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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2025
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Commitments and Contingencies Second Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with David J. Mazzo, Ph.D., the Company’s Chief Executive Officer (the “Mazzo Second Amended and Restated Employment Agreement”). The Mazzo Second Amended and Restated Employment Agreement supplements and amends the Amended and Restated Employment Agreement, dated and effective as of March 19, 2021, between Dr. Mazzo and the Company. The Mazzo Second Amended and Restated Employment Agreement: (i) amends Dr. Mazzo’s base salary to $717,229 from $633,032 and removed the non-accountable expense allowance of $12,000 per year, (ii) clarifies that a material reduction in Dr. Mazzo’s base salary is included in the definition of “Good Reason”, (iii) amends that in the event of Dr. Mazzo’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Mazzo’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Mazzo’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amends Dr. Mazzo’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Dr. Mazzo’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Dr. Mazzo a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (v) amends the form of payment of Dr. Mazzo’s bonus payments in the event of a termination not in connection to a Change in Control to a lump-sum payment, (vi) amends the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (vii) clarifies that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “Code”), comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Dr. Mazzo may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment; and (viii) clarifies other technical terms for compliance with Section 409A of the Code. Amended and Restated Employment Agreement On June 10, 2025, the Company entered into an amended and restated employment agreement with Kristen K. Buck, M.D., the Company’s Vice President, R&D and Chief Medical Officer (the “Buck Amended and Restated Employment Agreement”). The Buck Amended and Restated Employment Agreement supplements and amends the Employment Agreement, dated and effective as of July 26, 2021, between Dr. Buck and the Company. The Buck Amended and Restated Employment Agreement: (i) amends Dr. Buck’s base salary to $599,342 from $550,000, (ii) clarifies that a material reduction in Dr. Buck’s base salary is included in the definition of “Good Reason”, (iii) amends that in the event of Dr. Buck’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Dr. Buck’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Dr. Buck’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (iv) amends Dr. Buck’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Dr. Buck group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Dr. Buck a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (v) amends Dr. Buck’s bonus payments in the event of a termination not in connection to a Change in Control such that the amount will not be pro-rated for the number of days Dr. Buck was employed in the year of termination of employment, (vi) amends the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (vii) clarifies that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Code comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Dr. Buck may receive such severance payments as a lump sum payment on the next payroll period following the date of her termination from employment; and (viii) clarifies other technical terms for compliance with Section 409A of the Code. Amended and Restated Separation Benefits Agreement On June 10, 2025, the Company entered into an amended and restated separation benefits agreement with James Nisco, Senior Vice President Finance and Treasury and Chief Accounting Officer of the Company (the “Nisco Amendment”). The Nisco Amendment supplements and amends the separation benefits provided in the Non-Change in Control Separation Pay Agreement between the Company and Mr. Nisco, dated as of December 24, 2024, and the severance agreement between Mr. Nisco and the Company, dated and effective as of September 12, 2016, and further amended on March 25, 2022. The Nisco Amendment: (i) amends the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (ii) includes a condition that Mr. Nisco’s right to the severance payments and benefits described therein are subject to Mr. Nisco’s timely execution and non-revocation of a general release of claims within sixty days following Mr. Nisco’s termination or such shorter time period set forth therein, (iii) amends Mr. Nisco’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Mr. Nisco’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Mr. Nisco a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (iv) amends that in the event of Mr. Nisco’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Mr. Nisco’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Mr. Nisco’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (v) clarifies that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of the Code, comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Mr. Nisco may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment; and (vi) clarifies other technical terms for compliance with Section 409A of the Code. Amended and Restated Separation Benefits Agreement On June 10, 2025, the Company entered into an amended and restated separation benefits agreement (the “Imam Amendment”) with Tariq Imam, Senior Vice President, Business Development and Operations and General Counsel of the Company. The Imam Amendment supplements and amends the separation benefits provided in the Non-Change in Control Separation Pay Agreement between the Company and Mr. Imam, dated as of December 24, 2024, effective as of February 1, 2025 (the “Imam Non-Change in Control Separation Pay Agreement”) and the severance agreement between Mr. Imam and the Company, dated as of March 25, 2022 (the “Imam Severance Agreement”). Imam Severance Agreement Pursuant to the Imam Severance Agreement, Mr. Imam is entitled to receive certain payments following his termination from the Company in specific circumstances. If Mr. Imam terminates his employment for Good Reason (as defined in the Imam Severance Agreement) during the period commencing on the effective date of a Change in Control (as defined in the Imam Severance Agreement) and ending on the second anniversary of the effective date of a Change in Control (as defined in the Imam Severance Agreement), or the Company terminates Mr. Imam’s employment without Cause (as defined in the Imam Severance