NOTE 13 — SUBSEQUENT EVENTS

Employment Agreement Amendments

On January 8, 2023, the Board of Directors approved certain amendments to the employment agreements of the Company’s chief executive officer and chief medical officer (the “Executive Officers”). The amendments provide that if either of the Executive Officers are terminated outside of a change in control event and without cause, (i) all of their stock options that are subject to ongoing vesting conditions over subsequent periods ranging from 12 to 18 months will immediately vest, and (ii) such stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event. In addition, if either of the Executive Officers are terminated solely due to a change of control event, all of their unvested stock options will immediately vest and all outstanding stock options will remain exercisable for periods ranging from 6 to 12 months following the occurrence of the termination event.

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The amendment to the chief medical officer’s employment agreement provides that upon the occurrence of a termination event other than a change of control, the Company is required to (i) make severance payments equal to 12 months of salary, a pro-rata bonus, and health insurance coverage for 12 months following the termination date, and (ii) all unvested stock options subject to vest over the subsequent 12 month period after the termination event will become immediately exercisable and all outstanding stock options will remain exercisable for 6 months following the termination event. In addition, upon the occurrence of a termination solely due to a change of control event, the Company is required to (i) make severance payments equal to 18 months of salary, a pro-rata bonus, and health insurance coverage for 18 months following the termination event.

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ActiveSite Milestone Payment

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Pursuant to the ActiveSite License Agreement discussed in Note 4, the next scheduled milestone payment for $3.0 million is due upon dosing of the first patient in a Phase 2 clinical study. On February 6, 2023, the Company dosed the first patient in its Phase 2 study, triggering the obligation to pay this milestone payment in February 2023. The Company will recognize the related licensing expense in the fiscal quarter ending March 31, 2023.

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