommendation of the Special Committee, determined that the Offer and the Merger were fair and in the best interests of Pardes and the Unaffiliated Stockholders as described in the Schedule 14D-9 filed by Pardes with the SEC.

•

The Purchaser Parties did not participate in and did not have any influence on the deliberative process of, or the conclusions reached by, the Special Committee or the negotiating positions of the Special Committee. The terms and conditions of the Merger Agreement, including the Offer Price, resulted from arm’s length negotiations between the Special Committee and the Purchaser Parties.

•

The Special Committee retained its own independent financial advisor to assist the Pardes Board in connection with the Offer and the Merger and obtained an opinion from its financial advisor, dated July 16, 2023, that the Offer Price (regardless of whether the Additional Price Per Share was $0.00, $0.17 or any amount within such range) to be received by the holders of Shares (other than Excluded Shares) pursuant to the Merger Agreement is fair, from a financial point of view, to such holders. See “Special Factors—Section 4. Reports, Opinions, Appraisals and Negotiations” and Exhibit (c)(1) to the Schedule 13E-3 filed by Pardes with the SEC.

•

Given the decision by Pardes to suspend further clinical development of its lead candidate, pomotrelvir, following the failure to achieve the primary endpoint in its Phase 2 clinical trial, the Special Committee conducted a process to explore Pardes’ strategic alternatives. The Special Committee did not identify any superior prospects in its overview of strategic alternatives, including various potential transaction structures, including a “reverse merger” with a privately held company, in-licensing or acquiring clinical assets or new technologies, a merger with another publicly traded company, a “cash-out” tender offer, and a statutory dissolution and return of capital to stockholders.

•

Members of Pardes’ senior management prepared and approved a dissolution analysis that determined that Pardes has no standalone business plan and its plan in the absence of a sale or merger is to pursue a dissolution. The Purchaser Parties reviewed the value of the Cash Amount relative to the value that would be returned to the Unaffiliated Stockholders following a potential liquidation according to

•

Unaffiliated Stockholders will have sufficient time to make a decision whether or not to tender their Shares in the Offer:

○

○

•

Each of the Unaffiliated Stockholders will be able to decide voluntarily whether or not to tender such stockholder’s Shares.

•

If the Purchaser Parties consummate the Offer, the Purchaser Parties will acquire all remaining Shares (other than Excluded Shares) for the same Offer Price in the Merger.

•

If the Offer is successful and the Merger is consummated, stockholders and beneficial owners of Shares who did not tender their Shares in the Offer and who otherwise comply with the applicable statutory procedures under Section 262 of the DGCL, will be entitled to demand appraisal of their Shares and receive in lieu of the consideration payable in the Merger a cash payment equal to the “fair value” of their Shares exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery, in accordance with Section 262 of the DGCL. See “The Tender Offer—Section 11. Certain Legal Matters; Regulatory Approvals.”

•

Following the successful completion of the Offer and the Merger, the Unaffiliated Stockholders will not face the risk of any decline in the value of the Shares.

•

Dr. Tananbaum is a member of the Pardes Board, as well as the President and Chief Executive Officer of Parent and Purchaser, the Managing Member of the General Partner of Foresite Capital Fund V, L.P., the Managing Member of the General Partner of Foresite Capital Opportunity Fund V, L.P., and the founder and Chief Executive Officer of Foresite Capital.

•

Collectively, the Purchaser Parties’ own approximately 27.1% of the outstanding Shares of Pardes. In addition, Dr. Tananbaum personally holds In-the-Money Options to purchase 37,500 Shares of Pardes.

•

The Cash Amount (including the Base Price Per Share and the Additional Price Per Share as of the Cash Determination Date) is significantly lower than the price per Share that certain of the Purchaser Parties paid to acquire Shares in a block trade on December 22, 2021. See “The Tender Offer—Section 6. Certain Information Concerning Parent and Purchaser.”

•

With respect to the CVRs, it is uncertain whether we will be able to consummate any Dispositions during the Disposition Period or that such Dispositions, if any, will generate Net Proceeds. In addition, Pardes believes there is currently no market opportunity for the CVR Products and estimates the amount that is expected to be payable under the CVRs is $0.00. It is possible that no CVR Proceeds will be paid, and Unaffiliated Stockholders should base their tender decision on the Cash Amount as it may be the only consideration Unaffiliated Stockholders receive in the Offer.

