CALDERWOOD & HARKNESS LLP 200 Park Avenue, 42nd Floor New York, NY 10166
PRELIMINARY DUE DILIGENCE REQUEST LIST
March 6, 2024
VIA ELECTRONIC MAIL AND VIRTUAL DATA ROOM
Zalcourt Archer & Cole LLP One Federal Street, 30th Floor Boston, MA 02110
Attention: Rebecca Whitmore, Partner
Jonathan Pratt, Associate
Re: Proposed Acquisition of 100% of the Outstanding Capital Stock of Veridian Biosciences, Inc.
On behalf of: Penterra Pharmaceuticals Corp. ("Penterra" or "Buyer"), 1100 Meridian Boulevard, Suite 400, Princeton, NJ 08540
Calderwood & Harkness Matter No.: 1018-00008
Contact Persons at Calderwood & Harkness:
Oliver Mackenzie, Partner, Mergers & Acquisitions Megan Chu, Lead Associate, Mergers & Acquisitions Derek Okonkwo, Associate, Mergers & Acquisitions
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INTRODUCTORY INSTRUCTIONS AND GENERAL NOTES
This Preliminary Due Diligence Request List (this "Request List") sets forth the categories of documents and information that Penterra Pharmaceuticals Corp. ("Penterra" or "Buyer") and its advisors require in connection with their due diligence review of Veridian Biosciences, Inc. ("Veridian" or the "Company") in connection with the proposed acquisition by Penterra of 100% of the outstanding capital stock of Veridian (the "Proposed Transaction").
All documents and materials produced in response to this Request List shall be governed by and subject to the terms and conditions of that certain Confidentiality Agreement, dated March 4, 2024, by and between Penterra Pharmaceuticals Corp. and Veridian Biosciences, Inc. (the "Confidentiality Agreement"). Nothing in this Request List shall be deemed to modify, amend, or supersede the terms of the Confidentiality Agreement.
The virtual data room established for purposes of the Proposed Transaction was opened on March 11, 2024. All responsive materials should be uploaded to the virtual data room or, where appropriate, delivered in such other manner as may be mutually agreed by counsel for the parties. We request that all documents be organized by the numbered categories set forth below, and that a comprehensive index of all uploaded materials be maintained and updated on a rolling basis.
This Request List is a preliminary list. It is not intended to be exhaustive, and supplemental requests may follow as the due diligence review progresses. Penterra and its advisors reserve the right to issue additional or follow-up requests at any time during the course of the due diligence review. We request that Veridian promptly identify any documents or categories set forth herein that are not applicable to the Company and provide a brief explanation as to why such documents or categories are not applicable.
Where requests below call for agreements, contracts, or similar instruments, we request that Veridian produce all amendments, modifications, restatements, supplements, side letters, waivers, consents, estoppel certificates, and related correspondence in addition to the base documents.
We request that all materials be provided in native electronic format where possible (e.g., Microsoft Word, Excel, or PDF format), and that scanned documents be provided with optical character recognition (OCR) applied. To the extent that certain documents exist only in hard copy form, we ask that legible scans be uploaded to the data room with a notation that the original hard copy is available for review upon request.
Broadleaf Scientific Consulting LLC, led by Dr. Raymond Kapoor, Managing Director (225 Franklin Street, Suite 1900, Boston, MA 02110), has been engaged by Penterra to conduct clinical, regulatory, and scientific due diligence in connection with the Proposed Transaction. Certain requests set forth below — particularly those in Categories VI (Regulatory and FDA Matters), VII (Clinical and Preclinical Data), and portions of Category V (Intellectual Property) — reflect the information needs of Broadleaf Scientific Consulting LLC and its team of scientific and regulatory advisors. Materials responsive to those categories will be reviewed in coordination with Broadleaf.
Tax-related requests set forth below in Category IX (Tax Matters) have been prepared in coordination with Leonard Cross, Partner, Tax Group, Calderwood & Harkness LLP.
We appreciate the Company's cooperation and prompt attention to this Request List.
CATEGORY I: CORPORATE ORGANIZATION AND GOOD STANDING
1.1. Certificate of Incorporation (as amended and restated) and all amendments thereto for Veridian Biosciences, Inc., a corporation organized under the laws of the State of Delaware, including without limitation the initial Certificate of Incorporation, any and all Certificates of Amendment, any Amended and Restated Certificate of Incorporation, and any Certificates of Designation establishing the rights, preferences, privileges, and restrictions of any series of preferred stock.
1.2. Bylaws (as amended and restated) of the Company and all amendments thereto, including any emergency bylaws and any resolutions of the Board of Directors modifying or supplementing the bylaws.
1.3. Good standing certificates (certificates of status or certificates of existence, as applicable) from the Secretary of State of the State of Delaware and from the appropriate governmental authority in each other jurisdiction in which the Company is qualified to do business or otherwise registered, including, without limitation, the Commonwealth of Massachusetts, the State of California, and the State of Maryland. To the extent that such certificates have not been recently obtained, we request that the Company obtain current certificates dated within thirty (30) days of the date hereof.
1.4. Certificates of formation, certificates of qualification, certificates of authority, or equivalent filings in each state or jurisdiction where the Company is registered, qualified, or authorized to do business as a foreign corporation, including all related filings and annual reports submitted to the applicable Secretaries of State.
1.5. Organizational chart showing the Company and any direct or indirect subsidiaries, joint ventures, partnerships, affiliated entities, or other entities in which the Company holds an ownership interest, including the percentage ownership interest held by the Company in each such entity. The organizational chart should also depict the Company's relationship to any variable interest entities ("VIEs") or special purpose entities, if applicable.
