Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our President and Chief Executive Officer (CEO) and our Chief Financial Officer (CFO), our principal executive officer and principal accounting and financial officer, respectively, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of November 30, 2021. Based on their evaluation, the CEO and CFO have concluded that our disclosure controls and procedures were not effective as of such date due to the material weaknesses in internal control over financial reporting described in “Management’s Report on Internal Control Over Financial Reporting” below.
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our CEO and our CFO, to allow timely decisions regarding required disclosure.
In light of the material weaknesses described below, we performed additional analyses, reconciliations, and other post-closing procedures to determine that our consolidated financial statements are prepared in accordance with generally accepted accounting principles. Accordingly, management concluded that the consolidated financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of November 30, 2021 based on the framework in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (the COSO criteria). Based on the above evaluation, our management concluded that our internal control over financial reporting was not effective as of November 30, 2021 due to the material weaknesses described below .
Material Weaknesses in Internal Control over Financial Reporting
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. We have identified the following control deficiencies that constitute material weaknesses in our internal control over financial reporting as of November 30, 2021:
•
We did not design and maintain effective controls over certain information technology (IT) general controls for IT systems that are relevant to the preparation of the financial statements. Specifically, we did not design and maintain: (a) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate personnel, and (b) program change management controls to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately. These IT deficiencies did not result in any misstatements to the financial statements; however, the deficiencies, when aggregated, could impact our ability to maintain effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected. Accordingly, management has determined that these deficiencies in the aggregate
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constitute a material weakness.
•
We did not design and maintain effective segregation of duty controls over the review and approval of account reconciliations and manual journal entries. This material weakness did not result in any misstatements to the financial statements; however, the deficiency could result in a misstatement of substantially all of our account balances or disclosures that would result in a material misstatement to the annual or interim financial statements that would not be prevented or detected.
Because of these material weaknesses, our management has concluded that our internal control over financial reporting was not effective as of November 30, 2021, based on the criteria in “Internal Control — Integrated Framework” (2013) issued by the COSO.
The effectiveness of our internal control over financial reporting as of November 30, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report included in Part II, Item 8 of this Annual Report on Form 10-K.
Remediation Plan
To address our material weaknesses, we have implemented and continue to implement new IT controls. We intend to continue to take steps to remediate the material weaknesses through formalizing documentation of IT policies and procedures and ensuring the ongoing operating effectiveness of the newly implemented IT controls to support effective IT dependent controls and our ability to maintain segregation of duties for our accounting staff in relation to account reconciliations and manual journal entries.
While we believe that these efforts will improve our internal control over financial reporting, the design and implementation of our remediation is ongoing and will require validation and testing of the design and operating effectiveness of our internal controls over a sustained period of financial reporting cycles. The actions that we are taking are subject to ongoing senior management review, as well as audit committee oversight. We will not be able to conclude whether the steps we are taking will fully remediate the material weaknesses in our internal control over financial reporting until we have completed our remediation efforts and subsequent evaluation of their effectiveness.
Changes in Internal Control Over Financial Reporting
As described under the Remediation Plan above, we continued formalizing documentation of our IT policies and procedures and implementing new controls during the quarter ended November 30, 2021. Such remediation actions were changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended November 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspection
Not applicable.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item will be set forth in our definitive proxy statement for our 2022 Annual Meeting of Stockholders (Proxy Statement) to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
We have adopted a code of business conduct and ethics that applies to all employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The code of business conduct and ethics is available on our website at www.nurixtx.com. Amendments to, and waivers from, the code of business conduct and ethics that apply to any director, executive officer or persons performing similar functions will be disclosed at the website address provided above and, to the extent required by applicable regulations, on a Current Report on Form 8-K filed with the SEC.
Item 11. Executive Compensation
The information required by this item will be set forth in the Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item will be set forth in the Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be set forth in the Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
Item 14. Principal Accounting Fees and Services
The information required by this item will be set forth in the Proxy Statement to be filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, and is incorporated herein by reference.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
The following documents are filed as part of this Annual Report on Form 10-K:
(1)
Financial Statements
The financial statements filed as part of this Annual Report on Form 10-K are listed in the “Index to Financial Statements” under Part II, Item 8 of this Annual Report on Form 10-K.
(2)
Financial Statement Schedules
Financial statement schedules have been omitted in this Annual Report on Form 10-K because they are not applicable, not required under the instructions, or the information requested is set forth in the financial statements or related notes thereto.
(3)
Exhibits
The following is a list of exhibits filed with this Annual Report on Form 10-K incorporated herein by reference (numbered in accordance with Item 601 of Regulation S-K):
166
EXHIBIT INDEX
Incorporated by Reference
Filed or Furnished Herewith
Exhibit
Number
Description
Form
File No.
