Item 9A. Controls and Procedures
ITEM 9A. CONTROLS AND PROCEDURES
Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures
As of December 31, 2020, management, with the participation of our Chief Executive Officer and Chief Financial Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures.
Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2020, the design and operation of our disclosure controls and procedures were effective at a reasonable assurance level.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed by, or under the supervision of, our CEO and CFO, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:
● Pertain to the maintenance of records that accurately and fairly reflect in reasonable detail the transactions and dispositions of the assets of our company;
● Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
● Provide reasonable assurances regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material adverse effect on our financial statements.
Our management assessed our internal control over financial reporting as of December 31, 2020, the end of the period covered by this Annual Report on Form 10-K. Management based its assessment on criteria established in “Internal Control—Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on management’s assessment of our internal control over financial reporting, management concluded that, as of December 31, 2020, our internal control over financial reporting was effective.
Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended December 31, 2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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ITEM 9B. OTHER INFORMATION
None.
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information required by this item will be contained in our definitive proxy statement to be filed with the Securities and Exchange Commission on Schedule 14A in connection with our 2020 Annual Meeting of Stockholders (the “Proxy Statement”), which will be filed not later than 120 days after the end of our fiscal year ended December 31, 2020, under the headings “Executive Officers,” “Election of Directors,” “Corporate Governance,” and “ Section 16(a) Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference.
We have adopted a Code of Business Conduct and Ethics that applies to our officers, directors and employees which is available on our website at www.ardelyx.com. The Code of Business Conduct and Ethics is intended to qualify as a “code of ethics” within the meaning of Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K. In addition, we intend to promptly disclose (1) the nature of any amendment to our Code of Business Conduct and Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions and (2) the nature of any waiver, including an implicit waiver, from a provision of our code of ethics that is granted to one of these specified officers, the name of such person who is granted the waiver and the date of the waiver on our website in the future.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item regarding executive compensation will be incorporated by reference to the information set forth in the sections titled “Executive Compensation” in our Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information required by this item regarding security ownership of certain beneficial owners and management will be incorporated by reference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this item regarding certain relationships and related transactions and director independence will be incorporated by reference to the information set forth in the sections titled “Certain Relationships and Related Party Transactions” and “Election of Directors”, respectively, in our Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by this item regarding principal accountant fees and services will be incorporated by reference to the information set forth in the section titled “Principal Accountant Fees and Services” in our Proxy Statement.
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PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this report:
1. Financial Statements
See Index to Financial Statements at Item 8 herein.
2. Financial Statement Schedules
All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.
3. Exhibits
See the Exhibit Index immediately following this page.
ITEM 16. FORM 10-K SUMMARY
None.
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Exhibit Index
Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
Date
Number
Herewith
3.1
Amended and Restated Certificate of Incorporation
8-K
6/24/2014
3.1
3.2
Amended and Restated Bylaws
8-K
6/24/2014
3.2
4.1
Reference is made to Exhibits 3.1 and 3.2
4.2
Form of Common Stock Certificate
S-1/A
6/18/2014
4.2
4.3
Form of Warrant issued pursuant to the Securities Purchase Agreement by and among Ardelyx, Inc. and the purchasers signatory thereto, dated June 2, 2015
S-3
7/13/2015
4.3
4.4
Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934
X
10.1
Termination Agreement, dated June 2, 2015, by and between AstraZeneca AB and Ardelyx, Inc.
10-Q
8/12/2015
10.1
10.2
Amendment No. 1 to Termination Agreement and to Manufacturing and Supply Agreement, dated November 2, 2015 by and between AstraZeneca AB and Ardelyx, Inc.
10-K
3/4/2016
10.1(d)
10.3(a)
Lease, dated August 8, 2008, by and between 34175 Ardenwood Venture, LLC and Ardelyx, Inc.
S-1
5/19/2014
10.4(a)
10.3(b)
First Amendment to Lease, dated December 20, 2012, by and between 34175 Ardenwood Venture, LLC and Ardelyx, Inc.
