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Item 9A. Controls and Procedures

2022-02-28 compared with 2021-03-08 · 146 added, 82 removed, 100 unchanged (70% of the section changed)

14 unchanged sentences

Based on management’s assessment of our internal control over financial reporting, management concluded that, as of December 31, 2021, 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.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Attestation Report of Independent Registered Public Accounting Firm

Our independent registered public accounting firm, Ernst & Young LLP, has audited our Financial Statements included in Item 8 of this Annual Report on Form 10-K and have issued a report on our internal control over financial reporting as of December 31, 2021.

Their report on the audit of internal control over financial reporting appears below.

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Ardelyx, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Ardelyx, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (“the COSO criteria”).

In our opinion, Ardelyx, Inc.

(“the Company”) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the balance sheets of the Company as of December 31, 2021 and 2020, the related statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 28, 2022 expressed an unqualified opinion thereon that included an explanatory paragraph regarding the Company’s ability to continue as a going concern.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Redwood City, California

February 28, 2022

OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not Applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

20 unchanged sentences

Exhibit Index

Incorporated by Reference

Exhibit Description

Number Incorporated by Reference Filed

Exhibit Description Form Date Number

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

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-1/A 6/18/2014 4.2

4.4 Description of the Registrant’s Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

10-K 3/8/2021 4.4

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.

Lease, dated August 8, 2008, by and between 34175 Ardenwood Venture, LLC and Ardelyx, Inc.

First Amendment to Lease, dated December 20, 2012, by and between 34175 Ardenwood Venture, LLC and Ardelyx, Inc.

Second Amendment to Lease, dated September 5, 2014, by and between 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

Third Amendment to Lease, dated April 28, 2016, by and between Ardelyx, Inc.

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

Ardelyx, Inc.

10-Q 8/8/2016 10.3

10.3(e) Fifth Amendment to Lease, dated May 25, 2021, by and between Ardelyx, Inc.

and 34175 Ardenwood Venture, LLC

8-K 6/1/2021 10.1

10.4(a)# Ardelyx, Inc.

2008 Stock Incentive Plan, as amended

Form of Stock Option Grant Notice and Stock Option Agreement under the 2008 Stock Incentive Plan, as amended

Form of Restricted Stock Purchase Grant Notice and Restricted Stock Purchase Agreement under the 2008 Stock Incentive Plan, as amended

Ardelyx, Inc.

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

Form of Stock Option Grant Notice and Stock Option Agreement under the 2014 Equity Incentive Award Plan

Form of Restricted Stock Award Agreement and Restricted Stock Unit Award Grant Notice under the 2014 Equity Incentive Award Plan

S-8 7/14/2014 99.3

Number Incorporated by Reference Filed

Exhibit Description Form Date Number

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

Amended and Restated Change in Control Severance Agreement, dated June 6, 2014, by and between Ardelyx, Inc.

and Jeffrey Jacobs, Ph.D.

Offer Letter, dated May 2, 2008, by and between Ardelyx, Inc.

and Jeff Jacobs, Ph.D.

Incorporated by Reference

Exhibit Description

S-1/A 6/9/2014 10.8

10.8# Retention Agreement, dated October 25, 2021, by and between Ardelyx, Inc.

and Mike Raab

10.9# 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# Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc.

Rosenbaum, Ph.D.

10-Q 5/8/2018 10.10

10.12# Offer Letter, dated November 21, 2012, by and between Ardelyx, Inc.

and Elizabeth Grammer, Esq.

S-1/A 6/9/2014 10.14

10.13# Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc.

and Elizabeth Grammer.

10-Q 5/8/2018 10.00

10.14# Offer Letter, dated April 27, 2020, by and between Ardelyx, Inc.

and Susan Rodriguez

10-Q 8/6/2020 10.10

10.15# Change in Control Severance Agreement dated June 2, 2020, by and between Ardelyx, Inc.

and Susan Rodriguez

10-Q 8/6/2020 0.01

10.16# Retention Agreement, dated October 25, 2021, by and between Ardelyx, Inc.

and Susan Rodriguez

10.17# Offer Letter, dated June 2, 2020, by and between Ardelyx, Inc.

and Justin Renz

10-Q 8/6/2020 10.30

10.18# Change in Control Severance Agreement, dated June 8, 2020, by and between Ardelyx, Inc.

and Justin Renz

10-Q 8/6/2020 10.40

10.19# Retention Agreement, dated October 25, 2021, by and between Ardelyx, Inc.

and Justin Renz

10.20# Amendment Number One to Second Amended and Restated Change in Control Severance Agreement and Retention Agreement dated December 1, 2021 between Ardelyx, Inc.

and David Rosenbaum

10.21# Form of Executive Retention Agreement Version 1

10.22# Form of Executive Retention Agreement Version 2

10.23# Ardelyx, Inc.

2014 Employee Stock Purchase Plan

Non-Employee Director Compensation Program

Description of amendments to Non-Employee Director Compensation Program

S-8 7/14/2014 99.6

10.24(a)# Non-Employee Director Compensation Program

S-1/A 6/9/2014 10.21

10.24(b)# Description of amendments to Non-Employee Director Compensation Program

8-K 3/9/2017 N/A

10.24(c)# Amended and Restated Non-Employee Director Compensation Program.

