Delaware | | | 001-36829 | | | 04-3475813 |
(State of Incorporation) | | | (Primary Standard Industrial Classification Code Number) | | | (IRS Employer Identification No.) |
John T. Haggerty William D. Collins Sarah Ashfaq Goodwin Procter LLP 100 Northern Avenue Boston Massachusetts 02210 (617) 570-1000 | | | | | Rachael M. Bushey, Esq. Jennifer L. Porter, Esq. Troutman Pepper Hamilton Sanders LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103 (215) 981-4331 |
Large accelerated filer ☒ | | | | | Accelerated filer ☐ | |
Non-accelerated filer ☐ | | | | | Smaller reporting company ☐ | |
| | | | Emerging growth company ☐ |
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Magdalene Cook, M.D. | | | Gaurav Shah, M.D. |
Chief Executive Officer and Chairman of the Board | | | Chief Executive Officer |
Renovacor, Inc. | | | Rocket Pharmaceuticals, Inc. |
1. | A proposal to approve the issuance of shares of common stock, par value $0.01 per share, of Rocket (the “Rocket common stock”) to security holders of Renovacor, Inc., a Delaware corporation (“Renovacor”) as contemplated by the Agreement and Plan of Merger, dated as of September 19, 2022 (the “merger agreement”), by and among Rocket, Zebrafish Merger Sub, Inc., a Delaware corporation and a direct wholly owned subsidiary of Rocket (“Merger Sub I”), Zebrafish Merger Sub II, LLC, a Delaware limited liability company and a direct wholly owned Subsidiary of Rocket (“Merger Sub II” and together with Merger Sub I, the “Merger Subs”) and Renovacor, attached as Annex A to this joint proxy statement/prospectus pursuant to Nasdaq Rule 5635(a)(2) (the “Rocket share issuance proposal”); and |
2. | A proposal to approve the adjournment or postponement of the Rocket special meeting to another time and place to solicit additional proxies, if necessary or appropriate, if there are insufficient votes to approve the Rocket share issuance proposal (the “Rocket adjournment proposal”). |
By Order of the Board of Directors, | | | |
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Gaurav Shah, M.D. Chief Executive Officer and Director Rocket Pharmaceuticals, Inc. | |
1. | A proposal to adopt the merger agreement, a copy of which is attached as Annex A to the accompanying joint proxy statement/prospectus, and thereby approve the first merger and other transactions contemplated thereby (such proposal, the “Renovacor merger proposal”); and |
2. | A proposal to approve the adjournment or postponement of the Renovacor special meeting to another time and place to solicit additional proxies, if necessary or appropriate, if there are insufficient votes to approve the Renovacor merger proposal (the “Renovacor adjournment proposal”). |
By Order of the Board of Directors, | | | |
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Magdalene Cook, M.D. Chief Executive Officer and Chairman of the Board | |
For Rocket stockholders: | | | For Renovacor stockholders: |
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Rocket Pharmaceuticals, Inc. 9 Cedarbrook Drive Cranbury, New Jersey 08512 Attention: Corporate Secretary info@rocketpharma.com | | | Renovacor, Inc. 201 Broadway, Suite 310 Cambridge, Massachusetts, 02139 Attention: Corporate Secretary investors@renovacor.com |
1. | A proposal to adopt the merger agreement (the “Renovacor merger proposal”), and thereby approve the first merger and other transactions contemplated thereby; and |
2. | A proposal to approve the adjournment or postponement of the Renovacor special meeting to another time and place to solicit additional proxies, if necessary or appropriate, if there are insufficient votes to approve the Renovacor merger proposal (the “Renovacor adjournment proposal”). No other matters will be brought before the Renovacor special meeting by Renovacor. |
1. | A proposal to issue shares of Rocket common stock in connection with the first merger (the “Rocket share issuance proposal”); and |
2. | A proposal to approve the adjournment or postponement of the Rocket special meeting to another time and place to solicit additional proxies, if necessary or appropriate, if there are insufficient votes to approve the Rocket share issuance proposal (the “Rocket adjournment proposal”). No other matters will be brought before the Rocket special meeting by Rocket. |
Renovacor, Inc. Attention: Corporate Secretary 201 Broadway, Suite 310 Cambridge, Massachusetts 02139 | | | Rocket Pharmaceuticals, Inc. Attention: Corporate Secretary 9 Cedarbrook Drive Cranbury, New Jersey 08512 |
Renovacor, Inc. | | | Rocket Pharmaceuticals, Inc. |
201 Broadway, Suite 310 Cambridge, Massachusetts, 02139 Attention: Corporate Secretary (610) 424-2650 | | | 9 Cedarbrook Drive Cranbury, New Jersey 08512 Attention: Corporate Secretary (609) 659-8001 |
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Proxy Solicitor: | | | |
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Kingsdale Shareholder Services US Inc. | | | |
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Tel: 1-866-581-1571 | | | |
Email: contactus@kingsdaleadvisors.com | | |
Date | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | ||||||
September 19, 2022 | | $13.97 | | $1.90 | | $2.34 | | $13.97 | | $1.90 | | $2.34 | ||||||
October 7, 2022 | | $17.08 | | $2.71 | | $2.86 | ||||||||||||
October 25, 2022 | | $17.11 | | $2.76 | | $2.87 |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
Date | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | ||||||
September 19, 2022 | | $13.97 | | $1.90 | | $2.34 | | $13.97 | | $1.90 | | $2.34 | ||||||
October 7, 2022 | | $17.08 | | $2.71 | | $2.86 | ||||||||||||
October 25, 2022 | | $17.11 | | $2.76 | | $2.87 |
| | ($ in millions) | |||||||||||||
Renovacor Net Cash | | | $45.0 | | | $41.0 | | | $40.0 | | | $38.0 | | | $35.0 |
Exchange Ratio | | | 0.1763 | | | 0.1763 | | | 0.1734 | | | 0.1676 | | | 0.1589 |
Former Renovacor Stockholders’ Pro Forma Ownership | | | 4.33% | | | 4.33% | | | 4.26% | | | 4.12% | | | 3.92% |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
| | ($ in millions) | |||||||||||||
Renovacor Net Cash | | | $45.0 | | | $41.0 | | | $40.0 | | | $38.0 | | | $35.0 |
Exchange Ratio | | | 0.1763 | | | 0.1763 | | | 0.1734 | | | 0.1676 | | | 0.1589 |
Former Renovacor Stockholders’ Pro Forma Ownership | | | 4.33% | | | 4.33% | | | 4.26% | | | 4.12% | | | 3.92% |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 1: Rocket share issuance proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket share issuance proposal will have no effect on the outcome of the vote on the Rocket share issuance proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 2: Rocket adjournment proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket adjournment proposal will have no effect on the outcome of the vote on the Rocket adjournment proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 1: Renovacor merger proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Renovacor common stock entitled to vote at the Renovacor special meeting on the Renovacor merger proposal. | | | An abstention or other failure to vote on the Renovacor merger proposal will have the same effect as a vote “AGAINST” the Renovacor merger proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 2: Renovacor Adjournment proposal | | | Assuming a quorum is present, approval requires the affirmative vote of the majority of votes cast at the Renovacor special meeting. | | | Any shares not virtually present or represented by proxy (including due to the failure of a Renovacor stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Renovacor adjournment proposal. |
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| | If a quorum is not present or represented, the holders of voting stock representing a majority of the voting power present at the Renovacor special meeting, or the presiding officer, may adjourn the meeting. | | | An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Renovacor special meeting on the Renovacor adjournment proposal to vote on the Renovacor adjournment proposal will have “NO EFFECT” on the Renovacor adjournment proposal. |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
| | ($ in millions) | |||||||||||||
Renovacor Net Cash | | | $45.0 | | | $41.0 | | | $40.0 | | | $38.0 | | | $35.0 |
Exchange Ratio | | | 0.1763 | | | 0.1763 | | | 0.1734 | | | 0.1676 | | | 0.1589 |
Former Renovacor Stockholders’ Pro Forma Ownership | | | 4.33% | | | 4.33% | | | 4.26% | | | 4.12% | | | 3.92% |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 1: Rocket share issuance proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket share issuance proposal will have no effect on the outcome of the vote on the Rocket share issuance proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 2: Rocket adjournment proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket adjournment proposal will have no effect on the outcome of the vote on the Rocket adjournment proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 1: Renovacor merger proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Renovacor common stock entitled to vote at the Renovacor special meeting on the Renovacor merger proposal. | | | An abstention or other failure to vote on the Renovacor merger proposal will have the same effect as a vote “AGAINST” the Renovacor merger proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 2: Renovacor Adjournment proposal | | | Assuming a quorum is present, approval requires the affirmative vote of the majority of votes cast at the Renovacor special meeting. | | | Any shares not virtually present or represented by proxy (including due to the failure of a Renovacor stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Renovacor adjournment proposal. |
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| | If a quorum is not present or represented, the holders of voting stock representing a majority of the voting power present at the Renovacor special meeting, or the presiding officer, may adjourn the meeting. | | | An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Renovacor special meeting on the Renovacor adjournment proposal to vote on the Renovacor adjournment proposal will have “NO EFFECT” on the Renovacor adjournment proposal. |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
Date | | | Rocket Common Stock Closing Price | | | Renovacor Common Stock Closing Price | | | Implied per Share Value of Merger Consideration |
September 19, 2022 | | | $13.97 | | | $1.90 | | | $2.34 |
October 25, 2022 | | | $17.11 | | | $2.76 | | | $2.87 |
| | ($ in millions) | |||||||||||||
Renovacor Net Cash | | | $45.0 | | | $41.0 | | | $40.0 | | | $38.0 | | | $35.0 |
Exchange Ratio | | | 0.1763 | | | 0.1763 | | | 0.1734 | | | 0.1676 | | | 0.1589 |
Former Renovacor Stockholders’ Pro Forma Ownership | | | 4.33% | | | 4.33% | | | 4.26% | | | 4.12% | | | 3.92% |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 1: Rocket share issuance proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket share issuance proposal will have no effect on the outcome of the vote on the Rocket share issuance proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 2: Rocket adjournment proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket adjournment proposal will have no effect on the outcome of the vote on the Rocket adjournment proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 1: Renovacor merger proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Renovacor common stock entitled to vote at the Renovacor special meeting on the Renovacor merger proposal. | | | An abstention or other failure to vote on the Renovacor merger proposal will have the same effect as a vote “AGAINST” the Renovacor merger proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 2: Renovacor Adjournment proposal | | | Assuming a quorum is present, approval requires the affirmative vote of the majority of votes cast at the Renovacor special meeting. | | | Any shares not virtually present or represented by proxy (including due to the failure of a Renovacor stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Renovacor adjournment proposal. |
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| | If a quorum is not present or represented, the holders of voting stock representing a majority of the voting power present at the Renovacor special meeting, or the presiding officer, may adjourn the meeting. | | | An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Renovacor special meeting on the Renovacor adjournment proposal to vote on the Renovacor adjournment proposal will have “NO EFFECT” on the Renovacor adjournment proposal. |
Proposal | | Required Vote | | | Effects of Certain Actions | |
Rocket Proposal 1: Rocket share issuance proposal | | | Approval requires (i) a quorum and (ii) the |
| | An abstention or other failure to |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 2: Rocket adjournment proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 1: Renovacor merger proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Renovacor common stock entitled to vote at the Renovacor special meeting on the Renovacor merger proposal. | | | An abstention or other failure to vote on the Renovacor merger proposal will have the same effect as a vote “AGAINST” the Renovacor merger proposal. |
Proposal | | Required Vote | | | Effects of Certain Actions | |
Renovacor Proposal 2: Renovacor Adjournment proposal | | | Assuming a quorum is present, approval requires the affirmative vote of the majority of votes cast at the Renovacor special meeting. | | | Any shares not virtually present or represented by proxy (including due to the failure of a Renovacor stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have |
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| | If a quorum is not present or represented, the | | | An abstention or other failure of any shares virtually present or represented by proxy and entitled to |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 1: Rocket share issuance proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket share issuance proposal will have no effect on the outcome of the vote on the Rocket share issuance proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Rocket Proposal 2: Rocket adjournment proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the votes cast at the Rocket special meeting. | | | An abstention or other failure to vote on the Rocket adjournment proposal will have no effect on the outcome of the vote on the Rocket adjournment proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 1: Renovacor merger proposal | | | Approval requires (i) a quorum and (ii) the affirmative vote of the holders of a majority of the voting power of the outstanding shares of Renovacor common stock entitled to vote at the Renovacor special meeting on the Renovacor merger proposal. | | | An abstention or other failure to vote on the Renovacor merger proposal will have the same effect as a vote “AGAINST” the Renovacor merger proposal. |
Proposal | | | Required Vote | | | Effects of Certain Actions |
Renovacor Proposal 2: Renovacor Adjournment proposal | | | Assuming a quorum is present, approval requires the affirmative vote of the majority of votes cast at the Renovacor special meeting. | | | Any shares not virtually present or represented by proxy (including due to the failure of a Renovacor stockholder who holds shares in “street name” through a bank, broker or other nominee to provide voting instructions to such bank, broker or other nominee) will have no effect on the outcome of the Renovacor adjournment proposal. |
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| | If a quorum is not present or represented, the holders of voting stock representing a majority of the voting power present at the Renovacor special meeting, or the presiding officer, may adjourn the meeting. | | | An abstention or other failure of any shares virtually present or represented by proxy and entitled to vote at the Renovacor special meeting on the Renovacor adjournment proposal to vote on the Renovacor adjournment proposal will have “NO EFFECT” on the Renovacor adjournment proposal. |
○ | The fact that the mergers will provide Rocket with a greater opportunity to become a leading gene therapy company with a larger product portfolio as a result of the mergers with multiple clinical or near-clinical assets; |
○ | The potential for Rocket’s management, as described under “Management of the Combined Company Following the Mergers” to manage the future pipeline portfolio across the combined company to mitigate future financing needs and optimize preclinical and clinical spending while pursuing opportunities of significant commercial potential; |
○ | The expectation that Rocket will have greater financial resources and flexibility as a result of the mergers, even after taking into account transaction-related expenses, to realize the full potential of its product portfolio, which will increase as a result of the mergers, to engage in additional product development, and to invest in other business development opportunities for sustainable long-term growth; |
○ | The expectation that the combined company will be in a better position to operate in the current and expected future pharmaceutical landscape, including operating in and responding to the current and expected future regulatory and competitive challenges facing industry participants; |
○ | The expectation that the mergers will result in meaningful synergies by combining key assets, personnel, capabilities, intellectual property, as well as access to world-leading scientific and clinical collaborators, which will deliver long-term value for Rocket and Renovacor stockholders; |
○ | The expectation that the complementary nature of the businesses and products of Rocket and Renovacor will allow for a successful integration of the two companies, and enhance the combined company’s future opportunity and flexibility; and |
○ | The opinion of SVB Securities rendered to the Rocket board that, as of such date and based upon and subject to the various assumptions made, and the qualifications and limitations upon the review undertaken by SVB Securities in preparing its opinion, the exchange ratio proposed to be paid by Rocket pursuant to the terms of the merger agreement was fair, from a financial point of view, to Rocket, and the related presentation and financial analysis of SVB Securities provided to the Rocket board in connection with the rendering of its opinion, as more fully described in the section entitled “The Merger—Opinion of Rocket’s Financial Advisor–SVB Securities LLC”. |
○ | The calculation of the exchange ratio, including the definition of net cash, taking into consideration estimates of the resulting exchange ratio based upon the estimated closing net cash of Renovacor expected to be held by Renovacor upon completion of the mergers, and the fact that the calculation of the exchange ratio will not be adjusted based on the market price of Rocket common stock; |
○ | The limited number and nature of the conditions to Renovacor’s obligation to consummate the mergers and the limited risk of non-satisfaction of such conditions as well as the likelihood that the mergers will be consummated on a timely basis; |
○ | The Rocket voting agreements, pursuant to which certain directors, officers and stockholders of Rocket have agreed, solely in their capacity as stockholders of Rocket, to vote all of their shares of Rocket common stock in favor of the Rocket share issuance, and the Renovacor voting agreements, pursuant to which certain directors, officers and stockholders of Renovacor have agreed, solely in their capacity as stockholders of Renovacor, to vote all of their shares of Renovacor common stock in favor of the adoption of the merger agreement; |
○ | The belief that the terms of the merger agreement, including the parties’ representations, warranties, covenants and the conditions to their respective obligations, are reasonable under the circumstances; |
○ | The fact that there are restrictions in the merger agreement on Renovacor’s ability to solicit competing bids to acquire it and to entertain other acquisition proposals, unless certain conditions are satisfied, and the fact that the Renovacor board may not, under the merger agreement, unilaterally terminate the merger agreement to accept an alternative proposal; |
○ | The fact that the merger agreement contains restrictions on Renovacor’s conduct of business prior to the completion of the mergers; |
○ | The fact that, because holders of outstanding Rocket common stock as of immediately prior to the completion of the merger are expected to be approximately 95.9% of the outstanding Rocket common stock immediately after completion of the mergers, Rocket stockholders will have the opportunity to participate in the future performance of the combined company, including synergies; |
○ | The Rocket board’s belief that, while the consummation of the mergers is subject to the satisfaction of various conditions, such conditions are likely to be satisfied, in each case, without a material adverse impact on the respective businesses of Rocket, Renovacor or the combined company; |
○ | The fact that, while Rocket is obligated to use its commercially reasonable efforts to complete the mergers, such efforts standard does not obligate Rocket to take any actions or agree to any terms, conditions or limitations as a condition to, or in connection with, obtaining any regulatory approvals required to complete the mergers; |
○ | The fact that Renovacor is required to pay the Renovacor termination fee if the merger agreement is terminated under certain circumstances described under “The Merger Agreement—Termination Fees and Expenses”; |
○ | The fact that the mergers are conditioned upon the approval of the Rocket share issuance by the Rocket stockholders, and the Rocket stockholders will be free to approve or reject the Rocket share issuance; and |
○ | The fact that the merger consideration was the result of a series of arm’s length negotiations between the parties. |
○ | The respective businesses, operations, management, financial condition, earnings and prospects of Rocket and Renovacor; |
○ | The results of Rocket’s diligence investigations of Renovacor and the reputation, business practices and experience of Renovacor and its management; |
○ | The fact that the mergers are intended to qualify as a “reorganization” within the meaning of Section 368(a) of the code with the result that U.S. holders of shares of Renovacor common stock generally will not recognize any gain or loss for U.S. federal income tax purposes upon receipt of any portion of the merger consideration delivered in the form of Rocket common stock; |
○ | The review by the Rocket board and its legal and financial advisors of the structure of the mergers and the financial and other terms of the merger agreement and the mergers; and |
○ | Trends and competitive developments in the biopharmaceutical industry and the Rocket board’s knowledge and understanding of Rocket’s business, operations, financial condition, earnings, strategy and future prospects. |
○ | All-Stock Consideration. As a result of the all-stock merger consideration, upon completion of the first merger and based on the initial exchange ratio, former Renovacor stockholders are expected to own approximately 4.1% of the outstanding shares of Rocket common stock, which will provide such stockholders with an opportunity to participate in the future earnings and growth of Rocket and, indirectly, Renovacor, including any appreciation that may be reflected in the value of the combined company (including any resulting synergies). |