•

Certain directors and executive officers of Pardes have actual or potential conflicts of interest in connection with the Offer and the Merger. See “The Tender Offer—Section 13. Interests of Certain Pardes Directors and Executive Officers in the Offer and the Merger.”

•

The receipt of cash for Shares pursuant to the Offer or the Merger will be a taxable transaction for U.S. federal income tax purposes. See “Special Factors—Section 7. Certain U.S. Federal Income Tax Consequences of the Offer and the Merger.”

•

Neither the Offer nor the Merger is conditioned on the affirmative vote of a majority of Pardes’ Unaffiliated Stockholders and the Merger will be consummated without any vote of Pardes’ stockholders in accordance with Section 251(h) of the DGCL.

4.

REPORTS, OPINIONS, APPRAISALS AND NEGOTIATIONS.

5.

PRICE RANGE OF SHARES; DIVIDENDS.

6.

POSSIBLE EFFECTS OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING; EXCHANGE ACT REGISTRATION AND MARGIN REGULATIONS.

7.

CERTAIN U.S FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE MERGER.

1.

TERMS OF THE OFFER.

(A)

reduce the number of Shares subject to the Offer;

(B)

reduce the Offer Price below the Base Price Per Share;

(C)

waive, amend or modify the Termination Condition;

(D)

add to the Offer Conditions or impose any other conditions on the Offer or amend, modify or supplement any Offer Condition in any manner adverse to the holders of Shares;

(E)

terminate, extend or otherwise modify the Expiration Date of the Offer other than as provided in the Merger Agreement;

(F)

change the form or terms of consideration payable in the Offer (provided that the determination of the final Cash Amount pursuant to the terms of the Merger Agreement above the Base Price Per Share will not constitute such a change);

(G)

otherwise amend, modify or supplement any of the terms of the Offer in any manner adverse to the holders of Shares; or

(H)

provide for any “subsequent offering period” within the meaning of Rule 14d-11 under the Exchange Act.

2.

ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.

3.

PROCEDURES FOR TENDERING SHARES.

4.

WITHDRAWAL RIGHTS.

5.

CERTAIN INFORMATION CONCERNING PARDES.

6.

CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER.

7.

SUMMARY OF THE MERGER AGREEMENT AND CERTAIN OTHER AGREEMENTS.

(A)

reduce the number of Shares subject to the Offer;

(B)

reduce the Offer Price below the Base Price Per Share;

(C)

waive, amend or modify the Termination Condition;

(D)

add to the Offer Conditions or impose any other conditions on the Offer or amend, modify or supplement any Offer Condition in any manner adverse to the holders of Shares;

(E)

terminate, extend or otherwise amend or modify the Expiration Date of the Offer other than as provided in the Merger Agreement;

(F)

change the form or terms of consideration payable in the Offer (provided that the determination of the final Cash Amount pursuant to the terms of the Merger Agreement above the Base Price Per Share will not constitute such a change);

(G)

otherwise amend, modify or supplement any terms of the Offer in a manner adverse to the holders of Shares; or

(H)

provide for any “subsequent offering period” within the meaning of Rule 14d-11 under the Exchange Act.

(i)

there must not be any judgment issued, or other legal restraint or prohibition imposed, in each case, by any governmental entity of competent jurisdiction, or law, in each case, of the United States or any state thereof (collectively, “Legal Restraints”) preventing or prohibiting the consummation of the Merger; and

(ii)

Purchaser must have accepted or caused to be irrevocably accepted for payment all Shares validly tendered and not validly withdrawn pursuant to the Offer.

(i)

by mutual written consent of Parent, Purchaser and Pardes (in the case of Pardes, upon approval of the Special Committee);

(ii)

by either Parent or Pardes (in the case of Pardes, upon approval of the Special Committee) if:

a.