10-Q 5/7/2019 10.1

10.25 Registration Rights Agreement by and among Ardelyx, Inc.

and the investors signatory thereto, dated June 2, 2015

S-3 7/13/2015 99.1

10.26 Registration Rights Agreement by and among Ardelyx, Inc.

and the investors signatory thereto, dated July 14, 2016

Ardelyx, Inc.

10-Q 8/8/2016 10.2

10.27(a)# Ardelyx, Inc.

2016 Employment Commencement Incentive Plan

Form of Stock Option Grant Notice and Stock Option Agreement under the 2016 Employment Commencement Incentive Plan

Form of Restricted Stock Unit Award Grant Notice and Restricted Stock Unit Award Agreement under the 2016 Employment Commencement Incentive Plan

Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2016 Employment Commencement Incentive Plan

S-8 11/10/2016 99.1

10.27(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

10.27(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

Number Incorporated by Reference Filed

Exhibit Description Form Date Number

10.27(d)# Form of Restricted Stock Award Grant Notice and Restricted Stock Award Agreement under the 2016 Employment Commencement Incentive Plan

S-8 11/10/2016 99.4

10.28†† License Agreement, dated November 27, 2017, by and between Kyowa Hakko Kirin Co.

and Ardelyx, Inc.

10-K 3/14/2018 10.35

10.29†† License Agreement, dated December 11, 2017, by and between Shanghai Fosun Pharmaceutical Industrial Development Co.

and Ardelyx, Inc.

Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc.

and Elizabeth Grammer.

Second Amended and Restated Change in Control and Severance Agreement by and between Ardelyx, Inc.

Rosenbaum, Ph.D.

Loan and Security Agreement, dated May 16, 2018, by and between the Company and Solar Capital Ltd.

and Western Alliance Bank.

10-K 3/14/2018 10.36

10.30 Exit Fee Agreement, dated May 16, 2018, by and between the Company and Solar Capital Ltd.

and Western Alliance Bank.

Transition and Separation Agreement dated July 8, 2018, by and between the Company and Reginald Seeto, MBBS.

Amended and Restated Non-Employee Director Compensation Program.

Transition and Separation Agreement dated November 25, 2019, by and between the Company and Mark Kaufmann.

Offer Letter, dated April 27, 2020, by and between Ardelyx, Inc.

and Susan Rodriguez

Incorporated by Reference

Exhibit Description

Change in Control Severance Agreement dated June 2, 2020, by and between Ardelyx, Inc.

and Susan Rodriguez

Offer Letter, dated June 2, 2020, by and between Ardelyx, Inc.

and Justin Renz

Change in Control Severance Agreement, dated June 8, 2020, by and between Ardelyx, Inc.

and Justin Renz

10-Q 8/7/2018 10.2

10.31†† Manufacturing Services Agreement, dated May 18, 2020, between Ardelyx, Inc.

and Patheon Pharmaceuticals Inc.

10-Q 8/6/2020 10.5

10.32 Lease Agreement, dated December 30, 2020, by and between Ardelyx, Inc.

and Prospect Fifth Ave, LLC.

10-K 3/8/2021 10.31

10.33 Open Market Sales Agreement, dated August 31, 2021 between Ardelyx, Inc.

and Jefferies LLC.

8-K 8/17/2021 10.1

23.1 Consent of Independent Registered Public Accounting Firm

2 unchanged sentences

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

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_______________________________

† Confidential treatment granted as to portions of this Exhibit.

5 unchanged sentences

Ardelyx, Inc.

March 8, 2021

February 28, 2022 By:

/s/ Michael Raab

4 unchanged sentences

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.

/s/ Michael Raab

President, Chief Executive Officer and Director

March 8, 2021

Signature Title Date

/s/ Michael Raab President, Chief Executive Officer and Director

(Principal Executive Officer)

/s/ Justin Renz

Chief Financial Officer

March 8, 2021

February 28, 2022

/s/ Justin Renz Chief Financial Officer

(Principal Financial and Accounting Officer)

/s/ David Mott

Chairman of the Board of Directors

March 8, 2021

/s/ Robert Bazemore

March 8, 2021

February 28, 2022

/s/ David Mott Chairman of the Board of Directors February 28, 2022

/s/ Robert Bazemore Director February 28, 2022

Robert Bazemore

/s/ William Bertrand, Jr.

March 8, 2021

William Bertrand, Jr.

Director February 28, 2022

William Bertrand, Jr., J.D.

/s/ Muna Bhanji Director February 28, 2022

Muna Bhanji, R.Ph

/s/ Geoffrey A.

March 8, 2021

/s/ Onaiza Cadoret-Manier

March 8, 2021

Block Director February 28, 2022

/s/ Onaiza Cadoret-Manier Director February 28, 2022

Onaiza Cadoret-Manier

March 8, 2021

Lundberg Director February 28, 2022

Lundberg, Ph.D.

/s/ Gordon Ringold

March 8, 2021

Gordon Ringold, Ph.D.

/s/ Richard Rodgers

March 8, 2021

/s/ Richard Rodgers Director February 28, 2022

Richard Rodgers

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures