SERIES B PREFERRED STOCK PURCHASE AGREEMENT
by and between
HELIOGRAPH THERAPEUTICS, INC.
a Delaware Corporation
and
COBALT VENTURES LP
a Delaware Limited Partnership
________________________________________
Dated as of August 15, 2025
________________________________________
Purchase and Sale of 14,414,414 Shares of Series B Preferred Stock Par Value $0.0001 Per Share at a Purchase Price of $1.3875 Per Share for an Aggregate Purchase Price of $20,000,000
TABLE OF CONTENTS
Right-click to update Table of Contents
EXHIBITS
SCHEDULES
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into as of August 15, 2025, by and between:
(1) HELIOGRAPH THERAPEUTICS, INC., a Delaware corporation, with its principal offices at 4800 Biopark Drive, Building C, Suite 200, Durham, NC 27709 (the "Company"); and
(2) COBALT VENTURES LP, a Delaware limited partnership, with its principal offices at 2200 Sand Hill Road, Suite 310, Menlo Park, CA 94025 (the "Investor").
The Company and the Investor are sometimes referred to herein individually as a "Party" and collectively as the "Parties."
RECITALS
WHEREAS, the Company is a Delaware corporation engaged in the development of adeno-associated virus ("AAV")-based gene therapies for inherited retinal dystrophies, with its principal offices at 4800 Biopark Drive, Building C, Suite 200, Durham, NC 27709;
WHEREAS, the Company desires to issue and sell, and the Investor desires to purchase, 14,414,414 shares of the Company's Series B Preferred Stock, par value $0.0001 per share (the "Series B Preferred Stock"), at a price per share of $1.3875, for an aggregate purchase price of Twenty Million Dollars ($20,000,000.00) (the "Aggregate Purchase Price");
WHEREAS, the rights, preferences, privileges, and restrictions of the Series B Preferred Stock are set forth in the Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Exhibit A (the "Restated Certificate"), which shall be filed with the Secretary of State of the State of Delaware prior to the Closing (as defined herein);
WHEREAS, in connection with the transactions contemplated hereby, the Parties desire to enter into (i) an Investors' Rights Agreement, substantially in the form attached hereto as Exhibit B (the "Investors' Rights Agreement" or "IRA"), (ii) a Right of First Refusal and Co-Sale Agreement, substantially in the form attached hereto as Exhibit C (the "ROFR/Co-Sale Agreement"), (iii) a Voting Agreement, substantially in the form attached hereto as Exhibit D (the "Voting Agreement"), and (iv) an Escrow Agreement, substantially in the form attached hereto as Exhibit E (the "Escrow Agreement"), each as further defined herein; and
WHEREAS, the Board of Directors of the Company approved the issuance and sale of the Series B Preferred Stock and the transactions contemplated by this Agreement and the Ancillary Agreements at a duly convened meeting of the Board of Directors held on August 8, 2025;
NOW, THEREFORE, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE 1 — DEFINITIONS
Section 1.1 — Definitions
As used in this Agreement, the following terms shall have the meanings set forth below:
"Affiliate" means, with respect to any specified Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person. For purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.
"Aggregate Purchase Price" has the meaning set forth in Section 2.2 and is equal to Twenty Million Dollars ($20,000,000.00).
"Amended and Restated Certificate of Incorporation" or "Restated Certificate" means the Amended and Restated Certificate of Incorporation of the Company in the form attached hereto as Exhibit A, which shall authorize, among other things, the issuance of the Series B Preferred Stock and set forth the rights, preferences, privileges, and restrictions thereof, and which shall be filed with the Secretary of State of the State of Delaware prior to the Closing.
"Ancillary Agreements" means, collectively, the Investors' Rights Agreement, the ROFR/Co-Sale Agreement, the Voting Agreement, and the Escrow Agreement.
"Board of Directors" or "Board" means the board of directors of the Company.
"Business Day" means any day other than a Saturday, a Sunday, or a day on which commercial banks in New York, New York or San Francisco, California are authorized or required by law, regulation, or executive order to close.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3 and is expected to be September 5, 2025.
"Common Stock" means the common stock, par value $0.0001 per share, of the Company, of which 40,000,000 shares are issued and outstanding as of the date hereof.
"Company" means Heliograph Therapeutics, Inc., a Delaware corporation.
"Company intellectual Property" means all patents, patent applications, trademarks, trademark applications, trademark registrations, service marks, copyrights, copyright registrations, trade secrets, domain names, know-how, inventions (whether or not patentable), and all other intellectual property rights that are owned by, or exclusively licensed to, the Company, including those set forth on Schedule 3.10.
"Disclosure Schedule" means the disclosure schedule delivered by the Company to the Investor concurrently with the execution and delivery of this Agreement, which Disclosure Schedule is incorporated herein by reference and made a part of this Agreement for all purposes.
"Escrow Agent" means Granite Trust Company, N.A., a national banking association, having offices at 300 Park Avenue, 12th Floor, New York, NY 10022.
"Escrow Agreement" means the Escrow Agreement substantially in the form attached hereto as Exhibit E, to be entered into among the Company, the Investor, and the Escrow Agent.
"Escrow Amount" means One Million Dollars ($1,000,000.00), representing five percent (5%) of the Aggregate Purchase Price, to be deposited with the Escrow Agent at the Closing in accordance with the terms of the Escrow Agreement.
"Escrow Release Date" means the date that is twelve (12) months after the Closing Date (expected to be September 5, 2026), on which date the Escrow Amount (less any amounts previously disbursed or subject to then-pending claims) shall be released in accordance with the terms of the Escrow Agreement.
"Existing Investors" means, collectively, Pinnacle BioVentures Fund II LP, a Delaware limited partnership, and Lakeshore Health Innovation Fund LP, a Delaware limited partnership.
