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Shareholders' Equity and Redeemable Noncontrolling Interest
 3 Months Ended 12 Months Ended
Jun. 30, 2021
Mar. 31, 2021
Shareholders' Equity and Redeemable Noncontrolling Interest
Note 7—Shareholders’ Equity and Redeemable Noncontrolling Interest
Business Combination Agreement
On May 1, 2021, the Company entered into a Business Combination Agreement (the “Business Combination Agreement”) with Montes Archimedes Acquisition Corporation (“MAAC”) and Rhine Merger Sub, Inc. (“Merger Sub”). MAAC was incorporated in Delaware on July 6, 2020 and was formed as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses. Pursuant to the Business Combination Agreement, and assuming a favorable vote by MAAC’s stockholders at a special meeting of MAAC’s stockholders convened for purposes of approving the transactions contemplated by the Business Combination Agreement (the “Business Combination”), and the satisfaction or waiver of all other closing conditions pursuant to the Business Combination Agreement, Merger Sub will merge with and into MAAC, with MAAC surviving the merger as the Company’s wholly owned subsidiary.
For financial accounting and reporting purposes, MAAC will be treated as the acquired company. Accordingly, because MAAC does not represent a business for accounting purposes and its primary asset
represents cash and cash equivalents, the Business Combination will be treated as an equity contribution in exchange for the issuance of RSL shares. The net assets of MAAC will be stated at historical cost, with no goodwill or other intangible assets recorded. RSL will be deemed both the accounting predecessor and the successor SEC registrant, which means that the Company’s financial statements for previous periods will be disclosed in the Company’s future periodic reports filed with the SEC.
Note 10—Shareholders’ Equity and Redeemable Noncontrolling Interest
(A) Sumitomo Transaction Agreement and Roivant Equity Repurchase
In December 2019, RSL and Sumitomo completed the transactions contemplated by the Sumitomo Transaction Agreement; see Note 5, “Sumitomo Transaction Agreement.” Pursuant to the Sumitomo Transaction Agreement,
RSL issued 26,952,143 common shares to Sumitomo at closing at a price per share of $37.10 for allocated net proceeds of approximately $999.2 million, after offering expenses incurred. In connection with the Sumitomo Closing Date, RSL’s board of directors approved a repurchase of up to $1.0 billion of the Company’s equity securities using the proceeds received from Sumitomo.
In February 2020, the Company launched
one-time
offers to purchase up to $1.0 billion of issued and outstanding equity securities of the Company (the “Roivant Equity Repurchase”). The offers included (i) an offer to repurchase up to approximately 11.23% of the common stock held by each holder (and its affiliates) of the Company’s common stock as of December 26, 2019, at a price per share of $37.10 representing fair value of the common stock, (ii) an offer to purchase vested stock options whose fair market value (as determined as of December 27, 2019) was less than or equal to the fair market value of approximately 11.23% of the earliest-granted of such holder’s outstanding vested and unvested stock options, at a purchase price equal to such vested option’s fair market value, and (iii) an offer to holders of performance restricted stock units (“pRSUs”) to surrender 100% of their existing pRSUs in exchange for newly issued performance stock options and capped value appreciation rights. The offer to the holders of pRSUs included an offer by the Company to immediately purchase approximately 11.23% of the newly issued performance stock options and capped value appreciation rights for cash. The Company additionally entered into an agreement with the Company’s Founder to repurchase a portion of his common stock held and exchange his pRSUs for performance stock options and capped value appreciation rights. A summary of payments made during the year ended March 31, 2020 relating to the purchase of equity securities by the Company is as follows (in thousands):
 
    
Cash Payment
  
Common stock
    $ 950,722  
Other equity instruments
      39,292  
    
 
 
  
Total cash paid
    $ 990,014  
    
 
 
  
(B) Consolidated Vant Equity Transactions
Cytovant Sciences HK Limited
In March 2020, Cytovant Sciences HK Limited (“Cytovant”), a subsidiary of the Company, issued and sold 20,085,301 Series
A-1
preference shares at a purchase price of $
1.17
per share to third party investors for aggregate net proceeds of $22.5 million after deducting offering costs. The preferred stock is convertible into ordinary shares of Cytovant at any time at the option of the investor, or automatically upon a qualified initial public offering (“Qualified IPO”) as defined in the subscription agreement. If a Qualified IPO is not completed within five years of the initial investment, Series A preference shareholders can force a sale or liquidation of Cytovant. The Series
A-1
preference shares are classified as redeemable noncontrolling interest in the accompanying consolidated balance sheets and consolidated statements of shareholders’ equity and redeemable noncontrolling interest as the Company can be obligated to repurchase the Series A-1 preference shares upon the occurrence of certain contingent events outside the Company’s control. No dividends shall accrue or be payable on the convertible and redeemable preferred stock unless otherwise determined by the board of directors of Cytovant. The Company did not accrete changes in the redemption value as of March 31, 2021 as the Company considers the events leading to a redemption of the convertible and redeemable preferred stock as not probable.
Immunovant
In September 2019, Immunovant Sciences Ltd. (“ISL”) entered into a share exchange agreement (the “Share Exchange Agreement”) with Health Sciences Acquisitions Corporation (“HSAC”), and in December 2019, ISL and HSAC completed the transactions contemplated by the Share Exchange Agreement (the “Business Combination”). At closing, HSAC acquired 100% of the issued and outstanding common shares of ISL in exchange for 42,080,376 shares of HSAC’s common stock issued to HSAC, ISL, and the shareholders of ISL (together, the “Sellers”) and 10,000 shares of HSAC Series A preferred shares issued to RSL. Additionally, as
 
