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Item 9A. Controls and Procedures

2023-03-16 compared with 2022-03-14 · 96 added, 1141 removed, 135 unchanged (90% of the section changed)

Controls and Procedures

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, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2022.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022 because of the material weaknesses in internal control over financial reporting discussed below.

Notwithstanding the material weakness in internal control over financial reporting described below, our management has concluded that our consolidated financial statements included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with accounting principles generally accepted in the United States of America.

Notwithstanding the material weaknesses in internal control over financial reporting described below, our management has concluded that our consolidated financial statements included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with accounting principles generally accepted in the United States of America (“U.S.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act.

Internal control over financial reporting is a process designed under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer and oversight of the board of directors, our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022, based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 COSO framework).

Based on this evaluation, due to the material weaknesses described below, management concluded that the Company’s internal control over financial reporting were not effective.

As discussed elsewhere in this Annual Report on Form 10-K, we completed our acquisition of Legacy GeneDx on April 29, 2022.

The SEC permits companies to exclude acquisitions from their assessment of internal control over financial reporting during the first year in which the acquisition was completed, and our management has elected to exclude Legacy GeneDx from our assessment as of December 31, 2022.

Material Weaknesses

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 a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation of Legacy Sema4's audited financial statements for the years ended December 31, 2020, 2019 and 2018, we identified material weaknesses in our internal controls over financial reporting, as of December 31, 2020.

These material weaknesses had not been fully remediated as of December 31, 2021.

In addition, during 2021, management identified a misclassification of certain costs included within cost of services for the years ended December 31, 2021, 2020 and 2019.

The material weaknesses identified related to the fact that we did not design and maintain accounting policies, procedures and controls to ensure complete, accurate and timely financial reporting in accordance with U.S.

Specifically, the material weaknesses identified included the following:

• We did not design and maintain accounting policies, processes and controls to analyze, account for and report our revenue arrangements in accordance with ASC 606, Revenue from Contracts with Customers, and ASC 605, Revenue Recognition.

• We did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of account reconciliations, journal entries and classification of certain costs;

the accounting for cost capitalization policies in accordance with ASC 330, Inventory, and ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software;

and the application of ASC 840, Leases, ASC 340-40, Contracts with Customers and SEC Regulation S-X Article 5.

• We had not developed and effectively communicated to our employees our accounting policies and procedures, which resulted in inconsistent practices.

Since these entity level programs have a pervasive

effect across the organization, management has determined that these circumstances constitute a material weakness.

• Our accounting and operating systems lacked controls over access, and program change management that are needed to ensure access to financial data is adequately restricted to appropriate personnel.

In connection with the preparation of Legacy Sema4's audited financial statements as of December 31, 2020, we previously identified material weaknesses in our internal controls over financial reporting.

Certain of these material weaknesses remain unremediated as of December 31, 2022.

Specifically, as of December 31, 2022, the material weaknesses that remain unremediated include the following:

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• We do not have sufficient, qualified finance and accounting staff with the appropriate U.S.

GAAP technical accounting expertise to identify, evaluate and account for accounting and financial reporting, and effectively design and implement systems and processes that allow for the timely production of accurate financial information in accordance with internal financial reporting timelines, commensurate with our size and the nature and complexity of our operations.

As a result, we did not design and maintain formal accounting policies, processes and controls related to complex transactions necessary for an effective financial reporting process.

GAAP technical accounting expertise to effectively maintain processes and controls that allow for the timely production of accurate financial information in accordance with internal financial reporting timelines, commensurate with our size and the nature and complexity of our operations.

• We did not maintain formal processes and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including controls over the preparation and review of account reconciliations, journal entries, classification of certain costs, non-recurring complex transactions and the accounting in accordance with U.S.

As a result, it is possible that the Company’s business process controls that depend on the accuracy and completeness of data or financial reports generated by the Company's information technology system could be adversely affected due to the lack of operating effectiveness of the information technology general controls (“ITGCs”).

Remediation Plan

Our management is actively engaged and committed to taking the steps necessary to remediate the control deficiencies that constituted the material weaknesses.

During 2021, we made the following enhancements to our control environment:

• In May 2021, we hired a permanent Chief Accounting Officer with substantial technical accounting and internal controls experience, whose responsibilities include working with our Chief Financial Officer, existing employees and third-party consultants to improve the design, implementation, execution and supervision of our controls.

• We added accounting and information technology employees with appropriate experience, certification, education and training to the organization to strengthen our internal accounting team, to provide oversight, structure and reporting lines, and to provide additional review over our disclosures.

This includes hiring a Corporate Controller, whose primary responsibilities include working with third-party consultants to improve the design, implementation, execution, and supervision of our controls.

We expect to continue evaluating our needs for additional personnel.

We expect to provide enhanced training to existing and new employees in order to enhance the level of communication and understanding of controls with personnel that provide key information and perform key roles within our financial accounting and reporting group.

• We engaged outside consultants to assist in the design, implementation, and documentation of internal controls that address the relevant risks, are properly designed, and provide for appropriate evidence of performance of the internal controls;

• We engaged outside consultants to assist us in the evaluation of our Enterprise Resource Planning (“ERP”) system in order to mitigate the internal control gaps and limitations with the current configuration, and to enhance the information technology general controls environment.

• Our remediation activities are continuing during 2022.

In addition to the above actions, we expect to engage in additional activities, including, but not limited to:

• Hiring more technical accounting resources to enhance our control environment;

• Engaging external consultants to provide support and to assist us in our evaluation of more complex applications of GAAP, and to assist us with documenting and assessing our accounting policies and procedures until we have sufficient technical accounting resources;

• Implementing business process-level controls across all significant accounts and information technology general controls across all relevant systems.

This includes providing training for control owners that will present expectations as it relates to the control design, execution and monitoring of such controls, including enhancements to the documentation to evidence the execution of the controls;

• Implementing improvements to our ERP system to enhance the accuracy of our financial records, enable the enforcement of systematic segregation of duties, and to improve our information technology general controls environment.

