Delaware | | | 2834 | | | 20-8436652 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Stuart M. Cable, Esq. John T. Haggerty, Esq. Jesse Nevarez, Esq. Goodwin Procter LLP 100 Northern Ave Boston, Massachusetts 02210 (617) 570-1000 | | | Shawn Iadonato, Ph.D. Chief Executive Officer Kineta, Inc. 219 Terry Ave. N., Suite 300 Seattle, Washington 98109 (206) 378-0400 | | | Albert W. Vanderlaan, Esq. Blake Ilstrup, Esq. Orrick, Herrington & Sutcliffe LLP 222 Berkeley Street, Suite 2000 Boston, Massachusetts 02116 (617) 880-1800 |
Large accelerated filer | | | ☐ | | | | | Accelerated filer | | | ☐ | |
Non-accelerated filer | | | ☒ | | | | | Smaller reporting company | | | ☒ | |
| | | | | | Emerging growth company | | | ☐ |
| |
1. | approve the issuance of shares of Yumanity common stock to the Kineta securityholders in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger; |
2. | approve an amendment to the Yumanity certificate of incorporation effecting a reverse stock split of Yumanity common stock, at a ratio of one (1) new share for every five (5) to twenty (20) shares of outstanding Yumanity common stock (the “Yumanity Reverse Stock Split”); |
3. | approve the issuance of shares of Yumanity common stock to the PIPE Investors in the Private Placement; |
4. | approve the Asset Purchase Agreement and the transactions contemplated thereby; |
5. | approve the Kineta, Inc. 2022 Equity Incentive Plan (the “2022 Plan”); |
6. | approve, on a non-binding advisory vote basis, compensation that will or may become payable by Yumanity to its named executive officers in connection with the Transactions, each as described in the accompanying proxy statement/prospectus/information statement; |
7. | authorize the adjournment of the Yumanity special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Yumanity Proposal Nos. 1, 2, 3 or 4; and |
8. | transact such other business as may properly come before the Yumanity special meeting or any adjournment or postponement thereof. |
Richard Peters, M.D., Ph.D. President and Chief Executive Officer Yumanity Therapeutics, Inc. | | | Shawn Iadonato, Ph.D. Chief Executive Officer Kineta, Inc. |
1. | To approve the issuance of Yumanity common stock in the Merger in accordance with the terms of the Agreement and Plan of Merger, dated as of June 5, 2022, by and among Yumanity, Merger Sub and Kineta, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus/information statement (the “Merger Agreement”) and the change of control of Yumanity resulting from the Merger. |
2. | To approve the amendment to the certificate of incorporation of Yumanity to effect a reverse stock split of Yumanity common stock, at a ratio of one (1) new share for every five (5) to twenty (20) shares of outstanding Yumanity common stock, with the exact ratio and effective time of the reverse stock split of Yumanity common stock to be determined by the Yumanity board of directors and publicly announced by press release (the “Yumanity Reverse Stock Split”), in the form attached as Annex B to the accompanying proxy statement/prospectus/information statement. |
3. | To approve, for purposes of Nasdaq Listing Rule 5635, the issuance of 14,354,067 shares of Yumanity common stock for a purchase price of $2.09 per share (in each case subject to adjustment for any stock split, recapitalization or reverse stock split (including the Yumanity Reverse Stock Split) effected prior to the offering), to certain institutional investors (the “PIPE Investors”) in a private placement for gross proceeds of approximately $30.0 million (the “Private Placement”). |
4. | To approve the Asset Purchase Agreement, dated as of June 5, 2022, by and between Yumanity and Janssen, a copy of which is attached as Annex E to the accompanying proxy statement/prospectus/information statement (the “Asset Purchase Agreement”) and the transactions contemplated thereby. |
5. | To approve the Kineta, Inc. 2022 Equity Incentive Plan (the “2022 Plan”). |
6. | To consider and vote upon a proposal to approve, on a non-binding advisory vote basis, compensation that will or may become payable by Yumanity to its named executive officers in connection with the Transactions. |
7. | To consider and vote upon an adjournment of the Yumanity special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Yumanity Proposal Nos. 1, 2, 3 or 4. |
8. | To transact such other business as may properly come before the Yumanity special meeting or any adjournment or postponement thereof. |
| | By Order of the Yumanity Board of Directors, | | | ||
| | | ||||
| | Richard Peters, M.D., Ph.D. President and Chief Executive Officer Boston, Massachusetts , 2022 | |
Q: | What are the Transactions? |
A: | Yumanity Therapeutics, Inc. (“Yumanity”), Kineta, Inc. (“Kineta”) and Yacht Merger Sub, Inc., a wholly-owned subsidiary of Yumanity (“Merger Sub”) have entered into an Agreement and Plan of Merger dated as of June 5, 2022 as may be amended from time to time (the “Merger Agreement”). The Merger Agreement contains the terms and conditions of the proposed business combination of Yumanity and Kineta. Under the Merger Agreement, Merger Sub will merge with and into Kineta, with Kineta surviving as a wholly-owned subsidiary of Yumanity (the “Merger”). Under specified circumstances, Yumanity or Kineta will be required to pay a termination fee to the other party, as further described in the section titled “The Merger Agreement—Termination Fee” in this proxy statement/prospectus/information statement. |
Q: | What will happen in the Merger? |
A: | At the effective time of the Merger (the “Effective Time”), the shares of Kineta non-voting common stock and the shares of Kineta voting common stock outstanding immediately prior to the Effective Time (excluding certain shares of Kineta common stock that may be cancelled pursuant to the Merger Agreement and shares held by shareholders who have exercised and perfected appraisal rights or dissenters’ rights as more fully described in “The Transactions — Appraisal Rights and Dissenters’ Rights” below) will be converted into the right to receive an estimated aggregate of |
Q: | Will Yumanity stockholders receive any portion of the proceeds from the Asset Sale? |
A: | In connection with the Asset Sale, Yumanity plans to distribute any remaining available cash proceeds from the Asset Sale to Yumanity stockholders via a one-time dividend, net of any amounts used or retained for outstanding obligations of Yumanity and net cash requirements associated with the closing of the Merger. The amount of such dividend (if any) is currently uncertain, pending the determination of Yumanity’s outstanding obligations and net cash position as of the closing of the Merger. |
Q: | What will happen if, for any reason, either of the Transactions does not close? |
A: | The closing of the Merger and the closing of the Asset Sale are not conditioned on the closing of each other. Therefore, if, for any reason, the Merger does not close and the Merger Agreement is terminated, the Asset Sale can still close (subject to any conditions to closing contained in the Asset Purchase Agreement). Similarly, if, for any reason, the Asset Sale does not close and the Asset Purchase Agreement is terminated, the Merger can still close (subject to any conditions to closing contained in the Merger Agreement). |
Q: | What are the conditions to closing of the Transactions? |
A: | For more information regarding the conditions to closing of the Transactions, see the sections “The Merger Agreement—Conditions to the Completion of the Merger” and “The Asset Purchase Agreement—Conditions to the Completion of the Merger” in this proxy statement/prospectus/information statement. |
Q: | Why are Yumanity and Kineta proposing to merge? |
A: | Yumanity and Kineta believe that the Merger will result in an immuno-oncology focused company with a diversified pipeline of potential treatments for cancer patients. For a discussion of Yumanity and Kineta reasons for the Merger, please see the sections titled “The Transactions—Yumanity Reasons for the Transactions” and “The Transactions—Kineta Reasons for the Merger” in this proxy statement/prospectus/information statement. |
Q: | Why am I receiving this proxy statement/prospectus/information statement? |
A: | You are receiving this proxy statement/prospectus/information statement because you have been identified as a stockholder of Yumanity as of the applicable record date or as a shareholder of Kineta, and you are entitled, as applicable, to (i) vote at the Yumanity special meeting of stockholders to approve the issuance of shares of Yumanity common stock in the Merger in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger, the proposed Yumanity Reverse Stock Split, the issuance of shares of Yumanity common stock to the PIPE Investors in the Private Placement, the Asset Sale to Janssen in accordance with the terms of the Asset Purchase Agreement, the 2022 Plan, and to approve the adjournment of the special meeting, if necessary, to solicit additional proxies or (ii) sign and return the Kineta written consent to adopt the Merger Agreement and approve the transactions contemplated in the Merger Agreement. This document serves as: |
Q: | What is required to consummate the Merger? |
A: | To consummate the Merger, Yumanity stockholders must approve the issuance of shares of Yumanity common stock in the Merger in accordance with the terms of the Merger Agreement and the change of control resulting from the Merger, the amendment to the certificate of incorporation of Yumanity effecting the Yumanity Reverse Stock Split, and the issuance of shares of Yumanity common stock to the PIPE Investors in the Private Placement, and Kineta shareholders must adopt the Merger Agreement and approve the transactions contemplated in the Merger Agreement. |
Q: | What is required to consummate the Asset Sale? |
A: | To consummate the Asset Sale, Yumanity stockholders must authorize the Asset Sale by approving the Asset Purchase Agreement and the transactions contemplated thereby. The approval of the Asset Purchase Agreement and the transactions contemplated thereby requires the affirmative vote of holders of a majority of the outstanding Yumanity common stock having voting power on the record date for the Yumanity special meeting. In addition to the requirement of obtaining such stockholder approval and appropriate regulatory approvals, each of the other closing conditions set forth in the Asset Purchase Agreement must be satisfied or waived. For a more complete description of the closing conditions under the Asset Purchase Agreement, Yumanity and Kineta urge you to read the section titled “The Asset Purchase Agreement—Conditions to the Completion of the Asset Sale” in this proxy statement/prospectus/information statement. |
Q: | What will Kineta shareholders, warrantholders, optionholders and holders of Kineta RSUs receive in the Merger? |
A: | As a result of the Merger, Kineta shareholders, warrantholders, optionholders and holders of Kineta RSUs will become entitled to receive, prior to the proposed Yumanity Reverse Stock Split, |
Q: | Who will be the directors of the combined organization following the Merger? |
A: | Following the Merger, the board of directors of Yumanity will be as follows: |
Name | | | Current Principal Affiliation |
Shawn Iadonato, Ph.D. | | | Kineta Chief Executive Officer |
Marion R. Foote, M.B.A. | | | Kineta Director |
Raymond Bartoszek, M.B.A. | | | Kineta Director |
Jiyoung Hwang | | | Kineta Director |
Richard Peters, M.D., Ph.D. | | | Yumanity President, Chief Executive Officer and Director |
David Arkowitz, M.B.A. | | | Yumanity Director |
Q: | Who will be the executive officers of Yumanity immediately following the Merger? |
A: | Immediately following the Merger, the executive management team of Yumanity is expected to be composed solely of the members of the Kineta executive management team prior to the Merger as set forth below: |
Name | | | Position(s) |
Shawn Iadonato, Ph.D. | | | Chief Executive Officer |
Craig W. Philips, M.B.A. | | | President |
Keith Baker | | | Chief Financial Officer |
Thierry Guillaudeux, Ph.D. | | | Chief Scientific Officer |
Pauline Kenny, Esq. | | | General Counsel |
Q: | What are the material U.S. federal income tax consequences of the Merger to Kineta shareholders? |
A: | Each of Yumanity and Kineta intends the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”). In general and subject to the qualifications and limitations set forth in the section titled “The Transactions—Certain Material U.S. Federal Income Tax Consequences,” if the Merger qualifies as a “reorganization” within the meaning of Section 368(a) of the Code, the material tax consequences to U.S. Holders (as defined in the section titled “The Transactions—Certain Material U.S. Federal Income Tax Consequences”) of Kineta common stock should be as follows: |
Q: | What are the material U.S. federal income tax consequences of the Yumanity Reverse Stock Split to U.S. Holders of Yumanity? |
A: | A Yumanity U.S. Holder generally should not recognize gain or loss upon the Reverse Stock Split. Please review the information in the section titled “Proposal No. 2: Approval of the Amendment to the Certificate of Incorporation of Yumanity Effecting the Yumanity Reverse Stock Split—Tax Consequences of the Yumanity Reverse Stock Split” beginning on page |
Q: | What are the material U.S. federal income tax consequences of the Asset Sale to U.S. Holders of Yumanity? |
A: | In connection with the closing of the Asset Sale, Yumanity plans to distribute any remaining available cash proceeds from the Asset Sale to Yumanity stockholders via a one-time distribution, net of any amounts retained for outstanding obligations and net cash requirements associated with the closing of the Merger. The amount of such dividend (if any) is currently uncertain, pending the determination of Yumanity’s outstanding obligations and net cash position as of the closing of the Merger. You generally will be required to include in gross income as dividends the amount of proceeds received in connection with such a distribution to the extent the distribution is paid out of Yumanity’s current (as measured through the end of our taxable year that includes the distribution) or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of such earnings and profits generally will be treated as a return of capital that will be applied against and reduce your basis in your shares (but not below zero), with any remaining excess treated as gain from the sale or exchange of such shares. |
Q: | Do persons involved in the Transactions have interests that may conflict with mine as a Yumanity stockholder? |
A: | Yes. In considering the recommendation of Yumanity’s board of directors with respect to issuing shares of Yumanity common stock pursuant to the Merger Agreement and the other matters to be acted upon by Yumanity stockholders at the Yumanity special meeting, Yumanity stockholders should be aware that certain members of the Yumanity board of directors and executive officers of Yumanity have interests in the Merger that may be different from, or in addition to, interests they have as Yumanity stockholders. |
Q: | Do persons involved in the Merger have interests that may conflict with mine as a Kineta shareholder? |
A: | Yes. In considering the recommendation of the board of directors of Kineta with respect to approving the Merger and related transactions by written consent, Kineta shareholders should be aware that certain members of the board of directors and executive officers of Kineta have interests in the Merger that may be different from, or in addition to, interests they have as Kineta shareholders. All of Kineta’s executive officers and certain of its directors have options, subject to vesting, to purchase shares of Kineta common stock that will convert into options to purchase a number of shares of Yumanity common stock determined by the Exchange Ratio; certain of Kineta’s directors and all its executive officers are expected to become directors and executive officers of the combined organization upon the consummation of the Merger; and all of Kineta’s directors and executive officers are entitled to certain indemnification and liability insurance coverage pursuant to the terms of the Merger Agreement. In addition, certain of Kineta’s executive officers and directors and affiliates of Kineta’s directors currently hold shares of Kineta’s common stock. The Kineta board of directors was aware of these interests and considered them, among other matters, in its decision to approve the Merger Agreement. For more information, please see the section titled “The Transactions—Interests of the Kineta Directors and Executive Officers in the Merger” of this proxy statement/prospectus/information statement. |
Q: | As a Yumanity stockholder, how does the Yumanity board of directors recommend that I vote? |
A: | After careful consideration, the Yumanity board of directors recommends that Yumanity stockholders vote: |
Q: | Why am I being asked to approve the Yumanity Reverse Stock Split? |
A: | The Yumanity board of directors approved the proposal approving the amendment to the Yumanity certificate of incorporation effecting the Yumanity Reverse Stock Split for the following reasons: the Yumanity board of directors believes an investment in Yumanity common stock may not appeal to brokerage firms that are reluctant to recommend lower priced securities to their clients and investors may also be dissuaded from purchasing lower priced stocks because the brokerage commissions, as a percentage of the total transaction, tend to be higher for such stocks; the analysts at many brokerage firms do not monitor the trading activity or otherwise provide coverage of lower priced stocks; and the Yumanity board of directors believes that most investment funds are reluctant to invest in lower priced stocks. If Proposal No. 1 is not approved at the Yumanity special meeting, the Yumanity board of directors may still elect to effect the Yumanity Reverse Stock Split. For further details, see the section titled “Yumanity Proposal No. 2: Approval of the Amendment to the Certificate of Incorporation of Yumanity Effecting the Yumanity Reverse Stock Split.” |
Q: | As a Kineta shareholder, how does the Kineta board of directors recommend that I vote? |
A: | After careful consideration, the Kineta board of directors recommends that Kineta shareholders execute the written consent indicating their vote in favor of the approval of the Merger and the adoption of the Merger Agreement and the transactions contemplated thereby. |
Q: | What risks should I consider in deciding whether to vote in favor of the approval of the issuance of shares of Yumanity common stock in the Merger to the Kineta securityholders in accordance with the terms of the Merger Agreement, the Asset Sale in accordance with the Asset Purchase Agreement or to execute and return the written consent, as applicable? |
A: | You should carefully review the section of this proxy statement/prospectus/information statement, including any information incorporated into such section, titled “Risk Factors,” which sets forth certain risks and uncertainties related to the Merger, risks and uncertainties related to the Asset Sale, risks and uncertainties to which the combined organization’s business will be subject and risks and uncertainties to which each of Yumanity and Kineta, as an independent company, is subject. |
Q: | What is the quorum requirement? |
A: | A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority in voting power of the shares of Yumanity common stock issued and outstanding and entitled to vote at the Yumanity special meeting, are present at the live audio webcast Yumanity special meeting or |
Q: | If my Yumanity shares are held in “street name” by my broker, will my broker vote my shares for me? |
A: | If you hold shares beneficially in street name and do not provide your broker or other agent with voting instructions, your shares may constitute “broker non-votes.” Broker non-votes occur on a matter when banks, brokers and other nominees are not permitted to vote on certain non-discretionary matters without instructions from the beneficial owner and instructions are not given. These matters are referred to as “non-discretionary” matters. Proposal Nos. 1, 3, 4, 5, 6 and 7 are anticipated to be non-discretionary matters. Proposal No. 2 is anticipated to be a discretionary matter. Broker non-votes will not be considered as votes cast by the holders of Yumanity common stock present in person or represented by proxy at the Yumanity special meeting, and will therefore not have any effect with respect to Proposal Nos. 1, 3, 5, 6 and 7. Broker non-votes, if any, will have the effect of an “Against” vote with respect to Proposal Nos. 2 and 4. |
Q: | When do you expect the Transactions to be consummated? |
A: | Yumanity and Kineta anticipate that the Merger will occur sometime soon after the Yumanity special meeting to be held on , 2022, but cannot predict the exact timing. For more information, please see the section titled “The Merger Agreement—Conditions to the Completion of the Merger” in this proxy statement/prospectus/information statement. |
Q: | What do I need to do now? |
A: | Yumanity and Kineta urge you to read this proxy statement/prospectus/information statement, including its annexes, and to consider how the Transactions affect you. |
Q: | What happens if I do not return a proxy card or otherwise provide proxy instructions, as applicable? |
A: | If you are a Yumanity stockholder, the failure to return your proxy card or otherwise provide proxy instructions will reduce the aggregate number of votes required to approve Yumanity Proposal Nos. 1, 3, 5, 6 and 7 and will have the same effect as voting against Yumanity Proposal Nos. 2 and 4, and your shares will not be counted for purposes of determining whether a quorum is present at the Yumanity special meeting. Banks, brokers and other nominees will have discretion to vote on Yumanity Proposal No. 2. |
Q: | May I vote in person at the special meeting of stockholders of Yumanity? |
A: | Yes, Yumanity stockholders entitled to vote at the virtual-only format Yumanity special meeting may vote their shares during the live audio webcast. |
Q: | When and where is the special meeting of Yumanity stockholders? |
A: | The special meeting of Yumanity stockholders will be held in a virtual-only format via live audio webcast at www.virtualshareholdermeeting.com/YMTX2022SM at a.m., Eastern Time, on , 2022. All Yumanity stockholders as of the record date, or their duly appointed proxies, may attend the virtual special meeting. |
Q: | May I change my vote after I have submitted a proxy or provided proxy instructions? |
A: | Yumanity stockholders of record, other than those Yumanity stockholders who are parties to support agreements, may change their vote at any time before their proxy is voted at the Yumanity special meeting in one of three ways. First, a stockholder of record of Yumanity can send a written notice to the Secretary of Yumanity stating that it would like to revoke its proxy. Second, a stockholder of record of Yumanity can submit new proxy instructions either on a new proxy card or via the Internet. Third, a stockholder of record of Yumanity can attend the Yumanity special meeting and vote during the live audio webcast. Attendance alone at the virtual special meeting will not revoke a proxy. If a Yumanity stockholder of record or a stockholder who owns Yumanity shares in “street name” has instructed a broker to vote its shares of Yumanity common stock, the stockholder must follow directions received from its broker to change those instructions. |
Q: | Who is paying for this proxy solicitation? |
A: | Yumanity and Kineta will share equally the cost of printing and filing this proxy statement/prospectus/information statement and the proxy card. Arrangements will also be made with brokerage firms and other custodians, nominees and fiduciaries who are record holders of Yumanity common stock for the forwarding of solicitation materials to the beneficial owners of Yumanity common stock. Yumanity will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials. |
Q: | Who can help answer my questions? |
A: | If you are a Yumanity stockholder and would like additional copies, without charge, of this proxy statement/prospectus/information statement, please contact: |
each share of Kineta common stock outstanding immediately prior to the Effective Time (excluding certain shares of Kineta common stock that may be cancelled pursuant to the Merger Agreement and shares held |
Name | | | Position(s) |
Shawn Iadonato, Ph.D. | | | Chief Executive Officer |
Craig W. Philips, M.B.A. | | | President |
Keith Baker | | | Chief Financial Officer |
Thierry Guillaudeux, Ph.D. | | | Chief Scientific Officer |
Pauline Kenny, Esq. | | | General Counsel |
| | For the Six Months Ended June 30, | | | For the Year Ended December 31, | |||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | |
| | (Unaudited) | | | | | ||||||
| | (in thousands, except share and per share amounts) | ||||||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $8,044 | | | $6,896 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 6,037 | | | 14,106 | | | 26,410 | | | 22,310 |
General and administrative | | | 10,382 | | | 10,764 | | | 20,379 | | | 11,881 |
In-process research and development assets acquired | | | — | | | — | | | — | | | 28,336 |
Impairment loss | | | 3,901 | | | — | | | — | | | — |
Total operating expenses | | | 20,320 | | | 24,870 | | | 46,789 | | | 62,527 |
Loss from operations | | | (17,641) | | | (19,224) | | | (38,745) | | | (55,631) |
Other income (expense): | | | | | | | | | ||||
Interest expense | | | (217) | | | (951) | | | (1,817) | | | (1,900) |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (75) | | | 44 |
(Loss) gain on debt extinguishment | | | (200) | | | 1,134 | | | 1,134 | | | — |
Total other income (expense), net | | | (585) | | | 88 | | | (758) | | | (1,856) |
Net loss | | | $(18,226) | | | $(19,136) | | | $(39,503) | | | $(57,487) |
Net loss applicable to common shareholders | | | (18,226) | | | (19,136) | | | (39,503) | | | (50,790) |
Net loss per share, basic and diluted | | | $(1.69) | | | $(1.88) | | | $(3.84) | | | $(21.57) |
Weighted average common shares outstanding, basic and diluted | | | 10,800,473 | | | 10,194,474 | | | 10,283,172 | | | 2,354,143 |
| | June 30, 2022 | | | December 31, 2021 | |
| | (Unaudited) | | | ||
| | (in thousands) | ||||
Cash, cash equivalents and short-term investments | | | $11,846 | | | $ 36,501 |
Restricted cash | | | 878 | | | 928 |
Working capital | | | 6,989 | | | 20,045 |
Total assets | | | 15,469 | | | 62,932 |
Total debt | | | — | | | 13,162 |
Total stockholders' equity | | | 7,930 | | | 23,497 |
| | Six Months Ended June 30, | | | Year Ended December 31, | |||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | |
| | (Unaudited) | | | | | ||||||
| | (in thousands, except per share amounts) | ||||||||||
Consolidated Statements of Operations Data: | | | | | | | | | ||||
Revenues: | | | | | | | | | ||||
Licensing revenues | | | $967 | | | $4,291 | | | $7,883 | | | $8,187 |
Grant revenues | | | 299 | | | 639 | | | 1,208 | | | 2,301 |
Total revenues | | | 1,266 | | | 4,930 | | | 9,091 | | | 10,488 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 7,902 | | | 7,972 | | | 15,561 | | | 9,215 |
General and administrative | | | 3,434 | | | 2,412 | | | 4,623 | | | 4,388 |
Total operating expenses | | | 11,336 | | | 10,384 | | | 20,184 | | | 13,603 |
Loss from operations | | | (10,070) | | | (5,454) | | | (11,093) | | | (3,115) |
Other (expense) income: | | | | | | | | | ||||
Interest expense | | | (1,140) | | | (676) | | | (1,293) | | | (4,960) |
Change in fair value measurement of notes payable | | | (124) | | | (553) | | | (1,142) | | | 748 |
Gain on extinguishments of debt | | | 495 | | | 892 | | | 1,719 | | | 98 |
Other (expense) income, net | | | (14) | | | (16) | | | (8) | | | 117 |
Total other (expense) income, net | | | (783) | | | (353) | | | (724) | | | (3,997) |
| | Six Months Ended June 30, | | | Year Ended December 31, | |||||||
| | 2022 | | | 2021 | | | 2021 | | | 2020 | |
| | (Unaudited) | | | | | ||||||
| | (in thousands, except per share amounts) | ||||||||||
Net loss | | | $(10,853) | | | $(5,807) | | | $(11,817) | | | $(7,112) |
Net income (loss) attributable to noncontrolling interest | | | 1 | | | (14) | | | — | | | 940 |