○ | Exchange Ratio. The exchange ratio will not be adjusted based on the market price of Rocket common stock, which affords Renovacor stockholders the opportunity to benefit from any potential appreciation in the value of Rocket common stock after the announcement of the mergers. The exchange ratio resulted from extensive negotiation between the parties and, as a result, the Renovacor board believes that the exchange ratio represented the highest value that Renovacor could obtain from Rocket. The initial exchange ratio implies (i) a value of $2.60 per share of Renovacor common stock, based on the volume weighted average trading price of Rocket shares of $15.51 for the 30 trading days through and including September 19, 2022 (the last full trading day before the public announcement of the mergers) and a premium of approximately 37% to Renovacor’s closing price on September 19, 2022 (the last full trading day before the public announcement of the mergers) and (ii) a value of $2.34 per share of Renovacor common stock based on the closing price of Rocket common stock on September 19, 2022 (the last full trading day before the public announcement of the mergers and before the Renovacor board approved the merger agreement) of $13.97, which reflects a premium of 23% to the closing price of Renovacor common stock on September 19, 2022 (the last full trading day before the public announcement of the mergers) of $1.90. |
○ | Potential Stockholder Value in Light of Available Alternatives. The Renovacor board, with the assistance of the Renovacor board transaction committee and Renovacor’s senior management and legal and financial advisors, reviewed potential strategic alternatives for Renovacor in light of its current and projected financial position and results of operations, the challenges it faces in growing its core business operations as a stand-alone company (including its projected need to raise additional capital in the near term), and its historical and projected ability to execute on its long-term stand-alone plan, in order to identify the course of action that would, in the Renovacor board’s opinion, create the most value for Renovacor stockholders. The Renovacor board believes that the mergers preserve cash resources of the combined company, allowing Renovacor stockholders an opportunity to share in the future value of the combined company. The Renovacor board believes, after such review of potential strategic alternatives and Renovacor’s prospects and challenges as a stand-alone company, that the mergers with Rocket are a superior alternative to the other alternatives available to Renovacor, including remaining a stand-alone public company, considering the potential stockholder value that might result from such alternatives, the feasibility of such alternatives and the risks and uncertainties associated with pursuing such alternatives relative to the mergers with Rocket. |
○ | the risks associated with the unproven, early-stage nature of Renovacor’s product candidates, which may not be successfully developed into products that are marketed and sold, and the development of Renovacor’s product pipeline, including the initiation and completion of planned preclinical studies and clinical trials, delays or failures to obtain or make applicable regulatory filings and approvals, the uncertainty of FDA approval for Renovacor’s product candidates and the risk that Renovacor’s ongoing product development activities are not successful; |
○ | the costs that Renovacor would be required to incur to commercialize its product candidates on a stand-alone basis, if its preclinical studies and clinical trials are successful and FDA approval is received; |
○ | capital requirements forecasted to achieve profitability, the uncertainty of availability of adequate capital to Renovacor on reasonable terms for Renovacor to effectively launch its product candidates, if approved, independently, and the significant dilution to existing stockholders that would likely result from future fundraising at Renovacor; |
○ | uncertainty regarding future pricing for Renovacor’s product candidates for the indications currently being considered and uncertainty regarding the availability of, level of, or restrictions related to reimbursement from insurance companies and government payors; |
○ | potential future competition, including from larger and better funded companies which might have competitive advantages from their broader commercial scope and economies of scale in pricing; |
○ | the risks inherent in the pharmaceutical industry and, in light of the regulatory, financial and competitive challenges facing industry participants, the belief of the Renovacor board that the combined company following the merger would be better positioned to meet these challenges if the expected strategic and financial benefits of the transaction were fully realized; |
○ | the risks inherent in operating a preclinical-stage company with a limited product pipeline; and |
○ | the risks of failure of Renovacor’s ongoing preclinical studies or any clinical trials. |
○ | the fact that the mergers will create a combined company with the opportunity to become a leading gene therapy company with a diversified product portfolio; |
○ | the potential for synergies, which included the potential for significant cost savings in overhead, R&D, sales, marketing, distribution and administrative functions because Rocket’s existing and planned development and commercial infrastructure can also support the development and launch of Renovacor’s lead product candidate, if approved; and |
○ | the potential for the combined company to manage the future pipeline portfolio across both companies to mitigate future financing needs and optimize preclinical and clinical spending while pursuing opportunities of significant commercial potential. |
○ | the calculation of the exchange ratio, including the definition of net cash, taking into consideration estimates of the resulting exchange ratio based upon the estimated closing net cash of Renovacor expected to be held by Renovacor upon completion of the mergers; |
○ | that Renovacor and Rocket have agreed to use their respective commercially reasonable efforts to complete the mergers and, if applicable, obtain the consents and approvals required under applicable antitrust laws; |
○ | the right of the Renovacor board to respond to unsolicited acquisition proposals, and certain reasonably unforeseeable events or developments, by changing or withdrawing its recommendation to Renovacor’s stockholders with respect to the adoption of the merger agreement, generally subject to the payment to Rocket of the termination fee of $1.74 million if the merger agreement is terminated after such a change or withdrawal of such recommendation; |
○ | the fact that the deal protections set forth in the merger agreement do not preclude a third party from making an acquisition proposal that is superior to the terms of the merger agreement, including the reasonableness of the size of the termination fee and the related termination rights of the parties; |
○ | the fact that Rocket would be required to pay Renovacor the termination fee of $1.74 million if the merger agreement was terminated by Renovacor in connection with a Rocket adverse recommendation change with respect to the Rocket share issuance proposal; |
○ | the fact that if Renovacor or Rocket terminate the merger agreement in connection with Rocket’s failure to obtain approval of the Rocket share issuance proposal, Rocket would be required to reimburse up to $750,000 of Renovacor’s documented costs incurred in connection with the negotiation, preparation and execution of the merger agreement and the consummation of the transactions contemplated thereby; |
○ | the limited number and nature of the conditions to Rocket’s obligation to consummate the mergers and the limited risk of non-satisfaction of such conditions as well as the likelihood that the mergers will be consummated on a timely basis; |
○ | the support agreements, pursuant to which certain directors, officers and stockholders of Renovacor have agreed, solely in their capacity as stockholders of Renovacor, to vote all of their shares of Renovacor common stock in favor of the adoption of the merger agreement; and |
○ | the belief that the terms of the merger agreement, including the parties’ representations, warranties, covenants and the conditions to their respective obligations, are reasonable under the circumstances. |
| | Implied per Share Equity Value | ||||
| | Low | | | High | |
Discounted Cash Flow Analysis | | | $2.06 | | | $2.52 |
(in millions) | | | Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 |
Net Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $616 | | | $926 | | | $ 1,530 |
Cost of Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $(64) | | | $(96) | | | $(159) |
R&D expenses | | | $ (16) | | | $ (28) | | | $ (41) | | | $ (49) | | | $ (62) | | | $ (51) | | | $(40) | | | $(33) | | | $(30) | | | $(27) |
G&A expenses | | | $(6) | | | $ (12) | | | $ (14) | | | $ (16) | | | $ (17) | | | $ (19) | | | $ (29) | | | $ (123) | | | $ (124) | | | $(126) |
EBT | | | $ (21) | | | $ (41) | | | $ (57) | | | $ (67) | | | $ (81) | | | $ (73) | | | $ (71) | | | $394 | | | $674 | | | $ 1,217 |
Unlevered Free Cash Flow | | | $ (24) | | | $ (40) | | | $ (56) | | | $ (61) | | | $ (78) | | | $ (73) | | | $ (71) | | | $373 | | | $528 | | | $900 |
(in millions) | | | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 |
Net Sales | | | $ 2,080 | | | $ 2,260 | | | $ 2,657 | | | $ 2,934 | | | $ 2,638 | | | $ 2,174 | | | $ 1,977 | | | $ 1,268 | | | $ 1,169 |
Cost of Sales | | | $(215) | | | $(234) | | | $(275) | | | $(304) | | | $(273) | | | $(225) | | | $(204) | | | $(169) | | | $(155) |
R&D expenses | | | $(23) | | | $(22) | | | $(22) | | | $(23) | | | $(23) | | | $(24) | | | $(24) | | | $(25) | | | $(25) |
G&A expenses | | | $(128) | | | $(130) | | | $(131) | | | $(132) | | | $(133) | | | $(134) | | | $(135) | | | $(137) | | | $(138) |
EBT | | | $ 1,712 | | | $ 1,873 | | | $ 2,227 | | | $ 2,474 | | | $ 2,207 | | | $ 1,789 | | | $1,611 | | | $936 | | | $849 |
Unlevered Free Cash Flow | | | $ 1,266 | | | $ 1,385 | | | $ 1,648 | | | $ 1,830 | | | $ 1,633 | | | $ 1,324 | | | $ 1,192 | | | $692 | | | $628 |
(in millions) | | | Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 |
Net Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $616 | | | $926 | | | $1,530 |
Cost of Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $(64) | | | $(96) | | | $(159) |
R&D expenses | | | $(7) | | | $(28) | | | $(41) | | | $(49) | | | $(63) | | | $(52) | | | $(40) | | | $(35) | | | $(32) | | | $(29) |
G&A expenses | | | $(3) | | | $(11) | | | $(13) | | | $(15) | | | $(16) | | | $(18) | | | $(28) | | | $(121) | | | $(123) | | | $(125) |
EBT | | | $(9) | | | $(39) | | | $(55) | | | $(65) | | | $(81) | | | $(72) | | | $(70) | | | $394 | | | $674 | | | $1,217 |
Unlevered Free Cash Flow | | | $(10) | | | $(40) | | | $(54) | | | $(62) | | | $(79) | | | $(72) | | | $(70) | | | $373 | | | $523 | | | $900 |
Equity Capital raised | | | $— | | | $110 | | | $175 | | | $— | | | $— | | | $100 | | | $50 | | | $— | | | $— | | | $— |
Ending Cash Balance | | | $44 | | | $114 | | | $235 | | | $173 | | | $95 | | | $122 | | | $102 | | | $475 | | | $997 | | | $1,897 |
(in millions) | | | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 |
Net Sales | | | $2,080 | | | $2,260 | | | $2,657 | | | $2,934 | | | $2,638 | | | $2,174 | | | $1,977 | | | $1,268 | | | $1,169 |
Cost of Sales | | | $(215) | | | $(234) | | | $(275) | | | $(304) | | | $(273) | | | $(225) | | | $(204) | | | $(169) | | | $(155) |
R&D expenses | | | $(25) | | | $(24) | | | $(23) | | | $(23) | | | $(24) | | | $(24) | | | $(25) | | | $(25) | | | $(26) |
G&A expenses | | | $(126) | | | $(128) | | | $(129) | | | $(130) | | | $(131) | | | $(132) | | | $(134) | | | $(135) | | | $(136) |
EBT | | | $1,711 | | | $1,872 | | | $2,228 | | | $2,475 | | | $2,208 | | | $1,790 | | | $1,612 | | | $937 | | | $850 |
Unlevered Free Cash Flow | | | $1,266 | | | $1,385 | | | $1,648 | | | $1,831 | | | $1,633 | | | $1,324 | | | $1,192 | | | $693 | | | $629 |
Equity Capital raised | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— |
Ending Cash Balance | | | $3,163 | | | $5,548 | | | $6,196 | | | $8,028 | | | $9,661 | | | $10,985 | | | $12,178 | | | $12,871 | | | $13,500 |
(in millions) | | | Q4 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 |
Net Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $77 | | | $116 | | | $191 |
Cost of Sales | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $(8) | | | $(12) | | | $(20) |
R&D expenses | | | $(7) | | | $(25) | | | $(19) | | | $(23) | | | $(11) | | | $(9) | | | $(7) | | | $(4) | | | $(4) | | | $(4) |
G&A expenses | | | $(3) | | | $(10) | | | $(6) | | | $(7) | | | $(3) | | | $(3) | | | $(5) | | | $(15) | | | $(15) | | | $(16) |
EBT | | | $(9) | | | $(36) | | | $(26) | | | $(30) | | | $(15) | | | $(13) | | | $(13) | | | $49 | | | $84 | | | $152 |
Unlevered Free Cash Flow | | | $(10) | | | $(37) | | | $(25) | | | $(29) | | | $(14) | | | $(13) | | | $(13) | | | $47 | | | $80 | | | $134 |
(in millions) | | | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 |
Net Sales | | | $260 | | | $283 | | | $332 | | | $367 | | | $330 | | | $272 | | | $247 | | | $159 | | | $146 |
Cost of Sales | | | $(27) | | | $(29) | | | $(34) | | | $(38) | | | $(34) | | | $(28) | | | $(26) | | | $(21) | | | $(19) |
R&D expenses | | | $(3) | | | $(3) | | | $(3) | | | $(3) | | | $(3) | | | $(3) | | | $(3) | | | $(3) | | | $(3) |
G&A expenses | | | $(16) | | | $(16) | | | $(16) | | | $(16) | | | $(16) | | | $(17) | | | $(17) | | | $(17) | | | $(17) |
EBT | | | $214 | | | $234 | | | $279 | | | $309 | | | $276 | | | $224 | | | $202 | | | $117 | | | $106 |
Unlevered Free Cash Flow | | | $158 | | | $173 | | | $206 | | | $229 | | | $204 | | | $166 | | | $149 | | | $87 | | | $79 |
($ in millions) | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 |
Total Revenue | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $618 | | | $928 |
Cost of Goods Sold | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $192 | | | $283 |
Gross Profit | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $426 | | | $645 |
Total REN-001 R&D Expense | | | $(12) | | | $(12) | | | $(12) | | | $(12) | | | $(55) | | | $(51) | | | $(40) | | | $(33) | | | $(30) |
Total SG&A Expense | | | $(4) | | | $(5) | | | $(5) | | | $(6) | | | $(6) | | | $(7) | | | $(8) | | | $(84) | | | $(85) |
Total Operating Expenses | | | $(16) | | | $(17) | | | $(17) | | | $(18) | | | $(62) | | | $(59) | | | $(48) | | | $(117) | | | $(114) |
EBIT | | | $(16) | | | $(17) | | | $(17) | | | $(18) | | | $(62) | | | $(59) | | | $(48) | | | $308 | | | $531 |
| | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 | |
Total Revenue | | | $1,533 | | | $2,084 | | | $2,264 | | | $2,662 | | | $2,936 | | | $2,639 | | | $2,174 | | | $1,977 | | | $1,634 |
Cost of Goods Sold | | | $458 | | | $610 | | | $650 | | | $748 | | | $809 | | | $713 | | | $575 | | | $513 | | | $415 |
Gross Profit | | | $1,075 | | | $1,474 | | | $1,615 | | | $1,913 | | | $2,127 | | | $1,926 | | | $1,599 | | | $1,464 | | | $1,219 |
Total REN-001 R&D Expense | | | $(27) | | | $(23) | | | $(22) | | | $(22) | | | $(23) | | | $(23) | | | $(24) | | | $(24) | | | $(25) |
Total SG&A Expense | | | $(85) | | | $(86) | | | $(86) | | | $(86) | | | $(86) | | | $(87) | | | $(87) | | | $(87) | | | $(87) |
Total Operating Expenses | | | $(112) | | | $(109) | | | $(108) | | | $(108) | | | $(109) | | | $(110) | | | $(110) | | | $(111) | | | $(112) |
EBIT | | | $963 | | | $1,365 | | | $1,507 | | | $1,805 | | | $2,018 | | | $1,817 | | | $1,489 | | | $1,353 | | | $1,107 |
($ in millions) | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | | 2028 | | | 2029 | | | 2030 | | | 2031 |
Total Revenue | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | $93 | | | $139 |
EBIT | | | $(16) | | | $(17) | | | $(17) | | | $(18) | | | $(32) | | | $(30) | | | $(25) | | | $46 | | | $80 |
Less: Tax Expense (if profitable)(1) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (12) | | | (21) |
Plus: D&A | | | 1 | | | 1 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 |
Less: CapEx | | | (1) | | | (3) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) |
Less: Change in Net Working Capital | | | (2) | | | (2) | | | (5) | | | (3) | | | — | | | — | | | — | | | — | | | — |
Unlevered Free Cash Flow | | | $(19) | | | $(21) | | | $(23) | | | $(21) | | | $(32) | | | $(31) | | | $(25) | | | $34 | | | $59 |
| | 2032 | | | 2033 | | | 2034 | | | 2035 | | | 2036 | | | 2037 | | | 2038 | | | 2039 | | | 2040 | |
Total Revenue | | | $230 | | | $313 | | | $340 | | | $400 | | | $441 | | | $396 | | | $327 | | | $297 | | | $245 |
EBIT | | | $145 | | | $205 | | | $226 | | | $271 | | | $303 | | | $273 | | | $224 | | | $203 | | | $166 |
Less: Tax Expense (if profitable)(1) | | | (38) | | | (53) | | | (59) | | | (70) | | | (79) | | | (71) | | | (58) | | | (53) | | | (43) |
Pluss: D&A | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 | | | 2 |
Less: CapEx | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) | | | (2) |
Less: Change in Net Working Capital | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Unlevered Free Cash Flow | | | $107 | | | $151 | | | $167 | | | $200 | | | $224 | | | $201 | | | $165 | | | $150 | | | $123 |
(1) | Tax rate of 26% per Renovacor’s management. Excludes the impact of the Renovacor’s net operating losses. |
• | “net cash” means (I) the sum of (a) the fair market value (expressed in United States dollars) of all cash in Renovacor’s and its subsidiary’s bank, lock box and other accounts, net of all “cut” but un-cashed checks issued from such accounts, plus (b) pending electronic transfer or other deposits to such accounts, plus (c) the fair market value of marketable securities owned by Renovacor and its subsidiary as determined in accordance with GAAP, plus (e) the fair market value of any money market instruments, treasury bills, short-term government bonds or commercial paper held by Renovacor and its subsidiary plus (f) any other items considered by GAAP to constitute cash and cash equivalents for purposes of preparing a balance sheet in accordance with GAAP; plus (g) the aggregate amount of all prepaid expenses and receivables that will be utilized by Rocket and/or the Surviving Company on and following the closing plus (h) the aggregate amount of Renovacor’s transaction costs that have been paid prior to the closing in an amount not to exceed $5,000,000, plus (i) the aggregate amount of any covered employee transaction costs (as defined below) that have been paid prior to the closing, plus (j) the aggregate amount of permitted bonuses (as defined below under “—Employee Benefit Matters”) that have been paid prior to the closing in an amount not to exceed $2,473,000; minus (II) the sum of (without duplication) (v) Renovacor’s and its subsidiary’s accounts payable and accrued expenses in excess of $3,320,000, plus (w) Renovacor’s and its subsidiary’s other short-term liabilities, including under operating leases (excluding, in each case of the foregoing clauses (v) and (w), any amounts comprising Renovacor’s transaction costs or employee transaction costs (as defined below) or any non-cash lease liability resulting from Renovacor’s GAAP lease accounting), plus (x) the aggregate |
• | “Renovacor net cash target” means $38 million; provided that if the closing date occurs after December 31, 2022, then such amount will be reduced by $100,000 for each day that elapses between December 31, 2022 and the closing date. |
• | “Renovacor outstanding shares” means the total number of shares of Renovacor common stock outstanding immediately prior to the first effective time expressed on a fully diluted basis, assuming the issuance of the Renovacor earnout shares and all shares of Renovacor common stock in respect of all outstanding Renovacor stock options, Renovacor time-vesting RSUs and the Renovacor pre-funded warrant, in each case, outstanding as of immediately prior to the first effective time (whether then vested or unvested, exercisable or not exercisable), but excluding any shares of Renovacor common stock underlying the Renovacor public warrants or the Renovacor private warrants; |
• | “Renovacor per share value” means the quotient obtained by dividing (A) the Renovacor valuation by (B) the Renovacor outstanding shares; |
• | “Renovacor valuation” means $57,795,486 minus the amount, if any, by which the net cash of Renovacor is less than the Renovacor net cash target plus the amount, if any, by which the net cash of Renovacor is greater than the Renovacor net cash target, up to a maximum increase of $3,000,000; and |
• | “Rocket valuation price” means $15.51. |
Net Cash of Renovacor | | | Exchange Ratio | | | Post-Mergers Ownership by Renovacor Stockholders | | | Post-Mergers Ownership by Rocket Stockholders |
$45,000,000 | | | 0.1763 | | | 4.33% | | | 95.67% |
$41,000,000 | | | 0.1763 | | | 4.33% | | | 95.67% |
$40,000,000 | | | 0.1734 | | | 4.26% | | | 95.74% |
$38,000,000 | | | 0.1676 | | | 4.12% | | | 95.88% |
$35,000,000 | | | 0.1589 | | | 3.92% | | | 96.08% |
| | For the Six-Months Ended June 30, | | | For the Years Ended December 31, | |||||||
(In thousands except shares and per share amounts) | | | 2022 | | | 2021 | | | 2021 | | | 2020 |
| | (unaudited) | | | (unaudited) | | | | | |||
Income Statement Data | | | | | | | | | ||||
Operating expenses: | | | | | | | | | ||||
Research and development | | | $12,219 | | | $4,488 | | | $11,757 | | | $2,425 |
General and administrative | | | 5,763 | | | 912 | | | 6,872 | | | 805 |
Loss from operations | | | (17,982) | | | (5,400) | | | (18,629) | | | (3,230) |
| | | | | | | | |||||
Other income (expense): | | | | | | | | | ||||
Change in fair value of warrant liability | | | 10,185 | | | — | | | 2,240 | | | — |
Change in fair value of share earnout liability | | | 10,318 | | | — | | | 2,354 | | | — |
Other income (expense), net | | | 49 | | | — | | | (66) | | | — |
Net income (loss) | | | $2,570 | | | $(5,400) | | | $(14,101) | | | $(3,230) |
| | | | | | | | |||||
Net income (loss) per share — basic and diluted | | | $0.14 | | | $(0.86) | | | $(1.41) | | | $(0.83) |
Weighted-average number of common shares used in computing net income (loss) per share | | | | | | | | | ||||
— Basic | | | 17,471,341 | | | 6,274,566 | | | 9,976,240 | | | 3,883,316 |
— Diluted | | | 17,550,126 | | | 6,274,566 | | | 9,976,240 | | | 3,883,316 |
Balance Sheet Data (as period end): | | | June 30, 2022 | | | December 31, 2021 |
Cash and cash equivalents | | | $61,993 | | | $78,790 |
Other assets | | | 2,729 | | | 2,209 |
Total assets | | | $64,722 | | | $80,999 |
| | | | |||
Total liabilities | | | $7,370 | | | $27,455 |
Total stockholders’ equity | | | 57,352 | | | 53,544 |
Total liabilities and stockholders’ equity | | | $64,722 | | | $80,999 |
| | For the six-months ended | | | For the years ended | |||||||
(In thousands) | | | June 30, 2022 | | | June 30, 2021 | | | December 31, 2021 | | | December 31, 2020 |
Net cash provided by (used in): | | | | | | | | | ||||
Net cash used in operating activities | | | $(16,030) | | | $(4,050) | | | $(15,560) | | | $(3,412) |
Net cash used in investment activities | | | (719) | | | — | | | (20) | | | — |
Net cash provided by (used in) financing activities | | | (48) | | | 885 | | | 88,986 | | | 6,635 |