We continue to enhance corporate oversight over process-level controls and structures to ensure that there is appropriate assignment of authority, responsibility, and accountability to enable remediation of our material weaknesses.

We believe that our remediation plan will be sufficient to remediate the identified material weaknesses and strengthen our controls.

As we continue to evaluate, and work to improve our controls, management may determine that additional measures to address control deficiencies or modifications to the remediation plan are necessary.

While we have performed certain remediation activities to strengthen our controls to address the identified material weaknesses, control weaknesses are not considered remediated until new internal controls have been operational for a period of time, are tested, and management concludes that these controls are operating effectively.

We will continue to monitor the effectiveness of our remediation measures in connection with our future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures, and we will make any changes to the design of our plan and take such other actions that we deem appropriate given the circumstances.

Management’s Annual Report on Internal Control over Financial Reporting

As discussed elsewhere in this Annual Report on Form 10-K, we completed our business combination with CMLS on July 22, 2021.

Prior to the business combination, CMLS was a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or other similar business combination with one or more operating businesses.

As a result, CMLS’s previously existing internal controls are no longer applicable or comprehensive enough as of December 31, 2021, as CMLS’s operations prior to the business combination were insignificant compared to those of our consolidated company post-business combination.

We are engaged in the process of design and implementation of our internal control over financial reporting in a manner commensurate with the scale of our operations subsequent to the business combination, including the enhancement of our internal and external technical accounting resources (as well as to address the material weaknesses discussed above).

However, the design of internal control over financial reporting for our company post-business combination has required and will continue to require significant time and resources from management and other personnel.

As a result, management was unable, without incurring unreasonable effort or expense to conduct an assessment of our internal control over financial reporting as of December 31, 2021.

Accordingly, we are excluding management's report on internal control over financial reporting pursuant to Section 215.02 of the SEC Division of Corporation Finance's Regulation S-K Compliance & Disclosure Interpretations.

The Company has continued to improve its organizational capabilities and continues to implement processes and controls to remediate the material weaknesses.

During 2021 and 2022, we made the following enhancements to our control environment:

• We have hired key personnel, obtained qualified accountants through the acquisition of Legacy GeneDx, and supplemented interim staffing needs with third-party consultants that have the appropriate technical accounting skills to enable us to achieve complete, accurate, and timely financial accounting and reporting.

In addition, we have reallocated responsibilities across the organization to ensure that the appropriate level of knowledge and experience is applied based on risk and complexity of transactions.

• We added information technology employees with appropriate experience, certification, education and training to the organization to strengthen our IT team, to enable us to improve the ITGCs over our accounting and operating systems.

• We engaged outside consultants to assist in the design, implementation, documentation, and remediation of internal controls that address the relevant risks, and to assist us in the evaluation of our relevant accounting and operating systems, to enable us to improve our processes and controls over financial reporting.

• We provided training to internal control performers in order to enhance their level of understanding over the appropriate design, implementation and effectiveness of controls.

• We have strengthened and documented our internal accounting policies and procedures and communicated the policies to relevant personnel.

• We have completed the design of our internal controls, and have completed detailed remediation plans at the risk and control level.

Management has been actively engaged in remediation efforts to address the material weaknesses throughout 2022 and these efforts will continue into fiscal year 2023.

While we believe significant progress was made in 2022 to enhance and strengthen our internal control over financial reporting, material control weaknesses are not considered remediated until new internal controls have been operational for a sufficient period of time, are tested, and management concludes that these controls are operating effectively.

As of December 31, 2022, there was not a sufficient period of time available to sufficiently test nor conclude that these controls are operating effectively.

We will continue to monitor the effectiveness of our

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remediation measures in connection with our future assessments of the effectiveness of internal control over financial reporting and disclosure controls and procedures, and we will make any changes to the design of our plan and take such other actions that we deem appropriate given the circumstances.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2021 covered by this Annual Report on Form 10-K that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, other than as described herein.

Our management has evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, changes in our internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the fourth quarter of 2022.

Except as described above, there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, other than as described herein.

We are continuing to take steps to remediate the material weakness in our internal control over financial reporting, as discussed above.

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Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures, or our internal controls, will prevent all error and all fraud.

A control system, no

matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.

1 unchanged sentence

Other Information

As previously disclosed, we expect to call a special meeting of stockholders for the approval of the issuance of the additional 22,336,624 shares of Class A common stock in our registered direct offering for purposes of complying with Nasdaq listing rules.

At the special meeting, we also intend to seek stockholder approval of a reverse stock split of our outstanding shares of Class A common stock at a ratio to be set by our board of directors within a range approved by our stockholders, an amendment to our certificate of incorporation to limit the liability of certain of our officers as permitted pursuant to recent amendments to the Delaware corporate law, and an amendment to our 2021 Equity Incentive Plan to increase the aggregate number of shares of Class A common stock authorized for issuance under the plan by 26,000,000 shares.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the names, ages as of February 22, 2022, and certain other information regarding our executive officers and directors:

Name Age Position

Executive Officers:

Eric Schadt, Ph.D.

57 Chief Executive Officer and Director

Jason Ryan 47 Executive Chairman and Director

Isaac Ro 44 Chief Financial Officer

Daniel Clark, J.D.

42 Secretary and General Counsel

Anthony Prentice 49 Chief Product Officer

Kareem Saad 43 Chief Business Officer

Karen White 51 Chief People Officer

Non-Employee Directors:

Dennis Charney, M.D.

Casdin 48 Director

Emily Leproust, Ph.D.

Michael Pellini, M.D.

Joshua Ruch (2)(4)

Rachel Sherman, M.D., M.P.H., F.A.C.P.

Nat Turner (6)

__________________

(1) Chair of the Audit Committee

(2) Chair of the Compensation Committee

(3) Chair of the Nominating and Corporate Governance Committee

(4) Member of the Nominating and Corporate Governance Committee

(5) Member of the Audit Committee

(6) Member of the Compensation Committee

Executive Officers

Eric Schadt, Ph.D.