1.6. A complete list of all jurisdictions in which the Company is qualified to do business, has employees, maintains offices, conducts operations, owns or leases real property, or otherwise has a physical presence or nexus. We understand that the Company has known operations in the Commonwealth of Massachusetts, the State of California, and the State of Maryland, but request confirmation of whether the Company is qualified or registered in any additional jurisdictions.
1.7. Registered agent information for the State of Delaware and each other jurisdiction in which the Company is qualified to do business. We understand that the Company's current registered agent in Delaware is Tidewater Registered Agents LLC, 838 Walker Road, Suite 21-2, Dover, DE 19904. Please confirm and provide registered agent information for all other applicable jurisdictions.
1.8. Any fictitious business name filings, "doing business as" (d/b/a) registrations, trade name registrations, or assumed name certificates filed by the Company in any jurisdiction.
CATEGORY II: BOARD AND STOCKHOLDER RECORDS
2.1. Minutes of all meetings of the Board of Directors of the Company (and any committees thereof, including the compensation committee, audit committee, nominating and governance committee, and any special committees) for the past five (5) years, from January 1, 2019 through the present date, including agendas, presentations, and materials distributed to directors in connection with such meetings.
2.2. Minutes of all meetings of the stockholders of the Company and records of all actions taken by written consent of the stockholders (in lieu of a meeting) for the past five (5) years, from January 1, 2019 through the present date, including any notices of meetings, proxies, and ballots.
2.3. A current list of all directors and officers of the Company, including full legal names, titles, committee memberships, dates of appointment or election, terms of office, and any anticipated changes in the composition of the Board of Directors or officer positions.
2.4. Biographical information and background materials for each of the following key members of management and the Board of Directors, including employment history, educational background, and any other directorships or affiliations:
(a) Dr. Julian Marek, Chief Executive Officer and Co-Founder;
(b) Dr. Priya Chandrasekaran, Chief Scientific Officer and Co-Founder;
(c) Steven R. Kessler, Chief Financial Officer;
(d) Dr. Anne-Marie Fontaine, Vice President, Regulatory Affairs; and
(e) Rachel Stein-Goldberg, General Counsel.
2.5. Current and historical board committee charters for all committees of the Board of Directors, including the compensation committee charter, audit committee charter, nominating and governance committee charter, and any other committee charters adopted by the Board from time to time.
2.6. All director and officer questionnaires completed by current and former directors and officers, all indemnification agreements between the Company and its directors and officers, and all related indemnification arrangements, including any provisions in the Company's Certificate of Incorporation or Bylaws relating to indemnification and advancement of expenses.
2.7. Any management agreements, advisory board arrangements, scientific advisory board arrangements, and consulting agreements with directors or members of any advisory body of the Company, including descriptions of compensation, equity grants, and any other consideration provided under such arrangements.
CATEGORY III: CAPITALIZATION
3.1. A fully diluted capitalization table showing all outstanding shares of capital stock of the Company (including all classes and series of common stock and preferred stock), all outstanding options, warrants, convertible securities, and any other rights, agreements, or commitments to acquire equity securities of the Company, on an as-exercised and as-converted basis, including the name of each holder, the number and class of securities held, the percentage ownership on a fully diluted basis, and any vesting or other restrictions applicable to such securities.
3.2. Detailed information regarding each financing round completed by the Company, including the Series A, Series B, Series C, and Series D preferred stock rounds, specifying for each round the date of closing, the aggregate amount raised, the price per share, the number of shares issued, the pre-money and post-money valuation, and the identity of the lead investor(s) and other participating investors. Based on our preliminary understanding, the Company's capitalization includes the following:
(a) Series A and Series B Preferred Stock: Led by Crestline Ventures, LP, which holds approximately 28.3% of the Company on a fully diluted basis;
(b) Series C Preferred Stock: Led by Boreal Health Partners Fund III, LP, which holds approximately 19.7% of the Company on a fully diluted basis. We understand that the Series C round closed in Q3 2020, and note that the timing and magnitude of this round is relevant to the Section 382 ownership change analysis discussed further in Category IX below;
(c) Series D Preferred Stock: Led by Apex Growth Equity Fund II, LP, which holds approximately 14.1% of the Company on a fully diluted basis;
(d) Founders and Management: Dr. Julian Marek holds approximately 8.4% on a fully diluted basis, Dr. Priya Chandrasekaran holds approximately 6.2% on a fully diluted basis, and other management and employees hold equity through the Company's equity incentive plan (ESOP pool) representing approximately 9.8% of the Company on a fully diluted basis;
(e) Other Institutional Investors: Approximately 13.5% of the Company on a fully diluted basis; and
(f) Total Venture and Growth Equity Financing Raised: Approximately $420 million across all financing rounds.
We request confirmation of the foregoing and production of documentation supporting the capitalization summary.
3.3. Stock purchase agreements, subscription agreements, and investment agreements for each financing round (Series A, Series B, Series C, and Series D), including all exhibits, schedules, closing certificates, and related transaction documents.
3.4. All investor rights agreements, registration rights agreements, voting agreements, rights of first refusal and co-sale agreements, management rights letters, and any other stockholder agreements or arrangements governing the rights and obligations of the Company's stockholders, including all amendments, waivers, and side letters relating thereto.