Net increase (decrease) in cash | | | $(16,797) | | | $(4,935) | | | $73,406 | | | $3,223 |
Date | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | | Rocket Common Stock Closing Price | | Renovacor Common Stock Closing Price | | Implied per Share Value of Merger Consideration | ||||||
September 19, 2022 | | $13.97 | | $1.90 | | $2.34 | | $13.97 | | $1.90 | | $2.34 | ||||||
October 7, 2022 | | $17.08 | | $2.71 | | $2.86 | ||||||||||||
October 25, 2022 | | $17.11 | | $2.76 | | $2.87 |
* | The diagram above is representative of the current stage of Renovacor’s development and does not reflect Renovacor’s expectations of the clinical trials needed or an agreed upon pathway with the FDA for commercialization of Renovacor’s product candidates. Renovacor acknowledges that the required clinical studies and pathway to commercialization must be agreed upon with the FDA. |
Name | | | Age | | | Position(s) |
Gaurav Shah | | | 48 | | | Chief Executive Officer |
Jonathan Schwartz, M.D. | | | 59 | | | Chief Medical Officer & Clinical Development, SVP |
Kinnari Patel, Pharm.D., M.B.A. | | | | | President and Chief Operating Officer | |
John Militello, CPA | | | 49 | | | VP of Finance, Senior Controller, Treasurer, Principal Accounting Officer, Interim Principal Financial Officer |
Martin Wilson, J.D. | | | 45 | | | General Counsel and Chief Compliance Officer, SVP |
Elisabeth Björk, M.D., Ph.D. | | | 61 | | | Director |
Carsten Boess | | | 56 | | | Director |
Pedro Granadillo | | | 75 | | | Director |
Gotham Makker, M.D. | | | 48 | | | Director |
Fady Malik, M.D., Ph.D. | | | 57 | | | Director |
David P. Southwell | | | 61 | | | Director |
Roderick Wong, M.D. | | | 45 | | | Director, Chairman of the Rocket Board |
Naveen Yalamanchi, M.D. | | | 45 | | | Director |
Name | | | Age | | | Position(s) |
Gaurav Shah | | | 48 | | | Chief Executive Officer |
Jonathan Schwartz, M.D. | | | 59 | | | Chief Medical Officer & Clinical Development, SVP |
Kinnari Patel, Pharm.D., M.B.A. | | | 43 | | | President and Chief Operating Officer |
John Militello, CPA | | | 49 | | | VP of Finance, Senior Controller, Treasurer, Principal Accounting Officer, Interim Principal Financial Officer |
Martin Wilson, J.D. | | | 45 | | | General Counsel and Chief Compliance Officer, SVP |
Elisabeth Björk, M.D., Ph.D. | | | 61 | | | Director |
Carsten Boess | | | 56 | | | Director |
Pedro Granadillo | | | 75 | | | Director |
Gotham Makker, M.D. | | | 48 | | | Director |
Fady Malik, M.D., Ph.D. | | | 57 | | | Director |
David P. Southwell | | | 61 | | | Director |
Roderick Wong, M.D. | | | 45 | | | Director, Chairman of the Rocket Board |
Naveen Yalamanchi, M.D. | | | 45 | | | Director |
Name | | | Age | | | Position(s) |
Gaurav Shah | | | 48 | | | Chief Executive Officer |
Jonathan Schwartz, M.D. | | | 59 | | | Chief Medical Officer & Clinical Development, SVP |
Kinnari Patel, Pharm.D., M.B.A. | | | 43 | | | President and Chief Operating Officer |
John Militello, CPA | | | 49 | | | VP of Finance, Senior Controller, Treasurer, Principal Accounting Officer, Interim Principal Financial Officer |
Martin Wilson, J.D. | | | 45 | | | General Counsel and Chief Compliance Officer, SVP |
Elisabeth Björk, M.D., Ph.D. | | | 61 | | | Director |
Carsten Boess | | | 56 | | | Director |
Pedro Granadillo | | | 75 | | | Director |
Gotham Makker, M.D. | | | 48 | | | Director |
Fady Malik, M.D., Ph.D. | | | 57 | | | Director |
David P. Southwell | | | 61 | | | Director |
Roderick Wong, M.D. | | | 45 | | | Director, Chairman of the Rocket Board |
Naveen Yalamanchi, M.D. | | | 45 | | | Director |
* | The diagram above is representative of the current stage of Renovacor’s development and does not reflect its expectations of the clinical trials needed or an agreed upon pathway with the FDA for commercialization of its product candidates. Renovacor acknowledges that the required clinical studies and pathway to commercialization must be agreed upon with the FDA. |
| | Three Months Ended June 20, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Operating expenses: | | | | | | | | | | | | | ||||||
Research and development | | | $6,289 | | | $3,333 | | | $2,956 | | | $12,219 | | | $4,488 | | | $7,731 |
General and administrative | | | 2,838 | | | 385 | | | 2,453 | | | 5,763 | | | 912 | | | 4,851 |
Total operating expenses | | | $9,127 | | | $3,718 | | | $5,409 | | | $17,982 | | | $5,400 | | | $12,582 |
Loss from operations | | | $(9,127) | | | $(3,718) | | | $(5,409) | | | $(17,982) | | | $(5,400) | | | $(12,582) |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||||||||||||||||||||
($ in thousands) | | 2022 | | 2021 | | $ Change | | 2022 | | 2021 | | $ Change | | 2022 | | 2021 | | $ Change | | 2022 | | 2021 | | $ Change | ||||||||||||
Compensation and related benefits | | $2,353 | | $462 | | $1,891 | | $4,354 | | $497 | | $3,857 | | $2,353 | | $462 | | $1,891 | | $4,354 | | $497 | | $3,857 | ||||||||||||
Other external research and development costs | | 3,936 | | $2,871 | | $1,0651 | | $7,865 | | $3,991 | | $3,874 | | 3,936 | | $2,871 | | $1,065 | | $7,865 | | $3,991 | | $3,874 | ||||||||||||
Total research and development expenses | | $6,289 | | $3,333 | | $2,956 | | $12,219 | | $4,488 | | $7,731 | | $6,289 | | $3,333 | | $2,956 | | $12,219 | | $4,488 | | $7,731 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Compensation and related benefits | | | $1,162 | | | $120 | | | $1,042 | | | $2,147 | | | $219 | | | $1,928 |
Professional and consulting fees | | | 964 | | | 220 | | | 744 | | | 2,196 | | | 627 | | | 1,569 |
Other administrative costs | | | 712 | | | 45 | | | 667 | | | 1,420 | | | 66 | | | 1,354 |
Total general and administrative expenses | | | $2,838 | | | $385 | | | $2,453 | | | $5,763 | | | $912 | | | $4,851 |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Operating expenses: | | | | | | | | | ||||
Research and development | | | $11,757 | | | 2,425 | | | $9,332 | | | 385% |
General and administrative | | | 6,872 | | | 805 | | | 6,067 | | | 754% |
Total operating expenses | | | $18,629 | | | 3,230 | | | $15,399 | | | 477% |
Loss from operations | | | $(18,629) | | | $(3,230) | | | $(15,399) | | | 477% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $3,322 | | | $125 | | | $3,197 | | | 2558% |
Other external research and development costs | | | 8,435 | | | 2,425 | | | $9,332 | | | 267% |
Total research and development expenses | | | $11,757 | | | $2,425) | | | $9,332 | | | 385% |
| | Year Ended December 31, | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | ||||||||||||||||||||
($ in thousands) | | 2021 | | 2020 | | $ Change | | $ Change | | 2022 | | 2021 | | $ Change | | 2022 | | 2021 | | $ Change | ||||||||||
Compensation and related benefits | | $2,146 | | $234 | | $1,912 | | 817% | | $1,162 | | $120 | | $1,042 | | $2,147 | | $219 | | $1,928 | ||||||||||
Professional and consulting fees | | 2,825 | | 473 | | $2,352 | | 497% | | 964 | | 220 | | 744 | | 2,196 | | 627 | | 1,569 | ||||||||||
Merger-related transaction costs | | 616 | | — | | 616 | | 1004% | ||||||||||||||||||||||
Other administrative costs | | 1,285 | | 98 | | $1,187 | | 1211% | | 712 | | 45 | | 667 | | 1,420 | | 66 | | 1,354 | ||||||||||
Total general and administrative expenses | | $6,872 | | $805 | | $6,067 | | 754% | | $2,838 | | $385 | | $2,453 | | $5,763 | | $912 | | $4,851 |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Operating expenses: | | | | | | | | | ||||
Research and development | | | $11,757 | | | 2,425 | | | $9,332 | | | 385% |
General and administrative | | | 6,872 | | | 805 | | | 6,067 | | | 754% |
Total operating expenses | | | $18,629 | | | 3,230 | | | $15,399 | | | 477% |
Loss from operations | | | $(18,629) | | | $(3,230) | | | $(15,399) | | | 477% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $3,322 | | | $125 | | | $3,197 | | | 2558% |
Other external research and development costs | | | 8,435 | | | 2,300 | | | $6,135 | | | 267% |
Total research and development expenses | | | $11,757 | | | $2,425 | | | $9,332 | | | 385% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $2,146 | | | $234 | | | $1,912 | | | 817% |
Professional and consulting fees | | | 2,825 | | | 473 | | | $2,352 | | | 497% |
Merger-related transaction costs | | | 616 | | | — | | | 616 | | | 100% |
Other administrative costs | | | 1,285 | | | 98 | | | $1,187 | | | 1211% |
Total general and administrative expenses | | | $6,872 | | | $805 | | | $6,067 | | | 754% |
| | Six Month Ended June 30, | ||||
| | 2022 | | | 2021 | |
Net cash (used in) provided by: | | | | | ||
Net cash used in operating activities | | | $(16,030) | | | $(4,050) |
Net cash used in investing activities | | | (719) | | | — |
Net cash used in financing activities | | | (48) | | | (885) |
Net decrease in cash | | | $(16,797) | | | $(4,935) |
Name | | | Age | | | Position(s) |
Gaurav Shah | | | 48 | | | Chief Executive Officer |
Jonathan Schwartz, M.D. | | | 59 | | | Chief Medical Officer & Clinical Development, SVP |
Kinnari Patel, Pharm.D., M.B.A. | | | 43 | | | President and Chief Operating Officer |
John Militello, CPA | | | 49 | | | VP of Finance, Senior Controller, Treasurer, Principal Accounting Officer, Interim Principal Financial Officer |
Martin Wilson, J.D. | | | 45 | | | General Counsel and Chief Compliance Officer, SVP |
Elisabeth Björk, M.D., Ph.D. | | | 61 | | | Director |
Carsten Boess | | | 56 | | | Director |
Pedro Granadillo | | | 75 | | | Director |
Gotham Makker, M.D. | | | 48 | | | Director |
Fady Malik, M.D., Ph.D. | | | 57 | | | Director |
David P. Southwell | | | 61 | | | Director |
Roderick Wong, M.D. | | | 45 | | | Director, Chairman of the Rocket Board |
Naveen Yalamanchi, M.D. | | | 45 | | | Director |
* | The diagram above is representative of the current stage of Renovacor’s development and does not reflect its expectations of the clinical trials needed or an agreed upon pathway with the FDA for commercialization of its product candidates. Renovacor acknowledges that the required clinical studies and pathway to commercialization must be agreed upon with the FDA. |
| | Three Months Ended June 20, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Operating expenses: | | | | | | | | | | | | | ||||||
Research and development | | | $6,289 | | | $3,333 | | | $2,956 | | | $12,219 | | | $4,488 | | | $7,731 |
General and administrative | | | 2,838 | | | 385 | | | 2,453 | | | 5,763 | | | 912 | | | 4,851 |
Total operating expenses | | | $9,127 | | | $3,718 | | | $5,409 | | | $17,982 | | | $5,400 | | | $12,582 |
Loss from operations | | | $(9,127) | | | $(3,718) | | | $(5,409) | | | $(17,982) | | | $(5,400) | | | $(12,582) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Compensation and related benefits | | | $2,353 | | | $462 | | | $1,891 | | | $4,354 | | | $497 | | | $3,857 |
Other external research and development costs | | | 3,936 | | | $2,871 | | | $1,065 | | | $7,865 | | | $3,991 | | | $3,874 |
Total research and development expenses | | | $6,289 | | | $3,333 | | | $2,956 | | | $12,219 | | | $4,488 | | | $7,731 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Compensation and related benefits | | | $1,162 | | | $120 | | | $1,042 | | | $2,147 | | | $219 | | | $1,928 |
Professional and consulting fees | | | 964 | | | 220 | | | 744 | | | 2,196 | | | 627 | | | 1,569 |
Other administrative costs | | | 712 | | | 45 | | | 667 | | | 1,420 | | | 66 | | | 1,354 |
Total general and administrative expenses | | | $2,838 | | | $385 | | | $2,453 | | | $5,763 | | | $912 | | | $4,851 |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Operating expenses: | | | | | | | | | ||||
Research and development | | | $11,757 | | | 2,425 | | | $9,332 | | | 385% |
General and administrative | | | 6,872 | | | 805 | | | 6,067 | | | 754% |
Total operating expenses | | | $18,629 | | | 3,230 | | | $15,399 | | | 477% |
Loss from operations | | | $(18,629) | | | $(3,230) | | | $(15,399) | | | 477% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $3,322 | | | $125 | | | $3,197 | | | 2558% |
Other external research and development costs | | | 8,435 | | | 2,300 | | | $6,135 | | | 267% |
Total research and development expenses | | | $11,757 | | | $2,425 | | | $9,332 | | | 385% |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Net cash provided by (used in): | | | | | ||
Net cash used in operating activities | | | $(15,560) | | | $(3,412) |
Net cash used in investing activities | | | (20) | | | — |
Net cash provided by financing activities | | | 88,986 | | | 6,635 |
Net increase in cash | | | $73,406 | | | $3,223 |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $2,146 | | | $234 | | | $1,912 | | | 817% |
Professional and consulting fees | | | 2,825 | | | 473 | | | $2,352 | | | 497% |
Merger-related transaction costs | | | 616 | | | — | | | 616 | | | 100% |
Other administrative costs | | | 1,285 | | | 98 | | | $1,187 | | | 1211% |
Total general and administrative expenses | | | $6,872 | | | $805 | | | $6,067 | | | 754% |
Name | | | Age | | | Position(s) |
Gaurav Shah | | | 48 | | | Chief Executive Officer |
Jonathan Schwartz, M.D. | | | 59 | | | Chief Medical Officer & Clinical Development, SVP |
Kinnari Patel, Pharm.D., M.B.A. | | | 43 | | | President and Chief Operating Officer |
John Militello, CPA | | | 49 | | | VP of Finance, Senior Controller, Treasurer, Principal Accounting Officer, Interim Principal Financial Officer |
Martin Wilson, J.D. | | | 45 | | | General Counsel and Chief Compliance Officer, SVP |
Elisabeth Björk, M.D., Ph.D. | | | 61 | | | Director |
Carsten Boess | | | 56 | | | Director |
Pedro Granadillo | | | 75 | | | Director |
Gotham Makker, M.D. | | | 48 | | | Director |
Fady Malik, M.D., Ph.D. | | | 57 | | | Director |
David P. Southwell | | | 61 | | | Director |
Roderick Wong, M.D. | | | 45 | | | Director, Chairman of the Rocket Board |
Naveen Yalamanchi, M.D. | | | 45 | | | Director |
* | The diagram above is representative of the current stage of Renovacor’s development and does not reflect its expectations of the clinical trials needed or an agreed upon pathway with the FDA for commercialization of its product candidates. Renovacor acknowledges that the required clinical studies and pathway to commercialization must be agreed upon with the FDA. |
| | Three Months Ended June 20, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Operating expenses: | | | | | | | | | | | | | ||||||
Research and development | | | $6,289 | | | $3,333 | | | $2,956 | | | $12,219 | | | $4,488 | | | $7,731 |
General and administrative | | | 2,838 | | | 385 | | | 2,453 | | | 5,763 | | | 912 | | | 4,851 |
Total operating expenses | | | $9,127 | | | $3,718 | | | $5,409 | | | $17,982 | | | $5,400 | | | $12,582 |
Loss from operations | | | $(9,127) | | | $(3,718) | | | $(5,409) | | | $(17,982) | | | $(5,400) | | | $(12,582) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Compensation and related benefits | | | $2,353 | | | $462 | | | $1,891 | | | $4,354 | | | $497 | | | $3,857 |
Other external research and development costs | | | 3,936 | | | $2,871 | | | $1,065 | | | $7,865 | | | $3,991 | | | $3,874 |
Total research and development expenses | | | $6,289 | | | $3,333 | | | $2,956 | | | $12,219 | | | $4,488 | | | $7,731 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||||||||
($ in thousands) | | | 2022 | | | 2021 | | | $ Change | | | 2022 | | | 2021 | | | $ Change |
Compensation and related benefits | | | $1,162 | | | $120 | | | $1,042 | | | $2,147 | | | $219 | | | $1,928 |
Professional and consulting fees | | | 964 | | | 220 | | | 744 | | | 2,196 | | | 627 | | | 1,569 |
Other administrative costs | | | 712 | | | 45 | | | 667 | | | 1,420 | | | 66 | | | 1,354 |
Total general and administrative expenses | | | $2,838 | | | $385 | | | $2,453 | | | $5,763 | | | $912 | | | $4,851 |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Operating expenses: | | | | | | | | | ||||
Research and development | | | $11,757 | | | 2,425 | | | $9,332 | | | 385% |
General and administrative | | | 6,872 | | | 805 | | | 6,067 | | | 754% |
Total operating expenses | | | $18,629 | | | 3,230 | | | $15,399 | | | 477% |
Loss from operations | | | $(18,629) | | | $(3,230) | | | $(15,399) | | | 477% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $3,322 | | | $125 | | | $3,197 | | | 2558% |
Other external research and development costs | | | 8,435 | | | 2,300 | | | $6,135 | | | 267% |
Total research and development expenses | | | $11,757 | | | $2,425 | | | $9,332 | | | 385% |
| | Year Ended December 31, | | | | | ||||||
($ in thousands) | | | 2021 | | | 2020 | | | $ Change | | | $ Change |
Compensation and related benefits | | | $2,146 | | | $234 | | | $1,912 | | | 817% |
Professional and consulting fees | | | 2,825 | | | 473 | | | $2,352 | | | 497% |
Merger-related transaction costs | | | 616 | | | — | | | 616 | | | 100% |
Other administrative costs | | | 1,285 | | | 98 | | | $1,187 | | | 1211% |
Total general and administrative expenses | | | $6,872 | | | $805 | | | $6,067 | | | 754% |
| | Six Month Ended June 30, | ||||
| | 2022 | | | 2021 | |
Net cash (used in) provided by: | | | | | ||
Net cash used in operating activities | | | $(16,030) | | | $(4,050) |
Net cash used in investing activities | | | (719) | | | — |
Net cash used in financing activities | | | (48) | | | (885) |
Net decrease in cash | | | $(16,797) | | | $(4,935) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Net cash provided by (used in): | | | | | ||
Net cash used in operating activities | | | $(15,560) | | | $(3,412) |
Net cash used in investing activities | | | (20) | | | — |
Net cash provided by financing activities | | | 88,986 | | | 6,635 |
Net increase in cash | | | $73,406 | | | $3,223 |
(i) | the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and |
(ii) | the impact of the estimates and assumptions on financial condition or operating performance is material. |
Name | | Renovacor Stock Options ($) | | Renovacor Earnout RSU Awards ($) | | Renovacor Time-Based RSU Awards ($) | | Renovacor Stock Options ($) | | Renovacor Earnout RSU Awards ($) | | Renovacor Time-Based RSU Awards ($) | ||||||
Magdalene Cook, M.D. | | — | | — | | 184,145 | ||||||||||||
Matthew Killeen, Ph.D. | | — | | — | | 13,715 | ||||||||||||
Marc Semigran, M.D. | | — | | 91,588 | | 45,305 | | — | | 91,588 | | 45,305 | ||||||
Wendy F. DiCicco | | 124,260 | | 11,255 | | 48,880 | | 124,260 | | 11,255 | | 48,880 | ||||||
Joe Carroll | | 23,200 | | — | | 21,307 | | 23,200 | | — | | 21,307 |
Authorized and Outstanding Capital Stock | |||
| | ||
Rocket is authorized to issue 125,000,000 shares of stock, consisting of 120,000,000 shares of common stock, par value $0.01 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share. As of the close of business on the record date, there were 75,684,423 shares of Rocket common stock and no shares of preferred stock issued and outstanding. | | | Renovacor is authorized to issue 101,000,000 shares of stock, consisting of 100,000,000 shares of common stock, par value $0.0001 per share, and 1,000,000 shares of preferred stock, par value $0.0001 per share. As of the close of business on the record date, there were 17,269,415 shares of Renovacor common stock and shares of preferred stock issued and outstanding. |
| | ||
Rights of Preferred Stock | |||
| | ||
Rocket is authorized to issue preferred stock in one or more series. The Rocket board may fix by resolution or resolutions the designation, powers (which may include, without limitation, full, limited or no voting power), preferences, and rights of the shares and any qualifications, limitations or restrictions thereof, as may be permitted by the DGCL. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares of such class outstanding) by the affirmative vote of a majority of the voting power of the stock of Rocket entitled to vote, irrespective of the provisions of Section 242(b)(2) of the DGCL. | | | Renovacor is authorized to issue preferred stock in one or more series. The Renovacor board may fix by resolution the number of shares of preferred stock and determine or alter for each series, such voting powers, full or limited, or no voting powers, the designations, preferences, and the relative, participating, optional, or other rights, and the qualifications, limitations and restrictions thereof, as may be permitted by the DGCL. The number of authorized shares of preferred stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of Renovacor, irrespective of the provisions of Section 242(b)(2) of the DGCL. |
| | ||
Voting Rights | |||
| | ||
Each share of Rocket common stock entitles the holder to one vote on each matter properly submitted to the stockholders of Rocket for their vote. When a quorum is present at any meeting of holders, any matter before any such meeting will be decided by a majority of the votes properly cast for and against such matter, except where a larger vote is required by | | | Each share of Renovacor common stock entitles the holder to one vote on each matter properly submitted to the stockholders of Renovacor for their vote; provided however, that, holders of common stock are not entitled to vote on any amendment to Renovacor’s certificate of incorporation that alters or changes the powers, preferences, rights or other terms of one or more outstanding series of preferred stock if the |
law, by the certificate of incorporation or bylaws. Any election of directors by holders will be determined by a plurality of the votes properly cast on the election of directors. | | | holders of such affected series are entitled to vote either separately or together with the holders of one or more other such series, on such amendment pursuant to this Renovacor certificate of incorporation or pursuant to the DGCL. Other than with respect to the election of directors, for all matters as to which no other voting requirement is specified by the DGCL, Renovacor’s charter or bylaws, the affirmative vote required for stockholder action is that of a majority of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote on the subject matter. |
| | ||
Distributions and Dividends | |||
| | ||
The Rocket board or any committee thereof may declare and pay dividends or set apart for payment upon the share of Rocket common stock out of any assets or funds of Rocket legally available for the payment of dividends. | | | The Renovacor board or any authorized committee thereof may declare and pay dividends or set apart for payment upon the shares of Renovacor capital stock out of any assets or funds of Renovacor legally available for the payment of dividends. Dividends may be paid in cash, in property or in shares of stock. The Renovacor board may set apart out of any of the funds of Renovacor available for dividends a reserve or reserves for any proper purpose and may modify or abolish such reserve. |
| | ||
Quorum | |||
| | ||
The Rocket bylaws provide that a majority of the shares entitled to vote, present in person or represented by proxy constitutes a quorum. | | | The Renovacor bylaws provide that the presence (in person or by proxy duly authorized) of the holders of a majority of the voting power of the outstanding shares of capital stock entitled to vote at the meeting constitutes a quorum. |
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Record Date | |||
