[sheet: Closing Checklist]
Item No.
GENOME DX THERAPEUTICS INC.
$40,000,000 Senior Unsecured Convertible Promissory Notes
Private Placement under Section 4(a)(2) / Rule 506(b) of Regulation D
Closing Date: April 22, 2024 (originally targeted April 12, 2024)
Prepared by: Audrey Zhou / Brendan Walsh — Calderwood & Harkness LLP
Client Matter No.: 1013-00002
PARTIES:
Issuer: Genome Dx Therapeutics Inc.
Issuer's Counsel: Calderwood & Harkness LLP (Theodore Langston, Partner)
Lead Investor: Pinnacle BioVentures Fund III, L.P. ($22,000,000 — 55.0%)
Co-Investor: Cormorant Health Capital Partners, L.P. ($12,000,000 — 30.0%)
Co-Investor: Alder Creek Life Sciences Fund II, L.P. ($6,000,000 — 15.0%)
Investors' Counsel: Whitfield, Greer & Cavanaugh LLP (Elizabeth Hargrove, Partner)
Escrow / Paying Agent: Meridian Pacific Bank, N.A. (Colin Driscoll, VP)
NOTE: Closing was delayed from the original target date of April 12, 2024 to April 22, 2024 due to the need for an updated Officers' Certificate reflecting final disclosure schedule revisions and a Delaware Certificate of Good Standing refresh (original certificate had aged beyond 10 business days).
I. TRANSACTION DOCUMENTS
| 1.1 | Transaction Documents | Note Purchase Agreement (execution version), dated April 9, 2024, among Genome Dx Therapeutics Inc. (Issuer) and Pinnacle BioVentures Fund III, L.P., Cormorant Health Capital Partners, L.P., and Alder Creek Life Sciences Fund II, L.P. (Purchasers) — aggregate principal amount $40,000,000 | Calderwood & Harkness LLP / All Parties | April 9, 2024 | April 9, 2024 | Complete | Signed April 9, 2024; governed by laws of State of Delaware; exclusive jurisdiction in Court of Chancery of the State of Delaware |
| 1.2 | Transaction Documents | Disclosure Schedules to Note Purchase Agreement | GenomeDx / Calderwood & Harkness LLP | April 9, 2024 | April 9, 2024 | Complete | Prepared by C&H with input from Priya Raghunathan and Diane Kowalski; final revisions completed prior to closing; cross-referenced to NPA representations |
| 1.3 | Transaction Documents | Senior Unsecured Convertible Promissory Note — Pinnacle BioVentures Fund III, L.P. (principal amount: $22,000,000) | GenomeDx | April 22, 2024 | April 22, 2024 | Complete | 6.0% per annum simple interest, PIK; maturity April 12, 2027; conversion at lesser of 80% of QF price or Valuation Cap Price of $4.1451/share |
| 1.4 | Transaction Documents | Senior Unsecured Convertible Promissory Note — Cormorant Health Capital Partners, L.P. (principal amount: $12,000,000) | GenomeDx | April 22, 2024 | April 22, 2024 | Complete | Same terms as Item 1.3 |
| 1.5 | Transaction Documents | Senior Unsecured Convertible Promissory Note — Alder Creek Life Sciences Fund II, L.P. (principal amount: $6,000,000) | GenomeDx | April 22, 2024 | April 22, 2024 | Complete | Same terms as Item 1.3 |
II. COMPANY CLOSING DELIVERABLES
| 2.1 | Company Deliverables | Written Consent of the Board of Directors of Genome Dx Therapeutics Inc., dated April 5, 2024, approving issuance of the Notes and authorizing execution and delivery of NPA and ancillary documents | GenomeDx / Calderwood & Harkness LLP | April 5, 2024 | April 5, 2024 | Complete | Jonathan Merriweather (Board Chair / Managing Director, Pinnacle BioVentures) recused from vote due to Pinnacle's role as lead investor; Dr. Marcus Avellino (CEO) and Diane Kowalski (CFO) designated as authorized signatories |