3.5. All equity incentive plans (including stock option plans, restricted stock plans, restricted stock unit plans, and any other equity compensation plans), including all plan documents, forms of award agreements (option agreements, restricted stock purchase agreements, RSU award agreements), and a complete schedule of all outstanding awards, setting forth for each award the following information: holder name, type of award, grant date, exercise price (if applicable), number of shares subject to the award, vesting schedule (including any acceleration provisions), vesting commencement date, expiration date, and whether the award has been exercised in whole or in part.
3.6. A description of any anti-dilution provisions (weighted average or full ratchet) applicable to any series of preferred stock or other securities of the Company, and copies of any preemptive rights, rights of first offer, or similar preferential rights held by any stockholder or securityholder.
3.7. Copies of any outstanding warrants, convertible promissory notes, Simple Agreements for Future Equity (SAFEs), or any other securities or instruments convertible into, exchangeable for, or exercisable for equity securities of the Company, including all terms and conditions thereof.
3.8. The Company's stock transfer ledger and all records maintained by the Company's transfer agent (or, if no transfer agent has been appointed, the Company's internal records) reflecting all issuances, transfers, repurchases, cancellations, and conversions of capital stock.
3.9. Copies of all Section 83(b) election filings made by founders, employees, consultants, or other service providers of the Company with the Internal Revenue Service, together with evidence of timely filing.
3.10. Any stockholder agreements, buy-sell agreements, voting trusts, proxies, or contractual restrictions on the transfer, sale, or encumbrance of shares of the Company's capital stock, other than those produced pursuant to Request 3.4 above.
3.11. Copies of all prior independent valuations of the Company's common stock, including valuations prepared pursuant to Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), together with the identity of the valuation firm, the date of each valuation, and the per-share fair market value determined.
CATEGORY IV: MATERIAL CONTRACTS AND AGREEMENTS
4.1. A schedule of all material contracts to which the Company is a party or by which the Company or any of its assets is bound. For purposes of this Request List, "material contracts" shall include, without limitation, all agreements involving obligations, commitments, or payments in excess of $100,000 per year, agreements with a remaining term of more than one (1) year that are not cancelable without penalty on thirty (30) days' or less notice, and any other agreements that the Company considers material to the conduct of its business.
4.2. Copies of all contracts with any single counterparty involving aggregate payments, commitments, or obligations in excess of $250,000, whether payable by or to the Company, including all related statements of work, purchase orders, and change orders.
4.3. All license agreements (both inbound and outbound), collaboration agreements, co-development agreements, sponsored research agreements, and research and development agreements, including all exhibits, schedules, amendments, and related correspondence. This request encompasses agreements relating to the Company's proprietary VeriTCE platform technology, VRD-4187, and all other pipeline candidates.
4.4. All agreements with clinical research organizations ("CROs"), including but not limited to all agreements relating to the conduct, monitoring, data management, and biostatistical analysis of the Marlowe Asset Management-2 Phase II clinical trial for VRD-4187 and any other ongoing or completed clinical trials. Please include all master service agreements, work orders, task orders, budgets, and change orders.
4.5. All agreements with contract manufacturing organizations ("CMOs") and contract development and manufacturing organizations ("CDMOs"), including all supply agreements, quality agreements, manufacturing services agreements, and technology transfer agreements for drug substance (active pharmaceutical ingredient) and drug product manufacturing, formulation, fill-and-finish, labeling, packaging, and storage.
4.6. All agreements with academic institutions, universities, research hospitals, medical centers, or other non-profit research organizations, including sponsored research agreements, material transfer agreements, collaboration agreements, and any agreements pursuant to which the Company has in-licensed or acquired intellectual property rights from such institutions.
4.7. All distribution agreements, marketing agreements, promotion agreements, commercialization agreements, and co-promotion agreements, if any, including any agreements relating to the potential future commercialization of VRD-4187 or other pipeline candidates.
4.8. All joint venture agreements, partnership agreements, strategic alliance agreements, and similar arrangements to which the Company is a party.
4.9. All agreements containing change-of-control provisions, consent requirements, or termination rights that would be triggered by, or that are relevant to, the Proposed Transaction, including any agreements that require the consent of a counterparty to a change in control, assignment, or transfer of the agreement. Please include a summary schedule identifying each such agreement, the relevant provision, and the nature of the consent or right triggered.
4.10. All agreements containing non-competition, non-solicitation, exclusivity, most-favored-nation, or similar restrictive covenants that may restrict the Company's ability to conduct its business or that may affect the Company's or Penterra's operations following the closing of the Proposed Transaction.
4.11. All government contracts, government grants, cooperative agreements, and subcontracts, including any awards from the National Institutes of Health ("NIH"), the Biomedical Advanced Research and Development Authority ("BARDA"), the Department of Defense, the National Science Foundation, or any other federal, state, or quasi-governmental funding agency. Please include all grant applications, award notices, terms and conditions, progress reports, and related correspondence.
4.12. All agreements, transactions, or arrangements between the Company and any of its directors, officers, stockholders (holding 5% or more of the Company's capital stock), employees, or affiliates (collectively, "Related Parties"), including any agreements for the provision of services, loans, guarantees, or other financial accommodations.
4.13. All guarantees, letters of credit, performance bonds, surety bonds, and similar credit support arrangements to which the Company is a party, whether as guarantor, obligor, or beneficiary.
4.14. All powers of attorney granted by the Company to any person or entity, whether currently in effect or expired within the past three (3) years.
4.15. Any other agreement, contract, or arrangement to which the Company is a party that was not entered into in the ordinary course of business, or that the Company considers to be unusual, extraordinary, or otherwise noteworthy.