(A) the Offer Closing Time shall not have occurred on or before the Outside Date or (B) the Offer has expired or been terminated in accordance with its terms and in accordance with the Merger Agreement without Purchaser having purchased any Shares; provided that this right to terminate the Merger Agreement shall not be available to a party if such occurrence is primarily due to a material breach of the Merger Agreement by such party (an “Outside Date Termination”); or

b.

if any Legal Restraint permanently preventing or prohibiting the consummation of the Offer or the Merger shall be in effect and become final and non-appealable; provided, that this right to terminate the Merger Agreement shall not be available to a party if such Legal Restraint is primarily due to such party’s failure to comply with its reasonable best efforts obligations as described above;

(iii)

by Parent if Pardes breaches or fails to perform any of its representations, warranties or covenants contained in the Merger Agreement, which breach or failure to perform individually or in the aggregate with all such other breaches or failures to perform (A) would result in the failure of an Offer Condition and (B) cannot be or has not been cured prior to the earlier of (x) 30 days after giving written notice to Pardes of such breach or failure to perform and (y) the Outside Date; provided that Parent and Purchaser are not then in material breach of the Merger Agreement (a “Pardes Breach Termination”);

(iv)

by Parent if an Adverse Recommendation Change has occurred;

(v)

by Parent if the Closing Net Cash as finally determined pursuant to the Merger Agreement is less than $125 million (a “Minimum Cash Termination”);

(vi)

by Pardes (upon approval of the Special Committee) if (i) Purchaser fails to commence the Offer, except in the event of a violation by Pardes of its obligations under the Merger Agreement, (ii) Purchaser shall have terminated the Offer prior to its expiration date (as may be extended) other than in accordance with the Merger Agreement, or (iii) all of the Offer Conditions have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the time Purchaser consummates the Offer, but subject to such conditions being able to be satisfied or waived) as of immediately prior to the then-scheduled expiration of the Offer and the Offer Closing Time shall not have occurred within five business days following the expiration of the Offer;

(vii)

by Pardes (upon approval of the Special Committee) if Parent or Purchaser breaches or fails to perform any of its representations, warranties or covenants contained in the Merger Agreement, which breach or failure to perform (A) had or would reasonably be expected to, individually or in the aggregate with all such other breaches or failures to perform, result in a Parent Material Adverse Effect (as defined in the Merger Agreement) and (B) cannot be or has not been cured prior to the earlier of (x) 30 days after the giving of written notice to Parent or Purchaser of such breach or failure to perform and (y) the Outside Date; provided that Pardes is not then in material breach of the Merger Agreement; or

(viii)

by Pardes (upon approval of the Special Committee) if (A) the Pardes Board (acting upon the recommendation of the Special Committee) or the Special Committee authorizes Pardes to enter into a definitive written agreement constituting a Superior Company Proposal (as defined below), (ii) the Pardes Board and the Special Committee have complied in all material respects with their obligations under the Merger Agreement in respect of such Superior Company Proposal and (iii) Pardes has paid, or simultaneously with the termination of the Merger Agreement pays, the Company Termination Fee (as defined below).

(i)

Pardes terminates the Merger Agreement pursuant to a termination in connection with a Superior Company Proposal as described in clause (viii) of “Termination” above, except all references to 20% in the definition of Company Takeover Proposal (as defined below) shall be deemed references to 50%;

(ii)

Parent terminates the Merger Agreement in the event an Adverse Recommendation Change occurs; or

(iii)

(A) a bona fide Company Takeover Proposal is publicly proposed or announced or becomes publicly known or otherwise communicated to management of Pardes or the Pardes Board, and such Company Takeover Proposal is not publicly withdrawn or, if not publicly proposed or announced or communicated to the Pardes Board or management, has been withdrawn (x) in the case of an Outside Date Termination, four business days prior to the final expiration date of the Offer or (y) in the case of a Pardes Breach Termination, prior to the time of such breach, (B) the Merger Agreement is terminated pursuant to an Outside Date Termination or a Pardes Breach Termination, and (C) within 12 months after such termination, Pardes consummates, or enters into a definitive agreement with respect to, any Company Takeover Proposal.

•

“Company Takeover Proposal” means any inquiry, proposal or offer from any person or group (other than Parent and its subsidiaries) relating to (i) any direct or indirect acquisition or purchase, in a single transaction or a series of related transactions, of (A) 20% or more (based on the fair market value thereof, as determined by the Pardes Board (acting upon the recommendation of the Special Committee) or the Special Committee) of the assets of Pardes or (B) 20% or more of the aggregate voting power of the capital stock of Pardes, (ii) any tender offer, exchange offer, merger, consolidation, business combination, recapitalization, liquidation, dissolution, binding share exchange or similar transaction involving Pardes that, if consummated, would result in any person or group (or the stockholders of any person) beneficially owning, directly or indirectly, 20% or more of the aggregate voting power of the capital stock of Pardes or of the surviving entity or the resulting direct or indirect parent of Pardes or such surviving entity, other than, in each case, the Transactions or (iii) any combination of the foregoing.