"Financial Statements" has the meaning set forth in Section 3.6.
"Founders" means Dr. Priya Anand and Dr. Marcus Ellington.
"Fully Diluted Shares" means the aggregate number of shares of Common Stock of the Company, calculated on a fully diluted, as-converted basis, assuming the conversion of all outstanding shares of Preferred Stock (including the Series A Preferred Stock and, to the extent issued, the Series B Preferred Stock) into Common Stock, and the exercise or conversion of all outstanding options, warrants, and other rights to acquire shares of Common Stock, including all shares reserved under the Stock Option Pool (whether granted or available for future grant). As of immediately prior to the Closing, Fully Diluted Shares shall be 63,000,000. As of immediately after the Closing (giving effect to the issuance of the Shares), Fully Diluted Shares shall be 77,414,414.
"Fundamental Representations" means the representations and warranties of the Company set forth in Section 3.1 (Organization, Good Standing, and Qualification), Section 3.2 (Authorization), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares), and Section 3.16 (Tax Matters).
"Governmental Authority" means any federal, state, local, municipal, or foreign government or governmental, regulatory, or administrative authority, agency, instrumentality, or commission, or any court, tribunal, or judicial or arbitral body of competent jurisdiction, including the U.S. Securities and Exchange Commission (the "SEC"), the U.S. Food and Drug Administration (the "FDA"), and the Secretary of State of the State of Delaware.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.
"Indemnification Basket" means Two Hundred Thousand Dollars ($200,000.00), representing one percent (1%) of the Aggregate Purchase Price; the Indemnification Basket shall operate as a "tipping basket" as more particularly described in Section 8.4(b).
"Indemnification Cap" means Five Million Dollars ($5,000,000.00), representing twenty-five percent (25%) of the Aggregate Purchase Price.
"Investor" means Cobalt Ventures LP, a Delaware limited partnership, with its principal offices at 2200 Sand Hill Road, Suite 310, Menlo Park, CA 94025.
"Investors' Rights Agreement" or "IRA" means the Investors' Rights Agreement substantially in the form attached hereto as Exhibit B, to be entered into by and among the Company, the Investor, and the Existing Investors.
"Key Employees" means the Founders and such other employees of the Company as are designated on Schedule 1.1(a) hereto.
"Knowledge of the Company" or words of similar import mean the actual knowledge of Dr. Priya Anand, in her capacity as Chief Executive Officer of the Company, and Dr. Marcus Ellington, in his capacity as Chief Scientific Officer of the Company, in each case, after reasonable inquiry of (i) the individuals who report directly to either of them and who would reasonably be expected to have knowledge of the relevant matter and (ii) such other officers and senior employees of the Company as would reasonably be expected to have knowledge of the relevant matter.
"Losses" has the meaning set forth in Section 8.2.
"Material Adverse Effect" or "MAE" means any event, change, circumstance, occurrence, effect, or condition that, individually or in the aggregate with all other events, changes, circumstances, occurrences, effects, or conditions, has had or would reasonably be expected to have a material adverse effect on (a) the business, assets, liabilities, financial condition, or results of operations of the Company, or (b) the ability of the Company to consummate the transactions contemplated by this Agreement and the Ancillary Agreements on a timely basis; provided, however, that none of the following, individually or in the aggregate, shall be deemed to constitute, and none of the following shall be taken into account in determining whether there has been, a Material Adverse Effect: (i) changes in general economic, financial, or market conditions (including changes in interest rates, exchange rates, stock, bond, or debt prices, or market indices); (ii) changes affecting the biotechnology or gene-therapy industries generally; (iii) changes arising out of or relating to any change in applicable law, regulation, or regulatory policy, or changes in accounting standards (including GAAP); (iv) any natural disaster, act of God, epidemic, pandemic, or public health emergency; (v) any act of war (whether or not declared), armed hostilities, sabotage, terrorism, military action, or any escalation or worsening of any of the foregoing; (vi) any change resulting from the announcement or pendency of the transactions contemplated by this Agreement; or (vii) any failure by the Company to meet internal or published projections, forecasts, or budgets for any period (it being understood that the underlying causes of any such failure may be taken into account in determining whether a Material Adverse Effect has occurred); provided, further, that each of the exclusions in clauses (i) through (v) shall apply only to the extent that such event, change, circumstance, occurrence, effect, or condition does not have a disproportionate adverse effect on the Company as compared to other companies operating in the same industry and of a similar size and stage of development as the Company.
"Most Recent Balance Sheet Date" means March 31, 2025.
"Original Issue Price" means $1.3875 per share of Series B Preferred Stock, subject to appropriate adjustment in the event of any stock dividend, stock split, combination, recapitalization, or other similar event with respect to the Series B Preferred Stock.
"Outside Date" means October 15, 2025.
"Permitted Liens" means (a) liens for Taxes that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP; (b) statutory liens of landlords, carriers, warehousemen, mechanics, materialmen, repairmen, construction contractors, and other similar liens arising in the ordinary course of business that are not yet due and payable or that are being contested in good faith by appropriate proceedings; (c) liens arising by operation of law, including liens arising under workers' compensation, unemployment insurance, social security, or similar legislation; (d) purchase money liens and liens securing rental payments under capital lease arrangements, in each case to the extent disclosed in the Disclosure Schedule; (e) easements, covenants, conditions, restrictions, and other similar matters of record affecting title to real property that do not materially impair the occupancy or use of such real property for the purposes for which it is currently used in connection with the Company's business; and (f) other liens disclosed on Schedule 3.13 of the Disclosure Schedule.
"Person" means an individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated association, or other legal entity, or any Governmental Authority.
"Post-Money Valuation" means One Hundred Eight Million Dollars ($108,000,000.00), calculated as the Pre-Money Valuation plus the Aggregate Purchase Price.