, has served as our Chief Executive Officer and as a member of our Board since July 2021.

Schadt was the founder of Legacy Sema4 and previously served as its Chief Executive Officer and as a member of its board of directors from June 2017 to July 2021.

Schadt also serves as the Dean for Precision Medicine, and Mount Sinai Professor in Predictive Health and Computational Biology at the Icahn School of Medicine at Mount Sinai.

Schadt was previously Founding Director of the Icahn Institute for Genomics and Multiscale Biology from September 2011 to June 2017, and Professor and Chair of the Department of Genetics and Genomic Sciences from August 2011 to June 2017.

Schadt previously served as the Chief Scientific Officer at Pacific Biosciences of California, a biotechnology company, from May 2009 to July 2012, and as an Executive Director at Merck from July 2001 to May 2009.

Schadt also currently serves on numerous boards of directors and scientific advisory boards for various private companies.

Schadt earned his Ph.D.

from the University of California, Los Angeles, his M.A.

from the University of California, Davis, and his B.S.

from California Polytechnic State University-San Luis Obispo.

Schadt’s expertise in computational biology, genomics, health systems operating experience, and knowledge of Sema4’s business, years of senior management experience at a biotechnology company, and his service as a director of other biopharmaceutical companies provide him with the qualifications and skills to serve as a director on our Board.

Jason Ryan has served as a member of our Board since July 2021, and as our Executive Chairman since January 2022.

Ryan served as Chief Operating and Financial Officer of Magenta Therapeutics, Inc., a biotechnology company, from January 2019 to November 2020.

Prior to joining Magenta Therapeutics, Inc., Mr.

Ryan previously served as Chief Financial Officer of Foundation Medicine, Inc., a molecular information company which became a wholly-owned subsidiary of Roche Holdings, Inc., from March 2015 to November 2018.

Prior to his position as Chief Financial Officer of Foundation Medicine, Inc., Mr.

Ryan served in various other finance roles at Foundation Medicine, including as Senior Vice President of Finance.

Prior to joining Foundation Medicine, Inc., Mr.

Ryan led the finance and strategic planning functions of various other life science companies including Taligen Therapeutics, Inc., Codon Devices Inc.

and Genomics Collaborative, Inc.

Ryan joined the board of directors of Singular Genomics Systems, Inc.

in April 2021, and previously served on the board of directors of ArcherDX, Inc.

(which was acquired by Invitae Corporation) from April 2020 to October 2020.

He began his career at Deloitte & Touche LLP.

Ryan holds an M.B.A.

from Babson College and a B.S.

in economics from Bates College, and earned a C.P.A.

in Massachusetts.

Ryan’s extensive finance experience and his leadership experience in the life sciences and biopharmaceutical industries qualifies him to serve as a director on our Board.

Isaac Ro has served as our Chief Financial Officer since July 2021.

Ro previously served as Legacy Sema4’s Chief Financial Officer from February 2021 to July 2021.

Ro previously served as the Chief Financial Officer of Thrive Earlier Detection Corp., a company focused on early detection cancer screening, from June 2019 to February 2021, through Thrive’s sale to Exact Sciences Corporation in January 2021.

From July 2010 to June 2019, Mr.

Ro held roles of increasing responsibility at Goldman Sachs leading the U.S.

Medical Technology team, including as Vice President.

Prior to Goldman Sachs, Mr.

Ro served as a Director at SVB Leerink from June 2004 to July 2010.

Ro holds a B.A.

in History, with honors, from Middlebury College.

Daniel Clark, J.D.

, has served as our General Counsel since July 2021.

Clark previously served as Legacy Sema4’s General Counsel from March 2016 to July 2021 and Secretary from March 2016 to July 2021.

From 2015 to May 2017, Mr.

Clark served as the Senior Contracts Manager – Genetics & Genomics at Mount Sinai Innovation Partners.

Prior to joining Mount Sinai Innovation Partners, Mr.

Clark practiced with two leading law firms in New York, clerked for Judge Frederic Block in the Eastern District of New York, and helped found a boutique startup law firm.

Clark received his J.D.

from the University of Michigan School of Law, cum laude, and his B.A.

in Economics and Philosophy from Pomona College, cum laude.

Clark also traveled as a Thomas J.

Watson Fellow.

Anthony Prentice has served as our Chief Product Officer since July 2021.

Prentice previously served as Legacy Sema4’s Chief Product Officer from September 2016 to July 2021.

Prior to joining Sema4, Mr.

Prentice served in various roles of increasing responsibility at American Express from May 2005 to September 2016, including as the Vice President of Mobile Payments from August 2011 to September 2016 and as the Vice President of Gold Card Product Management from April 2010 to October 2011.

Prior to joining American Express, Mr.

Prentice served as the Director of Category Management at Starbucks Corp from 2002 to 2005, and as an Engagement Manager at McKinsey & Company from 1998 to 2002.

Prentice earned an M.B.A.

from Columbia University and his B.S.

in Mechanical Engineering from Cornell University.

Kareem Saad has served as our Chief Business Officer since July 2021.

Saad previously served as Legacy Sema4’s Chief Business Officer from January 2021 to July 2021.

Saad also previously served as the Chief Strategy Officer at Sema4 from October 2017 to January 2020.

Prior to rejoining Sema4, Mr.

Saad served as the President and Chief Operating Officer of Apervita, Inc., a healthcare technology company, from February 2020 to January 2021.

Saad previously served as the Chief Commercial Officer and EVP of Strategy and Business Development of SourceMed, a healthcare technology company, between January 2015 and June 2017.

Prior to joining SourceMed, Mr.

Saad served as a National Sales Director and Manager in Dell’s Healthcare and Life Sciences division between June 2009 and July 2013, and as a Business Segment Executive in IBM’s Healthcare Life Sciences group from November 2001 to February 2006.

Saad received an M.B.A.

with a concentration in Economics and Finance from the University of Chicago and a B.S.

in Biochemistry and Molecular Biology with a minor in Computer Science from the University of British Columbia.

