law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless
a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the
merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys fees) actually and reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.
We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us,
among other things, to indemnify our directors and officers for some expenses, including attorneys fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as
one of our directors or officers, or any of our subsidiaries or any other company or enterprise to which the person provides services at our request.
We also maintain general liability insurance that covers certain liabilities of our directors and officers arising out of claims based on acts
or omissions in their capacities as directors or officers, including liabilities under the Securities Act.
Under the Merger Agreement,
from the effective time of the Merger through the sixth anniversary of the date of the effective time, we agreed to indemnify and hold harmless each person who was, as of July 14, 2023, the signing date of the Merger Agreement, or had been at
any time prior, or who becomes prior to the effective time of the Merger, a director or officer of our company or Legacy Korro, against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including
attorneys fees and disbursements, pertaining to claims arising out of the fact that such person was a director or officer of our company or Legacy Korro, at or prior to the effective time of the merger, to the fullest extent permitted under
the DGCL.
Under the Merger Agreement, we agreed not to amend, modify or repeal provisions in the Charter and Bylaws that were in effect
as of July 14, 2023, the date of the Merger Agreement, with respect to indemnification, advancement of expenses and exculpation of our present and former directors and officers for a period of six years from the effective time of the Merger in
a manner that would adversely affect the rights of such individuals who at the effective time of the Merger were our officers or directors.
In connection with the Merger, we purchased an insurance policy in effect for six years from the effective time of the Merger, providing no
less favorable coverage as the current directors and officers liability insurance policies maintained by us with respect to any actual or alleged error, misstatement, misleading statement, act, omission, neglect, breach of duty or any
matter claimed against our current and former officers and directors.
Item 15. Recent Sales of Unregistered Securities.
Shares of Legacy Korro stock have not been adjusted to reflect the exchange for our common stock in the Merger and reflect actual shares issued by Legacy
Korro.
In July 2021, Legacy Korro sold an aggregate of 20,424,108 shares of Series A Preferred Stock at a purchase price of $2.24 per
share for aggregate gross proceeds of $45.8 million.
In November 2021, December 2021 and March 2023, Legacy Korro sold an aggregate
of 43,085,531 shares of its Series B preferred stock at a purchase price of $2.61 and $2.78 per share for aggregate gross proceeds of $116.0 million.
In connection with the Merger, we entered into a Subscription Agreement in July 2023 with certain investors to consummate the Pre-Closing Financing. Pursuant to the Subscription Agreement, the investors agreed to purchase shares of Legacy Korro common stock, at a price of $2.78 per share, for aggregate gross proceeds of
$117.3 million.
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