CATEGORY V: INTELLECTUAL PROPERTY
5.1. A complete schedule of all patents (issued and pending applications) owned by or assigned to the Company, or in which the Company otherwise has an interest, including for each patent or application the following information: patent number or application number, jurisdiction(s), filing date, issue date (if issued), expiration date (including any patent term adjustments or extensions), title, named inventor(s), and current owner or assignee of record. This request specifically encompasses, without limitation, all patents and patent applications relating to the Company's proprietary VeriTCE platform technology and VRD-4187, including all composition-of-matter patents, method-of-use patents, formulation patents, process patents, and any continuation, divisional, or continuation-in-part applications. Please also identify any patents or applications that are co-owned with a third party and provide copies of any co-ownership agreements.
5.2. A complete schedule of all trademarks (registered and pending applications) owned by or assigned to the Company, or in which the Company otherwise has an interest, including for each mark the following information: registration number or application number, jurisdiction(s), filing date, registration date (if registered), description of goods and/or services covered, international class(es), and current owner of record. This request encompasses the "Veridian," "VeriTCE," and any other marks used or proposed to be used by the Company.
5.3. A schedule of all copyrights registered with the United States Copyright Office or any foreign copyright office, including registration numbers, dates of registration, titles of works, and authors.
5.4. A schedule describing the Company's trade secrets and proprietary know-how, including a description of the nature of such trade secrets (without disclosing the substance of the trade secrets themselves to the extent not necessary), and a detailed description of the measures taken by the Company to protect the confidentiality and proprietary nature of such information, including physical security measures, access controls, confidentiality agreements, and information security protocols.
5.5. All patent prosecution files, including all correspondence with the United States Patent and Trademark Office ("USPTO"), the European Patent Office ("EPO"), and any other patent offices, or, in the alternative, a summary of the prosecution history for each key patent family, including a description of any rejections, office actions, amendments, and allowances. This request is particularly important with respect to the patent families covering the VeriTCE platform technology and VRD-4187.
5.6. All freedom-to-operate analyses, patentability opinions, invalidity opinions, non-infringement opinions, and other legal opinions relating to the Company's intellectual property rights or the intellectual property rights of third parties, whether prepared by outside counsel, in-house counsel, or consultants.
5.7. All intellectual property assignment agreements, including inventor assignment agreements with Dr. Julian Marek, Dr. Priya Chandrasekaran, and all other current and former employees, consultants, and independent contractors who have contributed to the development of the Company's intellectual property. Please also provide any assignment agreements with academic institutions or other entities pursuant to which intellectual property was assigned to the Company.
5.8. All intellectual property license agreements (both inbound and outbound), including any license agreements relating to the VeriTCE platform technology, and all sublicense agreements, together with all amendments, supplements, and related correspondence. For each license, please identify the licensor, licensee, licensed intellectual property, field of use, territory, royalty rates and other financial terms, term, and termination provisions.
5.9. A description of all intellectual property-related litigation, opposition proceedings, inter partes review ("IPR") proceedings, post-grant review proceedings, reexamination proceedings, interference proceedings, or other disputes involving the Company's intellectual property or the intellectual property of third parties, whether pending, concluded, or threatened, including copies of all complaints, petitions, responses, decisions, and settlement agreements.
5.10. Copies of any third-party claims of patent infringement, trade secret misappropriation, trademark infringement, copyright infringement, or invalidity received by the Company, whether in the form of cease-and-desist letters, demand letters, or otherwise, together with copies of the Company's responses thereto.
5.11. Copies of any intellectual property due diligence reports, IP audit reports, or IP portfolio assessments previously prepared by or on behalf of the Company.
5.12. A schedule of all internet domain names registered by or on behalf of the Company, including the registrar, registration date, expiration date, and the entity in whose name each domain is registered.
5.13. A schedule of all third-party software licenses used by the Company, including the licensor, software product, license type (e.g., perpetual, subscription, open source), and annual license fees, as well as a description of any proprietary software developed by or for the Company.
5.14. All data sharing agreements, data use agreements, and data processing agreements to which the Company is a party, including agreements governing the sharing, use, or processing of clinical trial data, patient data, genomic data, or other scientific data.
CATEGORY VI: REGULATORY AND FDA MATTERS
6.1. A complete list of all Investigational New Drug Applications ("INDs"), New Drug Applications ("NDAs"), Biologics License Applications ("BLAs"), abbreviated New Drug Applications ("ANDAs"), and any other regulatory filings or submissions made by the Company to the United States Food and Drug Administration ("FDA") or any foreign regulatory authority, including the European Medicines Agency ("EMA"), the United Kingdom Medicines and Healthcare products Regulatory Agency ("MHRA"), Health Canada, and any other applicable regulatory body. This request specifically encompasses IND 154832 for VRD-4187.
6.2. The complete IND file for VRD-4187 (IND No. 154832), including the original IND submission, all IND amendments and supplements, annual reports, IND safety reports (including all individual case safety reports filed pursuant to 21 CFR § 312.32), and all correspondence with the FDA relating to IND 154832.
6.3. Minutes and related documentation from all meetings with the FDA, including pre-IND meeting minutes, Type A meeting minutes, Type B meeting minutes, Type C meeting minutes, and end-of-Phase I and end-of-Phase II meeting minutes, together with all meeting request packages, briefing documents, and FDA responses relating to such meetings.
6.4. All correspondence with the FDA, including complete response letters, information request letters, clinical hold letters, refuse-to-file letters, warning letters, untitled letters, Form FDA 483 observations, and any other written communications from the FDA to the Company or from the Company to the FDA.