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) | | | $(11,817) | | | $(8,052) |
Net loss per share, basic and diluted | | | $(0.16) | | | $(0.10) | | | $(0.19) | | | $(0.14) |
Weighted-average shares outstanding, basic and diluted | | | 69,276 | | | 59,646 | | | 63,346 | | | 56,521 |
| | June 30, 2022 | | | December 31, 2021 | |
| | (Unaudited) | | | ||
| | (in thousands) | ||||
Consolidated Balance Sheet Data: | | | | | ||
Cash | | | $4,468 | | | $11,144 |
Working deficiency | | | (7,853) | | | (3,161) |
Restricted cash | | | 75 | | | 75 |
Total assets | | | 7,427 | | | 13,353 |
Deferred revenue | | | 74 | | | 1,041 |
Notes payable | | | 18,614 | | | 19,440 |
Accumulated deficit | | | (99,136) | | | (88,282) |
Total stockholders’ deficit | | | (19,279) | | | (11,949) |
| | Six Months Ended June 30, 2022 | | | Year Ended December 31, 2021 | |
| | (in thousands, except per share amounts) | ||||
Unaudited Pro Forma | | | | | ||
Combined Statement of Operations Data: | | | | | ||
Revenues: | | | | | ||
Licensing revenue | | | $967 | | | $7,883 |
Grant revenue | | | 299 | | | 1,208 |
Collaboration revenue | | | 2,679 | | | 8,044 |
Total revenue | | | 3,945 | | | 17,135 |
Operating expenses: | | | | | ||
Research and development | | | 11,861 | | | 47,447 |
General and administrative | | | 13,816 | | | 27,473 |
Impairment loss | | | 3,901 | | | — |
Gain on sale of assets | | | — | | | (25,985) |
Total operating expenses | | | 29,578 | | | 48,935 |
Loss from operations | | | (25,633) | | | (31,800) |
Other (expense) income: | | | | | ||
Interest expense | | | (1,281) | | | (3,110) |
Change in fair value measurement of notes payable | | | 287 | | | (1,142) |
Interest income and other (expense) income, net | | | (182) | | | (83) |
Gain on extinguishments of debt | | | 295 | | | 2,853 |
Total other (expense) income, net | | | (881) | | | (1,482) |
| | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | | | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | |||
| (in thousands, except per share amounts) | | (in thousands, except per share amounts) | |||||||||
Net loss | | $(26,514) | | $(33,282) | | $(26,514) | | $(33,282) | ||||
Net income attributable to noncontrolling interest | | 1 | | — | | 1 | | — | ||||
Net loss attributable to common stockholders. | | $(26,515) | | $(33,282) | | $(26,515) | | $(33,282) | ||||
Net loss per share, basic and diluted | | $(0.36) | | $(0.46) | | $(0.36) | | $(0.46) | ||||
Weighted-average shares outstanding, basic and diluted | | 73,579 | | 73,062 | | 72,657 | | 72,140 |
Unaudited Pro Forma Combined Balance Sheet Data: | | | |
Cash and cash equivalents | | | $48,752 |
Working capital | | | 24,767 |
Restricted cash | | | 953 |
Total assets | | | 54,090 |
Deferred revenue | | | 2,455 |
Notes payable | | | 13,403 |
Accumulated deficit | | | (114,715) |
Total stockholders’ equity | | | 19,221 |
| | As of and for the Six Months Ended June 30, 2022 | | As of and for the Year Ended December 31, 2021 | | | As of and for the Six Months Ended June 30, 2022 | | As of and for the Year Ended December 31, 2021 | |||
Yumanity Historical Per Common Share Data: | | | | | ||||||||
Basic and diluted net loss per share | | $(1.69) | | $(3.84) | | $(1.69) | | $(3.84) | ||||
Book value per share | | $0.73 | | $2.21 | | $0.73 | | $2.21 | ||||
| | | | |||||||||
Kineta Historical Per Common Share Data: | | | | | ||||||||
Basic and diluted net loss per share | | $(0.16) | | $(0.19) | | $(0.16) | | $(0.19) | ||||
Book value per share | | $(0.28) | | $(0.18) | | $(0.28) | | $(0.18) | ||||
| | | | |||||||||
Combined Organization Proforma Per Common Share Data: | | | | | ||||||||
Basic and diluted net loss per share | | $(0.36) | | $(0.46) | | $(0.36) | | $(0.46) | ||||
Book value per share | | $0.26 | | N/A | | $0.27 | | N/A |
1 | To equal 15% of fully diluted capitalization. |
1. | To approve the issuance of shares of Yumanity common stock to the Kineta securityholders in accordance with the terms of the Merger Agreement, a copy of which is attached as Annex A to the accompanying proxy statement/prospectus/information statement, and the change of control resulting from the Merger. |
2. | To approve the amendment to the certificate of incorporation of Yumanity to effect the Yumanity Reverse Stock Split, in the form attached as Annex B to the accompanying proxy statement/prospectus/information statement. |
3. | To approve the issuance of shares of Yumanity common stock to the PIPE Investors in the Private Placement. |
4. | To approve the Asset Purchase Agreement, a copy of which is attached as Annex E to the accompanying proxy statement/prospectus/information statement, and the transactions contemplated thereby. |
5. | To approve the 2022 Plan. |
6. | To consider and vote upon a proposal to approve, on a non-binding advisory vote basis, compensation that will or may become payable by Yumanity to its named executive officers in connection with the Transactions. |
7. | To consider and vote upon an adjournment of the Yumanity special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of Yumanity Proposal Nos. 1, 2, 3 or 4. |
8. | To transact such other business as may properly come before the Yumanity special meeting or any adjournment or postponement thereof. |
• | the Yumanity board of directors considered the financial analyses presented by Needham & Company to the Yumanity board of directors on June 5, 2022 and the opinions of Needham & Company, dated June 5, 2022, to the Yumanity board of directors that, as of such date, based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in such opinions, (a) the Exchange Ratio (as defined in the draft of the Merger Agreement reviewed by Needham & Company as of such date) was fair to Yumanity from a financial point of view and (b) the consideration to be received by Yumanity pursuant to the Asset Purchase Agreement was fair to Yumanity from a financial point of view, as more fully described below under the captions “Opinion of Yumanity’s Financial Advisor Related to the Merger;” and “Opinion of Yumanity’s Financial Advisor Related to the Asset Sale;” |
• | various other risks associated with the Merger, the combined organization following consummation of the Merger and the Asset Sale, including those described in the section titled “Risk Factors” in this proxy statement/prospectus/information statement. |
• | various other risks associated with the combined company and the Merger, including the risks described in the section entitled “Risk Factors” in this proxy statement/prospectus/information statement. |
Acquirer | | | Target |
Milendo Therapeutics, Inc. | | | Tempest Therapeutics, Inc. |
Anchiano Therapeutics Ltd. | | | Chemomab Ltd. |
Sunesis Pharmaceuticals, Inc. | | | Viracta Therapeutics, Inc. |
Rexahn Pharmaceuticals, Inc. | | | Ocuphire Pharma, Inc. |
Proteon Therapeutics, Inc. | | | ArTara Therapeutics, Inc. |
Histogenics Corporation | | | Ocugen, Inc. |
NeuBase Therapeutics, Inc. | | | Ohr Pharmaceutical, Inc. |
Vital Therapies, Inc. | | | Immunic AG |
Bioblast Pharma Ltr. | | | Enlivex Therapeutics Ltd. |
| | Selected Transactions (in millions) | ||||||||||||||||
| | High | | | 75th Percentile | | | Mean | | | Median | | | 25th Percentile | | | Low | |
Premium over net cash | | | $19.0 | | | $13.3 | | | $9.7 | | | $8.4 | | | $5.4 | | | $3.5 |
| | Offering As Priced | | | Current Data | |||||||||||||
| | Size | | | Pre-Money Value | | | Market Cap | | | Step-Up Multiple | | | Market Value | | | Enterprise Value | |
| | (Dollars in millions) | ||||||||||||||||
High | | | $587.5 | | | $4,007.9 | | | $4,595.4 | | | 3.0x | | | $1,240.5 | | | $722.7 |
75th Percentile | | | $206.5 | | | $626.6 | | | $826.8 | | | 1.8x | | | $470.5 | | | $190.0 |
Mean | | | $173.5 | | | $658.2 | | | $831.7 | | | 1.6x | | | $316.9 | | | $90.9 |
Median | | | $160.0 | | | $458.4 | | | $617.4 | | | 1.5x | | | $187.9 | | | $5.3 |
25th Percentile | | | $111.5 | | | $322.8 | | | $432.0 | | | 1.3x | | | $81.6 | | | $(56.1) |
Low | | | $40.0 | | | $84.6 | | | $124.6 | | | 0.8x | | | $41.6 | | | $(200.6) |
| | Offering As Priced | | Current Data | | | Offering As Priced | | Current Data | |||||||||||||||||||||||||||
| | Size | | Pre-Money Value | | Market Cap | | Step-Up Multiple | | Market Value | | Enterprise Value | | | Size | | Pre-Money Value | | Market Cap | | Step-Up Multiple | | Market Value | | Enterprise Value | |||||||||||
| (Dollars in millions) | | (Dollars in millions) | |||||||||||||||||||||||||||||||||
High | | $425.0 | | $3,703.1 | | $4,128.1 | | 2.5x | | $1,240.5 | | $626.6 | | $425.0 | | $3,703.1 | | $4,128.1 | | 2.5x | | $1,240.5 | | $626.6 | ||||||||||||
75th Percentile | | $220.5 | | $740.8 | | $972.0 | | 2.0x | | $470.5 | | $149.5 | | $220.5 | | $740.8 | | $972.0 | | 2.0x | | $470.5 | | $149.5 | ||||||||||||
Mean | | $177.3 | | $712.1 | | $889.4 | | 1.6x | | $274.0 | | $50.2 | | $177.3 | | $712.1 | | $889.4 | | 1.6x | | $274.0 | | $50.2 | ||||||||||||
Median | | $174.7 | | $460.4 | | $641.6 | | 1.5x | | $118.1 | | $(15.7) | ||||||||||||||||||||||||
25th Percentile | | $113.8 | | $314.8 | | $406.5 | | 1.3x | | $67.3 | | $(80.6) | ||||||||||||||||||||||||
Low | | $40.0 | | $147.5 | | $187.5 | | 1.1x | | $49.3 | | $(166.0) |
| | Offering As Priced | | | Current Data | |||||||||||||
| | Size | | | Pre-Money Value | | | Market Cap | | | Step-Up Multiple | | | Market Value | | | Enterprise Value | |
| | (Dollars in millions) | ||||||||||||||||
Median | | | $174.7 | | | $460.4 | | | $641.6 | | | 1.5x | | | $118.1 | | | $(15.7) |
25th Percentile | | | $113.8 | | | $314.8 | | | $406.5 | | | 1.3x | | | $67.3 | | | $(80.6) |
Low | | | $40.0 | | | $147.5 | | | $187.5 | | | 1.1x | | | $49.3 | | | $(166.0) |
Based On Early Stage Biotechnology IPO Data | |||||||||
Initial Public Offering Step-Up | | | Implied Kineta Stepped-Up Value (in millions) | ||||||
25th Percentile | | | 1.3x | | | 25th Percentile | | | $216 |
Median | | | 1.5x | | | Median | | | $254 |
75th Percentile | | | 1.8x | | | 75th Percentile | | | $303 |
Based On Early Stage Immuno-Oncology Company IPO Data | |||||||||
Initial Public Offering Step-Up | | | Implied Kineta Stepped-Up Value (in millions) | ||||||
25th Percentile | | | 1.3x | | | 25th Percentile | | | $218 |
Median | | | 1.5x | | | Median | | | $258 |
75th Percentile | | | 2.0x | | | 75th Percentile | | | $331 |
| | Selected Companies (dollars in thousands) | ||||||||||||||||
| | High | | | 75th Percentile | | | Mean | | | Median | | | 25th Percentile | | | Low | |
Total market capitalization | | | $96,774 | | | $95,825 | | | $51,149 | | | $37,737 | | | $28,281 | | | $25,865 |
Enterprise value | | | $20,727 | | | $7,937 | | | $(9,206) | | | $(7,022) | | | $(15,260) | | | $(67,499) |
Closing stock price as percentage of 52-week high | | | 38% | | | 32% | | | 24% | | | 21% | | | 18% | | | 12% |
Closing stock price percentage above 52-week low | | | 56% | | | 50% | | | 31% | | | 22% | | | 19% | | | 11% |
Seller | | | Purchaser | | | Asset |
Palisade Bio, Inc. | | | Undisclosed | | | NSI-189 |
Abeona Therapeutics Inc. | | | Taysha Gene Therapies, Inc. | | | ABO-202 |
Pfizer Inc. | | | Biogen Inc. | | | PF-05251749 |
AliveGen USA Inc. | | | Biogen Inc. | | | ALG-801; ALG-802 |
Karyopharm Therapeutics Inc. | | | Biogen Inc. | | | KPT-350 |
| | Selected Transactions (in millions) | ||||||||||||||||
| | High | | | 75th Percentile | | | Mean | | | Median | | | 25th Percentile | | | Low | |
Upfront cash | | | $75.00 | | | $51.25 | | | $23.98 | | | $10.00 | | | $3.70 | | | $0.40 |
Milestones | | | $635.00 | | | $585.00 | | | $287.50 | | | $207.00 | | | $30.25 | | | $4.50 |
Potential total deal value | | | $710.00 | | | $636.25 | | | $311.48 | | | $217.00 | | | $33.95 | | | $4.90 |
Executive Officer | | | No. of Yumanity RSAs and Yumanity RSUs | | | Merger Consideration ($)(1) |
Richard Peters, M.D., Ph.D. | | | 65,472 | | | 116,539 |
Michael Wyzga | | | 10,000 | | | 17,800 |
Devin Smith | | | 10,000 | | | 17,800 |
(1) | The value of Yumanity RSUs and Yumanity RSAs shown in the table is based on $1.78 per share of Yumanity common stock, which reflects the average closing market price of Yumanity’s common stock over the first five business days following the first public announcement of the transaction. |
Name | | | Cash ($)(1) | | | Equity ($)(2) | | | Perquisites/ Benefits ($)(3) | | | Total ($) |
Richard Peters, M.D., Ph.D. | | | 2,111,729 | | | 116,539 | | | 32,902 | | | 2,261,170 |
(1) | Amount represents (i) a lump sum cash severance payment of $1,854,000 provided in accordance with Dr. Peters’ employment agreement (two times his base salary, plus two times his target bonus for the 2022 calendar year), which amount is a double trigger payment and (ii) Dr. Peters’ transaction success bonus of $257,729, assuming an Earned Date of October 31, 2022 and as described above under the heading “Interests of the Yumanity Directors and Executive Officers in the Transactions—Transaction Bonuses”, which amount is a single trigger payment. |
(2) | Amount represents the estimated Merger consideration payable with respect to Yumanity RSUs and Yumanity RSAs that will be fully accelerated as of immediately prior to the effective time of the Merger. Amount excludes any value attributable to acceleration of Yumanity stock options, which are not In the Money Yumanity Options and will therefore be cancelled with no consideration payable to the holder therefore. |
(3) | Amount represents the estimated value of reimbursement of COBRA premiums for health benefit coverage, in an amount equal to the monthly employer contribution that Yumanity would have made to provide health insurance to Dr. Peters had he remained employed with Yumanity until the earliest of 18 months following the date of termination, based on the costs of coverage and benefit elections in effect as of |
| | Shares of Common Stock Underlying Options (#) | | Volume Weighted Average Option Exercise Price ($) | | Shares of Common Stock Underlying Warrants (#) | | Volume Weighted Average Warrant Exercise Price ($) | | Shares of Common Stock Underlying RSUs (#) | | | Shares of Common Stock Underlying Options (#) | | Volume Weighted Average Option Exercise Price ($) | | Shares of Common Stock Underlying Warrants (#) | | Volume Weighted Average Warrant Exercise Price ($) | | Shares of Common Stock Underlying RSUs (#) | |||||||||
Executive Officers | | | | | | | | | | | ||||||||||||||||||||
Shawn Iadonato, Ph.D. | | 3,490,000 | | 1.29 | | — | | — | | 562,910 | | 3,490,000 | | 1.29 | | — | | — | | 562,910 | ||||||||||
Craig W. Philips, M.B.A. | | 2,290,000 | | 1.65 | | 180,000(1) | | 0.70 | | 902,681 | | 2,290,000 | | 1.65 | | 180,000(1) | | 0.70 | | 902,681 | ||||||||||
Keith Baker | | — | | — | | — | | — | | — | ||||||||||||||||||||
Thierry Guillaudeux, Ph.D. | | 390,000 | | 1.84 | | — | | — | | 170,000 | | 390,000 | | 1.84 | | — | | — | | 170,000 | ||||||||||
Pauline Kenny, Esq. | | 892,500 | | 1.40 | | — | | — | | 123,291 | | 660,000 | | 1.67 | | — | | — | | 123,291 | ||||||||||
Non-Employee Directors | | | | | | | | | | | ||||||||||||||||||||
Donald Merlino | | 290,000 | | 1.76 | | 2,322,667(2) | | 0.71 | | 72,045 | | 290,000 | | 1.76 | | 2,322,667(2) | | 0.71 | | 72,045 | ||||||||||
Marion R. Foote, M.B.A. | | 290,000 | | 1.76 | | 222,916 | | 0.61 | | 72,045 | | 290,000 | | 1.76 | | 222,916 | | 0.61 | | 72,045 | ||||||||||
Raymond Bartoszek, M.B.A. | | 290,000 | | 1.76 | | 500,000(3) | | 1.50 | | 72,045 | | 290,000 | | 1.76 | | 500,000(3) | | 1.50 | | 72,045 | ||||||||||
Jiyoung Hwang | | — | | — | | — | | — | | 12,500 | | — | | — | | — | | — | | 12,500 | ||||||||||
Richard Samuelson | | 290,000 | | 1.76 | | — | | — | | 72,045 | | 290,000 | | 1.76 | | — | | — | | 72,045 | ||||||||||
Steven Mitchell, M.D., Ph.D. | | 140,000 | | 1.93 | | — | | — | | 72,045 | | 140,000 | | 1.93 | | — | | — | | 72,045 |
(1) | Consists of 180,000 warrants owned by Whetstone Ventures, LLC. Whetstone Ventures, LLC is affiliated with Craig W. Philips, Kineta’s President. |
(2) | Consists of 1,496,817 warrants owned by M&M Financial, LLC and 825,850 warrants owned by LTO Holdings, LLC. M&M Financial, LLC and LTO Holdings, LLC are affiliated with Donald Merlino, a member of the Kineta board of directors. |
(3) | Consists of 500,000 warrants owned by RLB Holdings Connecticut, LLC. RLB Holdings Connecticut, LLC is affiliated with Raymond Bartoszek, a member of the Kineta board of directors. |
Net Cash | | Exchange Ratio | | Post-Merger Ownership by Yumanity Securityholders | | Post-Merger Ownership of Kineta Securityholders | | Exchange Ratio | | Post-Merger Ownership by Yumanity Securityholders | | Post-Merger Ownership of Kineta Securityholders | ||||||
$5,500,000 | | 0.76 | | 11.3% | | 74.0% | | 0.74 | | 11.3% | | 74.0% | ||||||
$7,000,000 | | 0.72 | | 11.7% | | 73.1% | | 0.71 | | 11.7% | | 73.1% | ||||||
$8,500,000 | | 0.69 | | 12.1% | | 72.1% | | 0.68 | | 12.1% | | 72.1% | ||||||
$10,000,000 | | 0.66 | | 12.5% | | 71.2% | | 0.65 | | 12.5% | | 71.2% | ||||||
$11,500,000 | | 0.63 | | 12.9% | | 70.3% | | 0.62 | | 12.9% | | 70.3% | ||||||
$13,000,000 | | 0.61 | | 13.2% | | 69.4% | | 0.59 | | 13.3% | | 69.5% | ||||||
$14,500,000 | | 0.58 | | 13.6% | | 68.6% | | 0.57 | | 13.6% | | 68.6% |
• | each share of Kineta common stock outstanding immediately prior to the Effective Time (excluding shares held as treasury stock or owned by any of Kineta, any subsidiary of Kineta or Merger Sub, and shares held by shareholders who have exercised and perfected appraisal rights or dissenters’ rights as more fully described in “The Transactions—Appraisal Rights and Dissenters’ Rights” (each such share, a “dissenting share”)) will automatically be converted into the right to receive a number of shares of Yumanity common stock determined by the Exchange Ratio and subject to adjustment to account for the proposed Yumanity Reverse Stock Split. The Exchange Ratio, currently estimated as |
• | by either Yumanity or Kineta if the Merger shall not have been consummated within seven months of the date of the Merger Agreement; provided, however, that this right to terminate the Merger Agreement will not be available to any party whose action or failure to act has been a principal cause of the failure of the Merger to occur on or before such date and such action or failure to act constitutes a breach of the Merger Agreement, and this right to terminate shall not be available for an additional 30 days upon request of either party in the event that the SEC has not declared effective the Registration Statement, of which this proxy statement/prospectus/information statement is a part, by the date that is 60 days prior to such date; |
• | the Yumanity board of directors approves, endorses or recommends any acquisition proposal, as defined in the section titled “The Merger Agreement—No Solicitation” in this proxy statement/prospectus/information statement; or |
• | the Kineta board of directors publicly approves, endorses or recommends any acquisition proposal, as defined in the section titled “The Merger Agreement—No Solicitation” in this proxy statement/prospectus/information statement; |
• | the Merger Agreement is terminated by Kineta at any time prior to the approval of the Yumanity stockholder Proposals by the stockholders of Yumanity because of a Yumanity triggering event, as defined above in the section titled “The Merger Agreement—Termination” in this proxy statement/prospectus/information statement; |
• | (i) the Merger Agreement is terminated by either Yumanity or Kineta if the Merger shall not have been consummated within seven months of the date of the Merger Agreement, subject to the exceptions described above; (ii) the Merger Agreement is terminated by either Kineta or Yumanity after the Yumanity special meeting (including any adjournments and postponements thereof) shall have been held and completed and Yumanity’s stockholders shall have taken a final vote on the Yumanity stockholder Proposals and such matters shall not have been approved at the Yumanity special meeting (or any adjournment or postponement thereof) by the required Yumanity stockholder vote, or (iii) the Merger Agreement is terminated by Kineta because Yumanity or Merger Sub breached any of its representations, warranties, covenants or agreements contained in the Merger Agreement or if any representation or warrant of Yumanity or Merger Sub has become inaccurate, in either case such that the conditions to the closing of the Merger would not be satisfied as of the time of such breach or inaccuracy, subject to a 30-day cure period, and (a) an acquisition proposal, as defined above in the section titled “The Merger Agreement—No Solicitation,” with respect to Yumanity was publicly announced, disclosed or otherwise communicated to the Yumanity board of directors prior to such termination (and not withdrawn) and (b) within 12 months after the date of such termination, Yumanity enters into a definitive agreement with respect to any |
• | the Merger Agreement is terminated by Yumanity because of a Kineta triggering event, as defined above in the section titled “The Merger Agreement—Termination;” |
• | (i) the Merger Agreement is terminated by either Kineta or Yumanity if the Merger shall not have been consummated within seven months of the date of the Merger Agreement, subject to the exceptions described above, (ii) the Merger Agreement is terminated by either Kineta or Yumanity after Kineta does not obtain written consents of its stockholders sufficient to approve the Merger and adopt the Merger Agreement and related transactions within 10 business days after the Registration Statement, of which this proxy statement/prospectus/information statement is a part, being declared effective by the SEC, or (iii) the Merger Agreement is terminated by Yumanity because Kineta breached any of its representations, warranties, covenants or agreements contained in the Merger Agreement or if any representation or warrant of Kineta has become inaccurate, in either case such that the conditions to the closing of the Merger would not be satisfied as of the time of such breach or inaccuracy, subject to a 30-day cure period, and (a) an acquisition proposal, as defined above in the section titled “The Merger Agreement—No Solicitation,” with respect to Kineta was publicly announced, disclosed or otherwise communicated to Kineta’s board of directors prior to such termination (and not withdrawn) and (b) within 12 months after the date of such termination, Kineta enters into a definitive agreement with respect to any subsequent acquisition transaction, as defined above in the section titled “The Merger Agreement—No Solicitation,” that results or would result in any third party beneficially owning securities of Kineta representing more than 50% of the voting power of the outstanding securities of Kineta or owning assets representing more than 50% of the fair market value of the assets of Kineta or its respective subsidiaries, taken as a whole or consummates such a subsequent transaction, whether or not in respect of the acquisition proposal. |
○ | the closing has not occurred on or before January 5, 2023 (the “Asset Sale Outside Date”), provided that this right to terminate will not be available to Yumanity or Janssen if such party’s failure to perform and comply with any covenant contained in the Asset Purchase Agreement has been the primary cause of, or primarily resulted in, the failure of the closing to occur on or before such date; |
○ | any temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other law having the effect of restraining, enjoining or otherwise preventing the consummation of the transactions contemplated by the Asset Purchase Agreement is in effect and has become final and non-appealable; |
○ | Yumanity’s stockholders have not approved the Asset Purchase Agreement at the Yumanity special meeting (or any adjournment thereof); or |
○ | the other party has breached or failed to perform any of its representations, warranties, or covenants contained in the Asset Purchase Agreement, and such breach or failure to perform (A) would give rise to the failure of a closing condition and (B) cannot be cured by the Asset Sale Outside Date or, if capable of being cured by the Asset Sale Outside Date, has not been cured within 15 days following written notice of such breach or failure to perform; |
6 | To equal 15% of fully diluted capitalization. |
7 | To equal 15% of fully diluted capitalization. |
Plan Category | | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | | Weighted average exercise price of outstanding options, warrants and rights (b) | | | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
Equity compensation plans approved by security holders(1) | | | 409,902(2) | | | $48.01(3) | | | 179,789(4) |
Equity compensation plans not approved by security holders(5) | | | 1,455,497(6) | | | $12.54 | | | 260,809(7) |
Total | | | 1,865,399 | | | | | 440,598 |
(1) | Includes the 2016 Plan and the Proteostasis Therapeutics, Inc. 2016 Employee Stock Purchase Plan (the “ESPP”). |
(2) | Includes (i) 323,677 shares of common stock issuable upon the exercise of outstanding options and (ii) 86,225 shares of common stock issuable upon vesting of restricted stock units. |
(3) | Since restricted stock units do not have any exercise price, such units are not included in the weighted average exercise price calculation. |
(4) | As of December 31, 2021, a total of 379,720 shares of Yumanity’s common stock have been reserved for issuance pursuant to the 2016 Plan, which number excludes the 319,341 shares that were added to the 2016 Plan as a result of the automatic annual increase of 3% on January 1, 2022. As of December 31, 2021, a total of 41,626 shares of Yumanity’s common stock have been reserved for issuance pursuant to the ESPP, which number excludes the 6,938 shares that were added to the 2016 Plan as a result of the automatic annual increase of 1% on January 1, 2022. |
(5) | Includes the Yumanity Therapeutics, Inc. Amended and Restated 2018 Stock Option and Grant Plan (the “2018 Plan”) and the Yumanity Therapeutics, Inc. 2021 Inducement Plan (the “Inducement Plan”). A description of the 2018 Plan and the Inducement Plan is contained in Note 12 of the notes to Yumanity’s consolidated financial statements contained in Yumanity’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on March 24, 2022. |
(6) | Consists of (i) 104,000 shares of common stock underlying non-qualified stock options that were granted prior to the adoption of the Inducement Plan as a one-time award to a new employee in accordance Nasdaq Listing Rule 5635(c)(4), (ii) 1,177,097 shares of common stock issuable upon the exercise of outstanding options under the 2018 Plan and (iii) 174,400 shares of common stock issuable upon the exercise of outstanding options under the Inducement Plan. |
(7) | Consists of (i) 33,209 shares of common stock issuable under the 2018 Plan and (ii) 227,600 issuable under the Inducement Plan. |
• | Pursue another strategic transaction similar to the Merger. Yumanity may resume its process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such strategic transaction with such candidate. To pursue another strategic transaction, Yumanity would require a significant amount of time and financial resources, and Yumanity would be subject to all the risks and uncertainties involved in securing such transaction. There is no assurance that Yumanity could raise sufficient capital to support these efforts and that the process of evaluating other candidate companies would be successful. |
• | Continue to operate its business. If the Asset Sale also does not close, Yumanity could elect to continue to operate its business and pursue licensing or partnering transactions or utilize its intellectual property to pursue the treatment of neurodegenerative diseases. To continue to operate its business, Yumanity would require a significant amount of time and financial resources, and Yumanity would be subject to all the risks and uncertainties involved in the development of product candidates. There is no assurance that Yumanity could raise sufficient capital to support these efforts, that its development efforts would be successful or that it could successfully obtain the regulatory approvals required to market any product candidate it pursued. |