Karen White has served as our Chief People Officer since July 2021.

White previously served as Legacy Sema4’s Chief People Officer from September 2020 to July 2021.

Prior to joining Sema4, Ms.

White was Vice

President of Human Resources for Commercial Solutions at Syneos Health, Inc., a biopharmaceutical outsource services organization, from June 2016 to September 2020.

Prior to the merger of inVentiv Health, Inc.

and INC Research Holdings, Inc.

in August 2017, and later rebranding to Syneos Health in January 2018, Ms.

White served as Managing Director of Human Capital at inVentiv Health from June 2016 to August 2017.

Prior to that, Ms.

White served as Director of Talent Development at Memorial Sloan Kettering Cancer Center where she was employed from October 2011 to June 2016.

Before October 2011, Ms.

White held various positions at large global organizations such as Goldman Sachs Group Inc., International Business Machines Corp., and PricewaterhouseCoopers.

White earned her M.B.A.

from The George Washington University and her B.A.

from Hobart and William Smith Colleges.

Non-Employee Directors

Dennis Charney, M.D., has served as a member of our Board since July 2021, and previously served as a member of Legacy Sema4’s board of directors from June 2017 to July 2021.

Charney has served as the Anne and Joel Ehrenkranz Dean of the Icahn School of Medicine at Mount Sinai since March 2007, and as President for Academic Affairs for the Mount Sinai Health System since September 2013.

From March 2005 to March 2007, Dr.

Charney served as Dean for Academic and Scientific Affairs of the Icahn School of Medicine at Mount Sinai and Senior Vice President for Health Services of The Mount Sinai Medical Center.

From 2007-2013, Dr.

Charney served as the Dean of the School and Executive Vice President for Academic Affairs of the Medical Center.

Charney first joined the Icahn School of Medicine at Mount Sinai in 2004 as Dean of Research.

Prior to joining the Icahn School of Medicine at Mount Sinai, Dr.

Charney led the Mood and Anxiety Disorder Research Program and the Experimental Therapeutics and Pathophysiology Branch at the National Institute of Mental Health, and he served as Professor of Psychiatry with tenure at Yale University from January 1990 to January 2000.

Charney received his M.D.

from Penn State College of Medicine and his B.A.

from Rutgers University.

Charney completed a residency in clinical psychiatry at Yale University School of Medicine and a fellowship in biological psychiatry at Connecticut Mental Health Center.

Charney’s extensive medical and clinical experience in the biotechnology industry qualifies him to serve as a director on our Board.

Casdin has served as a member of our Board since July 2020, and from, previously served as the Chief Executive Officer of CMLS from July 2020 to July 2021.

Casdin founded Casdin Capital, LLC, an investment firm focused on the life sciences and healthcare industry, in November 2011 and currently serves as its Chief Investment Officer.

Casdin also serves on the boards of directors of SomaLogic, Inc., a protein biomarker discovery and clinical diagnostics company (formerly, CM Life Sciences II Inc., a special purpose acquisition company (“CMLS II”)), since September 2021 (having previously served as the Chief Executive Officer of CMLS II from February 2021 to September 2021), and EQRx, Inc., a pharmaceutical company (formerly, CM Life Sciences III Inc., a special purpose acquisition company (“CMLS III”)), since December 2021 (having previously served as the Chief Executive Officer of CMLS III from February 2021 to December 2021).

In addition, Mr.

Casdin serves on the boards of directors of Century Therapeutics, Inc., a biotechnology company, since February 2021, Absci Corp, a drug and target discovery company, since December 2020, and Tenaya Therapeutics, Inc., a biotechnology company, since August 2019, and previously served on the board of directors of Exact Sciences Corp., a molecular diagnostics company focused on early cancer detection, treatment and monitoring, from October 2017 to September 2020.

Casdin holds an M.B.A.

from Columbia Business School and a B.S.

degree from Columbia University School of General Studies.

Casdin’s qualifications to serve on our Board include his extensive leadership experience as an executive officer of an investment firm, his extensive public and private company directorship experience in the life sciences and healthcare sectors, and his expertise in finance, capital markets, and the biotechnology industry.

Emily Leproust, Ph.D., has served as a member of our Board since September 2020.

Leproust has been President and Chief Executive Officer of Twist Bioscience Corp., a biotechnology company, since co-founding Twist in 2013.

Since October 2018, she has also served as Chair of the board of directors for Twist.

Prior to co-founding Twist, Dr.

Leproust served in various positions at Agilent Technologies, Inc., an analytical instrumentation development and manufacturing company, most recently as its Director, Applications and Chemistry R&D from February 2009 to April 2013.

Leproust holds a Ph.D.

in Organic Chemistry from the University of Houston and a M.Sc.

in Industrial Chemistry from the Lyon School of Industrial Chemistry.

Leproust’s qualifications to serve on our Board include her extensive professional and educational experience in the life sciences industry.

Keith Meister has served as a member of our Board since January 2022, and previously served as the Chairman of the Board of CMLS from July 2020 to July 2021.

He founded Corvex Management LP, a New York based investment manager, in December 2010 and since its inception has served as its Managing Partner and Chief Investment Officer.

From 2003 to 2010, Mr.

Meister served as Chief Executive Officer and then Principal Executive Officer and Vice Chairman of the Board of Icahn Enterprises L.P.

IEP), the primary investment vehicle for Carl Icahn.

In addition, Mr.

Meister previously served as Chairman of CMLS II from December 2020 to September 2021 and CMLS III from January 2021 to December 2021.

Meister also serves on the Board of Directors of MGM Resorts International (NYSE:

MGM), a global hospitality and entertainment company, and its affiliate Roar Digital.

Meister has previously served on the Board of Directors of numerous other public companies in his career, including Yum!

YUM), The Williams Companies, Inc.

WMB), ADT, Inc.

ADT), Ralcorp Holdings, Inc.

and Motorola, Inc.

(now Motorola Solutions, Inc., NYSE:

MSI/Motorola Mobility, Inc.).