S-1
5/19/2014
10.4(b)
10.3(c)
Second Amendment to Lease, dated September 5, 2014, by and between Ardelyx, Inc. and 34175 Ardenwood Venture, LLC
8-K
9/9/2014
10.1
10.3(d)
Third Amendment to Lease, dated April 28, 2016, by and between Ardelyx, Inc. and 34175 Ardenwood Venture, LLC
10-Q
8/8/2016
10.3
10.4(a)#
Ardelyx, Inc. 2008 Stock Incentive Plan, as amended
S-1
5/19/2014
10.5(a)
10.4(b)#
Form of Stock Option Grant Notice and Stock Option Agreement under the 2008 Stock Incentive Plan, as amended
S-1
5/19/2014
10.5(b)
10.4(c)#
Form of Restricted Stock Purchase Grant Notice and Restricted Stock Purchase Agreement under the 2008 Stock Incentive Plan, as amended
S-1
5/19/2014
10.5(c)
10.5(a)#
Ardelyx, Inc. 2014 Equity Incentive Award Plan
S-8
7/14/2014
99.3
10.5(b)#
Form of Stock Option Grant Notice and Stock Option Agreement under the 2014 Equity Incentive Award Plan
S-1/A
6/9/2014
10.6(b)
10.5(c)#
Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2014 Equity Incentive Award Plan
S-1/A
6/9/2014
10.6(c)
10.6#
Form of Indemnification Agreement for directors and officers
S-1/A
6/9/2014
10.7
10.7#
Amended and Restated Executive Employment Agreement, dated June 6, 2014, by and between Ardelyx, Inc. and Michael Raab
S-1/A
6/9/2014
10.8
10.8#
Amended and Restated Change in Control Severance Agreement, dated June 6, 2014, by and between Ardelyx, Inc. and Jeffrey Jacobs, Ph.D.
S-1/A
6/9/2014
10.17
10.9#
Offer Letter, dated May 2, 2008, by and between Ardelyx, Inc. and Jeff Jacobs, Ph.D.
S-1/A
6/9/2014
10.12
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Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
Date
Number
Herewith
10.10#
Offer Letter, dated December 28, 2009, by and between Ardelyx, Inc. and David Rosenbaum, Ph.D.
S-1/A
6/9/2014
10.13
10.11#
Offer Letter, dated November 21, 2012, by and between Ardelyx, Inc. and Elizabeth Grammer, Esq.
S-1/A
6/9/2014
10.14
10.12#
Ardelyx, Inc. 2014 Employee Stock Purchase Plan
S-8
7/14/2014
99.6
10.13(a)#
Non-Employee Director Compensation Program
S-1/A
6/9/2014
10.21
10.13(b)#
Description of amendments to Non-Employee Director Compensation Program
8-K
3/9/2017
N/A
10.14
Registration Rights Agreement by and among Ardelyx, Inc. and the investors signatory thereto, dated June 2, 2015
S-3
7/13/2015
99.1
10.15
Registration Rights Agreement by and among Ardelyx, Inc. and the investors signatory thereto, dated July 14, 2016
10-Q
8/8/2016
10.2
10.16(a)#
Ardelyx, Inc. 2016 Employment Commencement Incentive Plan
S-8
11/10/2016
99.1
10.16(b)#
Form of Stock Option Grant Notice and Stock Option Agreement under the 2016 Employment Commencement Incentive Plan
S-8
11/10/2016
99.2
10.16(c)#
Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2016 Employment Commencement Incentive Plan
S-8
11/10/2016
99.3
10.16(d)#
Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2016 Employment Commencement Incentive Plan
S-8
11/10/16
99.4
10.17††
License Agreement, dated November 27, 2017, by and between Kyowa Hakko Kirin Co. , Ltd. and Ardelyx, Inc.
10-K
3/14/2018
10.35
10.18††
License Agreement, dated December 11, 2017, by and between Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. and Ardelyx, Inc.
10-K
3/14/2018
10.36
10.19#
Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc. and Elizabeth Grammer.
10-Q
5/8/2018
10.0
10.20#
Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc. and David P. Rosenbaum, Ph.D.