•

“Superior Company Proposal” means any written bona fide Company Takeover Proposal received after July 17, 2023 and that if consummated would result in a person or group (or the stockholders of any person) owning, directly or indirectly, (i) 50% or more of the aggregate voting power of the capital stock of Pardes or of the surviving entity or the resulting direct or indirect parent of Pardes or such surviving entity or (ii) 50% or more (based on the fair market value thereof, as determined in good faith by the Pardes Board (acting upon the recommendation of the Special Committee) or the Special Committee) of the assets of Pardes on terms and conditions which the Pardes Board (acting upon the recommendation of the Special Committee) or the Special Committee determines, in good faith, after consultation with outside counsel and its independent financial advisor, (A) would reasonably be expected to be more favorable from a financial point of view to the Pardes stockholders than the Transactions, taking into account all the terms and conditions (including all financial, regulatory, financing, conditionality, legal and other terms and conditions) of such proposal and the Merger Agreement; and (B) is reasonably likely to be completed.

•

enter into any new line of business outside of its existing business or enter into any agreement materially limiting or restricting its ability to compete in any line of business or in any geographic area or its operations;

•

(A) declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock or property) in respect of, any of its capital stock, (B) split, combine, reclassify or otherwise authorize the issuance of any other securities in respect of or in substitution for shares of its capital stock, or (C) repurchase, redeem or otherwise acquire shares of its capital stock or any options, warrants, or rights to acquire any such shares or other equity interests, other than in connection with the (x) acquisitions of Shares relating to the surrender of Shares by holders of Company Stock Options outstanding on the date of the Merger Agreement in order to pay the exercise price thereof, (y) withholding of Shares to satisfy tax obligations with respect to awards granted pursuant to the Company Stock Plans outstanding on the date of the Merger Agreement, and (z) acquisitions by Pardes of Company Stock Options in connection with the forfeiture of such awards;

•

issue, grant, deliver, sell, authorize, pledge or otherwise encumber any shares of its capital stock or options, warrants, convertible or exchangeable securities, stock-based performance units or other rights to acquire such shares, any indebtedness of Pardes having the right to vote or other rights that give a person the right to receive any economic interest accruing to the holders of Shares, other than the Company Restricted Shares and issuances of Shares upon the exercise of Company Stock Options;

•

amend its certificate of incorporation, bylaws or other comparable organizational documents, other than immaterial or ministerial amendments;

•

form any subsidiary or acquire or agree to acquire, directly or indirectly, in a single transaction or a series of related transactions, whether by merging or consolidating with, or by purchasing a substantial equity interest in or a substantial portion of the assets of, or by any other manner, any assets outside of the ordinary course of business, any business or any corporation, partnership, limited liability company, joint venture, association or other business organization or division thereof or any other person;

•

other than as required pursuant to the terms of any Pardes benefit plan or benefit agreement in effect on the date of the Merger Agreement, (A) adopt or enter into any collective bargaining agreement, Pardes benefit plan or benefit agreement, (B) grant to any director, employee or individual service provider any increase in base compensation, (C) grant to any director, employee or individual service provider any increase in severance or termination pay, (D) pay or award, or commit to pay or award, any bonuses or incentive or equity compensation, (E) enter into any employment, retention, consulting, change in control, severance or termination agreement with any director, employee or individual service provider, (F) take any action to vest or accelerate any rights or benefits under any Pardes benefit plan or benefit agreement or € hire or terminate (other than for cause) the employment or service of any employee or individual service provider;

•

change its accounting methods, principles or practices, except as may be required by GAAP or by applicable law;

•

sell, lease, license, or otherwise transfer (including through any “spin-off”), or pledge, encumber or otherwise subject to any lien (other than a Permitted Lien (as defined in the Merger Agreement)), any properties or assets (other than intellectual property) except sales or other dispositions of inventory and excess or obsolete properties or assets in the ordinary course of business;

•

incur or materially modify the terms of (including by extending the maturity date thereof) any indebtedness for borrowed money or guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to acquire any debt securities of Pardes, guarantee any debt securities of another person, enter into any “keep well” or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect of any of the foregoing or make any loans, advances or capital contributions to, or investments in, any other person;

•

make or agree to make any capital expenditures;