He is Chairman of the board of the Harlem Children’s Zone and also serves on the board of trustees of the American Museum of Natural History.

Meister holds a B.A.

degree in government from Harvard College where he graduated cum laude.

His qualifications to serve on our board of directors include his extensive leadership experience as managing partner and executive officer of an investment firm and a diversified holding company, his extensive public company directorship experience in a variety of industries, and his expertise in finance, capital markets, strategic development, and risk management.

Michael Pellini, M.D.

, has served as a member of our Board since July 2021, and previously served as a member of Legacy Sema4’s board of directors from August 2019 to July 2020.

Since December 2017, Dr.

Pellini has served as a Managing Partner of Section 32, LLC, a technology and life sciences-based venture capital fund.

Pellini held roles of increasing responsibility at Foundation Medicine, Inc., a molecular information company, which was acquired by F.

Hoffmann-La Roche Ltd.

in 2018, from May 2011 until its acquisition, including as Chairman of the board of directors, Chief Executive Officer and President.

From April 2008 to April 2011, Dr.

Pellini held the position of President and Chief Operating Officer at Clarient, Inc., a medical diagnostic services company, which was acquired by General Electric Healthcare Company in 2010, and also served on Clarient’s board of directors from May 2007 to April 2009.

Pellini also previously served as Vice President, Life Sciences at Safeguard Scientifics, Inc., a private equity and venture capital firm from March 2007 to April 2008.

Pellini currently serves as a member of the board of directors of Adaptive Biotechnologies Corporation, the GO2 Foundation, the Personalized Medicine Coalition, Singular Genomics Systems, Inc., the Mission Hospital Foundation and several private companies.

Pellini earned an M.D.

from Jefferson Medical College (now the Sidney Kimmel Medical College of Thomas Jefferson University), an M.B.A.

from Drexel University, and a B.A.

in Economics from Boston College.

Pellini’s broad experience in the technology, health care and life sciences industries as an investor, and his years of senior management experience at public biotechnology companies, provides him with the qualifications and skills to serve as a director on our Board.

Joshua Ruch has served as a member of our Board since July 2021, and previously served as the Chairman of our Board from July 2021 to January 2022 and as a member of Legacy Sema4’s board of directors from November 2017 to July 2021.

Ruch is also a managing partner and co-founder of Rho Capital Partners, an investment and venture capital management company focused on innovative technology, and has held such positions since the founding of Rho Capital Partners in 1981.

Prior to co-founding Rho Capital Partners and Rho Ventures in 1981, Mr.

Ruch worked as an investment banker at Salomon Brothers in New York, a multinational investment bank.

In addition to Sema4, Mr.

Ruch is also a trustee of the Mount Sinai Health System, Carnegie Hall and the National Humanities Center, and is a member of the Board of Governors of the Technion – Israel Institute of Technology and the Steering Committee of the Jacobs Institute.

Joshua received an M.B.A.

from the Harvard Business School and a B.S.

in electrical engineering from the Technion – Israel Institute of Technology in Haifa, Israel.

Ruch’s broad experience as an investor and serving on the boards of emerging technology companies, including health care and biotechnology companies, qualifies him to serve on our Board.

Rachel Sherman, M.D., M.P.H., F.A.C.P., has served as a member of our Board since July 2021, previously served as a member of Legacy Sema4’s board of directors from March 2020 to July 2021.

Sherman is currently the President of Rachel Sherman Partners LLC, a drug development, regulatory, and policy consulting firm she founded in 2019, and a clinical lecturer at Harvard Pilgrim Health Care Institute.

Sherman also currently serves as a member of the Board of Directors for Aptinyx Inc., a biopharmaceutical company.

From May 2017 to January

Sherman served as Principal Deputy Commissioner at the U.S.

Food and Drug Administration (FDA), where she spent nearly 30 years in medical product development and regulation.

Sherman also served in additional roles at the FDA including as deputy commissioner for Medical Products and Tobacco in the Office of the Commissioner and director of the Office of Medical Policy in the Center for Drug Evaluation and Research.

Sherman earned an M.D.

from Mount Sinai School of Medicine, an M.P.H from The School of Hygiene and Public Health at Johns Hopkins University and an A.B.

in mathematics from Washington University (St.

Sherman’s medical and regulatory experience across a broad range of subject matters, including biosimilars, expedited drug development, prescription drug promotion, and active post-market surveillance provides her with the qualifications and skills to serve on our Board.

Nat Turner has served as a member of our Board since July 2021.

Turner is currently CEO of Collectors Universe, an authentication and grading company for collectible coins, trading cards, video games, autographs, and memorabilia.

Turner is also Chairman of Flatiron Health, Inc., and Director on the Board of Directors for Clover Health Investments Corp.

Previously, Mr.

Turner was the Co-Founder and Chief Executive Officer of Flatiron Health, Inc., a healthcare technology company focusing on accelerating oncology research and improving patient care, from June 2012 until April 2021, and was acquired by Roche Holding AG in April 2018.

Prior to that, Mr.

Turner co-founded and served as Chief Executive Officer of Invite Media, Inc., an advertising technology company, from March 2007 until it was acquired by Google Inc.

in June 2010, after which he remained at Google until June 2012.

Turner received a B.S., cum laude, in Economics with concentrations in entrepreneurship and marketing from The Wharton School of the University of Pennsylvania.

Turner’s qualifications to serve on our Board include his significant experience in the life sciences industry, both as an executive and as an angel investor.

There are no familial relationships among our executive officers or directors.

Corporate Governance

Board of Directors

Our Board oversees our business affairs and works with our CEO and other senior management to determine our strategy and mission.

In fulfilling its responsibilities, our Board is involved in strategic and operational planning, financial reporting, governance, compliance and risk oversight.

Committees of the Board of Directors

Our Board has the authority to appoint standing and special committees to perform certain management and administration functions.

Our Board has established a standing audit committee, a standing compensation committee, and a standing nominating and corporate governance committee.

