In July 2014, TCG II LP purchased certain preferred shares of Flexus Biosciences, Inc. (“Flexus”). In April 2015, Flexus contributed and assigned to the Issuer certain of its assets and rights in exchange for Series A Preferred Stock of the Issuer (the “Series A Shares”). Flexus immediately distributed the Series A Shares to its preferred stockholders, including 2,681,963 Series A Shares distributed to TCG II LP, and was subsequently acquired by a third party. The fair market value of the Series A Shares distributed to TCG II LP at the time of distribution was approximately $2,681,963. In April 2015, TCG II LP purchased an aggregate of 12,100,000 shares of Series A Preferred Stock (the “Series A Shares”) for an aggregate purchase price of $12,100,000. In April 2016, TCG II LP purchased an aggregate of 7,000,000 shares of Series B Preferred Stock (the “Series B Shares”) for an aggregate purchase price of $14,000,000. In December 2017, TCG II LP purchased an aggregate of 4,362,050 shares of Series C Preferred Stock (the “Series C Shares”) for an aggregate purchase price of $10,000,000 and Ponoi LP purchased an aggregate of 8,724,100 Series C Shares for an aggregate purchase price of $20,000,000. In December 2018, Ponoi LP purchased an aggregate of 872,410 shares of SeriesC-2 Preferred Stock (the “SeriesC-2 Shares” and, together with the Series A Shares, the Series B Shares and the Series C Shares, the “Preferred Stock”) for an aggregate purchase price of $2,000,000 and Ponoi II LP purchased an aggregate of 872,410 SeriesC-2 Shares for an aggregate purchase price of $2,000,000.
Additionally, TCG II LP purchased 625,000 shares of Common Stock as part of the Issuer’s IPO for an aggregate purchase price of $7,500,000. Upon the IPO Closing, each share of Preferred Stock automatically converted into approximately 0.166 shares of Common Stock. TCG II LP received an aggregate of 4,357,333 shares of Common Stock upon conversion, Ponoi LP received an aggregate of 1,599,417 shares of Common Stock upon conversion and Ponoi II LP received an aggregate of 145,401 shares of Common Stock upon conversion.
As consideration for Mr. Goeddel’s service as interim chief executive officer of the Issuer between May 2015 and August 2015, in June 2015, the Issuer granted TCGM II LP 50,000 shares of Common Stock for which no consideration was paid. The fair market value of these shares at the time of grant was approximately $51,000.
TCG II LP, Ponoi LP and Ponoi II LP received the funds used to purchase each entity’s respective shares of Preferred Stock and/or Common Stock noted above from capital contributions made to each entity by their respective partners for investment purposes.
Item 4. Purpose of Transaction
TCG II LP, TCG II GP, TCGM II LP, Ponoi LP, Ponoi II LP, Mr. Goeddel, Mr. Svennilson and Mr. Kutzkey acquired the aforementioned Preferred Stock and Common Stock for investment purposes with the aim of increasing the value of their investments in the Issuer.
Except as set forth in Item 6 below, none of the Reporting Persons have a present plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D. However, each of the Reporting Persons reserves the right to propose or participate in future transactions which may result in one or more of such actions, including but not limited to, an extraordinary corporate transaction, such as a merger, reorganization, or liquidation, sale of a material amount of assets of the Issuer or its subsidiaries, or other transactions which might have the effect of causing the Common Stock to become eligible for termination of registration under Section 12(g) of the Securities Exchange Act of 1934, as amended. The Reporting Persons also retain the right to change their investment intent at any time, to acquire additional shares of Common Stock or other securities of the Issuer from time to time, or to sell or otherwise dispose of all or part of the Common Stock beneficially owned by them (or any shares of Common Stock into which such securities are converted) in any manner permitted by law. The Reporting Persons may engage from time to time in ordinary course transactions with financial institutions with respect to the securities described herein.
Item 5. Interest in Securities of the Issuer
(a) As of the date hereof, TCG II LP directly holds 4,982,333 shares of Common Stock, representing 23.4% of the Issuer’s outstanding Common Stock. As the general partner of TCG II LP, TCG II GP beneficially owns an aggregate of 4,982,333 shares of Common Stock, representing 23.4% of the Issuer’s outstanding Common Stock. TCGM II LP directly holds 50,000 shares of Common Stock, representing 0.2% of the Issuer’s outstanding Common Stock. Ponoi LP directly holds 1,599,417 shares of Common Stock, representing 7.5% of the Issuer’s outstanding Common Stock. As the general partner of Ponoi LP, Ponoi LLC beneficially owns an aggregate of