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The Rocket board may fix a record date for purposes of, among other things, determining the rights of stockholders to notice of or to vote at such meeting. In the case of (a) determining stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, or to vote at such meeting, the record date cannot be less than ten or more than 60 days preceding the date of any meeting of stockholders and (b) in the case of any other action cannot be more than 60 days prior to such other action. If no record date is fixed, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or if notice is waived, at the | | | The Renovacor board may fix a record date for purposes of, among other things, determining the rights of stockholders to notice of or to vote at such meeting or any adjournment thereof or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action. The record date (a) in the case of determination of stockholders entitled to vote at any meeting of stockholders, shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting and (b) in the case of any other action, shall not be more than sixty (60) days prior to such other action |
close of business on the day next preceding the day on which the meeting is held. | | | If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Renovacor board adopts the resolution relating thereto. |
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Number of Directors | |||
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The Rocket charter provides that the number of directors on Rocket’s board will be fixed solely and exclusively by resolution from time to time. There are currently nine Rocket directors. | | | The Renovacor charter provides that the number of directors on the Renovacor board shall be fixed exclusively by resolutions adopted by a majority of the Renovacor board. There are currently seven Renovacor directors. |
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Election of Directors | |||
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Pursuant to the Rocket charter, at each annual meeting of stockholders, directors elected to succeed directors whose terms expire will be elected for a term of office to expire at the next annual meeting of stockholders after their election. Pursuant to the Rocket bylaws, directors are elected at each annual meeting of stockholders by a plurality of the votes of the shares present in person, by remote communication, if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies resulting from death, resignation, disqualification, removal or other causes are filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Rocket board. | | | Pursuant to the Renovacor charter, directors serve three year terms and are divided into three classes designated as either Class I, Class II or Class III. The election of each class of directors is staggered such that each year, the term of only one class expires and stockholders vote only to elect directors with respect to such class. Pursuant to the Renovacor bylaws, directors are elected at each annual meeting of stockholders by a plurality of the votes of the shares present in person, by remote communication (if authorized by the board), if applicable, or represented by proxy duly authorized at the meeting and entitled to vote generally on the election of directors. Newly created directorships resulting from any increase in the authorized number of directors or any vacancies resulting from death, resignation, disqualification, removal or other causes are filled by the affirmative vote of a majority of the remaining directors then in office, even if less than a quorum of the Renovacor board. |
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Cumulative Voting | |||
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Rocket stockholders do not have cumulative voting rights. | | | Renovacor stockholders do not have cumulative voting rights. |
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Removal of Directors | |||
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The Rocket directors may be removed with cause by the affirmative vote of the holders of 75% or more of the outstanding shares of Rocket capital stock entitled to vote generally at an election of directors voting together as a single class. | | | The Renovacor directors may be removed with cause by the affirmative vote of the holders of a majority of the votes properly cast. |
Director Nominations by Stockholders | |||
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The Rocket bylaws provide that stockholders who comply with the notice provisions set forth in the Rocket bylaws, are stockholders of record on the date of giving such notice and are entitled to vote at an annual meeting of stockholders may nominate a candidate to the Rocket board for election at such meeting. These notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination containing specified information no less than 90 days and no more than 120 days prior to the anniversary of the date of the immediately preceding annual meeting of stockholders. Rocket does not have a proxy access provision in its bylaws. | | | The Renovacor bylaws provide that stockholders who comply with the notice provisions set forth in the Renovacor bylaws, are stockholders of record on the date of giving such notice and are entitled to vote at the meeting of stockholders and are present at the meeting (in person or by proxy), may nominate a candidate to the Renovacor board for election at such meeting. These notice requirements generally require that, among other things, the stockholder deliver a notice of any such nomination containing specified information no less than 90 days and no more than 120 days prior to the anniversary of the date of the immediately preceding annual meeting of stockholders. Renovacor does not have a proxy access provision in its bylaws. |
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Stockholder Proposals | |||
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Business may be properly brought before an annual meeting by any stockholder so long as he or she is a stockholder of record at the time of giving the written notice provided in the Rocket bylaws, is entitled to vote at the meeting and complies with the notice requirements set forth in the Rocket bylaws. To be timely, a stockholder’s notice must generally be delivered to Rocket’s Secretary no less than 90 days and no more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. | | | Business may be properly brought before an annual meeting by any stockholder so long as he or she is a stockholder of record at the time of giving the written notice provided in the Renovacor bylaws, is entitled to vote at the meeting and complies with the notice requirements set forth in the Renovacor bylaws. To be timely, a stockholder’s notice must generally be delivered to Renovacor’s Corporate Secretary no less than 90 days and no more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. |
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Stockholder Action by Written Consent | |||
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The Rocket charter prohibits stockholder action by written consent or electronic transmission and requires that any action taken by Rocket stockholders be taken at an annual or special meeting of stockholders. | | | The Renovacor charter prohibits stockholder action by written consent or electronic transmission and requires that any action taken by Renovacor stockholders be taken at an annual or special meeting of stockholders. |
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Special Stockholder Meetings | |||
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A special meeting of stockholders may be called only by the chairperson of the Rocket board, Rocket’s secretary, the Rocket board acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office, the chairperson of the Rocket board or the Rocket Secretary upon the written request of one or more persons who (i) represent at least 20% of the voting power of the stock entitled to vote on the matters to be considered at the proposed special meeting or (ii) comply with the notice procedures set forth in the bylaws. The only matters to be brought before a special meeting are those specified in the meeting notice. | | | A special meeting of stockholders may be called only by the chairperson of the Renovacor board, Renovacor’s chief executive officer, or the Renovacor board pursuant to a resolution approved by the affirmative vote of a majority of the directors. The only matters to be brought before a special meeting are those specified in the meeting notice. |
Notice of Stockholder Meetings | |||
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Whenever stockholders are required or permitted to take any action at a meeting, they must be given notice that states the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Notice must be given no less than ten and no more than 60 days before the date of the meeting. | | | Whenever stockholders are required or permitted to take any action at a meeting, they must be given notice that states the place, date and time of the meeting, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at any such meeting. Notice must be given no less than ten and no more than 60 days before the date of the meeting. |
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Adjournment of Stockholder Meetings | |||
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Any meeting of the stockholders may be adjourned if (i) no quorum is present for the transaction of business, (ii) the Rocket board determines that adjournment is necessary or appropriate to enable the stockholders to consider fully information which the Rocket board determines has not been made sufficiently or timely available to stockholders, or (iii) the Rocket board determines that adjournment is otherwise in the best interests of the company. When a meeting is adjourned to another time or place, if any, notice need not be given of the adjourned meeting if the time, place, if any, thereof, and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken. At any adjourned meeting, Rocket may transact any business which might have been transacted at the original meeting. | | | Any meeting of the stockholders may be adjourned if (i) no quorum is present for the transaction of business, (ii) the Renovacor board determines that adjournment is necessary or appropriate to enable the stockholders to consider fully information which the Renovacor board determines has not been made sufficiently or timely available to stockholders, or (iii) by the affirmative vote of the Renovacor board, the chairperson or presiding officer of the meeting. When a meeting is adjourned to another time or place, notice is not required if the time and place are announced at the meeting at which the adjournment is taken; provided that notice must be given to any stockholder entitled to vote at the adjourned meeting if the adjournment is longer than 30 days or if a new record date is fixed for the adjourned meeting. At the adjourned meeting, Renovacor may transact any business that might have been transacted at the original meeting. |
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Limitation of Personal Liability of Directors | |||
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The Rocket bylaws provide that each Rocket director will be indemnified and held harmless to the fullest extent authorized by the DGCL. | | | The Renovacor charter provides that no Renovacor director will be personally liable to Renovacor or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the DGCL, except for liability (i) for any breach of the director’s duty of loyalty to Renovacor or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from which the director derived an improper personal benefit. |
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Indemnification of Directors and Officers | |||
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The Rocket charter and bylaws provide that Rocket will indemnify its directors and officers who was or is a party or is made or is threatened to be made a party or is otherwise involved in proceeding, whether civil, | | | The Renovacor charter and bylaws provide that Renovacor will indemnify its directors and executive officers who was or is a party or is made or is threatened to be made a party or is otherwise involved |
criminal, administrative or investigative, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred by such person. Rocket is also obligated, to the fullest extent not prohibited by applicable law, to pay the expenses (including attorneys’ fees) incurred by any officer or director of Rocket, and may pay the expenses incurred by any employee or agent of Rocket, in defending any proceeding in advance of its final disposition, subject to limited exceptions. Rocket has also entered into indemnification agreements with certain directors and officers. These agreements, among other things, indemnify Rocket directors and officers for certain expenses (including attorneys’ fees), judgments, fines and settlement payments incurred in any action in connection with the good faith performance of their duties as a director or officer. | | | in proceeding, by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer of the corporation, against all liability and loss suffered and expenses (including attorneys’ fees) reasonably incurred by such person. Renovacor is also obligated to advance to any director who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or arbitration, alternate dispute resolution mechanism, inquiry, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative, arbitrative or investigative, all expenses incurred by any director in connection with such proceeding; provided, however, that no advance shall be made if such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the corporation. Renovacor has also entered into indemnification agreements with certain directors and executive officers. These agreements, among other things, indemnify Renovacor directors and executive officers for certain expenses (including attorneys’ fees), judgments, fines and settlement payments incurred in any action in connection with the good faith performance of their duties as a director or executive officer. |
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Rights Upon Liquidation | |||
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Upon the voluntary or involuntary liquidation, dissolution or winding up of Rocket, the net assets of Rocket will be distributed pro rata to the holders of Rocket common stock. | | | Subject to the rights of the preferred stockholders, upon the voluntary or involuntary liquidation, dissolution or winding up of Renovacor, the net assets of Renovacor shall be distributed pro rata to the holders of the common stock. |
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Stockholder Rights Plan | |||
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The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Rocket does not have a stockholder rights plan currently in effect. | | | The DGCL does not include a statutory provision expressly validating stockholder rights plans. However, such plans have generally been upheld by the decisions of courts applying Delaware law. Renovacor does not have a stockholder rights plan currently in effect. |
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Transactions under DGCL Section 203 | |||
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Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (a) together with its affiliates and associates, owns or | | | Section 203 of the DGCL generally prohibits a Delaware corporation from engaging in a business combination with an “interested stockholder” that acquires more than 15% but less than 85% of the corporation’s outstanding voting stock for three years following the time that person becomes an “interested stockholder” (generally defined as a holder who (a) together with its affiliates and associates, owns or |
(b) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Rocket charter has not opted out of Section 203. Although the DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above, the Rocket charter does not require a greater vote. | | | (b) is an affiliate or associate of the corporation and, together with that person’s affiliates and associates, has owned at any time within the previous three years, at least 15% of the corporation’s outstanding shares), unless prior to the date the person becomes an interested stockholder, the corporation’s board approves either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder or the business combination is approved by the corporation’s board and by the affirmative vote of at least two-thirds of the corporation’s outstanding voting stock that is not owned by the interested stockholder at a meeting of stockholders (and not by written consent) or other specified exceptions are met. The DGCL allows a corporation’s certificate of incorporation to contain a provision expressly electing not to be governed by Section 203, but the Renovacor charter has not opted out of Section 203. Although the DGCL permits a Delaware corporation’s certificate of incorporation to provide for a greater vote for a merger, consolidation or sale of substantially all the assets of a corporation than the vote described above, the Renovacor charter does not require a greater vote. |
Name of Beneficial Owner (>5%) | | | Shares of Rocket Common Stock Owned | | | Percentage of Total Outstanding Rocket Common Stock (%)(1) |
5% Stockholders | | | | | ||
RTW Investments, LP(1) 40 10th Avenue, Floor 7 New York, NY 10014 | | | 16,272,635 | | | 21.5% |
Wellington Management Group, LLP(2) 280 Congress Street Boston, MA, 02210 | | | 3,490,879 | | | 4.6% |
Blackrock, Inc.(3) 55 East 52nd Street New York, NY 10055 | | | 3,339,469 | | | 4.4% |
The Vanguard Group(4) 100 Vanguard Blvd Malvern, PA 19355 | | | 3,301,138 | | | 4.4% |
Named executive officers and directors | | | | | ||
David P. Southwell(5) | | | 388,270 | | | *% |
Carsten Boess(6) | | | 122,486 | | | *% |
Pedro Granadillo(7) | | | 104,615 | | | *% |
Gotham Makker, M.D.(8) | | | 1,476,096 | | | 2% |
Kinnari Patel, Pharm.D., MBA(9) | | | 964,610 | | | 1.3% |
Gaurav Shah, M.D.(10) | | | 2,151,324 | | | 2.8% |
Roderick Wong, M.D.(1) | | | 16,402,430 | | | 21.7% |
Naveen Yalamanchi, M.D.(11) | | | 215,877 | | | *% |
Elisabeth Björk, M.D., Ph.D.(12) | | | 73,935 | | | *% |
Jonathan Schwartz(13) | | | 388,435 | | | *% |
Martin Wilson(14) | | | — | | | *% |
Fady Malik, M.D., Ph.D.(14) | | | — | | | *% |
John Militello(15) | | | 104,176 | | | *% |
* | Represents beneficial ownership of less than one percent. |
(1) | Based on Schedule 13D, jointly filed by RTW Investments, LP (“RTW”) and Roderick Wong with the SEC on September 21, 2022. According to the Schedule 13D, the reporting persons had shared voting power and shared dispositive power with respect to 16,272,635 shares, and did not have sole voting power or dispositive power as to any shares. According to the Schedule 13D/A, the shares of Rocket common stock beneficially owned by the reporting persons are held by one or more funds (together the “RTW Funds”) managed by RTW Investments, LP (the “RTW Adviser”). The RTW Adviser, in its capacity as the investment manager of the RTW Funds, has the power to vote and the power to direct the disposition of all such shares of Rocket common stock held by the RTW Funds. Roderick Wong is the Managing Partner and Chief Investment Officer of the RTW Adviser. Roderick Wong is a control person of RTW and Chairman of the Board. |
(2) | Based on Schedule 13G, filed by Wellington Management Group, LLP, with the SEC on February 4, 2022. According to the Schedule 13G, the reporting persons had shared dispositive power with respect to 3,490,879 shares of Rocket common stock, and did not have sole voting or dispositive power as to any shares of Rocket common stock. |
(3) | Based on Schedule 13G, filed by Blackrock, Inc. with the SEC on February 4, 2022. According to the Schedule 13G, the reporting persons had sole voting power with respect to 3,296,025 shares of Rocket common stock, sole dispositive power with respect to 3,339,469 shares, and did not have shared voting or dispositive power as to any shares of Rocket common stock. |
(4) | Based on Schedule 13G, filed by The Vanguard Group with the SEC on February 9, 2022. According to the Schedule 13G, the reporting persons had shared voting power and shared dispositive power with respect to 3,301,138 shares of Rocket common stock, and did not have sole voting power or dispositive power as to any shares of Rocket common stock. |
(5) | Consists of (i) 95,160 shares of Rocket common stock, and (ii) 293,110 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 9, 2022. |
(6) | Consists of 122,486 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(7) | Consists of 104,615 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(8) | Consists of (i) 1,331,486 shares of Rocket common stock held by Simran Investment Group, and (ii) 144,610 shares of Rocket common stock issuable upon the exercise of options within 60 days after October 7, 2022. Dr. Makker exercises voting and dispositive control over the securities held by Simran Investment Group and is therefore deemed be the beneficial owner of securities owned or controlled by Simran Investment Group. |
(9) | Consists of (i) 195,614 shares of Rocket common stock, (ii) 98,261 shares of Rocket common stock owned by Adaptive Technologies, LLC, a limited liability company that is owned and managed by Dr. Patel’s husband, (iii) 5,675 shares of Rocket common stock owned by Dr. Patel’s husband, and (iv) 665,060 shares of Rocket common stock common stock issuable upon the exercise of stock options within 60 days after October 7, 2022. |
(10) | Consists of (i) 904,277 shares of Rocket common stock and (ii) 1,246,547 Rocket shares of common stock issuable upon the exercise of options exercisable within 60 days after October 9, 2022. |
(11) | Consists of (i) 113,641 shares of Rocket common stock owned by the Naveen Yalamanchi Revocable Living Trust dated February 9, 2016, of which Dr. Yalamanchi is the trustee and (ii) 102,236 shares of Rocket common stock issuable upon the exercise of options within 60 days of April 18, 2022. Dr. Yalamanchi has a pecuniary interest in RTW, but the beneficial ownership of Dr. Yalamanchi in the table above does not reflect such ownership. Dr. Yalamanchi has no voting or dispositive power over the shares of Rocket common stock held by RTW. |
(12) | Consists of 73,935 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(13) | Consists of (i) 89,529 shares of Rocket common stock, (ii) 298,906 shares of common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(14) | Consists of 0 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(15) | Consists of 104,176 shares of Rocket common stock issuable upon the exercise of options exercisable within 60 days after October 7, 2022. |
(16) | Includes only current directors and executive officers serving in such capacity on the date of the table. Consists of the shares and stock options held by Dr. Björk, Mr. Southwell, Mr. Boess, Mr. Granadillo, Dr. Malik, Dr. Makker, Dr. Shah, Dr. Wong, and Dr. Yalamanchi and shares and stock options held by current executive officers of Rocket. |
Name and Address of Beneficial Owner(1) | | | Number of Shares | | | % |
Five Percent Holders: | | | | | ||
Acorn Bioventures, L.P.(2) | | | 1,713,342 | | | 9.99% |
Arthur Feldman, M.D.(3) | | | 1,009,445 | | | 6.02% |
Broadview Ventures I LLC(4) | | | 974,529 | | | 5.81% |
Innogest Capital(5) | | | 984,546 | | | 5.87% |
RTW Investments, LP(6) | | | 3,175,803 | | | 18.74% |
Citadel Advisors LLC(7) | | | 1,199,014 | | | 7.09% |