•

pay, discharge, settle, compromise or satisfy (A) any pending or threatened claims, liabilities or obligations relating to any proceeding (absolute, accrued, asserted or unasserted, contingent or otherwise), other than any such payment, discharge, settlement, compromise or satisfaction of a claim solely for money damages in the ordinary course of business in an amount not to exceed $100,000 per payment, discharge, settlement, compromise or satisfaction or $250,000 in the aggregate for all such payments, discharges, settlements, compromises or satisfactions, provided such amounts are taken into account in the calculation of Closing Net Cash or (B) any litigation, arbitration, proceeding or dispute that relates to the Transactions;

•

make, change or revoke any material tax election or any annual tax accounting period or adopt or change any material method of tax accounting;

•

amend, cancel or terminate any material insurance policy naming Pardes as an insured, a beneficiary or a loss payable payee without obtaining comparable substitute insurance coverage;

•

adopt a plan or agreement of complete or partial liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization (other than the Merger);

•

enter into, terminate or modify in any material respect, or expressly release any material rights under, any Material Contract (as defined in the Merger Agreement) or any contract that, if existing on the date of the Merger Agreement, would have been a Material Contract; or

•

authorize, commit or agree to take any of the foregoing actions.

•

corporate matters, such as due organization, organizational documents, good standing, qualification,

•

capitalization;

•

subsidiaries;

•

power and authority and enforceability;

•

absence of conflicts and required consents and approvals;

•

SEC filings, financial statements and absence of undisclosed liabilities;

•

accuracy of information supplied for purposes of the Schedule 14D-9 and the Offer Documents;

•

absence of certain changes (including a Pardes Material Adverse Effect (as defined below)) since March 31, 2023;

•

taxes;

•

material contracts;

•

litigation;

•

real property;

•

compliance with laws;

•

regulatory matters;

•

environmental matters;

•

labor matters;

•

employee benefit plans;

•

intellectual property;

•

privacy and data security;

•

brokers’ fees and expenses

•

absence of a stockholder rights plan and Takeover Laws;

•

fairness opinion of financial advisor; and

•

absence of any requirement for stockholder votes or consents in accordance with Section 251(h) of the DGCL.

(i)

general conditions or changes in the industries in which Pardes operates;

(ii)

general economic or regulatory, legislative or political conditions or changes, including any actual or potential stoppage, shutdown, default or similar event or occurrence affecting a national or federal government, or securities, credit, banking, financial or other capital markets conditions (including changes generally in prevailing interest rates, currency exchange rates, credit markets or equity price levels or trading volumes), in each case, in the United States, the European Union or elsewhere in the world;

(iii)

any change in applicable law or GAAP after the date of the Merger Agreement;

(iv)

geopolitical conditions, the outbreak or escalation of hostilities, any acts or threats of war (whether or not declared, including the ongoing conflict between Russia and Ukraine), sabotage or terrorism, or any escalation or worsening of any of the foregoing;

(v)

any epidemic, pandemic (including COVID-19), disease outbreak or other public health-related event (or escalation or worsening of any such events or occurrences, including, in each case, the response of governmental officials (including any quarantine, “shelter in place,” “stay at home,” social distancing, shutdown, closure, sequester or other law, order, directive, guideline or recommendation by any governmental entity or public health agency in connection with or in response to COVID-19), hurricane, tornado, flood, fire, volcano, earthquake or other natural or man-made disaster or any other national or international calamity, crisis or disaster;

(vi)

the failure, in and of itself, of Pardes to meet any internal or external forward-looking projections, forecasts, estimates or predictions in respect of any financial or operating metrics before, on or after the date of the Merger Agreement, or changes in the market price or trading volume of the Shares or the credit rating of Pardes;

(vii)

the announcement, pendency or performance of any of the Transactions, including the identity of, or any facts or circumstances relating to, Parent, Purchaser or their respective affiliates, any stockholder litigation (direct or derivative) in respect of the Merger Agreement or any of the Transactions and any loss of or change in relationship, contractual or otherwise, with any governmental entity, supplier, vendor, service provider, collaboration partner, licensor, licensee or any other party having business dealings with Pardes, or departure of any employees or officers, of Pardes;

(viii)

Pardes’ compliance with the covenants contained in the Merger Agreement;

(ix)

any action taken by Pardes at Parent’s express written request or with Parent’s express written consent; or

(x)

any matter disclosed in Pardes’ confidential disclosure schedules delivered in connection with the Merger Agreement;

•

corporate matters, such as due organization, good standing, power and authority;

•

absence of conflicts and required consents and approvals;

•

accuracy of information supplied for purposes of the Schedule 14D-9 and the Offer Documents;

•

broker’s fees and expenses;

•

litigation;

•

ownership of certain Pardes common stock; and

•

the Limited Guaranty.

