What changed in this filing

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Item 1. Financial Statements

2021-05-13 compared with 2020-11-12 · 603 added, 975 removed, 22 unchanged (99% of the section changed)

Financial Statements.

DEVELOPMENT CORP.

CONDENSED BALANCE SHEET

Gemini Therapeutics, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

Current assets:

Prepaid expenses

Cash and cash equivalents

Prepaid expenses and other current assets

Total current assets

Cash equivalents held in Trust Account

$ 122,358,987

Liabilities and Stockholders’

Property and equipment, net

Restricted cash

Deferred offering costs

Liabilities and stockholders' equity (deficit)

Current liabilities:

Accounts payable

Accrued expenses

Franchise tax payable

Accrued expenses and other current liabilities

Term loan, current portion

Convertible notes

Total current liabilities

Deferred underwriting commissions

Warrant liability

Other liabilities

Term loan, net of current portion and discount

Total liabilities

Commitments and Contingencies

Class A common stock, $0.0001 par value;

11,258,033 shares subject to possible redemption at $10.00 per share

Stockholders’

Stockholders' equity (deficit):

Preferred stock, $0.0001 par value;

10,000,000 shares authorized;

none issued and outstanding

Class A common stock, $0.0001 par value;

100,000,000 shares authorized;

1,258,467 shares issued and outstanding (excluding 11,258,033 shares subject to possible redemption)

Class B common stock, $0.0001 par value;

no shares issued

and outstanding as of March 31, 2021 and December 31, 2020

Common stock, $0.0001 par value;

250,000,000 shares authorized;

3,018,750 shares issued and outstanding

43,002,144 and

15,565,380 shares issued and outstanding as of March 31, 2021 and December 31,

2020, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’

Total Liabilities and Stockholders’

$ 122,358,987

accompanying notes are an integral part of these unaudited condensed financial statements.

DEVELOPMENT CORP.

CONDENSED STATEMENTS OF OPERATIONS

three months ended September 30,

For The Period From June 25,

2020 (inception) through September 30,

General and administrative expenses

Franchise tax expense

Total stockholders' equity (deficit)

Total liabilities and stockholders' equity (deficit)

The accompanying notes are an integral part of the financial statements.

Gemini Therapeutics, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

Three Months Ended March 31,

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Interest earned on cash equivalents held in Trust Account

Loss before income tax expense

Income tax benefit

Weighted average shares outstanding of Class A common stock

Basic and diluted net income per share,

Weighted average shares outstanding of Class B common stock

Basic and diluted net loss per share, Class B

accompanying notes are an integral part of these unaudited condensed financial statements.

DEVELOPMENT CORP.

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS’

THE THREE MONTHS ENDED SEPTEMBER 30, 2020 AND FOR THE PERIOD FROM JUNE 25, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

Other income (expense):

Interest expense

Interest income

Loss on conversion of convertible notes

Change in fair value of warrant liability

Net loss and comprehensive loss

Net loss attributable to common stockholders

Net loss per share attributable to common stockholders, basic and diluted

Weighted average common shares outstanding, basic and diluted

The accompanying notes are an integral part of the financial statements.

Gemini Therapeutics, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share amounts)

Convertible Preferred Stock

stockholders'

Balance - June 25, 2020 (inception)

Issuance of Class B common stock to Sponsor

Balance - June 30, 2020

Sale of shares in initial public offering, gross

Offering costs

Sale of private placement shares to Sponsor in private placement

Common stock subject to possible redemption

(11,258,033 )

(112,579,204 )

(112,580,330 )

Balance - September 30, 2020 (unaudited)

accompanying notes are an integral part of these unaudited condensed financial statements.

DEVELOPMENT CORP.

CONDENSED STATEMENT OF CASH FLOWS

THE PERIOD FROM JUNE 25, 2020 (INCEPTION) THROUGH SEPTEMBER 30, 2020

Balance at December 31, 2019

(as previously reported)

Retroactive application of the

recapitalization due to the Business

Combination (Note 3)

Balance at December 31, 2019, effect of

Business Combination (Note 3)

Issuance of Series B convertible preferred

stock, net of issuance costs of $148

Issuance of common stock upon exercise of

stock options

Vesting of restricted common stock

Stock-based compensation expense

Balance at March 31, 2020, effect of

Business Combination (Note 3)

Convertible Preferred Stock

stockholders'

Balance at December 31, 2020

(as previously reported)

Retroactive application of the

recapitalization due to the Business

Combination (Note 3)

Balance at December 31, 2020, effect of

Business Combination (Note 3)

Issuance of common stock upon Business

Combination, net of issuance costs

Conversion of promissory notes (Note 3)

Issuance of common stock upon exercise of

warrants (Note 3)

Vesting of restricted common stock

Issuance of common stock upon exercise of

stock options

Stock-based compensation expense

Balance at March 31, 2021

The accompanying notes are an integral part of the financial statements.

Gemini Therapeutics, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

Three Months Ended March 31,

Cash flows from operating activities:

Interest earned on cash equivalents held in Trust Account

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation expense

Stock-based compensation expense

Non-cash interest expense

Change in fair value of warrant liability

Loss on conversion of convertible notes

Accretion of discount on convertible notes

Changes in operating assets and liabilities:

Prepaid expenses

Prepaid expenses and other current assets

Deferred offering costs

Accounts payable

Franchise tax payable

Accrued expenses

Accrued expenses and other current liabilities

Net cash used in operating activities

Cash Flows from Investing Activities

Cash deposited in Trust Account

(120,750,000 )

Net cash used in Investing activities

(120,750,000 )

Cash flows from financing activities:

Proceeds from issuance of Class B common stock to Sponsor

Proceeds from note payable to related party

Repayment of note payable to related party

Proceeds received from initial public offering, gross

Proceeds received from private placement

Offering costs paid

Proceeds from Business Combination, net

Proceeds from sale of Series B convertible preferred stock, net

Proceeds from exercise of stock options

Principal payments on term loan

Net cash provided by financing activities

Net increase in cash

Cash - beginning of the period

Cash - end of the period

Supplemental disclosure of noncash activities:

Offering costs included in accounts payable

Offering costs included in accrued expenses

Deferred underwriting commissions in connection with the initial public offering

Initial value of Class A common stock subject to possible redemption

$ 113,053,770

Change in value of Class A common stock subject to possible redemption

accompanying notes are an integral part of these unaudited condensed financial statements.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

1—Description of Organization, Business Operations and Basis of Presentation

Development Corp.

(the “Company”) is a blank check company incorporated in Delaware on June 25, 2020.

was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or

similar business combination with one or more businesses (the “Business Combination”).

The Company is an emerging

growth company and, as such, the Company is subject to all of the risks associated with emerging growth companies.

of September 30, 2020, the Company had not commenced any operations.

All activity for the period from June 25, 2020 (inception)

through September 30, 2020 relates to the Company’s formation and the initial public offering (“Initial Public Offering”)

and since the closing of the Initial Public Offering, the search for a prospective initial Business Combination.

The Company will

not generate any operating revenues until after the completion of its initial Business Combination, at the earliest.

will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived

from the Initial Public Offering.

The Company has selected December 31 as its fiscal year end.

Company’s sponsor is FS Development Holdings, LLC, a Delaware limited liability company (the “Sponsor”).

registration statement for the Company’s Initial Public Offering became effective on August 11, 2020.

On August 14, 2020,

the Company consummated its Initial Public Offering of 12,075,000 shares of Class A common stock, including the issuance

of 1,575,000 shares of Class A Common Stock as a result of the underwriter’s exercise in full of its over-allotment option,

(each, a “Public Share”

and collectively, the “Public Shares”) at $10.00 per share, generating gross proceeds

of approximately $120.8 million, and incurring offering costs of approximately $7.1 million, inclusive of approximately

$4.2 million in deferred underwriting commissions (Note 5).

Simultaneously

with the closing of the Initial Public Offering, the Company consummated the private placement (“Private Placement”)

of 441,500 shares of Class A common stock (each, a “Private Placement Share”

and collectively, the “Private

Placement Shares”), at a price of $10.00 per Private Placement Share to the Sponsor, generating proceeds of approximately

$4.4 million (Note 4).

the closing of the Initial Public Offering and the Private

Placement , approximately $120.8 million ($10.00 per share) of the

net proceeds of the sale of the Public Shares in the Initial Public Offering and of the Private Placement Shares in the

Private Placement were placed in a trust account (“Trust Account”) located in the United States

at JP Morgan Chase Bank, N.A.

with Continental Stock Transfer & Trust Company acting as trustee, and are invested only in

“government securities”

within the meaning of Section 2(a)(16) of the Investment Company Act having a

maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the

Investment Company Act which invest only in direct U.S.

government treasury obligations, as determined by the Company, until

the earlier of:

(i) the completion of a Business Combination and (ii) the distribution of the Trust Account as described

Company’s management has broad discretion with respect to the specific application of the net proceeds of the Initial Public

Offering and the sale of Private Placement Shares, although substantially all of the net proceeds are intended to be applied generally

toward consummating a Business Combination.

There is no assurance that the Company will be able to complete a Business Combination

successfully.

The Company must complete one or more initial Business Combinations having an aggregate fair market value of at

least 80% of the net assets held in the Trust Account (as defined below) (net of amounts disbursed to management for working capital

purposes and excluding the amount of any deferred underwriting discount held in trust) at the time of the agreement to enter into

the initial Business Combination.

However, the Company will only complete a Business Combination if the post-transaction company

owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in the target

sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended

(the “Investment Company Act”).

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Company will provide the holders (the “Public Stockholders”) of the Company’s outstanding Public Shares with

the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in

connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer.

as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the

Company, solely in its discretion.

The Public Stockholders will be entitled to redeem their Public Shares for a pro rata portion

of the amount then held in the Trust Account (initially anticipated to be $10.00 per Public Share).

The per-share amount

to be distributed to Public Stockholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions

the Company will pay to the underwriters (as discussed in Note 5).

These Public Shares will be recorded at a redemption value

and classified as temporary equity upon the completion of the Initial Public Offering in accordance with the Financial Accounting

Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing

Liabilities from Equity.”

The Company will proceed with a Business Combination if a majority of the shares voted are voted

in favor of the Business Combination.

The Company will not redeem the Public Shares in an amount that would cause its net tangible

assets to be less than $5,000,001.

If a stockholder vote is not required by law and the Company does not decide to hold a stockholder

vote for business or other legal reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation

(the “Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the U.S.

and Exchange Commission (“SEC”) and file tender offer documents with the SEC prior to completing a Business Combination.

If, however, stockholder approval of the transaction is required by law, or the Company decides to obtain stockholder approval

for business or legal reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the

proxy rules and not pursuant to the tender offer rules.

Additionally, each public stockholder may elect to redeem their Public

Shares irrespective of whether they vote for or against the proposed transaction.

If the Company seeks stockholder approval in

connection with a Business Combination, the Initial Stockholders (as defined below) have agreed to vote their Founder Shares (as

defined below in Note 4) and any Public Shares purchased during or after the Initial Public Offering in favor of a Business Combination.

In addition, the Initial Stockholders have agreed to waive their redemption rights with respect to their Founder Shares and Public

Shares in connection with the completion of a Business Combination.

Certificate of Incorporation provides that a Public Stockholder, together with any affiliate of such stockholder or any other

person with whom such stockholder is acting in concert or as a “group”

(as defined under Section 13 of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect

to more than an aggregate of 20% or more of the Public Shares, without the prior consent of the Company.

Sponsor and the Company’s officers and directors (the “Initial Stockholders”) have agreed not to propose an

amendment to the Certificate of Incorporation to modify the substance or timing of the Company’s obligation to redeem 100%

of the Public Shares if the Company does not complete a Business Combination within the Combination Period (as defined below)

or with respect to any other material provisions relating to stockholders’

rights or pre-initial Business Combination

activity, unless the Company provides the Public Stockholders with the opportunity to redeem their Public Shares in conjunction

with any such amendment.

the Company is unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering,

or August 14, 2022 (the “Combination Period”), the Company will (i) cease all operations except for the purpose of

winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares,

at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest

earned on the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000

of interest to pay dissolution expenses), divided by the number of then outstanding Public Shares, which redemption will completely

extinguish Public Stockholders’

rights as stockholders (including the right to receive further liquidating distributions,

if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the remaining stockholders

and the board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law

to provide for claims of creditors and the requirements of other applicable law.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Initial Stockholders have agreed to waive their rights to liquidating distributions from the Trust Account with respect to the

Founder Shares and Private Placement Shares if the Company fails to complete a Business Combination within the Combination Period.

However, if the Initial Stockholders acquire Public Shares on or after the Initial Public Offering, they will be entitled to liquidating

distributions from the Trust Account with respect to such Public Shares if the Company fails to complete a Business Combination

within the Combination Period.