Altium Capital Management, LP(8) | | | 1,120,406 | | | 6.40% |
Chardan Investments, 2 LLC (9) | | | 1,860,500 | | | 9.99% |
Directors and Executive Officers: | | | | | ||
Magdalene Cook, M.D.(10) | | | 526,070 | | | 3.12% |
Fred Driscoll(11) | | | — | | | * |
Wendy DiCicco(12) | | | 19,565 | | | * |
Joseph Carroll (13) | | | 8,088 | | | * |
Matthew Killeen, Ph.D.(14) | | | 79,698 | | | * |
Marc Semigran, M.D. (15) | | | 152,684 | | | * |
Gbola Amusa, M.D.(16) | | | 286,088 | | | 1.71% |
Edward J. Benz, Jr., M.D.(17) | | | 13,917 | | | * |
Gregory F. Covino (18) | | | 7,500 | | | * |
Jonas Grossman, MBA(19) | | | 2,262,657 | | | 12.14% |
Joan Lau, Ph.D. (20) | | | 7,500 | | | * |
Thomas Needham, MBA (21) | | | 7,500 | | | * |
All Directors and Executive Officers as a group (12 individuals)(22) | | | 3,371,267 | | | 17.73% |
(1) | Unless otherwise indicated, the business address of each of the directors and officers is c/o Renovacor, Inc., 201 Broadway, Suite 310, Cambridge, Massachusetts, 02139. |
(2) | Consists of (i) 1,331,342 shares of Renovacor common stock originally issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and updated through October 7, 2022 and (ii) 382,000 shares of Renovacor common stock underlying the Pre-Funded Warrant, exercisable to purchase one share of Renovacor common stock at $0.01, which are exercisable within 60 days up and until the 9.99% beneficial ownership limitation. Excludes 333,224 shares of Renovacor common stock underlying the Pre-Funded Warrant that are not currently exercisable based on the 9.99% beneficial ownership limitation. Isaac Manke, a director of the board of directors of Chardan Healthcare Acquisition 2 Corp. prior to the Business Combination, is a member |
(3) | Consists of (i) 1,004,433 shares of Renovacor common stock held by Dr. Feldman, including (a) 994,433 shares of Renovacor common stock issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and (b) 10,000 shares of Renovacor common stock issued in the PIPE Investment, and (ii) 5,012 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 2, 2022. |
(4) | Consists of (i) 443,823 shares of Renovacor common stock held by Broadview Ventures I, LLC, or Broadview Ventures, and (ii) 530,706 shares held by Longview Healthcare Ventures, LLC, or Longview Ventures, an affiliate of Broadview Ventures. The address for the reporting persons is Goodman’s Bay Corporate Center, West Bay Street, P.O. Box N-3933, Nassau, Bahamas. The information in this footnote is based on a Schedule 13D filed with the SEC on September 13, 2021. |
(5) | Consists of shares of Renovacor common stock held by the following affiliates of Innogest Capital: (i) 437,120 shares of Renovacor common stock issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and 194,953 shares of Renovacor common stock issued in the PIPE Investment to Renovaholding M S.r.l.; (ii) 220,949 shares of Renovacor common stock issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and 85,147 shares of Renovacor common stock issued in the PIPE Investment to Elysia Capital; and (iii) 33,477 shares of Renovacor common stock issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and 12,900 shares of Renovacor common stock issued in the PIPE Investment to Francesco Loredan. The address for the reporting persons is c/o Renovaholding M S.r.l., Via Locatelli 2, 20124 Milan, Italy. |
(6) | Consists of (i) 3,000,803 shares of Renovacor common stock collectively held by affiliates of RTW Investments, LP, or RTW Investments, including RTW Master Fund, Ltd. and RTW Innovation Master Fund, Ltd., or the RTW Funds, and (ii) 175,000 shares of Renovacor common stock underlying warrants held by the RTW Funds. RTW Investments is the investment advisor to the RTW Funds. Mr. Roderick Wong is the Managing Partner and Chief Investment Officer of RTW Investments and as such has sole voting and investment control over such shares. Dr. Wong disclaims beneficial ownership of such shares except to the extent of any pecuniary interest therein. The address of RTW Investments, LP and Dr. Wong is 40 10th Avenue, Floor 7, New York, New York, 10014. The information in this footnote is based on a Schedule 13D filed with the SEC on September 21, 2022. |
(7) | Consists of (i) 1,049,014 shares of Renovacor common stock collectively held by Citadel Multi-Strategy Equities Master Fund Ltd., or Citadel MEM Fund, an affiliate of Citadel Advisors LLC, or Citadel Advisors, and (ii) 150,000 shares of Renovacor common stock underlying warrants held by Citadel MEM Fund. Citadel Advisors is the portfolio manager for Citadel MEM Fund. Citadel Advisors Holdings LP is the sole member of Citadel Advisors. Citadel GP LLC, or CGP, is the general partner of Citadel Advisors Holdings LP. Citadel Securities Group LP, or CALC4, is the non-member manager of Citadel Securities. Citadel Securities GP LLC, or CSGP, is the general partner of CALC4. Kenneth Griffin is the President and Chief Executive Officer of CGP, and owns a controlling interest in CGP and CSGP. Mr. Griffin, as the owner of a controlling interest in CGP, may be deemed to have shared power to vote or dispose of the securities held by the reporting person. The address for the reporting persons is 131 S. Dearborn Street, 32nd Floor, Chicago, Illinois 60603. The information in this footnote is based on Amendment No. 1 to Schedule 13G filed with the SEC on February 14, 2022. |
(8) | Consists of (i) 388,845 shares of Renovacor common stock collectively held by affiliates of Altium Capital Management, LP, or Altium Capital, including Altium Growth Fund, LP and Altium Growth GP, LLC, or the Altium Funds, and (ii) 731,561 shares of Renovacor common stock underlying warrants held by the Altium Funds. Altium Growth Fund, LP is the record and direct beneficial owner of these securities. Altium Capital Management, LP is the investment adviser of, and may be deemed to beneficially own securities, owned by, the Altium Growth Fund, LP. Altium Growth GP, LLC is the general partner of, and may be deemed to beneficially own securities owned by, the Altium Growth Fund, LP. The address of the Altium Funds is 152 West 57th Street, FL 20, New York, NY 10019. The information in this footnote is based on the Schedule 13G filed with the SEC on February 14, 2022. |
(9) | Consists of 1,860,500 shares of Renovacor common stock underlying warrants that are exercisable within 60 days to purchase one share of Renovacor common stock at an exercise price of $11.50, held by Chardan Investments which are currently exercisable up and until the 9.99% beneficial ownership limitation and excludes (i) 500,000 shares of Renovacor common stock being held in escrow and subject to vesting or forfeiture based on satisfaction of the earnout milestones set forth in that certain Sponsor Support Agreement and (ii) 1,639,500 shares underlying warrants, exercisable to purchase one share of Renovacor common stock at an exercise price of $11.50, held by Chardan Investments which are not currently exercisable based on the 9.99% beneficial ownership limitation. Chardan Investments 2, LLC originally owned 1,605,661 shares of Renovacor common stock held by Chardan Investments 2, LLC or Chardan Investments. However, Chardan Investments 2, LLC, distributed 1,605,661 shares of the Company's stock for no consideration to certain of its members representing each individual's pro-rata contributions to Chardan Investments 2, LLC, including 354,657 shares to Mr. Grossman and 238,588 shares to Mr. Amusa in April 2022. The address for the reporting persons is c/o Chardan Healthcare Acquisition 2 Corp., 17 State Street, 21st Floor, New York, NY 10004. |
(10) | Consists of (i) 451,448 shares of Renovacor common stock held by Dr. Cook, including (a) 401,448 shares of Renovacor common stock issued as a portion of the aggregate merger consideration and/or pursuant to Old Renovacor’s Investor Incentive Plan and (b) 50,000 shares of Renovacor common stock issued in the PIPE Investment and, (ii) 74,622 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(11) | Mr. Driscoll has resigned from his position as the Chief Financial Officer of the Company as of June 17, 2022. |
(12) | Consists of 19,565 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(13) | Consists of 8,088 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(14) | Consists of 79,698 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(15) | Consists of 152,684 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(16) | Consists of (i) 278,588 shares of Renovacor common stock held by Mr. Amusa and (ii) 7,500 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(17) | Consists of 13,917 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(18) | Consists of 7,500 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(19) | Consists of (i) 1,860,500 warrants held by Chardan Investment 2, LLC that are exercisable within 60 days up and until the 9.99% blocker in place as Mr. Grossman is the managing member of Chardan Investment 2, LLC, (ii) 394,657 shares of Renovacor common stock held by Mr. Grossman, and (iii) 7,500 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. The address for the reporting persons is c/o Chardan Healthcare Acquisition 2 Corp., 17 State Street, 21st Floor, New York, NY 10004. |
(20) | Consists of 7,500 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(21) | Consists of 7,500 shares of Renovacor common stock underlying outstanding stock options that are exercisable within 60 days after October 7, 2022. |
(22) | Includes 1,860,500 shares of Renovacor common stock underlying warrants and 386,074 shares of Renovacor common stock underlying outstanding stock options held by our directors and NEOs as a group that are exercisable within 60 days of October 7, 2022. |
• | Rocket’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on February 28, 2022; |
• | the information specifically incorporated by reference in Rocket’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 from Rocket’s definitive proxy statement on Schedule 14A for Rocket’s 2022 annual meeting of stockholders, filed with the SEC on April 29, 2022; |
• | Rocket’s Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2022 and June 30, 2022, filed with the SEC on May 6, 2022 and August 9, 2022, respectively; |
• | Rocket’s Current Reports on Form 8-K (excluding any information and exhibits furnished under Item 2.02 or 7.01 thereof) filed with the SEC on March 1, 2022, March 11, 2022, June 15, 2022, September 9, 2022, September 20, 2022, October 3, 2022 and October 4, 2022; and |
• | Rocket’s description of shares of Rocket common stock contained in Exhibit 4.2 to Rocket’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 and any amendment or report filed for the purpose of updating such description. |
(In thousands, except share and per share amounts) | | | June 30, 2022 | | | December 31, 2021* |
ASSETS | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $61,993 | | | $78,790 |
Prepaid expenses | | | 1,221 | | | 1,763 |
Total current assets | | | 63,214 | | | 80,553 |
Property and equipment, net | | | 913 | | | 379 |
Operating lease right-of-use assets | | | 539 | | | — |
Other | | | 56 | | | 67 |
Total assets | | | $64,722 | | | $80,999 |
| | | | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,546 | | | $1,536 |
Accrued expenses | | | 2,341 | | | 2,498 |
Operating lease liability | | | 238 | | | — |
Total current liabilities | | | 4,125 | | | 4,034 |
Warrant liability | | | 980 | | | 11,165 |
Share earnout liability (includes 500,000 shares of Common stock, $0.0001 par value per share, subject to forfeiture, issued and outstanding at June 30, 2022 and December 31, 2021 – Note 3) | | | 1,938 | | | 12,256 |
Operating lease liability, net of current portion | | | 327 | | | — |
Total liabilities | | | 7,370 | | | 27,455 |
| | | | |||
Commitments and contingencies (Note 8) | | | | | ||
| | | | |||
Stockholders’ equity: | | | | | ||
Preferred stock, $0.0001 par value per share; 1,000,000 shares authorized; none issued or outstanding at June 30, 2022 and December 31, 2021 | | | — | | | — |
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 16,767,690 and 16,756,042 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively | | | 2 | | | 2 |
Additional paid-in capital | | | 73,778 | | | 72,540 |
Accumulated deficit | | | (16,428) | | | (18,998) |
Total stockholders’ equity | | | 57,352 | | | 53,544 |
Total liabilities and stockholders’ equity | | | $64,722 | | | $80,999 |
* | The condensed balance sheet at December 31, 2021 has been derived from the audited financial statements at that date. |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
(In thousands, except share and per share amounts) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | $6,289 | | | $3,333 | | | $12,219 | | | $4,488 |
General and administrative | | | 2,838 | | | 385 | | | 5,763 | | | 912 |
Loss from operations | | | (9,127) | | | (3,718) | | | (17,982) | | | (5,400) |
Other income (expense): | | | | | | | | | ||||
Interest income | | | 45 | | | — | | | 49 | | | — |
Change in fair value of warrant liability | | | 2,905 | | | — | | | 10,185 | | | — |
Change in fair value of share earnout liability | | | 2,152 | | | — | | | 10,318 | | | — |
Other income (expense), net | | | 1 | | | — | | | — | | | — |
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
| | | | | | | | |||||
Net income (loss) per share | | | | | | | | | ||||
— Basic | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
— Diluted | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
Weighted-average number of common shares used in computing net income (loss) per share – (Note 13) | | | | | | | | | ||||
— Basic | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
— Diluted | | | 17,478,008 | | | 6,274,566 | | | 17,550,126 | | | 6,274,566 |
| | Six months ended June 30, | ||||
(In thousands) | | | 2022 | | | 2021 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | ||
Net income (loss) | | | $2,570 | | | $(5,400) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,233 | | | 192 |
Gain on change in fair value of warrant liability | | | (10,185) | | | — |
Gain on change in fair value of share earnout liability | | | (10,318) | | | — |
Depreciation expense | | | 36 | | | 1 |
Change in assets and liabilities: | | | | | ||
Prepaid expenses | | | 542 | | | (438) |
Accounts payable | | | (95) | | | 1,157 |
Accrued expenses | | | 150 | | | 438 |
Other | | | 37 | | | — |
Net cash used in operating activities | | | (16,030) | | | (4,050) |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | ||
Acquisitions of property and equipment | | | (719) | | | — |
Net cash used in investing activities | | | (719) | | | — |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | ||
Merger-related costs | | | (53) | | | (885) |
Proceeds from issuance of common stock upon exercise of stock options | | | 5 | | | — |
Net cash used in financing activities | | | (48) | | | (885) |
Net decrease in cash and cash equivalents | | | (16,797) | | | (4,935) |
Cash and cash equivalents at beginning of period | | | 78,790 | | | 5,384 |
Cash and cash equivalents at end of period | | | $61,993 | | | $449 |
| | | | |||
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: | | | | | ||
Deferred merger costs in accounts payable | | | $— | | | $1,439 |
Property and equipment in accounts payable and accrued expenses | | | $211 | | | $— |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFO: | | | | | ||
Cash paid for amounts included in measurement of lease liabilities | | | $59 | | | $— |
Right-of-use assets obtained in exchange for new operating lease obligations | | | $575 | | | $— |
| | Six Months Ended June 30, 2022 | |||||||||||||
| | Common Stock | | | Additional Paid-in- Capital | | | Accumulated Deficit | | | Total Stockholders' Equity | ||||
(In thousands, except share amounts) | | | Shares | | | Amount | | ||||||||
Balance, December 31, 2021 | | | 16,756,042 | | | $2 | | | $72,540 | | | $(18,998) | | | $53,544 |
Stock-based compensation | | | — | | | — | | | 601 | | | — | | | 601 |
Net income | | | — | | | — | | | — | | | 6,594 | | | 6,594 |
Balance, March 31, 2022 | | | 16,756,042 | | | $2 | | | $73,141 | | | $(12,404) | | | $60,739 |
Issuance of common stock upon exercise of stock options | | | 11,648 | | | — | | | 5 | | | — | | | 5 |
Stock-based compensation | | | — | | | — | | | 632 | | | — | | | 632 |
Net loss | | | — | | | — | | | — | | | (4,024) | | | (4,024) |
Balance, June 30, 2022 | | | 16,767,690 | | | $2 | | | $73,778 | | | $(16,428) | | | $57,352 |
| | Six Months Ended June 30, 2021 | |||||||||||||||||||
| | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in- Capital | | | Accumulated Deficit | | | Total Stockholders’ Equity (Deficit) | |||||||
(In thousands, except share amounts) | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||
Balance, December 31, 2020 | | | 2,578,518 | | | $10,074 | | | 1,953,368 | | | $— | | | $121 | | | $(4,897) | | | $(4,776) |
Retroactive application of reverse recapitalization (Note 3) | | | (2,578,518) | | | (10,074) | | | 4,321,198 | | | 1 | | | 10,073 | | | — | | | 10,074 |
Balance, December 31, 2020, effect of Merger | | | — | | | $— | | | 6,274,566 | | | $1 | | | $10,194 | | | $(4,897) | | | $5,298 |
Issuance of restricted common stock | | | — | | | — | | | 30,495 | | | — | | | — | | | — | | | — |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 7 | | | — | | | 7 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (1,681) | | | (1,681) |
Balance, March 31, 2021 | | | — | | | $— | | | 6,305,061 | | | $1 | | | $10,201 | | | $(6,578) | | | $3,624 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 185 | | | — | | | 185 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (3,719) | | | (3,719) |
Balance, June 30, 2021 | | | — | | | $— | | | 6,305,061 | | | $1 | | | $10,386 | | | $(10,297) | | | $90 |
| | Target Price | | | Old Renovacor Earnout Shares | | | Sponsor Earnout Shares | | | Total | |
December 31, 2023 | | | $17.50 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2025 | | | $25.00 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2027 | | | $35.00 | | | 769,126 | | | 200,000 | | | 969,126 |
| | | | 1,922,816 | | | 500,000 | | | 2,422,816 |
(In thousands) | | | Amount |
Cash – CHAQ trust and cash, net of redemptions | | | $65,127 |
Cash – PIPE financing | | | 29,993 |
Less: CHAQ and Old Renovacor transaction costs paid | | | (6,079) |
Less: Settlement of convertible note at closing | | | (2,500) |
Effect of Merger, net of redemptions and transaction costs | | | $86,541 |
| | Number of Shares | |
Common stock, outstanding prior to Merger | | | 8,622,644 |
Less: redemption of CHAQ shares | | | (2,112,100) |
Common stock of CHAQ | | | 6,510,544 |
CHAQ Founder shares | | | 2,155,661 |
Shares issued in PIPE Financing | | | 2,284,776 |
Merger and PIPE financing shares – common stock | | | 10,950,981 |
Shares issued to Old Renovacor – common stock(1) | | | 6,305,061 |
Total shares of common stock immediately after Merger(2) | | | 17,256,042 |
(1) | The number of shares of common stock issued to Old Renovacor equityholders was determined based on (i) 1,987,636 shares of Old Renovacor Common Stock outstanding immediately prior to the closing of the Merger converted based on the Common Per Share Merger Consideration (as defined in the Merger Agreement) and (ii) 2,578,518 shares of Old Renovacor Preferred Stock outstanding immediately prior to the closing of the Merger converted based on the Preferred Per Share Merger Consideration (as defined in the Merger Agreement). All fractional shares were rounded down. |
(2) | Includes 500,000 shares of common stock being held in escrow and subject to vesting or forfeiture based on satisfaction of the Earnout Milestones set forth in the Sponsor Support Agreement. Such shares are liability classified and included in the Share earnout liability as of June 30, 2022 and December 31, 2021. |
| | June 30, 2022 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $60,997 | | | $60,997 | | | $— | | | $— |
Total assets | | | $60,997 | | | $60,997 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $980 | | | $— | | | $— | | | $980 |
Share earnout liability | | | 1,938 | | | — | | | — | | | 1,938 |
Total liabilities | | | $2,918 | | | $— | | | $— | | | $2,918 |
| | December 31, 2021 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $77,792 | | | $77,792 | | | $— | | | $— |
Total assets | | | $77,792 | | | $77,792 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $11,165 | | | $— | | | $— | | | $11,165 |
Share earnout liability | | | 12,256 | | | — | | | — | | | 12,256 |
Total liabilities | | | $23,421 | | | $— | | | $— | | | $23,421 |
(In thousands) | | | Warrant Liability | | | Earnout Share Liability |
Balance, December 31, 2021 | | | $11,165 | | | $12,256 |
Change in the fair value of liability | | | (10,185) | | | (10,318) |
Balance, June 30, 2022 | | | $980 | | | $1,938 |
| | June 30, 2022 | | | December 31, 2021 | |
Stock price | | | $2.03 | | | $7.70 |
Strike price | | | $11.50 | | | $11.50 |
Expected volatility | | | 80.0% | | | 75.0% |
Risk-free interest rate | | | 2.94% | | | 1.01% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 2.82 | | | 3.31 |
Fair value per warrant | | | $0.28 | | | $3.19 |
| | June 30, 2022 | | | December 31, 2021 | |
Stock price | | | $2.03 | | | $7.70 |
Probability of Change in Control | | | 20.0% | | | 7.5% |
Expected volatility | | | 80.0% | | | 75.0% |
Risk-free interest rate | | | 3.02% | | | 1.35% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 5.51 | | | 6.00 |
Fair value per share | | | $0.80 | | | $5.06 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Laboratory equipment | | | $897 | | | $380 |
Leasehold improvements | | | 53 | | | — |
Total property and equipment, at cost | | | 950 | | | 380 |
Less: accumulated depreciation and amortization | | | (37) | | | (1) |
Property and equipment, net | | | $913 | | | $379 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Research and development costs | | | $530 | | | $209 |
Insurance | | | 401 | | | 1,369 |
Other | | | 290 | | | 185 |
Total prepaid expenses | | | $1,221 | | | $1,763 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Employee compensation and benefits | | | $1,339 | | | $1,282 |
External research and development expenses | | | 639 | | | 409 |
Property and equipment | | | 53 | | | 360 |
Professional fees | | | 166 | | | 347 |
Other | | | 144 | | | 100 |
Total accrued expenses | | | $2,341 | | | $2,498 |
($ in thousand) | | | Operating Leases |
Remainder of 2022 | | | $146 |
2023 | | | 254 |
2024 | | | 76 |
2025 | | | 16 |
2026 | | | 17 |
Thereafter | | | 124 |
Total lease payments | | | $633 |
Less: imputed interest | | | (68) |
Total present value of lease liabilities | | | $565 |
| | June 30, 2022 | |
Weighted-average remaining lease term (in years): | | | |
Operating leases | | | 4.24 |
Weighted-average discount rate: | | | |
Operating leases | | | 2.97% |
| | Number of Warrants | | | | | ||||||
| | June 30, 2022 | | | December 31, 2021 | | | Weighted-Average Exercise Price | | | Expiration Date | |
Liability-classified Warrants | | | | | | | | | ||||
April 2020 Private Placement Warrants | | | 3,500,000 | | | 3,500,000 | | | $11.50 | | | 4/23/2025 |
| | 3,500,000 | | | 3,500,000 | | | | | |||
Equity-classified Warrants | | | | | | | | | ||||
April 2020 Public Warrants(1) | | | 8,622,644 | | | 8,622,644 | | | $11.50 | | | 9/2/2026 |
September 2021 Pre-Funded Warrants(2) | | | 715,224 | | | 715,224 | | | $0.01 | | | — |
| | 9,337,868 | | | 9,337,868 | | | | | |||