"Pre-Money Valuation" means Eighty-Eight Million Dollars ($88,000,000.00).
"Preferred Stock" means, collectively, the Series A Preferred Stock and the Series B Preferred Stock.
"Purchase Price" means $1.3875 per share of Series B Preferred Stock.
"ROFR/Co-Sale Agreement" means the Right of First Refusal and Co-Sale Agreement substantially in the form attached hereto as Exhibit C, to be entered into by and among the Company, all stockholders of the Company (including the Founders as Key Holders), the Investor, and the Existing Investors.
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
"Series A Preferred Stock" means the Series A Preferred Stock, par value $0.0001 per share, of the Company, of which 15,000,000 shares are issued and outstanding as of the date hereof, having been issued at $2.00 per share in September 2022 for aggregate gross proceeds of $30,000,000.
"Series B Preferred Stock" means the Series B Preferred Stock, par value $0.0001 per share, of the Company, having the rights, preferences, privileges, and restrictions set forth in the Restated Certificate.
"Shares" means the 14,414,414 shares of Series B Preferred Stock to be issued and sold by the Company to the Investor pursuant to this Agreement.
"Stock Option Pool" means the 8,000,000 shares of Common Stock reserved for issuance under the Company's 2021 Equity Incentive Plan, as amended, of which, as of the date hereof, 5,200,000 shares are subject to outstanding option grants and 2,800,000 shares remain available for future grants.
"Transaction Documents" means this Agreement, the Ancillary Agreements, and all other documents, instruments, and certificates delivered or to be delivered in connection with the transactions contemplated hereby and thereby.
"Voting Agreement" means the Voting Agreement substantially in the form attached hereto as Exhibit D, to be entered into by and among the Company, the Investor, the Existing Investors, and all other stockholders of the Company.
Section 1.2 — Rules of Construction
(a) Unless the context otherwise requires, terms defined in the singular shall include the plural, and terms defined in the plural shall include the singular. The use of any gender shall be applicable to all genders.
(b) The headings and captions of the articles, sections, and subsections of this Agreement are for convenience of reference only, shall not be deemed to be a part of this Agreement, and shall not be referred to in connection with the construction or interpretation of this Agreement.
(c) The word "including" (and with correlative meaning, "include" and "includes") means "including, without limitation."
(d) References to "Sections," "Articles," "Exhibits," and "Schedules" refer to the corresponding sections, articles, exhibits, and schedules of or to this Agreement, unless otherwise specified.
(e) References to "$" or "Dollars" mean the lawful currency of the United States of America.
(f) References to any law, statute, rule, or regulation shall include all amendments thereto and all rules and regulations promulgated thereunder, unless the context otherwise requires.
(g) Where not otherwise defined herein, capitalized terms used in this Agreement that are defined in the Delaware General Corporation Law (the "DGCL") shall have the meanings ascribed to them in the DGCL.
(h) The Parties have participated jointly in the negotiation and drafting of this Agreement, and in the event of any ambiguity or question of intent or interpretation, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.
ARTICLE 2 — PURCHASE AND SALE OF SHARES
Section 2.1 — Authorization of Shares
Prior to the Closing, the Company shall have authorized the sale and issuance to the Investor of up to 14,414,414 shares of Series B Preferred Stock, having the rights, preferences, privileges, and restrictions set forth in the Restated Certificate. In connection therewith, the Company shall have duly adopted and filed the Restated Certificate with the Secretary of State of the State of Delaware, and the Restated Certificate shall have been accepted for filing by and shall be effective under the laws of the State of Delaware. The authorized capital stock of the Company, as set forth in the Restated Certificate, shall include a sufficient number of authorized shares of Series B Preferred Stock and a sufficient number of authorized shares of Common Stock to be reserved for issuance upon conversion of the Series B Preferred Stock.
Section 2.2 — Sale and Issuance of Series B Preferred Stock
Subject to the terms and conditions of this Agreement, at the Closing, the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, 14,414,414 shares of Series B Preferred Stock at a purchase price of $1.3875 per share, for an aggregate purchase price of Twenty Million Dollars ($20,000,000.00) (the "Aggregate Purchase Price").
For purposes of clarity, $20,000,000.00 divided by $1.3875 per share equals 14,414,414.414414... shares. The number of shares to be issued has been rounded down to the nearest whole share, resulting in the issuance of 14,414,414 shares. The actual aggregate consideration at 14,414,414 shares multiplied by $1.3875 per share is $19,999,999.425. The balance of $0.575 shall be treated as additional paid-in capital of the Company and shall not entitle the Investor to any additional shares.
Payment of the Aggregate Purchase Price shall be made by the Investor by wire transfer of immediately available funds, denominated in United States Dollars, as follows:
(a) One Million Dollars ($1,000,000.00) (the "Escrow Amount") shall be transferred to the escrow account established and maintained by the Escrow Agent, Granite Trust Company, N.A., in accordance with the terms and conditions of the Escrow Agreement; and
(b) Nineteen Million Dollars ($19,000,000.00) (the balance of the Aggregate Purchase Price) shall be transferred to the bank account of the Company designated in writing by the Company to the Investor at least five (5) Business Days prior to the Closing Date, which wire instructions shall include the bank name, account number, routing number, and any reference or memo information required by the Company's bank.
The Company shall deliver wire transfer instructions to the Investor (and the Investor's counsel) at least five (5) Business Days prior to the anticipated Closing Date. The Investor shall use commercially reasonable efforts to initiate the wire transfers sufficiently in advance of the Closing to ensure receipt of funds on the Closing Date.