The underwriters have agreed to waive their rights to the deferred underwriting commission (see

Note 5) held in the Trust Account in the event the Company does not complete a Business Combination within the Combination Period

and, in such event, such amounts will be included with the other funds held in the Trust Account that will be available to fund

the redemption of the Public Shares.

In the event of such distribution, it is possible that the per share value of the residual

assets remaining available for distribution (including Trust Account assets) will be only $10.00.

In order to protect the amounts

held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party

(except for the Company’s independent registered public accounting firm) for services rendered or products sold to the Company,

or a prospective target business with which the Company has entered into a letter of intent, confidentiality or other similar

agreement or business combination agreement (a “Target”), reduce the amount of funds in the Trust Account to below

the lesser of (i) $10.00 per Public Share and (ii) the actual amount per Public Share held in the Trust Account as of the date

of the liquidation of the Trust Account, if less than $10.00 per Public Share due to reductions in the value of the trust assets,

less taxes payable, provided that such liability will not apply to any claims by a third party or Target that executed a waiver

of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to

any claims under the Company’s indemnity of the underwriters of the Initial Public Offering against certain liabilities,

including liabilities under the Securities Act of 1933, as amended (the “Securities Act”).

The Company will seek to

reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to

have all vendors, service providers, prospective target businesses or other entities with which the Company does business, execute

agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

Increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosure

Cash paid for interest

Noncash financing activities

Conversion of convertible notes to Series B preferred stock

Exercise of warrants

Unpaid issuance costs in accounts payable and accrued expenses and other current liabilities

The accompanying notes are an integral part of the financial statements.

Gemini Therapeutics, Inc.

Notes to Condensed Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts)

Nature of the business

Gemini Therapeutics, Inc.

(the “Company” or “Gemini”) is a clinical-stage precision medicine company developing novel therapeutic compounds to treat genetically defined, age-related macular degeneration.

The Company was founded on March 3, 2015 and is currently located in Cambridge, Massachusetts.

Unless the context otherwise requires, references in these notes to “Gemini”, “the Company”, “we”, “us” and “our” and any related terms are intended to mean the post-Business Combination Gemini Therapeutics, Inc.

and its consolidated subsidiary.

Business Combination Transaction

On February 5, 2021 (the “Closing Date”), FS Development Corporation, a Delaware corporation (“FSDC”), consummated the previously announced business combination (the “Business Combination”) pursuant to the terms of the Agreement and Plan of Merger, dated as of October 15, 2020 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among Gemini Therapeutics, Inc., a Delaware corporation (“Old Gemini”), Shareholder Representative Services LLC, a Colorado limited liability company solely in its capacity as the representative, agent and attorney-in-fact of the Company Securityholders (the “Stockholders’ Representative”), FSDC and FSG Merger Sub Inc., a Delaware corporation (“Merger Sub”).

FSDC was incorporated in Delaware on June 25, 2020 and was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On the day prior to the Closing Date, Old Gemini changed its name to “Gemini Therapeutics Sub, Inc.” Pursuant to the Merger Agreement, on the Closing Date, (i) FSDC changed its name to “Gemini Therapeutics, Inc.” and (ii) Old Gemini merged with and into Merger Sub (the “Merger”), with Old Gemini as the surviving company in the Merger and, after giving effect to such Merger, Old Gemini becoming a wholly-owned subsidiary of Gemini.

Upon the closing of the Business Combination, and pursuant to the terms of the Merger Agreement, the existing shareholders of Old Gemini exchanged their interests for shares of common stock of Gemini.

In connection with the Business Combination, certain investors purchased an aggregate of $95.1 million of the Company’s Common Stock in a private placement of public equity (the “PIPE Financing”).

Together with FSDC’s cash resources and funding of the PIPE Financing, the Company received net proceeds of approximately $195.9 million.

For additional information on the Business Combination, please refer to Note 3, Business Combination , to these condensed consolidated financial statements.

Risks and Liquidity

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, uncertainty of product development and commercialization, lack of marketing and sales history, development by its competitors of new technological innovations, dependence on key personnel, market acceptance of products, product liability, protection of proprietary technology, ability to raise additional financing and compliance with government regulations.

If the Company does not successfully commercialize any of its product candidates, it will be unable to generate recurring product revenue or achieve profitability.

The Company’s product candidates are in development and will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization.

These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities.

There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be obtained, that any products developed will obtain necessary government regulatory approval or that any approved products will be commercially viable.

Even if the Company’s product development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from product sales.

The Company operates in an environment of rapid change in technology and is dependent upon the services of its employees, consultants, third-party contract research organizations and other third-party organizations.

Prior to the Business Combination, the Company primarily financed its operations through the sale of convertible preferred stock, borrowings under convertible promissory notes and borrowings under loan agreements.

The Company believes that its $185.0 million of cash and cash equivalents will enable it to fund its planned operations for at least twelve months from the issuance date of these condensed consolidated financial statements, though the Company may pursue additional cash resources through public or private equity

or debt financings .

Management’s expectations with respect to its ability to fund current planned operations is based on estimates that are subject to risks and uncertainties.

Its operating plan may change as a result of many factors currently unknown to management and there can be no assurance that the current operating plan will be achieved in the time frame anticipated by the Company, and it may need to seek additional funds sooner than anticipated.

If adequate funds are not available to the Company on a timely basis, management may be required to delay, limit, reduce or terminate certain of its research, product development or future commercialization efforts, obtain funds through arrangements with collaborators on terms unfavorable to the Company, or pursue merger or acquisition strategies, all of which could adversely affect the holdings or the rights of its stockholders.

Impact of the COVID-19 Pandemic

In March 2020, the WHO declared the COVID-19 outbreak a pandemic.

The COVID-19 outbreak and government measures taken in response have had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred;

supply chains have been disrupted;

facilities and production have been suspended;

and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen.

The COVID-19 pandemic continues to present significant business challenges in 2021, and the future progression of the outbreak and its effects on the Company’s business and operations are uncertain.

The Company and its third-party contract manufacturers (“CMOs”), contract research organizations (“CROs”) and clinical sites may experience disruptions in supply of product candidates and/or procurement of items that are essential for the Company’s research and development activities, including raw materials used in the manufacturing of its product candidates, medical and laboratory supplies used in its clinical trials or preclinical studies or animals that are used for preclinical testing, in each case, for which there may be shortages because of ongoing efforts to address the outbreak.

Additionally, the Company has enrolled, and will seek to enroll, patients in its clinical trials at sites located both in the United States and internationally.

Most of the Company’s clinical trial sites are in areas affected by COVID-19 and, as a result, its trials are being impacted.

The Company cannot predict how long or impactful these delays may be on its clinical trials.

In addition, even if sites are initiating and actively recruiting, the Company may face difficulties recruiting or retaining patients in its clinical trials if patients are affected by the virus or are unable to or are fearful of visiting or traveling to clinical trial sites because of the outbreak.

Prolonged delays or closure to enrollment in the Company’s trials or patient discontinuations could have a material adverse impact on its clinical trial plans and timelines.

In addition, the Company’s ability to collect and verify data requested of patients enrolled in its clinical trials during this pandemic is being impacted to varying degrees.

Clinical trial data collection continues for each of the Company’s clinical trials but at a slower pace, and with challenges and interruptions in data collection, including, in some instances, disruption of collection of complete study data.

This could have a material adverse impact on the Company’s data quality and analysis.

In addition, clinical trial sites may be unable or unwilling to initiate a new trial if factors relevant to the pandemic render this impracticable.

These COVID-19 related issues may prolong the time required to conduct ongoing clinical trials and/or impact the quality of the data obtained from one or more of these studies.

The Company has not incurred impairment losses in the carrying values of its assets as a result of the COVID-19 pandemic, and it is not aware of any specific related event or circumstance that would require it to revise its estimates reflected in these condensed consolidated financial statements.

Although the COVID-19 pandemic did not have a significant impact on the Company’s condensed consolidated financial results in the first quarter of 2021, the full extent to which the COVID-19 pandemic will impact the Company’s business, results of operations, financial condition and cash flows will depend on future developments that are highly uncertain, and the estimates of the impact on the Company’s business may change based on new information that may emerge concerning COVID-19, including the duration of the pandemic, any potential subsequent waves or strains of COVID-19 infection, the effectiveness, distribution and acceptance of COVID-19 vaccines and the actions to contain it or treat its impact and the economic impact on local, regional, national and international markets.

Business Combination

October 15, 2020, the Company entered into an agreement and plan of merger (the “Merger Agreement”) by and among the

Company, FSG Merger Sub Inc., a Delaware corporation (“Merger Sub”), Gemini Therapeutics, Inc., a Delaware corporation

(“Gemini”) and Shareholder Representative Services LLC, a Colorado limited liability company, in its capacity as the

representative, agent and attorney-in-fact of the securityholders of Gemini (in such capacity, the “Stockholders’

Representative”).

The Merger Agreement provides, among other things, that Merger Sub will merge with and into Gemini, with

Gemini surviving as a wholly owned subsidiary of the Company (the “Merger”).

of Presentation

accompanying unaudited condensed financial statements of the Company have been prepared in accordance with United States generally

accepted accounting principles (“U.S.

GAAP”) for interim financial information and Article 8 of Regulation S-X.

they do not include all of the information and footnotes required by U.S.

In the opinion of management, all adjustments

(consisting of normal accruals) considered for a fair presentation have been included.

Operating results for the period from June

25, 2020 (inception) through September 30, 2020 are not necessarily indicative of the results that may be expected for the period

ending December 31, 2020.

accompanying unaudited condensed financial statements should be read in conjunction with the audited financial statements and

notes thereto included in the Form 8-K and the final prospectus filed by the Company with the SEC on August 20, 2020 and August

13, 2020, respectively.

Growth Company

Company is an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the

Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from

various reporting requirements that are applicable to other public companies that are not emerging growth companies including,

but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley

Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and

exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any

golden parachute payments not previously approved.

Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial

accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared

effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised

financial accounting standards.

The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition

period and comply with the requirements that apply to non-emerging growth companies but any such

an election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means

that when a standard is issued or revised and it has different application dates for public or private companies, the Company,

as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

may make comparison of the Company’s financial statements with another public company that is neither an emerging growth

company nor an emerging growth company that has opted out of using the extended transition period difficult or impossible because

of the potential differences in accounting standards used.

and Capital Resources

of September 30, 2020, the Company had $1.4 million in its operating bank account, working capital of approximately $1.1 million

and cash equivalents held in the Trust Account of approximately $120.8 million.

Interest income on the balance in the Trust Account

may be used to pay the Company’s franchise and income tax obligations.

Through September 30, 2020, the Company has not withdrawn

any interest earned on the Trust Account to pay franchise and income tax obligations.

Management intends to use substantially

all of the funds held in the Trust Account to complete the initial Business Combination and to pay the Company’s expenses

relating thereto.

To the extent that the Company’s capital stock or debt is used, in whole or in part, as consideration

to complete the initial Business Combination, the remaining proceeds held in the Trust Account will be used as working capital

to finance the operations of the target business or businesses, make other acquisitions and pursue our growth strategies.

Company’s liquidity needs to date have been satisfied through the $25,000 capital contribution to purchase Founder Shares

(as defined below) by the Sponsor, the loan proceeds under the Note of $200,000 from the Sponsor (see Note 4) to the Company to

cover offering costs in connection with the Initial Public Offering, and the net proceeds from the consummation of the Private

Placement not held in the Trust Account.

The Note was fully repaid on August 14, 2020.

In addition, in order to finance transaction

costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s

officers and directors may, but are not obligated to, provide the Company Working Capital Loans (see Note 4).

As of September

30, 2020, there were no amounts outstanding under any Working Capital Loans.

on the foregoing, management believes that the Company will have sufficient working capital and borrowing capacity from the Sponsor

or an affiliate of the Sponsor, or certain of the Company’s officers and directors to meet its needs through the earlier

of the consummation of a Business Combination or one year from this filing.

Over this time period, the Company will be using these

funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates, performing

due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with or

acquire, and structuring, negotiating and consummating the Business Combination.

continues to evaluate the impact of the COVID-19 pandemic and has concluded that the specific impact is not readily determinable

as of the date of the balance sheet.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

2—Summary of Significant Accounting Policies

preparation of financial statements in conformity with U.S.

GAAP requires the Company’s management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at

the date of the financial statements.

Making estimates requires management to exercise significant judgment.