Total outstanding | | | 12,837,868 | | | 12,837,868 | | | | |
(1) | Public Warrants assumed in the Merger. Each warrant share is exercisable for one-half share of common stock, provided, however, each warrant must be exercised in multiples of two. |
(2) | Pre-Funded Warrant issued in connection with PIPE Investment (Note 3). Each warrant share is exercisable indefinitely for one share of common stock. |
| | Amount | |
Shares issuable upon exercise of pre-funded warrants outstanding | | | 715,224 |
Shares issuable upon exercise of warrants outstanding | | | 7,811,322 |
Shares issuable upon issuance of contingent consideration (Earnout Shares and Earnout RSUs) | | | 1,994,338 |
Shares issuable upon exercise of outstanding stock options | | | 2,140,201 |
Shares issuable upon vesting of time-based restricted stock units | | | 163,350 |
Shares reserved for future issuance under 2021 Incentive Plan | | | 814,420 |
Total | | | 13,638,855 |
| | Three months ended June 30, | | | Six Months Ended June 30, | |||||||
($ in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Research and development | | | $328 | | | $176 | | | $673 | | | $179 |
General and administrative | | | 304 | | | 9 | | | 560 | | | 13 |
Total stock-based compensation expense | | | $632 | | | $185 | | | $1,233 | | | $192 |
| | Six months ended June 30, | ||||
| | 2022 | | | 2021 | |
Expected volatility | | | 77.0% | | | 72.3% |
Risk-free interest rate | | | 2.37% | | | 0.79% |
Expected dividend yield | | | — | | | — |
Expected term (years) | | | 6.03 | | | 5.47 |
($ in thousands, except share and per share data) | | | Stock Options | | | Weighted-Average Exercise Price | | | Weighted-Average Remaining Contractual Life (in years) | | | Aggregate Intrinsic Value |
Outstanding at December 31, 2021 | | | 1,376,937 | | | $7.61 | | | 9.5 | | | $676 |
Granted | | | 953,725 | | | 4.42 | | | | | ||
Exercised | | | (11,648) | | | 0.45 | | | | | ||
Forfeited | | | (178,813) | | | 4.73 | | | | | ||
Expired | | | — | | | — | | | | | ||
Outstanding at June 30, 2022(1) | | | 2,140,201 | | | $6.47 | | | 9.3 | | | $158 |
Exercisable at June 30, 2022 | | | 266,199 | | | $7.18 | | | 8.6 | | | $90 |
(1) | Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. |
| | Time-based Awards | | | Market-based Awards | |||||||
($ in thousands, except per share data) | | | Number of Shares | | | Weighted-Average Grant Date Fair Value | | | Number of Shares | | | Weighted-Average Grant Date Fair Value |
Nonvested shares at December 31, 2021 | | | — | | | $— | | | 72,546 | | | $6.42 |
Granted | | | 163,350 | | | 6.45 | | | — | | | — |
Forfeited | | | — | | | — | | | (1,024) | | | 6.42 |
Vested | | | — | | | — | | | — | | | — |
Nonvested shares at June 30, 2022 | | | 163,350 | | | $6.45 | | | 71,522 | | | $6.42 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
($ in thousands except per share data) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Net income (loss) per share – Basic: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Net income (loss) attributable to common stockholders | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Basic net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | | | | | | | |||||
Net income (loss) per share – Diluted: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Numerator for diluted net income (loss) per share | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Plus: Incremental shares underlying “in the money” options outstanding | | | — | | | — | | | 39,153 | | | — |
Plus: Incremental shares underlying time-based restricted stock units | | | — | | | — | | | 39,632 | | | — |
Denominator for diluted net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,550,126 | | | 6,274,566 |
Diluted net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Stock options | | | 2,140,201 | | | 194,926 | | | 1,826,229 | | | 194,926 |
Restricted stock units | | | 234,872 | | | — | | | 234,872 | | | — |
Common stock warrants | | | 12,122,644 | | | — | | | 12,122,644 | | | — |
Earnout shares | | | 2,422,816 | | | — | | | 2,422,816 | | | — |
Total | | | 16,920,533 | | | 194,926 | | | 16,606,561 | | | 194,926 |
| | /s/ ERNST & YOUNG LLP | |
| | ||
We have served as the Company’s auditor since 2021. | | | |
| | ||
Philadelphia, Pennsylvania | | | |
March 24, 2022 | | |
(In thousands, except share and per share amounts) | | | December 31, 2021 | | | December 31, 2020 |
ASSETS | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $78,790 | | | $5,384 |
Prepaid expenses | | | 1,763 | | | 107 |
Total current assets | | | 80,553 | | | 5,491 |
Property and equipment, net | | | 379 | | | 1 |
Other | | | 67 | | | — |
Total assets | | | $80,999 | | | $5,492 |
| | | | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,536 | | | $137 |
Accrued expenses | | | 2,498 | | | 57 |
Total current liabilities | | | 4,034 | | | 194 |
Warrant liability | | | 11,165 | | | — |
Share earnout liability (includes 500,000 shares of Common stock, $0.0001 par value per share, subject to forfeiture, issued and outstanding at December 31, 2021 – Note 3) | | | 12,256 | | | — |
Total liabilities | | | 27,455 | | | 194 |
| | | | |||
Commitments and contingencies (Note 8) | | | | | ||
| | | | |||
Stockholders’ equity:* | | | | | ||
Preferred stock, $0.0001 par value per share; 1,000,000 shares authorized; none issued or outstanding at December 31, 2021 and 2020 | | | — | | | — |
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 16,756,042 and 6,274,566 shares issued and outstanding at December 31, 2021 and 2020, respectively | | | 2 | | | 1 |
Additional paid-in capital | | | 72,540 | | | 10,194 |
Accumulated deficit | | | (18,998) | | | (4,897) |
Total stockholders’ equity | | | 53,544 | | | 5,298 |
Total liabilities and stockholders’ equity | | | $80,999 | | | $5,492 |
* | Reflects effect of retroactive application of reverse recapitalization (Note 3). |
| | Year Ended December 31, | ||||
(In thousands, except share and per share amounts) | | | 2021 | | | 2020 |
Operating expenses: | | | | | ||
Research and development | | | $11,757 | | | $2,425 |
General and administrative | | | 6,872 | | | 805 |
Loss from operations | | | (18,629) | | | (3,230) |
Other income (expense): | | | | | ||
Interest income (expense), net | | | (146) | | | — |
Change in fair value of derivative liability | | | 80 | | | — |
Change in fair value of warrant liability | | | 2,240 | | | — |
Change in fair value of share earnout liability | | | 2,354 | | | — |
Net Loss | | | $(14,101) | | | $(3,230) |
| | | | |||
Net loss per share – basic and diluted | | | $(1.41) | | | $(0.83) |
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders – basic and diluted | | | 9,976,240 | | | 3,883,316 |
| | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in- Capital | | | Accumulated Deficit | | | Total Stockholders' Equity (Deficit) | |||||||
(In thousands, except share amounts) | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||
Balance, December 31, 2019 (as previously reported) | | | 934,803 | | | $3,439 | | | 1,933,988 | | | $— | | | $95 | | | $(1,667) | | | $(1,572) |
Retroactive application of reverse recapitalization (Note 3) | | | (934,803) | | | (3,439) | | | 1,384,468 | | | — | | | 3,439 | | | — | | | 3,439 |
Balance, December 31, 2019, effect of Merger (Note 3) | | | — | | | $— | | | 3,318,456 | | | $— | | | $3,534 | | | $(1,667) | | | $1,867 |
Issuance of Series A Preferred | | | — | | | — | | | 2,938,864 | | | 1 | | | 6,634 | | | — | | | 6,635 |
Issuance of restricted common stock | | | — | | | — | | | 9,121 | | | — | | | — | | | — | | | — |
Vesting of restricted common stock | | | — | | | — | | | — | | | — | | | 18 | | | — | | | 18 |
Issuance of common stock in exchange for license rights | | | — | | | — | | | 8,125 | | | — | | | 4 | | | — | | | 4 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 4 | | | — | | | 4 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (3,230) | | | (3,230) |
Balance, December 31, 2020 | | | — | | | $— | | | 6,274,566 | | | $1 | | | $10,194 | | | $(4,897) | | | $5,298 |
Issuance of restricted common stock | | | — | | | — | | | 30,495 | | | — | | | — | | | — | | | — |
Effect of Merger and recapitalization (refer to Note 3) | | | — | | | — | | | 8,166,205 | | | 1 | | | 31,269 | | | — | | | 31,270 |
Common stock and pre-funded warrants issued pursuant to PIPE financing | | | — | | | — | | | 2,284,776 | | | — | | | 29,704 | | | — | | | 29,704 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,373 | | | — | | | 1,373 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (14,101) | | | (14,101) |
Balance, December 31, 2021 | | | — | | | $— | | | 16,756,042 | | | $2 | | | $72,540 | | | $(18,998) | | | $53,544 |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | ||
Net loss | | | $(14,101) | | | $(3,230) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,373 | | | 4 |
Shares issued in connection with license agreement | | | — | | | 4 |
Gain on change in fair value of derivative liability | | | (80) | | | — |
Gain on change in fair value of warrant liability | | | (2,240) | | | — |
Gain on change in fair value of share earnout liability | | | (2,354) | | | — |
Amortization of debt discount | | | 136 | | | — |
Depreciation expense | | | 2 | | | 1 |
Change in assets and liabilities: | | | | | ||
Prepaid expenses | | | (1,656) | | | (8) |
Other assets | | | (67) | | | — |
Accounts payable | | | 1,346 | | | (219) |
Accrued expenses | | | 2,081 | | | 36 |
Net cash used in operating activities | | | (15,560) | | | (3,412) |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | ||
Acquisitions of property and equipment | | | (20) | | | — |
Net cash used in investing activities | | | (20) | | | — |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | ||
Proceeds from issuance of Series A convertible preferred stock, net of issuance costs | | | — | | | 6,635 |
Proceeds from issuance of convertible promissory note, net of issuance costs | | | 2,445 | | | — |
Effect of Merger, net of transaction costs (Note 3) | | | 86,541 | | | — |
Net cash provided by financing activities | | | 88,986 | | | 6,635 |
Net increase in cash and cash equivalents | | | 73,406 | | | 3,223 |
Cash and cash equivalents at beginning of period | | | 5,384 | | | 2,161 |
Cash and cash equivalents at end of period | | | $78,790 | | | $5,384 |
| | | | |||
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: | | | | | ||
Merger costs allocated to equity included in accounts payable | | | $53 | | | $— |
Property and equipment in accrued expenses | | | $360 | | | $— |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFO: | | | | | ||
Cash paid during the period for interest | | | $12 | | | $— |
| | Target Price | | | Old Renovacor Earnout Shares | | | Sponsor Earnout Shares | | | Total | |
December 31, 2023 | | | $17.50 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2025 | | | $25.00 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2027 | | | $35.00 | | | 769,126 | | | 200,000 | | | 969,126 |
| | | | 1,922,816 | | | 500,000 | | | 2,422,816 |
(In thousands) | | | Amount |
Cash – CHAQ trust and cash, net of redemptions | | | $65,127 |
Cash – PIPE financing | | | 29,993 |
Less: CHAQ and Old Renovacor transaction costs paid | | | (6,079) |
Less: Settlement of convertible note at closing | | | (2,500) |
Effect of Merger, net of redemptions and transaction costs | | | $86,541 |
| | Number of Shares | |
Common stock, outstanding prior to Merger | | | 8,622,644 |
Less: redemption of CHAQ shares | | | (2,112,100) |
Common stock of CHAQ | | | 6,510,544 |
CHAQ Founder shares | | | 2,155,661 |
Shares issued in PIPE Financing | | | 2,284,776 |
Merger and PIPE financing shares – common stock | | | 10,950,981 |
Shares issued to Old Renovacor – common stock(1) | | | 6,305,061 |
Total shares of common stock immediately after Merger(2) | | | 17,256,042 |
(1) | The number of shares of common stock issued to Old Renovacor equityholders was determined based on (i) 1,987,636 shares of Old Renovacor Common Stock outstanding immediately prior to the closing of the Merger converted based on the Common Per Share Merger Consideration (as defined in the Merger Agreement) and (ii) 2,578,518 shares of Old Renovacor Preferred Stock outstanding immediately prior to the closing of the Merger converted based on the Preferred Per Share Merger Consideration (as defined in the Merger Agreement). All fractional shares were rounded down. |
(2) | Includes 500,000 shares of common stock being held in escrow and subject to vesting or forfeiture based on satisfaction of the Earnout Milestones set forth in the Sponsor Support Agreement. Such shares are liability classified and included in the Share earnout liability as of June 30, 2022 and December 31, 2021. |
| | June 30, 2022 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $60,997 | | | $60,997 | | | $— | | | $— |
Total assets | | | $60,997 | | | $60,997 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $980 | | | $— | | | $— | | | $980 |
Share earnout liability | | | 1,938 | | | — | | | — | | | 1,938 |
Total liabilities | | | $2,918 | | | $— | | | $— | | | $2,918 |
| | December 31, 2021 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $77,792 | | | $77,792 | | | $— | | | $— |
Total assets | | | $77,792 | | | $77,792 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $11,165 | | | $— | | | $— | | | $11,165 |
Share earnout liability | | | 12,256 | | | — | | | — | | | 12,256 |
Total liabilities | | | $23,421 | | | $— | | | $— | | | $23,421 |
(In thousands) | | | Warrant Liability | | | Earnout Share Liability |
Balance, December 31, 2021 | | | $11,165 | | | $12,256 |
Change in the fair value of liability | | | (10,185) | | | (10,318) |
Balance, June 30, 2022 | | | $980 | | | $1,938 |
| | June 30, 2022 | | | December 31, 2021 | |
Stock price | | | $2.03 | | | $7.70 |
Strike price | | | $11.50 | | | $11.50 |
Expected volatility | | | 80.0% | | | 75.0% |
Risk-free interest rate | | | 2.94% | | | 1.01% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 2.82 | | | 3.31 |
Fair value per warrant | | | $0.28 | | | $3.19 |
| | June 30, 2022 | | | December 31, 2021 | |
Stock price | | | $2.03 | | | $7.70 |
Probability of Change in Control | | | 20.0% | | | 7.5% |
Expected volatility | | | 80.0% | | | 75.0% |
Risk-free interest rate | | | 3.02% | | | 1.35% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 5.51 | | | 6.00 |
Fair value per share | | | $0.80 | | | $5.06 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Laboratory equipment | | | $897 | | | $380 |
Leasehold improvements | | | 53 | | | — |
Total property and equipment, at cost | | | 950 | | | 380 |
Less: accumulated depreciation and amortization | | | (37) | | | (1) |
Property and equipment, net | | | $913 | | | $379 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Research and development costs | | | $530 | | | $209 |
Insurance | | | 401 | | | 1,369 |
Other | | | 290 | | | 185 |
Total prepaid expenses | | | $1,221 | | | $1,763 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Employee compensation and benefits | | | $1,339 | | | $1,282 |
External research and development expenses | | | 639 | | | 409 |
Property and equipment | | | 53 | | | 360 |
Professional fees | | | 166 | | | 347 |
Other | | | 144 | | | 100 |
Total accrued expenses | | | $2,341 | | | $2,498 |
($ in thousand) | | | Operating Leases |
Remainder of 2022 | | | $146 |
2023 | | | 254 |
2024 | | | 76 |
2025 | | | 16 |
2026 | | | 17 |
Thereafter | | | 124 |
Total lease payments | | | $633 |
Less: imputed interest | | | (68) |
Total present value of lease liabilities | | | $565 |
| | June 30, 2022 | |
Weighted-average remaining lease term (in years): | | | |
Operating leases | | | 4.24 |
Weighted-average discount rate: | | | |
Operating leases | | | 2.97% |
| | Number of Warrants | | | | | ||||||
| | June 30, 2022 | | | December 31, 2021 | | | Weighted-Average Exercise Price | | | Expiration Date | |
Liability-classified Warrants | | | | | | | | | ||||
April 2020 Private Placement Warrants | | | 3,500,000 | | | 3,500,000 | | | $11.50 | | | 4/23/2025 |
| | 3,500,000 | | | 3,500,000 | | | | | |||
Equity-classified Warrants | | | | | | | | | ||||
April 2020 Public Warrants(1) | | | 8,622,644 | | | 8,622,644 | | | $11.50 | | | 9/2/2026 |
September 2021 Pre-Funded Warrants(2) | | | 715,224 | | | 715,224 | | | $0.01 | | | — |
| | 9,337,868 | | | 9,337,868 | | | | | |||
Total outstanding | | | 12,837,868 | | | 12,837,868 | | | | |
(1) | Public Warrants assumed in the Merger. Each warrant share is exercisable for one-half share of common stock, provided, however, each warrant must be exercised in multiples of two. |
(2) | Pre-Funded Warrant issued in connection with PIPE Investment (Note 3). Each warrant share is exercisable indefinitely for one share of common stock. |
| | Amount | |
Shares issuable upon exercise of pre-funded warrants outstanding | | | 715,224 |
Shares issuable upon exercise of warrants outstanding | | | 7,811,322 |
Shares issuable upon issuance of contingent consideration (Earnout Shares and Earnout RSUs) | | | 1,994,338 |
Shares issuable upon exercise of outstanding stock options | | | 2,140,201 |
Shares issuable upon vesting of time-based restricted stock units | | | 163,350 |
Shares reserved for future issuance under 2021 Incentive Plan | | | 814,420 |
Total | | | 13,638,855 |
| | Three months ended June 30, | | | Six Months Ended June 30, | |||||||
($ in thousands) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Research and development | | | $328 | | | $176 | | | $673 | | | $179 |
General and administrative | | | 304 | | | 9 | | | 560 | | | 13 |
Total stock-based compensation expense | | | $632 | | | $185 | | | $1,233 | | | $192 |
| | Six months ended June 30, | ||||
| | 2022 | | | 2021 | |
Expected volatility | | | 77.0% | | | 72.3% |
Risk-free interest rate | | | 2.37% | | | 0.79% |
Expected dividend yield | | | — | | | — |
Expected term (years) | | | 6.03 | | | 5.47 |
($ in thousands, except share and per share data) | | | Stock Options | | | Weighted-Average Exercise Price | | | Weighted-Average Remaining Contractual Life (in years) | | | Aggregate Intrinsic Value |
Outstanding at December 31, 2021 | | | 1,376,937 | | | $7.61 | | | 9.5 | | | $676 |
Granted | | | 953,725 | | | 4.42 | | | | | ||
Exercised | | | (11,648) | | | 0.45 | | | | | ||
Forfeited | | | (178,813) | | | 4.73 | | | | | ||
Expired | | | — | | | — | | | | | ||
Outstanding at June 30, 2022(1) | | | 2,140,201 | | | $6.47 | | | 9.3 | | | $158 |
Exercisable at June 30, 2022 | | | 266,199 | | | $7.18 | | | 8.6 | | | $90 |
(1) | Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. |
| | Time-based Awards | | | Market-based Awards | |||||||
($ in thousands, except per share data) | | | Number of Shares | | | Weighted-Average Grant Date Fair Value | | | Number of Shares | | | Weighted-Average Grant Date Fair Value |
Nonvested shares at December 31, 2021 | | | — | | | $— | | | 72,546 | | | $6.42 |
Granted | | | 163,350 | | | 6.45 | | | — | | | — |
Forfeited | | | — | | | — | | | (1,024) | | | 6.42 |
Vested | | | — | | | — | | | — | | | — |
Nonvested shares at June 30, 2022 | | | 163,350 | | | $6.45 | | | 71,522 | | | $6.42 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
($ in thousands except per share data) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Net income (loss) per share – Basic: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Net income (loss) attributable to common stockholders | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Basic net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | | | | | | | |||||
Net income (loss) per share – Diluted: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Numerator for diluted net income (loss) per share | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Plus: Incremental shares underlying “in the money” options outstanding | | | — | | | — | | | 39,153 | | | — |
Plus: Incremental shares underlying time-based restricted stock units | | | — | | | — | | | 39,632 | | | — |
Denominator for diluted net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,550,126 | | | 6,274,566 |
Diluted net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Stock options | | | 2,140,201 | | | 194,926 | | | 1,826,229 | | | 194,926 |
Restricted stock units | | | 234,872 | | | — | | | 234,872 | | | — |
Common stock warrants | | | 12,122,644 | | | — | | | 12,122,644 | | | — |
Earnout shares | | | 2,422,816 | | | — | | | 2,422,816 | | | — |
Total | | | 16,920,533 | | | 194,926 | | | 16,606,561 | | | 194,926 |
| | /s/ ERNST & YOUNG LLP | |
| | ||
We have served as the Company’s auditor since 2021. | | | |
| | ||
Philadelphia, Pennsylvania | | | |
March 24, 2022 | | |
(In thousands, except share and per share amounts) | | | December 31, 2021 | | | December 31, 2020 |
ASSETS | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $78,790 | | | $5,384 |
Prepaid expenses | | | 1,763 | | | 107 |
Total current assets | | | 80,553 | | | 5,491 |
Property and equipment, net | | | 379 | | | 1 |
Other | | | 67 | | | — |
Total assets | | | $80,999 | | | $5,492 |
| | | | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,536 | | | $137 |
Accrued expenses | | | 2,498 | | | 57 |
Total current liabilities | | | 4,034 | | | 194 |
Warrant liability | | | 11,165 | | | — |
Share earnout liability (includes 500,000 shares of Common stock, $0.0001 par value per share, subject to forfeiture, issued and outstanding at December 31, 2021 – Note 3) | | | 12,256 | | | — |
Total liabilities | | | 27,455 | | | 194 |
| | | | |||
Commitments and contingencies (Note 8) | | | | | ||
| | | | |||
Stockholders’ equity:* | | | | | ||
Preferred stock, $0.0001 par value per share; 1,000,000 shares authorized; none issued or outstanding at December 31, 2021 and 2020 | | | — | | | — |
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 16,756,042 and 6,274,566 shares issued and outstanding at December 31, 2021 and 2020, respectively | | | 2 | | | 1 |
Additional paid-in capital | | | 72,540 | | | 10,194 |
Accumulated deficit | | | (18,998) | | | (4,897) |
Total stockholders’ equity | | | 53,544 | | | 5,298 |
Total liabilities and stockholders’ equity | | | $80,999 | | | $5,492 |
* | Reflects effect of retroactive application of reverse recapitalization (Note 3). |
| | Year Ended December 31, | ||||
(In thousands, except share and per share amounts) | | | 2021 | | | 2020 |
Operating expenses: | | | | | ||
Research and development | | | $11,757 | | | $2,425 |
General and administrative | | | 6,872 | | | 805 |
Loss from operations | | | (18,629) | | | (3,230) |
Other income (expense): | | | | | ||
Interest income (expense), net | | | (146) | | | — |
Change in fair value of derivative liability | | | 80 | | | — |
Change in fair value of warrant liability | | | 2,240 | | | — |
Change in fair value of share earnout liability | | | 2,354 | | | — |
Net Loss | | | $(14,101) | | | $(3,230) |
| | | | |||
Net loss per share – basic and diluted | | | $(1.41) | | | $(0.83) |
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders – basic and diluted | | | 9,976,240 | | | 3,883,316 |
| | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in- Capital | | | Accumulated Deficit | | | Total Stockholders' Equity (Deficit) | |||||||
(In thousands, except share amounts) | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||
Balance, December 31, 2019 (as previously reported) | | | 934,803 | | | $3,439 | | | 1,933,988 | | | $— | | | $95 | | | $(1,667) | | | $(1,572) |
Retroactive application of reverse recapitalization (Note 3) | | | (934,803) | | | (3,439) | | | 1,384,468 | | | — | | | 3,439 | | | — | | | 3,439 |