The composition and responsibilities of each committee are described below.

Members serve on these committees until their resignation or until otherwise determined by the Board.

The charters for each of these committees are available on our website at www.Sema4.com.

Information contained on or accessible through our website is not a part of this Annual Report, and the inclusion of such website address in this Annual Report is an inactive textual reference only.

Audit Committee

Our audit committee is comprised of Keith Meister, Dennis Charney and Emily Leproust, with Mr.

Meister as the chairman of our audit committee.

The Board has determined that the composition of our audit committee meets the requirements for independence under the current Nasdaq and SEC rules and regulations, and that each member of the audit committee is financially literate.

In addition, the Board has determined that Mr.

Meister is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K promulgated under the Securities Act.

This designation does not impose on him or her any duties, obligations or liabilities that are greater than are generally imposed on members of our audit committee and our Board.

Our audit committee is directly responsible for, among other things:

• reviewing and discussing with management and the independent auditors our quarterly and annual financial results and earnings releases, our annual audited and quarterly unaudited financial statements and annual

and quarterly reports on Form 10-K and 10-Q and recommend to the Board whether the annual financial statements should be included in our Annual Report on Form 10-K;

• selecting and hiring the independent registered public accounting firm;

• monitoring the qualifications, independence and performance of our independent auditors;

• the preparation of the audit committee report to be included in the proxy statement for our annual meeting;

• our compliance with legal and regulatory requirements;

• overseeing our accounting and financial reporting processes, including our financial statement audits and the integrity of our financial statements;

• reviewing and approving related-person transactions;

• overseeing our financial risks, enterprise exposures, cybersecurity risks and other risks as it deems necessary or appropriate.

Compensation Committee

Our compensation committee is comprised of Joshua Ruch, Rachel Sherman and Nat Turner, with Mr.

Ruch as the chairman of our compensation committee.

The Board has determined that each member of our compensation committee is a non-employee director, as defined by Rule 16b-3 promulgated under the Exchange Act, and meets the requirements for independence under the current Nasdaq listing standards and SEC rules and regulations.

Our compensation committee is responsible for, among other things:

• evaluating, recommending, approving and reviewing executive officer compensation arrangements, plans, policies and programs;

• evaluating and recommending non-employee director compensation arrangements for determination by our Board;

• administering our cash-based and equity-based compensation plans;

• overseeing our compliance with regulatory requirements associated with the compensation of directors, officers and employees.

The compensation committee may retain compensation advisors and other compensation consultants.

Role of Compensation Consultant

The compensation committee has the authority to retain the services and obtain the advice of external advisors, including compensation consultants, legal counsel and other advisors to assist in the evaluation of executive officer compensation.

The compensation committee has engaged Radford Data & Analytics of Aon, our independent compensation consultant (“Radford”) to conduct an executive compensation market analysis and review of our short-term cash and long-term equity incentive practices to help ensure they align with market practices.

Radford reviewed and advised on all principal aspects of our executive compensation program, including:

• Assisting in developing a peer group of publicly traded companies to be used to help assess the competitiveness of executive compensation;

• Assisting in ensuring a competitive compensation framework;

• Meeting regularly with the compensation committee to review all elements of executive compensation, including the competitiveness of our executive compensation program;

• Assisting in the competitive assessment of the short-term cash and long-term equity incentive plans designs;

• Assisting in the risk assessment of our compensation program.

Outside of its services to the compensation committee, Radford provides no other services to us.

The compensation committee evaluated the independence of Radford and determined that it is independent.

The compensation committee also determined that Radford’s work for the Company in 2021 did not raise any conflicts of interest.

Role of Compensation Committee and Executive Officers in Compensation Decisions

Our compensation committee works in close collaboration with the full Board on executive compensation matters.

Following the adoption of our compensation committee charter, our compensation committee has adopted a practice of informing and consulting with the full Board concerning the establishment of performance goals and objectives for our Chief Executive Officer, evaluating our Chief Executive Officer’s performance in light of the goals and objectives that were set, and determining the Chief Executive Officer’s compensation based on that evaluation.

Our Chief Executive Officer serves on our Board but recuses himself from any deliberations about his compensation.

For fiscal year 2021, our Chief Executive Officer prepared an analysis for the compensation committee recommending each element of compensation to be paid to all other executive officers.

The compensation committee considered his recommendations, along with an analysis from Radford, in approving the compensation of our other executive officers.

Nominating and Corporate Governance Committee

Our nominating and governance committee is comprised of Joshua Ruch and Rachel Sherman, with Ms.

Sherman as the chairwoman of our nominating and governance committee.

The Board has determined that each member of our nominating and governance committee meets the requirements for independence under the current Nasdaq listing standards.

Our nominating and governance committee is responsible for, among other things:

• identifying, considering and recommending candidates for membership on our Board;

• overseeing the process of evaluating the performance of our Board;

• advising our Board on other corporate governance matters.

Stock Ownership Guidelines

With the exception of a 9-month lockup established in the employment agreements entered into in June and July 2021 with Eric Schadt, Isaac Ro, Daniel Clark, James Coffin, Anthony Prentice, Kareem Saad and Karen White in connection with the closing of our 2021 SPAC merger transaction, we have not established any stock ownership requirements for our executives.

Board and Committee Meetings and Attendance

The Board and its committees meet throughout the year on a pre-determined schedule and also hold special meetings and act by written consent from time to time.

During 2021, the Board met six times (including telephonic meetings) and took action by unanimous written consent four times.

During 2021, our audit committee met three times and took action by unanimous written consent one time, our compensation committee met three times and took action by unanimous written consent two times, and our nominating and governance committee did not meet.

In addition to the official meetings, the Board also had a number of informational meetings throughout the year to update the Board on various strategic initiatives, including in connection with the Acquisition.

Each director attended at least 75% of the meetings held by the Board and by each committee on which he or she served while he or she was a director during the year, except for Nat Turner.

We acknowledge the value of having directors with significant experience in other businesses and activities.