It is at least reasonably

possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial

statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming

Accordingly, the actual results could differ significantly from those estimates.

and Cash Equivalents

Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

The Company had approximately $120.8 million in cash equivalents held in the Trust Account as of September 30, 2020.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Equivalents Held in Trust Account

the closing of the Initial Public Offering and the Private Placement, the Company was required to place net proceeds of the Initial

Public Offering and certain of the proceeds of the Private Placement in a Trust Account, which may be invested in U.S.

securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 185 days or less,

or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest

only in direct U.S.

government treasury obligations, as determined by management of the Company, until the earlier of:

completion of a Business Combination and (ii) the distribution of the Trust Account.

the closing of the Initial Public Offering and the Private Placement , approximately

$120.8 million, was placed in the Trust Account and invested in money market funds that invest in U.S.

government securities.

All of the Company’s investments held in the Trust Account are classified as trading securities.

Trading securities are

presented on the balance sheet at fair value at the end of each reporting period.

The estimated fair values of investments held

in Trust Account are determined using available market information, other than for investments in open-ended money market funds

with published daily net asset values (“NAV”), in which case the Company uses NAV as a practical expedient to fair

The NAV on these investments is typically held constant at $1.00 per unit.

Concentration

of Credit Risk

instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution,

which, at times, may exceed the Federal Depository Insurance Coverage of $250,000, and investments held in Trust Account.

30, 2020, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant

risks on such accounts.

Value of Financial Instruments

value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction

between market participants at the measurement date.

GAAP establishes a three-tier fair value hierarchy, which prioritizes

the inputs used in measuring fair value.

hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1

measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

These tiers include:

defined as observable inputs such as quoted prices for identical instruments in active

defined as inputs other than quoted prices in active markets that are either directly

or indirectly observable such as quoted prices for similar instruments in active markets

or quoted prices for identical or similar instruments in markets that are not active;

defined as unobservable inputs in which little or no market data exists, therefore requiring

an entity to develop its own assumptions, such as valuations derived from valuation techniques

in which one or more significant inputs or significant value drivers are unobservable.

some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy.

those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level

input that is significant to the fair value measurement.

of September 30, 2020, the carrying values of cash, accounts payable and accrued expenses approximate their fair values due to

the short-term nature of the instruments.

As of September 30, 2020, the Company’s portfolio of investments held in the Trust

Account is comprised entirely of investments in money market funds that invest in U.S.

government securities.

The Company uses

NAV as a practical expedient to fair value for its investments in money market funds.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Costs Associated with the Initial Public Offering

costs consisted of legal, accounting, and other costs incurred that were directly related to the Initial Public Offering and that

were charged to stockholders’

equity upon the completion of the Initial Public Offering.

Common Stock Subject to Possible Redemption

Company accounts for its Class A common stock subject to possible redemption in accordance with the guidance in ASC Topic

480 “Distinguishing Liabilities from Equity.”

Class A common stock subject to mandatory redemption (if any) is

classified as a liability instrument and measured at fair value.

Conditionally redeemable Class A common stock (including

Class A common stock that features redemption rights that are either within the control of the holder or subject to redemption

upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity.

other times, Class A common stock is classified as stockholders’

The Company’s Class A common stock

features certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence

of uncertain future events.

Accordingly, at September 30, 2020, 11,258,033 Class A common stock subject to possible redemption

is presented as temporary equity, outside of the stockholders’

equity section of the Company’s unaudited condensed

balance sheet.

follows the asset and liability method of accounting for income taxes.

Deferred tax assets and liabilities are recognized for

the estimated future tax consequences attributable to differences between the financial statement carrying amounts of

existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using

enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be

recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in

the period that included the enactment date.

Valuation allowances are established, when necessary, to reduce deferred tax

assets to the amount expected to be realized.

As of September 30, 2020, the Company had a deferred tax asset of approximately

$105,000, which had a full valuation allowance recorded against it of approximately $105,000.

The deferred tax asset is

comprised of $95,000 of organization and start-up costs and $10,000 of projected net operating loss for the current tax year.

tax benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

There were no unrecognized tax benefits as of September 30, 2020.

The Company recognizes accrued interest and penalties related

to unrecognized tax benefits as income tax expense.

No amounts were accrued for the payment of interest and penalties as of September

The Company is currently not aware of any issues under review that could result in significant payments, accruals or

material deviation from its position.

The Company is subject to income tax examinations by major taxing authorities since inception.

Income (Loss) Per Common Share

income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock outstanding during

The Company’s unaudited condensed statements of operations include a presentation of income (loss) per share

for common stock subject to redemption in a manner similar to the two-class method of income (loss) per share.

Net income (loss)

per common share, basic and diluted for Class A common stock is calculated by dividing the interest earned on cash equivalents

held in the Trust Account of approximately $1,000 for the three months ended September 30, 2020 and for the period from June 25,

2020 (inception) through September 30, 2020, net of applicable taxes available to be withdrawn from the Trust Account of approximately

$1,000 for the three months ended September 30, 2020 and for the period from June 25, 2020 (inception) through September 30, 2020,

resulting in net income of $0 for the three months ended September 30, 2020 and for the period from June 25, 2020 (inception)

through September 30, 2020, by the weighted average number of Class A common stock outstanding for each period.

On February 5, 2021, Old Gemini and FSDC completed the Business Combination pursuant to the Merger Agreement with Old Gemini surviving the merger as a wholly owned subsidiary of FSDC.

Net proceeds from the Business Combination totaled approximately $195.9 million, which included funds held in FSDC’s trust account and the completion of the concurrent PIPE Financing.

In accordance with the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger, (i) all shares of Old Gemini’s Series B Preferred Stock (including shares of Series B Preferred Stock issued upon conversion of outstanding convertible promissory notes), Series A Preferred Stock and Common Stock (collectively, “Old Gemini Stock”) issued and outstanding immediately prior to the effective time of the Merger, whether vested or unvested, were converted into the right to receive their pro rata portion of the 17,942,274 shares of FSDC Class A Common Stock (the “Common Stock”) issued as Merger consideration (the “Merger Consideration”), provided that 2,150,000 shares of Common Stock are held in escrow for a period of 12 months from the closing date to satisfy any indemnification obligations of Old Gemini under the Merger Agreement;

(ii) each option exercisable for Old Gemini

Stock that was outstanding immediately prior to effective time of the Merger was assumed and continues in full force and effect on the same terms and conditions as were previously applicable to such options, subject to adjustments to exercise price and number of shares Common Stock issuable upon exercise based on the final conversion ratio calculated in accordance with the Merger Agreement, and (iii) 4,264,341 shares of Common Stock were reserved for issuance under the newly adopted 2021 Stock Option and Incentive Plan (the “2021 Plan”) .

The Company accounted for the Business Combination as a reverse recapitalization, which is the equivalent of Old Gemini issuing stock for the net assets of FSDC, accompanied by a recapitalization, with FSDC treated as the acquired company for accounting purposes.

The determination of FSDC as the “acquired” company for accounting purposes was primarily based on the fact that subsequent to the Business Combination, Gemini has a majority of the voting power of the combined company, Gemini will comprise all of the ongoing operations of the combined entity, a majority of the governing body of the combined company and Gemini’s senior management will comprise all of the senior management of the combined company.

The net assets of FSDC were stated at historical cost with no goodwill or other intangible assets recorded.

Reported results from operations included herein prior to the Business Combination are those of Old Gemini.

The shares and corresponding capital amounts and loss per share related to Old Gemini’s outstanding convertible preferred stock and common stock prior to the Business Combination have been retroactively restated to reflect the conversion ratio established in the Merger Agreement (1.00 Old Gemini share for .2180 shares of Gemini, the “Conversion Ratio”).

In connection with the Business Combination, the Company incurred underwriting fees and other costs considered direct and incremental to the transaction totaling $21.0 million, consisting of legal, accounting, financial advisory and other professional fees.

These amounts are reflected within additional paid-in capital in the condensed consolidated balance sheet as of March 31, 2021.

PIPE Financing

Concurrent with the execution of the Business Combination, the Company entered into subscription agreements with certain investors (the “PIPE Investors”) pursuant to which the PIPE Investors subscribed for and purchased an aggregate of 9,506,000 shares of Common Stock for an aggregate purchase price of $95.1 million.

Summary of Net Proceeds

The following table summarizes the elements of the net proceeds from the Business Combination as of March 31, 2021 (in thousands):

Cash - FSDC Trust Account and cash (net of redemptions)

Cash - PIPE Financing

Underwriting fees and other issuance costs paid prior to March 31, 2021

Proceeds from Business Combination, net of issuance costs paid per the Cash Flows

from Financing Activities

Other issuance costs included in accounts payable and accrued expenses and

other current liabilities

Net proceeds from the Business Combination

Summary of Shares Issued

The following table summarizes the number of shares of Common Stock outstanding immediately following the consummation of the Business Combination:

FSDC shares outstanding prior to the Business Combination

Shares issued pursuant to the PIPE Financing

Business Combination and PIPE Financing shares

Conversion of Old Gemini Series A preferred stock for common stock

Conversion of Old Gemini Series B preferred stock for common stock

Conversion of Old Gemini common stock for common stock

Issuance of common stock upon exercise of warrants

Total shares of New Gemini common stock outstanding immediately following

the Business Combination

Summary of Significant Accounting Policies

Basis of presentation

The accompanying unaudited condensed consolidated financial statements include those of the Company and its subsidiary, Gemini Therapeutics Sub, Inc.

, after elimination of all intercompany accounts and transactions.

The accompanying unaudited condensed consolidated financial statements and notes hereto have been prepared in conformity with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting and, therefore, omit or condense certain footnotes and other information normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) as set forth in the Financial Accounting Standards Board’s (“FASB”).

Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the FASB.

In the opinion of management, all adjustments necessary for a fair statement of the financial information, which are of a normal and recurring nature, have been made for the interim periods reported.

Results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results for the entire fiscal year or any other period.

The condensed consolidated financial information for the three months ended March 31, 2021 and 2020 have been prepared on the same basis as and should be read in conjunction with Old Gemini’s audited financial statements and notes thereto for the year ended December 31, 2020 included the Company’s Form 8-K/A as filed with the SEC on March 29, 2021.

As a result of the Business Combination, the shares and corresponding capital amounts and loss per share related to Old Gemini’s outstanding convertible preferred stock and common stock prior to the Business Combination have been retroactively restated to reflect the Conversion Ratio established in the Merger Agreement.

For additional information regarding the Business Combination, please refer to Note 3, Business Combination , to these condensed consolidated financial statements.

Use of estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting periods.

Significant estimates contained within these financial statements include, but are not limited to, the accruals of research and development expenses, share-based awards utilized for stock-based compensation purposes and, prior to the Business Combination, the estimated fair value of the Company’s common stock and warrant liability.

The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances.

On an ongoing basis, management evaluates its estimates, as there are changes in circumstances, facts and experience.

Actual results may differ materially from those estimates or assumptions.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less at the time of initial purchase to be cash equivalents.

The objectives of the Company’s cash management policy are to safeguard and preserve funds to maintain liquidity sufficient to meet the Company’s cash flow requirements and to attain a market rate of return.

The Company’s cash equivalents consist of amounts invested in money market mutual funds as of March 31, 2021 and December 31, 2020.

Restricted cash

Restricted cash amounted to $323 thousand as of March 31, 2021 and December 31, 2020, which consists of $100 thousand to collateralize the Company’s credit card and $223 thousand to collateralize its irrevocable standby letter of credit for its facility lease arrangement.

The letter of credit is in the name of the landlord and is required to fulfill lease requirements in the event the Company should default on its lease obligation.

A reconciliation of the cash and cash equivalents and restricted cash as presented in the Company’s balance sheets to the Company’s statements of cash flows is as follows:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents and restricted cash

Concentration of credit risk and of significant suppliers

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents.

The Company maintains deposits in accredited financial institutions in amounts that could exceed federally insured limits.

Cash equivalents are invested in money market funds.

The Company maintains each of its cash balances with high-quality and accredited financial institutions and accordingly, such funds are not exposed to unusual credit risk beyond the normal credit risk associated with commercial banking relationships.

The Company is dependent on third-party manufacturers to supply products for research and development activities in its programs.

In particular, the Company relies and expects to continue to rely on a small number of manufacturers to supply its requirements for the active pharmaceutical ingredients and formulated drugs related to these programs.

These programs could be adversely affected by a significant interruption in the supply of active pharmaceutical ingredients and formulated drugs.

Property and equipment

Property and equipment are stated at cost, less accumulated depreciation.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets.

The estimated useful lives are as follows:

Computer equipment

Furniture and fixtures

Laboratory equipment

Leasehold improvements

Shorter of the useful life of the asset

or the life of the lease

Costs for capital assets not yet placed in service are capitalized and depreciated once placed into service.

Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is included in loss from operations.