• | Dissolve and liquidate its assets. If Yumanity is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, Yumanity may dissolve and liquidate its assets. In that event, Yumanity would be required to pay all of its debts and contractual obligations and to set aside certain reserves for potential future claims. If Yumanity dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to Yumanity’s stockholders after paying Yumanity’s debts and other obligations and setting aside funds for its reserves. |
| |
• | Parkinson’s disease: Currently available therapies for Parkinson’s disease include Levodopa, D2/D3-preferring agonists, monoamine oxidase B inhibitors as monotherapy or in combination, anticholinergics as well as deep brain stimulation devices by Medtronic Inc. and St. Jude Medical Inc., among others. Yumanity is also aware of several large and specialty pharmaceutical and biotechnology companies developing potentially disease modifying therapeutics for Parkinson’s disease, including Denali, Prothena, Roche (in partnership with Prothena), Novartis, AbbVie (in partnership with BioArctic AB), Voyager Therapeutics, Prevail Therapeutics, Sage Therapeutics, Neurocrine Biosciences, Eli Lilly, Biogen (in partnership with Ionis and Neurimmune), AstraZeneca, Takeda, IRLAB Therapeutics, Avanir Pharmaceuticals and Lundbeck, that are in various stages of clinical development. |
• | Dementia with Lewy bodies: Currently available therapies to alleviate symptoms in dementia with Lewy bodies include cholinesterase inhibitors, carbidopa/levodopa, memantine, “atypical” antipsychotics, melatonin and clonazepam. Yumanity is also aware of several large and specialty pharmaceutical and biotechnology companies and academic institutes developing potentially disease modifying therapeutics for dementia with Lewy bodies, including Lawson Health Research Institute, Sun Pharma Advanced Research Company, Georgetown University, Pfizer, Eisai, Allergan and Novartis, that are in various stages of clinical development. |
• | ALS: Currently available therapies for ALS include riluzole (Rilutek®) and edaravone (Radicava®). Yumanity is also aware of several large and specialty pharmaceutical and biotechnology companies and academic institutions developing potentially disease modifying therapeutics for ALS, including Denali, Avanir Pharmaceuticals, Amylyx Pharmaceuticals, Biogen (in partnership with Ionis), Neuropore Therapies, Cytokinetics and Mallinckrodt, that are in various stages of clinical development. |
• | FTLD: There are no currently available therapies indicated for FTLD, however some patients are prescribed riluzole (Rilutek®) and other medications to manage symptoms such as antidepressants, |
• | Yumanity’s Lead Program – YTX-7739: one granted U.S. patent expected to expire in 2038; two pending U.S. non-provisional patent applications, and 28 pending patent applications outside the U.S., which, if pursued and granted, would be expected to expire in 2038-2039, without taking a potential patent term |
• | Yumanity’s Potential Programs – YTX-9184: one granted U.S. patent expected to expire in 2038; four pending U.S. non-provisional patent applications, and 31 pending patent applications outside the U.S., which, if pursued and granted in the U.S., would be expected to expire in 2037-2040, without taking a potential patent term adjustment or extension into account, with composition of matter claims directed to one of its proprietary compounds and method claims directed to the treatment of neurological disorders, for example SCD-associated disorders, or inhibiting toxicity in a cell relating to a protein; five pending international Patent Cooperation Treaty (“PCT”) applications, which, if pursued and granted in the U.S., would be expected to expire in 2041, without taking a potential patent term adjustment or extension into account, with composition of matter and claims directed to the treatment of neurological disorders using inhibitors of an undisclosed target; five pending U.S. provisional patent applications, which, if pursued and granted in the U.S., would be expected to expire in 2042, without taking a potential patent term adjustment or extension into account, with composition of matter and claims directed to the treatment of neurological disorders using inhibitors of an undisclosed target; four pending international PCT applications, which, if pursued and granted in the U.S., would be expected to expire in 2041, without taking a potential patent term adjustment or extension into account, with composition of matter claims directed to compounds and methods claims directed to the treatment of neurological disorders using inhibitors of an undisclosed target; three pending U.S. provisional patent applications, which, if pursued and granted in the U.S., would be expected to expire in 2042, without taking a potential patent term adjustment or extension into account, with composition of matter claims directed to compounds and methods claims directed to the treatment of neurological disorders using inhibitors of an undisclosed target. |
• | Advance the Clinical Development of Kineta’s Lead Product Candidates. Kineta’s most advanced drug candidate, KVA12.1, is an IND-ready, |
• | Leverage the PiiONEER Platform to Expand the Pipeline. Kineta’s proprietary platform enables a scalable model to opportunistically expand the pipeline with antibody drug programs that address the mechanisms of cancer immune resistance and complement existing pipeline assets. Kineta initiated an anti-CD24 antagonist mAb immunotherapy discovery program to address the lack of tumor immunogenicity in the tumor microenvironment in the second quarter of 2022. |
• | Optimize Strategic Partnerships. Kineta has an established strategic collaboration with Genentech, Inc. (“Genentech”), a member of the Roche Group, in a $359 million transaction. Kineta is eligible for additional collaboration milestone payments over the next 18 months for such program. Genentech has the rights to take over this program and continue clinical development and commercialization of these assets. Advancing this program enables Kineta to focus on its immuno-oncology portfolio and can potentially drive near-term revenue into the company. |
• | PiiONEER Target Biology: leverages Kineta’s expertise in innate immunity for the selection and validation of novel drug targets that may address the main mechanisms of cancer resistance to existing therapies. |
• | PiiONEER Single B Cell Technology: utilizes single B cell antibody discovery technology that results in large and diverse libraries of fully human monoclonal antibodies against each selected target for downstream screening. |
• | PiiONEER Innate Immune Screening: applies Kineta’s matrix of proprietary innate immune cellular assays for characterization, screening and ranking of antibody libraries for the selection of the top immune-modulating lead candidates. |
• | PiiONEER Immuno-profiling: utilizes flow cytometry-based technologies to characterize innate immune target expression on and therapeutic candidate binding to immune cell populations in blood and tumor samples from human and preclinical species. |
• | PiiONEER Protein Engineering: combines precision protein engineering with antibody characterization software and antibody production to modulate therapeutic antibody properties such as antibody-dependent cellular cytotoxicity (“ADCC”), complement-dependent cytotoxicity (“CDC”) and pharmacokinetic properties for meeting exact target product profile characteristics. |
• | PiiONEER Pharmacology: utilizes a unique combination of novel ex vivo assays and specialized in vivo preclinical models to characterize a therapeutic antibody’s anti-cancer efficacy, pharmacokinetics, receptor occupancy and biomarkers. This platform is designed to provide proof of concept preclinical data for lead selection as well as data to inform clinical trial design, patient selection and clinical dose selection. |
• | Binding at physiologic and acidic Ph |
| | Chronic Pain Patents (KCP506) | | | Lassa patents (LHF535) | | | IO Patents | | | VISTA patents (KVA12.1) | |||||||
Patent Family | | | K3-001 | | | K3-UURF 002/3 | | | K3-002/4 | | | K4-007 | | | KINC-001 | | | KVA-001 |
Composition of matter | | | Y | | | Y | | | Y | | | Y | | | | | Y | |
Methods of Manufacturing | | | | | | | Y | | | | | | | Y | ||||
Sequences/Structure | | | Y | | | Y | | | Y | | | Y | | | Y | | | Y |
Indications | | | Y | | | Y | | | Y | | | Y | | | Y | | | Y |
Specification on use (mono or combo) | | | | | | | | | Y | | | Y | | | Y | |||
Binding characteristics | | | | | Y | | | | | | | Y | | | Y | |||
Immune cell regulation | | | | | Y | | | Y | | | | | Y | | | Y | ||
Physiologic properties | | | | | Y | | | Y | | | | | Y | | | Y | ||
Discovery Candidates | | | | | Y | | | | | | | Y | | | To be added on a rolling basis |
• | Phase 1: The product candidate is initially introduced into healthy human volunteers and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion and, if possible, to gain an early indication of its effectiveness. In the case of some products for severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients. Sponsors sometimes designate their Phase 1 clinical trials as Phase 1a or Phase 1b. Phase 1b clinical trials are typically aimed at confirming dosing, pharmacokinetics and safety in larger number of patients. Some Phase 1b studies evaluate biomarkers or surrogate markers that may be associated with efficacy in patients with specific types of diseases. |
• | Phase 2: This phase involves clinical trials in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and appropriate dosage. |
• | Phase 3: Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population, generally at geographically dispersed clinical study sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling. |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $1,657 | | | $2,114 | | | $(457) |
Operating expenses: | | | | | | | |||
Research and development | | | 1,141 | | | 7,327 | | | (6,186) |
General and administrative | | | 5,557 | | | 4,712 | | | 845 |
Impairment loss | | | — | | | — | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | (5,341) |
Loss from operations | | | (5,041) | | | (9,925) | | | 4,884 |
Other income (expense): | | | | | | | |||
Interest expense | | | (7) | | | (463) | | | 456 |
Interest income and other income (expense), net | | | 203 | | | (66) | | | 269 |
Total other income (expense), net | | | 196 | | | (529) | | | 725 |
Net loss | | | $(4,845) | | | $(10,454) | | | $5,609 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $8,230 | | | $5,449 | | | 2,781 |
YTX-9184 | | | 1,873 | | | 1,826 | | | 47 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 3,045 | | | 2,478 | | | 567 |
Personnel related (including stock/equity-based compensation) | | | 7,825 | | | 7,293 | | | 532 |
Facility related and other | | | 5,437 | | | 5,264 | | | 173 |
Total research and development expenses | | | $26,410 | | | $22,310 | | | $4,100 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $8,765 | | | $5,837 | | | $2,928 |
Professional and consultant fees | | | 6,307 | | | 5,090 | | | 1,217 |
Facility related and other | | | 5,307 | | | 954 | | | 4,353 |
Total general and administrative expenses | | | $20,379 | | | $11,881 | | | $8,498 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(13,118) | | | $(31,903) |
Cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents, and restricted cash | | | $(23,306) | | | $(34,628) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(48,915) | | | $(17,938) |
Cash provided by investing activities | | | 3,093 | | | 31,041 |
Cash (used in) provided by financing activities | | | (1,033) | | | 55,536 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | | | $(46,855) | | | $68,639 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $1,657 | | | $2,114 | | | $(457) |
Operating expenses: | | | | | | | |||
Research and development | | | 1,141 | | | 7,327 | | | (6,186) |
General and administrative | | | 5,557 | | | 4,712 | | | 845 |
Impairment loss | | | — | | | — | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | (5,341) |
Loss from operations | | | (5,041) | | | (9,925) | | | 4,884 |
Other income (expense): | | | | | | | |||
Interest expense | | | (7) | | | (463) | | | 456 |
Interest income and other income (expense), net | | | 203 | | | (66) | | | 269 |
Total other income (expense), net | | | 196 | | | (529) | | | 725 |
Net loss | | | $(4,845) | | | $(10,454) | | | $5,609 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $8,230 | | | $5,449 | | | 2,781 |
YTX-9184 | | | 1,873 | | | 1,826 | | | 47 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 3,045 | | | 2,478 | | | 567 |
Personnel related (including stock/equity-based compensation) | | | 7,825 | | | 7,293 | | | 532 |
Facility related and other | | | 5,437 | | | 5,264 | | | 173 |
Total research and development expenses | | | $26,410 | | | $22,310 | | | $4,100 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $8,765 | | | $5,837 | | | $2,928 |
Professional and consultant fees | | | 6,307 | | | 5,090 | | | 1,217 |
Facility related and other | | | 5,307 | | | 954 | | | 4,353 |
Total general and administrative expenses | | | $20,379 | | | $11,881 | | | $8,498 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(13,118) | | | $(31,903) |
Cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents, and restricted cash | | | $(23,306) | | | $(34,628) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(48,915) | | | $(17,938) |
Cash provided by investing activities | | | 3,093 | | | 31,041 |
Cash (used in) provided by financing activities | | | (1,033) | | | 55,536 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | | | $(46,855) | | | $68,639 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $1,657 | | | $2,114 | | | $(457) |
Operating expenses: | | | | | | | |||
Research and development | | | 1,141 | | | 7,327 | | | (6,186) |
General and administrative | | | 5,557 | | | 4,712 | | | 845 |
Impairment loss | | | — | | | — | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | (5,341) |
Loss from operations | | | (5,041) | | | (9,925) | | | 4,884 |
Other income (expense): | | | | | | | |||
Interest expense | | | (7) | | | (463) | | | 456 |
Interest income and other income (expense), net | | | 203 | | | (66) | | | 269 |
Total other income (expense), net | | | 196 | | | (529) | | | 725 |
Net loss | | | $(4,845) | | | $(10,454) | | | $5,609 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $8,230 | | | $5,449 | | | 2,781 |
YTX-9184 | | | 1,873 | | | 1,826 | | | 47 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 3,045 | | | 2,478 | | | 567 |
Personnel related (including stock/equity-based compensation) | | | 7,825 | | | 7,293 | | | 532 |
Facility related and other | | | 5,437 | | | 5,264 | | | 173 |
Total research and development expenses | | | $26,410 | | | $22,310 | | | $4,100 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $8,765 | | | $5,837 | | | $2,928 |
Professional and consultant fees | | | 6,307 | | | 5,090 | | | 1,217 |
Facility related and other | | | 5,307 | | | 954 | | | 4,353 |
Total general and administrative expenses | | | $20,379 | | | $11,881 | | | $8,498 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(13,118) | | | $(31,903) |
Cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents, and restricted cash | | | $(23,306) | | | $(34,628) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(48,915) | | | $(17,938) |
Cash provided by investing activities | | | 3,093 | | | 31,041 |
Cash (used in) provided by financing activities | | | (1,033) | | | 55,536 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | | | $(46,855) | | | $68,639 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $1,657 | | | $2,114 | | | $(457) |
Operating expenses: | | | | | | | |||
Research and development | | | 1,141 | | | 7,327 | | | (6,186) |
General and administrative | | | 5,557 | | | 4,712 | | | 845 |
Impairment loss | | | — | | | — | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | (5,341) |
Loss from operations | | | (5,041) | | | (9,925) | | | 4,884 |
Other income (expense): | | | | | | | |||
Interest expense | | | (7) | | | (463) | | | 456 |
Interest income and other income (expense), net | | | 203 | | | (66) | | | 269 |
Total other income (expense), net | | | 196 | | | (529) | | | 725 |
Net loss | | | $(4,845) | | | $(10,454) | | | $5,609 |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $8,230 | | | $5,449 | | | 2,781 |
YTX-9184 | | | 1,873 | | | 1,826 | | | 47 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 3,045 | | | 2,478 | | | 567 |
Personnel related (including stock/equity-based compensation) | | | 7,825 | | | 7,293 | | | 532 |
Facility related and other | | | 5,437 | | | 5,264 | | | 173 |
Total research and development expenses | | | $26,410 | | | $22,310 | | | $4,100 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $8,765 | | | $5,837 | | | $2,928 |
Professional and consultant fees | | | 6,307 | | | 5,090 | | | 1,217 |
Facility related and other | | | 5,307 | | | 954 | | | 4,353 |
Total general and administrative expenses | | | $20,379 | | | $11,881 | | | $8,498 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(13,118) | | | $(31,903) |
Cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents, and restricted cash | | | $(23,306) | | | $(34,628) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(48,915) | | | $(17,938) |
Cash provided by investing activities | | | 3,093 | | | 31,041 |
Cash (used in) provided by financing activities | | | (1,033) | | | 55,536 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | | | $(46,855) | | | $68,639 |
| | Six Months Ended June 30, | | | Change | ||||
| | 2022 | | | 2021 | | |||
| | | | (in thousands) | | | |||
Revenues: | | | | | | | |||
Licensing revenues | | | $967 | | | $4,291 | | | $(3,324) |
Grant revenues | | | 299 | | | 639 | | | (340) |
Total revenues | | | 1,266 | | | 4,930 | | | (3,664) |
Operating expenses: | | | | | | | |||
Research and development | | | $7,902 | | | $7,972 | | | $(70) |
General and administrative | | | 3,434 | | | 2,412 | | | 1,022 |
Total operating expenses | | | 11,336 | | | 10,384 | | | 952 |
Loss from operations | | | (10,070) | | | (5,454) | | | (4,616) |
Other (expense) income: | | | | | | | |||
Interest expense | | | (1,140) | | | (676) | | | (464) |
Change in fair value of measurement of notes payable | | | (124) | | | (553) | | | 429 |
Gain on extinguishments of debt | | | 495 | | | 892 | | | (397) |
Other (expense) income, net | | | (14) | | | (16) | | | 2 |
Total other (expense) income, net | | | (783) | | | (353) | | | (430) |
Net loss | | | $(10,853) | | | $(5,807) | | | $(5,046) |
Net income (loss) attributable to noncontrolling interest | | | 1 | | | (14) | | | 15 |
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) | | | $(5,061) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $1,657 | | | $2,114 | | | $(457) |
Operating expenses: | | | | | | | |||
Research and development | | | 1,141 | | | 7,327 | | | (6,186) |
General and administrative | | | 5,557 | | | 4,712 | | | 845 |
Impairment loss | | | — | | | — | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | (5,341) |
Loss from operations | | | (5,041) | | | (9,925) | | | 4,884 |
Other income (expense): | | | | | | | |||
Interest expense | | | (7) | | | (463) | | | 456 |
Interest income and other income (expense), net | | | 203 | | | (66) | | | 269 |
Total other income (expense), net | | | 196 | | | (529) | | | 725 |
Net loss | | | $(4,845) | | | $(10,454) | | | $5,609 |
| | Six Months Ended June 30, | | | Change | ||||
| | 2022 | | | 2021 | | |||
| | (in thousands) | |||||||
Direct external program expenses: | | | | | | | |||
KVA.12.1 program | | | $4,376 | | | $1,266 | | | $3,110 |
CD27 program | | | 362 | | | 4 | | | 358 |
KCP-506 program | | | 311 | | | 3,276 | | | (2,965) |
Other programs | | | 178 | | | 217 | | | (39) |
Internal and unallocated expenses: | | | | | | | |||
Personnel-related costs | | | 2,055 | | | 2,571 | | | (516) |
Facilities and related costs | | | 428 | | | 483 | | | (55) |
Other costs | | | 192 | | | 155 | | | 37 |
Total research and development expenses | | | $7,902 | | | $7,972 | | | $(70) |
| | Year Ended December 31, | | | Change | ||||
| | 2021 | | | 2020 | | |||
| | (in thousands) | |||||||
Revenues: | | | | | | | |||
Licensing revenues | | | $7,883 | | | $8,187 | | | $(304) |
Grant revenues | | | 1,208 | | | 2,301 | | | (1,093) |
Total revenues | | | 9,091 | | | 10,488 | | | (1,397) |
Operating expenses: | | | | | | | |||
Research and development | | | $15,561 | | | $9,215 | | | $6,346 |
General and administrative | | | 4,623 | | | 4,388 | | | 235 |
Total operating expenses | | | 20,184 | | | 13,603 | | | 6,581 |
Loss from operations | | | (11,093) | | | (3,115) | | | (7,978) |
Other (expense) income: | | | | | | | |||
Interest expense | | | (1,293) | | | (4,960) | | | 3,667 |
Change in fair value of measurement of notes payable | | | (1,142) | | | 748 | | | (1,890) |
Gain on extinguishments of debt | | | 1,719 | | | 98 | | | 1,621 |
Other (expense) income, net | | | (8) | | | 117 | | | (125) |
Total other (expense) income, net | | | (724) | | | (3,997) | | | 3,273 |
Net loss | | | $(11,817) | | | $(7,112) | | | $(4,705) |
Net income attributable to noncontrolling interest | | | — | | | 940 | | | (940) |
Net loss attributable to Kineta, Inc. | | | $(11,817) | | | $(8,052) | | | $(3,765) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $231 | | | $2,397 | | | (2,166) |
YTX-9184 | | | 38 | | | 642 | | | (604) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 19 | | | 731 | | | (712) |
Personnel related (including equity-based compensation) | | | 387 | | | 2,126 | | | (1,739) |
Facility related and other | | | 466 | | | 1,431 | | | (965) |
Total research and development expenses | | | $1,141 | | | $7,327 | | | $(6,186) |
| | Three Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $1,962 | | | $2,138 | | | (176) |
Professional and consultant fees | | | 2,584 | | | 1,403 | | | 1,181 |
Facility related and other | | | 1,011 | | | 1,171 | | | (160) |
Total general and administrative expenses | | | $5,557 | | | $4,712 | | | $845 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $2,679 | | | $5,646 | | | $(2,967) |
Operating expenses: | | | | | | | |||
Research and development | | | 6,037 | | | 14,106 | | | (8,069) |
General and administrative | | | 10,382 | | | 10,764 | | | (382) |
Impairment loss | | | 3,901 | | | — | | | 3,901 |
Total operating expenses | | | 20,320 | | | 24,870 | | | (4,550) |
Loss from operations | | | (17,641) | | | (19,224) | | | 1,583 |
Other income (expense): | | | | | | | |||
Interest expense | | | (217) | | | (951) | | | 734 |
Interest income and other income (expense), net | | | (168) | | | (95) | | | (73) |
Loss on debt extinguishment | | | (200) | | | 1,134 | | | (1,334) |
Total other income (expense), net | | | (585) | | | 88 | | | (673) |
Net loss | | | $(18,226) | | | $(19,136) | | | $910 |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $1,965 | | | $4,118 | | | $(2,153) |
YTX-9184 | | | 113 | | | 1,145 | | | (1,032) |
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 341 | | | 1,801 | | | (1,460) |
Personnel related (including equity-based compensation) | | | 2,049 | | | 4,154 | | | (2,105) |
Facility related and other | | | 1,569 | | | 2,888 | | | (1,319) |
Total research and development expenses | | | $6,037 | | | $14,106 | | | $(8,069) |
| | Six Months Ended June 30, | | | |||||
| | 2022 | | | 2021 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $4,661 | | | $4,407 | | | 254 |
Professional and consultant fees | | | 3,399 | | | 3,488 | | | (89) |
Facility related and other | | | 2,322 | | | 2,869 | | | (547) |
Total general and administrative expenses | | | $10,382 | | | $10,764 | | | $(382) |
| | Year Ended December 31, | | | Change | ||||
| | 2021 | | | 2020 | | |||
| | (in thousands) | |||||||
Direct external program expenses: | | | | | | | |||
KVA12.1 program | | | $3,288 | | | $736 | | | $2,552 |
CD27 program | | | 208 | | | — | | | 208 |
KCP-506 program | | | 5,817 | | | 2,990 | | | 2,827 |
Other programs | | | 433 | | | 897 | | | (464) |
Internal and unallocated expenses: | | | | | | | |||
Personnel-related costs | | | 4,543 | | | 3,478 | | | 1,065 |
Facilities and related costs | | | 972 | | | 887 | | | 85 |
Other costs | | | 300 | | | 227 | | | 73 |
Total research and development expenses | | | $15,561 | | | 9,215 | | | $6,346 |
| | Years Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Collaboration revenue | | | $8,044 | | | $6,896 | | | $1,148 |
Operating expenses: | | | | | | | |||
Research and development | | | 26,410 | | | 22,310 | | | 4,100 |
General and administrative | | | 20,379 | | | 11,881 | | | 8,498 |
In-process research and development assets acquired | | | — | | | 28,336 | | | (28,336) |
Total operating expenses | | | 46,789 | | | 62,527 | | | (15,738) |
Loss from operations | | | (38,745) | | | (55,631) | | | 16,886 |
Other income (expense): | | | | | | | |||
Change in fair value of preferred unit warrant liability | | | — | | | 72 | | | (72) |
Interest expense | | | (1,817) | | | (1,900) | | | 83 |
Interest income and other income (expense), net | | | (75) | | | (28) | | | (47) |
Gain on debt extinguishment | | | 1,134 | | | — | | | 1,134 |
Total other income (expense), net | | | (758) | | | (1,856) | | | 1,098 |
Net loss | | | $(39,503) | | | $(57,487) | | | $17,984 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Direct research and development expenses by program: | | | | | | | |||
YTX-7739 | | | $8,230 | | | $5,449 | | | 2,781 |
YTX-9184 | | | 1,873 | | | 1,826 | | | 47 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Platform, research and discovery, and unallocated expenses: | | | | | | | |||
Platform and other early stage research external costs | | | 3,045 | | | 2,478 | | | 567 |
Personnel related (including stock/equity-based compensation) | | | 7,825 | | | 7,293 | | | 532 |
Facility related and other | | | 5,437 | | | 5,264 | | | 173 |
Total research and development expenses | | | $26,410 | | | $22,310 | | | $4,100 |
| | Year Ended December 31, | | | |||||
| | 2021 | | | 2020 | | | Change | |
| | (in thousands) | |||||||
Personnel related (including equity-based compensation) | | | $8,765 | | | $5,837 | | | $2,928 |
Professional and consultant fees | | | 6,307 | | | 5,090 | | | 1,217 |
Facility related and other | | | 5,307 | | | 954 | | | 4,353 |
Total general and administrative expenses | | | $20,379 | | | $11,881 | | | $8,498 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(13,118) | | | $(31,903) |
Cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents, and restricted cash | | | $(23,306) | | | $(34,628) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Cash used in operating activities | | | $(48,915) | | | $(17,938) |
Cash provided by investing activities | | | 3,093 | | | 31,041 |
Cash (used in) provided by financing activities | | | (1,033) | | | 55,536 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | | | $(46,855) | | | $68,639 |
| | Six Months Ended June 30, | | | Change | ||||
| | 2022 | | | 2021 | | |||
| | | | (in thousands) | | | |||
Revenues: | | | | | | | |||
Licensing revenues | | | $967 | | | $4,291 | | | $(3,324) |
Grant revenues | | | 299 | | | 639 | | | (340) |
Total revenues | | | 1,266 | | | 4,930 | | | (3,664) |
Operating expenses: | | | | | | | |||
Research and development | | | $7,902 | | | $7,972 | | | $(70) |
General and administrative | | | 3,434 | | | 2,412 | | | 1,022 |
Total operating expenses | | | 11,336 | | | 10,384 | | | 952 |
Loss from operations | | | (10,070) | | | (5,454) | | | (4,616) |
Other (expense) income: | | | | | | | |||
Interest expense | | | (1,140) | | | (676) | | | (464) |
Change in fair value of measurement of notes payable | | | (124) | | | (553) | | | 429 |
Gain on extinguishments of debt | | | 495 | | | 892 | | | (397) |
Other (expense) income, net | | | (14) | | | (16) | | | 2 |
Total other (expense) income, net | | | (783) | | | (353) | | | (430) |
Net loss | | | $(10,853) | | | $(5,807) | | | $(5,046) |
Net income (loss) attributable to noncontrolling interest | | | 1 | | | (14) | | | 15 |
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) | | | $(5,061) |
| | Six Months Ended June 30, | | | Change | ||||
| | 2022 | | | 2021 | | |||
| | (in thousands) | |||||||
Direct external program expenses: | | | | | | | |||
KVA.12.1 program | | | $4,376 | | | $1,266 | | | $3,110 |
CD27 program | | | 362 | | | 4 | | | 358 |
KCP-506 program | | | 311 | | | 3,276 | | | (2,965) |
Other programs | | | 178 | | | 217 | | | (39) |
