Civica Inc

“Civica, Inc. has three classes of members and each class has distinct rights and privileges. The three classes of members are Governing Members, Founding Members, and Partnering Members. Each Governing Member has the right to nominate one individual to serve on Civica's Board of Directors and certain decisions of the Board of Directors also require the approval of Governing Members. Governing Members also have the right to designate one individual to serve on the Drug Selection Advisory Committee and one to serve on the Medical Trends Advisory Committee. Founding Members have no voting rights as a member as those rights are only conferred upon the Governing Members. However, Founding Members have the right to designate individuals to serve on the two advisory committees. Partnering Members have no voting or designation rights. None of the three classes of members has any right to distributions of income or assets at any time, including upon dissolution of Civica.”

“Each Governing Member has the right to nominate one individual to serve on Civica's Board of Directors. Governing Members also have the right to designate one individual to serve on the Drug Selection Advisory Committee and one to serve on the Medical Trends Advisory Committee. Founding Members have no voting rights as a member as those rights are only conferred upon the Governing Members. However, Founding Members have the right to designate individuals to serve on the two advisory committees described above.”

“The governing documents require the approval of two-thirds of all Governing Members for the: i) formation of and delegation of any power by the Board of Directors to an Executive Committee or any similar committee; ii) amendment or restatement of the Articles of Incorporations except in certain limited circumstances where approval of 100% of the Governing Members is required, and iii) amendment or restatement of the Bylaws. The governing documents also require approval by 90% of all of the Governing Members for i) changing the strategic lines of business of the organization; ii) disposing of all or substantially all of the organization's assets; iii) winding up, dissolving or liquidating the organization; iv) merging with one or more other entities; or v) consolidating with one or more other entities. In addition, the governing documents also require approval by 100% of all of the Governing Members for certain actions including: i) changing certain terms of credit agreements; and ii) altering certain terms of master minimum viable volume agreements to benefit one Member.”

“Civica has engaged in a public accounting firm to prepare its Form 990. After the public accounting firm has prepared the return and it is reviewed by management, the Form 990 is then submitted for review by the Audit and Compliance Committee of the Board of Directors. Civica also sends a copy of Form 990 to all remaining members of the Board of Directors before the Form 990 is filed with the IRS.”

“Directors and Officers have been provided training on the conflict of interest policy and process, are surveyed for possible conflicts of interest, and required to disclose potential conflicts on an annual basis. The annual conflict of interest disclosures are collected and reviewed by General Counsel and Chief Compliance Officer. If a conflict is identified, the individual with the conflict of interest will not participate in the deliberative discussion or vote on the transaction involved.”

“The Compensation Committee of the Board of Directors reviews the compensation of the president, officers and executives on an annual basis. The Compensation Committee is comprised of independent members of the Board of Directors. Contemporaneous written minutes are kept of their meetings, deliberations and decisions. The Compensation Committee relies on compensation comparability data during its review and approval of compensation of the president, officers and executives. Civica also engages an independent, third party executive compensation consultant to provide comparability data and other guidance on a periodic basis. The use of an independent, third party executive compensation consultant last occurred in 2019. The President/CEO serves Civica in that role without being paid "reportable compensation" as is reflected in Part VII of the Form 990.”

“The Organization's governing documents, conflict of interest policy and financial statements are made available upon request.”

“Civica's mission is to enhance availability and affordability of quality generic injectables for patients, especially high needs populations, by (1) alleviating drug shortages and (2) providing these drugs at a sustainable and affordable price level, both via its member hospital systems as well as non-member organizations including non-member covered entities like 340B hospitals and additionally, government organizations including Veterans Affairs and Department of Defense. FORM 990, PART III - PROGRAM SERVICE, LINE 2 Refer below to the narrative for Part III, Line 4b and Part III, Line 4c for a detailed description of the two new program services for 2020. FORM 990, PART III - PROGRAM SERVICE, LINE 4A GENERIC DRUG DISTRIBUTION Develop an open and growing network of hospitals to expand the reach of Civica's mission and its benefits to both members and non-members. Alleviate shortages of essential drug products and stabilize pricing by securing availability from existing manufacturers for the benefit of patients served by these members and non-member customers. Civica's major accomplishments to date include the following: (1) Customer growth covering more than 30% of U.S. licensed hospital beds. New customers enrolled include nationwide non-member 340B hospitals that serve a disproportionate patient population of high-needs patients, Veterans Affairs hospitals and Department of Defense. During the COVID-19 pandemic, in addition to serving the needs of hospital systems for 11 emergency medications, Civica also supplied 2.1 million units of essential medicines from its inventory to the United States government for building the strategic national stockpile. (2) Launched 41 essential medicines with more than 58 presentations as of December 2020; these medications were deemed in short supply per FDA drug shortage list or per ASHP drug shortage list. When the COVID-19 pandemic hit the U.S., Civica was one of the few companies that had sufficient availability of these essential medications to serve the hospitals that needed these medications. (3) Established and maintained approximately 6 months of finished goods inventory to buffer any supply chain shocks typically experienced in the industry for essential sterile injectable medicines. (4) Single transparent affordable pricing to all members and non-members regardless of membership status, size of the hospital, volume of drugs purchased from Civica or relationship longevity with Civica. FORM 990, PART III - PROGRAM SERVICE, LINE 4B FILL - FINISH FACILITY After the emergence of COVID-19 pandemic and the resulting spike in demand for essential medications in hospitals to manage the patient surge, there was a higher recognition of dependence of United States on foreign manufacturers for these life-saving essential medications, especially sterile injectables. In an effort to on-shore end-to-end manufacturing of such sterile injectables and as a national security measure, Biomedical Advanced Research and Development Authority ("BARDA"), a U.S. Department of Health and Human Services ("HHS") government office responsible for the procurement and development of medical countermeasures, principally against bioterrorism, including chemical, biological, radiological and nuclear threats, as well as pandemic influenza and emerging diseases awarded a certain Contract ("Prime Contract") to Phlow Corp., ("Phlow"). Phlow is a Delaware Public Benefit Corporation engaged in the business of the research, development, and commercialization of pharmaceutical products. Given Civica's experience and expertise in the area, Phlow has subcontracted certain of its obligations under the Prime Contract to Civica whereby Civica will qualify, design, build, equip, operate and own a 120,000 square foot, two-story, cGMP compliant aseptic fill-finish facility ("Fill-Finish Facility"), to be funded, at least partially, with $100,000,000 provided by BARDA, capable of, among other things providing at least 90 million ase”