| 2.2 | Company Deliverables | Officers' Certificate of Genome Dx Therapeutics Inc., executed by Dr. Marcus Avellino (CEO) and Diane Kowalski (CFO) | GenomeDx | April 22, 2024 | April 22, 2024 | Complete | Updated to reflect final disclosure schedule revisions; certifies accuracy of representations, satisfaction of closing conditions, absence of material adverse changes since December 31, 2023, and good standing in Delaware and California |
| 2.3 | Company Deliverables | Secretary's Certificate of Genome Dx Therapeutics Inc., executed by Priya Raghunathan (General Counsel & Corporate Secretary) | GenomeDx | April 22, 2024 | April 22, 2024 | Complete | Attaches Restated Certificate of Incorporation (DE file no. 6347821), Bylaws, and Board Written Consent; certifies incumbency and specimen signatures of Dr. Avellino, Ms. Kowalski, and Ms. Raghunathan; registered agent: Capitol Registered Agents, Inc., 1209 Orange Street, Suite 200, Wilmington, DE 19801 |
| 2.4 | Company Deliverables | Delaware Certificate of Good Standing — Genome Dx Therapeutics Inc. (refreshed) | GenomeDx / Calderwood & Harkness LLP | April 22, 2024 | April 22, 2024 | Complete | Original certificate obtained prior to April 12, 2024 had aged beyond 10 business days; refreshed certificate obtained for April 22 closing; DE file number 6347821 |
| 2.5 | Company Deliverables | California Certificate of Good Standing / Certificate of Status — Genome Dx Therapeutics Inc. | GenomeDx / Calderwood & Harkness LLP | April 22, 2024 | April 22, 2024 | Complete | CA entity number C4085629; foreign corporation qualification filed April 3, 2017 |
| 2.6 | Company Deliverables | Executed Signature Pages — GenomeDx to Note Purchase Agreement and each Note | GenomeDx (Dr. Marcus Avellino, CEO) | April 22, 2024 | April 22, 2024 | Complete | Countersigned at closing |
III. PURCHASER CLOSING DELIVERABLES
| 3.1 | Purchaser Deliverables | Executed Signature Pages — Pinnacle BioVentures Fund III, L.P. to Note Purchase Agreement | Pinnacle BioVentures (Jonathan Merriweather, Managing Director, signing on behalf of Pinnacle BioVentures Management III, LLC, its General Partner) | April 22, 2024 | April 22, 2024 | Complete | |
| 3.2 | Purchaser Deliverables | Executed Signature Pages — Cormorant Health Capital Partners, L.P. to Note Purchase Agreement | Cormorant Health Capital (Victor Nakamura, Managing Partner, signing on behalf of Cormorant Health Capital Management, LLC, its General Partner) | April 22, 2024 | April 22, 2024 | Complete | |
| 3.3 | Purchaser Deliverables | Executed Signature Pages — Alder Creek Life Sciences Fund II, L.P. to Note Purchase Agreement | Alder Creek Life Sciences (Katharine Ostrowski, General Partner, signing on behalf of Alder Creek Life Sciences Management II, LLC, its General Partner) | April 22, 2024 | April 22, 2024 | Complete | |
| 3.4 | Purchaser Deliverables | Accredited Investor Questionnaire — Pinnacle BioVentures Fund III, L.P. | Pinnacle BioVentures | April 22, 2024 | April 22, 2024 | Complete | Required for Section 4(a)(2) / Rule 506(b) exemption |
| 3.5 | Purchaser Deliverables | Accredited Investor Questionnaire — Cormorant Health Capital Partners, L.P. | Cormorant Health Capital | April 22, 2024 | April 22, 2024 | Complete | Required for Section 4(a)(2) / Rule 506(b) exemption |