6.5. All clinical trial protocols, protocol amendments, informed consent forms, and investigator brochures for all pipeline candidates, including, without limitation:
(a) VRD-4187: the Marlowe Asset Management-2 Phase II clinical trial (ClinicalTrials.gov Identifier: NCT05837291), including the original protocol, all protocol amendments, all versions of the informed consent form, and the current investigator brochure; and
(b) Any other pipeline candidates leveraging the VeriTCE platform or otherwise in development by the Company, at any stage (preclinical, Phase I, Phase II, or Phase III).
6.6. All clinical trial data, results, interim analyses, and data monitoring committee ("DMC") reports for VRD-4187 and all other pipeline candidates. With respect to the Marlowe Asset Management-2 trial, we request detailed data including, but not limited to, the following: the trial design (randomized, open-label Phase II), the number and location of clinical sites (42 clinical sites across the United States and the European Union), the number of enrolled patients (387 enrolled patients), all efficacy endpoints and results, all safety data, patient disposition data, and all statistical analyses performed to date.
6.7. All clinical trial agreements with clinical trial sites, principal investigators, sub-investigators, and all institutional review board ("IRB") and independent ethics committee ("IEC") approvals, including initial approvals, continuing review approvals, and any correspondence regarding protocol deviations or adverse event reporting.
6.8. All serious adverse event ("SAE") reports, individual case safety reports, expedited safety reports, periodic safety update reports, development safety update reports, and any other safety signal reports or analyses, together with all related correspondence with the FDA, EMA, or any other regulatory authority.
6.9. Chemistry, manufacturing, and controls ("CMC") documentation, including drug substance specifications, drug product specifications, certificates of analysis, stability data (including both accelerated and long-term stability studies), manufacturing process descriptions, batch records, process validation reports, analytical method validation reports, and any comparability studies.
6.10. Good Manufacturing Practice ("GMP"), Good Laboratory Practice ("GLP"), and Good Clinical Practice ("GCP") compliance documentation, including all FDA inspection reports (Form FDA 483 observations and Establishment Inspection Reports), internal and third-party audit reports, corrective and preventive action ("CAPA") plans, and documentation evidencing the Company's compliance with applicable quality standards. This request also encompasses quality management system documentation, standard operating procedures, and quality agreements with CROs and CMOs.
6.11. Documentation relating to any clinical holds (full or partial), import alerts, consent decrees, warning letters, untitled letters, seizures, injunctions, or other enforcement actions imposed by the FDA or any other domestic or foreign regulatory authority with respect to the Company, its products, or its facilities, whether currently pending or resolved.
6.12. All regulatory strategies, regulatory timelines, regulatory interaction logs, and regulatory correspondence with foreign regulatory agencies (including the EMA, MHRA, Health Canada, the Pharmaceuticals and Medical Devices Agency of Japan, and any other applicable regulatory authority) relating to the Company's pipeline candidates, including any pre-submission meetings, scientific advice proceedings, or other regulatory interactions.
6.13. Documentation relating to any special regulatory designations obtained or applied for by the Company, including orphan drug designations, fast track designations, breakthrough therapy designations, accelerated approval pathway designations, priority review designations, rare pediatric disease designations, and any equivalent designations under foreign regulatory frameworks (e.g., PRIME designation from the EMA).
6.14. All Risk Evaluation and Mitigation Strategies ("REMS"), risk management plans, or similar risk minimization programs applicable to the Company's products, if any, including all REMS elements, REMS assessments, and related correspondence with the FDA.
6.15. Documentation demonstrating the Company's compliance with applicable provisions of Title 21 of the Code of Federal Regulations, including, without limitation:
(a) 21 CFR Part 11 (Electronic Records; Electronic Signatures);
(b) 21 CFR Part 50 (Protection of Human Subjects — Informed Consent);
(c) 21 CFR Part 54 (Financial Disclosure by Clinical Investigators);
(d) 21 CFR Part 56 (Institutional Review Boards);
(e) 21 CFR Part 312 (Investigational New Drug Application); and
(f) 21 CFR Part 314 (Applications for FDA Approval to Market a New Drug) and 21 CFR Part 601 (Licensing of Biological Products), as applicable.
CATEGORY VII: CLINICAL AND PRECLINICAL DATA
7.1. A comprehensive summary of the Company's entire product pipeline, including for each candidate the following information: the compound name and identifier, the target or mechanism of action, the target indication(s), the current stage of development (preclinical, IND-enabling, Phase I, Phase II, or Phase III), the current status of development activities, expected timelines and key milestones, and any material risks or challenges identified by the Company's scientific or regulatory teams.
7.2. Detailed preclinical data packages for all pipeline candidates, including pharmacology studies (in vitro and in vivo efficacy studies), toxicology studies (single-dose and repeat-dose toxicity, genotoxicity, carcinogenicity, reproductive and developmental toxicity studies), pharmacokinetic studies, absorption, distribution, metabolism, and excretion ("ADME") studies, and any other nonclinical studies conducted in support of the Company's IND filings or regulatory strategy. Please include full study reports, summary tabulations of individual animal data, and any integrated summaries of safety.
7.3. Phase I clinical trial data and study reports (including dose-escalation and dose-expansion cohort data) for VRD-4187 and all other pipeline candidates that have entered clinical development, including complete study reports, clinical study protocols, statistical analysis plans, data listings, and summary tables.
