TRANSACTIONS WITH RELATED PERSONS AND INDEMNIFICATION
RELATED PERSON TRANSACTIONS POLICY AND
PROCEDURES
In June 2021, we adopted a related person transaction policy that sets forth our procedures for the identification, review,
consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person transaction will be a transaction, arrangement or relationship, or any series of similar transactions, arrangements or
relationships, in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director will not be covered by this
policy. A related person means any person who is, or at any time since the beginning of the Companys last fiscal year, was, a director or executive officer of the Company or a nominee to become a director of the Company and any security holder
known by the Company to be the beneficial owner of more than 5% of any class of the Companys voting securities, including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction
when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to our Audit Committee, or, if
Audit Committee approval would be inappropriate, to another independent body of the Board, for review, consideration and approval or ratification. The presentation must include a description of, among other things, the material facts, the interests,
direct and indirect, of the related persons, the benefits to us of the transaction and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees
generally. Under the policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related-person
transactions and to effectuate the terms of the policy. In addition, under our Code of Conduct, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise
to a conflict of interest. In considering related person transactions, our Audit Committee, or other independent body of the Board, takes into account the relevant available facts and circumstances including:
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the risks, costs and benefits to us; |
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the impact on a directors independence in the event that the related person is a director, immediate family
member of a director or an entity with which a director is affiliated; |
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the availability of other sources for comparable services or products; and |
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the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
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The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit Committee, or
other independent body of our Board, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or other independent body of
our Board, determines in the good faith exercise of its discretion.
Although we did not have a written policy for the review and approval of transactions
with related persons entered into prior to June 2021, our Board has historically reviewed and approved any transaction where a director or officer had a financial interest, including the transactions described above. Prior to approving such a
transaction, the material facts as to a directors or officers relationship or interest in the agreement or transaction were disclosed to our Board. Our Board took this information into account when evaluating the transaction and in
determining whether such transaction was fair to us and in the best interest of all our stockholders.
CERTAIN
RELATED PERSON TRANSACTIONS
Private Placements of Our Securities
Series B Convertible Preferred Stock Financing
In
November 2020, we issued and sold an aggregate of 11,862,043 shares of Series B convertible preferred stock at a purchase price of $3.80 per share for aggregate gross proceeds of $45.1 million. Each of our Series B convertible preferred stock
shares converted into common stock upon the closing of our IPO. Further, pursuant to the Series B purchase agreement, participating investors agreed to purchase 7,908,027 additional shares of Series B convertible preferred stock at a purchase price
of $3.80 per share (as adjusted for stock splits, dividends and other similar events), for an aggregate purchase price of $30.0 million upon the occurrence of a milestone event, defined in the Series B purchase agreement as the successful
completion of cohort 3 of the single ascending dose portion of the ACU193 Phase 1 clinical trial. On June 9, 2021, our Board and the holders of more than 67% of the outstanding shares of Series B preferred stock elected to waive the achievement
of the milestone event. The second tranche of the Series B preferred stock financing closed on June 17, 2021.
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