Passage BIO, Inc. 10-Q

Item 1. Legal Proceedings From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. We are currently a defendant in litigation with a former employee in the Court of Common Pleas of Philadelphia County (Commerce Division), or the Court, relating to a claim of breach of contract and violation of the Pennsylvania Wage Payment and Collection Law. The plaintiff claims that, pursuant to an alleged settlement agreement reached on February 3, 2020, we agreed to issue plaintiff 150,000 shares of our common stock and that such shares would not be subject to the reverse stock split implemented by us in connection with our initial public offering on February 14, 2020. The plaintiff’s claim is for an amount in the mid-single digit millions of dollars. We disagree with the allegations that there was ever a binding settlement agreement or that any shares would not be subject to the reverse stock split, and we believe the plaintiff’s claim is without merit. In October 2023, the Court denied both the Company’s and the plaintiff’s motions for summary judgement and therefore we anticipate that this matter will go to trial in 2024. We intend to vigorously defend against these claims, and believe we have strong arguments to prevail in the litigation. There can be no assurance that we will prevail on our claims. Other than the above, we are not presently a party to any legal proceedings that, in the opinion of management, would, if decided against us, have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm, and other factors.