Section 2.3 — Closing; Delivery
(a) Closing Date. The purchase and sale of the Shares shall take place at a closing (the "Closing") to be held remotely via the electronic exchange of documents and signatures on or before September 5, 2025 (the "Closing Date"), or at such other time, date, and place as the Company and the Investor may mutually agree in writing, subject to the satisfaction or waiver (to the extent permitted by applicable law) of the conditions set forth in Articles 5 and 6 hereof; provided, however, that in no event shall the Closing take place later than the Outside Date of October 15, 2025. The Closing shall be deemed to be effective as of 12:01 a.m. Eastern Time on the Closing Date.
(b) Company Deliverables at Closing. At or prior to the Closing, the Company shall deliver (or cause to be delivered) to the Investor each of the following:
(i) Stock certificate(s) or evidence of book-entry issuance representing 14,414,414 shares of Series B Preferred Stock, registered in the name of "Cobalt Ventures LP," free and clear of all liens, charges, and encumbrances other than those imposed by this Agreement, the Ancillary Agreements, applicable federal and state securities laws, and the Restated Certificate; each such certificate, if issued in certificated form, shall bear the legends described in Section 4.3(e) of this Agreement and such other legends as may be required by applicable law;
(ii) A certified copy of the Restated Certificate, as filed with and accepted by the Secretary of State of the State of Delaware, together with evidence that the Restated Certificate has become effective under the laws of the State of Delaware;
(iii) Executed counterparts of each of the Investors' Rights Agreement, the ROFR/Co-Sale Agreement, and the Voting Agreement, duly executed by the Company and each of the other parties thereto (other than the Investor);
(iv) An executed counterpart of the Escrow Agreement, duly executed by the Company;
(v) A legal opinion of Breck Alderman & Yost LLP, counsel to the Company, dated as of the Closing Date, addressed to the Investor, in form and substance reasonably satisfactory to the Investor and its counsel, substantially in the form set forth in Exhibit F;
(vi) A Secretary's Certificate of the Company, executed by the Secretary or an Assistant Secretary of the Company, substantially in the form set forth in Exhibit H, attaching and certifying as true, correct, and complete copies of: (A) the Restated Certificate as filed with the Delaware Secretary of State; (B) the Company's Bylaws, as currently in effect; (C) resolutions of the Board of Directors approving the Series B financing and the transactions contemplated by this Agreement and the Ancillary Agreements (as adopted on August 8, 2025); (D) an incumbency certificate setting forth the names, titles, and specimen signatures of Dr. Priya Anand, Chief Executive Officer, and Dr. Marcus Ellington, Chief Scientific Officer; and (E) a certificate of good standing (or certificate of status) for the Company issued by the Secretary of State of the State of Delaware, dated within ten (10) Business Days of the Closing Date;
(vii) An Officer's Certificate (Compliance Certificate), substantially in the form set forth in Exhibit G, executed by Dr. Priya Anand, Chief Executive Officer, certifying on behalf of the Company as to the satisfaction of the conditions set forth in Sections 5.1, 5.2, and 5.3; and
(viii) Payment by the Company, by wire transfer of immediately available funds, of up to Fifty Thousand Dollars ($50,000.00) in reimbursement of the Investor's documented legal fees and expenses incurred in connection with the transactions contemplated hereby, in accordance with Section 10.4.
(c) Investor Deliverables at Closing. At or prior to the Closing, the Investor shall deliver (or cause to be delivered) to the Company each of the following:
(i) The Aggregate Purchase Price of Twenty Million Dollars ($20,000,000.00) by wire transfer of immediately available funds, allocated as follows: (A) One Million Dollars ($1,000,000.00) to the escrow account at Granite Trust Company, N.A. in accordance with the Escrow Agreement; and (B) Nineteen Million Dollars ($19,000,000.00) to the Company's designated bank account;
(ii) Executed counterparts of each of the Investors' Rights Agreement, the ROFR/Co-Sale Agreement, the Voting Agreement, and the Escrow Agreement, each duly executed by the Investor; and
(iii) A certificate of good standing (or certificate of status) for the Investor issued by the Secretary of State of the State of Delaware, dated within ten (10) Business Days of the Closing Date.
Section 2.4 — Use of Proceeds
The Company shall use the net proceeds from the sale of the Shares primarily for the following purposes:
(i) continued clinical development of HT-201, the Company's AAV5-based gene therapy product candidate for the treatment of Leber congenital amaurosis type 10 ("LCA10"), including the conduct of the ongoing Phase I/II clinical trial under IND 178452 filed with the FDA, enrollment of additional clinical trial sites, manufacturing of clinical-grade vector material, and related regulatory activities;
(ii) general corporate purposes, including working capital, general and administrative expenses, and capital expenditures incurred in the ordinary course of business; and
(iii) payment of obligations under existing material contracts of the Company, including payments under the Contract Manufacturing Agreement with Prismline Biologics, Inc. and the Exclusive License Agreement with Meridian University.
The Company acknowledges that the foregoing description of the use of proceeds is provided for informational purposes and does not limit the Company's discretion in the application of such proceeds, subject to the Company's obligation to use commercially reasonable efforts to advance its clinical development programs and the covenants set forth in Section 7.2(d) hereof.