Internal and unallocated expenses: | | | | | | | |||
Personnel-related costs | | | 2,055 | | | 2,571 | | | (516) |
Facilities and related costs | | | 428 | | | 483 | | | (55) |
Other costs | | | 192 | | | 155 | | | 37 |
Total research and development expenses | | | $7,902 | | | $7,972 | | | $(70) |
| | Year Ended December 31, | | | Change | ||||
| | 2021 | | | 2020 | | |||
| | (in thousands) | |||||||
Revenues: | | | | | | | |||
Licensing revenues | | | $7,883 | | | $8,187 | | | $(304) |
Grant revenues | | | 1,208 | | | 2,301 | | | (1,093) |
Total revenues | | | 9,091 | | | 10,488 | | | (1,397) |
Operating expenses: | | | | | | | |||
Research and development | | | $15,561 | | | $9,215 | | | $6,346 |
General and administrative | | | 4,623 | | | 4,388 | | | 235 |
Total operating expenses | | | 20,184 | | | 13,603 | | | 6,581 |
Loss from operations | | | (11,093) | | | (3,115) | | | (7,978) |
Other (expense) income: | | | | | | | |||
Interest expense | | | (1,293) | | | (4,960) | | | 3,667 |
Change in fair value of measurement of notes payable | | | (1,142) | | | 748 | | | (1,890) |
Gain on extinguishments of debt | | | 1,719 | | | 98 | | | 1,621 |
Other (expense) income, net | | | (8) | | | 117 | | | (125) |
Total other (expense) income, net | | | (724) | | | (3,997) | | | 3,273 |
Net loss | | | $(11,817) | | | $(7,112) | | | $(4,705) |
Net income attributable to noncontrolling interest | | | — | | | 940 | | | (940) |
Net loss attributable to Kineta, Inc. | | | $(11,817) | | | $(8,052) | | | $(3,765) |
| | Year Ended December 31, | | | Change | ||||
| | 2021 | | | 2020 | | |||
| | (in thousands) | |||||||
Direct external program expenses: | | | | | | | |||
KVA12.1 program | | | $3,288 | | | $736 | | | $2,552 |
CD27 program | | | 208 | | | — | | | 208 |
KCP-506 program | | | 5,817 | | | 2,990 | | | 2,827 |
Other programs | | | 433 | | | 897 | | | (464) |
Internal and unallocated expenses: | | | | | | | |||
Personnel-related costs | | | 4,543 | | | 3,478 | | | 1,065 |
Facilities and related costs | | | 972 | | | 887 | | | 85 |
Other costs | | | 300 | | | 227 | | | 73 |
Total research and development expenses | | | $15,561 | | | 9,215 | | | $6,346 |
| | Year Ended December 31, | | | Six Months Ended June 30, | |||||||
| | 2021 | | | 2020 | | | 2022 | | | 2021 | |
| | (in thousands) | | | (in thousands) | |||||||
Net cash (used in) provided by: | | | | | | | | | ||||
Operating activities | | | $(17,853) | | | $2,296 | | | $(8,452) | | | $(8,319) |
Investing activities | | | — | | | (6) | | | (15) | | | — |
Financing activities | | | 17,527 | | | 3,987 | | | 1,791 | | | 12,390 |
Net change in cash and cash equivalents | | | $(326) | | | $6,277 | | | $(6,676) | | | $4,071 |
NAME | | | AGE | | | POSITION(S) |
Executive Officers: | | | | | ||
Shawn Iadonato, Ph.D. | | | 52 | | | Chief Executive Officer and Director |
Craig W. Philips, M.B.A. | | | 62 | | | President |
Keith Baker | | | 55 | | | Chief Financial Officer |
Thierry Guillaudeux, Ph.D. | | | 55 | | | Chief Scientific Officer |
Pauline Kenny, Esq. | | | 49 | | | General Counsel |
Non-Employee Directors: | | | | | ||
Marion R. Foote, M.B.A.(1) | | | 76 | | | Director |
Raymond Bartoszek, M.B.A.(1)(2) | | | 57 | | | Director |
Jiyoung Hwang(2) | | | 45 | | | Director |
Richard Peters, M.D., Ph.D.(3) | | | | | Director | |
David Arkowitz, M.B.A.(1)(3) | | | 60 | | | Director |
(1) | Member of the Audit Committee. |
(2) | Member of the Compensation Committee. |
(3) | Member of the Nominating and Corporate Governance Committee. |
Name and Principal Position | | Year | | Salary ($) | | Bonus ($)(1) | | Stock Awards ($)(2) | | Option Awards ($)(3) | | Non-Equity Incentive Plan Compensation ($)(4) | | All Other Compensation ($)(5) | | Total ($) | | Year | | Salary ($) | | Bonus ($)(1) | | Stock Awards ($)(2) | | Option Awards ($)(3) | | Non-Equity Incentive Plan Compensation ($)(4) | | All Other Compensation ($)(5) | | Total ($) | ||||||||||||||||
Shawn P. Iadonato, Ph.D. Chief Executive Officer | | 2021 | | 234,619 | | 273,750 | | 845,602 | | 202,331 | | 131,250 | | 24,503 | | 1,712,055 | | | 2021 | | 234,619 | | 273,750 | | 845,602 | | 202,331 | | 131,250 | | 24,503 | | 1,712,055 | |||||||||||||||
Shawn P. Iadonato, Ph.D. Chief Executive Officer | | 2020 | | 211,743 | | 87,500 | | — | | 129,580 | | — | | 20,353 | | 449,176 | ||||||||||||||||||||||||||||||||
| | 2021 | | 196,931 | | 188,000 | | 1,517,068 | | 640,077 | | 84,003 | | 41,446 | | 2,667,525 | ||||||||||||||||||||||||||||||||
Craig W. Philips, M.B.A. President | | 2021 | | 196,931 | | 188,000 | | 1,517,068 | | 640,077 | | 84,003 | | 41,446 | | 2,667,525 | | 2020 | | 184,823 | | 57,100 | | — | | 228,990 | | — | | 32,617 | | 503,530 | ||||||||||||||||
Pauline Kenny, Esq. General Counsel | | 2021 | | 217,360 | | 15,750 | | 145,740 | | 53,235 | | 48,906 | | 33,489 | | 514,480 | | | 2021 | | 217,360 | | 15,750 | | 145,740 | | 53,235 | | 48,906 | | 33,489 | | 514,480 | |||||||||||||||
Pauline Kenny, Esq. General Counsel | | 2020 | | 208,706 | | 32,600 | | — | | 69,360 | | — | | 30,896 | | 341,562 |
(1) | Represents the payment of one-time bonuses to each of Kineta’s named executive officers for the achievement of certain financial goals and other financing accomplishments. |
(2) | Amounts represent the aggregate grant-date fair value of performance-based restricted stock units (“PSUs”) granted to Kineta’s named executive officers in 2021, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 11 to Kineta’s financial statements included elsewhere in this proxy statement/prospectus/information statement. These amounts do not correspond to the actual value that may be recognized by the named executive officers upon vesting or settlement of the applicable awards. Each of the PSUs granted in 2021 will vest on the 180-day anniversary of a change in control of Kineta, which the Merger will constitute. |
(3) | Amounts represent the aggregate grant-date fair value of option awards granted to Kineta’s named executive officers in 2021 and 2020, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 11 to Kineta’s financial statements included elsewhere in this proxy statement/prospectus/information statement. These amounts do not correspond to the actual value that may be recognized by the named executive officers upon vesting or exercise of the applicable awards. |
(4) | Represents the annual performance-based cash bonuses earned by the named executive officers in 2021, as discussed further under the heading “Annual Cash Incentive” below. These amounts were paid to the named executive officers in the second quarter of 2022. |
(5) | Amounts represent, with respect to Dr. Iadonato, $13,132 for 2021 and $9,614 for 2020 in 401(k) matching contributions, $7,652 for 2021 and $7,032 for 2020 in employer medical, dental and vision coverage, $1,391 for each of 2021 and 2020 in employer life and disability insurance coverage, and $2,327 for 2021 and $2,316 for 2020 in employer parking benefits; with respect to Mr. Philips, $14,905 for 2021 and $9,633 for 2020 in 401(k) matching contributions, $22,832 for 2021 and $19,287 in 2020 in employer medical, dental and vision coverage, $1,382 for each of 2021 and 2020 in employer life and disability insurance coverage, and $2,327 for 2021 and $2,316 for 2020 in employer parking benefits; and, with respect to Ms. Kenny, $7,821 for 2021 and $7,942 for 2020 in 401(k) matching contributions, $21,990 for 2021 and $19,287 for 2020 in employer medical, dental and vision coverage, $1,351 for each of 2021 and 2020 in employer life and disability insurance coverage, and $2,327 for 2021 and $2,316 for 2020 in employer parking benefits. |
Name | | | Target Bonus | | | Corporate Goal Weighting (%) | | | Individual Goal Weighting (%) |
Shawn Iadonato, Ph.D. | | | 50% | | | 100 | | | — |
Craig W. Philips, M.B.A. | | | 40% | | | 100 | | | — |
Pauline Kenny, Esq. | | | 30% | | | 100 | | | — |
| | | Option Awards(1) | | Stock Awards(1) | | | | Option Awards(1) | | Stock Awards(1) | |||||||||||||||||||||||||||||||||||||
Name | | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Non- Exercisable (#) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price(1) | | Option Expiration Date | | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(2) | | Grant Date | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Non- Exercisable (#) | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price(1) | | Option Expiration Date | | Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) | | Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)(2) | ||||||||||||||||
Shawn Iadonato, Ph.D. | | | 3/31/2014 | | 1,800,000 | | — | | — | | 0.83 | | 12/31/2023 | | — | | — | | | 3/31/2014 | | 1,800,000 | | — | | — | | 0.83 | | 12/31/2023 | | — | | — | ||||||||||||||
| 11/9/2018 | | 632,728 | | — | | — | | 1.60 | | 3/31/2024 | | — | | — | | 11/9/2018 | | 632,728 | | — | | — | | 1.60 | | 3/31/2024 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 227,272 | | — | | — | | 1.76 | | 7/30/2022 | | — | | — | | 11/9/2018 | | 227,272 | | — | | — | | 1.76 | | 11/9/2023 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 50,000 | | — | | — | | 1.60 | | 12/1/2023 | | — | | — | | 11/9/2018 | | 50,000 | | — | | — | | 1.60 | | 12/1/2023 | | — | | — | |||||||||||||||||
| 2/22/2021(3) | | — | | — | | — | | — | | — | | 54,728 | | 103,436 | | 2/22/2021(3) | | — | | — | | — | | — | | — | | 54,728 | | 103,436 | |||||||||||||||||
| 2/22/2021(3) | | — | | — | | — | | — | | — | | 3,182 | | 6,014 | | 2/22/2021(3) | | — | | — | | — | | — | | — | | 3,182 | | 6,014 | |||||||||||||||||
| 5/26/2021(4) | | 126,667 | | 253,333 | | — | | 1.96 | | 6/30/2027 | | — | | — | | 5/26/2021(4) | | 126,667 | | 253,333 | | — | | 1.96 | | 6/30/2027 | | — | | — | |||||||||||||||||
| 5/26/2021(5) | | — | | — | | — | | — | | — | | 380,000 | | 718,200 | | 5/26/2021(5) | | — | | — | | — | | — | | — | | 380,000 | | 718,200 | |||||||||||||||||
Craig W. Philips, M.B.A. | | | 12/1/2013 | | 255,000 | | — | | — | | 0.80 | | 5/25/2031 | | — | | — | | | 12/1/2013 | | 255,000 | | — | | — | | 0.80 | | 5/25/2031 | | — | | — | ||||||||||||||
| 6/30/2017 | | 200,000 | | — | | — | | 1.59 | | 5/25/2031 | | — | | — | | 6/30/2017 | | 200,000 | | — | | — | | 1.59 | | 5/25/2031 | | — | | — | |||||||||||||||||
| 3/19/2018 | | 50,000 | | — | | — | | 1.60 | | 5/25/2026 | | — | | — | | 3/19/2018 | | 50,000 | | — | | — | | 1.60 | | 5/25/2026 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 433,750 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | | 11/9/2018 | | 433,750 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 50,000 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | | 11/9/2018 | | 50,000 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 26,250 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | | 11/9/2018 | | 26,250 | | — | | — | | 1.60 | | 5/25/2031 | | — | | — | |||||||||||||||||
| 6/24/2019(6) | | 125,000 | | 125,000 | | — | | 2.00 | | 5/30/2032 | | — | | — | | 6/24/2019(6) | | 125,000 | | 125,000 | | — | | 2.00 | | 5/30/2032 | | — | | — | |||||||||||||||||
| 2/22/2021(3) | | — | | — | | — | | — | | — | | 29,272 | | 55,324 | | 2/22/2021(3) | | — | | — | | — | | — | | — | | 29,272 | | 55,324 | |||||||||||||||||
| 2/22/2021(3) | | — | | — | | — | | — | | — | | 23,409 | | 44,243 | | 2/22/2021(3) | | — | | — | | — | | — | | — | | 23,409 | | 44,243 | |||||||||||||||||
| 5/26/2021(4) | | 250,000 | | 500,000 | | — | | 1.80 | | 5/30/2032 | | — | | — | | 5/26/2021(4) | | 250,000 | | 500,000 | | — | | 1.80 | | 5/30/2032 | | — | | — | |||||||||||||||||
| 5/26/2021(5) | | — | | — | | — | | — | | — | | 750,000 | | 1,417,500 | | 5/26/2021(5) | | — | | — | | — | | — | | — | | 750,000 | | 1,417,500 | |||||||||||||||||
Pauline Kenny, Esq. | | | 12/28/2012 | | 232,500 | | — | | — | | 0.63 | | 11/9/2028 | | — | | — | | | 12/28/2012 | | 232,500 | | — | | — | | 0.63 | | 7/30/2022 | | — | | — | ||||||||||||||
| 12/31/2013 | | 9,000 | | — | | — | | 0.83 | | 11/9/2028 | | — | | — | | 12/31/2013 | | 9,000 | | — | | — | | 0.83 | | 12/31/2023 | | — | | — | |||||||||||||||||
| 6/30/2017 | | 62,893 | | — | | — | | 1.59 | | 11/9/2028 | | — | | — | | 6/30/2017 | | 62,893 | | — | | — | | 1.59 | | 6/29/2027 | | — | | — | |||||||||||||||||
| 6/30/2017 | | 12,107 | | — | | — | | 1.59 | | 11/9/2028 | | — | | — | | 6/30/2017 | | 12,107 | | — | | — | | 1.59 | | 6/29/2027 | | — | | — | |||||||||||||||||
| 3/19/2018 | | 290,000 | | — | | — | | 1.60 | | 11/9/2028 | | — | | — | | 3/19/2018 | | 290,000 | | — | | — | | 1.60 | | 3/19/2028 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 42,496 | | — | | — | | 1.60 | | 11/9/2028 | | — | | — | | 11/9/2018 | | 42,496 | | — | | — | | 1.60 | | 11/9/2028 | | — | | — | |||||||||||||||||
| 11/9/2018 | | 33,504 | | — | | — | | 1.60 | | 6/24/2029 | | — | | — | | 11/9/2018 | | 33,504 | | — | | — | | 1.60 | | 11/9/2028 | | — | | — | |||||||||||||||||
| 2/22/2021 (3) | | — | | — | | — | | 2.20 | | 6/24/2029 | | 23,291 | | 44,020 | | 2/22/2021 (3) | | — | | — | | — | | 2.20 | | 2/22/2031 | | 23,291 | | 44,020 | |||||||||||||||||
| 5/26/2021 (4) | | 16,667 | | 33,333 | | — | | 1.80 | | 2/22/2031 | | — | | — | | 5/26/2021 (4) | | 16,667 | | 33,333 | | — | | 1.80 | | 5/26/2031 | | — | | — | |||||||||||||||||
| 5/26/2021 (5) | | — | | — | | — | | — | | — | | 50,000 | | 94,500 | | 5/26/2021 (5) | | — | | — | | — | | — | | 5/26/2031 | | 50,000 | | 94,500 |
(1) | Exercise prices reported without adjustment in the Merger. |
(2) | Amounts in this column represent the value of restricted stock units (“RSUs”). The market value of the RSUs is calculated by multiplying the number of shares by $1.89, the fair value per share of Kineta common stock on December 31, 2021, as determined by the Kineta board of directors, without adjustment in the Merger. |
(3) | Represents a grant of RSUs that become fully vested upon the 180 day anniversary after a change in control of the company or an initial public offering, which the Merger constituted. |
(4) | Represents a grant of stock options that were vested as to 1/3 on the grant date, with the remainder subject to vesting in two equal annual installments on each of the first two anniversaries from grant, subject to the holder’s continued service on each vesting date. |
(5) | Represents a grant of RSUs that become fully vested upon the 180 day anniversary after a change in control of the company or an initial public offering, which the Merger constituted, subject to the holder’s continued service on each vesting date. |
(6) | Represents a grant of stock options that will vest over the 4 year period from June 24, 2019, in equal annual installments, subject to the holder’s continued service on each vesting date. |
| | Annual Retainer ($) | |
Board of Directors: | | | |
All non-employee members | | | 35,000 |
Audit Committee: | | | |
Chairperson | | | 15,000 |
Non-Chairperson members | | | 7,500 |
Compensation Committee: | | | |
Chairperson | | | 10,000 |
Non-Chairperson members | | | 5,000 |
Nominating and Corporate Governance Committee: | | | |
Chairperson | | | 7,500 |
Non-Chairperson members | | | 3,500 |
Name | | | Year | | | Fees Earned or Paid in Cash ($)(1) | | | Stock Awards ($)(2) | | | Option Awards ($)(3) | | | Non-Equity Incentive Plan Compensation ($) | | | All Other Compensation ($) | | | Total ($) |
Richard Peters, M.D., Ph.D.(4) | | | 2021 | | | — | | | 1,358,370 | | | 2,239,770 | | | 278,100 | | | 618,000(5) | | | 4,494,240 |
David Arkowitz, M.B.A. | | | 2021 | | | 46,000 | | | — | | | 159,802 | | | — | | | — | | | 205,802 |
(1) | Amounts represent cash compensation for services rendered as a director during 2021. |
(2) | Amounts represent restricted stock units granted during 2021. Amounts represent the aggregate grant-date fair value of restricted stock units awarded during 2021, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 12 to Yumanity’s financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022. These amounts do not correspond to the actual value that may be recognized by the individuals upon vesting or settlement of the applicable awards. |
(3) | Amounts represent stock options granted during 2021. Amounts represent the aggregate grant-date fair value of stock options awarded during 2021, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 12 to Yumanity’s financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on March 24, 2022. These amounts do not correspond to the actual value that may be recognized by the individuals upon vesting or exercise of the applicable awards. |
(4) | For 2021, Dr. Peters served as Yumanity’s President and Chief Executive Officer and did not receive any additional compensation for serving as a member of Yumanity’s board of directors. |
(5) | Amount represents Dr. Peters’ salary earned for services during 2021 as Yumanity’s President and Chief Executive Officer. |
Name | | | Year | | | Stock Awards ($)(1) | | | Option Awards ($)(2) | | | Total ($) |
Marion R. Foote, M.B.A.(3) | | | 2021 | | | 115,499 | | | 75,862 | | | 191,361 |
Raymond Bartoszek, M.B.A.(3) | | | 2021 | | | 115,499 | | | 75,862 | | | 191,361 |
Jiyoung Hwang(4) | | | 2021 | | | — | | | — | | | — |
(1) | Amounts represent restricted stock units granted during 2021. Amounts represent the aggregate grant-date fair value of restricted stock units awarded during 2021, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 11 to Kineta’s financial statements included elsewhere in this proxy statement/prospectus/information statement. These amounts do not correspond to the actual value that may be recognized by the individuals upon vesting or settlement of the applicable awards. |
(2) | Amounts represent stock options granted during 2021. Amounts represent the aggregate grant-date fair value of stock options awarded during 2021, computed in accordance with FASB ASC Topic 718 excluding any estimates of forfeitures related to service-based vesting conditions. For information regarding assumptions underlying the valuation of equity awards, see Note 11 to Kineta’s financial statements included elsewhere in this proxy statement/prospectus/information statement. These amounts do not correspond to the actual value that may be recognized by the individuals upon vesting or exercise of the applicable awards. |
(3) | In 2021, each of Ms. Foote and Mr. Bartoszek was granted 50,000 options to acquire Kineta stock and 59,545 restricted stock units. As of December 31, 2021, each of Ms. Foote and Mr. Bartoszek held 290,000 options to acquire Kineta stock and 59,545 restricted stock units. |
(4) | Ms. Hwang became a director of Kineta in June 2022 and did not receive any compensation from Kineta for service on the board of directors in 2021. As of December 31, 2021, Ms. Hwang held no options or restricted stock units. |
• | A director, executive officer, holder of more than 5% of the outstanding capital stock of Yumanity or Kineta, or any member of such person’s immediate family had or will have a direct or indirect material interest, other than compensation, termination and change in control arrangements that are described under the section titled “Management Following the Merger—Kineta Executive Compensation” of this proxy statement/prospectus/information statement. |
Investor | | | Shares of Common Stock | | | Total Purchase Price |
Entities affiliated with Fidelity(1) | | | 434,780 | | | $9,999,940.00 |
Franklin Berger(2) | | | 65,217 | | | $1,500,000.00 |
(1) | Consists of (i) 19,530 shares held by Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund, (ii) 106,446 units held by Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, (iii) 115,573 shares held by Fidelity Growth Company Commingled Pool, (iv) 19,318 units held by Fidelity Mt. Vernon Street Trust: Fidelity Growth Company K6 Fund, (v) 173,913 shares held by Fidelity Select Portfolios: Biotechnology Portfolio. |
(2) | Franklin Berger is a former member of the board directors of Proteostasis. |
Investor | | | Class C Preferred Units | | | Total Class C Purchase Price |
Alexandria Equities No. 7, LLC(1) | | | 691,990 | | | $2,768,513.60 |
Entities affiliated with Fidelity(2) | | | 1,099,780 | | | $4,399,999.83 |
Entities affiliated with Redmile Group, LLC(3) | | | 499,900 | | | $1,999,999.92 |
Merck Sharp & Dohme Corp. | | | 2,499,500 | | | $9,999,999.60 |
N. Anthony Coles, M.D.(4) | | | 249,950 | | | $999,999.96 |
(1) | Lynne Zydowsky, Ph.D. was a member of Holdings’ board of directors and is the chief science officer of Alexandria Real Estate Equities, Inc., an affiliate of Alexandria Equities No. 7, LLC. |
(2) | Consisted of (i) 117,944 units held by Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund, (ii) 478,304 units held by Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund, (iii) 440,788 units held by Fidelity Growth Company Commingled Pool and (iv) 62,744 units held by Fidelity Mt. Vernon Street Trust : Fidelity Growth Company K6 Fund. |
(3) | Consisted of (i) 124,975 units held by RAF, L.P. and (ii) 374,925 units held by Redmile Biopharma Investments I, L.P. |
(4) | Represented 249,950 units held by the Coles 2016 Irrevocable Trust. N. Anthony Coles, M.D. was a 5% holder of Holdings and a member of Holdings’ board of directors. |
| | | | Transaction Accounting Adjustments | | | | | | | | | Transaction Accounting Adjustments | | | | | Transaction Accounting Adjustments | | | | | ||||||||
| | Yumanity | | | Asset Sale/ Distribution | | | Note 4 | | | Yumanity (As adjusted) | | | Kineta | | | Merger | | | Note 4 | | | Private Placement | | | Note 4 | | | Pro Forma Combined | |
Assets | | | | | | | | | | | | | | | | | | | | | ||||||||||
Current assets: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Cash and cash equivalents | | | $11,846 | | | $26,000 | | | A | | | $15,259 | | | $4,468 | | | $— | | | | | $30,000 | | | K | | | $48,752 | |
| | | | (4,599) | | | B | | | | | | | | | | | (975) | | | L | | | |||||||
| | | | (17,988) | | | C | | | | | | | | | | | | | | | |||||||||
Restricted cash | | | 828 | | | | | | | 828 | | | — | | | | | | | | | | | 828 | ||||||
Prepaid expenses and other current assets | | | 1,854 | | | (15) | | | A | | | 1,839 | | | 1,123 | | | (957) | | | I | | | | | | | 2,005 | ||
Total current assets | | | 14,528 | | | 3,398 | | | | | 17,926 | | | 5,591 | | | | | | | 29,025 | | | | | 51,585 | ||||
Property, plant and equipment, net | | | 60 | | | | | | | 60 | | | 211 | | | | | | | | | | | 271 | ||||||
Operating lease, right of use asset | | | 831 | | | | | | | 831 | | | 1,550 | | | (272) | | | F | | | | | | | 2,109 | ||||
Restricted cash, net of current portion | | | 50 | | | | | | | 50 | | | 75 | | | | | | | | | | | 125 | ||||||
Total assets | | | $15,469 | | | $3,398 | | | | | $18,867 | | | $7,427 | | | $(1,229) | | | | | $29,025 | | | | | $54,090 | |||
Liabilities and stockholders’ equity (deficit) | | | | | | | | | | | | | | | | | | | | | ||||||||||
Current liabilities: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Accounts payable | | | $1,599 | | | $(1,599) | | | B | | | $— | | | $4,123 | | | $— | | | | | $— | | | | | $4,123 | ||
Accrued expenses and other current liabilities | | | 2,422 | | | (2,422) | | | B | | | — | | | 1,983 | | | 2,471 | | | D | | | | | | | 12,417 | ||
| | | | | | | | | | | | 3,440 | | | E | | | | | | | |||||||||
| | | | | | | | | | | | 4,523 | | | I | | | | | | | |||||||||
Notes payable (with related parties $5,916) | | | — | | | | | | | — | | | 6,437 | | | | | | | | | | | 6,437 | ||||||
Operating lease liabilities | | | 559 | | | | | | | 559 | | | 789 | | | | | | | | | | | 1,348 | ||||||
Finance lease liabilities | | | — | | | | | | | — | | | 38 | | | | | | | | | | | 38 | ||||||
Short-term borrowings | | | 578 | | | (578) | | | B | | | — | | | — | | | | | | | | | | | — | ||||
Deferred revenue | | | 2,381 | | | | | | | 2,381 | | | 74 | | | | | | | | | | | 2,455 | ||||||
Total current liabilities | | | 7,539 | | | (4,599) | | | | | 2,940 | | | 13,444 | | | 10,434 | | | | | — | | | | | 26,818 | |||
Notes payable, net of current portion (with related parties $8,521) | | | — | | | | | | | — | | | 12,177 | | | (5,211) | | | J | | | | | | | 6,966 | ||||
Operating lease liabilities, net of current portion | | | — | | | | | | | — | | | 981 | | | | | | | | | | | 981 | ||||||
Finance lease liabilities, net of current portion | | | — | | | | | | | — | | | 104 | | | | | | | | | | | 104 | ||||||
Total liabilities | | | 7,539 | | | (4,599) | | | | | 2,940 | | | 26,706 | | | 5,223 | | | | | — | | | | | 34,869 | |||
Stockholders' equity (deficit): | | | | | | | | | | | | | | | | | | | | | ||||||||||
Preferred stock | | | — | | | | | | | — | | | — | | | | | | | | | | | — | ||||||
Common stock | | | 11 | | | | | | | 11 | | | 7 | | | 52 | | | G | | | 14 | | | K | | | 73 | ||
| | | | | | | | | | | | (11) | | | H | | | | | | | |||||||||
Additional paid-in capital | | | 213,458 | | | (17,988) | | | C | | | 195,470 | | | 79,658 | | | 19,791 | | | G | | | 29,986 | | | K | | | 133,671 |
| | | | | | | | | | | | (195,470) | | | H | | | (975) | | | L | | | |||||||
| | | | | | | | | | | | 5,211 | | | J | | | | | | | |||||||||
Accumulated deficit | | | (205,539) | | | 25,985 | | | A | | | (179,554) | | | (99,136) | | | (2,471) | | | D | | | | | | | (114,715) | ||
| | | | | | | | | | | | (3,440) | | | E | | | | | | | |||||||||
| | | | | | | | | | | | (272) | | | F | | | | | | | |||||||||
| | | | | | | | | | | | (19,843) | | | G | | | | | | | |||||||||
| | | | | | | | | | | | 195,481 | | | H | | | | | | | |||||||||
| | | | | | | | | | | | (5,480) | | | I | | | | | | | |||||||||
Noncontrolling interests | | | — | | | | | | | — | | | 192 | | | | | | | | | | | 192 | ||||||
Total stockholders' equity | | | 7,930 | | | 7,997 | | | | | 15,927 | | | (19,279) | | | (6,452) | | | | | 29,025 | | | | | 19,221 | |||
Total liabilities and stockholders' equity (deficit) | | | $15,469 | | | $3,398 | | | | | $18,867 | | | $7,427 | | | $(1,229) | | | | | $29,025 | | | | | $54,090 |
| | For Six Months Ended June 30, 2022 | | | For Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||
| | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | |||||||||||||||||||||
| | Yumanity | | Asset Sale/ Distribution | | Note 4 | | Yumanity (As adjusted) | | Kineta | | Merger | | Note 4 | | Pro Forma Combined | | | Yumanity | | Asset Sale/ Distribution | | Note 4 | | Yumanity (As adjusted) | | Kineta | | Merger | | Note 4 | | Pro Forma Combined | |||||||||||||||
Revenue: | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Licensing revenue | | $— | | $— | | | $— | | $967 | | $— | | | $967 | | $— | | $— | | | $— | | $967 | | $— | | | $967 | ||||||||||||||||||||
Grant revenue | | — | | | | — | | 299 | | | | 299 | | — | | | | — | | 299 | | | | 299 | ||||||||||||||||||||||||
Collaboration revenue | | 2,679 | | | | 2,679 | | — | | | | 2,679 | | 2,679 | | | | 2,679 | | — | | | | 2,679 | ||||||||||||||||||||||||
Total revenue | | 2,679 | | — | | | 2,679 | | 1,266 | | — | | | 3,945 | | 2,679 | | — | | | 2,679 | | 1,266 | | — | | | 3,945 | ||||||||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Research and development | | 6,037 | | (2,078) | | AA | | 3,959 | | 7,902 | | | | 11,861 | | 6,037 | | (2,078) | | AA | | 3,959 | | 7,902 | | | | 11,861 | ||||||||||||||||||||
General and administrative | | 10,382 | | | | 10,382 | | 3,434 | | | | 13,816 | | 10,382 | | | | 10,382 | | 3,434 | | | | 13,816 | ||||||||||||||||||||||||
Impairment loss | | 3,901 | | | | 3,901 | | — | | | | 3,901 | | 3,901 | | | | 3,901 | | — | | | | 3,901 | ||||||||||||||||||||||||
Total operating expenses | | 20,320 | | (2,078) | | | 18,242 | | 11,336 | | — | | | 29,578 | | 20,320 | | (2,078) | | | 18,242 | | 11,336 | | — | | | 29,578 | ||||||||||||||||||||
Loss from operations | | (17,641) | | 2,078 | | | (15,563) | | (10,070) | | — | | | (25,633) | | (17,641) | | 2,078 | | | (15,563) | | (10,070) | | — | | | (25,633) | ||||||||||||||||||||
Other income (expense): | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Interest expense | | (217) | | | | (217) | | (1,140) | | 76 | | DD | | (1,281) | | (217) | | | | (217) | | (1,140) | | 76 | | DD | | (1,281) | ||||||||||||||||||||
Change in fair value measurement of notes payable | | — | | | | — | | (124) | | 411 | | DD | | 287 | | — | | | | — | | (124) | | 411 | | DD | | 287 | ||||||||||||||||||||
Interest income and other income (expense), net | | (168) | | | | (168) | | (14) | | | | (182) | | (168) | | | | (168) | | (14) | | | | (182) | ||||||||||||||||||||||||