7.4. Phase II clinical trial data, including all available data from the Marlowe Asset Management-2 trial for VRD-4187. We request the following categories of data in particular:
(a) Efficacy data: overall response rate ("ORR"), complete response rate, partial response rate, progression-free survival ("PFS"), overall survival ("OS"), duration of response, disease control rate, and any other efficacy endpoints assessed in the trial;
(b) Safety data: adverse events tabulated by grade (CTCAE), serious adverse events, treatment-related adverse events, dose-limiting toxicities, treatment-related deaths (if any), adverse events leading to treatment discontinuation, and any safety signals identified;
(c) Statistical analysis plans: copies of the primary and any amended statistical analysis plans, including the pre-specified primary and secondary endpoints, sample size calculations, and planned interim analyses; and
(d) Patient disposition data: enrollment, randomization, treatment completion, withdrawals, and reasons for discontinuation.
7.5. All DMC charters, DMC membership rosters (including the names, affiliations, and qualifications of DMC members), and all DMC meeting minutes, reports, and recommendations.
7.6. All statistical analysis plans and interim analysis plans for ongoing clinical trials, including any adaptive trial design features, futility analyses, or pre-planned interim efficacy and safety analyses.
7.7. Any reports or recommendations issued by an independent data safety monitoring board ("DSMB"), if separate from the DMC referenced in Request 7.5 above, including all correspondence between the DSMB and the Company's clinical team.
7.8. All biomarker data, companion diagnostic development plans, patient stratification analyses, and any agreements with diagnostic companies relating to the development or validation of companion or complementary diagnostic tests for VRD-4187 or other pipeline candidates.
7.9. Copies of any manuscripts, publications, posters, abstracts, or presentations submitted, published, or in preparation relating to the Company's clinical or preclinical data, including publications in peer-reviewed journals, presentations at scientific conferences (e.g., ASCO, AACR, ESMO), and any embargoed or pre-publication data.
7.10. Competitive landscape analyses, market research reports, scientific literature reviews, and any other assessments of the competitive environment for VRD-4187 in its target indications, including DLL3-expressing tumors and small cell lung cancer ("SCLC"), as well as any analyses of competing T-cell engager therapies, bispecific antibodies, or other immunotherapeutic approaches targeting DLL3 or related targets.
CATEGORY VIII: FINANCIAL INFORMATION
8.1. Audited financial statements for fiscal years ended December 31, 2021 ("FY2021"), December 31, 2022 ("FY2022"), and December 31, 2023 ("FY2023"), including audited balance sheets, statements of operations, statements of comprehensive loss, statements of changes in stockholders' equity (deficit), statements of cash flows, and all accompanying notes to the financial statements. We understand that the Company's independent auditor is Northbridge Accounting Group LLP (Engagement Partner: Patrick Calloway, 125 High Street, Suite 3100, Boston, MA 02110). We further understand that the Company is a clinical-stage biopharmaceutical company with no product revenue, and that the Company reported total revenue of $0 and a net loss of approximately ($87.3 million) for FY2023.
8.2. Unaudited interim financial statements (monthly and/or quarterly, as available) for all periods subsequent to the most recent audited period (i.e., from January 1, 2024 through the most recently available period), including unaudited balance sheets, statements of operations, and statements of cash flows. We understand that the Company's cash and cash equivalents as of March 31, 2024 were approximately $112.4 million.
8.3. All management-prepared financial projections, budgets, operating plans, and forecasts, including cash burn rate analyses, cash runway projections, and any scenario analyses or sensitivity analyses prepared by management. Please also provide any board-approved budgets for FY2024 and beyond.
8.4. All audit reports (including any qualified or adverse opinions), management letters, internal control deficiency communications, and other correspondence from Northbridge Accounting Group LLP to the Company's management or Board of Directors (or audit committee) for the past three (3) years.
8.5. A description of all significant accounting policies adopted by the Company and any changes in accounting policies, methods, or estimates during the past three (3) years, including any changes resulting from the adoption of new accounting standards (e.g., ASC 842 — Leases, ASC 606 — Revenue from Contracts with Customers).
8.6. A schedule of all bank accounts, investment accounts, money market accounts, and cash management arrangements maintained by the Company, including the financial institution, account type, account number, authorized signatories, and approximate balances as of the most recent practicable date.
8.7. A schedule of all outstanding indebtedness of the Company, including loans, lines of credit, revolving credit facilities, notes payable, capital leases, finance leases, and any other debt obligations, together with copies of all related loan agreements, credit agreements, promissory notes, security agreements, mortgages, and other instruments evidencing or securing such indebtedness. We understand that the Company currently has no outstanding debt, but request confirmation.
8.8. A schedule of all accounts receivable and accounts payable of the Company, including aging schedules, as of the most recent practicable date.
8.9. A schedule of all grants, government funding awards, and related financial reporting and compliance requirements, including any unused grant balances, cost-sharing obligations, and reporting deadlines.
8.10. Any going concern qualifications, emphasis-of-matter paragraphs, or similar auditor concerns expressed in any audit report or communication from the Company's independent auditor.
8.11. Documentation relating to the Company's internal financial controls and procedures, including any internal audit reports, internal control assessments, management certifications, or Sarbanes-Oxley Act-equivalent documentation maintained by the Company on a voluntary basis, if any.
CATEGORY IX: TAX MATTERS
The requests in this Category IX have been prepared in coordination with Leonard Cross, Partner, Tax Group, Calderwood & Harkness LLP.
9.1. Federal income tax returns (IRS Form 1120 or other applicable forms) for the past five (5) tax years, together with all schedules, attachments, elections, and workpapers. The Company's Employer Identification Number is 84-2193047.
9.2. State and local income, franchise, excise, and other tax returns for the past five (5) tax years for all jurisdictions in which the Company files or is required to file tax returns, including the Commonwealth of Massachusetts, the State of California, and the State of Maryland, together with all schedules and attachments.