ARTICLE 3 — REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered by the Company to the Investor concurrently herewith (each section of which qualifies the correspondingly numbered representation and warranty and any other representation and warranty to the extent that the applicability of such disclosure to such other representation and warranty is reasonably apparent on the face of such disclosure), the Company hereby represents and warrants to the Investor, as of the date hereof and as of the Closing Date (except for those representations and warranties that speak as of a specific date, which shall be made as of such date), as follows:
Section 3.1 — Organization, Good Standing, and Qualification
The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, having been formed on March 8, 2020, with Delaware File Number 5923417. The Company has all requisite corporate power and authority to (a) own, lease, and operate its properties and assets, (b) carry on its business as presently conducted and as proposed to be conducted, and (c) execute, deliver, and perform its obligations under each of the Transaction Documents to which it is or will be a party. The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in the State of North Carolina and in each other jurisdiction in which the nature of its business or the ownership or leasing of its properties makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect. The registered agent of the Company in the State of Delaware is Capitol Corporate Services, Inc., 1675 South Ashbury Asset Advisors, Suite B, Dover, DE 19901. The Company's principal offices are located at 4800 Biopark Drive, Building C, Suite 200, Durham, NC 27709. The Company has made available to the Investor true, correct, and complete copies of the Company's Certificate of Incorporation (as in effect prior to the filing of the Restated Certificate) and the Company's Bylaws, each as in effect as of the date hereof.
Section 3.2 — Authorization
All corporate action on the part of the Company, its officers, directors, and stockholders necessary for the (a) authorization, execution, and delivery of this Agreement and each of the Ancillary Agreements to which the Company is a party, (b) authorization of the performance of all obligations of the Company hereunder and thereunder, and (c) authorization, sale, issuance, and delivery of the Shares, has been taken or will be taken prior to the Closing. The Board of Directors of the Company approved the Series B financing and the transactions contemplated by this Agreement and the Ancillary Agreements at a duly convened meeting of the Board of Directors held on August 8, 2025, at which a quorum was present throughout, and such approval has not been rescinded, revoked, or modified. This Agreement, when executed and delivered by the Company, shall constitute the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to: (i) laws of general application relating to bankruptcy, insolvency, moratorium, reorganization, and the relief of debtors; and (ii) rules of law governing specific performance, injunctive relief, and other equitable remedies.
Section 3.3 — Capitalization
(a) Authorized Capital Stock. The authorized capital stock of the Company, immediately following the filing and effectiveness of the Restated Certificate, shall consist of: (i) 100,000,000 shares of Common Stock, par value $0.0001 per share; (ii) 15,000,000 shares of Series A Preferred Stock, par value $0.0001 per share; and (iii) 14,414,414 shares of Series B Preferred Stock, par value $0.0001 per share.
(b) Outstanding Shares (Pre-Closing). As of the date hereof (and immediately prior to the Closing), the issued and outstanding capital stock of the Company consists of the following:
(i) Common Stock: 40,000,000 shares of Common Stock are issued and outstanding, held by the Persons and in the amounts set forth on Schedule 3.3 of the Disclosure Schedule;
(ii) Series A Preferred Stock: 15,000,000 shares of Series A Preferred Stock are issued and outstanding, having been issued at $2.00 per share for aggregate gross proceeds of $30,000,000.00 in September 2022, held as follows:
• Pinnacle BioVentures Fund II LP: 10,000,000 shares of Series A Preferred Stock; and
• Lakeshore Health Innovation Fund LP: 5,000,000 shares of Series A Preferred Stock;
(iii) Stock Option Pool: 8,000,000 shares of Common Stock are reserved for issuance under the Company's 2021 Equity Incentive Plan, as amended (the "Equity Incentive Plan"), of which (A) 5,200,000 shares are subject to outstanding option grants (with the exercise prices, vesting schedules, and holders thereof set forth on Schedule 3.3), and (B) 2,800,000 shares remain available for future grants;
(iv) Fully Diluted Shares Pre-Closing: 63,000,000 shares on a fully diluted, as-converted basis (consisting of 40,000,000 shares of Common Stock + 15,000,000 shares issuable upon conversion of the Series A Preferred Stock + 8,000,000 shares reserved under the Stock Option Pool).
(c) Post-Closing Capitalization. Upon the issuance of 14,414,414 shares of Series B Preferred Stock at the Closing, the total Fully Diluted Shares Post-Closing shall be 77,414,414, and the Investor's ownership on a fully diluted, as-converted basis shall be approximately 18.62%.
(d) Founder Holdings. The following Founders hold shares of Common Stock as follows:
(i) Dr. Priya Anand: 16,000,000 shares of Common Stock, representing approximately 25.3% of Fully Diluted Shares on a pre-Closing basis; and
(ii) Dr. Marcus Ellington: 12,000,000 shares of Common Stock, representing approximately 19.0% of Fully Diluted Shares on a pre-Closing basis.
(e) Other than as set forth in this Section 3.3 and in Schedule 3.3 of the Disclosure Schedule, no shares of capital stock or other equity securities of the Company are authorized, issued, or outstanding, and no securities convertible into or exchangeable or exercisable for shares of capital stock or other equity securities of the Company are authorized, issued, or outstanding. There are no outstanding warrants, options, rights (including conversion or preemptive rights and rights of first refusal or similar rights), or agreements, orally or in writing, to purchase or acquire from the Company any shares of capital stock, or any securities convertible into or exercisable for any shares of capital stock of the Company, except as described in this Agreement, the Ancillary Agreements, the Equity Incentive Plan, and the existing Series A transaction documents.
(f) All outstanding shares of Common Stock and Series A Preferred Stock have been duly authorized and are validly issued, fully paid, and non-assessable, and were issued in compliance with all applicable federal and state securities laws and all requirements set forth in the Company's organizational documents and any applicable agreements or instruments to which the Company is a party.
(g) Except as set forth in this Agreement, the Ancillary Agreements, and the existing Series A Preferred Stock Purchase Agreement dated as of September 2022 and the related ancillary agreements (copies of which have been made available to the Investor), there are no outstanding preemptive rights, rights of first refusal, registration rights, anti-dilution protections, voting trusts, stockholder agreements, proxies, or similar rights or arrangements with respect to the issuance, sale, or transfer of any capital stock or other equity securities of the Company.
