Item 1.03. Bankruptcy or Receivership.
On March 27, 2023, Codiak BioSciences, Inc. (the "Company") filed a voluntary
petition (the "Bankruptcy Petition") for relief under Chapter 11 of Title 11
("Chapter 11") of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court"), thereby commencing a Chapter 11 case for the Company
(Case No. 23-10350). The Company continues to operate its business as a
"debtor-in-possession" under the jurisdiction of the Bankruptcy Court and in
accordance with the applicable provisions of the Bankruptcy Code and orders of
the Bankruptcy Court. The Company is seeking approval of a variety of "first
day" motions containing customary relief intended to enable the Company to
continue its ordinary course operations. The Company intends to sell
substantially all of its assets during the bankruptcy case.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On March 23, 2023, the board of directors (the "Board") of Codiak BioSciences,
Inc. approved a restructuring of operations and corresponding reduction in
workforce, designed to reduce costs and reallocate resources while maintaining
the personnel needed to support the Company's key programs and refocused
pipeline, including the wind down of the Company's clinical trial for
exoASO™-STAT6, while the Company explores strategic alternatives (the
"Restructuring"). The Restructuring reduced the Company's workforce by
thirty-four (34) employees, or 69%, with the reductions in personnel expected to
be completed by April 7, 2023. The Company expects to provide severance payments
to the affected employees. The Company also plans to enter into retention
arrangements with certain employees who are expected to remain with the Company
to assist with its exploration of strategic alternatives. The Company estimates
that it will incur approximately $1,120,000 of costs in connection with the
reduction in workforce related to severance pay and other related termination
benefits. The costs related to the Restructuring are subject to a number of
assumptions, and actual results may differ materially. The Company may also
incur other charges or cash expenditures not currently contemplated due to
events that may occur as a result of, or associated with, the Restructuring.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
In connection with the Restructuring discussed in Item 2.05 above, the following
members of the Company's executive team will be leaving the Company to pursue
new opportunities: (i) Douglas E. Williams, Ph.D., President and Chief Executive
Officer, (ii) Linda C. Bain, Chief Financial Officer and Treasurer, (iii) David
Mauro, M.D., Ph.D., Chief Medical Officer, (iv) Sriram Sathyanarayanan, Ph.D.,
Chief Scientific Officer, (v) Yalonda Howze, Executive Vice President, Chief
Legal and Compliance Officer and Corporate Secretary, and (iv) Nicole Barna,
Senior Vice President, Human Resources. Ms. Howze notified the Company of her
resignation from her position, to be effective as of April 4, 2023, on March 24,
2023. The departures of Dr. Williams, Ms. Bain, Dr. Mauro, Dr. Sathyanarayanan
and Ms. Barna will be effective as of April 7, 2023. The Company plans to enter
into consulting agreements with each of Dr. Williams, Ms. Bain, Dr. Mauro, Dr.
Sathyanarayanan, Ms. Howze and Ms. Barna.
Dr. Williams will continue to serve as a director of the Company.
The Company would like to thank Dr. Williams, Ms. Bain, Dr. Mauro,
Dr. Sathyanarayanan, Ms. Barna and Ms. Howze for their commitment and guidance
to the Company.
In connection with their departures, the executives will be entitled to certain
severance payments. Ms. Bain will be entitled to a severance payment of $74,254,
Dr. Mauro will be entitled to a severance payment of $55,200,
Dr. Sathyanarayanan will be entitled to a severance payment of $68,169, and
Ms. Barna will be entitled to a severance payment of $59,119.
Item 8.01. Other Events.
On March 27, 2023, the Company issued a press release announcing its Bankruptcy
Petition and related matters. A copy of the press release is filed as Exhibit
99.1 hereto and is incorporated herein by reference.
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Cautionary Note Regarding Forward-Looking Statements
This report, including the exhibits hereto, contains "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995, including, among other things, statements regarding the expected
cost-savings from the Restructuring and the expecting timing for incurring costs
associated with the Restructuring, the expected timing of implementing and
completing the Restructuring and the Bankruptcy Petition, the Company's plans to
retain certain individuals as employees or consultants to assist in this
process, and the potential for and timing of the consummation of sales of the
Company's assets or other strategic alternatives. Any forward-looking statements
in this report, including the exhibits hereto, are based on management's current
expectations of future events and are subject to a number of risks and
uncertainties that could cause actual results to differ materially and adversely
from those set forth in or implied by such forward-looking statements,
including, but not limited to, the risk that the Company may not be able to
implement the Restructuring or the exploration of strategic alternatives under
the Bankruptcy Petition as currently anticipated or within the timing currently
anticipated, the impact of the workforce reduction on the Company's business,
the risk that the Company's cost saving initiatives may not be successful,
unanticipated difficulties with preserving capital, unanticipated difficulties
in terminating certain contracts and arrangements, unanticipated charges not
currently contemplated that may occur as a result of the Restructuring, and the
risk that the Company may not be successful in identifying one or more strategic
alternatives or ultimately pursuing a strategic alternative that delivers the
anticipated benefits. For a discussion of these risks and uncertainties, and
other important factors, any of which could cause our actual results to differ
from those contained in the forward-looking statements, see the section entitled
"Risk Factors" in the Company's Annual Report on Form 10-K for the year ended
December 31, 2021, and in subsequent filings with the Securities and Exchange
Commission ("SEC"), as well as discussions of potential risks, uncertainties and
other important factors in the Company's subsequent filings with the SEC. All
information in this report, including the exhibits hereto, is current as of the
date of this report, and the Company undertakes no duty to update this
information unless required by law.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
Number Description
99.1 Press release, dated March 27, 2023, issued by Codiak BioSciences,
Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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