(Loss) gain on debt extinguishment | | (200) | | | | (200) | | 495 | | | | �� | 295 | | (200) | | | | (200) | | 495 | | | | 295 | |||||||||||||||||||||||
Total other income (expense), net | | (585) | | — | | | (585) | | (783) | | 487 | | | (881) | | (585) | | — | | | (585) | | (783) | | 487 | | | (881) | ||||||||||||||||||||
Net loss | | (18,226) | | 2,078 | | | (16,148) | | (10,853) | | 487 | | | (26,514) | | (18,226) | | 2,078 | | | (16,148) | | (10,853) | | 487 | | | (26,514) | ||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | | — | | | | | 1 | | | | 1 | | — | | | | | 1 | | | | 1 | ||||||||||||||||||||||||||
Net loss attributable to common stockholders | | $(18,226) | | $2,078 | | | $(16,148) | | $(10,854) | | $487 | | | $(26,515) | | $(18,226) | | $2,078 | | | $(16,148) | | $(10,854) | | $487 | | | $(26,515) | ||||||||||||||||||||
Net loss per common share, basic and diluted | | $(1.69) | | | | | $(0.16) | | | | $(0.36) | | $(1.69) | | | | | $(0.16) | | | | $(0.36) | ||||||||||||||||||||||||||
Weighted average common share outstanding – basic and diluted | | 10,800 | | | | | 69,276 | | 4,303 | | EE | | 73,579 | | 10,800 | | | | | 69,276 | | 3,381 | | EE | | 72,657 |
| | For Year Ended December 31, 2021 | | | For Year Ended December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||
| | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | | | | Transaction Accounting Adjustments | | | | |||||||||||||||||||||
| | Yumanity | | Asset Sale/ Distribution | | Note 4 | | Yumanity (As adjusted) | | Kineta | | Merger | | Note 4 | | Pro Forma Combined | | | Yumanity | | Asset Sale/ Distribution | | Note 4 | | Yumanity (As adjusted) | | Kineta | | Merger | | Note 4 | | Pro Forma Combined | |||||||||||||||
Revenue: | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Licensing revenue | | $— | | $— | | | $— | | $7,883 | | $— | | | $7,883 | | $— | | $— | | | $— | | $7,883 | | $— | | | $7,883 | ||||||||||||||||||||
Grant revenue | | — | | | | — | | 1,208 | | | | 1,208 | | — | | | | — | | 1,208 | | | | 1,208 | ||||||||||||||||||||||||
Collaboration revenue | | 8,044 | | | | 8,044 | | — | | | | 8,044 | | 8,044 | | | | 8,044 | | — | | | | 8,044 | ||||||||||||||||||||||||
Total revenue | | 8,044 | | — | | | 8,044 | | 9,091 | | — | | | 17,135 | | 8,044 | | — | | | 8,044 | | 9,091 | | — | | | 17,135 | ||||||||||||||||||||
Operating expenses: | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Research and development | | 26,410 | | (10,103) | | AA | | 16,307 | | 15,561 | | 15,579 | | BB | | 47,447 | | 26,410 | | (10,103) | | AA | | 16,307 | | 15,561 | | 15,579 | | BB | | 47,447 | ||||||||||||||||
General and administrative | | 20,379 | | | | 20,379 | | 4,623 | | 2,471 | | CC | | 27,473 | | 20,379 | | | | 20,379 | | 4,623 | | 2,471 | | CC | | 27,473 | ||||||||||||||||||||
Gain on sale of assets | | — | | (25,985) | | AA | | (25,985) | | — | | | | (25,985) | | — | | (25,985) | | AA | | (25,985) | | — | | | | (25,985) | ||||||||||||||||||||
Total operating expenses | | 46,789 | | (36,088) | | | 10,701 | | 20,184 | | 18,050 | | | 48,935 | | 46,789 | | (36,088) | | | 10,701 | | 20,184 | | 18,050 | | | 48,935 | ||||||||||||||||||||
Loss from operations | | (38,745) | | 36,088 | | | (2,657) | | (11,093) | | (18,050) | | | (31,800) | | (38,745) | | 36,088 | | | (2,657) | | (11,093) | | (18,050) | | | (31,800) | ||||||||||||||||||||
Other income (expense): | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||
Interest expense | | (1,817) | | | | (1,817) | | (1,293) | | | | (3,110) | | (1,817) | | | | (1,817) | | (1,293) | | | | (3,110) | ||||||||||||||||||||||||
Change in fair value measurement of notes payable | | — | | | | — | | (1,142) | | | | (1,142) | | — | | | | — | | (1,142) | | | | (1,142) | ||||||||||||||||||||||||
Interest income and other income (expense), net | | (75) | | — | | | (75) | | (8) | | | | (83) | | (75) | | — | | | (75) | | (8) | | | | (83) | ||||||||||||||||||||||
(Loss) gain on debt extinguishment | | 1,134 | | | | 1,134 | | 1,719 | | | | 2,853 | | 1,134 | | | | 1,134 | | 1,719 | | | | 2,853 | ||||||||||||||||||||||||
Total other income (expense), net | | (758) | | — | | | (758) | | (724) | | — | | | (1,482) | | (758) | | — | | | (758) | | (724) | | — | | | (1,482) | ||||||||||||||||||||
Net loss | | (39,503) | | 36,088 | | | (3,415) | | (11,817) | | (18,050) | | | (33,282) | | (39,503) | | 36,088 | | | (3,415) | | (11,817) | | (18,050) | | | (33,282) | ||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | | — | | | | — | | — | | | | — | | — | | | | — | | — | | | | — | ||||||||||||||||||||||||
Net loss attributable to common stockholders | | $(39,503) | | $36,088 | | | $(3,415) | | $(11,817) | | $(18,050) | | | $(33,282) | | $(39,503) | | $36,088 | | | $(3,415) | | $(11,817) | | $(18,050) | | | $(33,282) | ||||||||||||||||||||
Net loss per common share, basic and diluted | | $(3.84) | | | | | $(0.19) | | | | $(0.46) | | $(3.84) | | | | | $(0.19) | | | | $(0.46) | ||||||||||||||||||||||||||
Weighted average common share outstanding – basic and diluted | | 10,283 | | | | | 63,346 | | 9,716 | | EE | | 73,062 | | 10,283 | | | | | 63,346 | | 8,794 | | EE | | 72,140 |
Value of equity of the combined company owned by Yumanity equity holders(1) | | | $19,843 |
Estimated Kineta transaction costs | | | 5,480 |
Total preliminary estimated purchase price | | | $25,323 |
(1) | Represents the fair value of the equity in the combined company that Yumanity equity holders would own as of the closing of the Merger. This amount is calculated, for purposes of this unaudited pro forma condensed combined financial information, based on shares of Yumanity common stock, restricted stock units and warrants outstanding as of June 30, 2022. |
Yumanity common stock outstanding | | | 10,843 |
Yumanity restricted stock units(a) | | | 48 |
Estimated number of shares of the combined company to be owned by Yumanity equity holders | | | 10,891 |
Multiplied by the assumed price per share of Yumanity stock(b) | | | $1.82 |
Fair value of shares of the combined company to be owned by Yumanity equity holders | | | $19,822 |
Fair value of warrants of the combined company owned by Yumanity warrant holders(c) | | | $21 |
Fair value of shares and warrants of the combined company to be owned by Yumanity equity holders and warrant holders | | | $19,843 |
(a) | Pursuant to the Merger Agreement, each Yumanity restricted stock award (RSA) and Yumanity restricted stock unit (RSU) that is outstanding will become fully vested immediately prior to the closing of the Merger. The RSAs are included in the common stock outstanding. Additionally, upon the closing of the Merger, any outstanding unexercised option to purchase Yumanity common stock that are in-the-money will become fully vested and net exercised into shares of Yumanity common stock and any out-of-the-money options will be cancelled. As of June 30, 2022, all outstanding options to purchase Yumanity common stock are out-of-the-money. |
(b) | The estimated purchase price was based on the closing price of Yumanity common stock on June 30, 2022 of $1.82. The actual purchase price will fluctuate until the effective date of the transaction and does not give effect to any changes that may result from the Asset Sale. A |
(c) | Pursuant to the Merger agreement, warrants to purchase Yumanity common stock will remain outstanding after the closing of the Merger. As of June 30, 2022, 99,986 warrants to purchase common stock are outstanding. In calculating the estimated fair value of the warrants to purchase Yumanity common stock based on the Black-Scholes model, management used the closing stock price of Yumanity on June 30, 2022 and the following weighted-average assumptions: |
Expected term (in years) | | | 3.87 |
Volatility | | | 81.3% |
Risk free interest rate | | | 1.0% |
Dividend yield | | | —% |
Cash and cash equivalents | | | $15,259 |
IPR&D | | | 15,579 |
Restricted cash | | | 878 |
Prepaid expenses and other current assets | | | 1,839 |
Property and equipment, net | | | 60 |
Operating lease right-of-use assets | | | 559 |
Accrued expenses and other current liabilities | | | (5,911) |
Deferred revenue | | | (2,381) |
Operating lease liabilities | | | (559) |
Net assets acquired | | | $25,323 |
A. | To reflect Yumanity’s sale to Janssen of all of its rights, title and interest in and to clinical-stage product candidate YTX-7739 as well as Yumanity’s unpartnered pre-clinical and discovery-stage product candidates and related intellectual property rights and other assets for a purchase price of $26.0 million in cash. |
B. | To reflect Yumanity’s planned settlement of outstanding obligations prior to the Distribution. |
C. | To reflect Yumanity’s plans to distribute any remaining available cash proceeds from the Asset Sale to Yumanity stockholders. Such amount will change depending on the amounts necessary to cover outstanding obligations upon the closing of the Merger and net cash requirements associated with the Merger. |
D. | To accrue for merger-related transaction costs consisting of legal fees, advisory fees, accounting and audit fees and other expenses to be incurred by Yumanity between June 30, 2022 and the closing of the Merger. |
E. | To accrue for the estimated transaction success bonuses to Yumanity executives and estimated merger-related severance costs to Yumanity employees. |
F. | To adjust Yumanity’s operating right-of-use asset to equal its right-of-use liability as there are no favorable or unfavorable terms of the lease compared with market terms. |
G. | Represents estimated purchase consideration values based on the Yumanity equity to be acquired, using the Yumanity closing stock price of $1.82 as of June 30, 2022. The net impact to Kineta’s accumulated deficit resulting from all the proforma balance sheet adjustments, excluding tickmark A related to the Asset Sale, is the immediate expensing of Yumanity’s IPR&D of $15,579. |
H. | To eliminate Yumanity’s historical stockholders’ equity balances, including accumulated deficit. |
I. | To record the acquisition costs of Kineta consisting of legal and banker fees related to the Merger, of which $1.0 million was incurred as of June 30, 2022 and already included in prepaid expenses and other current assets in the historical condensed consolidated balance sheet as of June 30, 2022 and $4.5 million that will be incurred subsequent to June 30, 2022 and has been accrued in the pro forma condensed combined balance sheet. The acquisition costs will be included as a cost of the asset acquisition and any amounts allocated to the IPR&D will be expensed immediately following the acquisition. |
J. | Represents the automatic conversion of Kineta’s 2022 convertible notes payable into shares of Kineta common stock (and subsequently Yumanity common stock) concurrent with the closing of the Merger. |
K. | To reflect the aggregate gross proceeds from the Private Placement which is conditioned upon and expected to close immediately following the Merger. |
L. | To reflect the fees to be paid by Kineta to a third-party consultant related to the Private Placement. |
AA. | To reflect the estimated gain on sale of assets related to the Asset Sale and the elimination of direct external R&D expenses related to the YTX-7739 and YTX-9184 programs which will be sold by Yumanity in the Asset Sale. Such R&D expenses were incurred and included in the Yumanity historical condensed consolidated statement of operations for the six months ended June 30, 2022 and the historical consolidated statement of operations for the year ended December 31, 2021. The proforma adjustment does not include any tax effect from the Asset Sale as such sale is anticipated to have no material tax effects given Yumanity's existing deferred tax assets, including net operating loss carryforwards. This gain is not expected to recur in any period beyond twelve months from the close of the Merger. |
BB. | To reflect an adjustment to immediately expense the value attributed to Yumanity's intangible assets consisting of IPR&D related to the research and development of Yumanity's Genentech UPS14 drug development program, Fair Therapeutics cystic fibrosis drug program, and Merck ALS drug development program, acquired as part of the transaction. |
CC. | To reflect Merger-related transaction costs consisting of legal fees, advisory fees, accounting and audit fees and other expenses to be incurred by Yumanity between June 30, 2022 and the closing of the Merger. |
DD. | To eliminate interest expense and change in fair value measurement related to Kineta's 2022 Convertible Notes which will automatically convert to Kineta common stock (and subsequently Yumanity common stock) concurrent with the closing of the Merger. |
EE. | The weighted average shares outstanding for the period has been calculated as if the Merger occurred on January 1, 2021, calculated as the sum of 1) historical weighted average shares outstanding for Yumanity, 2) Yumanity shares issuable to Kineta’s shareholders upon the closing of the Merger, consisting of Kineta outstanding shares of common stock as of June 30, 2022 and the 2022 convertible notes, as-converted and as adjusted for the Exchange Ratio, and 3) the Private Placement shares. As the combined company is in a net loss position, any adjustment for potentially dilutive shares would be anti-dilutive, and as such basic and diluted loss per share are the same. The following table presents the calculation of the pro forma weighted average number of common stock outstanding (in thousands): |
| | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | | | Six Months Ended June 30, 2022 | | Year Ended December 31, 2021 | |||
Weighted average Yumanity shares outstanding | | 10,800 | | 10,283 | | 10,800 | | 10,283 | ||||
Estimated shares of Yumanity common stock to be issued to Kineta shareholders upon closing of the Merger(1) | | 47,460 | | 47,460 | | 46,556 | | 46,556 | ||||
Estimated shares of Yumanity common stock underlying Kineta warrants with exercise price of $0.01 per share | | 965 | | 965 | | 947 | | 947 | ||||
Shares of Yumanity common stock to be issued to PIPE Investors in the Private Placement | | 14,354 | | 14,354 | | 14,354 | | 14,354 | ||||
Pro forma combined weighted average number of shares of common stock—basic and diluted | | 73,579 | | 73,062 | | 72,657 | | 72,140 |
(1) | An Exchange Ratio of |
Kineta common shares | | | 68,831 |
Kineta 2022 convertible notes, as converted | | | 3,228 |
Total Kineta common stock prior to Merger | | | 72,059 |
Estimated Exchange Ratio per share | | | |
Estimated shares of Yumanity common stock to be issued to Kineta shareholders upon closing of the Merger | | |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
ELECTIONS; VOTING; PROCEDURAL MATTERS | ||||||
| | | | |||
Authorized Capital Stock | | | The articles of incorporation of Kineta authorize the issuance of up to 250,000,000 shares of common stock, par value $0.0001 per share, consisting of (i) 45,000,000 shares of voting common stock and (ii) 205,000,000 shares of non-voting common stock. | | | The certificate of incorporation of Yumanity authorizes the issuance of up to 125,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share. |
| | | | |||
Number of Directors | | | The bylaws of Kineta provide that the board of directors shall be composed of not less than one nor more than ten directors, the specific number to be set by resolution of the board of directors. | | | The certificate of incorporation and bylaws of Yumanity currently provide that the number of directors that shall constitute the whole board of directors shall be fixed solely and exclusively by resolution adopted from time to time by the board of directors. |
| | | | |||
Stockholder Nominations and Proposals | | | The articles of incorporation and the bylaws of Kineta do not have a provision providing for stockholder nominations and proposals. | | | The bylaws of Yumanity provide that in order for a stockholder to make a director nomination or propose business at an annual meeting of stockholders, the |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
| | | | stockholder must give timely written notice to the Yumanity Secretary, which must be received no earlier than the close of business on the 120th day nor later than the close of business on the 90th day prior to the one-year anniversary of the preceding year’s annual meeting (with certain adjustments if no annual meeting was held the previous year or the date of the annual meeting is changed by more than 30 days before or more than 60 days after the first anniversary of the preceding year’s annual meeting). | ||
| | | | |||
Classified Board of Directors | | | The articles of incorporation and the bylaws of Kineta do not provide for a classified board of directors. | | | The certificate of incorporation of Yumanity provides that the directors comprising the Yumanity board of directors is divided into three staggered classes. |
| | | | |||
Removal of Directors | | | The bylaws of Kineta provide that, at a meeting of shareholders called expressly for such purpose, one or more members of the board of directors, including the entire board of directors, may be removed with or without cause by the holders of the shares entitled to elect the director or directors whose removal is sought if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. | | | Under the certificate of incorporation of Yumanity, a director may be removed from office only (i) with cause and (ii) by the affirmative vote of holders of 75% or more of the outstanding shares of capital stock then entitled to vote at an election of directors. |
| | | | |||
Special Meeting of the Stockholders | | | The bylaws of Kineta provide that the Chairman of the board of directors, the Chief Executive Officer or the board of directors may call special meetings of the shareholders for any purpose. Further, the bylaws of Kineta provide that a special meeting of the shareholders shall be held if the holders of not less than 25% of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Secretary one or more written demands for such meeting, describing the purpose or purposes for which it is to be held. | | | The certificate of incorporation and bylaws of Yumanity provide that a special meeting of the stockholders may be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office. |
| | | |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
Cumulative Voting | | | The articles of incorporation of Kineta do not authorize cumulative voting in the election of Kineta’s directors. | | | The Yumanity certificate of incorporation and bylaws do not have a provision granting cumulative voting rights in the election of its directors. |
| | | | |||
Vacancies | | | The bylaws of Kineta provide that any vacancy occurring on the board of directors may be filled by the shareholders, the board of directors or, if the directors in office constitute fewer than a quorum, by the affirmative vote of a majority of the remaining directors. | | | The certificate of incorporation and bylaws of Yumanity provide that any vacancy or newly created directorships on the board of directors may be filled by a majority of the directors then in office, even if less than a quorum. |
| | | | |||
Voting Stock | | | Under the articles of incorporation of Kineta, each holder of voting common stock is entitled to one vote per share of voting common stock, to notice of any shareholders’ meeting in accordance with Kineta’s bylaws and to vote upon such matters and in such manner as may be provided by law. Subject to the protective provision described below, the number of authorized shares of voting common stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of voting common stock representing a majority of the votes represented by all outstanding shares of voting common stock. | | | Under the certificate of incorporation and bylaws of Yumanity, the holders of common stock are entitled to one vote on each matter submitted to a vote at a meeting of the stockholders. The certificate of incorporation of Yumanity provides that the Yumanity board of directors is authorized, to the fullest extent permitted by law, to issue shares of Yumanity preferred stock in one or more series, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof. |
| | | | |||
Voting Agreement | | | Kineta does not have a voting agreement or similar agreement with any of its shareholders in place. | | | Yumanity does not have a voting agreement or similar agreement with any of its stockholders in place. |
| | | | |||
Right of First Refusal | | | Kineta does not have a right of first refusal in place. | | | Yumanity does not have a right of first refusal in place. |
| | | | |||
Tag Along | | | Kineta does not have tag along terms in place. | | | Yumanity does not have tag along terms in place. |
| | | | |||
Drag Along | | | Kineta does not have drag along terms in place. | | | Yumanity does not have drag along terms in place. |
| | | | |||
Registration Rights | | | None of Kineta’s shareholders have any registration rights. | | | None of Yumanity’s stockholders have the right to demand that Yumanity file a registration |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
| | | | statement, so called “demand” registration rights, or request that their shares be covered by a registration statement that Yumanity is otherwise filing, so-called “piggyback” registration rights. | ||
| | | | |||
Stockholder Action by Written Consent | | | The articles of incorporation of Kineta provide that any action required or permitted to be taken at a meeting of Kineta’s shareholders may be taken by written consent if either (i) the action is taken by all of Kineta’s shareholders entitled to vote on the action or (ii) so long as Kineta is not a public company, the action is taken by Kineta’s shareholders holding of record, or otherwise entitled to vote, in the aggregate no less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote on the action were present and voted. | | | The certificate of incorporation of Yumanity provides that any action required or permitted to be taken by Yumanity’s stockholders at any annual or special meeting of stockholders of the Corporation must be effected at a duly called annual or special meeting of stockholders and may not be taken or effected by a written consent of stockholders in lieu thereof. |
| | | | |||
Notice of Stockholder Meeting | | | Under the bylaws of Kineta, written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by or at the direction of the board of directors, the Chairman of the board of directors, the Chief Executive Officer or the Secretary to each shareholder entitled to notice of or to vote at the meeting. Subject to certain exceptions, notice shall be given not less than 10 nor more than 60 days before the meeting. | | | Under the bylaws of Yumanity, notice of each stockholder meeting must specify the hour, date and place, if any, meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Notice shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. |
| | | | |||
Conversion Rights, Preemptive Rights and Protective Provisions | | | The articles of incorporation of Kineta provide that the shares of voting common stock and non-voting common stock are not convertible into any other security of Kineta. The articles of incorporation of Kineta provide that no preemptive rights shall exist with respect to shares of stock or securities | | | The certificate of incorporation of Yumanity does not provide that holders of Yumanity stock shall have preemptive, conversion or other protective rights. The certificate of incorporation of Yumanity provides that the Yumanity board of directors is authorized, to the fullest extent permitted by law, to issue shares of Yumanity preferred stock in one or |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
| | convertible into shares of stock of Kineta, except to the extent provided by written agreement with Kineta. The articles of incorporation further provide that Kineta shall not, by amendment, merger, consolidation or otherwise, without first obtaining the vote of the holders of at least a majority of the then outstanding shares of voting common stock, voting as a separate class, amend, alter, repeal or waive the rights, powers and restrictions granted to and imposed on the voting common stock. | | | more series, to establish or change from time to time the number of shares of each such series, and to fix the designations, powers, including voting powers, full or limited, or no voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof. | |
| | | | |||
Transfer Restrictions in connection with the Merger | | | The articles of incorporation and bylaws of Kineta do not have a provision on transfer restrictions in connection with the Merger. | | | The bylaws of Yumanity will be amended immediately following the Effective Time to provide that shareholders of Kineta will be subject to certain restrictions on the transfer of shares of Yumanity common stock for the 180-day period following the closing of the Merger. |
| | | | |||
INDEMNIFICATION OF OFFICERS AND DIRECTORS AND ADVANCEMENT OF EXPENSES; LIMITATION ON PERSONAL LIABILITY | ||||||
| | | | |||
Indemnification | | | The articles of incorporation of Kineta provide that Kineta shall indemnify its directors to the fullest extent permitted by law. The bylaws of Kineta further provide that Kineta shall indemnify its directors and officers; provided, however, that no indemnification shall be provided to any director or officer for acts or omissions of such person adjudged to be intentional misconduct or a knowing violation of law, for conduct of such person adjudged to be in violation of Section 23B.08.310 of the WBCA, for any transaction with respect to which it was adjudged that such person personally received a benefit in money, property or services to which the person was not legally entitled or if Kineta is otherwise | | | The bylaws of Yumanity provide that Yumanity shall indemnify its directors and officers to the fullest extent authorized by the DGCL, if a determination is made that such person acted in good faith and in a manner believed to be in or not opposed to the best interests of Yumanity. |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
| | prohibited by applicable law from paying such indemnification. | | | ||
| | | | |||
Advancement of Expenses | | | The bylaws of Kineta provide that Kineta will advance expenses to any director or officer in advance of the final disposition of the proceeding. An advancement of expenses shall be made only upon delivery to Kineta of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision that such director or officer is not entitled to be indemnified for such expenses. | | | The bylaws of Yumanity provide that Yumanity will advance expenses to any director or officer prior to or after final disposition of the proceeding, provided, however, that such advancements shall be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it should be ultimately determined that such director or officer is not entitled to indemnification under the bylaws. |
| | | | |||
DIVIDENDS | ||||||
| | | | |||
Declaration and Payment of Dividends | | | The articles of incorporation provide that the holders of the voting common stock shall be entitled to receive when, as and if declared by the board of directors, out of any assets of Kineta legally available therefor, such dividends as may be declared from time to time by the board of directors, on a pro rata basis with the holders of non-voting common stock based on the number of shares of voting common stock held by each. The articles of incorporation provide that the holders of the non-voting common stock shall be entitled to receive when, as and if declared by the board of directors, out of any assets of Kineta legally available therefor, such dividends as may be declared from time to time by the board of directors, on a pro rata basis with the holders of voting common stock based on the number of shares of non-voting common stock held by each. | | | The certificate of incorporation of Yumanity provides that, subject to any restrictions in law or the certificate of incorporation of Yumanity, the board of directors may declare and pay dividends upon the shares of Yumanity’s common stock. |
| | | |
Provision | | | Kineta (Pre-Merger) | | | Yumanity (Post-Merger) |
AMENDMENTS TO CERTIFICATE OF INCORPORATION OR BYLAWS | ||||||
| | | | |||
