| Item 1.01 |
Entry into a Material Definitive Agreement. |
On August 30, 2023, Erydel Italy, Inc., a Delaware corporation (“EryDel Italy”) and wholly owned subsidiary of Quince Therapeutics, Inc. (the “Company”), entered into that certain promissory note with Erydel S.p.A., a company with shares (società per azioni) incorporated under the laws of Italy (“EryDel”) (the “Promissory Note”), pursuant to which EryDel Italy promised to make advances to EryDel of up to $1.0 million. The Company previously entered into a Stock Purchase Agreement, dated as of July 21, 2023, by and among the Company, EryDel, and the other parties thereto.
Under the terms of the Promissory Note, the principal amount of the note shall be made available in two tranches as follows: (i) an initial tranche, in an aggregate amount of $500,000, with an interest rate of 5.07% per annum, and (ii) a second tranche, up to an aggregate amount of $500,000, with an annual interest rate equal to Applicable Federal Rate for Annual Compounding Short-Term Debt Instruments as at the funding date of such tranche, to be funded to EryDel during the period commencing September 1, 2023 to October 31, 2023. All accrued interest and unpaid interest payable by EryDel under the Promissory Note are payable, at EryDel’s election (i) in kind in arrears (the “PIK Interest”) on the last Business Day of each calendar month (each, an “Interest Payment Date”) by adding such PIK Interest to the outstanding principal amount of the note, or (ii) in cash on each Interest Payment Date.
The Promissory Note will mature on July 1, 2024, provided that, subject to certain conditions, in the event that (i) the closing date occurs under the Stock Purchase Agreement on or before December 31, 2023, or (ii) the Stock Purchase Agreement is terminated for any reason other than by the Company in certain specified circumstances, all obligations of EryDel and EryDel Italy under the Promissory Note shall be deemed to be paid and discharged in full, all unfunded commitments of EryDel Italy to make advances under the Promissory Note shall be terminated, and all other obligations of EryDel shall be deemed terminated.
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure included in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
| Item 5.02 |
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On August 30, 2023, the Board of Directors of the Company approved the appointment of Charles S. Ryan, Ph.D., as the President of the Company, effective as of September 1, 2023. Dr. Ryan, age 59, has been working as a consultant for life sciences companies since November 2022. From May 2021 until October 2022, Dr. Ryan served as a President, Chief Executive Officer, and Chairman of the Board of Directors of Travecta Therapeutics, Pte Ltd, a private biopharmaceutical company. Dr. Ryan served as a member of the Board of Directors and Chief Executive Officer of Neurotrope, Inc., a public biopharmaceutical company, from December 2017 until December 2020. Dr. Ryan also served on the Board of Directors of BioRestorative Therapies, Inc. and Applied DNA Sciences, Inc. until 2019. Dr. Ryan earned his B.A. in Chemistry from The College of Wooster in 1986, his Ph.D. in Oral Biology and Pathology from Stony Brook University in 1990, and his J.D. from Western New England University in 1993.
In connection with his appointment as the Company’s President, the Company and Dr. Ryan entered into an employment offer letter (the “Ryan Offer Letter”). Pursuant to the Ryan Offer Letter, for his service as the President of the Company, Dr. Ryan will receive an annual base salary of $500,000, subject to increases in the discretion of the Company’s Board of Directors from time to time, and is eligible to receive an annual discretionary performance bonus of up to forty percent of his base salary, to be prorated as of his date of hire. In addition, Dr. Ryan is eligible for a monthly cash stipend of $1,800 to assist in covering the cost of his health insurance premium or other medical expenses.
In connection with the commencement of his employment with the Company, the Company granted Dr. Ryan an option to purchase 545,000 shares of the Company’s Common Stock (the “Option”) pursuant to the Company’s 2019 Equity Incentive Plan, with an exercise price equal to the fair market value of the Company’s common stock on the grant date. 25% of the shares subject to the Option will vest one year after the date of the grant and the remaining shares will vest in equal monthly installments over the following three years thereafter, subject to Dr. Ryan’s continuous service with the Company through each applicable vesting date.