Expenditures for normal, recurring or periodic repairs and maintenance activities are charged to expense as incurred.

Impairment of long-lived assets

Long-lived assets, comprised of property and equipment, to be held and used are tested for recoverability whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable.

Factors that the Company considers in deciding when to perform an impairment review include significant underperformance of the business in relation to expectations, significant negative industry or economic trends and significant changes or planned changes in the use of the assets.

If an impairment review is performed to evaluate a long-lived asset for recoverability, the Company compares forecasts of undiscounted cash flows expected to result from the use and eventual disposition of the long-lived asset to its carrying value.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of an asset are less than its carrying amount.

The impairment loss would be based on the excess of the carrying value of the impaired asset over its fair value, determined based on discounted cash flows.

To date, the Company has not recorded any impairment losses on long-lived assets.

Offering costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated.

After consummation of the equity financing, these costs are recorded in stockholders’ equity (deficit) as a reduction of additional paid-in capital generated as a result of the offering.

Should the in-process equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the condensed consolidated statements of operations and comprehensive loss.

The Company had no deferred offering costs as of March 31, 2021.

As of December 31, 2020, the Company recorded deferred offering costs of $2.6 million related to the costs incurred in connection with the Business Combination.

Fair value measurements

Certain assets and liabilities are carried at fair value under GAAP.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be

classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

Level 1 – Quoted prices in active markets that are identical assets or liabilities.

Level 2 – Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The Company’s cash equivalents and preferred stock warrant liability (outstanding as of December 31, 2020 only) are carried at fair value, determined according to the fair value hierarchy described above (see Note 5).

The carrying values of the Company’s prepaid expenses and other current assets and accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The carrying value of the Company’s term loan as of March 31, 2021 and December 31, 2020 (see Note 7) approximated fair value based on interest rates currently available to the Company.

Debt issuance costs

The carrying value of the Company’s term loan was recorded net of issuance costs and discount relating to the issuance of warrants.

The debt discounts are amortized over the term of the debt using the effective interest method and recognized as interest expense.

In February 2019, concurrent with the Company’s term loan agreement (see Note 7), the Company issued warrants to purchase shares of Old Gemini’s Series A preferred stock.

The Company accounts for the warrants to purchase Series A preferred stock as a liability as these warrants are freestanding financial instruments that may require the Company to transfer assets upon exercise.

The fair value of the warrants classified as liabilities is estimated using the Black-Scholes Option Pricing Model and adjusted to fair value at the end of each reporting period.

Changes in the fair value of the warrant are recognized as a component of other income (expense) in the condensed consolidated statements of operations and comprehensive loss.

The estimates in the Black-Scholes Option Pricing Model are based, in part, on subjective assumptions, including, stock price volatility, term of the warrants, risk-free interest rate, dividend yield and the fair value of the preferred stock underlying the warrants.

Such assumptions could differ materially in the future.

At the closing of the Business Combination, the warrants were automatically exercised for 15,257 shares of the Company’s common stock.

Segment information

Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance.

The Company’s CODM is its Chief Executive Officer.

The Company’s singular focus is the development of novel therapies for genetically defined, age-related macular degeneration.

The Company has determined that it operates as a single operating segment and has one reportable segment.

The Company’s long-lived assets are located in the United States.

Research and development contract costs and accruals

Research and development expenses include employee payroll, consulting, contract research, depreciation, rent and other corporate costs attributable to research and development activities and are expensed as incurred.

Upfront payments and milestone payments made for the licensing of technology are expensed as research and development expenses in the period in which they are incurred.

Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses.

The prepaid amounts are expensed as the related goods are delivered or the services are performed.

The Company has entered into various research and development contracts with companies both inside and outside of the United States.

These agreements are generally cancelable, and related payments are recorded as research and development expenses as incurred.

The Company records accruals for estimated ongoing research costs.

When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies or trials, including the phase or completion of events, invoices received and contracted costs.

Significant judgments and estimates are made in determining the accrued balances at the end of any reporting period.

Actual results could differ from the Company’s estimates.

The Company’s historical accrual estimates have not been materially different from the actual costs.

The Company expenses all patent-related costs incurred in connection with filing and prosecuting patent applications.

It records such costs within general and administrative expenses in its accompanying statements of operations and comprehensive loss.

Stock-based compensation

The Company measures all stock-based awards granted to employees, directors and non-employees based on the fair value on the date of grant and recognizes compensation expense of those awards over the requisite service period, which is generally the vesting period of the respective award.

Forfeitures are accounted for as they occur.

The Company grants stock options and restricted stock awards that are subject to either service or performance-based vesting conditions.

Compensation expense related to awards to employees and non-employees with performance-based vesting conditions is recognized based on the grant date fair value over the requisite service period using the accelerated attribution method to the extent achievement of the performance condition is probable.

The Company estimates the probability that certain performance criteria will be met and does not recognize compensation expense until it is probable that the performance-based vesting condition will be achieved.

The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Determination of Fair Value – Preferred and Common Stock

Prior to the completion of the Business Combination transaction, given that there had been no public market for the Company’s common stock, the estimated fair value of its common stock was determined by its most recently available third-party valuations of common stock.

These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation .

The Company’s common stock valuations were prepared using an option pricing method, or OPM, or a hybrid method, both of which used market approaches to estimate its enterprise value.

The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes.

Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger.

A discount for lack of marketability of the common stock is then applied to arrive at an indication of value for the common stock.

The hybrid method is a probability-weighted expected return method, or PWERM, where the equity value in one or more scenarios is calculated using an OPM.

The PWERM is a scenario-based methodology that estimates the fair value of the Company’s common stock based upon an analysis of its future values, assuming various outcomes.

The common stock value is based on the probability-weighted present value of expected future investment returns considering each of the possible outcomes available as well as the rights of each class of stock.

The future value of the common stock under each outcome is discounted back to the valuation date at an appropriate risk-adjusted discount rate and probability weighted to arrive at an indication of value for the common stock.

There are significant judgments and estimates inherent in the determination of the fair value of the Company’s common stock.

These estimates and assumptions include a number of objective and subjective factors, including external market conditions, the prices at which the Company sold shares of preferred securities, the superior rights and preferences of securities senior to the common securities at the time of, and the likelihood of, achieving a liquidity event, such as an initial public offering or sale.

Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date.

Subsequent to the closing of the Business Combination, the fair value of each share of common stock underlying stock-based awards is determined based on the closing price of the Company’s common stock as reported by Nasdaq on the date of grant.

Determination of Fair Value – Stock Option Awards

The fair value of each restricted common stock award is estimated on the date of grant based on the fair value of the Company’s common stock on that same date.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which requires inputs based on certain subjective assumptions, including the expected stock price volatility, the expected term of the award, the risk-free interest rate and expected dividends.

Prior to the Business Combination, the Company was a private company and, therefore, lacked company-specific historical and implied volatility information for its stock.

Therefore, it estimated its expected stock price volatility based on the historical volatility of publicly traded peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price.

The expected term of the Company’s options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options.

The expected term of options granted to non-employees is equal to the contractual term of the option award.

The risk-free interest rate is determined by reference to the U.S.

Treasury yield curve in effect at the time of grant of the

award for time periods approximately equal to the expected term of the award.

Expected dividend yield is based on the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.

The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns.

Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Changes in deferred tax assets and liabilities are recorded in the provision for income taxes.

The Company assesses the likelihood that its deferred tax assets will be and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of the deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense.

Potential for recovery of deferred tax assets is evaluated by analyzing carryback capacity in periods with taxable income, reversal of existing taxable temporary differences and estimating the future taxable profits expected and considering prudent and feasible tax planning strategies.

The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized.

First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities.

If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements.

The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

To the extent an income tax provision is necessary, the provision for income taxes would include the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate as well as the related net interest and penalties.

Comprehensive loss

Comprehensive loss includes net loss as well as other changes in stockholders’ equity (deficit) that result from transactions and economic events other than those with stockholders.

There was no difference between net loss and comprehensive loss for each of the periods presented in the accompanying condensed consolidated financial statements.

Net loss per share

basic and diluted for Class B common stock is calculated by dividing the net loss of approximately $499,000 and $501,000 for the

three months ended September 30, 2020 and for the period from June 25, 2020 (inception) through September 30, 2020, respectively,

less income attributable to Class A common stock of $0 for each period, by the weighted average number of Class B common stock

outstanding for the period.

Accounting Pronouncements

does not believe that any recently issued, but not yet effective, accounting pronouncement if currently adopted would have a material

effect on the Company’s financial statements.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

3—Initial Public Offering

August 14, 2020, the Company consummated its Initial Public Offering of 12,075,000 Public Shares, including the issuance of 1,575,000

Public Shares as a result of the underwriter’s exercise in full of its over-allotment option, at $10.00 per share, generating

gross proceeds of approximately $120.8 million, and incurring offering costs of approximately $7.1 million, inclusive of approximately

$4.2 million in deferred underwriting commissions.

4—Related Party Transactions

Shares and Private Placement Shares

June 30, 2020, the Sponsor purchased 2,875,000 shares of the Company’s Class B common stock, par value $0.0001 per share,

(the “Founder Shares”) for an aggregate price of $25,000.

On July 24, 2020, the Sponsor transferred 30,000 Founder

Shares to each of its independent director nominees at their original per-share purchase price, for an aggregate of 90,000 Founder

Shares transferred.

On August 11, 2020, the Company effected a 1:1.05 stock split of the Class B common stock, resulting in the

Sponsor holding an aggregate of 2,928,750 Founder Shares and there being an aggregate of 3,018,750 Founder Shares outstanding.

shares and the associated amounts have been retroactively restated to reflect the aforementioned stock split.

agreed to forfeit up to 393,750 Founder Shares to the extent that the over-allotment option is not exercised in full

by the underwriter, so that the Founder Shares would represent 20.0% of the Company’s issued and outstanding shares of common

stock after the Initial Public Offering (excluding the Private Placement Shares).

On August 14, 2020, the underwriter exercised

the over-allotment option;

thus, these Founder Shares were no longer subject to forfeiture.

Simultaneously

with the closing of the Initial Public Offering, the Company consummated the Private Placement of 441,500 Private Placement

Shares, at a price of $10.00 per Private Placement Share to the Sponsor, generating proceeds of approximately $4.4 million.

Initial Stockholders agreed, subject to limited exceptions, not to transfer, assign or sell any of the Founder Shares or Private

Placement Shares until the earlier to occur of:

(i) one year after the completion of the initial Business Combination and (ii)

the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction after the initial

Business Combination that results in all of the Company’s stockholders having the right to exchange their Class A common

stock for cash, securities or other property;

except to certain permitted transferees and under certain circumstances.

Any permitted

transferees will be subject to the same restrictions and other agreements of the Initial Stockholders with respect to any Founder

Shares or Private Placement Shares.

Notwithstanding the foregoing, if (1) the closing price of the Class A common stock equals

or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like)

for any 20 trading days within any 30-trading day period commencing at least 150 days after the initial Business Combination

or (2) if the Company consummates a transaction after the initial Business Combination which results in the Company’s stockholders

having the right to exchange their shares for cash, securities or other property, the Founder Shares and Private Placement Shares

will be released from the lock-up.

June 30, 2020, the Sponsor agreed to loan the Company an aggregate of up to $200,000 to cover expenses related to the Initial

Public Offering pursuant to a promissory note (the “Note”).

This loan is non-interest bearing and payable upon

the completion of the Initial Public Offering.

The Company borrowed $200,000 under the Note, and fully repaid it on August 14,

addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the

Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may

be required (“Working Capital Loans”).

If the Company completes a Business Combination, the Company would repay the

Working Capital Loans out of the proceeds of the Trust Account released to the Company.

Otherwise, the Working Capital Loans would

be repaid only out of funds held outside the Trust Account.

In the event that a Business Combination does not close, the Company

may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust

Account would be used to repay the Working Capital Loans.

The Working Capital Loans would either be repaid upon consummation of

a Business Combination or, at the lender’s discretion, up to $1.5 million of such Working Capital Loans may be convertible

into shares of Class A Common Stock of the post Business Combination entity at a price of $10.00 per share.

Except for the foregoing,

the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such

To date, the Company had no borrowings under the Working Capital Loans.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Placement of Common Stock in connection with initial Business Combination

Sponsor has indicated an interest to purchase $25.0 million of the Company’s Class A Common Stock in a private placement

that would occur concurrently with the consummation of the initial Business Combination.

The funds from such private placement

would be used as part of the consideration to the sellers in the initial Business Combination, and any excess funds from such

private placement would be used for working capital in the post-transaction company.

However, because indications of interest

are not binding agreements or commitments to purchase, the Sponsor may determine not to purchase any such shares, or to purchase

fewer shares than it indicated an interest in purchasing.