| 3.6 | Purchaser Deliverables | Accredited Investor Questionnaire — Alder Creek Life Sciences Fund II, L.P. | Alder Creek Life Sciences | April 22, 2024 | April 22, 2024 | Complete | Required for Section 4(a)(2) / Rule 506(b) exemption |
IV. THIRD-PARTY / COUNSEL DELIVERABLES
| 4.1 | Counsel Deliverables | Legal Opinion of Calderwood & Harkness LLP (Issuer's Counsel), dated April 22, 2024, addressed to all Purchasers | Calderwood & Harkness LLP (Theodore Langston) | April 22, 2024 | April 22, 2024 | Complete | Covers: due organization and good standing (DE and CA); corporate power and authority; due authorization, execution, and delivery; enforceability; no conflicts with charter, bylaws, or material agreements; Securities Act exemption (Section 4(a)(2) / Rule 506(b)); no governmental approvals required other than Form D and blue sky filings; subject to customary qualifications and assumptions |
| 4.2 | Counsel Deliverables | Funds Flow Memorandum, dated April 22, 2024 | Calderwood & Harkness LLP | April 22, 2024 | April 22, 2024 | Complete | Details wire transfer instructions for $40,000,000 aggregate purchase price to Meridian Pacific Bank, N.A. escrow account (Trust Account No. 7841-0093-22), 350 Sansome Street, 12th Floor, San Francisco, CA 94104; release to GenomeDx operating account upon satisfaction of closing conditions |
| 4.3 | Third-Party Deliverables | Escrow Agreement among Genome Dx Therapeutics Inc., Purchasers, and Meridian Pacific Bank, N.A. | Calderwood & Harkness LLP / Meridian Pacific Bank (Colin Driscoll, VP, Capital Markets Services) | April 22, 2024 | April 22, 2024 | Complete | Escrow of purchase price pending satisfaction of closing conditions |
| 4.4 | Third-Party Deliverables | Wire Confirmation — Pinnacle BioVentures Fund III, L.P. ($22,000,000) | Meridian Pacific Bank, N.A. | April 22, 2024 | April 22, 2024 | Complete | Wire received into Trust Account No. 7841-0093-22 |
| 4.5 | Third-Party Deliverables | Wire Confirmation — Cormorant Health Capital Partners, L.P. ($12,000,000) | Meridian Pacific Bank, N.A. | April 22, 2024 | April 22, 2024 | Complete | Wire received into Trust Account No. 7841-0093-22 |
| 4.6 | Third-Party Deliverables | Wire Confirmation — Alder Creek Life Sciences Fund II, L.P. ($6,000,000) | Meridian Pacific Bank, N.A. | April 22, 2024 | April 22, 2024 | Complete | Wire received into Trust Account No. 7841-0093-22 |
| 4.7 | Third-Party Deliverables | Confirmation of Release of Funds from Escrow to GenomeDx Operating Account ($40,000,000 aggregate) | Meridian Pacific Bank, N.A. | April 22, 2024 | April 22, 2024 | Complete | Funds released upon confirmation that all closing conditions satisfied |
V. POST-CLOSING ITEMS
| 5.1 | Post-Closing | Form D filing with the SEC (within 15 days of first sale of securities) | Calderwood & Harkness LLP | May 7, 2024 (deadline) | April 24, 2024 | Complete | Filed April 24, 2024; first sale date April 22, 2024 |
| 5.2 | Post-Closing | Blue Sky Filing — California (Section 25102(f) notice) | Calderwood & Harkness LLP | Promptly after closing | April 25, 2024 | Complete | |
| 5.3 | Post-Closing | Blue Sky Filing — New York | Calderwood & Harkness LLP | Promptly after closing | April 25, 2024 | Complete | |