General Provisions | | | The articles of incorporation of Kineta provide that, subject to the protective provision described above, Kineta reserves the right to amend or repeal any of the provisions contained in the articles of incorporation in any manner permitted by law, and the rights of Kineta’s shareholders are granted subject to this reservation. The bylaws of Kineta provide that the bylaws may be altered, amended or repealed and new bylaws may be adopted by the board of directors, except that the board of directors may not repeal or amend any bylaw that the shareholders have expressly provided, in amending or repealing such bylaw, may not be amended or repealed by the board of directors. The bylaws of Kineta further provide that the shareholders may alter, amend and repeal the bylaws or adopt new bylaws and that all bylaws made by the board of directors may be amended, repealed, altered or modified by the shareholders. | | | The certificate of incorporation of Yumanity may be amended by an affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment, and the affirmative vote of the majority of the outstanding shares of each class entitled to vote thereon as a class, provided however that the affirmative vote of 75% of the outstanding shares of capital stock, and the affirmative vote of not less than 75% of the outstanding shares of each class entitled to vote thereon as a class, shall be required to amend certain enumerated provisions. The certificate of incorporation of Yumanity provides that the board of directors is expressly authorized to amend or repeal the bylaws. The certificate of incorporation of Yumanity provides that the stockholders of Yumanity may amend or repeal the bylaws with an affirmative vote of at least 75% of the outstanding shares of capital stock entitled to vote on such amendment or repeal, voting together as a single class, provided however that if the board of directors recommends that stockholders approve an amendment or repeal at a meeting of stockholders, such amendment or repeal shall only require the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote on such amendment or repeal, voting together as a single class. |
Name and Address of Beneficial Owner | | Number | | Percent | | Number | | Percent | ||||
5% Stockholders | | | | | ||||||||
Entities Associated with Fidelity(1) | | 1,624,462 | | 14.98% | | 1,624,462 | | 14.96% | ||||
Entities affiliated with the estate of Susan Lindquist, Ph.D.(2) | | 1,190,599 | | 10.97% | | 1,190,599 | | 10.96% | ||||
N. Anthony Coles, M.D.(3) | | 865,425 | | 7.89% | | 867,063 | | 7.90% | ||||
Named Executive Officers and Directors | | | | | ||||||||
Richard Peters, M.D., Ph.D.(4) | | 380,584 | | 3.51% | | 390,234 | | 3.49% | ||||
Paulash Mohsen(5) | | 104,413 | | * | | 104,413 | | * | ||||
Ajay Verma, M.D., Ph.D. | | — | | — | | — | | — | ||||
N. Anthony Coles, M.D.(3) | | 865,425 | | 7.89% | | 867,063 | | 7.90% | ||||
Patricia L. Allen(6) | | 23,932 | | * | | 23,933 | | * | ||||
David Arkowitz(7) | | 10,513 | | * | | 10,513 | | * | ||||
Kim C. Drapkin(8) | | 6,166 | | * | | 6,166 | | * | ||||
Jeffery W. Kelly, Ph.D.(9) | | 24,591 | | * | | 24,591 | | * | ||||
Cecil B. Pickett, Ph.D.(10) | | 19,554 | | * | | 19,554 | | * | ||||
Lynne Zydowsky, Ph.D.(11) | | 23,932 | | * | | 23,932 | | * | ||||
All current directors and executive officers as a group (11 persons)(12) | | 1,423,387 | | 12.48% | ||||||||
All current directors and executive officers as a group (10 persons)(12) | | 1,438,600 | | 12.60% |
* | Indicates beneficial ownership of less than one percent. |
(1) | Based solely on information set forth in a Schedule 13F-HR filed with the SEC on May 13, 2022 by FMR LLC (“FMR”) with respect to holdings at March 31, 2022. The Schedule 13F-HR indicates sole investment discretion with respect to no shares, defined investment discretion with respect to 1,624,462 shares, sole voting authority with respect to 1,624,462 shares, shares voting authority with respect to no shares and no voting authority with respect to no shares. The address of FMR is 245 Summer Street, Boston, Massachusetts 02210. |
(2) | Based solely on a Schedule 13G filed with the SEC on January 4, 2021. Consists of (i) 230,170 shares of common stock held by the Susan L. Lindquist Exempt Marital Trust, (ii) 241,257 shares of common stock held by the Susan L. Lindquist Non-Exempt Marital Trust, (iii) 228,966 shares of common stock held by the Susan L. Lindquist Massachusetts Only Marital Trust, (iv) 484,168 shares of common stock held by the Susan L. Lindquist Family Trust and (v) 6,038 shares of common stock issuable upon exercise of warrants within 60 days of April 9, 2021 held by the Susan L. Lindquist Family Trust. The address for each of the Susan L. Lindquist Exempt Marital Trust, Susan |
(3) | Consists of (i) 691,008 shares of common stock held by N. Anthony Coles, M.D., (ii) |
(4) | Consists of (i) |
(5) | Consists of (i) 52,818 shares of common stock held by Mr. Mohsen and (ii) 51,595 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(6) | Consists of |
(7) | Consists of (i) 4,347 shares of common stock held by Mr. Arkowitz and (ii) 6,166 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(8) | Consists of 6,166 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(9) | Consists of (i) 13,154 shares of common stock held by Dr. Kelly and (ii) 11,437 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(10) | Consists of (i) 8,117 shares of common stock held by Dr. Pickett and (ii) 11,437 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(11) | Consists of 23,932 shares of common stock issuable upon exercise of options exercisable within 60 days of |
(12) | Includes |
Name of Beneficial Owner | | Number of Shares Beneficially Owned | | % | | Number of Shares Beneficially Owned | | % | ||||
Five Percent Stockholders (other than directors and officers): | | | | | ||||||||
Charles Magness(1) | | 9,119,391 | | 13.1% | | 9,119,391 | | 12.9% | ||||
CBI USA, Inc.(2) | | 6,784,936 | | 9.5% | | 6,784,936 | | 9.4% | ||||
| | | | |||||||||
Named Executive Officers and Directors: | | | | | ||||||||
Shawn Iadonato, Ph.D.(3) | | 12,255,893 | | 16.8% | | 12,255,893 | | 16.5% | ||||
Craig W. Philips, M.B.A.(4) | | 2,433,358 | | 3.4% | | 2,433,358 | | 3.3% | ||||
Pauline Kenny, Esq.(5) | | 536,666 | | * | | 691,255 | | 1.0% | ||||
Marion R. Foote, M.B.A.(6) | | 1,600,030 | | 2.3% | | 1,600,030 | | 2.2% | ||||
Raymond Bartoszek, M.B.A.(7) | | 6,286,643 | | 8.9% | | 6,286,643 | | 8.7% | ||||
Jiyoung Hwang(2) | | 6,784,936 | | 9.5% | | 6,784,936 | | 9.4% | ||||
Donald Merlino(8) | | 9,695,210 | | 12.6% | | 9,695,210 | | 12.4% | ||||
Richard Samuelson(9) | | 293,213 | | * | | 293,213 | | * | ||||
Steven Mitchell, M.D., Ph.D.(10) | | 1,788,257 | | 2.6% | | 2,118,011 | | 3.0% | ||||
All current executive officers and directors as a group (10 persons) | | 41,749,206 | | 48.0% | ||||||||
All current executive officers and directors as a group (11 persons) | | 42,318,966 | | 47.9% |
* | Indicates beneficial ownership of less than one percent. |
(1) | Consists of (i) 9,015,331 shares of common stock held by Charles Magness and (ii) 104,060 shares of common stock held by Robert W. Baird & Co. Inc. TTEE FBO Charles Magness. |
(2) | Consists of (i) 5,291,005 shares of common stock held by CBI USA, Inc. (“CBI USA”) and (ii) 1,493,931 shares of common stock issuable upon the conversion of outstanding convertible promissory notes held by CBI USA that are convertible within 60 days of |
(3) | Consists of (i) 9,034,908 shares of common stock held by Shawn Iadonato, (ii) 55,844 shares of common stock held by NuView IRA, Inc. FBO Shawn Iadonato 9914306, (iii) 68,474 shares of common stock held by Robert W. Baird & Co. Inc. TTEE FBO Shawn Iadonato Rollover IRA, and (iv) 3,096,667 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of |
(4) | Consists of (i) 101,418 shares of common stock held by Craig W. Philips, (ii) 357,773 shares of common stock held by Whetstone Ventures, LLC (“Whetstone”), (iii) 180,000 shares of common stock issuable upon the exercise of a warrant issued to Whetstone currently exercisable within 60 days of |
(5) | Consists of (i) 154,589 shares of common stock held by Pauline Kenny, and (ii) 536,666 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of |
(6) | Consists of (i) 511,309 shares of common stock held by Marion R. Foote, (ii) 622,472 shares of common stock issuable upon the conversion of outstanding convertible promissory notes held by Marion R. Foote that are convertible within 60 days of |
(7) | Consists of (i) 5,045,333 shares of common stock held by RLB Holdings Connecticut LLC (“RLB Connecticut”), (ii) 497,977 shares of common stock issuable upon the conversion of outstanding convertible promissory notes held by RLB Holdings, LLC (“RLB Holdings”) that are convertible within 60 days of |
(8) | Consists of (i) 34,922 shares of common stock held by Donald Merlino, (ii) 675,778 shares of common stock held by M&M Financial LLC (“M&M”), (iii) 1,438,740 shares of common stock held by LTO Holdings, LLC (“LTO”), (iv) 3,112,356 shares of common stock issuable upon the conversion of outstanding convertible promissory notes held by M&M that are convertible within 60 days of |
(9) | Consists of (i) 49,880 shares of common stock held by Richard Samuelson and (ii) 243,333 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of |
(10) | Consists of (i) |
Name of Beneficial Owner | | | Number of Shares Beneficially Owned | | | % |
Five Percent Stockholders (other than directors and officers): | | | | | ||
Charles Magness(1) | | | 5,891,947 | | | 7.7% |
CBI USA, Inc.(2) | | | 4,383,679 | | | 5.7% |
| | | | |||
Named Executive Officers and Directors: | | | | | ||
Shawn Iadonato, Ph.D.(3) | | | 7,918,409 | | | 10.0% |
Craig W. Philips, M.B.A.(4) | | | 1,572,168 | | | 2.0% |
Pauline Kenny, Esq.(5) | | | 446,613 | | | * |
Marion R. Foote, M.B.A.(6) | | | 1,033,764 | | | 1.3% |
Raymond Bartoszek, M.B.A.(7) | | | 4,061,737 | | | 5.2% |
Jiyoung Hwang(2) | | | 4,383,679 | | | 5.7% |
Richard Peters, M.D., Ph.D.(8) | | | 390,234 | | | * |
David Arkowitz, M.B.A.(9) | | | 10,513 | | | * |
All executive officers and directors as a group (10 persons) | | | 19,920,761 | | | 25.5% |
Indicates beneficial ownership of |
(1) | ||||||
(i) 5,824,715 shares of common stock held by Charles Magness and (ii) 67,232 shares of common stock held by Robert W. Baird & Co. Inc. TTEE FBO Charles Magness. |
(2) | ||||||
Consists of 4,383,679 shares of common stock held by CBI USA. Jiyoung Hwang, a member of Kineta’s board of directors, is a member of the board of directors of CBI USA and shares voting and dispositive power over the shares held by CBI USA. As such, Ms. Hwang may be deemed to beneficially own such shares held by CBI USA. The address for CBI USA is 300 Western Ave., Suite 400, Seattle, WA 98121. |
(3) | ||||||
Consists of (i) 5,837,363 shares of common stock held by Shawn Iadonato, (ii) 36,080 shares of common stock held by NuView IRA, Inc. FBO Shawn Iadonato 9914306, (iii) 44,240 shares of common stock held by Robert W. Baird & Co. Inc. TTEE FBO Shawn Iadonato Rollover IRA, and (iv) 2,000,725 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of August 31, 2022. |
(4) | ||||||
Consists of (i) 65,525 shares of common stock held by Craig W. Philips, (ii) 231,154 shares of common stock held by Whetstone, (iii) 116,296 shares of common stock issuable upon the exercise of a warrant issued to Whetstone currently exercisable within 60 days of August 31, 2022, and (iv) 1,159,193 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of August 31, 2022. Mr. Philips is a member/manager of Whetstone and shares voting and dispositive power over the shares held by Whetstone. As such, Mr. Philips may be deemed to beneficially own such shares held by Whetstone. The address for Whetsone is 7239 SE 29th St., Mercer Island, WA 98040. |
(5) | ||||||
Consists of (i) 99,878 shares of common stock held by Pauline Kenny, and (ii) 346,735 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of August 31, 2022. |
(6) | ||||||
Consists of (i) 732,525 shares of common stock held by Marion R. Foote, (ii) 144,024 shares of common stock issuable upon the exercise of warrants issued to Marion R. Foote currently exercisable within 60 days of August 31, 2022, and (iii) 157,215 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of August 31, 2022. |
(7) | ||||||
Consists of (i) 3,259,739 shares of common stock held by RLB Connecticut, (ii) 321,738 shares of common stock held by RLB Holdings, (iii) 323,045 shares of common stock issuable upon the exercise of a warrant issued to RLB Connecticut currently exercisable within 60 days of August 31, 2022, and (iv) 157,215 shares of common stock issuable upon the exercise of options currently exercisable or exercisable within 60 days of August 31, 2022. Raymond Bartoszek, | ||||||
(8) | Consists of (i) 70,446 shares of common stock held by Dr. Peters and (ii) 319,788 shares of common stock issuable upon exercise of options exercisable within 60 days of August 31, 2022. |
(9) | Consists of (i) 4,347 shares of common stock held by Mr. Arkowitz and (ii) 6,166 shares of common stock issuable upon exercise of options exercisable within 60 days of August 31, 2022. |
Yumanity Therapeutics, Inc. 40 Guest Street, Suite 4410 Boston, MA 02135 | | | Kineta, Inc. 219 Terry Ave. N., Suite 300 Seattle, WA 98109 |
| | ||
Telephone: (617) 409-5300 | | | Telephone: (206) 378-0400 |
| | ||
Attn: Secretary | | | Attn: Secretary |
| | Page | |
Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
Unaudited Interim Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| |
Audited Consolidated Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
| | ||
Unaudited Condensed Consolidated Financial Statements | | | |
| | ||
| | ||
| | ||
| | ||
| |
| | December 31, | | | December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Assets | | | | | ||||||||
Current assets: | | | | | ||||||||
Cash and cash equivalents | | $35,102 | | $80,819 | | $35,102 | | $80,819 | ||||
Marketable securities | | 1,399 | | 4,498 | | 1,399 | | 4,498 | ||||
Accounts receivable | | 5,000 | | — | | 5,000 | | — | ||||
Prepaid expenses and other current assets | | 1,207 | | 2,264 | | 1,207 | | 2,264 | ||||
Total current assets | | 42,708 | | 87,581 | | 42,708 | | 87,581 | ||||
Property and equipment, net | | 387 | | 874 | | 387 | | 874 | ||||
Operating lease right-of-use assets | | 18,543 | | 23,678 | | 18,543 | | 23,678 | ||||
Deposits | | 366 | | 386 | | 366 | | 386 | ||||
Restricted cash | | 928 | | 2,066 | | 928 | | 2,066 | ||||
Assets held-for-sale | | 0 | | 250 | | — | | 250 | ||||
Total assets | | $62,932 | | $114,835 | | $62,932 | | $114,835 | ||||
Liabilities and Stockholders’ Equity | | | | | ||||||||
Current liabilities: | | | | | ||||||||
Accounts payable | | $1,839 | | $7,384 | | $1,839 | | $7,384 | ||||
Accrued expenses and other current liabilities | | 4,846 | | 7,851 | | 4,846 | | 7,851 | ||||
Current portion of long-term debt | | 5,805 | | 2,891 | | 5,805 | | 2,891 | ||||
Operating lease liabilities | | 5,064 | | 4,468 | | 5,064 | | 4,468 | ||||
Current portion of finance lease obligation | | 48 | | 166 | | 48 | | 166 | ||||
Deferred revenue | | 5,061 | | 8,104 | | 5,061 | | 8,104 | ||||
Total current liabilities | | 22,663 | | 30,864 | | 22,663 | | 30,864 | ||||
Long-term debt, net of discount and current portion | | 7,357 | | 13,237 | | 7,357 | | 13,237 | ||||
Operating lease liabilities, net of current portion | | 9,415 | | 14,479 | | 9,415 | | 14,479 | ||||
Finance lease obligation, net of current portion | | 0 | | 48 | | — | | 48 | ||||
Total liabilities | | 39,435 | | 58,628 | | 39,435 | | 58,628 | ||||
Commitments and contingencies (Note 12) | | | | | ||||||||
Stockholders’ equity: | | | | | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | 0 | | 0 | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of December 31, 2021 and 2020, respectively | | — | | — | ||||||||
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,644,714 shares and 10,193,831 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | 11 | | 10 | | 11 | | 10 | ||||
Additional paid-in capital | | 210,799 | | 204,007 | | 210,799 | | 204,007 | ||||
Accumulated deficit | | (187,313) | | (147,810) | | (187,313) | | (147,810) | ||||
Total stockholders’ equity | | 23,497 | | 56,207 | | 23,497 | | 56,207 | ||||
Total liabilities and stockholders’ equity | | $62,932 | | $114,835 | | $62,932 | | $114,835 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Collaboration revenue | | $8,044 | | $6,896 | | $8,044 | | $6,896 | ||||
Operating expenses: | | | | | ||||||||
Research and development | | 26,410 | | 22,310 | | 26,410 | | 22,310 | ||||
General and administrative | | 20,379 | | 11,881 | | 20,379 | | 11,881 | ||||
In-process research and development assets acquired | | 0 | | 28,336 | | — | | 28,336 | ||||
Total operating expenses | | 46,789 | | 62,527 | | 46,789 | | 62,527 | ||||
Loss from operations | | (38,745) | | (55,631) | | (38,745) | | (55,631) | ||||
Other income (expense): | | | | | ||||||||
Change in fair value of preferred unit warrant liability | | 0 | | 72 | | — | | 72 | ||||
Interest expense | | (1,817) | | (1,900) | | (1,817) | | (1,900) | ||||
Interest income and other income (expense), net | | (75) | | (28) | | (75) | | (28) | ||||
Gain on debt extinguishment | | 1,134 | | 0 | | 1,134 | | — | ||||
Total other income (expense), net | | (758) | | (1,856) | | (758) | | (1,856) | ||||
Net loss | | $(39,503) | | $(57,487) | | $(39,503) | | $(57,487) | ||||
Gain on extinguishment of Class B preferred units | | 0 | | 6,697 | | — | | 6,697 | ||||
Net loss applicable to common shareholders | | (39,503) | | (50,790) | | (39,503) | | (50,790) | ||||
Net loss per share, basic and diluted | | $(3.84) | | $(21.57) | | $(3.84) | | $(21.57) | ||||
Weighted average common shares outstanding, basic and diluted | | 10,283,172 | | 2,354,143 | | 10,283,172 | | 2,354,143 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Net loss | | $(39,503) | | $(57,487) | | $(39,503) | | $(57,487) | ||||
Other comprehensive loss: | | | | | ||||||||
Unrealized gains on marketable securities, net of tax of $0 | | 0 | | 0 | | — | | — | ||||
Comprehensive loss | | $(39,503) | | $(57,487) | | $(39,503) | | $(57,487) |
| | Preferred Units | | | Common Units | | | Defaulting Class B Preferred Units | | | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity/ (Deficit) | |||||||||||||
| | Units | | | Amount | | | Units | | | Amount | | | Units | | | Amount | | | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2019 | | | 12,391,101 | | | $89,699 | | | 2,163,099 | | | $5,120 | | | — | | | $— | | | — | | | $— | | | $— | | | $— | | | $(97,020) | | | $(91,900) |
Issuance of Class C preferred units, net of issuance costs of $388 | | | 5,404,588 | | | 21,235 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Exchange of Class B preferred units for Defaulting Class B preferred units | | | (836,319) | | | (288) | | | — | | | — | | | 836,319 | | | 288 | | | — | | | — | | | — | | | — | | | — | | | 288 |
Gain on extinguishment of Class B preferred units | | | — | | | (6,697) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,697 | | | 6,697 |
Forfeiture of unvested incentive units | | | — | | | — | | | (790) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Stock/equity-based compensation expense | | | — | | | — | | | — | | | 2,266 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,266 |
Exchange of preferred units of Yumanity Holdings, LLC for shares of common stock of Yumanity Therapeutics, Inc., adjusted to reflect the Exchange Ratio | | | (16,959,370) | | | (103,949) | | | — | | | — | | | (836,319) | | | (288) | | | 3,745,983 | | | 4 | | | 104,233 | | | — | | | — | | | 103,949 |
Exchange of common units of Yumanity Holdings, LLC for shares of common stock of Yumanity Therapeutics, Inc., adjusted to reflect the Exchange Ratio | | | — | | | — | | | (2,162,309) | | | (7,386) | | | — | | | — | | | 2,278,450 | | | 2 | | | 7,384 | | | — | | | — | | | — |
Exchange of common stock in connection with the Merger | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,708,537 | | | 3 | | | 60,127 | | | — | | | — | | | 60,130 |
Fair value of replacement equity | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 471 | | | — | | | — | | | 471 |
Reclassification of warrant liability to permanent equity | | | — | | | — | | | - | | | — | | | — | | | — | | | — | | | — | | | 189 | | | — | | | — | | | 189 |
Private placement of common stock, net of issuance costs of $1,996 | | | — | | | — | | | — | | | — | | | — | | | — | | | 1,460,861 | | | 1 | | | 31,603 | | | — | | | — | | | 31,604 |
Net loss | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (57,487) | | | (57,487) |
Balances at December 31, 2020 | | | — | | | $— | | | — | | | $— | | | — | | | — | | | 10,193,831 | | | $10 | | | $204,007 | | | — | | | $(147,810) | | | $56,207 |
Issuance of common stock from at the market offering, net of issuance costs of $44 | | | — | | | — | | | — | | | — | | | — | | | — | | | 112,833 | | | — | | | 1,419 | | | | | | | 1,419 | ||
Exercises of common stock options | | | — | | | — | | | — | | | — | | | — | | | — | | | 9,241 | | | — | | | 84 | | | | | | | 84 | ||
Vesting of restricted stock units | | | — | | | — | | | — | | | — | | | — | | | — | | | 23,146 | | | — | | | — | | | | | | | — | ||
Issuance of restricted stock awards | | | — | | | — | | | — | | | — | | | — | | | — | | | 305,663 | | | 1 | | | (1) | | | | | | | — | ||
Stock/equity-based compensation expense | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 5,290 | | | | | | | 5,290 | ||
Net loss | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | (39,503) | | | (39,503) | |
Balances at December 31, 2021 | | | — | | | $— | | | — | | | $— | | | — | | | $— | | | 10,644,714 | | | $11 | | | $ 210,799 | | | $ — | | | $ (187,313) | | | $ 23,497 |
| | December 31, | | | December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Cash flows from operating activities: | | | | | ||||||||
Net loss | | $(39,503) | | $(57,487) | | $(39,503) | | $(57,487) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||||||||
Non-cash expense for in-process research and development acquired | | 0 | | 28,336 | | — | | 28,336 | ||||
Depreciation and amortization expense | | 631 | | 770 | | 631 | | 770 | ||||
Non-cash lease expense | | 5,135 | | 2,501 | | 5,135 | | 2,501 | ||||
Stock/equity-based compensation expense | | 5,290 | | 2,266 | | 5,290 | | 2,266 | ||||
Other non-cash expense | | 58 | | 0 | | 58 | | — | ||||
Accretion of discounts on marketable securities | | (9) | | (6) | | (9) | | (6) | ||||
Non-cash interest expense | | 527 | | 535 | | 527 | | 535 | ||||
Gain on debt extinguishment | | (1,134) | | 0 | | (1,134) | | — | ||||
Change in fair value of preferred unit warrant liability | | 0 | | (72) | | — | | (72) | ||||
Loss on assets held-for-sale | | 63 | | — | | 63 | | — | ||||
(Gain) on sale of property and equipment | | 0 | | (2) | | — | | (2) | ||||
Changes in operating assets and liabilities, excluding the effect of acquisition: | | | | | ||||||||
Accounts receivable | | (5,000) | | — | | (5,000) | | — | ||||
Prepaid expenses and other current assets | | 1,057 | | (1,497) | | 1,057 | | (1,497) | ||||
Deposits | | 20 | | (346) | | 20 | | (346) | ||||
Operating lease liabilities | | (4,468) | | (1,688) | | (4,468) | | (1,688) | ||||
Accounts payable | | (5,545) | | 2,802 | | (5,545) | | 2,802 | ||||
Accrued expenses and other current liabilities | | (2,994) | | (2,154) | | (2,994) | | (2,154) | ||||
Deferred revenue | | (3,043) | | 8,104 | | (3,043) | | 8,104 | ||||
Net cash used in operating activities | | (48,915) | | (17,938) | | (48,915) | | (17,938) | ||||
Cash flows from investing activities: | | | | | ||||||||
Purchases of marketable securities | | (11,267) | | (4,495) | | (11,267) | | (4,495) | ||||
Proceeds from sales and maturities of marketable securities | | 14,375 | | 1,350 | | 14,375 | | 1,350 | ||||
Purchases of property and equipment | | (138) | | (246) | | (138) | | (246) | ||||
Proceeds from assets held-for-sale | | 123 | | — | | 123 | | — | ||||
Proceeds from sale of property and equipment | | — | | 13 | | — | | 13 | ||||
Cash, cash equivalents, and restricted cash acquired in connection with the Merger | | — | | 35,939 | | — | | 35,939 | ||||
Merger transaction costs | | — | | (1,520) | | — | | (1,520) | ||||
Net cash provided by investing activities | | 3,093 | | 31,041 | | 3,093 | | 31,041 | ||||
Cash flows from financing activities: | | | | | ||||||||
Proceeds from issuance of Class C preferred units, net of offering costs paid | | — | | 21,235 | | — | | 21,235 | ||||
Proceeds from private placement of common stock, net of issuance costs | | — | | 33,597 | | — | | 33,597 | ||||
Proceeds from Paycheck Protection Program loan | | — | | 1,123 | | — | | 1,123 | ||||
Proceeds from at the market offering, net of issuance costs | | 1,419 | | — | | 1,419 | | — | ||||
Proceeds from exercise of stock options | | 84 | | — | | 84 | | — | ||||
Payments of principal portion of long-term debt | | (2,267) | | — | | (2,267) | | — | ||||
Payments of debt issuance costs related to long-term debt | | (103) | | (72) | | (103) | | (72) | ||||
Payments of finance lease obligations | | (166) | | (347) | | (166) | | (347) | ||||
Net cash (used in) provided by financing activities | | (1,033) | | 55,536 | | (1,033) | | 55,536 | ||||
Net (decrease) increase in cash, cash equivalents and restricted cash | | (46,855) | | 68,639 | | (46,855) | | 68,639 | ||||
Cash, cash equivalents and restricted cash at beginning of period | | 82,885 | | 14,246 | | 82,885 | | 14,246 | ||||
Cash, cash equivalents and restricted cash at end of period | | $36,030 | | $82,885 | | $36,030 | | $82,885 | ||||
Supplemental cash flow information: | | | | | ||||||||
Cash paid for interest | | $1,298 | | $1,287 | | $1,298 | | $1,287 |
| | December 31, | | | December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Supplemental disclosure of noncash investing and financing activities: | | | | | ||||||||
Additions to property and equipment under finance lease | | $— | | $102 | | $— | | $102 | ||||
Merger transaction costs included in accounts payable and accrued expenses | | $— | | $1,169 | | $— | | $1,169 | ||||
Offering costs included in accounts payable | | $— | | $1,993 | | $— | | $1,993 | ||||
Operating lease liabilities arising from obtaining right-of-use assets | | $0 | | $10,219 | | $— | | $10,219 | ||||
Fair value of net assets acquired in the Merger, excluding cash, cash equivalents and restricted cash acquired | | $— | | $24,662 | | $— | | $24,662 | ||||
Conversion of preferred units to common stock | | $— | | $104,237 | | $— | | $104,237 | ||||
Conversion of preferred unit warrants into common stock warrants | | $— | | $189 | | $— | | $189 |
| | Estimated Useful Life | |
Laboratory equipment | | | 2 - 3 years |
Office equipment, computers and software | | | 2 - 5 years |
Furniture and fixtures | | | 2 - 7 years |
Leasehold improvements | | | Shorter of remaining term of lease or useful life |
Number of shares owned by Proteostasis stockholders(1) | | | 2,708,537 |
Multiplied by fair value per share of Proteostasis common stock(2) | | | $22.20 |
Fair value of shares of combined organization owned by Proteostasis Stockholders | | | $60,130 |
Fair value of Proteostasis stock options assumed in Merger(3) | | | 471 |
Transaction costs | | | 2,689 |
Total purchase price | | | $63,290 |
(1) | The number of shares represents 2,609,489 shares of PTI common stock outstanding as of December 22, 2020, plus 25,719 shares issued for the settlement of severance obligations and 21,739 shares issued as compensation for investment banking fees related to the Merger. Additionally, 51,590 shares of restricted stock units were issued as compensation for two consultants hired by PTI. The number of shares reflects the impact of the Reverse Stock Split. |
(2) | Based on the last reported sale price of PTI common stock on the Nasdaq Global Market on December 22, 2020, the closing date of the Merger, and after giving effect to the Reverse Stock Split. |
(3) | Represents the fair value of the PTI options to purchase 194,550 shares of common stock outstanding at the time of the Merger. |
Cash and cash equivalents | | | $35,111 |
Prepaid expenses and other current assets | | | 703 |
Assets held-for-sale | | | 250 |
Property and equipment, net | | | 290 |
In-process research and development | | | 28,336 |
Operating lease right-of-use assets | | | 15,166 |
Restricted cash | | | 828 |