Section 3.4 — Valid Issuance of Shares
The Shares, when issued, sold, and delivered in accordance with the terms of this Agreement and for the consideration set forth herein, will be validly issued, fully paid, and non-assessable, and free and clear of all liens, charges, and encumbrances, other than restrictions on transfer imposed by (a) this Agreement, (b) the Ancillary Agreements, (c) the Restated Certificate, and (d) applicable federal and state securities laws. Assuming the accuracy of the representations and warranties of the Investor set forth in Article 4 hereof, the Shares will be issued in compliance with all applicable federal and state securities laws. The shares of Common Stock issuable upon conversion of the Shares have been duly reserved for issuance and, when issued upon conversion of the Shares in accordance with the terms of the Restated Certificate, will be validly issued, fully paid, and non-assessable.
Section 3.5 — Subsidiaries
The Company does not presently own or control, directly or indirectly, any interest in any other corporation, partnership, limited liability company, association, joint venture, or other business entity. The Company is not a participant in any joint venture, partnership, or similar arrangement with any other Person.
Section 3.6 — Financial Statements
The Company has delivered to the Investor the following financial statements (collectively, the "Financial Statements"):
(a) audited financial statements of the Company for the fiscal year ended December 31, 2024 (the "Audited Financial Statements"), consisting of a balance sheet as of December 31, 2024, statements of operations, stockholders' equity (deficit), and cash flows for the fiscal year then ended, together with the notes thereto and the report of the Company's independent registered public accounting firm, Whitmore & Kassidy LLP (engagement partner: Robert Yuen, CPA), which Audited Financial Statements are set forth on Schedule 3.6; and
(b) unaudited financial statements as of and for the three-month period ended March 31, 2025 (the "Interim Financial Statements"), consisting of an unaudited balance sheet as of March 31, 2025 (the "Most Recent Balance Sheet") and unaudited statements of operations and cash flows for the three-month period then ended, which Interim Financial Statements are set forth on Schedule 3.6.
The Financial Statements have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods indicated and fairly present, in all material respects, the financial position, results of operations, changes in stockholders' equity (deficit), and cash flows of the Company as of the dates and for the periods indicated therein. The Interim Financial Statements are subject to normal year-end audit adjustments (which are not expected to be material, individually or in the aggregate) and the absence of footnote disclosures. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, and (iii) access to assets is permitted only in accordance with management's general or specific authorization.
The following key financial data is derived from the Financial Statements:
Section 3.7 — Absence of Changes
Since December 31, 2024 (the date of the most recent Audited Financial Statements), (a) there has been no Material Adverse Effect and no event has occurred that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect, and (b) the Company has conducted its business only in the ordinary course of business consistent with past practice. Without limiting the generality of the foregoing, except as set forth on Schedule 3.7 of the Disclosure Schedule, since December 31, 2024, the Company has not:
(i) declared, set aside, or paid any dividend or other distribution (whether in cash, stock, property, or any combination thereof) in respect of any of its capital stock, or redeemed, repurchased, or otherwise acquired any of its capital stock;
(ii) made any change in its accounting methods, principles, or practices, except as required by GAAP or applicable law;
(iii) sold, assigned, transferred, leased, licensed, or otherwise disposed of any material assets, properties, or rights, except in the ordinary course of business and in a manner consistent with past practice;
(iv) incurred, assumed, or guaranteed any indebtedness for borrowed money in excess of $100,000 in the aggregate (other than trade payables and accrued expenses incurred in the ordinary course of business), or made any material capital expenditure or commitment therefor in excess of $100,000;
(v) made any material change to the compensation or benefits payable or to become payable to any officer, director, employee, or consultant, other than increases in the ordinary course of business consistent with past practice;
(vi) entered into, modified, amended, or terminated any material contract, or waived, released, or assigned any material rights or claims, except in the ordinary course of business;
(vii) settled or compromised any litigation, claim, or proceeding involving the payment of more than $50,000 or that imposes any material non-monetary obligations on the Company;
(viii) experienced any damage, destruction, or loss (whether or not covered by insurance) to any material assets or properties;
(ix) amended its Certificate of Incorporation or Bylaws, except as contemplated by this Agreement;
(x) adopted any plan of merger, consolidation, reorganization, liquidation, or dissolution;
(xi) granted any equity awards, issued any shares of capital stock, or granted any options, warrants, or other rights to acquire capital stock, other than grants of stock options under the Equity Incentive Plan to employees in the ordinary course of business and consistent with past practice, in each case in amounts that do not, in the aggregate, exceed 200,000 shares; or
(xii) agreed, committed, or entered into any binding agreement or understanding to do any of the foregoing.
Section 3.8 — No Conflicts; Consents
(a) The execution, delivery, and performance by the Company of this Agreement and each of the Ancillary Agreements to which the Company is a party, and the consummation by the Company of the transactions contemplated hereby and thereby (including the issuance and sale of the Shares), do not and will not: (i) violate, conflict with, or result in a breach of any provision of the Restated Certificate or the Company's Bylaws, each as in effect at the time of the Closing; (ii) violate, conflict with, or result in a breach of, or constitute a default (or an event that, with notice or lapse of time, or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in the creation of any lien or encumbrance upon any of the properties or assets of the Company under, any law, rule, regulation, order, judgment, writ, injunction, or decree of any Governmental Authority applicable to the Company or any of its properties or assets; (iii) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any material contract, instrument, agreement, or arrangement to which the Company is a party or by which any of its properties or assets are bound; or (iv) result in the imposition or creation of any lien, charge, or encumbrance upon any of the properties or assets of the Company.