9.3. A schedule of all federal and state net operating loss ("NOL") carryforwards and carrybacks, including the year in which each NOL was generated, the original amount of each NOL, any amounts utilized, and the remaining balance. We understand that the Company has a federal NOL carryforward of approximately $312 million as of December 31, 2023.
9.4. All analyses, studies, and documentation relating to Section 382 ownership changes and any limitations on the utilization of the Company's NOL carryforwards and other tax attributes (including research and development credits) under Section 382 of the Code. We understand that a known ownership change occurred in Q3 2020 in connection with the Series C preferred stock financing round led by Boreal Health Partners Fund III, LP, and that the Company has pre-change NOLs of approximately $148 million subject to an annual Section 382 limitation of approximately $5.9 million per year. Please provide all workpapers, shareholder ownership analyses, and legal memoranda relating to the Section 382 analysis.
9.5. Research and development tax credit studies, calculations, and supporting documentation (both federal and state), including all documentation supporting the qualification of expenditures for the credit under Section 41 of the Code and analogous state provisions, for all open tax years.
9.6. All tax sharing agreements, tax indemnification agreements, tax allocation agreements, and tax receivable agreements to which the Company is a party.
9.7. All private letter rulings, closing agreements, technical advice memoranda, determination letters, and other written guidance received from the Internal Revenue Service ("IRS") or any state or local tax authority.
9.8. All correspondence with the IRS or any state or local tax authority, including audit reports, revenue agent reports, notices of deficiency, notices of proposed adjustment, settlement agreements, and closing letters, for the past five (5) years.
9.9. A schedule of all open tax years (i.e., tax years for which the statute of limitations on assessment has not expired) and a description of all pending or threatened tax audits, examinations, inquiries, or assessments by the IRS or any state or local tax authority.
9.10. All transfer pricing documentation, including transfer pricing studies, contemporaneous documentation, and intercompany agreements, if applicable to any intercompany transactions between the Company and any affiliate or related entity.
9.11. Sales and use tax returns and records for the past three (3) years for all jurisdictions in which the Company collects or remits sales or use tax, together with any exemption certificates obtained from customers or vendors.
9.12. Documentation relating to Section 83(b) elections filed by founders, employees, and consultants (cross-referenced with Request 3.9), Section 409A compliance analyses for deferred compensation arrangements, and any other documentation relating to the tax treatment of equity compensation provided by the Company.
9.13. Payroll tax compliance records, including Forms W-2, Forms 1099, payroll tax returns (Forms 941), and any correspondence with the IRS or state tax authorities regarding payroll tax matters.
9.14. Any analyses or documentation relating to the Company's uncertain tax positions under ASC 740 (formerly FIN 48), including a schedule of all uncertain tax positions, the Company's assessment of the likelihood of sustaining each position, and any reserves or accruals recorded in the financial statements.
9.15. A schedule of all tax credits claimed or available to the Company, including research and development credits under Section 41 of the Code, orphan drug credits under Section 45C of the Code, and any state-level tax credits, together with supporting documentation.
CATEGORY X: EMPLOYMENT AND LABOR MATTERS
10.1. A list of all current employees of the Company (we understand there are approximately 148 employees as of the anticipated signing date of the Proposed Transaction), including for each employee the following information: full legal name, title, department, hire date, location (city and state), full-time or part-time status, exempt or non-exempt classification under the Fair Labor Standards Act and applicable state wage and hour laws, current annual base salary or hourly wage rate, target bonus and/or commission structure, and eligibility for equity awards.
10.2. Copies of all employment agreements, offer letters, and consulting agreements for all executive officers and key employees of the Company, including, without limitation, the following individuals:
(a) Dr. Julian Marek, Chief Executive Officer and Co-Founder;
(b) Dr. Priya Chandrasekaran, Chief Scientific Officer and Co-Founder;
(c) Steven R. Kessler, Chief Financial Officer;
(d) Dr. Anne-Marie Fontaine, Vice President, Regulatory Affairs; and
(e) Rachel Stein-Goldberg, General Counsel.
10.3. All agreements, plans, or arrangements containing change-of-control provisions, severance provisions, retention bonus provisions, acceleration of vesting provisions, "single trigger" or "double trigger" equity acceleration provisions, golden parachute provisions (as described in Section 280G of the Code), or similar provisions that would be triggered by or relevant to the Proposed Transaction, together with any analyses of the potential payments or benefits payable thereunder in connection with the Proposed Transaction.
10.4. All non-competition agreements, non-solicitation agreements, confidentiality and non-disclosure agreements, and invention assignment agreements entered into with current and former employees, consultants, and independent contractors of the Company.
10.5. The Company's employee handbook and all written employment policies and procedures, including, without limitation, anti-harassment policies, anti-discrimination policies, equal employment opportunity policies, whistleblower policies, social media policies, remote work policies, drug and alcohol policies, and any other policies applicable to the Company's workforce.
10.6. The Company's current organizational chart, showing reporting relationships, departmental structure, and headcount by department and location.
10.7. All independent contractor and consultant agreements currently in effect or entered into within the past three (3) years, together with any analyses conducted by the Company regarding the proper classification of individuals as independent contractors versus employees under applicable federal and state law (including IRS guidelines and the ABC test applicable in certain states such as California and Massachusetts).
10.8. Any collective bargaining agreements, union contracts, or similar arrangements, and a description of any pending or threatened labor organizing activity, union representation petitions, or unfair labor practice charges filed with the National Labor Relations Board or any state labor relations agency.