10-Q
5/8/2018
10.1
10.21
Loan and Security Agreement, dated May 16, 2018, by and between the Company and Solar Capital Ltd. and Western Alliance Bank.
10-Q
8/7/2018
10.1
10.22
Exit Fee Agreement, dated May 16, 2018, by and between the Company and Solar Capital Ltd. and Western Alliance Bank.
10-Q
8/7/2018
10.2
10.23#
Transition and Separation Agreement dated July 8, 2018, by and between the Company and Reginald Seeto, MBBS.
10-Q
8/7/2018
10.3
10.24(a)#
Amended and Restated Non-Employee Director Compensation Program.
10-Q
5/7/2019
10.1
10.25#
Transition and Separation Agreement dated November 25, 2019, by and between the Company and Mark Kaufmann.
10-K
3/6/2020
10.3
10.26#
Offer Letter, dated April 27, 2020, by and between Ardelyx, Inc. and Susan Rodriguez
10-Q
8/6/2020
10.1
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Exhibit
Incorporated by Reference
Filed
Number
Exhibit Description
Form
Date
Number
Herewith
10.27#
Change in Control Severance Agreement dated June 2, 2020, by and between Ardelyx, Inc. and Susan Rodriguez
10-Q
8/6/2020
10.2
10.28#
Offer Letter, dated June 2, 2020, by and between Ardelyx, Inc. and Justin Renz
10-Q
8/6/2020
10.3
10.29#
Change in Control Severance Agreement, dated June 8, 2020, by and between Ardelyx, Inc. and Justin Renz
10-Q
8/6/2020
10.4
10.30††
Manufacturing Services Agreement, dated May 18, 2020, between Ardelyx, Inc. and Patheon Pharmaceuticals Inc.
10-Q
8/6/2020
10.5
10.31
Lease Agreement, dated December 30, 2020, by and between Ardelyx, Inc. and Prospect Fifth Ave, LLC.
X
23.1
Consent of Independent Registered Public Accounting Firm
X
31.1
Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
X
31.2
Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended
X
32.1
Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a ‑ 14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C §1350
X
101.INS
Inline XBRL Instance Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File
†
Confidential treatment granted as to portions of this Exhibit. The confidential portions of this Exhibit have been omitted and are marked by asterisks.
††
Certain portions have been omitted pursuant to a confidential treatment request. Omitted information has been filed separately with the Securities and Exchange Commission.
#
Indicates management contract or compensatory plan.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Ardelyx, Inc.
Date: March 8, 2021
By:
/s/ Michael Raab
Michael Raab
President Chief Executive Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes and appoints Michael Raab and Justin Renz, and each of them, with full power of substitution and resubstitution and full power to act without the other, as his or her true and lawful attorney-in-fact and agent to act in his or her name, place and stead and to execute in the name and on behalf of each person, individually and in each capacity stated below, and to file any and all amendments to this annual report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing, ratifying and confirming all that said attorneys-in-fact and agents or any of them or their or his substitute or substitutes may lawfully do or cause to be done by virtue thereof.
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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Michael Raab
President, Chief Executive Officer and Director
March 8, 2021
Michael Raab
(Principal Executive Officer)
/s/ Justin Renz
Chief Financial Officer
March 8, 2021
Justin Renz
(Principal Financial and Accounting Officer)
/s/ David Mott
Chairman of the Board of Directors
March 8, 2021
David Mott
/s/ Robert Bazemore
Director
March 8, 2021
Robert Bazemore
/s/ William Bertrand, Jr.
Director
March 8, 2021
William Bertrand, Jr.
/s/ Geoffrey A. Block
Director
March 8, 2021
Geoffrey A. Block, M.D.
/s/ Onaiza Cadoret-Manier
Director
March 8, 2021
Onaiza Cadoret-Manier
/s/ Jan M. Lundberg
Director
March 8, 2021
Jan M. Lundberg, Ph.D.
/s/ Gordon Ringold
Director
March 8, 2021
Gordon Ringold, Ph.D.
/s/ Richard Rodgers
Director
March 8, 2021
Richard Rodgers
120