(b) No consent, approval, waiver, authorization, or other action by, or filing with, or notification to, any Governmental Authority or any other Person is required in connection with the execution, delivery, and performance by the Company of this Agreement and the Ancillary Agreements, the issuance and sale of the Shares, or the consummation of any other transaction contemplated hereby or thereby, except for: (i) the filing of the Restated Certificate with the Secretary of State of the State of Delaware; (ii) such filings, qualifications, and notices as may be required under applicable state securities or "blue sky" laws, which filings shall have been made on a timely basis; and (iii) such other consents, approvals, or filings as have been obtained or made prior to the Closing, as set forth on Schedule 3.8 of the Disclosure Schedule.
(c) The HSR Act is not applicable to the transactions contemplated by this Agreement. The aggregate transaction value of the purchase and sale of the Shares contemplated hereby is below the applicable filing threshold under the HSR Act for the calendar year 2025 (being $119.5 million), and, accordingly, no premerger notification filing under the HSR Act is required in connection with the transactions contemplated hereby.
(d) No FDA or other governmental approval is required for the financing transaction itself. The Company's clinical and regulatory activities are subject to the jurisdiction of the FDA and other regulatory authorities as described in Section 3.15, but no approval or clearance from any such authority is a condition to, or required in connection with, the issuance and sale of the Shares.
Section 3.9 — Litigation
Except as set forth on Schedule 3.9 of the Disclosure Schedule, there is no action, suit, proceeding, claim, arbitration, investigation, or inquiry pending or, to the Knowledge of the Company, threatened in writing against the Company or any of its officers, directors, or employees (in their capacities as such) before any Governmental Authority or arbitrator that (a) questions the validity of this Agreement or the Ancillary Agreements, or the right of the Company to enter into any of the Transaction Documents or to consummate the transactions contemplated hereby or thereby, or (b) would reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect. Neither the Company nor, to the Knowledge of the Company, any of its officers, directors, or employees (in their capacities as such) is subject to any outstanding order, writ, injunction, judgment, or decree of any Governmental Authority that would reasonably be expected to have a Material Adverse Effect. There is no action, suit, or proceeding by the Company pending or that the Company intends to initiate.
Section 3.10 — Intellectual Property
(a) Patent Portfolio. The Company owns or has exclusive rights to seven (7) patent families relating to its AAV-based gene-therapy platform and product candidates. The current status of such patent portfolio is as follows:
(i) Issued U.S. Patents: Three (3) United States patents have been issued to the Company: U.S. Patent No. 11,234,567 (titled "Engineered AAV5 Capsid Variants for Retinal Gene Delivery," issued June 14, 2022); U.S. Patent No. 11,456,789 (titled "Methods of Treating Inherited Retinal Dystrophies Using Modified AAV Vectors," issued November 8, 2022); and U.S. Patent No. 11,678,901 (titled "Codon-Optimized CEP290 Expression Cassettes," issued March 21, 2023);
(ii) Pending U.S. Patent Applications: Four (4) U.S. patent applications are currently pending, the details of which are set forth on Schedule 3.10;
(iii) International Filings: Patent Cooperation Treaty ("PCT") applications have been filed in three (3) of the seven (7) patent families, with designations in the European Patent Office ("EP"), Japan ("JP"), and Australia ("AU"), as further described on Schedule 3.10; and
(iv) Patent Prosecution: All patent prosecution activities are handled by Langford Speir Patent Group LLP (lead partner: Dr. Teresa Langford), 1300 I Street NW, Suite 700, Washington, DC 20005. All maintenance fees, annuities, and prosecution deadlines have been timely paid or met, as applicable, and no patent or patent application has been abandoned or allowed to lapse except as a strategic determination made in the ordinary course of the Company's patent prosecution activities.
(b) University License. The Company holds an exclusive, worldwide, sublicensable license from Meridian University, a non-profit educational institution organized under the laws of the State of North Carolina, for the AAV5 capsid engineering platform and certain related know-how and patent rights, pursuant to an Exclusive License Agreement dated March 15, 2021, as amended (the "Meridian License"). The Meridian License has a term co-extensive with the last-to-expire licensed patent right under such agreement. The Company paid an upfront license fee of $500,000 at execution and is obligated to pay a running royalty of 3.5% of net sales of licensed products. The Meridian License is in full force and effect, and neither the Company nor, to the Knowledge of the Company, Meridian University is in material breach or default thereunder. The Company has made all payments required to be made by it under the Meridian License through the date hereof.
(c) Trademarks. The Company owns the following trademark registrations and applications: (i) the trademark "HELIOGRAPH" is registered with the United States Patent and Trademark Office (U.S. Reg. No. 7,123,456, registered on the Principal Register, in International Class 5 for pharmaceutical preparations for the treatment of genetic eye diseases); and (ii) a trademark application for "HT-201" is pending with the United States Patent and Trademark Office. All such registrations are valid and subsisting, and all maintenance filings and renewal fees have been timely filed and paid.
(d) Trade Secrets. The Company possesses proprietary trade secrets, including a proprietary manufacturing process for high-titer AAV5 production, certain cell-line engineering know-how, and confidential formulation and purification data. The Company has taken commercially reasonable steps to protect the confidentiality of its trade secrets, including requiring all employees, consultants, and contractors with access to such trade secrets to execute written confidentiality and invention assignment agreements. To the Knowledge of the Company, there has been no unauthorized use or disclosure of any material trade secrets of the Company.
(e) To the Knowledge of the Company, the conduct of the Company's business as currently conducted and as proposed to be conducted, including the development, manufacture, and commercialization of the Company's current product candidates, does not infringe, misappropriate, or otherwise violate the intellectual property rights of any third party. No claim of infringement, misappropriation, or violation has been asserted or, to the Knowledge of the Company, threatened in writing against the Company by any Person with respect to any Company intellectual Property or the Company's use thereof.