10.9. A schedule of all complaints, charges, claims, or proceedings filed against the Company or any of its employees before the Equal Employment Opportunity Commission ("EEOC"), any state or local human rights commission or fair employment agency, the Occupational Safety and Health Administration ("OSHA"), the U.S. Department of Labor, or any other governmental agency, whether pending or resolved within the past five (5) years, including copies of all charges, complaints, position statements, determinations, and settlement agreements.
10.10. Workers' compensation claims history for the past five (5) years, including a schedule of all open and closed claims, the nature of each claim, and the amounts paid or reserved.
10.11. Immigration and work authorization records, including Form I-9 compliance documentation, a schedule of all employees for whom the Company has sponsored or is sponsoring work visas (including H-1B, L-1, O-1, TN, and other visa classifications), copies of all approved visa petitions, and a description of the Company's I-9 compliance practices.
10.12. A description of any reductions in force, layoffs, furloughs, plant closings, or mass layoffs within the past three (3) years, including any notices issued under the Worker Adjustment and Retraining Notification Act ("WARN Act") or analogous state "mini-WARN" statutes, and any severance agreements entered into in connection therewith.
CATEGORY XI: EMPLOYEE BENEFIT PLANS
11.1. Copies of all employee benefit plans, programs, and arrangements maintained, sponsored, or contributed to by the Company for the benefit of its employees, former employees, or their dependents, including health insurance plans, dental plans, vision plans, short-term and long-term disability plans, life insurance plans, accidental death and dismemberment plans, 401(k) or other defined contribution retirement plans, profit-sharing plans, and any deferred compensation plans or arrangements. For each plan, please provide the plan document, summary plan description, most recent amendments, and any related trust agreements or insurance contracts.
11.2. ERISA compliance documentation for all employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including the most recent three (3) years of Form 5500 annual returns/reports (with all schedules and attachments), nondiscrimination testing results (including ADP/ACP testing, coverage testing, and top-heavy testing for 401(k) plans), fiduciary liability insurance documentation, and any ERISA bond certificates.
11.3. All equity incentive plans (stock option plans, restricted stock unit plans, employee stock purchase plans), including the ESOP pool representing approximately 9.8% of the Company's fully diluted equity, together with all plan documents, prospectuses, forms of award agreements, and current administration records (cross-referenced with Request 3.5).
11.4. All Section 409A valuations and compliance analyses for nonqualified deferred compensation arrangements, including documentation supporting the Company's determination that stock options and other equity awards have been granted with exercise prices equal to or greater than the fair market value of the underlying common stock on the date of grant.
11.5. Documentation relating to any defined benefit pension plans, retiree health benefit plans, post-retirement benefit obligations, or other post-employment benefit plans maintained or contributed to by the Company, if any. If no such plans exist, please confirm.
11.6. All severance plans, retention plans, change-in-control bonus plans, stay bonus arrangements, and transaction bonus arrangements, whether formal or informal, written or unwritten, including all plan documents, individual agreements, and any board or compensation committee resolutions authorizing such arrangements.
11.7. A summary of annual health and welfare plan costs, including employer contributions, employee contributions, and claims experience for the past three (3) plan years.
11.8. Documentation relating to any multi-employer plan participation, including any withdrawal liability assessments or potential withdrawal liability.
11.9. COBRA compliance records, including documentation of timely COBRA election notices, qualifying event notices, and any COBRA subsidy administration (if applicable).
11.10. A description of any pending or threatened claims, audits, or investigations under any employee benefit plan, including any claims for benefits, fiduciary breach claims, Department of Labor investigations, IRS determination letter applications, or voluntary correction submissions under the IRS Employee Plans Compliance Resolution System ("EPCRS") or the Department of Labor's Voluntary Fiduciary Correction Program.
CATEGORY XII: LITIGATION, CLAIMS, AND GOVERNMENTAL PROCEEDINGS
12.1. A schedule of all pending or threatened litigation, arbitration, mediation, or other dispute resolution proceedings involving the Company as a party or potential party, including for each matter the following information: the names of all parties, the court or tribunal, the case or docket number, the nature and factual basis of the claims asserted, the relief sought and amounts in controversy, the current status of the matter, and the Company's assessment of the likely outcome.
12.2. Copies of all complaints, petitions, answers, counterclaims, cross-claims, motions, briefs, orders, judgments, and settlement agreements relating to any pending or recently resolved litigation, arbitration, or other dispute resolution proceedings.
12.3. Copies of all demand letters, cease-and-desist letters, and pre-litigation correspondence received by or sent on behalf of the Company within the past five (5) years.
12.4. A description of all governmental investigations, inquiries, subpoenas, civil investigative demands, or enforcement actions involving the Company or any of its current or former directors, officers, or employees (in their capacity as such), whether pending or concluded within the past five (5) years, including any matters involving the FDA, the U.S. Department of Justice ("DOJ"), the Securities and Exchange Commission ("SEC"), the Federal Trade Commission ("FTC"), state attorneys general, or any other federal, state, or local governmental authority.
12.5. Copies of all consent decrees, corporate integrity agreements, deferred prosecution agreements, non-prosecution agreements, settlement agreements, and judgments to which the Company is a party or by which it is bound.
12.6. A description of all product liability claims, clinical trial liability claims, professional malpractice claims, or similar claims (pending or threatened) arising out of the Company's products, clinical trials, or operations.
12.7. A schedule of all reserves, accruals, or provisions for litigation losses or contingent liabilities reflected in the Company's financial statements, including the amount of each reserve and the nature of the underlying matter.