Furthermore, the Company is not under any obligation to sell any such

Administrative

Services Agreement

Company has entered into an agreement that provides that, commencing on the date that the Company’s securities are first

listed on Nasdaq and continuing until the earlier of the Company’s consummation of a Business Combination and the Company’s

liquidation, the Company will pay the Sponsor a total of $10,000 per month for office space, secretarial and administrative services

provided to members of the Company’s management team.

The Company incurred approximately $20,000 in administrative expenses

under the agreement, which is recognized in the accompanying unaudited condensed statements of operations for both the three months

ended September 30, 2020 and for the period from June 25, 2020 (inception) through September 30, 2020 within general and administrative

Sponsor, officers and directors, or any of their respective affiliates will be reimbursed for any out-of-pocket expenses

incurred in connection with activities on the Company’s behalf such as identifying potential target businesses and performing

due diligence on suitable Business Combinations.

The Company’s audit committee will review on a quarterly basis all payments

that were made to the Sponsor, officers or directors, or their affiliates.

Business Combination

connection with the execution of the Merger Agreement, the Sponsor entered into a subscription agreement to purchase 1,500,000

shares of Class A Common Stock at a purchase price of $10 per share in a private placement that would occur concurrently with

the closing of the Merger (the “Closing”).

In addition, the Initial Stockholders entered into the Parent Support Agreement

in which they agreed to vote, at any meeting of the stockholders of the Company, and in any action by written consent of the stockholders

of the Company, all of such holders’

Class A common stock and Class B common stock (i) in favor of the Merger Agreement,

each of the Parent Proposals (as defined in the Merger Agreement) and the transactions contemplated by the Merger Agreement and

the Parent Support Agreement, and (ii) in favor of any other matter reasonably necessary to the consummation of the transactions

contemplated by the Merger Agreement and the approval of the Parent Proposals.

Also, in connection with the Closing, the Sponsor

and certain other stockholders will enter into a Voting Agreement with the Company and the Initial Stockholders and certain other

stockholders will enter into a Registration Rights Agreement with the Company.

See Note 7 for a discussion of certain agreements

entered into, or to be entered into, in connection with the execution of the Merger Agreement.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

5—Commitments and Contingencies

holders of Founder Shares and Private Placement Shares that may be issued upon conversion of Working Capital Loans, if any, will

be entitled to registration rights pursuant to a registration rights agreement.

The holders of these securities are entitled to

make up to three demands, excluding short form demands, that the Company register such securities.

In addition, the holders have

certain “piggy-back”

registration rights with respect to registration statements filed subsequent to the completion

of the initial Business Combination.

The Company will bear the expenses incurred in connection with the filing of any such registration

underwriter was entitled to an underwriting discount of $0.20 per share, or approximately $2.4 million in the aggregate, paid

upon the closing of the Initial Public Offering.

In addition, $0.35 per share, or approximately $4.2 million in the aggregate

will be payable to the underwriter for deferred underwriting commissions.

The deferred fee will become payable to the underwriter

from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the

terms of the underwriting agreement.

6—Stockholders’

A Common Stock —

The Company is authorized to issue 100,000,000 shares of Class A common stock with a

par value of $0.0001 per share.

As of September 30, 2020, there were 12,516,500 Class A common stock outstanding, including 11,258,033

Class A common stock subject to possible conversion were classified as temporary equity in the accompanying balance sheet.

B Common Stock —

The Company is authorized to issue 10,000,000 shares of Class B common stock with a par

value of $0.0001 per share.

On June 30, 2020, the Company issued 2,875,000 shares of Class B common stock.

On August 11,

2020, the Company effected a 1:1.05 stock split of the Class B common stock, resulting in an aggregate of 3,018,750 shares

of Class B common stock outstanding, including an aggregate of up to 393,750 shares of Class B common stock that are subject

to forfeiture by the Sponsor, to the Company by the Initial Stockholders for no consideration to the extent that the underwriters’

over-allotment option is not exercised in full or in part, so that the Initial Stockholders would collectively own 20% of

the Company’s issued and outstanding common stock (excluding the Private Placement Shares) after the Initial Public Offering

(excluding the Private Placement Shares).

All shares and the associated amounts have been retroactively restated to reflect the

aforementioned stock split.

On August 14, 2020, the underwriter exercised the over-allotment option;

thus, these Founder Shares

were no longer subject to forfeiture.

of record of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a

vote of our stockholders, with each share of common stock entitling the holder to one vote except as required by law.

Class B common stock will automatically convert into Class A common stock concurrently with or immediately following the consummation

of the initial Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations,

recapitalizations and the like, and subject to further adjustment as provided herein.

In the case that additional shares of Class

A common stock or equity-linked securities are issued or deemed issued in connection with the initial Business Combination,

the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal, in the aggregate, on an

as-converted basis, 20% of the total number of shares of Class A common stock issued and outstanding (excluding the Private

Placement Shares) after such conversion (after giving effect to any redemptions of shares of Class A common stock by Public Stockholders),

including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise

of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the

consummation of the initial Business Combination, excluding any shares of Class A common stock or equity-linked securities

or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in the initial

Business Combination and any private placement shares issued upon conversion of Working Capital Loans, provided that such conversion

of Founder Shares will never occur on a less than one-for-one basis.

Stock —

The Company is authorized to issue 1,000,000 shares of preferred stock, par value $0.0001 per

share, with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s

board of directors.

As of September 30, 2020, there were no shares of preferred stock issued or outstanding.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

7—Subsequent Events

Business Combination

October 15, 2020, the Company entered into an agreement and plan of merger (the “Merger Agreement”) by and among the

Company, FSG Merger Sub Inc., a Delaware corporation (“Merger Sub”), Gemini Therapeutics, Inc., a Delaware corporation

(“Gemini”) and Shareholder Representative Services LLC, a Colorado limited liability company, in its capacity as the

representative, agent and attorney-in-fact of the securityholders of Gemini (in such capacity, the “Stockholders’

Representative”).

The Merger Agreement provides, among other things, that Merger Sub will merge with and into Gemini, with

Gemini surviving as a wholly owned subsidiary of the Company (the “Merger”).

the Merger Agreement, subject to customary representations, warranties and covenants, the Company has agreed to acquire all of

the outstanding equity interests of Gemini in exchange for up to 21,500,000 shares of Company Class A common stock, subject to

adjustments, to be paid at the effective time of the Merger.

The aggregate number of shares of Class A Common Stock to be issued

in connection with the Merger (including the shares being placed in escrow as described below) will be equal to the difference

between (a) 21,500,000 shares of FS Development Class A Common Stock;

minus (b) a number of shares of FS Development Class A Common

Stock equal to one half (1/2) of the initial unallocated shares of the Company’s Class A Stock reserved for issuance under

the new equity incentive plan to be adopted by the Company pursuant to the Merger Agreement (which shall not exceed two and one-half

percent (2.5%) of the issued and outstanding shares of the Company’s Class A Common Stock as of immediately following the

effective time of the Merger as set forth in the capitalization schedule delivered prior to Closing pursuant to the Merger Agreement

(and approved by the Company, such approval not to be unreasonably withheld, conditioned or delayed)).

At or prior to the effective

time of the Merger, each option exercisable for Gemini equity that is outstanding immediately prior to the effective time of the

Merger shall be assumed by the Company and continue in full force and effect on the same terms and conditions as are currently

applicable to such options, subject to adjustments to exercise price and number of shares of Company Class A common stock issued

upon exercise.

In addition, the Merger Agreement contemplates that at Closing, the Company will deliver 2,150,000 of its shares

of Class A common stock to be placed into escrow for indemnification purposes, as further described in the Merger Agreement.

the Merger Agreement, the obligations of the parties to consummate the Merger are subject to the satisfaction or waiver of certain

customary closing conditions of the respective parties, including, without limitation:

(i) the approval and adoption of the Merger

Agreement and transactions contemplated thereby by requisite vote of the Company’s stockholders (the “Company Stockholder

Approval”) and the Gemini’s stockholders (the “Gemini Stockholder Approval”);

(ii) the receipt of consents

or approvals from the applicable governmental, regulatory or administrative authorities;

(iii) the aggregate cash proceeds from

Company’s trust account, together with the proceeds from the Subscriptions (as defined below), equaling no less than $170,000,000

(after deducting any amounts paid to Company stockholders that exercise their redemption rights in connection with the Merger

and net of the Company’s unpaid liabilities), (iv) the absence of a Material Adverse Effect (as defined in the Merger Agreement)

since the date of the Merger Agreement that is continuing;

(v) the Company has not redeemed the Class A of common stock of the

Company in an amount that would cause the Company to have net tangible assets of less than $5,000,001 upon consummation of the

and (vi) the Company’s initial listing application with Nasdaq in connection with the Merger has been conditionally

approved and, immediately following the effective time of the Merger, the Company has satisfied any applicable initial and continuing

listing requirements of Nasdaq, and the Company has not received any notice of non-compliance therewith, and the shares of the

Company’s Class A common stock has been approved for listing on Nasdaq.

The Company and Gemini have agreed to waive the

condition that the By-Laws of the combined entity be approved by the stockholders of the Company.

Merger Agreement may be terminated under certain customary and limited circumstances at any time prior to the Closing, including,

without limitation, (i) by the Company or Gemini, if (A) the Closing has not occurred by April 15, 2021, which date shall be automatically

extended to May 15, 2021 if the U.S.

Securities and Exchange Commission (the “SEC”) has not declared the proxy statement/prospectus

effective on or prior to January 15, 2021 and (B) the party (the Company or Merger Sub, on one hand, or Gemini, on the other hand)

seeking to terminate the Merger Agreement is not in material breach of the Merger Agreement;

(ii) by the Company or Gemini, in

the event an applicable governmental, regulatory or administrative authority has issued a final and non-appealable order having

the effect of permanently restraining, enjoining or otherwise prohibiting the Merger;

(iii) by the Company or Gemini, in the event

any applicable law is in effect making the consummation of the Merger illegal;

or (iv) by the Company or Gemini, if the Company

or Gemini, as applicable, has breached any of its respective representations, warranties, agreements or its respective covenants

contained in the Merger Agreement, such failure or breach would render certain conditions precedents to the Closing incapable

of being satisfied, and such breach or failure is not cured by the time allotted.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Merger Agreement contemplates the execution of various additional agreements and instruments, on or before the Closing, including,

among others, the following:

Support Agreement - In connection with the execution of the Merger Agreement, the Initial Stockholders of the Company

(the “Parent Supporting Stockholders”) entered into support agreements with the Company and Gemini (the “Parent

Support Agreements”).

Under the Parent Support Agreements, each Parent Supporting Stockholder agreed to vote, at any meeting

of the stockholders of the Company, and in any action by written consent of the stockholders of the Company, all of such Parent

Supporting Stockholder’s Class A common stock and Class B common stock (i) in favor of the Merger Agreement, each of the

Parent Proposals (as defined in the Merger Agreement) and the transactions contemplated by the Merger Agreement and the Parent

Support Agreement, and (ii) in favor of any other matter reasonably necessary to the consummation of the transactions contemplated

by the Merger Agreement and the approval of the Parent Proposals.

In addition, the Parent Support Agreements prohibit the Parent

Supporting Stockholders from, among other things, selling, assigning or transferring any Class A Common Stock or Class B Common

Stock held by the Parent Supporting Stockholders or taking any action that would prevent or disable the Parent Support Stockholders

from performing its obligations thereunder.

Support Agreement - In connection with the execution of the Merger Agreement, certain Gemini stockholders (the “Gemini

Supporting Stockholders”) entered into support agreements with the Company (the “Gemini Support Agreements”).

Under the Gemini Support Agreements, each Gemini Supporting Stockholder agreed, as promptly as reasonably practicable (and in

any event within two (2) business days) following the SEC declaring effective the proxy statement/prospectus relating to the approval

by the Company stockholders of the Merger, to execute and deliver a written consent with respect to the outstanding shares of

Gemini common stock, Series A preferred stock and Series B preferred stock held by such Gemini Supporting Stockholder (the “Subject

Gemini Shares”) approving the Merger Agreement and the transactions contemplated thereby.

In addition to the foregoing,

each Gemini Supporting Stockholder agreed that at any meeting of the holders of Gemini capital stock, each such Gemini Supporting

Stockholder will appear at the meeting, in person or by proxy, and cause its Subject Gemini Shares to be voted (i) to approve

and adopt the Merger Agreement and the transactions contemplated thereby, including the Merger (ii) against any Alternative Transaction

(as defined in the Merger Agreement);

and (iii) against any action or agreement that would impede or frustrate the provisions

of the Gemini Support Agreements, the Merger Agreement or the transactions contemplated thereby.