| 5.4 | Post-Closing | Blue Sky Filing — Massachusetts | Calderwood & Harkness LLP | Promptly after closing | April 25, 2024 | Complete | |
| 5.5 | Post-Closing | Blue Sky Filing — Delaware | Calderwood & Harkness LLP | Promptly after closing | April 25, 2024 | Complete | |
| 5.6 | Post-Closing | Delivery of closing binder (original executed documents and closing set) to GenomeDx (Priya Raghunathan, GC) at 450 Pinnacle Drive, Suite 300, South San Francisco, CA 94080 | Calderwood & Harkness LLP | Promptly after closing | Pending | ||
| 5.7 | Post-Closing | Delivery of copies of closing binder to investors' counsel — Whitfield, Greer & Cavanaugh LLP (Elizabeth Hargrove) at 1251 Avenue of the Americas, 34th Floor, New York, NY 10020 | Calderwood & Harkness LLP | Promptly after closing | Pending | ||
| 5.8 | Post-Closing | Ongoing Covenant Compliance: Quarterly unaudited financial statements (within 45 days of quarter-end); annual audited financial statements (within 120 days of fiscal year-end); monthly cash burn reports | GenomeDx (Diane Kowalski, CFO) | Ongoing per NPA schedule | Ongoing | First quarterly delivery due within 45 days of June 30, 2024 quarter-end; auditors: Baxter & Calloway, CPAs (Nadia Sorensen, CPA) | |
| 5.9 | Post-Closing | Ongoing Covenant Compliance: Negative covenants (no additional indebtedness >$2,000,000, no liens on material assets, no dividends/distributions, no Change of Control, no equity issuances outside 2018 Equity Incentive Plan) — Majority Holder consent required; MFN provision through April 22, 2025 | GenomeDx | Ongoing through maturity (April 12, 2027) | Ongoing | Majority Holder threshold: holders of >50% of outstanding principal ($20,000,001+); Pinnacle alone ($22,000,000) exceeds threshold |
[sheet: Key Deal Terms Reference]
Term
DEAL OVERVIEW
| Issuer | Genome Dx Therapeutics Inc. (Delaware corporation; EIN 82-3194507) |
| Security | Senior Unsecured Convertible Promissory Notes |
| Aggregate Principal Amount | $40,000,000 |
| Pinnacle BioVentures Fund III, L.P. | $22,000,000 (55.0%) |
| Cormorant Health Capital Partners, L.P. | $12,000,000 (30.0%) |
| Alder Creek Life Sciences Fund II, L.P. | $6,000,000 (15.0%) |
| Interest Rate | 6.0% per annum, simple interest, PIK (capitalized annually) |
| Maturity Date | April 12, 2027 (36 months from original Closing Date of April 12, 2024) |
| Governing Law | State of Delaware |
| Exemption | Section 4(a)(2) of the Securities Act / Rule 506(b) of Regulation D |
CONVERSION MECHANICS
| Pre-Money Valuation Cap | $200,000,000 |
| Fully Diluted Share Count (pre-closing) | 48,250,000 |
| Valuation Cap Price | $4.1451/share ($200,000,000 ÷ 48,250,000) |
| Qualified Financing Threshold | $50,000,000 gross proceeds (inclusive of Note conversion) |
| QF Conversion discount | 20% (conversion price = 80% of QF per-share price) |
| QF Conversion Price | Lesser of (a) 80% of QF per-share price or (b) Valuation Cap Price of $4.1451/share |
| Voluntary Conversion (at maturity/CoC) | At Valuation Cap Price of $4.1451/share |
| Change of Control Repayment Premium | 1.5x (outstanding principal + accrued interest) |
| Illustrative Conversion at Cap Price | $40,000,000 ÷ $4.1451 = ~9,650,906 shares |
PIK INTEREST SCHEDULE
| Year 1 PIK Interest | $2,400,000 ($40,000,000 × 6.0%) |
| Outstanding Principal after Year 1 | $42,400,000 |