(f) Schedule 3.10 of the Disclosure Schedule sets forth a complete and accurate list of all Company intellectual Property, including all registrations, applications (patent, trademark, and copyright), licenses (whether as licensor or licensee), and material agreements relating thereto.
Section 3.11 — Material Contracts
Schedule 3.11 of the Disclosure Schedule sets forth a true, correct, and complete list of all contracts, agreements, instruments, and arrangements to which the Company is a party that are material to the business, financial condition, assets, liabilities, or operations of the Company (collectively, the "Material Contracts"). Without limiting the generality of the foregoing, the Material Contracts include the following:
(i) the Exclusive License Agreement with Meridian University, dated March 15, 2021, as amended, relating to the AAV5 capsid engineering platform (upfront fee: $500,000, paid at execution; running royalty: 3.5% of net sales of licensed products);
(ii) the Contract Manufacturing Agreement with Prismline Biologics, Inc., a Delaware corporation, for the production of clinical-grade AAV5 vector material (minimum annual commitment: $2,400,000; term: three (3) years, with automatic one-year renewals; governing law: Delaware);
(iii) the Loan Agreement with Ridgeline Capital Finance LLC, a Delaware limited liability company, dated April 12, 2024, for a venture debt facility in the original principal amount of $2,500,000 (current outstanding balance: $2,500,000; term: thirty-six (36) months; interest rate: 9.5% per annum; maturity date: April 12, 2027; secured by a first-priority lien on substantially all assets of the Company, subject to customary exceptions); and
(iv) the Series A Preferred Stock Purchase Agreement dated September 2022, and the related Investors' Rights Agreement, Right of First Refusal and Co-Sale Agreement, and Voting Agreement, each entered into with Pinnacle BioVentures Fund II LP and Lakeshore Health Innovation Fund LP in connection with the Series A financing.
Each Material Contract is in full force and effect and constitutes the legal, valid, and binding obligation of the Company and, to the Knowledge of the Company, of each other party thereto, enforceable against such parties in accordance with its terms, subject to applicable bankruptcy, insolvency, and similar laws affecting creditors' rights generally and to general principles of equity. Neither the Company nor, to the Knowledge of the Company, any other party thereto is in material breach or default under any Material Contract, and no event has occurred that, with the giving of notice or the lapse of time or both, would constitute a material breach or default by any party under any Material Contract. The Company has made available to the Investor true, correct, and complete copies of all Material Contracts (including all amendments, modifications, and supplements thereto).
Section 3.12 — Indebtedness
The total outstanding indebtedness of the Company for borrowed money is Two Million Five Hundred Thousand Dollars ($2,500,000.00) under the venture debt facility provided by Ridgeline Capital Finance LLC pursuant to the Loan Agreement dated April 12, 2024 (the "Ridgeline Loan Agreement"). The material terms of the Ridgeline Loan Agreement are as follows: (a) original principal amount: $2,500,000; (b) outstanding principal balance as of the date hereof: $2,500,000; (c) interest rate: 9.5% per annum; (d) term: thirty-six (36) months from the date of the Ridgeline Loan Agreement; (e) maturity date: April 12, 2027; and (f) security: first-priority lien on substantially all assets of the Company, subject to customary exceptions. The details of the Ridgeline Loan Agreement are further set forth on Schedule 3.12 of the Disclosure Schedule.
Other than the Ridgeline Loan Agreement, the Company has no other material indebtedness for borrowed money, whether secured or unsecured, direct or contingent, and has not guaranteed the indebtedness of any other Person.
The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby (including the issuance of the Shares) do not constitute a default or event of default under the Ridgeline Loan Agreement, and no consent, waiver, or notice is required under the Ridgeline Loan Agreement in connection with such transactions; provided, however, that if any such consent, waiver, or notice is required, the Company shall have obtained such consent, waiver, or delivered such notice, as applicable, prior to the Closing, and evidence thereof shall have been delivered to the Investor.
Section 3.13 — Title to Properties and Assets; Liens
The Company has good and marketable title to, or a valid leasehold interest in, all of its properties and assets (whether real, personal, or mixed, tangible or intangible) used or held for use in connection with its business as presently conducted, free and clear of all liens, charges, claims, encumbrances, pledges, security interests, and other restrictions of any kind, except for (a) Permitted Liens and (b) liens and encumbrances set forth on Schedule 3.13 of the Disclosure Schedule. The Company does not own any real property. The Company's principal leased premises at 4800 Biopark Drive, Building C, Suite 200, Durham, NC 27709 are subject to a commercial lease that is in full force and effect, and the Company is not in material breach or default thereunder.
Section 3.14 — Compliance with Laws
The Company is, and has at all times since its inception been, in compliance with all applicable laws, rules, regulations, orders, writs, injunctions, judgments, and decrees of any Governmental Authority (including applicable FDA regulations, state and federal securities laws, tax laws, employment and labor laws, environmental laws, and data privacy laws), except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has not received any written notice from any Governmental Authority alleging any violation of applicable law that remains unresolved as of the date hereof.
Section 3.15 — Regulatory Matters
(a) The Company filed Investigational New Drug Application No. 178452 ("IND 178452") with the FDA for HT-201, its AAV5-based gene-therapy product candidate for the treatment of Leber congenital amaurosis type 10 (LCA10), in October 2024. IND 178452 is in active status and has not been placed on clinical hold, withdrawn, or terminated. The Company commenced a Phase I/II clinical trial for HT-201 under IND 178452 and dosed the first patient in February 2025.
(b) To the Knowledge of the Company, the Company is in material compliance with all applicable regulatory requirements relating to the development, manufacturing, and testing of HT-201, including current Good Manufacturing Practice ("cGMP") requirements applicable to the manufacture of clinical-grade vector material and Good Clinical Practice ("GCP") requirements applicable to the conduct of the Phase I/II clinical trial.