Pursuant to the Gemini Support

Agreements, certain stockholder agreements of Gemini shall be automatically terminated and of no further force and effect (other

than certain indemnity provisions that, by their terms, survive such termination), effective as of, and subject to and condition

upon the occurrence of, the Closing.

In addition, the Gemini Support Agreements prohibits the Gemini Supporting Stockholders from,

among other things, (i) transferring any of the Subject Gemini Shares;

(ii) entering into (a) any option, warrant, purchase right,

or other contact that would require the Gemini Support Stockholders to transfer the Subject Gemini Shares, or (b) any voting trust,

proxy or other contract with respect to the voting or transfer of the Subject Gemini Shares;

or (iii) or taking any action in

furtherance of the forgoing.

Agreement - In connection with the Merger, the Company entered into subscription agreements with certain investors, including

the Sponsor (the “Subscription Agreements”), pursuant to which, among other things, such investors have agreed to

purchase an aggregate of 9,506,000 shares of Class A common stock of the Company (together, the “Subscriptions”) for

a purchase price of $10.00 per share, for aggregate gross proceeds of $95,060,000, to be issued at the Closing.

The obligations

of each party to consummate the Subscriptions are conditioned upon, among other things, customary closing conditions and the consummation

of the transactions contemplated by the Merger Agreement.

DEVELOPMENT CORP.

TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

Non-Redemption

connection with the execution of the Merger Agreement, certain public stockholders of the Company entered into non-redemption

letter agreements with the Company, pursuant to which, among other things, such stockholders owning shares of Class A Common Stock

agreed not to elect to redeem or tender or submit for redemption 2,742,529 shares of Class A Common Stock held in the aggregate

by such stockholders.

Rights Agreement

connection with the Closing, the holders of the Founder Shares, Private Placement Shares and certain other stockholders will

enter into a registration rights agreement with the Company and Gemini, pursuant to which such stockholders can each demand

that the combined entity register their registrable securities under certain circumstances and will each also have piggyback

registration rights for these securities.

In addition, following the consummation of the business combination, the combined

entity is required to file and maintain an effective registration statement under the Securities Act covering such securities

and certain other securities of the combined entity.

The registration of these securities will permit the public sale of such

securities, subject to certain contractual restrictions imposed by such agreement and the Merger Agreement.

As part of the

Registration Rights Agreement, holders of the registrable securities agree to a one hundred eighty (180) day lock-up period

with respect to such registrable securities.

connection with the Closing, the Sponsor, FS Development, certain stockholders of the Company and certain stockholders of Gemini

will enter into a voting agreement, pursuant to which:

(a) Gemini will have the right to designate four (4) directors to the board

of directors of the combined entity and (b) the Sponsor will have the right to designate one (1) individual for election as a

member of the board of directors of the combined entity until the fifth (5th) anniversary of the date of the voting agreement,

subject to certain terms and holding requirements set forth therein.

connection with the Closing, certain stockholders of Gemini will enter into a lockup agreement, pursuant to which the stockholder

parties thereto will agree to not (i) sell, hypothecate, pledge, grant any option to purchase or establish or increase a put equivalent

position or liquidate or decrease a call equivalent position or (ii) enter into any swap or other arrangement that transfers any

of the economic consequences of ownership, in each case, of the combined entity’s common stock for a period of one hundred

eighty (180) days after the Closing.

above description of the Proposed Business Combination should be read in conjunction with the disclosures contained in the Form

S-4 filed by the Company with the SEC on November 2, 2020.

Management has evaluated

subsequent events to determine if events or transactions occurring through November 10, 2020, the date the financial statements

were available for issuance, require potential adjustment to or disclosure in the financial statements and has concluded that all

such events that would require recognition or disclosure have been recognized or disclosed.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

to the “Company,”

“our,”

“us”

or “we”

refer to FS Development Corp.

The following

discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with

the unaudited condensed financial statements and the notes thereto contained elsewhere in this report.

Certain information contained

in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A

of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange

Act of 1934, as amended (the “Exchange Act”).

We have based these forward-looking statements on our current expectations

and projections about future events.

These forward-looking statements are subject to known and unknown risks, uncertainties and

assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different

from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can identify forward-looking statements by terminology such as “may,”

“should,”

“could,”

“would,”

“expect,”

“plan,”

“anticipate,”

“believe,”

“estimate,”

“continue,”

or the negative of such terms or other similar expressions.

Such statements include, but are not limited

to, possible business combinations and the financing thereof, and related matters, as well as all other statements other than

statements of historical fact included in this Form 10-Q.

Factors that might cause or

contribute to such a discrepancy include, but are not limited to, those described in our other Securities and Exchange Commission

(“SEC”) filings.

are a blank check company incorporated in Delaware on June 25, 2020 for the purpose of effecting a merger, capital stock

exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business

Combination”).

Our sponsor is FS Development Holdings, LLC, a Delaware limited liability company (our “Sponsor”).

registration statements for our initial public offering (the “Initial Public Offering”) became effective on August

On August 14, 2020, we consummated the Initial Public Offering of 12,075,000 shares of Class A common stock,

including the issuance of 1,575,000 shares of Class A common stock as a result of the underwriter’s exercise in full of

its over-allotment option, (each, a “Public Share”

and collectively, the “Public Shares”) at $10.00 per

share, generating gross proceeds of approximately $120.8 million, and incurring offering costs of approximately $7.1

million, inclusive of approximately $4.2 million in deferred underwriting commissions.

Simultaneously

with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 441,500 shares

of Class A common stock (each, a “Private Placement Share”

and collectively, the “Private Placement Shares”),

at a price of $10.00 per Private Placement Share to our Sponsor, generating proceeds of approximately $4.4 million.

the closing of the Initial Public Offering and the Private

Placement , approximately $120.8 million ($10.00 per share) of the

net proceeds of the sale of the Public Shares in the Initial Public Offering and of the Private Placement Shares in the

Private Placement were placed in a trust account (“Trust Account”) located in the United States

at JP Morgan Chase Bank, N.A.

with Continental Stock Transfer & Trust Company acting as trustee, and are invested only in

“government securities”

within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as

amended (the “Investment Company Act”) having a maturity of 185 days or less or in money market funds meeting

certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct U.S.

government treasury obligations, as determined by the Company, until the earlier of:

(i) the completion of a Business

Combination and (ii) the distribution of the Trust Account.

we are unable to complete a Business Combination within 24 months from the closing of the Initial Public Offering, or August

14, 2022 (the “Combination Period”), we will (i) cease all operations except for the purpose of winding up, (ii) as

promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price,

payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held

in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses),

divided by the number of then outstanding Public Shares, which redemption will completely extinguish Public Stockholders’

rights as stockholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably

possible following such redemption, subject to the approval of the remaining stockholders and the board of directors, liquidate

and dissolve, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements

of other applicable law.

Business Combination

October 15, 2020, we entered into an agreement and plan of merger (the “Merger Agreement”) by and among the

Company, FSG Merger Sub Inc., a Delaware corporation (“Merger Sub”), Gemini Therapeutics, Inc., a Delaware

corporation (“Gemini”) and Shareholder Representative Services LLC, a Colorado limited liability company, in its

capacity as the representative, agent and attorney-in-fact of the securityholders of Gemini.

The Merger Agreement provides,

among other things, that Merger Sub will merge with and into Gemini, with Gemini surviving as a wholly owned subsidiary of

the Company (the “Merger”).

In connection with the Business Combination, FS Development will be renamed

“Gemini Therapeutics, Inc.”

The Merger Agreement also calls for additional agreements, including, among others,

Subscription Agreements, Non-Redemption Letter Agreements, and Gemini Support Agreements.

Parent Support Agreements,

Registration Rights Agreement, Lock-Up Agreement and Voting Agreement.

For additional information about the Merger Agreement

and the ancillary documents executed or to be executed in connection therewith, see Note 7 to the “Notes to Unaudited

Condensed Financial Statements”

included in this Report.

of Operations

entire activity since inception through September 30, 2020 related to our formation, the preparation for the Initial Public Offering,

and since the closing of the Initial Public Offering , the

search for a prospective initial Business Combination and activities in connection with the proposed Business Combination with

We have neither engaged in any operations nor generated any revenues to date.

We will not generate any operating

revenues until after completion of our initial Business Combination.

We will generate non-operating income in the form of interest

income on cash and cash equivalents.

We expect to incur increased expenses as a result of being a public company (for legal,

financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

the three months ended September 30, 2020, we had net loss of approximately $499,000, which consisted of approximately $451,000

in general and administrative costs and $50,000 of franchise tax expense, which was partially offset by approximately $1,000 gain

on the investments held in the Trust Account.

the period from June 25, 2020 (inception) through September 30, 2020, we had net loss of approximately $501,000, which consisted

of approximately $452,000 in general and administrative costs and $50,000 of franchise tax expense, which was partially offset

by approximately $1,000 gain on the investments held in the Trust Account.

and Capital Resources

of September 30, 2020, we had $1.4 million in its operating bank account, working capital of approximately $1.1 million

and cash equivalents held in the Trust Account of approximately $120.8 million.

Interest income on the balance in the Trust Account

may be used by us to pay franchise and income tax obligations.

Through September 30, 2020, we have not withdrawn any interest

earned on the Trust Account to pay franchise and income tax obligations.

We intend to use substantially all of the funds held

in the Trust Account to complete the initial Business Combination and to pay our expenses relating thereto.

To the extent that

our capital stock or debt is used, in whole or in part, as consideration to complete the initial Business Combination, the remaining

proceeds held in the Trust Account will be used as working capital to finance the operations of the target business or businesses,

make other acquisitions and pursue our growth strategies.

liquidity needs to date have been satisfied through the $25,000 capital contribution to purchase Founder Shares (as defined below)

by our Sponsor, the loan proceeds under the promissory note of $200,000 from our Sponsor (the “Note”) to cover our

offering costs in connection with the Initial Public Offering, and the net proceeds from the consummation of the Private Placement

not held in the Trust Account.

The Note was fully repaid on August 14, 2020.

In addition, in order to finance transaction costs

in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of our officers and directors

may, but are not obligated to, provide the Company Working Capital Loans.

As of September 30, 2020, there were no amounts outstanding

under any Working Capital Loans.

on the foregoing, management believes that we will have sufficient working capital and borrowing capacity from our Sponsor

or an affiliate of our Sponsor, or our officers and directors to

meet our needs through the earlier of the consummation of a Business Combination or one year from this filing.

Over this time

period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business

Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the

target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

continue to evaluate the impact of the COVID-19 pandemic and have concluded that the specific impact is not readily determinable

as of the date of the balance sheet.

The financial statements do not include any adjustments that might result from the outcome

of this uncertainty.

do not have any long-term debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term

liabilities, other than an agreement to pay Administrative Services Agreement fees to our Sponsor that total $10,000 per month

for office space, secretarial and administrative services provided to members of our management team.

As of September 30, 2020,

the Company paid $20,000 to our Sponsor as part of the Administrative Services Agreement and recognized $20,000 in the statement

of operations for the three months ended September 30, 2020 and for the period from June 25, 2020 (inception) through September

Accounting Policies

management’s discussion and analysis of our financial condition and results of operations is based on our financial statements,

which have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation

of our financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,

revenues and expenses and the disclosure of contingent assets and liabilities in our financial statements.

On an ongoing basis,

we evaluate our estimates and judgments, including those related to fair value of financial instruments and accrued expenses.

We base our estimates on historical experience, known trends and events and various other factors that we believe to be reasonable

under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities

that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or

The Company has identified the following as its critical accounting policies:

Common Stock Subject to Possible Redemption

common stock subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value.

Conditionally

redeemable Class A common stock (including Class A common stock that features redemption rights that are either within

the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s

control) is classified as temporary equity.

At all other times, Class A common stock is classified as stockholders’

Our Class A common stock features certain redemption rights that are considered to be outside of our control and

subject to the occurrence of uncertain future events.

at September 30, 2020, 11,258,033 shares of Class A common stock subject to possible redemption are presented as temporary

equity, outside of the stockholders’

equity section of the Company’s unaudited condensed balance sheet.

Income (Loss) Per Common Share

income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock outstanding during

Our unaudited condensed statements of operations include a presentation of income (loss) per share for common stock

subject to redemption in a manner similar to the two-class method of income (loss) per share.

Net income (loss) per common share,

basic and diluted for Class A common stock is calculated by dividing the interest earned on cash equivalents held in the Trust

Account of approximately $1,000 for the three months ended September 30, 2020 and for the period from June 25, 2020 (inception)

through September 30, 2020, net of applicable taxes available to be withdrawn from the Trust Account of approximately $1,000 for

the three months ended September 30, 2020 and for the period from June 25, 2020 (inception) through September 30, 2020, resulting

in net income of $0 for the three months ended September 30, 2020 and for the period from June 25, 2020 (inception) through September

30, 2020, by the weighted average number of Class A common stock outstanding for each period.