| Year 2 PIK Interest | $2,544,000 ($42,400,000 × 6.0%) |
| Outstanding Principal after Year 2 | $44,944,000 |
| Year 3 PIK Interest | $2,696,640 ($44,944,000 × 6.0%) |
| Outstanding Principal at Maturity | $47,640,640 |
KEY DATES
| GenomeDx Incorporation (Delaware) | March 14, 2017 |
| GenomeDx CA Foreign Qualification | April 3, 2017 |
| Series C Closing ($95M) | September 2022 |
| Most Recent 409A Valuation ($4.15/share) | January 15, 2024 |
| C&H Engagement Letter / Matter Opened | February 26, 2024 |
| Term Sheet Circulated | March 4, 2024 |
| Term Sheet Executed | March 11, 2024 |
| First Draft NPA Circulated | March 18, 2024 |
| Board Approval | April 5, 2024 |
| NPA Signing Date | April 9, 2024 |
| Original Target Closing Date | April 12, 2024 |
| Actual Closing Date | April 22, 2024 |
| Note Maturity Date | April 12, 2027 |
| MFN Period Expiration | April 22, 2025 |
CAPITALIZATION (PRE-CLOSING)
| Common Stock Outstanding | 12,400,000 shares |
| Series A Preferred Outstanding | 6,850,000 shares |
| Series B Preferred Outstanding | 11,500,000 shares |
| Series C Preferred Outstanding | 14,000,000 shares |
| Options Outstanding (2018 Equity Incentive Plan) | 3,500,000 shares (weighted avg. exercise price: $1.87/share) |
| Total Fully Diluted | 48,250,000 shares |
FINANCIAL SUMMARY (FY2023)
| Net Loss | ($62,400,000) |
| Total Assets (12/31/2023) | $74,100,000 |
| Cash & Equivalents (12/31/2023) | $51,300,000 |
| Total Liabilities (12/31/2023) | $18,700,000 |
| Monthly Cash Burn Rate | ~$5,800,000 |
| Remaining Cash Runway (incl. new capital) | ~18 months |
USE OF PROCEEDS
| Phase 2b Clinical Trial — GDT-4187 | ~$28,000,000 (70%) |
| Preclinical Development — GDT-5201 | ~$7,000,000 (17.5%) |
| General Working Capital | ~$5,000,000 (12.5%) |
KEY CONTACTS
| GenomeDx — CEO | Dr. Marcus Avellino, Ph.D., MBA |
| GenomeDx — CFO | Diane Kowalski, CPA |
| GenomeDx — GC & Corp. Secretary | Priya Raghunathan, J.D. |
| GenomeDx — VP, Clinical Development | Dr. Helen Tsai, M.D. |
| Pinnacle — Managing Director / GDT Board Chair | Jonathan Merriweather |
| Pinnacle — Principal (Transaction Lead) | Sarah Lindholm |
| Pinnacle — General Counsel | Robert Echevarria, J.D. |
| Cormorant — Managing Partner | Victor Nakamura |
| Cormorant — VP, Investments | Angela Ferraro |
| Alder Creek — General Partner | Katharine Ostrowski |
| Alder Creek — Associate | Daniel Yoo |
| C&H — Responsible Partner | Theodore Langston |
| C&H — Billing Partner | Vivienne St. Claire |
| C&H — Lead Associate | Audrey Zhou |
| C&H — Working Associate | Brendan Walsh |
| WGC — Lead Counsel (Investors) | Elizabeth Hargrove |
| WGC — Senior Associate | James Petrosian |
| Meridian Pacific Bank — VP | Colin Driscoll |
| Baxter & Calloway — Engagement Partner | Nadia Sorensen, CPA |
KEY COVENANTS
| Majority Holder Threshold | >50% of outstanding principal ($20,000,001+); Pinnacle alone ($22M) exceeds threshold |
| Additional Indebtedness Threshold | $2,000,000 (consent required above this amount) |
| MFN Provision | 12 months post-closing (through April 22, 2025) |
| Information Rights — Quarterly Financials | Within 45 days of quarter-end (unaudited) |
| Information Rights — Annual Financials | Within 120 days of fiscal year-end (audited) |
| Information Rights — Monthly Cash Burn | Monthly reports |