Exhibit
Filing Date
3.1
Restated Certificate of Incorporation
10-Q
001-39398
3.1
October 14, 2020
3.2
Restated Bylaws
10-Q
001-39398
3.2
October 14, 2020
4.1
Form of Common Stock Certificate
S-1
333-239651
4.1
July 2, 2020
4.2
Amended and Restated Investor Rights Agreement, dated March 9, 2020, by and among the Registrant and certain of its stockholders
S-1
333-239651
4.2
July 2, 2020
4.3
Description of Registrant’s Securities
10-K
001-39398
4.3
February 16, 2021
10.1
Form of Indemnity Agreement
S-1
333-239651
10.1
July 2, 2020
10.2*
2012 Equity Incentive Plan, as amended, and forms of award agreements
S-1
333-239651
10.2
July 2, 2020
10.3*
2020 Equity Incentive Plan and forms of award agreements
S-1/A
333-239651
10.3
July 20, 2020
10.4*
2020 Employee Stock Purchase Plan and forms of award agreements
S-1/A
333-239651
10.4
July 20, 2020
10.5*
Employment Agreement, dated July 15, 2020, by and between the Registrant and Arthur T. Sands
S-1/A
333-239651
10.5
July 20, 2020
10.6*
Letter Agreement, dated June 15, 2020, by and between the Registrant and Arthur T. Sands
S-1
333-239651
10.11
July 2, 2020
10.7*
Employment Agreement, dated July 15, 2020, by and between the Registrant and Gwenn Hansen
S-1/A
333-239651
10.7
July 20, 2020
10.8*
Employment Agreement, dated July 15, 2020, by and between the Registrant and Christine Ring
10-K
001-39398
10.7
February 16, 2021
10.9*
Employment Agreement, dated July 15, 2020, by and between the Registrant and Hans van Houte
X
10.10*
Employment Agreement, dated June 10, 2021, by and between the Registrant and Stefani Wolff
10-Q
001-39398
10.1
October 14, 2021
10.11*
Executive Severance and Change in Control Plan, as amended and restated on January 19, 2022, and form of Participation Agreement thereunder
X
10.12
Lease Agreement, dated as of March 24, 2014, between ARE-San Francisco No. 26, LLC and the Registrant
S-1
333-239651
10.8
July 2, 2020
167
10.13
Lease Agreement, dated as of June 21, 2021, between ARE-San Francisco No. 19 LLC and the Registrant
10-Q
001-39398
10.2
October 14, 2021
10.14 †
Collaboration, Option and License Agreement, dated June 10, 2019, by and between the Registrant and Gilead Sciences, Inc., as amended
S-1
333-239651
10.9
July 2, 2020
10.15 †
Collaboration and License Agreement, dated December 19, 2019, by and between the Registrant and Genzyme Corporation
S-1
333-239651
10.10
July 2, 2020
10.16 †
First Amendment to Collaboration and License Agreement, dated January 6, 2021, by and between the Registrant and Genzyme Corporation
10-K
001-39398
10.11
February 16, 2021
10.17
Equity Distribution Agreement, dated August 4, 2021, by and between the Registrant and Piper Sandler & Co .
S-3
333-258448
1.2
August 4, 2021
21.1
Subsidiaries of the Registrant
X
23.1
Consent of Independent Registered Public Accounting Firm
X
24.1
Power of Attorney (reference is made to the signature page hereto)
X
31.1
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Principal Financial and Accounting Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1 ‡
Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
168
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File (formatted as Inline XBRL and included in exhibit 101)
X
*
Indicates a management or compensatory plan or arrangement in which directors or executive officers are eligible to participate.
†
Registrant has omitted portions of the exhibit as permitted under Item 601(b)(10) of Regulation S-K.
‡
The certifications furnished in Exhibits 32.1 hereto are deemed to accompany this Annual Report on Form 10-K and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act of the Exchange Act.
Item 16. Form 10-K Summary
None.
169
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized .
NURIX THERAPEUTICS, INC.
Date: January 28, 2022
By:
/s/ Arthur T. Sands
Arthur T. Sands, M.D., Ph.D.
President, Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Arthur T. Sands and Hans van Houte, and each of them, as his or her true and lawful attorneys-in-fact, proxies, and agents, each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact, proxies, and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact, proxies, and agents, or their or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Name
Title
Date
/s/ Arthur T. Sands
President, Chief Executive Officer and Director
January 28, 2022
Arthur T. Sands, M.D., Ph.D.
( Principal Executive Officer )
/s/ Hans van Houte
Chief Financial Officer
January 28, 2022
Hans van Houte
( Principal Financial and Accounting Officer )
/s/ David L. Lacey
Chairman and Director
January 28, 2022
David L. Lacey, M.D.
/s/ Julia P. Gregory
Director
January 28, 2022
Julia P. Gregory
/s/ Lori A. Kunkel
Director
January 28, 2022
Lori A. Kunkel, M.D.
/s/ Judith A. Reinsdorf
Director
January 28, 2022
Judith A. Reinsdorf, J.D.
/s/ Clay B. Siegall
Director
January 28, 2022
Clay B. Siegall, Ph.D.
/s/ Paul M. Silva
Director
January 28, 2022
Paul M. Silva
/s/ Jeffrey K. Tong
Director
January 28, 2022
Jeffrey K. Tong, Ph.D.
170