Balance, December 31, 2019, effect of Merger (Note 3) | | | — | | | $— | | | 3,318,456 | | | $— | | | $3,534 | | | $(1,667) | | | $1,867 |
Issuance of Series A Preferred | | | — | | | — | | | 2,938,864 | | | 1 | | | 6,634 | | | — | | | 6,635 |
Issuance of restricted common stock | | | — | | | — | | | 9,121 | | | — | | | — | | | — | | | — |
Vesting of restricted common stock | | | — | | | — | | | — | | | — | | | 18 | | | — | | | 18 |
Issuance of common stock in exchange for license rights | | | — | | | — | | | 8,125 | | | — | | | 4 | | | — | | | 4 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 4 | | | — | | | 4 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (3,230) | | | (3,230) |
Balance, December 31, 2020 | | | — | | | $— | | | 6,274,566 | | | $1 | | | $10,194 | | | $(4,897) | | | $5,298 |
Issuance of restricted common stock | | | — | | | — | | | 30,495 | | | — | | | — | | | — | | | — |
Effect of Merger and recapitalization (refer to Note 3) | | | — | | | — | | | 8,166,205 | | | 1 | | | 31,269 | | | — | | | 31,270 |
Common stock and pre-funded warrants issued pursuant to PIPE financing | | | — | | | — | | | 2,284,776 | | | — | | | 29,704 | | | — | | | 29,704 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,373 | | | — | | | 1,373 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (14,101) | | | (14,101) |
Balance, December 31, 2021 | | | — | | | $— | | | 16,756,042 | | | $2 | | | $72,540 | | | $(18,998) | | | $53,544 |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | ||
Net loss | | | $(14,101) | | | $(3,230) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,373 | | | 4 |
Shares issued in connection with license agreement | | | — | | | 4 |
Gain on change in fair value of derivative liability | | | (80) | | | — |
Gain on change in fair value of warrant liability | | | (2,240) | | | — |
Gain on change in fair value of share earnout liability | | | (2,354) | | | — |
Amortization of debt discount | | | 136 | | | — |
Depreciation expense | | | 2 | | | 1 |
Change in assets and liabilities: | | | | | ||
Prepaid expenses | | | (1,656) | | | (8) |
Other assets | | | (67) | | | — |
Accounts payable | | | 1,346 | | | (219) |
Accrued expenses | | | 2,081 | | | 36 |
Net cash used in operating activities | | | (15,560) | | | (3,412) |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | ||
Acquisitions of property and equipment | | | (20) | | | — |
Net cash used in investing activities | | | (20) | | | — |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | ||
Proceeds from issuance of Series A convertible preferred stock, net of issuance costs | | | — | | | 6,635 |
Proceeds from issuance of convertible promissory note, net of issuance costs | | | 2,445 | | | — |
Effect of Merger, net of transaction costs (Note 3) | | | 86,541 | | | — |
Net cash provided by financing activities | | | 88,986 | | | 6,635 |
Net increase in cash and cash equivalents | | | 73,406 | | | 3,223 |
Cash and cash equivalents at beginning of period | | | 5,384 | | | 2,161 |
Cash and cash equivalents at end of period | | | $78,790 | | | $5,384 |
| | | | |||
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: | | | | | ||
Merger costs allocated to equity included in accounts payable | | | $53 | | | $— |
Property and equipment in accrued expenses | | | $360 | | | $— |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFO: | | | | | ||
Cash paid during the period for interest | | | $12 | | | $— |
| | Target Price | | | Old Renovacor Earnout Shares | | | Sponsor Earnout Shares | | | Total | |
December 31, 2023 | | | $17.50 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2025 | | | $25.00 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2027 | | | $35.00 | | | 769,126 | | | 200,000 | | | 969,126 |
| | | | 1,922,816 | | | 500,000 | | | 2,422,816 |
(In thousands) | | | |
Cash – CHAQ trust and cash, net of redemptions | | | $65,127 |
Cash – PIPE financing | | | 29,993 |
Less: CHAQ and Old Renovacor transaction costs paid | | | (6,079) |
Less: Settlement of convertible note at closing | | | (2,500) |
Effect of Merger, net of redemptions and transaction costs | | | $86,541 |
| | Number of Shares | |
Common stock, outstanding prior to Merger | | | 8,622,644 |
Less: redemption of CHAQ shares | | | (2,112,100) |
Common stock of CHAQ | | | 6,510,544 |
CHAQ Founder shares | | | 2,155,661 |
Shares issued in PIPE Financing | | | 2,284,776 |
Merger and PIPE financing shares | | | 10,950,981 |
Shares issued to Old Renovacor | | | 6,305,061 |
Total shares of common stock immediately after Merger(2) | | | 17,256,042 |
(1) | The number of shares of common stock issued to Old Renovacor equityholders was determined based on (i) 1,987,636 shares of Old Renovacor Common Stock outstanding immediately prior to the closing of the Merger converted based on the Common Per Share Merger Consideration (as defined in the Merger Agreement) and (ii) 2,578,518 shares of Old Renovacor Preferred Stock outstanding immediately prior to the closing of the Merger converted based on the Preferred Per Share Merger Consideration (as defined in the Merger Agreement). All fractional shares were rounded down. |
(2) | Includes 500,000 shares of common stock being held in escrow and subject to vesting or forfeiture based on satisfaction of the Earnout Milestones set forth in the Sponsor Support Agreement. Such shares are liability classified and included in the Share earnout liability as of June 30, 2022 and December 31, 2021. |
| | June 30, 2022 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $60,997 | | | $60,997 | | | $— | | | $— |
Total assets | | | $60,997 | | | $60,997 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $980 | | | $— | | | $— | | | $980 |
Share earnout liability | | | 1,938 | | | — | | | — | | | 1,938 |
Total liabilities | | | $2,918 | | | $— | | | $— | | | $2,918 |
| | December 31, 2021 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $77,792 | | | $77,792 | | | $— | | | $— |
Total assets | | | $77,792 | | | $77,792 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $11,165 | | | $— | | | $— | | | $11,165 |
Share earnout liability | | | 12,256 | | | — | | | — | | | 12,256 |
Total liabilities | | | $23,421 | | | $— | | | $— | | | $23,421 |
(In thousands) | | | Warrant Liability | | | Earnout Share Liability |
Balance, December 31, 2020 | | | $— | | | $— |
Assumed warrants due to Merger(1) | | | 13,405 | | | — |
Issuance of earn-out shares(1) | | | — | | | 14,610 |
Change in the fair value of liability | | | (2,240) | | | (2,354) |
Balance, December 31, 2021 | | | $11,165 | | | $12,256 |
(In thousands) | | | Warrant Liability | | | Earnout Share Liability |
Balance, December 31, 2021 | | | $11,165 | | | $12,256 |
Change in the fair value of liability | | | (10,185) | | | (10,318) |
Balance, June 30, 2022 | | | $980 | | | $1,938 |
| | December 31, 2021 | | September 2, 2021 | | | June 30, 2022 | | December 31, 2021 | |||
Stock price | | $7.70 | | $8.41 | | $2.03 | | $7.70 | ||||
Strike price | | $11.50 | | $11.50 | | $11.50 | | $11.50 | ||||
Expected volatility | | 75.0% | | 75.0% | | 80.0% | | 75.0% | ||||
Risk-free interest rate | | 1.01% | | 0.54% | | 2.94% | | 1.01% | ||||
Expected dividend yield | | — | | — | | — | | — | ||||
Expected life (years) | | 3.31 | | 3.64 | | 2.82 | | 3.31 | ||||
Fair value per warrant | | $3.19 | | $3.83 | | $0.28 | | $3.19 |
| | December 31, 2021 | | September 2, 2021 | | | June 30, 2022 | | December 31, 2021 | |||
Stock price | | $7.70 | | $8.41 | | $2.03 | | $7.70 | ||||
Probability of Change in Control | | 7.5% | | 7.5% | | 20.0% | | 7.5% | ||||
Expected volatility | | 75.0% | | 75.0% | | 80.0% | | 75.0% | ||||
Risk-free interest rate | | 1.35% | | 0.97% | | 3.02% | | 1.35% | ||||
Expected dividend yield | | — | | — | | — | | — | ||||
Expected life (years) | | 6.00 | | 6.33 | | 5.51 | | 6.00 | ||||
Fair value per share | | $5.06 | | $6.03 | | $0.80 | | $5.06 |
| | December 31, | ||||
($ in thousands) | | | 2021 | | | 2020 |
Laboratory equipment | | | $380 | | | $3 |
Less: accumulated amortization | | | (1) | | | (2) |
Property and equipment, net | | | $379 | | | $1 |
($ in thousands) | | | June 30, 2022 | | | December 31, 2021 |
Laboratory equipment | | | $897 | | | $380 |
Leasehold improvements | | | 53 | | | — |
Total property and equipment, at cost | | | 950 | | | 380 |
Less: accumulated depreciation and amortization | | | (37) | | | (1) |
Property and equipment, net | | | $913 | | | $379 |
| | December 31, | ||||||||||
($ in thousands) | | 2021 | | 2020 | | June 30, 2022 | | December 31, 2021 | ||||
Research and development costs | | $209 | | $90 | | $530 | | $209 | ||||
Insurance | | 1,369 | | 15 | | 401 | | 1,369 | ||||
Other | | 185 | | 2 | | 290 | | 185 | ||||
Total prepaid expenses | | $1,763 | | $107 | | $1,221 | | $1,763 |
| | December 31, | ||||||||||
($ in thousands) | | 2021 | | 2020 | | June 30, 2022 | | December 31, 2021 | ||||
Employee compensation and benefits | | $1,282 | | $35 | | $1,339 | | $1,282 | ||||
External research and development expenses | | 409 | | 22 | | 639 | | 409 | ||||
Property and equipment | | 360 | | — | | 53 | | 360 | ||||
Professional fees | | 347 | | — | | 166 | | 347 | ||||
Other | | 100 | | — | | 144 | | 100 | ||||
Total accrued expenses | | $2,498 | | $57 | | $2,341 | | $2,498 |
($ in thousand) | | | Operating Leases |
Remainder of 2022 | | | $146 |
2023 | | | 254 |
2024 | | | 76 |
2025 | | | 16 |
2026 | | | 17 |
Thereafter | | | 124 |
Total lease payments | | | $633 |
Less: imputed interest | | | (68) |
Total present value of lease liabilities | | | $565 |
| | June 30, 2022 | |
Weighted-average remaining lease term (in years): | | | |
Operating leases | | | 4.24 |
Weighted-average discount rate: | | | |
Operating leases | | | 2.97% |
| | Number of Shares | | | | |||||||||||||||||||
| | December 31, | | | Weighted-Average Exercise Price | | Expiration Date | | | Number of Warrants | | | | |||||||||||
| | 2021 | | 2020 | | | June 30, 2022 | | December 31, 2021 | | Weighted-Average Exercise Price | | Expiration Date | |||||||||||
Liability-classified Warrants | | | | | | | | | ||||||||||||||||
April 2020 Private Placement Warrants | | 3,500,000 | | — | | $11.50 | | 4/23/2025 | | 3,500,000 | | 3,500,000 | | $11.50 | | 4/23/2025 | ||||||||
| 3,500,000 | | — | | | | 3,500,000 | | 3,500,000 | | | |||||||||||||
Equity-classified Warrants | | | | | | | | | ||||||||||||||||
April 2020 Public Warrants(1) | | 8,622,644 | | — | | $11.50 | | 9/2/2026 | | 8,622,644 | | 8,622,644 | | $11.50 | | 9/2/2026 | ||||||||
September 2021 Pre-Funded Warrants(2) | | 715,224 | | — | | $0.01 | | — | | 715,224 | | 715,224 | | $0.01 | | — | ||||||||
| 9,337,868 | | — | | | | 9,337,868 | | 9,337,868 | | | |||||||||||||
Total outstanding | | 12,837,868 | | — | | | | 12,837,868 | | 12,837,868 | | |
(1) | Public Warrants assumed in the Merger. Each warrant share is exercisable for one-half share of common stock, provided, however, each warrant must be exercised in multiples of two. |
(2) | Pre-Funded Warrant issued in connection with PIPE Investment (Note 3). Each warrant share is exercisable indefinitely for one share of common stock. |
| | Amount | |
Shares issuable upon exercise of pre-funded warrants outstanding | | | 715,224 |
Shares issuable upon exercise of warrants outstanding | | | 7,811,322 |
Shares issuable upon issuance of contingent consideration (Earnout Shares and Earnout RSUs) | | | |
Shares issuable upon exercise of outstanding stock options | | | |
Shares issuable upon vesting of time-based restricted stock units | | | 163,350 |
Shares reserved for future issuance under 2021 Incentive Plan | | | |
Total | | |
| | Year Ended December 31, | | | Three months ended June 30, | | Six Months Ended June 30, | |||||||||||
($ in thousands) | | 2021 | | 2020 | | 2022 | | 2021 | | 2022 | | 2021 | ||||||
Research and development | | $1,027 | | $3 | | $328 | | $176 | | $673 | | $179 | ||||||
General and administrative | | 346 | | 1 | | 304 | | 9 | | 560 | | 13 | ||||||
Total stock-based compensation expense | | $1,373 | | $4 | | $632 | | $185 | | $1,233 | | $192 |
| | Year Ended December 31, | | | Six months ended June 30, | |||||||
| | 2021 | | 2020 | | | 2022 | | 2021 | |||
Expected volatility | | 77.3% | | 69.4% | | 77.0% | | 72.3% | ||||
Risk-free Interest Rate | | 1.00% | | 1.46% | ||||||||
Risk-free interest rate | | 2.37% | | 0.79% | ||||||||
Expected dividend yield | | — | | — | | — | | — | ||||
Expected term (years) | | 5.98 | | 6.08 | | 6.03 | | 5.47 |
($ in thousands, except share and per share data) | | Stock Options | | Weighted- Average Exercise Price | | Weighted- Average Remaining Contractual Life (in years) | | Aggregate Intrinsic Value | | Stock Options | | Weighted-Average Exercise Price | | Weighted-Average Remaining Contractual Life (in years) | | Aggregate Intrinsic Value | ||||||||
Outstanding at December 31, 2020 (as previously reported) | | 82,179 | | $0.25 | | 8.4 | | $12 | ||||||||||||||||
Retroactive application of reverse recapitalization (Note 3) | | (9,052) | | 0.04 | | | ||||||||||||||||||
Outstanding at December 31, 2020, effect of Merger | | 73,127 | | $0.29 | | | ||||||||||||||||||
Outstanding at December 31, 2021 | | 1,376,937 | | $7.61 | | 9.5 | | $676 | ||||||||||||||||
Granted | | 1,303,810 | | 8.02 | | | | 953,725 | | 4.42 | | | ||||||||||||
Exercised | | — | | — | | | | (11,648) | | 0.45 | | | ||||||||||||
Forfeited | | — | | — | | | | (178,813) | | 4.73 | | | ||||||||||||
Expired | | — | | — | | | | — | | — | | | ||||||||||||
Outstanding at December 31, 2021(1) | | 1,376,937 | | $7.61 | | 9.5 | | $676 | ||||||||||||||||
Exercisable at December 31, 2021 | | 148,636 | | $6.59 | | 7.9 | | $444 | ||||||||||||||||
Outstanding at June 30, 2022(1) | | 2,140,201 | | $6.47 | | 9.3 | | $158 | ||||||||||||||||
Exercisable at June 30, 2022 | | 266,199 | | $7.18 | | 8.6 | | $90 |
(1) | Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. |
| | Time-based Awards | | | Market-based Awards | |||||||
($ in thousands, except per share data) | | | Number of Shares | | | Weighted-Average Grant Date Fair Value | | | Number of Shares | | | Weighted-Average Grant Date Fair Value |
Nonvested shares at December 31, 2021 | | | — | | | $— | | | 72,546 | | | $6.42 |
Granted | | | 163,350 | | | 6.45 | | | — | | | — |
Forfeited | | | — | | | — | | | (1,024) | | | 6.42 |
Vested | | | — | | | — | | | — | | | — |
Nonvested shares at June 30, 2022 | | | 163,350 | | | $6.45 | | | 71,522 | | | $6.42 |
| | 2021 | | | 2020 | |
Expected federal income tax rate | | | (21.0)% | | | (21.0)% |
Change in valuation allowance | | | 37.4 | | | 29.0 |
State income taxes, net of federal benefit | | | (10.8) | | | (8.0) |
Warrant and share earnout liability | | | (6.8) | | | — |
Other | | | 1.2 | | | — |
Effective tax rate | | | —% | | | —% |
(in thousands) | | | 2021 | | | 2020 |
Operating loss carryforwards | | | $5,423 | | | $1,251 |
Prepaids and accruals | | | 660 | | | — |
Capitalized patent costs | | | 293 | | | 167 |
Stock-based compensation | | | 325 | | | 2 |
Total deferred tax assets | | | 6,701 | | | 1,420 |
Valuation allowance | | | (6,701) | | | (1,420) |
Net deferred tax assets | | | $— | | | $— |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
($ in thousands except per share data) | | | 2022 | | | 2021 | | | 2022 | | | 2021 |
Net income (loss) per share – Basic: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Net income (loss) attributable to common stockholders | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Basic net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | | | | | | | |||||
Net income (loss) per share – Diluted: | | | | | | | | | ||||
Net income (loss) | | | $(4,024) | | | $(3,718) | | | $2,570 | | | $(5,400) |
Less: Undistributed earnings to participating securities | | | — | | | — | | | (72) | | | — |
Numerator for diluted net income (loss) per share | | | $(4,024) | | | $(3,718) | | | $2,498 | | | $(5,400) |
| | | | | | | | |||||
Denominator for basic net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,471,341 | | | 6,274,566 |
Plus: Incremental shares underlying “in the money” options outstanding | | | — | | | — | | | 39,153 | | | — |
Plus: Incremental shares underlying time-based restricted stock units | | | — | | | — | | | 39,632 | | | — |
Denominator for diluted net income (loss) per share | | | 17,478,008 | | | 6,274,566 | | | 17,550,126 | | | 6,274,566 |
Diluted net income (loss) per common share | | | $(0.23) | | | $(0.59) | | | $0.14 | | | $(0.86) |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Stock options | | | 2,140,201 | | | 194,926 | | | 1,826,229 | | | 194,926 |
Restricted stock units | | | 234,872 | | | — | | | 234,872 | | | — |
Common stock warrants | | | 12,122,644 | | | — | | | 12,122,644 | | | — |
Earnout shares | | | 2,422,816 | | | — | | | 2,422,816 | | | — |
Total | | | 16,920,533 | | | 194,926 | | | 16,606,561 | | | 194,926 |
| | /s/ ERNST & YOUNG LLP | |
| | ||
We have served as the Company’s auditor since 2021. | | | |
| | ||
Philadelphia, Pennsylvania | | | |
March 24, 2022 | | |
(In thousands, except share and per share amounts) | | | December 31, 2021 | | | December 31, 2020 |
ASSETS | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $78,790 | | | $5,384 |
Prepaid expenses | | | 1,763 | | | 107 |
Total current assets | | | 80,553 | | | 5,491 |
Property and equipment, net | | | 379 | | | 1 |
Other | | | 67 | | | — |
Total assets | | | $80,999 | | | $5,492 |
| | | | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,536 | | | $137 |
Accrued expenses | | | 2,498 | | | 57 |
Total current liabilities | | | 4,034 | | | 194 |
Warrant liability | | | 11,165 | | | — |
Share earnout liability (includes 500,000 shares of Common stock, $0.0001 par value per share, subject to forfeiture, issued and outstanding at December 31, 2021 – Note 3) | | | 12,256 | | | — |
Total liabilities | | | 27,455 | | | 194 |
| | | | |||
Commitments and contingencies (Note 8) | | | | | ||
| | | | |||
Stockholders’ equity:* | | | | | ||
Preferred stock, $0.0001 par value per share; 1,000,000 shares authorized; none issued or outstanding at December 31, 2021 and 2020 | | | — | | | — |
Common stock, $0.0001 par value per share; 100,000,000 shares authorized; 16,756,042 and 6,274,566 shares issued and outstanding at December 31, 2021 and 2020, respectively | | | 2 | | | 1 |
Additional paid-in capital | | | 72,540 | | | 10,194 |
Accumulated deficit | | | (18,998) | | | (4,897) |
Total stockholders’ equity | | | 53,544 | | | 5,298 |
Total liabilities and stockholders’ equity | | | $80,999 | | | $5,492 |
* | Reflects effect of retroactive application of reverse recapitalization (Note 3). |
| | Year Ended December 31, | ||||
(In thousands, except share and per share amounts) | | | 2021 | | | 2020 |
Operating expenses: | | | | | ||
Research and development | | | $11,757 | | | $2,425 |
General and administrative | | | 6,872 | | | 805 |
Loss from operations | | | (18,629) | | | (3,230) |
Other income (expense): | | | | | ||
Interest income (expense), net | | | (146) | | | — |
Change in fair value of derivative liability | | | 80 | | | — |
Change in fair value of warrant liability | | | 2,240 | | | — |
Change in fair value of share earnout liability | | | 2,354 | | | — |
Net Loss | | | $(14,101) | | | $(3,230) |
| | | | |||
Net loss per share – basic and diluted | | | $(1.41) | | | $(0.83) |
Weighted-average number of common shares used in computing net loss per share applicable to common stockholders – basic and diluted | | | 9,976,240 | | | 3,883,316 |
| | Convertible Preferred Stock | | | Common Stock | | | Additional Paid-in- Capital | | | Accumulated Deficit | | | Total Stockholders' Equity (Deficit) | |||||||
(In thousands, except share amounts) | | | Shares | | | Amount | | | Shares | | | Amount | | ||||||||
Balance, December 31, 2019 (as previously reported) | | | 934,803 | | | $3,439 | | | 1,933,988 | | | $— | | | $95 | | | $(1,667) | | | $(1,572) |
Retroactive application of reverse recapitalization (Note 3) | | | (934,803) | | | (3,439) | | | 1,384,468 | | | — | | | 3,439 | | | — | | | 3,439 |
Balance, December 31, 2019, effect of Merger (Note 3) | | | — | | | $— | | | 3,318,456 | | | $— | | | $3,534 | | | $(1,667) | | | $1,867 |
Issuance of Series A Preferred | | | — | | | — | | | 2,938,864 | | | 1 | | | 6,634 | | | — | | | 6,635 |
Issuance of restricted common stock | | | — | | | — | | | 9,121 | | | — | | | — | | | — | | | — |
Vesting of restricted common stock | | | — | | | — | | | — | | | — | | | 18 | | | — | | | 18 |
Issuance of common stock in exchange for license rights | | | — | | | — | | | 8,125 | | | — | | | 4 | | | — | | | 4 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 4 | | | — | | | 4 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (3,230) | | | (3,230) |
Balance, December 31, 2020 | | | — | | | $— | | | 6,274,566 | | | $1 | | | $10,194 | | | $(4,897) | | | $5,298 |
Issuance of restricted common stock | | | — | | | — | | | 30,495 | | | — | | | — | | | — | | | — |
Effect of Merger and recapitalization (refer to Note 3) | | | — | | | — | | | 8,166,205 | | | 1 | | | 31,269 | | | — | | | 31,270 |
Common stock and pre-funded warrants issued pursuant to PIPE financing | | | — | | | — | | | 2,284,776 | | | — | | | 29,704 | | | — | | | 29,704 |
Stock-based compensation | | | — | | | — | | | — | | | — | | | 1,373 | | | — | | | 1,373 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | (14,101) | | | (14,101) |
Balance, December 31, 2021 | | | — | | | $— | | | 16,756,042 | | | $2 | | | $72,540 | | | $(18,998) | | | $53,544 |
| | Year Ended December 31, | ||||
(In thousands) | | | 2021 | | | 2020 |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | ||
Net loss | | | $(14,101) | | | $(3,230) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,373 | | | 4 |
Shares issued in connection with license agreement | | | — | | | 4 |
Gain on change in fair value of derivative liability | | | (80) | | | — |
Gain on change in fair value of warrant liability | | | (2,240) | | | — |
Gain on change in fair value of share earnout liability | | | (2,354) | | | — |
Amortization of debt discount | | | 136 | | | — |
Depreciation expense | | | 2 | | | 1 |
Change in assets and liabilities: | | | | | ||
Prepaid expenses | | | (1,656) | | | (8) |
Other assets | | | (67) | | | — |
Accounts payable | | | 1,346 | | | (219) |
Accrued expenses | | | 2,081 | | | 36 |
Net cash used in operating activities | | | (15,560) | | | (3,412) |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | ||
Acquisitions of property and equipment | | | (20) | | | — |
Net cash used in investing activities | | | (20) | | | — |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | ||
Proceeds from issuance of Series A convertible preferred stock, net of issuance costs | | | — | | | 6,635 |
Proceeds from issuance of convertible promissory note, net of issuance costs | | | 2,445 | | | — |
Effect of Merger, net of transaction costs (Note 3) | | | 86,541 | | | — |
Net cash provided by financing activities | | | 88,986 | | | 6,635 |
Net increase in cash and cash equivalents | | | 73,406 | | | 3,223 |
Cash and cash equivalents at beginning of period | | | 5,384 | | | 2,161 |
Cash and cash equivalents at end of period | | | $78,790 | | | $5,384 |
| | | | |||
SUPPLEMENTAL DISCLOSURES OF NONCASH ACTIVITIES: | | | | | ||
Merger costs allocated to equity included in accounts payable | | | $53 | | | $— |
Property and equipment in accrued expenses | | | $360 | | | $— |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFO: | | | | | ||
Cash paid during the period for interest | | | $12 | | | $— |