Effective service requires substantial commitment, but we recognize that the demands of other business activities vary substantially;

therefore, we do not consider it necessary to impose specific limits on such activities so long as

directors are sufficiently attentive and available to fulfill their duties and so long as directors comply at all times with our conflict of interests policies.

Director Attendance at Annual Meetings

Although we do not have a formal policy regarding attendance by members of the Board at each annual meeting of stockholders, we encourage all of our directors to attend in person, or virtually, depending on the meeting format.

In fiscal year 2021, all of the directors serving at the time of last year’s special meeting, which was held as a special meeting in lieu of our annual meeting, attended that meeting.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting.

The Code of Business Conduct and Ethics is available on our website at www.Sema4.com.

Information contained on or accessible through such website is not a part of this Annual Report, and the inclusion of the website address in this Annual Report is an inactive textual reference only.

We intend to disclose any amendments to the Code of Business Conduct and Ethics, or any waivers of its requirements, on its website to the extent required by the applicable rules and exchange requirements.

Corporate Governance Guidelines

Our Board has adopted Corporate Governance Guidelines that set forth expectations for directors, director independence standards, board committee structure and functions, stock ownership guidelines, and other policies for the governance of the Company.

Under our Corporate Governance Guidelines, at all times, a majority of our directors will be independent, which means, generally, that they will not have any connections to us that could affect their ability to provide impartial oversight.

Specifically, these directors will meet the independence requirements of the applicable rules, regulations and listing standards of the stock exchange on which our securities are listed for trading.

Our Corporate Governance Guidelines are available without charge on the investor relations section of our website at www.Sema4.com .

Information contained on or accessible through such website is not a part of this Annual Report, and the inclusion of the website address in this Annual Report is an inactive textual reference only.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires our directors, executive officers, and any persons who own more than 10% of our common stock, to file initial reports of ownership and reports of changes in ownership with the SEC.

Based solely on our review of the forms filed with the SEC and written representations from the directors and executive officers, we believe that all Section 16(a) filing requirements were timely met in the fiscal year ended December 31, 2021, with the exception of:

a Form 4 with respect to the issuance of restricted stock units (“RSUs”) and an associated sale to cover transaction in respect of tax withholding obligations in connection with the vesting and settlement of a portion of the RSUs, which was filed one day late on October 6, 2021 on behalf of Shawn Assad;

a Form 4 with respect to a sale to cover transaction in respect of tax withholding obligations in connection with the vesting and settlement of RSUs, which was filed one day late on November 15, 2021 on behalf of Shawn Assad;

Forms 4 with respect to the issuance of RSUs and associated sale to cover transactions in respect of tax withholding obligations in connection with the vesting and settlement of a portion of the RSUs, which were filed four days late on November 2, 2021 on behalf of each of Shawn Assad, Daniel Clark, James Coffin, Anthony Prentice, Isaac Ro, Kareem Saad, Eric Schadt, and Karen White;

a Form 5 with respect to the exercise of shares underlying the option grant, which was filed eighty-three days late on February 7, 2022 on behalf of Daniel Clark;

and a Form 3 that was filed 29 days late on August 30, 2021, which was due within 10 calendar days of July 22, 2021, following the closing of the business combination, by BTO Sema4 Holdings L.P., BTO Holdings Manager L.L.C., Blackstone Tactical Opportunities Associates L.L.C., BTOA L.L.C., Blackstone Family Tactical Opportunities Investment Partnership III ESC L.P., BTO Side-by-Side GP L.L.C., Blackstone Holdings III L.P., Blackstone Holdings III GP L.P., Blackstone Holdings III GP Management L.L.C., Blackstone Tactical Opportunities Fund – FD L.P., Blackstone Tactical Opportunities Associates III – NQ L.P., BTO DE GP – NQ L.L.C., Blackstone Holdings II L.P., Blackstone Aqua Master Sub-Fund, a sub-fund of Blackstone Global Master Fund ICAV, Blackstone Alternative Solutions L.L.C., Blackstone Holdings I L.P., Blackstone Holdings I/II GP L.L.C., Blackstone Inc., Blackstone Group Management L.L.C.

and Stephen A.

Except as set forth below, the information required by this Item is incorporated by reference from our definitive proxy statement for our 2023 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2022.

EXECUTIVE COMPENSATION

Executive Compensation Overview

Objectives of our Executive Compensation Program

The main objectives of our executive compensation program are to create a competitive total rewards package to attract, retain and incent qualified executive officers who will lead us to long-term success and enhance stockholder value based on the balanced attainment of short-term performance objectives and long-term strategic goals.

Each element of our compensation program supports these objectives.

Compensation of our Named Executive Officers

The following tables and accompanying narrative disclosure set forth information about the compensation earned by our named executive officers for the year ended December 31, 2021, who were:

• Eric Schadt, Ph.D., our Chief Executive Officer,

• Isaac Ro, our Chief Financial Officer, and

• James Coffin, Ph.D., our former President and Chief Operating Officer.

The named executive officers’ compensation primarily consists of (1) base salary, (2) annual discretionary cash bonus and (3) equity incentive awards.

Our named executive officers, during their employment with us, are also eligible to participate in the same retirement and health and welfare benefit plans as its other full-time employees.

2021 Summary Compensation Table

The following table presents summary information regarding the total compensation for services rendered in all capacities that was awarded to and earned by our named executive officers during the year ended December 31, 2021.

Name and Principal Position

Bonus ($) (1)

All Other Compensation ($) (3)

Eric Schadt, Ph.D.

Chief Executive Officer and Director

2021 650,000 513,000 10,699,239 3,867,064 41,533 15,770,836

2020 643,846 540,000 — 1,770,474 13,756 2,968,076

Chief Financial Officer

2021 353,846 139,333 7,897,167 2,633,103 16,615 11,040,064

James Coffin, Ph.D.

Former President and Chief Operating Officer (4)

2021 530,397 180,370 3,155,535 1,104,874 17,400 4,988,576

2020 524,615 363,000 623,189 — 11,169 1,521,973

__________________

(1) The amounts reported reflect the annual performance-based cash bonus amounts awarded to our named executive officers for their service in 2021.