8.

SOURCE AND AMOUNT OF FUNDS.

9.

CONDITIONS OF THE OFFER.

(a)

prior to the Expiration Date, there shall not have been validly tendered (and not properly withdrawn) a number of Shares that would represent at least a majority of the Shares owned by Unaffiliated Stockholders (the “Minimum Tender Condition”); or

(b)

any of the following conditions shall exist or shall have occurred and be continuing at the Expiration Date:

(i)

there shall have been any Legal Restraint (as defined in the Merger Agreement) in effect preventing or prohibiting the consummation of the Offer or the Merger;

(A)

(1) any representation or warranty of Pardes set forth in Article IV of the Merger Agreement (other than those set forth in Sections 4.01 (Organization, Standing and Power) (but only with

(B)

Pardes shall have failed to perform in all material respects the obligations to be performed by it under the Merger Agreement;

(C)

Parent shall have failed to receive from Pardes a certificate, dated as of the date on which the Offer expires and signed by an executive officer of Pardes, certifying to the effect that the Offer Conditions set for in clauses (A) and (B) above have been satisfied as of immediately prior to the expiration of the Offer;

(iii)

the Merger Agreement shall have been terminated in accordance with its terms; or

(iv)

the Closing Net Cash as finally determined is less than $125,000,000.

10.

DIVIDENDS AND DISTRIBUTIONS.

11.

CERTAIN LEGAL MATTERS; REGULATORY APPROVALS.

•

within the later of the consummation of the Offer (which will occur at the date and time of the acceptance for payment of Shares pursuant to and subject to the conditions of the Offer) and 20 days after the mailing of the Schedule 14D-9, deliver to Pardes at the address indicated in the Schedule 14D-9 a written demand for appraisal of their Shares, which demand must reasonably inform Pardes of the identity of the person making the demand and that the person is demanding appraisal and, in the case of a demand made by a beneficial owner of Shares, must also reasonably identify the holder of record of the Shares for which the demand is made, be accompanied by documentary evidence of such beneficial owner’s beneficial ownership of stock and a statement that such documentary evidence is a true and correct copy of what it purports to be, and provide an address at which such beneficial owner consents to receive notices given by the surviving corporation and to be set forth on the verified list required by subsection (f) of Section 262 of the DGCL;

•

not tender his, her or its Shares pursuant to the Offer (or, if tendered, validly and subsequently withdraw such Shares prior to the time Parent accepts properly tendered Shares for purchase); and

•

continuously hold of record or beneficially own, as applicable, the Shares from the date on which the written demand for appraisal is made through the Effective Time.

12.

FEES AND EXPENSES.

(1)

Purchaser will pay an additional $2,500 to the Depositary and Paying Agent following each extension of the Offer (if any). In connection with the CVR Agreement, the Rights Agent will receive an annual fee of $3,500 per year until the earlier of the end of the Disposition Period or the date that the CVR Agreement is terminated. Purchaser will also reimburse the Depositary and Paying Agent and the Rights Agent for certain reasonable and documented out-of-pocket fees and expenses.

(2)

The fee paid to the Information Agent will be reduced to $30,000 if the Transactions are not consummated. Purchaser will also reimburse the Information Agent for certain reasonable and documented out-of-pocket fees and expenses.

13.

INTERESTS OF CERTAIN PARDES DIRECTORS AND EXECUTIVE OFFICERS IN THE OFFER AND THE MERGER.

14.

MISCELLANEOUS.

1.

MediPacific Sub, Inc.

2.

MediPacific, Inc.

3.

Foresite Capital Opportunity Fund V, L.P.

4.

Foresite Capital Fund V, L.P.

5.

FS Development Holdings II, LLC

(1)

Consists of (i) the Shares beneficially owned by the Foresite Stockholders and (ii) 37,500 Shares subject to In-the-Money Options held by Dr. Tananbaum. The In-the-Money Options held by Dr. Tananbaum were granted on June 1, 2023 and have an exercise price of $1.87 per Share.