Agreement) (other than by reason of his death or disability), the Company will (a) continue to pay Mr. Imam’s current base salary of $356,000 (the “Imam Salary Payment”) for 12 months following the date the termination becomes effective (the "Imam Severance Period"), commencing on the next payroll period following the date the termination becomes effective and (b) pay Mr. Imam a lump-sum equal to 100% of Mr. Imam’s then annual target bonus on the next payroll period following the date the termination becomes effective (the “Imam Cash Severance”) and (c) pay monthly the monthly premium amount for continued COBRA coverage. If the Company may not pay Mr. Imam’s COBRA premiums without incurring tax penalties or violating any requirement of law, the Company shall use its commercially reasonable best efforts to provide Mr. Imam with substantially similar assistance in an alternative manner (the “Imam COBRA Payments”), provided that the cost of doing so does not exceed the cost that the Company would have incurred had the Company been able to pay the COBRA premiums on Mr. Imam’s behalf. In addition to the Imam Salary Payment, Imam Cash Severance and the Imam COBRA Payments, the Company shall (i) fully vest as of the date the termination becomes effective, all outstanding unvested equity awards, including options granted to Mr. Imam; and (ii) extend the exercise date of the options to the earlier of the one-year anniversary of the date the termination becomes effective and the original expiration date of the options. Imam Non-Change in Control Separation Pay Agreement Pursuant to the Imam Non-Change in Control Separation Pay Agreement, Mr. Imam is entitled to a salary continuation of his current base salary of $356,000 for 12 months from the date of his termination, as well as a lump-sum cash payment of 100% of his then annual target bonus on the next payroll period following the date the termination becomes effective. Mr. Imam is also entitled to payment of accrued but unpaid paid time off and wages up to the date of termination and monthly COBRA coverage reimbursements for 12 months from the date of termination. The Imam Non-Change in Control Separation Pay Agreement also provides an extension of the time period for exercising any fully vested option awards to the earlier of the one-year anniversary of the date the termination becomes effective and the original expiration date of the options. The Imam Amendment: (i) amends the definition of “Change in Control” therein to include the approval by the shareholders of the Company of any plan of complete liquidation of the Company, provided that the Change in Control meets all of the requirements of a “change in control” within the meaning of Treasury Regulation §1.409A-3(i)(5), (ii) includes a condition that Mr. Imam’s right to the severance payments and benefits described therein are subject to Mr. Imam’s timely execution and non-revocation of a general release of claims within sixty days following Mr. Imam’s termination or such shorter time period set forth therein, (iii) amends Mr. Imam’s COBRA benefit coverage after the date of termination to monthly reimbursement payments for the cost of Mr. Imam’s group health plan coverage, except in the event that such payment would incur tax penalties to the Company, violate applicable nondiscrimination requirements or in the event that the Company terminates the group health plan, in which case the Company will pay Mr. Imam a lump-sum cash payment equal to the aggregate cost of the remaining reimbursement payments less required withholdings, (iv) clarifies that in the event of Mr. Imam’s termination from the Company within two years following a Change in Control (as defined therein), any determination on (a) whether Mr. Imam’s termination constitutes a termination with or without Cause (as defined therein) or with or without Good Reason (as defined therein) and (b) Mr. Imam’s entitlement to the separation benefits and payments described therein, will be determined by the board of directors of the Company as constituted immediately prior to such Change in Control, which board may delegate its authority to a qualified independent third party, (v) clarifies that the base salary severance payments, to the extent that the payments are in the aggregate less than or equal to twice the compensation limit under Section 401(a)(17) of Code, comply with the involuntary separation pay plan exception to Section 409A of the Code, and further clarifies that Mr. Imam may receive such severance payments as a lump sum payment on the next payroll period following the date of his termination from employment and (vi) clarifies other technical terms for compliance with Section 409A of the Code. Legal Proceedings and Claims From time to time, the Company is subject to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business. While the outcome of pending claims cannot be predicted with certainty, the Company does not believe that the outcome of any pending claims will have a material adverse effect on the Company's financial condition or operating results. The Company has elected to recognize expense for legal fees as incurred when the legal services are provided. In May 2021, Cend received a written threat of litigation on behalf of a Chinese entity called Lingmed Limited (“Lingmed”) claiming Lingmed was entitled to a success fee based on Cend’s Collaboration and License Agreement with Qilu Pharmaceuticals. Cend responded by denying that Lingmed is entitled to a success fee under the terms of their agreement. In May 2022, Cend was served with a complaint filed by Lingmed in the San Diego County Superior Court, alleging claims for breach of contract, fraud and declaratory relief. Cend’s response to the complaint was filed on June 6, 2022 and denied all of Lingmed’s material allegations. Lingmed filed an answer to Cend’s response on July 11, 2022, denying all of the Company’s material allegations. On March 25, 2024 the Company entered into a settlement agreement whereby the Company was required to pay Lingmed $0.5 million within 30 days of the effective date and the Company effected payment on April 4, 2024. Lingmed is also entitled to 5.0% of any future milestone payments received by the Company under the license agreement with Qilu in addition to a sum of $250 thousand with respect to the first future milestone received by the Company. On April 9, 2024, pursuant to the parties’ joint request, the Court entered a dismissal with prejudice of the entire action as to all parties and all claims and the matter was settled.

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