Current liabilities | | | (7,171) |
Operating lease liabilities | | | (10,223) |
Total purchase price | | | $63,290 |
| | Fair Value Measurements at December 31, 2021 Using: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $0 | | | $0 | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | 0 | | | 1,399 | | | 0 | | | 1,399 |
| | $34,136 | | | $1,399 | | | $0 | | | $35,535 |
| | Fair Value Measurements at December 31, 2020 Using: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $77,129 | | | $0 | | | $0 | | | $77,129 |
Commercial paper | | | 0 | | | 1,800 | | | 0 | | | 1,800 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | 0 | | | 4,498 | | | 0 | | | 4,498 |
| | $77,129 | | | $6,298 | | | $0 | | | $83,427 |
| | Fair Value Measurements at December 31, 2021 Using: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $— | | | $— | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | 1,399 | | | — | | | 1,399 |
| | $34,136 | | | $1,399 | | | $— | | | $35,535 |
| | Fair Value Measurements at December 31, 2020 Using: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $77,129 | | | $— | | | $— | | | $77,129 |
Commercial paper | | | — | | | 1,800 | | | — | | | 1,800 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | 4,498 | | | — | | | 4,498 |
| | $77,129 | | | $6,298 | | | $— | | | $83,427 |
| | Preferred Unit Warrant Liability | |
Fair value at December 31, 2019 | | | $261 |
Change in fair value | | | (72) |
Reclassification of warrant liability to permanent equity | | | (189) |
Fair value at December 31, 2020 | | | $ |
| | December 31, 2021 | ||||||||||
| | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
Commercial paper | | | $1,399 | | | $0 | | | $0 | | | $1,399 |
| | $1,399 | | | $0 | | | $0 | | | $1,399 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
Commercial paper | | | $4,498 | | | $0 | | | $0 | | | $4,498 |
| | $4,498 | | | $0 | | | $0 | | | $4,498 |
| | December 31, 2021 | ||||||||||
| | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
Commercial paper | | | $1,399 | | | $— | | | $— | | | $1,399 |
| | $1,399 | | | $— | | | $— | | | $1,399 |
| | December 31, 2020 | ||||||||||
| | Amortized Cost | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value | |
Commercial paper | | | $4,498 | | | $— | | | $— | | | $4,498 |
| | $4,498 | | | $— | | | $— | | | $4,498 |
| | December 31, | | | December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Laboratory equipment | | $1,339 | | $1,674 | | $1,339 | | $1,674 | ||||
Office equipment, computers and software | | 211 | | 209 | | 211 | | 209 | ||||
Furniture and fixtures | | 170 | | 170 | | 170 | | 170 | ||||
| $1,720 | | 2,053 | | $1,720 | | 2,053 | |||||
Less: Accumulated depreciation and amortization | | (1,333) | | (1,179) | | (1,333) | | (1,179) | ||||
| $387 | | $874 | | $387 | | $874 | |||||
Assets held-for-sale | | $0 | | $250 | | $— | | $250 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
Accrued employee compensation and benefits | | | $1,763 | | | $4,295 |
Accrued external research and development expenses | | | 1,633 | | | 1,780 |
Accrued professional fees | | | 901 | | | 987 |
Other | | | 549 | | | 789 |
| | $4,846 | | $7,851 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
Principal amount of long-term debt | | | $12,733 | | | $16,123 |
Less: Current portion of long-term debt | | | (5,805) | | | (2,891) |
Long-term debt, net of current portion | | | 6,928 | | | 13,232 |
Debt discount, net of accretion | | | (217) | | | (348) |
Accrued end-of-term payment | | | 646 | | | 353 |
Long-term debt, net of discount and current portion | | | $7,357 | | | $13,237 |
Year Ending December 31, | | | ||||
2022 | | $5,805 | | $5,805 | ||
2023 | | 6,341 | | 6,341 | ||
2024 | | 586 | | 586 | ||
2025 | | 0 | | — | ||
2026 | | 0 | | — | ||
| $12,732 | | $12,732 |
Issuance Date | | | Contractual Term (in Years) | | | Class of Stock | | | Number of Shares of Common Stock Issuable | | | Exercise Price |
August 14, 2015 | | | 10 | | | Common | | | 74,622 | | | $24.05 |
October 9, 2015 | | | 10 | | | Common | | | 7,798 | | | $24.05 |
June 14, 2018 | | | 10 | | | Common | | | 2,152 | | | $30.13 |
December 20, 2019 | | | 10 | | | Common | | | 15,414 | | | $18.98 |
| | | | | | 99,986 | | |
| | RSUs | | Weighted Average Grant Date Fair Value | | | RSUs | | Weighted Average Grant Date Fair Value | |||
Unvested at December 31, 2020 | | 0 | | $0 | | — | | $— | ||||
Issued | | 122,469 | | $17.89 | | 122,469 | | $17.89 | ||||
Vested | | (23,146) | | $17.89 | | (23,146) | | $17.89 | ||||
Forfeited | | (13,098) | | $17.89 | | (13,098) | | $17.89 | ||||
Unvested at December 31, 2021 | | 86,225 | | $17.89 | | 86,225 | | $17.89 |
| | RSAs | | Weighted Average Grant Date Fair Value | | | RSAs | | Weighted Average Grant Date Fair Value | |||
Unvested at December 31, 2020 | | 0 | | $0 | | — | | $— | ||||
Issued | | 305,663 | | $3.83 | | 305,663 | | $3.83 | ||||
Vested | | 0 | | $0 | | — | | $— | ||||
Forfeited | | 0 | | $0 | | — | | $— | ||||
Unvested at December 31, 2021 | | 305,663 | | $3.83 | | 305,663 | | $3.83 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Risk-free interest rate | | 1.0% | | 1.1% | | 1.0% | | 1.1% | ||||
Expected volatility | | 81.3% | | 70.9% | | 81.3% | | 70.9% | ||||
Expected dividend yield | | 0 | | 0 | | — | | — | ||||
Expected term (in years) | | 6.3 | | 7.8 | | 6.3 | | 7.8 |
| | Number of Shares/ Units | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term | | | Aggregate Intrinsic Value | |
| | | | | | (in years) | | | (in thousands) | |||
Outstanding as of December 31, 2020 | | | 944,961 | | | $20.70 | | | 8.29 | | | $6,522 |
Granted | | | 994,014 | | | $16.63 | | | | | ||
Exercised | | | (9,241) | | | $8.97 | | | | | ||
Cancelled | | | (150,560) | | | $14.60 | | | | | ||
Outstanding as of December 31, 2021 | | | 1,779,174 | | | $18.99 | | | 7.67 | | | $— |
Vested and expected to vest as of December 31, 2021 | | | 1,764,174 | | | $19.00 | | | 7.66 | | | $— |
Options exercisable as of December 31, 2021(1) | | | 1,024,379 | | | $20.99 | | | 6.48 | | | $— |
(1) | Certain options were immediately exercisable for restricted common stock which vest according to the original vesting terms of the option grant. No options have been exercised prior to vesting. |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Research and development expenses | | | $1,352 | | | $663 |
General and administrative expenses | | | 3,938 | | | 1,603 |
| | $5,290 | | | $2,266 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Federal statutory income tax rate | | (21.0)% | | (21.0)% | | (21.0)% | | (21.0)% | ||||
State taxes, net of federal benefit | | (10.0) | | (1.6) | | (10.0) | | (1.6) | ||||
Federal and state research and development tax credits | | (4.1) | | (2.5) | | (4.1) | | (2.5) | ||||
In-process research and development(1) | | 0 | | 10.4 | | — | | 10.4 | ||||
Other | | (1.8) | | 1.2 | | (1.8) | | 1.2 | ||||
Change in deferred tax asset valuation allowance | | 36.9 | | 13.5 | | 36.9 | | 13.5 | ||||
Effective income tax rate | | 0.0% | | 0.0% | | 0.0% | | 0.0% |
(1) | Represents the tax effect on the in-process research and development expense recorded on the acquisition of PTI |
| | December 31, | | | December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Deferred tax assets: | | | | | ||||||||
Net operating loss carryforwards | | $134,395 | | $122,460 | | $134,395 | | $122,460 | ||||
Research and development tax credit carryforwards | | 20,246 | | 18,654 | | 20,246 | | 18,654 | ||||
Property and equipment | | 242 | | 184 | | 242 | | 184 | ||||
Accrued expenses | | 521 | | 539 | | 521 | | 539 | ||||
Capitalized intellectual property costs | | 102 | | 89 | | 102 | | 89 | ||||
Stock/equity-based compensation expense | | 1,712 | | 1,084 | | 1,712 | | 1,084 | ||||
Operating lease liabilities | | 4,534 | | 4,670 | | 4,534 | | 4,670 | ||||
Other | | 290 | | 0 | | 290 | | 0 | ||||
Total deferred tax assets | | 162,042 | | 147,680 | | 162,042 | | 147,680 | ||||
Deferred tax liabilities: | | | | | ||||||||
Operating lease right-of-use assets | | (5,806) | | (5,836) | | (5,806) | | (5,836) | ||||
Other | | 0 | | (172) | | — | | (172) | ||||
Total deferred tax liabilities | | (5,806) | | (6,008) | | (5,806) | | (6,008) | ||||
Valuation allowance | | (156,236) | | (141,672) | | (156,236) | | (141,672) | ||||
Net deferred tax assets | | $0 | | $0 | | $— | | $— |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Valuation allowance as of beginning of year | | $141,672 | | $26,724 | | $141,672 | | $26,724 | ||||
Increases recorded to income tax provision | | 14,564 | | 7,777 | | 14,564 | | 7,777 | ||||
Amounts from Merger with PTI | | 0 | | 107,171 | | — | | 107,171 | ||||
Valuation allowance as of end of year | | $156,236 | | $141,672 | | $156,236 | | $141,672 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Numerator: | | | | | ||||||||
Net loss | | $(39,503) | | $(57,487) | | $(39,503) | | $(57,487) | ||||
Gain on extinguishment of Class B preferred units | | 0 | | 6,697 | | — | | 6,697 | ||||
Net loss applicable to common shareholders | | $(39,503) | | $(50,790) | | $(39,503) | | $(50,790) | ||||
Denominator: | | | | | ||||||||
Weighted average common shares outstanding, basic and diluted | | 10,283,172 | | 2,354,143 | | 10,283,172 | | 2,354,143 | ||||
Net loss per share, basic and diluted | | $(3.84) | | $(21.57) | | $(3.84) | | $(21.57) |
| | As of December 31, | | | As of December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Options to purchase common stock | | 1,779,174 | | 944,961 | | 1,779,174 | | 944,961 | ||||
Warrants to purchase common stock or shares convertible into common stock | | 99,986 | | 99,986 | | 99,986 | | 99,986 | ||||
Unvested RSUs | | 86,225 | | 0 | | 86,225 | | — | ||||
| 1,965,385 | | 1,044,947 | | 1,965,385 | | 1,044,947 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Operating lease cost | | $6,665 | | $3,097 | | $6,665 | | $3,097 | ||||
Short-term lease cost | | $0 | | $0 | | $— | | $— | ||||
Variable lease cost | | $844 | | $271 | | $844 | | $271 | ||||
Finance lease cost: | | | | | ||||||||
Amortization of lease assets | | $152 | | $361 | | $152 | | $361 | ||||
Interest on lease liabilities | | 7 | | 20 | | 7 | | 20 | ||||
Total finance lease cost | | $159 | | $381 | | $159 | | $381 |
| | Year Ended December 31, | | | Year Ended December 31, | |||||||
| | 2021 | | 2020 | | | 2021 | | 2020 | |||
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | | $5,998 | | $2,461 | | $5,998 | | $2,461 | ||||
Cash paid for amounts included in the measurement of finance lease liabilities (operating cash flows) | | $7 | | $20 | | $7 | | $20 | ||||
Cash paid for amounts included in the measurement of finance lease liabilities (financing cash flows) | | $166 | | $347 | | $166 | | $347 | ||||
Operating lease liabilities arising from obtaining right-of-use assets | | $0 | | $10,219 | | $— | | $10,219 | ||||
Finance lease liabilities arising from obtaining right-of-use assets | | $0 | | $102 | | $— | | $102 |
| | As of December 31, | ||||
| | 2021 | | | 2020 | |
Weighted-average remaining lease term (in years) used for: | | | | | ||
Operating leases | | | 5.22 | | | 5.03 |
Finance leases | | | 0.60 | | | 1.26 |
Weighted-average discount rate used for: | | | | | ||
Operating leases | | | 9.10% | | | 9.01% |
Finance leases | | | 3.41% | | | 6.46% |
Year Ending December 31, | | Operating Leases | | Finance Leases | | Operating Leases | | Finance Leases | ||||
2022 | | $6,173 | | $49 | | $6,173 | | $49 | ||||
2023 | | 2,977 | | 0 | | 2,977 | | — | ||||
2024 | | 1,931 | | 0 | | 1,931 | | — | ||||
2025 | | 1,985 | | 0 | | 1,985 | | — | ||||
2026 | | 2,039 | | 0 | | 2,039 | | — | ||||
Thereafter | | 2,801 | | 0 | | 2,801 | | — | ||||
Total future lease payments | | 17,906 | | 49 | | 17,906 | | 49 | ||||
Less: Imputed interest | | (3,427) | | (1) | | (3,427) | | (1) | ||||
Total lease liabilities | | $14,479 | | $48 | | $14,479 | | $48 |
| | | As of December 31, | | | | As of December 31, | |||||||||||
Leases | | Consolidated Balance Sheet Classification | | 2021 | | 2020 | | Consolidated Balance Sheet Classification | | 2021 | | 2020 | ||||||
Assets: | | | | | | | ||||||||||||
Operating lease assets | | Operating lease right-of- use assets | | $18,543 | | $23,678 | | Operating lease right-of- use assets | | $18,543 | | $23,678 | ||||||
Finance lease assets | | Property and equipment, net | | 315 | | 199 | | Property and equipment, net | | 315 | | 199 | ||||||
Total leased assets | | | $18,858 | | $23,877 | | | $18,858 | | $23,877 | ||||||||
Liabilities: | | | | | | | ||||||||||||
Current: | | | | | | | ||||||||||||
Operating lease liabilities | | Operating lease liabilities | | $5,064 | | $4,468 | | Operating lease liabilities | | $5,064 | | $4,468 | ||||||
Finance lease liabilities | | Current portion of finance lease obligation | | 48 | | 166 | | Current portion of finance lease obligation | | 48 | | 166 | ||||||
Non-current: | | | | | | | ||||||||||||
Operating lease liabilities | | Operating lease liabilities, net of current portion | | 9,415 | | 14,479 | | Operating lease liabilities, net of current portion | | 9,415 | | 14,479 | ||||||
Finance lease liabilities | | Finance lease obligation, net of current portion | | 0 | | 48 | | Finance lease obligation, net of current portion | | — | | 48 | ||||||
Total lease liabilities | | | $14,527 | | $19,161 | | | $14,527 | | $19,161 |
| | June 30, 2022 | | December 31, 2021 | | | June 30, 2022 | | December 31, 2021 | |||
Assets | | | | | ||||||||
Current assets: | | | | | ||||||||
Cash and cash equivalents | | $11,846 | | $35,102 | | $11,846 | | $35,102 | ||||
Marketable securities | | 0 | | 1,399 | | — | | 1,399 | ||||
Accounts receivable | | 0 | | 5,000 | | — | | 5,000 | ||||
Restricted cash, current | | 828 | | 0 | | 828 | | — | ||||
Prepaid expenses and other current assets | | 1,854 | | 1,207 | | 1,854 | | 1,207 | ||||
Total current assets | | 14,528 | | 42,708 | | 14,528 | | 42,708 | ||||
Property and equipment, net | | 60 | | 387 | | 60 | | 387 | ||||
Operating lease right-of-use assets | | 831 | | 18,543 | | 831 | | 18,543 | ||||
Deposits | | 0 | | 366 | | — | | 366 | ||||
Restricted cash | | 50 | | 928 | | 50 | | 928 | ||||
Total assets | | $15,469 | | $62,932 | | $15,469 | | $62,932 | ||||
Liabilities and Stockholders’ Equity | | | | | ||||||||
Current liabilities: | | | | | ||||||||
Accounts payable | | $1,599 | | $1,839 | | $1,599 | | $1,839 | ||||
Accrued expenses and other current liabilities | | 2,422 | | 4,846 | | 2,422 | | 4,846 | ||||
Current portion of long-term debt | | 0 | | 5,805 | | — | | 5,805 | ||||
Operating lease liabilities | | 559 | | 5,064 | | 559 | | 5,064 | ||||
Current portion of finance lease obligation | | 0 | | 48 | | — | | 48 | ||||
Short-term borrowings | | 578 | | 0 | | 578 | | — | ||||
Deferred revenue | | 2,381 | | 5,061 | | 2,381 | | 5,061 | ||||
Total current liabilities | | 7,539 | | 22,663 | | 7,539 | | 22,663 | ||||
Long-term debt, net of discount and current portion | | 0 | | 7,357 | | — | | 7,357 | ||||
Operating lease liabilities, net of current portion | | 0 | | 9,415 | | — | | 9,415 | ||||
Total liabilities | | 7,539 | | 39,435 | | 7,539 | | 39,435 | ||||
Commitments and contingencies (Note 11) | | 0 | | 0 | | | ||||||
Stockholders’ equity: | | | | | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | 0 | | 0 | ||||||||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | — | | — | ||||||||
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,842,945 shares and 10,644,714 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | 11 | | 11 | | 11 | | 11 | ||||
Additional paid-in capital | | 213,458 | | 210,799 | | 213,458 | | 210,799 | ||||
Accumulated deficit | | (205,539) | | (187,313) | | (205,539) | | (187,313) | ||||
Total stockholders’ equity | | 7,930 | | 23,497 | | 7,930 | | 23,497 | ||||
Total liabilities and stockholders’ equity | | $15,469 | | $62,932 | | $15,469 | | $62,932 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | | 2022 | | 2021 | | 2022 | | 2021 | |||||||
Collaboration revenue | | $1,657 | | $2,114 | | $2,679 | | $5,646 | | $1,657 | | $2,114 | | $2,679 | | $5,646 | ||||||||
Operating expenses: | | | | | | | | | ||||||||||||||||
Research and development | | 1,141 | | 7,327 | | 6,037 | | 14,106 | | 1,141 | | 7,327 | | 6,037 | | 14,106 | ||||||||
General and administrative | | 5,557 | | 4,712 | | 10,382 | | 10,764 | | 5,557 | | 4,712 | | 10,382 | | 10,764 | ||||||||
Impairment loss | | 0 | | 0 | | 3,901 | | 0 | | — | | — | | 3,901 | | — | ||||||||
Total operating expenses | | 6,698 | | 12,039 | | 20,320 | | 24,870 | | 6,698 | | 12,039 | | 20,320 | | 24,870 | ||||||||
Loss from operations | | (5,041) | | (9,925) | | (17,641) | | (19,224) | | (5,041) | | (9,925) | | (17,641) | | (19,224) | ||||||||
Other income (expense): | | | | | | | | | ||||||||||||||||
Interest expense | | (7) | | (463) | | (217) | | (951) | | (7) | | (463) | | (217) | | (951) | ||||||||
Interest income and other income (expense), net | | 203 | | (66) | | (168) | | (95) | | 203 | | (66) | | (168) | | (95) | ||||||||
(Loss) gain on debt extinguishment | | 0 | | 0 | | (200) | | 1,134 | | — | | — | | (200) | | 1,134 | ||||||||
Total other income (expense), net | | 196 | | (529) | | (585) | | 88 | | 196 | | (529) | | (585) | | 88 | ||||||||
Net loss | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) | ||||||||
Net loss applicable to common shareholders | | (4,845) | | (10,454) | | (18,226) | | (19,136) | | (4,845) | | (10,454) | | (18,226) | | (19,136) | ||||||||
Net loss per share, basic and diluted | | $(0.45) | | $(1.03) | | $(1.69) | | $(1.88) | | $(0.45) | | $(1.03) | | $(1.69) | | $(1.88) | ||||||||
Weighted average common shares outstanding, basic and diluted | | 10,847,734 | | 10,195,608 | | 10,800,473 | | 10,194,474 | | 10,847,734 | | 10,195,608 | | 10,800,473 | | 10,194,474 |
| | Three Months Ended June 30, | | Six Months Ended June 30, | | | Three Months Ended June 30, | | Six Months Ended June 30, | |||||||||||||||
| | 2022 | | 2021 | | 2022 | | 2021 | | | 2022 | | 2021 | | 2022 | | 2021 | |||||||
Net loss | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) | ||||||||
Other comprehensive income: | | | | | | | | | ||||||||||||||||
Unrealized gains on marketable securities, net of tax of $0 | | 0 | | 0 | | 0 | | 0 | | — | | — | | — | | — | ||||||||
Comprehensive loss | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) | | $(4,845) | | $(10,454) | | $(18,226) | | $(19,136) |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $0 | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $0 | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $0 | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $0 | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $0 | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $0 | | | $(166,946) | | | $41,107 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $— | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $— | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $— | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $— | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $— | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $— | | | $(166,946) | | | $41,107 |
| | Six Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | 2021 | | | 2022 | | 2021 | |||
Cash flows from operating activities: | | | | | ||||||||
Net loss | | $(18,226) | | $(19,136) | | $(18,226) | | $(19,136) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||||||||
Net amortization of premiums (accretion of discounts) on marketable securities | | (1) | | (7) | | (1) | | (7) | ||||
Depreciation and amortization expense | | 97 | | 375 | | 97 | | 375 | ||||
Non-cash lease expense | | 1,967 | | 2,518 | | 1,967 | | 2,518 | ||||
Stock/equity-based compensation expense | | 2,276 | | 2,666 | | 2,276 | | 2,666 | ||||
Other non-cash expense | | 0 | | 55 | | — | | 55 | ||||
Non-cash interest expense | | 36 | | 284 | | 36 | | 284 | ||||
Loss (gain) on debt extinguishment | | 200 | | (1,134) | | 200 | | (1,134) | ||||
Impairment of right-of-use asset | | 3,901 | | 0 | | 3,901 | | — | ||||
Loss on sale of property and equipment | | 20 | | 63 | | 20 | | 63 | ||||
Changes in operating assets and liabilities: | | | | | ||||||||
Accounts receivable | | 5,000 | | — | | 5,000 | | — | ||||
Prepaid expenses and other current assets | | (668) | | (164) | | (668) | | (164) | ||||
Deposits | | 366 | | — | | 366 | | — | ||||
Operating lease liabilities | | (2,076) | | (2,157) | | (2,076) | | (2,157) | ||||
Accounts payable | | (240) | | (5,573) | | (240) | | (5,573) | ||||
Accrued expenses and other current liabilities | | (3,090) | | (4,047) | | (3,090) | | (4,047) | ||||
Deferred revenue | | (2,680) | | (5,646) | | (2,680) | | (5,646) | ||||
Net cash used in operating activities | | (13,118) | | (31,903) | | (13,118) | | (31,903) | ||||
Cash flows from investing activities: | | | | | ||||||||
Purchases of marketable securities | | 0 | | (9,869) | | — | | (9,869) | ||||
Proceeds from sales and maturities of marketable securities | | 1,400 | | 6,075 | | 1,400 | | 6,075 | ||||
Purchases of property and equipment | | (53) | | (90) | | (53) | | (90) | ||||
Proceeds from sale of property and equipment | | 263 | | — | | 263 | | — | ||||
Net cash provided by (used in) investing activities | | 1,610 | | (3,884) | | 1,610 | | (3,884) | ||||
Cash flows from financing activities: | | | | | ||||||||
Proceeds from at the market offering | | 383 | | 1,313 | | 383 | | 1,313 | ||||
Proceeds from exercise of stock options | | 0 | | 57 | | — | | 57 | ||||
Proceeds from issuance of short-term borrowings | | 1,742 | | — | | 1,742 | | — | ||||
Payments of principal portion of long-term debt | | (929) | | — | | (929) | | — | ||||
Payments of final payoff of long term debt | | (11,803) | | — | | (11,803) | | — | ||||
Payments of debt issuance costs related to long-term debt | | 0 | | (103) | | — | | (103) | ||||
Payments of short-term borrowings | | (1,164) | | — | | (1,164) | | — | ||||
Payments of finance lease obligations | | (27) | | (108) | | (27) | | (108) | ||||
Net cash provided by (used in) financing activities | | (11,798) | | 1,159 | | (11,798) | | 1,159 | ||||
Net decrease in cash, cash equivalents and restricted cash | | (23,306) | | (34,628) | | (23,306) | | (34,628) | ||||
Cash, cash equivalents and restricted cash at beginning of period | | 36,030 | | 82,885 | | 36,030 | | 82,885 | ||||
Cash, cash equivalents and restricted cash at end of period | | $12,724 | | $48,257 | | $12,724 | | $48,257 | ||||
Supplemental cash flow information: | | | | | ||||||||
Cash paid for interest | | $400 | | $660 | | $400 | | $660 |
• | Pursue another strategic transaction similar to the Merger. The Company may resume its process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such strategic transaction with such candidate. |
• | Continue to operate its business. If the Asset Sale also does not close, the Company could elect to continue to operate its business and pursue licensing or partnering transactions or utilize its intellectual property to pursue the treatment of neurodegenerative diseases. To continue to operate its business, the Company would require a significant amount of time and financial resources, and the Company would be subject to |
• | Dissolve and liquidate its assets. If the Company is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, the Company may dissolve and liquidate its assets. In that event, the Company would be required to pay all of its debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If the Company dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to the Company’s stockholders after paying the Company’s debts and other obligations and setting aside funds for commitments and contingent liabilities. |
| | Fair Value Measurements at June 30, 2022: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $11,506 | | | $0 | | | $0 | | | $11,506 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | 0 | | | 0 | | | 0 | | | 0 |
| | $11,506 | | | $0 | | | $0 | | | $11,506 |
| | Fair Value Measurements at December 31, 2021: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $0 | | | $0 | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | 0 | | | 1,399 | | | 0 | | | 1,399 |
| | $34,136 | | | $1,399 | | | $0 | | | $35,535 |
| | June 30, 2022 | | | December 31, 2021 | |
Accrued employee compensation and benefits | | | $350 | | | $1,763 |
Accrued external research and development expenses | | | 962 | | | 1,633 |
Accrued professional fees | | | 740 | | | 901 |
Other | | | 370 | | | 549 |
| | $2,422 | | | $4,846 |
| | June 30, 2022 | | | December 31, 2021 | |
Principal amount of long-term debt | | | $0 | | | $12,733 |
Less: Current portion of long-term debt | | | 0 | | | (5,805) |
Long-term debt, net of current portion | | | 0 | | | 6,928 |
Debt discount, net of accretion | | | 0 | | | (217) |
Accrued end-of-term payment | | | 0 | | | 646 |
Long-term debt, net of discount and current portion | | | $0 | | | $7,357 |
| | RSUs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 86,225 | | | $17.89 |
Issued | | | 0 | | | $0 |
Vested | | | (17,624) | | | $17.89 |
Forfeited | | | (20,429) | | | $17.89 |
Unvested balance at June 30, 2022 | | | 48,172 | | | $17.89 |
| | RSAs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 305,663 | | | $3.83 |
Issued | | | 0 | | | $0 |
Vested | | | (189,778) | | | $3.83 |
Forfeited | | | (35,725) | | | $3.83 |
Unvested balance at June 30, 2022 | | | 80,160 | | | $3.83 |
| | Number of Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value (in thousands) | |
Outstanding as of December 31, 2021 | | | 1,779,174 | | | $18.99 | | | 7.67 | | | 0 |
Granted | | | 17,000 | | | $2.89 | | | | | 0 | |
Exercised | | | 0 | | | 0 | | | | | 0 | |
Forfeited | | | (573,490) | | | $31.47 | | | | | 0 | |
Outstanding as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | 0 |
Vested and expected to vest as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | 0 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Research and development expenses | | | $89 | | | $355 | | | $190 | | | $746 |
General and administrative expenses | | | 983 | | | 904 | | | 2,086 | | | 1,920 |
| | $1,072 | | | $1,259 | | | $2,276 | | | $2,666 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Options to purchase common stock | | | 1,222,684 | | | 1,756,947 |
Warrants to purchase common stock or shares convertible into common stock | | | 99,986 | | | 99,986 |
Unvested RSUs | | | 48,172 | | | 112,544 |
| | 1,370,842 | | | 1,969,477 |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $11,846 | | | $35,102 |
Marketable securities | | | — | | | 1,399 |
Accounts receivable | | | — | | | 5,000 |
Restricted cash, current | | | 828 | | | — |
Prepaid expenses and other current assets | | | 1,854 | | | 1,207 |
Total current assets | | | 14,528 | | | 42,708 |
Property and equipment, net | | | 60 | | | 387 |
Operating lease right-of-use assets | | | 831 | | | 18,543 |
Deposits | | | — | | | 366 |
Restricted cash | | | 50 | | | 928 |
Total assets | | | $15,469 | | | $62,932 |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,599 | | | $1,839 |
Accrued expenses and other current liabilities | | | 2,422 | | | 4,846 |
Current portion of long-term debt | | | — | | | 5,805 |
Operating lease liabilities | | | 559 | | | 5,064 |
Current portion of finance lease obligation | | | — | | | 48 |
Short-term borrowings | | | 578 | | | — |
Deferred revenue | | | 2,381 | | 5,061 | |
Total current liabilities | | | 7,539 | | | 22,663 |
Long-term debt, net of discount and current portion | | | — | | | 7,357 |
Operating lease liabilities, net of current portion | | | — | | | 9,415 |
Total liabilities | | | 7,539 | | | 39,435 |
Commitments and contingencies (Note 11) | | | | | ||
Stockholders’ equity: | | | | | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | — | | | — |
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,842,945 shares and 10,644,714 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 11 | | | 11 |
Additional paid-in capital | | | 213,458 | | | 210,799 |
Accumulated deficit | | | (205,539) | | | (187,313) |
Total stockholders’ equity | | | 7,930 | | | 23,497 |
Total liabilities and stockholders’ equity | | | $15,469 | | $62,932 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Collaboration revenue | | | $1,657 | | | $2,114 | | | $2,679 | | | $5,646 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 1,141 | | | 7,327 | | | 6,037 | | | 14,106 |
General and administrative | | | 5,557 | | | 4,712 | | | 10,382 | | | 10,764 |