| | Target Price | | | Old Renovacor Earnout Shares | | | Sponsor Earnout Shares | | | Total | |
December 31, 2023 | | | $17.50 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2025 | | | $25.00 | | | 576,845 | | | 150,000 | | | 726,845 |
December 31, 2027 | | | $35.00 | | | 769,126 | | | 200,000 | | | 969,126 |
| | | | 1,922,816 | | | 500,000 | | | 2,422,816 |
| | Recapitalization | |
Cash – CHAQ trust and cash, net of redemptions | | | 65,127 |
Cash – PIPE financing | | | 29,993 |
Less: CHAQ and Old Renovacor transaction costs paid | | | (6,079) |
Less: Settlement of convertible note at closing | | | (2,500) |
Effect of Merger, net of redemptions and transaction costs | | | 86,541 |
| | Recapitalization | |
Cash – CHAQ trust and cash, net of redemptions | | | 65,127 |
Less: CHAQ and Old Renovacor transaction costs incurred | | | (5,842) |
Less: Fair value of assumed Private Placement Warrants from CHAQ | | | (13,405) |
Less: Fair value of Earnout Consideration and Sponsor Earnout Consideration(1) | | | (14,610) |
Effect of Merger, net of redemptions and transaction costs | | | 31,270 |
| | Number of Shares | |
Common stock, outstanding prior to Merger | | | 8,622,644 |
Less: redemption of CHAQ shares | | | (2,112,100) |
Common stock of CHAQ | | | 6,510,544 |
CHAQ Founder shares | | | 2,155,661 |
Shares issued in PIPE Financing | | | 2,284,776 |
Merger and PIPE financing shares - common stock | | | 10,950,981 |
Shares issued to Old Renovacor - common stock(1) | | | 6,305,061 |
Total shares of common stock immediately after Merger(2) | | | 17,256,042 |
(1) | The number of shares of common stock issued to Old Renovacor equityholders was determined based on (i) 1,987,636 shares of Old Renovacor Common Stock outstanding immediately prior to the closing of the Merger converted based on the Common Per Share Merger Consideration (as defined in the Merger Agreement) and (ii) 2,578,518 shares of Old Renovacor Preferred Stock outstanding immediately prior to the closing of the Merger converted based on the Preferred Per Share Merger Consideration (as defined in the Merger Agreement). All fractional shares were rounded down. |
(2) | Includes 500,000 shares of common stock being held in escrow and subject to vesting or forfeiture based on satisfaction of the Earnout Milestones set forth in the Sponsor Support Agreement. Such shares are liability classified and included in the Share earnout liability as of December 31, 2021. |
| | December 31, 2021 | ||||||||||
(In thousands) | | | Total | | | Level 1 | | | Level 2 | | | Level 3 |
Assets | | | | | | | | | ||||
Cash equivalents – money market funds | | | $77,792 | | | $77,792 | | | $— | | | $— |
Total assets | | | $77,792 | | | $77,792 | | | $— | | | $— |
Liabilities | | | | | | | | | ||||
Warrant liability | | | $11,165 | | | $— | | | $— | | | $11,165 |
Share earnout liability | | | 12,256 | | | — | | | — | | | 12,256 |
Total liabilities | | | $23,421 | | | $— | | | $— | | | $23,421 |
(In thousands) | | | Warrant Liability | | | Earnout Share Liability |
Balance, December 31, 2020 | | | $— | | | $— |
Assumed warrants due to Merger(1) | | | 13,405 | | | — |
Issuance of earn-out shares(1) | | | — | | | 14,610 |
Change in the fair value of liability | | | (2,240) | | | (2,354) |
Balance, December 31, 2021 | | | $11,165 | | | $12,256 |
(1) | Represents fair value on the Closing Date |
| | December 31, 2021 | | | September 2, 2021 | |
Stock price | | | $7.70 | | | $8.41 |
Strike price | | | $11.50 | | | $11.50 |
Expected volatility | | | 75.0% | | | 75.0% |
Risk-free interest rate | | | 1.01% | | | 0.54% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 3.31 | | | 3.64 |
Fair value per warrant | | | $3.19 | | | $3.83 |
| | December 31, 2021 | | | September 2, 2021 | |
Stock price | | | $7.70 | | | $8.41 |
Probability of Change in Control | | | 7.5% | | | 7.5% |
Expected volatility | | | 75.0% | | | 75.0% |
Risk-free interest rate | | | 1.35% | | | 0.97% |
Expected dividend yield | | | — | | | — |
Expected life (years) | | | 6.00 | | | 6.33 |
Fair value per share | | | $5.06 | | | $6.03 |
| | December 31, | ||||
($ in thousands) | | | 2021 | | | 2020 |
Laboratory equipment | | | $380 | | | $3 |
Less: accumulated amortization | | | (1) | | | (2) |
Property and equipment, net | | | $379 | | | $1 |
| | December 31, | ||||
($ in thousands) | | | 2021 | | | 2020 |
Research and development costs | | | $209 | | | $90 |
Insurance | | | 1,369 | | | 15 |
Other | | | 185 | | | 2 |
Total prepaid expenses | | | $1,763 | | | $107 |
| | December 31, | ||||
($ in thousands) | | | 2021 | | | 2020 |
Employee compensation and benefits | | | $1,282 | | | $35 |
External research and development expenses | | | 409 | | | 22 |
Property and equipment | | | 360 | | | — |
Professional fees | | | 347 | | | — |
Other | | | 100 | | | — |
Total accrued expenses | | | $2,498 | | | $57 |
| | Number of Shares | | | | | ||||||
| | December 31, | | | Weighted-Average Exercise Price | | | Expiration Date | ||||
| | 2021 | | | 2020 | | ||||||
Liability-classified Warrants | | | | | | | | | ||||
April 2020 Private Placement Warrants | | | 3,500,000 | | | — | | | $11.50 | | | 4/23/2025 |
| | 3,500,000 | | | — | | | | | |||
Equity-classified Warrants | | | | | | | | | ||||
April 2020 Public Warrants(1) | | | 8,622,644 | | | — | | | $11.50 | | | 9/2/2026 |
September 2021 Pre-Funded Warrants(2) | | | 715,224 | | | — | | | $0.01 | | | — |
| | 9,337,868 | | | — | | | | | |||
Total outstanding | | | 12,837,868 | | | — | | | | |
(1) | Public Warrants assumed in the Merger. Each warrant share is exercisable for one-half share of common stock, provided, however, each warrant must be exercised in multiples of two. |
(2) | Pre-Funded Warrant issued in connection with PIPE Investment (Note 3). Each warrant share is exercisable indefinitely for one share of common stock. |
| | Amount | |
Shares issuable upon exercise of pre-funded warrants outstanding | | | 715,224 |
Shares issuable upon exercise of warrants outstanding | | | 7,811,322 |
Shares issuable upon issuance of contingent consideration (Earnout Shares and Earnout RSUs) | | | 1,995,362 |
Shares issuable upon exercise of outstanding stock options | | | 1,376,937 |
Shares reserved for future issuance under 2021 Incentive Plan | | | 1,240,537 |
Total | | | 13,139,382 |
| | Year Ended December 31, | ||||
($ in thousands) | | | 2021 | | | 2020 |
Research and development | | | $1,027 | | | $3 |
General and administrative | | | 346 | | | 1 |
Total stock-based compensation expense | | | $1,373 | | | $4 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Expected volatility | | | 77.3% | | | 69.4% |
Risk-free Interest Rate | | | 1.00% | | | 1.46% |
Expected dividend yield | | | — | | | — |
Expected term (years) | | | 5.98 | | | 6.08 |
($ in thousands, except share and per share data) | | | Stock Options | | | Weighted- Average Exercise Price | | | Weighted- Average Remaining Contractual Life (in years) | | | Aggregate Intrinsic Value |
Outstanding at December 31, 2020 (as previously reported) | | | 82,179 | | | $0.25 | | | 8.4 | | | $12 |
Retroactive application of reverse recapitalization (Note 3) | | | (9,052) | | | 0.04 | | | | | ||
Outstanding at December 31, 2020, effect of Merger | | | 73,127 | | | $0.29 | | | | | ||
Granted | | | 1,303,810 | | | 8.02 | | | | | ||
Exercised | | | — | | | — | | | | | ||
Forfeited | | | — | | | — | | | | | ||
Expired | | | — | | | — | | | | | ||
Outstanding at December 31, 2021(1) | | | 1,376,937 | | | $7.61 | | | 9.5 | | | $676 |
Exercisable at December 31, 2021 | | | 148,636 | | | $6.59 | | | 7.9 | | | $444 |
(1) | Includes both vested stock options as well as unvested stock options for which the requisite service period has not been rendered but that are expected to vest based on achievement of a service condition. |
| | 2021 | | | 2020 | |
Expected federal income tax rate | | | (21.0)% | | | (21.0)% |
Change in valuation allowance | | | 37.4 | | | 29.0 |
State income taxes, net of federal benefit | | | (10.8) | | | (8.0) |
Warrant and share earnout liability | | | (6.8) | | | — |
Other | | | 1.2 | | | — |
Effective tax rate | | | —% | | | —% |
(in thousands) | | | 2021 | | | 2020 |
Operating loss carryforwards | | | $5,423 | | | $1,251 |
Prepaids and accruals | | | 660 | | | — |
Capitalized patent costs | | | 293 | | | 167 |
Stock-based compensation | | | 325 | | | 2 |
Total deferred tax assets | | | 6,701 | | | 1,420 |
Valuation allowance | | | (6,701) | | | (1,420) |
Net deferred tax assets | | | $— | | | $— |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Stock options | | | 1,376,937 | | | 73,127 |
Restricted stock units (Earnout RSUs) | | | 72,546 | | | — |
Common stock warrants | | | 12,122,644 | | | — |
Earnout shares | | | 2,422,816 | | | — |
Total | | | 15,994,943 | | | 73,127 |
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| | Rocket Pharmaceuticals, Inc. | |||||||
| | 9 Cedarbrook Drive | |||||||
| | Cranbury, NJ 08512 | |||||||
| | | | General Counsel | |||||
| | | | [Omitted] | |||||
| | | | ||||||
| | ||||||||
| | | | ||||||
| | Goodwin Procter LLP | |||||||
| | 100 Northern Avenue | |||||||
| | Boston, MA 02210 | |||||||
| | Attention: | | | John T. Haggerty; William D. Collins; Sarah Ashfaq | ||||
| | Email: | | | JHaggerty@goodwinlaw.com | ||||
| | | | WCollins@goodwinlaw.com | |||||
| | | | SAshfaq@goodwinlaw.com | |||||
| | | | ||||||
| | Notices to the Company prior to the Closing Date: | |||||||
| | | | ||||||
| | Renovacor, Inc. | |||||||
| | 201 Broadway, Suite 310 | |||||||
| | Cambridge, MA 02139 | |||||||
| | Attention: | | | Magdalene Cook, Chief Executive Officer | ||||
| | Email: | | | [ | ||||
| | | |
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | Troutman Pepper Hamilton Sanders, LLP | ||||
| | 3000 Two Logan Square | ||||
| | Eighteenth and Arch Streets | ||||
| | Philadelphia, PA 19103 | ||||
| | Attention: | | | Rachael Bushey; Jennifer Porter | |
| | Email: | | | rachael.bushey@troutman.com; jennifer.porter@troutman.com |
| | RENOVACOR, INC. | ||||
| | | | |||
| | By: | | | /s/ Magdalene Cook, M.D. | |
| | Name: | | | Magdalene Cook, M.D. | |
| | Title: | | | President, Chief Executive Officer and Director |
| | | | ||||||||||||||
| | ROCKET PHARMACEUTICALS, INC. | |||||||||||||||
| | | | ||||||||||||||
| | By: | | | /s/ Gaurav Shah, M.D. | ||||||||||||
| | Name: | | | Gaurav Shah, M.D. | ||||||||||||
| | Title: | | | Chief Executive Officer | ||||||||||||
| | | | ||||||||||||||
| | ZEBRAFISH MERGER SUB, INC. | |||||||||||||||
| | | | ||||||||||||||
| | By: | | | /s/ Martin Wilson | ||||||||||||
| | Name: | | | Martin Wilson | ||||||||||||
| | Title: | | | Secretary | ||||||||||||
| | | | ||||||||||||||
| | ZEBRAFISH MERGER SUB II, LLC | |||||||||||||||
| | | | ||||||||||||||
| | By: | | | /s/ Gaurav Shah, M.D. | ||||||||||||
| | Name: | | | Gaurav Shah, M.D. | ||||||||||||
| | Title: | | | Authorized Person |
| | Very truly yours, | |
| | ||
| | /s/ SVB SECURITIES LLC |
| | Very truly yours, | |
| | ||
| | ||
| | WELLS FARGO SECURITIES, LLC |
| | Notices to Parent: | | | |||||
| | | | | | ||||
| | Rocket Pharmaceuticals, Inc. | | | |||||
| | 9 Cedarbrook Drive | | | |||||
| | Cranbury, New Jersey 08512 | | | |||||
| | Attention: | | | Gaurav Shah, Chief Executive Officer | | | ||
| | Email: | | | gs@rocketpharma.com | | | ||
| | | | | | ||||
| | with copies (which shall not constitute notice) to: | | | |||||
| | | | | | ||||
| | Goodwin Procter LLP | | | |||||
| | 100 Northern Avenue | | | |||||
| | Boston, Massachusetts 02210 | | | |||||
| | Attention: | | | John T. Haggerty | | | ||
| | | | William D. Collins | | | |||
| | | | Sarah Ashfaq | | | |||
| | Email: | | | JHaggerty@goodwinlaw.com | | | ||
| | | | WCollins@goodwinlaw.com | | | |||
| | | | SAshfaq@goodwinlaw.com | | | |||
| | | | | | ||||
| | Notices to the Stockholder: | | | |||||
| | | | | | ||||
| | [•] | | | | | |||
| | [•] | | | | | |||
| | Attention: | | | [•] | | | ||
| | Email: | | | [•] | | |
| | PARENT | ||||
| | | | |||
| | Rocket Pharmaceuticals, Inc. | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | | ||
| | | | |||
| | STOCKHOLDER | ||||
| | | | |||
| | [Stockholder] | ||||
| | | | |||
| | By: | | | ||
| | Name: | | | ||
| | Title: | | |
| Stockholder | | | Company Shares | | | Company Shares underlying Company Options | | | Company Shares underlying Company RSUs | | | Company Shares underlying Company Warrants | | | Total Shares | |
| | | | | | | | | | | |
| | Renovacor, Inc. | ||||
| | 201 Broadway, Suite 310 | ||||
| | Cambridge, MA 02139 | ||||
| | Attention: | | | Magdalene Cook, Chief Executive Officer | |
| | Email: | | | mcook@renovacor.com | |
| | | | |||
| | with copies (which shall not constitute notice) to: | ||||
| | | | |||
| | Troutman Pepper Hamilton Sanders, LLP | ||||
| | 3000 Two Logan Square | ||||
| | Eighteenth and Arch Streets | ||||
| | Philadelphia, PA 19103 | ||||
| | Attention: | | | Rachael Bushey; Jennifer Porter | |
| | Email: | | | rachael.bushey@troutman.com; jennifer.porter@troutman.com |
| | [•] | | | ||
| | [•] | | | ||
| | Attention: | | | [•] | |
| | Email: | | | [•] |
| | COMPANY | ||||
| | | | |||
| | Renovacor, Inc. | ||||
| | | | |||
| | By: | | | ||
| | Name: | ||||
| | Title: | ||||
| | | | |||
| | STOCKHOLDER | ||||
| | | | |||
| | [Stockholder] | ||||
| | | | |||
| | By: | | | ||
| | Name: | ||||
| | Title: |
| Stockholder | | | Parent Shares | | | Parent Shares underlying Parent Options | | | Parent Shares underlying Parent RSUs | | | Parent Shares underlying Parent Warrants | | | Total Shares | |
| | | | | | | | | | | |
Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statement Schedules |
Exhibit Number | | | Description |
| | Agreement and Plan of Merger, dated as of September 19, 2022, by and among Rocket, Renovacor, Inc., Zebrafish Merger Sub, Inc., a wholly owned subsidiary of Rocket, and Zebrafish Merger Sub II, LLC, a wholly owned subsidiary of Rocket (included as Annex A to the proxy statement/prospectus forming a part of this registration statement). | |
| | Seventh Amended and Restated Certificate of Incorporation of Rocket (incorporated by reference to Exhibit 3.1 to Rocket’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021). | |
| | Certificate of Amendment (Reverse Stock Split) to the Seventh Amended and Restated Certificate of Incorporation of Rocket (incorporated by reference to Exhibit 3.1 to Rocket’s Current Report on Form 8-K filed with the SEC on January 5, 2018). | |
| | Certificate of Amendment (Name Change) to the Seventh Amended and Restated Certificate of Incorporation of Rocket (incorporated by reference to Exhibit 3.2 to Rocket’s Current Report on Form 8-K filed with the SEC on January 5, 2018). | |
| | Certificate of Amendment to the Seventh Amended and Restated Certificate of Incorporation of Rocket (incorporated by reference to Exhibit 3.1 to Rocket’s Current Report on Form 8-K filed with the SEC on June 25, 2019). | |
| | Amended and Restated Bylaws of Rocket (incorporated by reference to Exhibit 3.5 to Rocket’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021). | |
| | Specimen Common Stock Certificate of Rocket (incorporated by reference to Exhibit 4.1 to Rocket Pharmaceuticals, Inc.’s Report on Form 8-K filed on January 5, 2018 (file no. 001-36829)). | |
| | Opinion of Goodwin Procter LLP. | |
| | License Agreement, dated as of August 12, 2019, by and between Renovacor, Inc. and Temple University – Of the Commonwealth System of Higher Education (incorporated by reference to Exhibit 10.1 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Sponsored Research Agreement, dated as of August 12, 2019, by and between Renovacor, Inc and Temple University – Of the Commonwealth System of Higher Education (incorporated by reference to Exhibit 10.2 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Amendment No. 1 to Sponsored Research Agreement, dated as of August 27, 2019, by and between Renovacor, Inc and Temple University – Of the Commonwealth System of Higher Education (incorporated by reference to Exhibit 10.3 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Amendment No. 2 to Sponsored Research Agreement, dated as of August 18, 2021 and effective as of July 1, 2021, by and between Renovacor, Inc and Temple University – Of the Commonwealth System of Higher Education (incorporated by reference to Exhibit 10.4 of the Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). |
Exhibit Number | | | Description |
| | Form of Subscription Agreement, dated as of March 22, 2021, by and between Renovacor, Inc and the PIPE Investors (incorporated by reference to Annex D to the Schedule 14A, filed with the SEC on August 5, 2021). | |
| | Form of Lock-Up Agreement (incorporated by reference to Annex G to the Schedule 14A, filed with the SEC on August 5, 2021). | |
| | Renovacor, Inc. 2018 Stock Option and Grant Plan (incorporated by reference to Exhibit 99.2 of Renovacor, Inc’s Form S-8, filed with the SEC on November 12, 2021). | |
| | Amendment 2019-1 to Renovacor, Inc. 2018 Stock Option and Grant Plan, dated as of August 12, 2019 (incorporated by reference to Exhibit 99.2 of Renovacor, Inc’s Form S-8, filed with the SEC on November 12, 2021). | |
| | Renovacor, Inc. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.8 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Form of Option Award Agreement (incorporated by reference to Exhibit 10.9 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Form of Earnout Restricted Stock Award Under the 2021 Omnibus Incentive Plan. | |
| | Form of Restricted Stock Award Under the 2021 Omnibus Incentive Plan. | |
| | Form of Indemnification Agreement (incorporated by reference to Exhibit 10.10 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Form of Executive Employment Agreement (incorporated by reference to Exhibit 10.11 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Amended and Restated Employment Agreement, by and between Renovacor, Inc and Magdalene Cook, M.D., dated as of May 17, 2021 and effective as of September 2, 2021 (incorporated by reference to Exhibit 10.12 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Employment Agreement, by and between Renovacor, Inc and Mark Semigran, M.D., dated as of May 5, 2021 and effective as of June 2, 2021 (incorporated by reference to Exhibit 10.13 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Employment Agreement, by and between Renovacor, Inc and Matthew Killeen, Ph.D., dated as of August 16, 2021 and effective as of September 1, 2021 (incorporated by reference to Exhibit 10.14 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Letter Agreement, by and between Renovacor, Inc and Wendy F. DiCicco, dated as of September 3, 2021 (incorporated by reference to Exhibit 10.15 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Consulting Agreement, by and between Renovacor, Inc and Arthur M. Feldman, M.D., dated as of August 12, 2019 (incorporated by reference to Exhibit 10.16 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | Amendment to Consulting Agreement, by and between Renovacor, Inc. and Arthur M. Feldman, M.D., dated as of September 2, 2021 (incorporated by reference to Exhibit 10.17 of Renovacor, Inc’s Current Report on Form 8-K, filed with the SEC on September 9, 2021). | |
| | CFO Services Agreement, by and between Renovacor, Inc and Wendy DiCicco, dated as of June 17, 2022 (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K/A, filed with the Securities & Exchange Commission on June 24, 2022). | |
| | Employment Agreement, by and between Renovacor, Inc and Joseph Carroll, dated as of June 17, 2022 (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8-K/A, filed with the Securities & Exchange Commission on June 24, 2022). | |
| | Subsidiaries of Rocket (incorporated by reference to Exhibit 21.1 to Rocket’s annual report on Form 10-K filed on February 28, 2022. | |
| | Consent of EisnerAmper LLP, independent registered public accounting firm of Rocket Pharmaceuticals, Inc. | |
| | Consent of Ernst & Young LLP, independent registered public accounting firm of Renovacor, Inc. | |
| | Consent of Goodwin Procter LLP (included in Exhibit 5.1). |
Exhibit Number | | | Description |
| | Consent of SVB Securities LLC. | |
| | Consent of Wells Fargo Securities LLC. | |
| | Power of Attorney (included on the signature page of this registration statement). | |
| | Proxy Card for Special Meeting of Renovacor, Inc. | |
| | Proxy Card for Special Meeting of Rocket Pharmaceuticals, Inc. | |
| | Filing Fee Table. |
† | Schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The undersigned registrant hereby undertakes to provide a copy of any of the omitted schedules upon request by the U.S. Securities and Exchange Commission. |
# | Indicates management contract or compensatory arrangement. |
Item 22. | Undertakings |
(a) | The undersigned registrant hereby undertakes to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act”); (ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the U.S. Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(b) | The undersigned registrant hereby undertakes that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(c) | The undersigned registrant hereby undertakes to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(d) | The undersigned registrant hereby undertakes that, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(e) | The undersigned registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: (i) any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424; (ii) any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant; (iii) the portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and (iv) any other communication that is an offer in the offering made by the registrant to the purchaser. |
(f) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(g) | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(h) | The undersigned registrant undertakes that every prospectus: (i) that is filed pursuant to the paragraph immediately preceding; or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(i) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the undersigned registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
(j) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
| | Rocket Pharmaceuticals, Inc. | |||||||
| | ||||||||
| | By: | | | /s/ Gaurav Shah, MD | ||||
| | | | Name: | | | Gaurav Shah, MD | ||
| | | | Title: | | | Chief Executive Officer | ||
| | | | | | ||||
| | By: | | | /s/ John C. Militello | ||||
| | | | Name: | | | John C. Militello | ||
| | | | Title: | | | VP, Finance, Senior Controller & Treasurer |
Signature | | | Title | |||
| | |||||
| | Chief Executive Officer (Principal Executive Officer) | ||||
Gaurav Shah, M.D. | | |||||
| | |||||
| | Vice President, Principal Accounting Officer (Interim Principal Financial Officer and Principal Accounting Officer) | ||||
John Militello, CPA | | |||||
| | |||||
* | | | Chairman of the Board | |||
Roderick Wong, M.D. | | |||||
| | |||||
* | | | Director | |||
Elisabeth Bjork, M.D. | | |||||
| | |||||
* | | | Director | |||
Carsten Boess, MBA | | |||||
| | |||||
* | | | Director | |||
Pedro Granadillo, BS | | |||||
| | |||||
* | | | Director | |||
Gotham Makker, M.D. | | |||||
| | |||||
* | | | Director | |||
David Southwell, MBA | | |||||
| | |||||
* | | | Director | |||
Naveen Yalamanchi, M.D. | | |||||
| | |||||
* | | | Director | |||
Fady Malik, M.D. | |
*By: | | | /s/ Gaurav Shah | | | |
| | Name: Gaurav Shah | | | ||
| | Attorney-in-Fact | | | ||
| | | | |||
| | |||||
/s/ John Militello, CPA | | | ||||
| | |||||
Name: John Militello, CPA | | | ||||
| | |||||
Attorney-in-Fact | | | ||||