For additional information regarding the bonus compensation, see “—2021 Bonuses.”

(2) Amounts represent the grant date fair value of the restricted stock units and stock options awarded to the named executive officer during 2021 in accordance with FASB Accounting Standards Codification Topic 718.

The assumptions used in determining the grant date fair value of the restricted stock units and stock options are set forth in Note 10 of the notes to our audited consolidated financial statements included in this Annual Report.

In determining the total value of the equity awards, we have considered all grants issued during the year as earned by the respective executive officers.

(3) The amounts reported in this column represent our matching contributions made on behalf of our named executive officers under our 401(k) plan and other personal benefits including reimbursement for travel costs in the amount of $24,133.

Coffin left the Company in February 2022.

Amounts reported include payments in respect of his 2021 bonus pursuant to our separation agreement with Dr.

Narrative Disclosure to the Summary Compensation Table

Under their employment agreements, Dr.

Eric Schadt and Mr.

Ro are entitled to receive annual bonuses based on the achievement of certain corporate and individual performance objectives.

Prior to his leaving the Company, Dr.

Coffin was also entitled to receive annual bonuses based on the achievement of corporate performance objectives.

For the 2021 bonuses, the target annual bonuses for Dr.

Schadt and Mr.

Ro were equal to 100% and 50 %, respectively, of their respective annual base salaries.

In February 2022, based on the achievement of corporate and individual performance objectives, the Compensation Committee determined to award bonuses for 2021 to Dr.

Schadt, and to Mr.

Ro on a pro rata basis based on his hire date, as set forth in the table above.

Further, pursuant to a separation agreement we entered into with Dr.

Coffin in January 2022, we agreed to pay Dr.

Coffin a 2021 bonus in the amount reflected in the table above.

2021 Equity Awards

Our company offers stock options as well as service-based RSUs to our named executive officers as the long-term incentive component of our compensation program.

Stock options allow employees to purchase shares of our Class A common stock at a price per share at least equal to the fair market value of our Class A common stock on the date of grant and may or may not be intended to qualify as “incentive stock options” for U.S.

federal income tax purposes.

All of our named executive officers received RSU awards in recognition of their service to us and to further incentivize continued performance.

Generally, our equity-based awards vest over four years, subject to the employee’s continued employment with us on each vesting date.

In connection with the Prior Merger Agreement and following the closing of the business combination, we also granted RSUs in the form of “Earnout RSUs” to our named executive officers that vest subject to certain market-based and service-based vesting conditions.

In December 2021, we also issued stock bonuses to our employees who were hired on or before June 30, 2021, including our named executive officers, in connection with the termination of our sabbatical leave program.

The stock bonuses were fully vested as of the date of issuance.

Outstanding Equity Awards at 2021 Fiscal Year-End

The following table sets forth information concerning outstanding equity awards held by each of our named executive officers as of December 31, 2021.

Option Awards (1)

Stock Awards (1)

Name Grant Date Number of Securities Underlying Unexercised Options Exercisable (#) Number of Securities Underlying Unexercised Options Unexercisable (#) Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) (*)

Eric Schadt 6/1/2017 (2)

4,829,521 — $0.1529 5/31/2027 — —

10/17/2019 (3)

851,357 510,815 $0.7659 10/16/2029 — —

2/18/2020 (4)

1,300,203 1,011,285 $0.7659 2/17/2030 — —

10/1/2021 (5)

52,541 788,125 $7.62 9/30/2031 — —

10/1/2021 (5)

1,182,187 $ 5,272,552

12/9/2021 (6)

— — — — 223,830 $ 309,334

12/9/2021 (7)

— — — — 35,054 35,054 $ 48,444

12/9/2021 (8)

— — — — 197,635 $ 273,133

12/9/2021 (8)

— — — — 83,818 $ 115,836

12/9/2021 (9)

— — — — 201,720 $ 278,778

Isaac Ro 10/1/2021 (10)

108,507 470,197 $7.62 9/30/2031 — —

10/1/2021 (10)

— — — — 812,500 $ 3,623,750

12/9/2021 (11)

— — — — 197,848 $ 273,428

James Coffin 8/31/2017 (12)

2,167,093 — $0.1529 8/30/2027 — —

2/18/2020 (4)

457,659 355,961 $0.7659 2/17/2030 — —

10/1/2021 (5)

15,011 225,179 $7.62 9/30/2031 — —

10/1/2021 (5)

— — — — 337,767 $ 1,506,442

12/9/2021 (6)

— — — — 189,119 $ 261,363

12/9/2021 (13)

— — — — 29,056 $ 40,155

12/9/2021 (14)

— — — — 41,946 $ 57,968

__________________

(*) The closing market price of our Class A common stock on December 31, 2021 was $4.46 per share.

(1) The outstanding stock options were granted under our 2021 Equity Incentive Plan and Legacy Sema4’s 2017 Equity Incentive Plan, as applicable.

The outstanding RSUs were granted under our 2021 Equity Incentive Plan and pursuant to the Prior Merger Agreement, as applicable.

(2) The shares underlying the stock option are fully vested.

(3) The stock option vests at in quarterly installments over a four-year period.

100% of the shares underlying the stock option will vest (a) in the event that the service provider’s option is not assumed or replaced by the buyer in connection with a change of control transaction or (b) upon termination of the service provider’s employment by us without cause or by the service provider for good reason in connection with a change in control transaction.

(4) The stock option vests in quarterly installments over a four-year period..

(5) The stock options and RSU vest in quarterly installments over a four-year period.

100% of the shares underlying the stock options and RSUs will vest (a) in the event that the service provider’s option is not assumed or replaced by the buyer in connection with a change of control transaction or (b) upon termination of the service provider’s employment by us without cause or by the service provider for good reason in connection with a change in control transaction.

(6) The RSUs were granted pursuant to the Prior Merger Agreement.