Net loss per share, basic and diluted

for Class B common stock is calculated by dividing the net loss of approximately $499,000 and $501,000 for the three months ended

September 30, 2020 and for the period from June 25, 2020 (inception) through September 30, 2020, respectively, less income attributable

to Class A common stock of $0 for each period, by the weighted average number of Class B common stock outstanding for the period.

Accounting Pronouncements

management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have

a material effect on the accompanying financial statements.

Off-Balance Sheet Arrangements

of September 30, 2020, we did not have any off-balance sheet arrangements as defined in Item

303(a)(4)(ii) of Regulation S-K.

do not believe that inflation had a material impact on our business, revenues or operating results during the period presented.

Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain

reporting requirements for qualifying public companies.

We qualify as an “emerging growth company”

and under the JOBS

Act are allowed to comply with new or revised accounting pronouncements based on the effective date for private (not publicly

traded) companies.

We are electing to delay the adoption of new or revised accounting standards, and as a result, we may not comply

with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging

growth companies.

As a result, the financial statements may not be comparable to companies that comply with new or revised accounting

pronouncements as of public company effective dates.

Additionally,

we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

Subject to certain conditions set forth in the JOBS Act, if, as an “emerging growth company,”

we choose to rely on

such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report on our system

of internal controls over financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may

be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii)

comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s

report providing additional information about the audit and the financial statements (auditor discussion and analysis) and (iv)

disclose certain executive compensation related items such as the correlation between executive compensation and performance and

comparisons of the CEO’s compensation to median employee compensation.

These exemptions will apply for a period of five

years following the completion of our Initial Public Offering or until we are no longer an “emerging growth company,”

whichever is earlier.

Quantitative and Qualitative Disclosures About Market Risk

are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the

information otherwise required under this item.

The Company calculates earnings per share in accordance with ASC Topic 260, Earnings per Share .

The two-class method of computing earnings per share is required for entities that have participating securities.

Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed.

Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period.

Diluted net loss attributable to common stockholders is computed by adjusting net loss attributable to common stockholders to reallocate undistributed earnings based on the potential impact of dilutive securities.

Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, including potential dilutive common stock.

For purpose of this calculation, outstanding options, unvested restricted common stock and convertible preferred stock are considered potential dilutive common stock and are excluded from the computation of net loss per share as their effect is anti-dilutive.

In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders, since dilutive common shares are not assumed to be outstanding if their effect is anti-dilutive.

The Company reported a net loss attributable to common stockholders for the three months ended March 31, 2021 and 2020.

Emerging growth company status

Following the closing of the Business Combination, the Company is an “emerging growth company” (“EGC”), as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not EGCs.

The Company may take advantage of these exemptions until it is no longer an EGC under Section 107 of the JOBS Act, which provides that an EGC can take advantage of the extended transition period afforded by the JOBS Act for the implementation of new or revised accounting standards.

The Company has elected to avail itself of the extended transition period and, therefore, while the Company is an EGC it will not be subject to new or revised accounting standards at the same time that they become applicable to other public companies that are not EGCs, unless it chooses to early adopt a new or revised accounting standard.

As a result of this election, the condensed consolidated financial statements may not be comparable to companies that comply with public company FASB standards’ effective dates.

Recently adopted accounting pronouncements

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement , (“ASU 2018-13”).

The new standard removes certain disclosures, modifies certain disclosures and adds additional disclosures related to fair value measurement.

ASU 2018-13 is effective for annual periods after December 15, 2019.

This standard became effective for the Company on January 1, 2020 and did not have a material impact on the Company’s disclosures.

In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808):

Clarifying the Interaction between Topic 808 and Topic 606 , (“ASU 2018-18”).

The amendments in this update clarify that certain transactions between collaborative arrangement participants should be accounted for as revenue when the collaborative arrangement participant is a customer in the context of a unit of account and precludes recognizing as revenue consideration received from a collaborative arrangement participant if the participant is not a customer.

This standard became effective for the Company on January 1, 2021 and did not have an impact on its condensed consolidated financial statements for the three months ended March 31, 2021.

Recently issued accounting pronouncements

In February 2016, the FASB issued ASU No.

2016-02, Leases ( Topic 842 ), Amendments to the FASB Accounting Standards Codification ( “ASU 2016-02”), which replaces the existing guidance for leases.

ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees.

In general, for lease arrangements exceeding a twelve-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee.

Under ASU 2016-02, a right-of-use asset and a lease liability will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases.

The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption.

The guidance is effective for annual reporting periods beginning after December 15, 2021 and interim periods beginning after December 15, 2022, and early adoption is permitted.

The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its financial statements.

In June 2016, the FASB issued ASU No.

2016-13, Financial Instruments — Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments , which has been subsequently amended by ASU No.

2018-19, ASU No.

2019-04, ASU No.

2019-05, ASU No.

2019-10, ASU No.

2019-11 and ASU No.

2020-3 (“ASU 2016-13”).

The provisions of ASU 2016-13 modify the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology and require a consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

ASU 2016-13 is effective for the Company on January 1, 2023, with early adoption permitted.

The Company is currently evaluating the potential impact that ASU 2016-13 may have on its financial statements and related disclosures.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify the accounting for income taxes.

ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application.

The new standard will be effective for annual reporting periods beginning after December 15, 2021.

The Company is currently evaluating the potential impact ASU 2018-18 will have on its financial statements.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”), which reduces the number of accounting models for convertible debt instruments and convertible preferred stock as well as amends the derivatives scope exception for contracts in an entity’s own equity.

ASU 2020-06 is effective for the Company on January 1, 2024, with early adoption permitted.

The Company is currently evaluating the potential impact that this standard may have on its financial statements and related disclosures.

Fair value measurements

The following tables present information about the Company’s financial assets and liabilities measured at fair value (in thousands) on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values:

March 31, 2021

Money market funds in cash and cash equivalents

December 31, 2020

Money market funds in cash and cash equivalents

Warrant liability

The values of cash equivalents are classified as Level 1 measurements under the fair value hierarchy, as these assets have been valued using quoted market prices in active markets and do not have any restrictions on redemption.

As of March 31, 2021 and December 31, 2020, cash equivalents were comprised of funds in money market accounts.

There were no transfers or reclassifications between Level 1, Level 2 and Level 3 during the three months ended March 31, 2021.

The value of the warrant liability is classified as a Level 3 measurement under the fair value hierarchy, as this liability has been valued based on significant inputs not observable in the market.

Warrants to purchase Series A Preferred Stock

In February 2019, concurrent with the Company’s term loan agreement, the Company issued warrants to purchase 15,257 shares of Old Gemini’s Series A preferred stock.

The warrants had an exercise price of $5.46 per share and expired in February 2029, representing a contractual term of ten years from issuance.

At the closing of the Business Combination, the warrants were automatically exercised for 15,257 shares of the Company’s common stock.

The fair value of the warrants was recorded as a liability on the date of issuance and was revalued at the end of each reporting period until being exercised upon the closing of the Business Combination.

The following table sets forth a summary of the activities of the Company’s Series A preferred stock warrant liability, which represents a recurring measurement that is classified within Level 3 of the fair value hierarchy wherein fair value is estimated using significant unobservable inputs:

Three Months Ended March 31,

Beginning warrant liability balance

Change in fair value

Warrant exercise

Ending warrant liability balance

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

Accrued payroll and benefits

Accrued external research and development

Accrued professional fees

Accrued interest

Accrued other

On February 8, 2019 (the “Closing Date”), the Company entered into a term loan facility of up to $10.0 million (the “Term Loan”) with Silicon Valley Bank (“SVB”).

The proceeds were used for general corporate and working capital purposes.

Concurrent with the Term Loan, the Company issued SVB warrants to purchase 15,257 shares of the Company’s Series A preferred stock at an exercise price of $5.46 (see Note 5).

As of March 31, 2021 and December 31, 2020, the Company had $9.2 million and $10.0 million, respectively, in principal outstanding under the Term Loan.

The Term Loan is governed by a loan and security agreement, dated February 8, 2019 , between the Company and SVB (the “SVB Loan Agreement”).

The SVB Loan Agreement provided for two separate tranches under which the Company could borrow.

The first tranche for $ 7.5 million was available as single term loan advance until January 31, 2020.

The second tranche was also available until January 31, 2020 as single term loan advance for $ 2.5 million and required that the Company meet a certain milestone event.

On April 18, 2019, the Company borrowed $ 7.5 million under the first tranche, and on December 17, 2019, the Company borrowed $ 2.5 million under the second tranche having satisfied the milestone requirement.

The Term Loan initially matured on July 1, 2022 and accrues interest at a floating rate per annum equal to the greater of 3.75% or the prime rate minus 1.5% (1.75% as of March 31, 2021).

The Term Loan initially provided for monthly interest-only payments until July 31, 2020.

Thereafter, payments are payable in equal monthly installments of principal, plus all accrued and unpaid interest.

The Company may prepay the Term Loan in whole upon 5 days’ prior written notice to SVB.

Any such prepayment of the Term Loan is subject to a prepayment charge of 0.5% of the then outstanding principal balance.

Amounts outstanding during an event of default are payable upon SVB’s demand and will accrue interest at an additional rate of 5.0% per annum of the past due amount outstanding.

On April 7, 2020, the Company entered into a deferral agreement with SVB to defer scheduled principal repayments on its term loan by six months.

The deferral agreement was offered to the Company in connection with SVB’s venture debt relief initiative, which was started due to the COVID-19 pandemic.

The Company’s first principal payment under its credit facility occurred in February 2021.

The required monthly interest-only payment was not impacted by the deferral.

The Term Loan’s new maturity date is January 1, 2023.

After considering the debt guidance in ASC 470, the Company concluded that it did not meet the indicators of a troubled debt restructuring and accounted for the deferral of principal payment as a debt modification.

Since there were no fees paid to SVB in connection with the deferral agreement, the modification had no impact to the Company’s financial statements.

At the end of the loan term (whether at maturity, by prepayment in full or otherwise), the Company is required to pay a final end of term charge to SVB in the amount of 4.0% of the aggregate original principal amount advanced by SVB.

The amount of the end of term charge is being accrued over the loan term as interest expense.

As of March 31, 2021 and December 31, 2020, the Company accrued $275 thousand and $239 thousand, respectively, related to the end of term charge, which has been classified within other long-term liabilities.

The SVB Loan Agreement includes a provision under which SVB may accelerate the scheduled maturities of the Term Loan under conditions that are not objectively determinable.

The Company evaluated the likelihood of such acceleration and determined that it is not probable and classified the Term Loan on the balance sheet in accordance with the repayment schedule as of March 31, 2021.

As of March 31, 2021, scheduled principal payments for the Term Loan are as follows (in thousands):

Year Ending December 31,

Total principal

Unamortized discounts

Carrying amount

Less current portion

Long-term portion

Interest expense for the three months ended March 31, 2021 and 2020 was approximately $138 thousand and $153 thousand, respectively.

Convertible promissory notes

On August 21, 2020, the Company entered into a purchase agreement with various investors to issue $14.0 million in convertible promissory notes (the “Notes”).

The Notes accrued simple interest at 8% per annum.

The Company determined that a beneficial conversion feature (“BCF”) exists and should be recognized on the issuance date.

The Company recorded the Notes at the original issuance price, net of the BCF discount.

The BCF discount was accreted to the face value of the Notes over the period from the issuance date until the maturity date, offset against interest expense.

The Notes served as a bridge loan prior to the PIPE Financing that was completed in connection with the closing of the Business Combination.

The Notes were intended to automatically convert into shares of common stock issued in the PIPE at a per share conversion price equal to the lowest per share price paid for such shares of common stock in the PIPE.

The Notes were amended to allow for the principal and interest to convert to shares of Series B preferred stock prior to the closing of the Business Combination.

immediately prior to the closing of the Business Combination, the outstanding principal and interest under the Notes converted into 2,341,316 shares of Series B preferred stock at a per share conversion price of $ 6.1986 and the Notes liability was extinguished .

T he Company recorded other expense of $ 0.7 million for the difference between the reacquisition price of the Notes and the net carrying amount of the Notes in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 .

As of December 31, 2020, the carrying value of the Notes was as follows:

Principal amount

Unamortized discount (beneficial conversion feature)

Carrying amount

Less current portion

Long-term portion

During the three months ended March 31, 2021, the Company recognized interest expense of $1.7 million.

Stockholders’ Equity (Deficit)

The condensed consolidated statement of stockholders’ equity (deficit) has been retroactively adjusted for all periods presented to reflect the Business Combination and reverse recapitalization as defined in Note 3, Business Combination .