part of its initial public offering in May 2019, HSAC issued common stock warrants, which are classified in equity. Upon completion of the Business Combination, 11,500,000 warrants were outstanding for the purchase of
one-half
of one share of common stock (an aggregate of 5,750,000 common shares) at a price of $11.50 per whole share. Upon closing, ISL became a wholly owned subsidiary of HSAC and HSAC was renamed “Immunovant, Inc.” The Business Combination was accounted for as a reverse recapitalization and HSAC was treated as the “acquired” company for accounting purposes. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of ISL issuing equity for the net assets of HSAC, accompanied by a recapitalization. Immunovant, Inc. received $111.0 million in cash as a result of the Business Combination, consisting of the funds held in HSAC’s trust account. The proceeds included $5.1 million related to common shares purchased by RSL.
The sellers were entitled to receive an additional 20,000,000 shares of Immunovant, Inc.’s common stock (the “Earnout Shares”) if the volume-weighted average price of Immunovant, Inc.’s shares equaled or exceeded the following prices for any 20 trading days within any 30
trading-day
period (the “Trading Period”) following the closing of the Business Combination:
(i) during any Trading Period prior to March 31, 2023, 10,000,000 Earnout Shares upon the achievement of a volume-weighted average price of at least $17.50 per share; and
(ii) during any Trading Period prior to March 31, 2025, 10,000,000 Earnout Shares upon the achievement of a volume-weighted average price of at least $31.50 per share.
In May 2020 and September 2020, Immunovant, Inc. achieved the first earnout milestone and second earnout milestone, respectively, under the Share Exchange Agreement and, as a result, all of the 20,000,000 earnout shares of Immunovant, Inc.’s common stock were issued to former stockholders of ISL, including 17,547,938 shares of common stock issued to RSL. In addition, upon the achievement of the first earnout milestone and second earnout milestone and pursuant to the restricted stock agreement entered into between HSAC and Health Sciences Holdings, LLC (the “Sponsor”), all of the 1,800,000 shares of the Sponsor’s restricted shares vested and are no longer subject to forfeiture.
Immediately prior to the closing of the Business Combination, as described above, ISL’s convertible promissory notes were automatically converted into an aggregate of 7,156,495 common shares of ISL, which were then exchanged for an aggregate of 3,499,995 shares of Immunovant, Inc. common stock upon the closing of transactions contemplated by the Share Exchange Agreement. The conversion of ISL’s convertible promissory notes resulted in an increase to equity by $
35.6 
million, the carrying amount of the convertible promissory notes. The conversion included a convertible promissory note held by RSL for $2.5 million.
In April 2020, Immunovant, Inc. completed an underwritten public offering of 9,613,365 shares of its common stock, including 1,034,483 shares of common stock purchased by RSL, at a price of $14.50 per share for net proceeds to Immunovant, Inc. of approximately $131.0 million, after deducting underwriting discounts and commissions and offering expenses. The proceeds included $15.0 million received from RSL.
In May 2020, Immunovant, Inc.’s 11,500,000 outstanding warrants became exercisable for an aggregate of 5,750,000 shares of Immunovant, Inc.’s common stock at a price of $11.50 per share. An aggregate of 11,438,290 outstanding warrants were exercised for an aggregate of 5,719,145 shares of Immunovant, Inc.’s common stock at a price of $11.50 per share, for net proceeds of approximately $65.8 million. The remaining 61,710 warrants were cancelled.
In September 2020, Immunovant, Inc. completed an underwritten public offering of 6,060,606 shares of its common stock, including 380,000 shares of common stock purchased by RSL, at a price of $33.00 per share for net proceeds to Immunovant, Inc. of approximately $188.1 million, after deducting underwriting discounts and commissions and offering expenses. The proceeds included $12.5 million received from RSL.
Sinovant
Sinovant, a subsidiary of the Company, previously issued and sold preferred stock convertible into ordinary shares of Sinovant at any time at the option of the investors or automatically upon a qualified initial public offering (“Qualified IPO”) as defined in the subscription agreement relating to the sale of the preferred stock. The convertible preferred stock was redeemable at the option of the investor if a Qualified IPO was not completed within five years of the initial investment and was payable in cash equal to the investment amount plus an annualized return of 12%. As such events are not within the control of the Company, the preferred stock was previously classified as redeemable noncontrolling interest in the accompanying consolidated balance sheets and consolidated statements of shareholders’ equity and redeemable noncontrolling interest. No dividends accrued or were payable on the convertible preferred stock. In January 2020, Sinovant’s parent company, Roivant China Holdings Ltd. (“RCHL”), purchased all preferred stock of Sinovant held by third parties at a purchase price of $12.26 per preferred share for an aggregate purchase price of $132.9 million. Consideration paid in excess of the carrying value for the repurchase of redeemable noncontrolling interest of $77.8 million is considered a deemed dividend. See Note 18, “Earnings per Common Share” for resulting impact to earnings per share.