Preferred Stock

Upon closing of the Business Combination, pursuant to the terms of the Amended and Restated Certificate of Incorporation dated February 5, 2021, the Company authorized 10,000,000 shares of preferred stock with a par value $0.0001 per share.

The Company’s board of directors has the authority, without further action by the stockholders, to issue such shares of preferred stock in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designations, powers, voting, and other rights, preferences and privileges of the shares.

There were no issued and outstanding shares of preferred stock as of March 31, 2021.

In connection with the closing of the Business Combination, all previously issued and outstanding Series A convertible preferred stock and Series B convertible preferred stock were exchanged for common stock in Gemini pursuant to the Conversion Ratio established in the Merger Agreement.

All fractional shares were rounded down.

Pursuant to the term of the Amended and Restated Certificate of Incorporation, the Company authorized 250,000,000 shares of common stock with a par value of $0.0001 per share.

Immediately following the closing of the Business Combination and as of March 31, 2021, there were 42,998,664 and 43,002,144 shares of common stock issued and outstanding, respectively.

As discussed in Note 3, Business Combination , the Company has retroactively adjusted the shares issued and outstanding prior to February 5, 2021 to give effect to the Conversion Ratio established in the Merger Agreement to determine the number of shares of common stock into which they were converted.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders.

Common stockholders are entitled to receive dividends, as may be declared by the board of directors.

No dividends have been declared to date.

Equity incentive plan

2017 Old Gemini Equity Incentive Plan

Old Gemini’s 2017 Stock Option and Grant Plan, as amended (the “2017 Plan”), provided for the Company to grant qualified incentive options, nonqualified options, stock grants and other stock-based awards to employees and non-employees to purchase the Company’s common stock.

The 2017 Plan was administered by the board of directors, or at the discretion of the board of directors, by a committee of the board of directors.

The exercise price for incentive options was determined at the discretion of the board of directors.

All incentive options granted to any person possessing less than 10% of the total combined voting power of all classes of stock may not have an exercise price of less than 100% of the fair market value of the common stock on the grant date.

All incentive options granted to any person possessing more than 10% of the total combined voting power of all classes of stock may not have an exercise price of less than 110% of the fair market value of the common stock on the grant date.

The option term for incentive awards may not be greater than ten years from the date of the grant.

Incentive options granted to persons possessing more than 10% of the total combined voting power of all classes of stock may not have an option term of greater than five years from the date of the grant.

The vesting period for equity-based awards under the 2017 Plan was determined at the discretion of the board of directors, which was generally four years.

For awards granted to employees and non-employees with four-year vesting terms, 25% of the option vests on the first anniversary of the grant date and the remaining stock vest equally each month for three years thereafter.

Upon completion of the Business Combination, the Company ceased granting awards under the 2017 Plan.

All awards under the 2017 Plan continue in full force and effect on the same terms and conditions as were previously applicable to such awards, subject to adjustments to the exercise price and number of shares of common stock issuable upon exercise based on the Conversion Ratio.

Conversion of Awards

Each Old Gemini option from the 2017 Plan and each option from Old Gemini’s 2015 Stock Option and Grant Plan (the “2015 Plan”) that was outstanding immediately prior to the Business Combination, whether vested or unvested, was converted into an option to purchase a number of shares of common stock (each such option, an "Exchanged Option") equal to the product (rounded down to the nearest whole number) of (i) the number of shares of Old Gemini common stock subject to such Old Gemini option immediately prior to the Business Combination and (ii) the Conversion Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of such Old Gemini option immediately prior to the consummation of the Business Combination, divided by (B) the Conversion Ratio.

Each Exchanged Option will continue to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Old Gemini option immediately prior to the consummation of the Business Combination.

All stock option activity was retroactively restated to reflect the Exchanged Options.

As of the Closing Date, the 10,567,508 options and 163,157 restricted stock units (“RSUs”) outstanding under the 2017 Plan and 2015 Plan were converted into 2,303,309 options and 35,561 RSUs upon completion of the Business Combination after effect of the Conversion Ratio.

This effect of the Conversion Ratio has been retroactively adjusted throughout the Company’s unaudited condensed consolidated financial statements.

2021 Gemini Equity Incentive Plan

On February 3, 2021, FSDC’s stockholders approved the 2021 Stock Option and Incentive Plan (the “2021 Plan”), pursuant to which 4,264,341 shares of common stock were reserved for issuance.

The 2021 Plan provides for the Company to grant incentive stock options or nonqualified stock options for the purchase of common stock, stock appreciation rights, restricted stock awards, restricted stock units, unrestricted stock awards, cash-based awards and dividend equivalent rights to employees, officers, directors and consultants of Gemini.

Incentive stock options may only be granted to employees.

The 2021 Plan is administered by the plan administrator, which is the Compensation Committee of Gemini’s board of directors, provided therein, which has discretionary authority, subject only to the express provisions of the 2021 Plan, to interpret the 2021 Plan;

determine eligibility for and grant awards;

determine form of settlement of awards (whether in cash, shares of stock, other property or a combination of the foregoing), determine, modify or waive the terms and conditions of any award;

prescribe forms, rules and procedures;

and otherwise do all things necessary to carry out the purposes of the 2021 Plan.

The exercise price of each award granted under the 2021 Plan requiring exercise will be 100% of the fair market value of stock subject to the award, determined as of the date of the grant, or such higher amount as the plan administrator may determine in connection with the grant, and the term of stock option may not be greater than ten years.

The vesting and other restrictions are determined at the discretion of the plan administrator.

2021 Inducement Plan

On February 12, 2021, the Company’s board of directors approved the 2021 Inducement Plan.

The 2021 Inducement Plan is a non-stockholder approved stock plan under which the Company grants equity awards to induce highly-qualified prospective officers and employees who are not currently employed by the Company to accept employment and provide them with a proprietary interest in the Company.

The Company intends that the 2021 Inducement Plan be reserved for persons to whom the Company may issue securities without stockholder approval as an inducement pursuant to Rule 5635(c)(4) of the Marketplace Rules of the NASDAQ Stock Market, Inc.

The 2021 Inducement Plan is administered by the board of directors or the Compensation Committee of the board, which determines the types of awards to be granted, including the number of shares subject to the awards, the exercise price and the vesting schedule.

Awards granted under the 2021 Inducement Plan expire no later than ten years from the date of grant.

As of March 31, 2021, 1,616,895 shares were available for issuance under the 2021 Inducement Plan.

Stock-based compensation expense

The Company recorded stock-based compensation expense in the following expense categories of its condensed consolidated statements of operations and comprehensive loss (in thousands):

Three Months Ended March 31,

Research and development

General and administrative

Total stock-based compensation expense

Net loss per share

As a result of the Business Combination, the Company has retroactively restated the weighted average shares outstanding prior to February 5, 2021 to give effect to the Conversion Ratio.

The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders of the Company (in thousands, except share and per share amounts):

Three Months Ended March 31,

Net loss attributable to common stockholders

Weighted average common shares outstanding-basic and diluted

Net loss per share attributable to common stockholders-basic and diluted

The Company’s unvested restricted common shares have been excluded from the computation of basic net loss per share attributable to common stockholders.

The Company’s potentially dilutive securities, which include options and unvested restricted stock, have been excluded from the computation of diluted net loss per share attributable to common stockholders as the effect would be to reduce the net loss per share attributable to common stockholders.

Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders is the same.

The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti-dilutive effect:

Three Months Ended March 31,

Unvested restricted stock

Options to purchase common stock

Warrants to purchase shares of Series A preferred stock (as converted to common stock)

Commitments and contingencies

The Company’s long-term contractual obligations include commitments entered into in the normal course of business.

The Company’s most significant contracts relate to agreements with clinical research organizations (“CROs”) for clinical trials and preclinical studies and clinical manufacturing organizations (“CMOs”), which the Company enters into in the normal course of business.

The contracts with CROs and CMOs are generally cancellable, with notice, at the Company’s option.

The Company also has commitments related to facility leases, debt obligations, license agreements and other purchase obligations.

License agreements

In April 2017, the Company entered into a Research Collaboration and License Agreement with Sanquin Blood Supply Foundation (the “2017 License Agreement”) to develop antibodies that bind and enhance the activity of CFH.

As consideration for the license, the Company paid a one-time, non-refundable upfront payment of $100 thousand.

The 2017 License Agreement includes additional consideration upon the achievement of certain development and commercial milestones (i.e., once net sales targets exceed certain thresholds) totaling up to an aggregate amount of $29.0 million.

Finally, the Company is required to make royalty payments of between 1.25% and 2.50% of net product sales if commercialization is achieved.

The financial statements as of March 31, 2021 do not include liabilities with respect to this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

In June 2018, the Company entered into a Cell Line License Agreement with Life Technologies Corporation (the “2018 License Agreement”) to obtain non-exclusive use of 293 H cells in support of GEM-103 manufacturing activities.

As consideration for the license, the Company paid a one-time, non-refundable, non-creditable initial license fee of $75 thousand.

In addition, an annual non-refundable, non-creditable development fee of $65 thousand is due on each anniversary date.

The 2018 License Agreement includes additional consideration of $275 thousand contingent upon future commercialization of each licensed product.

As the Company has not yet generated revenue from operations, no provision was included in the financial statements with respect to the additional consideration under the 2018 License Agreement as of March 31, 2021.

In March 2019, the Company entered into a second Cell Line License Agreement with Life Technologies Corporation (the “2019 License Agreement”) to obtain non-exclusive use of a CTS Viral Production cell line for producing genetically engineered adeno-associated virus particles to be used in human therapeutics.

As consideration for the license, the Company paid a one-time, non-refundable, non-creditable initial license fee of $100 thousand.

In addition, an annual non-refundable, non-creditable development fee of $80 thousand is due on each anniversary date, beginning on the second anniversary date.

The 2019 License Agreement includes additional consideration of $350 thousand contingent upon future commercialization of each licensed product.

As the Company has not yet generated revenue from operations, no provision was included in the financial statements with respect to the additional consideration under the 2019 License Agreement as of March 31, 2021.

In October 2018, the Company entered into a Master License Agreement with Avitide, Inc.

(the “2018 Master License Agreement”) to license, on an exclusive basis, certain of Avitide’s affinity chromatography resins comprised of proprietary ligands.

As consideration for the license, the Company paid an upfront license fee of $200 thousand.

In addition, an annual license fee of $75 thousand is due on each anniversary date.

The 2018 Master License Agreement includes additional consideration upon the achievement of certain development, commercial and sales milestones totaling up to $700 thousand, $2.2 million and $7.0 million, respectively.

Finally, the Company is required to make royalty payments of 1.25% of net product sales if commercialization is achieved.

The financial statements as of March 31, 2021 do not include liabilities with respect to additional consideration under this agreement as the Company has not yet generated revenue and the achievement of certain milestones is not probable.

In June 2019, the Company entered into a GPEx-Derived Cell Line Sale Agreement with Catalent Pharma Solutions, LLC (the “2019 Sale Agreement”) to purchase all right, title and interest in and to the GPEx Cell Line.

As consideration for the GPEx Cell Line, the Company is required to make one-time milestone payments totaling up to $1.3 million in aggregate, as well as a contingent annual fee upon commercialization (1% of net sales, or $100 thousand, whichever is greater) and other fees after certain milestones are reached.

Certain milestone payments may be waived if Catalent manufactures >50% of the total product required for the relevant clinical trial.

Contingencies

Indemnification agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising out of breach of such agreements or from intellectual property infringement claims made by third parties.

In addition, the Company has entered into indemnification agreements with members of its board of directors and executive officers that will require the Company, among other things, to

indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers.

The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited.

To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company is not aware of any indemnification arrangements could have a material effect on its financial position, results of operations or cash flows, and it has not accrued any liabilities related to such obligations in its condensed consolidated financial statements as of March 31, 2021 .

Legal proceedings

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business.

As of March 31, 2021, the Company was not a party to any material legal matters or claims.

Related party transactions

The Company engaged a firm managed by an executive of the Company for professional services related to accounting, finance and other administrative functions.

For the three months ended March 31, 2021, the costs incurred under this arrangement totaled $105 thousand, of which $95 thousand was recorded in stockholders’ equity (deficit) as a reduction to additional paid-in capital as a result of the Business Combination and $10 thousand was recorded as general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive loss.

As of March 31, 2021 and December 31, 2020, amounts owed under this arrangement totaled $6 and $257 thousand, respectively, and is included in accounts payable and/or accrued expenses in the accompanying consolidated balance sheet for each period.

The executive of the Company associated with this firm resigned from the Company in February 2021.

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-Q

Item 1. Financial Statements