Impairment loss | | | — | | | — | | | 3,901 | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | 20,320 | | | 24,870 |
Loss from operations | | | (5,041) | | (9,925) | | | (17,641) | | | (19,224) | |
Other income (expense): | | | | | | | | | ||||
Interest expense | | | (7) | | | (463) | | | (217) | | | (951) |
Interest income and other income (expense), net | | | 203 | | | (66) | | | (168) | | | (95) |
(Loss) gain on debt extinguishment | | | — | | | — | | | (200) | | | 1,134 |
Total other income (expense), net | | | 196 | | | (529) | | | (585) | | | 88 |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Net loss applicable to common shareholders | | | (4,845) | | | (10,454) | | | (18,226) | | | (19,136) |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Other comprehensive income: | | | | | | | | | ||||
Unrealized gains on marketable securities, net of tax of $0 | | | — | | | — | | | — | | | — |
Comprehensive loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $— | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $— | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $— | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $— | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $— | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $— | | | $(166,946) | | | $41,107 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash flows from operating activities: | | | | | ||
Net loss | | | $(18,226) | | | $(19,136) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Net amortization of premiums (accretion of discounts) on marketable securities | | | (1) | | | (7) |
Depreciation and amortization expense | | | 97 | | | 375 |
Non-cash lease expense | | | 1,967 | | | 2,518 |
Stock/equity-based compensation expense | | | 2,276 | | | 2,666 |
Other non-cash expense | | | — | | | 55 |
Non-cash interest expense | | | 36 | | | 284 |
Loss (gain) on debt extinguishment | | | 200 | | | (1,134) |
Impairment of right-of-use asset | | | 3,901 | | | — |
Loss on sale of property and equipment | | | 20 | | | 63 |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 5,000 | | | — |
Prepaid expenses and other current assets | | | (668) | | | (164) |
Deposits | | | 366 | | | — |
Operating lease liabilities | | | (2,076) | | | (2,157) |
Accounts payable | | | (240) | | | (5,573) |
Accrued expenses and other current liabilities | | | (3,090) | | | (4,047) |
Deferred revenue | | | (2,680) | | | (5,646) |
Net cash used in operating activities | | | (13,118) | | | (31,903) |
Cash flows from investing activities: | | | | | ||
Purchases of marketable securities | | | — | | | (9,869) |
Proceeds from sales and maturities of marketable securities | | | 1,400 | | | 6,075 |
Purchases of property and equipment | | | (53) | | | (90) |
Proceeds from sale of property and equipment | | | 263 | | | — |
Net cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash flows from financing activities: | | | | | ||
Proceeds from at the market offering | | | 383 | | | 1,313 |
Proceeds from exercise of stock options | | | — | | | 57 |
Proceeds from issuance of short-term borrowings | | | 1,742 | | | — |
Payments of principal portion of long-term debt | | | (929) | | | — |
Payments of final payoff of long term debt | | | (11,803) | | | — |
Payments of debt issuance costs related to long-term debt | | | — | | | (103) |
Payments of short-term borrowings | | | (1,164) | | | — |
Payments of finance lease obligations | | | (27) | | | (108) |
Net cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents and restricted cash | | | (23,306) | | | (34,628) |
Cash, cash equivalents and restricted cash at beginning of period | | | 36,030 | | | 82,885 |
Cash, cash equivalents and restricted cash at end of period | | | $12,724 | | | $48,257 |
Supplemental cash flow information: | | | | | ||
Cash paid for interest | | | $400 | | | $660 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating lease cost | | | $2,496 | | | $3,053 |
Short-term lease cost | | | 0 | | | 0 |
Variable lease cost | | | 357 | | | 272 |
Finance lease cost: | | | | | ||
Amortization of lease assets | | | 8 | | | 77 |
Interest on lease liabilities | | | 1 | | | 5 |
Total finance lease cost | | | $9 | | | $82 |
• | Pursue another strategic transaction similar to the Merger. The Company may resume its process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such strategic transaction with such candidate. |
• | Continue to operate its business. If the Asset Sale also does not close, the Company could elect to continue to operate its business and pursue licensing or partnering transactions or utilize its intellectual property to pursue the treatment of neurodegenerative diseases. To continue to operate its business, the Company would require a significant amount of time and financial resources, and the Company would be subject to |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | | | $2,177 | | | $2,970 |
Cash paid for amounts included in the measurement of finance lease liabilities (operating cash flows) | | | $1 | | | $5 |
Cash paid for amounts included in the measurement of finance lease liabilities (financing cash flows) | | | $27 | | | $108 |
Operating lease liabilities arising from obtaining right-of-use assets | | | $0 | | | $— |
Finance lease liabilities arising from obtaining right- of-use assets | | | $0 | | | $— |
Reduction in operating lease liabilities as a result of lease modifications | | | $11,844 | | | $— |
Reduction in operating right-of-use assets as a result of lease modifications | | | $11,852 | | | $— |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Weighted-average remaining lease term (in years) used for: | | | | | ||
Operating leases | | | 0.39 | | | 4.75 |
Finance leases | | | — | | | 1.11 |
Weighted-average discount rate used for: | | | | | ||
Operating leases | | | 5.85% | | | 9.08% |
Finance leases | | | — | | | 5.88% |
• | Dissolve and liquidate its assets. If the Company is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, the Company may dissolve and liquidate its assets. In that event, the Company would be required to pay all of its debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If the Company dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to the Company’s stockholders after paying the Company’s debts and other obligations and setting aside funds for commitments and contingent liabilities. |
Year | | | Operating Leases | | | Lease Payments to be Received from Sublease | | | Net Operating Lease Payments |
2022 | | | $566 | | | $(166) | | | $400 |
2023 | | | 0 | | | — | | | $0 |
2024 | | | 0 | | | — | | | $0 |
2025 | | | 0 | | | — | | | $0 |
2026 | | | 0 | | | — | | | $0 |
Thereafter | | | 0 | | | — | | | $0 |
Total future lease payments | | | 566 | | | (166) | | | 400 |
Less: Imputed interest | | | (7) | | | — | | | (7) |
Total lease liabilities | | | $559 | | | $(166) | | | $393 |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $11,846 | | | $35,102 |
Marketable securities | | | — | | | 1,399 |
Accounts receivable | | | — | | | 5,000 |
Restricted cash, current | | | 828 | | | — |
Prepaid expenses and other current assets | | | 1,854 | | | 1,207 |
Total current assets | | | 14,528 | | | 42,708 |
Property and equipment, net | | | 60 | | | 387 |
Operating lease right-of-use assets | | | 831 | | | 18,543 |
Deposits | | | — | | | 366 |
Restricted cash | | | 50 | | | 928 |
Total assets | | | $15,469 | | | $62,932 |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,599 | | | $1,839 |
Accrued expenses and other current liabilities | | | 2,422 | | | 4,846 |
Current portion of long-term debt | | | — | | | 5,805 |
Operating lease liabilities | | | 559 | | | 5,064 |
Current portion of finance lease obligation | | | — | | | 48 |
Short-term borrowings | | | 578 | | | — |
Deferred revenue | | | 2,381 | | 5,061 | |
Total current liabilities | | | 7,539 | | | 22,663 |
Long-term debt, net of discount and current portion | | | — | | | 7,357 |
Operating lease liabilities, net of current portion | | | — | | | 9,415 |
Total liabilities | | | 7,539 | | | 39,435 |
Commitments and contingencies (Note 11) | | | | | ||
Stockholders’ equity: | | | | | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | — | | | — |
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,842,945 shares and 10,644,714 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 11 | | | 11 |
Additional paid-in capital | | | 213,458 | | | 210,799 |
Accumulated deficit | | | (205,539) | | | (187,313) |
Total stockholders’ equity | | | 7,930 | | | 23,497 |
Total liabilities and stockholders’ equity | | | $15,469 | | $62,932 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Collaboration revenue | | | $1,657 | | | $2,114 | | | $2,679 | | | $5,646 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 1,141 | | | 7,327 | | | 6,037 | | | 14,106 |
General and administrative | | | 5,557 | | | 4,712 | | | 10,382 | | | 10,764 |
Impairment loss | | | — | | | — | | | 3,901 | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | 20,320 | | | 24,870 |
Loss from operations | | | (5,041) | | (9,925) | | | (17,641) | | | (19,224) | |
Other income (expense): | | | | | | | | | ||||
Interest expense | | | (7) | | | (463) | | | (217) | | | (951) |
Interest income and other income (expense), net | | | 203 | | | (66) | | | (168) | | | (95) |
(Loss) gain on debt extinguishment | | | — | | | — | | | (200) | | | 1,134 |
Total other income (expense), net | | | 196 | | | (529) | | | (585) | | | 88 |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Net loss applicable to common shareholders | | | (4,845) | | | (10,454) | | | (18,226) | | | (19,136) |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Other comprehensive income: | | | | | | | | | ||||
Unrealized gains on marketable securities, net of tax of $0 | | | — | | | — | | | — | | | — |
Comprehensive loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $— | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $— | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $— | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $— | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $— | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $— | | | $(166,946) | | | $41,107 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash flows from operating activities: | | | | | ||
Net loss | | | $(18,226) | | | $(19,136) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Net amortization of premiums (accretion of discounts) on marketable securities | | | (1) | | | (7) |
Depreciation and amortization expense | | | 97 | | | 375 |
Non-cash lease expense | | | 1,967 | | | 2,518 |
Stock/equity-based compensation expense | | | 2,276 | | | 2,666 |
Other non-cash expense | | | — | | | 55 |
Non-cash interest expense | | | 36 | | | 284 |
Loss (gain) on debt extinguishment | | | 200 | | | (1,134) |
Impairment of right-of-use asset | | | 3,901 | | | — |
Loss on sale of property and equipment | | | 20 | | | 63 |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 5,000 | | | — |
Prepaid expenses and other current assets | | | (668) | | | (164) |
Deposits | | | 366 | | | — |
Operating lease liabilities | | | (2,076) | | | (2,157) |
Accounts payable | | | (240) | | | (5,573) |
Accrued expenses and other current liabilities | | | (3,090) | | | (4,047) |
Deferred revenue | | | (2,680) | | | (5,646) |
Net cash used in operating activities | | | (13,118) | | | (31,903) |
Cash flows from investing activities: | | | | | ||
Purchases of marketable securities | | | — | | | (9,869) |
Proceeds from sales and maturities of marketable securities | | | 1,400 | | | 6,075 |
Purchases of property and equipment | | | (53) | | | (90) |
Proceeds from sale of property and equipment | | | 263 | | | — |
Net cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash flows from financing activities: | | | | | ||
Proceeds from at the market offering | | | 383 | | | 1,313 |
Proceeds from exercise of stock options | | | — | | | 57 |
Proceeds from issuance of short-term borrowings | | | 1,742 | | | — |
Payments of principal portion of long-term debt | | | (929) | | | — |
Payments of final payoff of long term debt | | | (11,803) | | | — |
Payments of debt issuance costs related to long-term debt | | | — | | | (103) |
Payments of short-term borrowings | | | (1,164) | | | — |
Payments of finance lease obligations | | | (27) | | | (108) |
Net cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents and restricted cash | | | (23,306) | | | (34,628) |
Cash, cash equivalents and restricted cash at beginning of period | | | 36,030 | | | 82,885 |
Cash, cash equivalents and restricted cash at end of period | | | $12,724 | | | $48,257 |
Supplemental cash flow information: | | | | | ||
Cash paid for interest | | | $400 | | | $660 |
• | Pursue another strategic transaction similar to the Merger. The Company may resume its process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such strategic transaction with such candidate. |
• | Continue to operate its business. If the Asset Sale also does not close, the Company could elect to continue to operate its business and pursue licensing or partnering transactions or utilize its intellectual property to pursue the treatment of neurodegenerative diseases. To continue to operate its business, the Company would require a significant amount of time and financial resources, and the Company would be subject to |
• | Dissolve and liquidate its assets. If the Company is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, the Company may dissolve and liquidate its assets. In that event, the Company would be required to pay all of its debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If the Company dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to the Company’s stockholders after paying the Company’s debts and other obligations and setting aside funds for commitments and contingent liabilities. |
| | Fair Value Measurements at June 30, 2022: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $11,506 | | | $— | | | $— | | | $11,506 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | — | | | — | | | — |
| | $11,506 | | | $— | | | $— | | | $11,506 |
| | Fair Value Measurements at December 31, 2021: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $— | | | $— | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | 1,399 | | | — | | | 1,399 |
| | $34,136 | | | $1,399 | | | $— | | | $35,535 |
| | June 30, 2022 | | | December 31, 2021 | |
Accrued employee compensation and benefits | | | $350 | | | $1,763 |
Accrued external research and development expenses | | | 962 | | | 1,633 |
Accrued professional fees | | | 740 | | | 901 |
Other | | | 370 | | | 549 |
| | $2,422 | | | $4,846 |
(In thousands) | | | 2022 |
Beginning balance at December 31, 2021 | | | $— |
Restructuring costs, personnel related | | | 985 |
Cash paid for restructuring costs | | | (330) |
Ending balance at March 31, 2022 | | | 655 |
Restructuring costs, personnel related | | | 412 |
Cash paid for restructuring costs | | | (765) |
Forfeitures | | | (31) |
Ending balance at June 30, 2022 | | | $271 |
| | June 30, 2022 | | | December 31, 2021 | |
Principal amount of long-term debt | | | $— | | | $12,733 |
Less: Current portion of long-term debt | | | — | | | (5,805) |
Long-term debt, net of current portion | | | — | | | 6,928 |
Debt discount, net of accretion | | | — | | | (217) |
Accrued end-of-term payment | | | — | | | 646 |
Long-term debt, net of discount and current portion | | | $— | | | $7,357 |
| | RSUs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 86,225 | | | $17.89 |
Issued | | | — | | | $— |
Vested | | | (17,624) | | | $17.89 |
Forfeited | | | (20,429) | | | $17.89 |
Unvested balance at June 30, 2022 | | | 48,172 | | | $17.89 |
| | RSAs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 305,663 | | | $3.83 |
Issued | | | — | | | $— |
Vested | | | (189,778) | | | $3.83 |
Forfeited | | | (35,725) | | | $3.83 |
Unvested balance at June 30, 2022 | | | 80,160 | | | $3.83 |
| | Number of Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value (in thousands) | |
Outstanding as of December 31, 2021 | | | 1,779,174 | | | $18.99 | | | 7.67 | | | — |
Granted | | | 17,000 | | | $2.89 | | | | | — | |
Exercised | | | — | | | — | | | | | — | |
Forfeited | | | (573,490) | | | $31.47 | | | | | — | |
Outstanding as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
Vested and expected to vest as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Research and development expenses | | | $89 | | | $355 | | | $190 | | | $746 |
General and administrative expenses | | | 983 | | | 904 | | | 2,086 | | | 1,920 |
| | $1,072 | | | $1,259 | | | $2,276 | | | $2,666 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Options to purchase common stock | | | 1,222,684 | | | 1,756,947 |
Warrants to purchase common stock or shares convertible into common stock | | | 99,986 | | | 99,986 |
Unvested RSUs | | | 48,172 | | | 112,544 |
| | 1,370,842 | | | 1,969,477 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating lease cost | | | $2,496 | | | $3,053 |
Short-term lease cost | | | — | | | — |
Variable lease cost | | | 357 | | | 272 |
Finance lease cost: | | | | | ||
Amortization of lease assets | | | 8 | | | 77 |
Interest on lease liabilities | | | 1 | | | 5 |
Total finance lease cost | | | $9 | | | $82 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | | | $2,177 | | | $2,970 |
Cash paid for amounts included in the measurement of finance lease liabilities (operating cash flows) | | | $1 | | | $5 |
Cash paid for amounts included in the measurement of finance lease liabilities (financing cash flows) | | | $27 | | | $108 |
Operating lease liabilities arising from obtaining right-of-use assets | | | $— | | | $— |
Finance lease liabilities arising from obtaining right- of-use assets | | | $— | | | $— |
Reduction in operating lease liabilities as a result of lease modifications | | | $11,844 | | | $— |
Reduction in operating right-of-use assets as a result of lease modifications | | | $11,852 | | | $— |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Weighted-average remaining lease term (in years) used for: | | | | | ||
Operating leases | | | 0.39 | | | 4.75 |
Finance leases | | | — | | | 1.11 |
Weighted-average discount rate used for: | | | | | ||
Operating leases | | | 5.85% | | | 9.08% |
Finance leases | | | — | | | 5.88% |
Year | | | Operating Leases | | | Lease Payments to be Received from Sublease | | | Net Operating Lease Payments |
2022 | | | $566 | | | $(166) | | | $400 |
2023 | | | — | | | — | | | $— |
2024 | | | — | | | — | | | $— |
2025 | | | — | | | — | | | $— |
2026 | | | — | | | — | | | $— |
Thereafter | | | — | | | — | | | $— |
Total future lease payments | | | 566 | | | (166) | | | 400 |
Less: Imputed interest | �� | | (7) | | | — | | | (7) |
Total lease liabilities | | | $559 | | | $(166) | | | $393 |
Leases | | | Condensed Consolidated Balance Sheet Classification | | | Amount |
Assets: | | | | | ||
Operating lease assets | | | Operating lease right-of- use assets | | | $831 |
Total leased assets | | | | | $831 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities | | | $559 |
Non-current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities, net of current portion | | | — |
Total lease liabilities | | | | | $559 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $11,144 | | | $11,470 |
Prepaid expenses and other current assets | | | 73 | | | 54 |
Total current assets | | | 11,217 | | | 11,524 |
Property and equipment, net | | | 189 | | | 241 |
Operating right-of-use asset | | | 1,872 | | | 2,462 |
Restricted cash | | | 75 | | | 75 |
Total assets | | | $13,353 | | | $14,302 |
Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $732 | | | $1,160 |
Accrued expenses and other current liabilities | | | 1,842 | | | 1,165 |
Deferred revenue | | | 1,041 | | | 8,924 |
Notes payable, current portion (with related parties $8,378 as of December 31, 2021) | | | 9,996 | | | — |
Operating lease liability, current portion | | | 737 | | | 642 |
Finance lease liabilities, current portion | | | 30 | | | 23 |
Total current liabilities | | | 14,378 | | | 11,914 |
Notes payable, net of current portion (with related parties $8,378 and $15,726 as of December 31, 2021 and 2020, respectively) | | | 9,444 | | | 21,709 |
Operating lease liability, net of current portion | | | 1,390 | | | 2,127 |
Finance lease liabilities, net of current portion | | | 90 | | | 98 |
Total liabilities | | | 25,302 | | | 35,848 |
Commitments and contingencies (Note 6) | | | | | ||
Shareholders’ deficit: | | | | | ||
Common stock, $0.0001 par value; 250,000 shares authorized as of December 31, 2021 and 2020; 67,673 and 55,934 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | | 7 | | | 6 |
Additional paid-in capital | | | 76,135 | | | 54,722 |
Accumulated deficit | | | (88,282) | | | (76,465) |
Total shareholders’ deficit attributable to Kineta, Inc. | | | (12,140) | | | (21,737) |
Noncontrolling interest | | | 191 | | | 191 |
Total shareholders’ deficit | | | (11,949) | | | (21,546) |
Total liabilities and shareholders’ deficit | | | $13,353 | | | $14,302 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Revenues: | | | | | ||
Licensing revenues | | | $7,883 | | | $8,187 |
Grant revenues | | | 1,208 | | | 2,301 |
Total revenues | | | 9,091 | | | 10,488 |
Operating expenses: | | | | | ||
Research and development | | | 15,561 | | | 9,215 |
General and administrative | | | 4,623 | | | 4,388 |
Total operating expenses | | | 20,184 | | | 13,603 |
Loss from operations | | | (11,093) | | | (3,115) |
Other (expense) income: | | | | | ||
Interest expense (with related parties $893 and $1,948 in 2021 and 2020, respectively) | | | (1,293) | | | (4,960) |
Change in fair value measurement of notes payable | | | (1,142) | | | 748 |
Gain on extinguishments of debt | | | 1,719 | | | 98 |
Other (expense) income, net | | | (8) | | | 117 |
Total other (expense) income, net | | | (724) | | | (3,997) |
Net loss | | | $ (11,817) | | | $(7,112) |
Net income attributable to noncontrolling interest | | | — | | | 940 |
Net loss attributable to Kineta, Inc. | | | $ (11,817) | | | $(8,052) |
Net loss per share, basic and diluted | | | $(0.19) | | | $(0.14) |
Weighted-average shares outstanding, basic and diluted | | | 63,346 | | | 56,521 |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Shares | | | Amount | | |||||||||||||||
Balance as of December 31, 2019, previously issued | | | 54,138 | | | $5 | | | $47,723 | | | $(68,640) | | | $(20,912) | | | $(706) | | | $(21,618) |
Change due to application of new accounting standard ASU 2020-06 | | | — | | | — | | | — | | | 249 | | | 249 | | | — | | | 249 |
Change due to application of new accounting standard ASC 842 | | | — | | | — | | | — | | | (22) | | | (22) | | | — | | | (22) |
Immaterial correction | | | — | | | — | | | 43 | | | — | | | 43 | | | (43) | | | — |
Balance as of January 1, 2020 | | | 54,138 | | | $5 | | | $ 47,766 | | | $ (68,413) | | | $(20,642) | | | $(749) | | | $(21,391) |
Issuance of common stock | | | 1,712 | | | 1 | | | 3,527 | | | — | | | 3,528 | | | — | | | 3,528 |
Issuance of common stock upon vesting of restricted stock | | | 7 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 77 | | | — | | | 18 | | | — | | | 18 | | | — | | | 18 |
Issuance of warrants to purchase common stock | | | — | | | — | | | 2,357 | | | — | | | 2,357 | | | — | | | 2,357 |
Stock-based compensation | | | — | | | — | | | 1,054 | | | — | | | 1,054 | | | — | | | 1,054 |
Net (loss) income | | | — | | | — | | | — | | | (8,052) | | | (8,052) | | | 940 | | | (7,112) |
Balance as of December 31, 2020 | | | 55,934 | | | $6 | | | $54,722 | | | $ (76,465) | | | $ (21,737) | | | $191 | | | $(21,546) |
Issuance of common stock | | | 9,396 | | | 1 | | | 16,712 | | | — | | | 16,713 | | | — | | | 16,713 |
Issuance of common stock upon extinguishment of notes payable | | | 1,360 | | | — | | | 2,570 | | | — | | | 2,570 | | | — | | | 2,570 |
Issuance of common stock to settle obligation | | | 114 | | | — | | | 250 | | | — | | | 250 | | | — | | | 250 |
Issuance of common stock upon exercise of stock options | | | 813 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon vesting of restricted stock | | | 6 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 50 | | | — | | | 27 | | | — | | | 27 | | | — | | | 27 |
Stock-based compensation | | | — | | | — | | | 1,854 | | | — | | | 1,854 | | | — | | | 1,854 |
Net loss | | | — | | | — | | | — | | | (11,817) | | | (11,817) | | | — | | | (11,817) |
Balance as of December 31, 2021 | | | 67,673 | | | $7 | | | $ 76,135 | | | $ (88,282) | | | $ (12,140) | | | $191 | | | $(11,949) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Operating activities: | | | | | ||
Net loss | | | $(11,817) | | | $(7,112) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Noncash interest expense | | | — | | | 2,357 |
Stock-based compensation | | | 1,854 | | | 1,054 |
Change in fair value of notes payable | | | 1,142 | | | (748) |
Gain on extinguishments of debt | | | (1,719) | | | (98) |
Noncash operating lease expense | | | 590 | | | 656 |
Gain on partial termination of operating lease | | | — | | | (155) |
Depreciation and amortization | | | 79 | | | 158 |
Amortization of contract costs | | | — | | | 229 |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses and other current assets | | | (18) | | | 3,046 |
Accounts payable | | | (178) | | | (585) |
Accrued expenses and other current liabilities | | | 739 | | | (59) |
Deferred revenue | | | (7,883) | | | 4,240 |
Operating lease liability | | | (642) | | | (687) |
Net cash (used in) provided by operating activities | | | (17,853) | | | 2,296 |
Investing activities: | | | | | ||
Purchases of property and equipment | | | — | | | (6) |
Net cash used in investing activities | | | — | | | (6) |
Financing activities: | | | | | ||
Proceeds from issuance of common stock | | | 16,713 | | | 3,528 |
Proceeds from payroll protection program loan | | | 815 | | | 890 |
Proceeds from notes payable | | | — | | | 300 |
Proceeds from exercise of warrants | | | 27 | | | 18 |
Proceeds from Small Business Administration loan | | | — | | | 150 |
Repayments of notes payable | | | — | | | (820) |
Repayments of finance lease liabilities | | | (28) | | | (79) |
Net cash provided by financing activities | | | 17,527 | | | 3,987 |
Net change in cash and restricted cash | | | (326) | | | 6,277 |
Cash and restricted cash at beginning of year | | | 11,545 | | | 5,268 |
Cash and restricted cash at end of year | | | $11,219 | | | $ 11,545 |
Components of cash and restricted cash: | | | | | ||
Cash | | | $11,144 | | | $ 11,470 |
Restricted cash | | | 75 | | | 75 |
Total cash and restricted cash | | | $11,219 | | | $ 11,545 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for interest | | | $1,100 | | | $2,544 |
Supplemental disclosure of noncash financing activities: | | | | | ||
Issuance of common stock upon extinguishment of notes payable | | | $2,570 | | | $— |
Issuance of warrants to purchase common stock upon refinancing of notes payable | | | $— | | | $2,357 |
Finance lease liabilities arising from obtaining new right-of-use assets | | | $27 | | | $135 |
Issuance of common stock to settle obligation | | | $250 | | | $— |
1. | Organization and Liquidity |
2. | Summary of Significant Accounting Policies |
3. | Fair Value Measurements |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $18,102 | | | $19,618 |
Change in fair value of 2020 notes | | | 1,142 | | | (748) |
Partial settlement of 2020 notes | | | (1,414) | | | (768) |
Balance at end of period | | | $17,830 | | | $ 18,102 |
4. | Balance Sheet Components |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Laboratory equipment | | | $1,058 | | | $1,031 |
Computer and software | | | 68 | | | 68 |
Leasehold improvements | | | 14 | | | 14 |
Total property and equipment | | | 1,140 | | | 1,113 |
Less: accumulated depreciation and amortization | | | 951 | | | 872 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Total property and equipment, net | | | $189 | | | $241 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Compensation and benefits | | | $790 | | | $939 |
Accrued clinical trial and preclinical costs | | | 641 | | | 33 |
Accrued interest | | | 280 | | | 86 |
Professional services | | | 99 | | | 66 |
Other | | | 32 | | | 41 |
Total accrued expense and other current liabilities | | | $1,842 | | | $1,165 |
5. | Notes Payable |
| | December 31, | ||||||||||
| | 2021 | | | 2020 | |||||||
| | Principal | | | Fair Value | | | Principal | | | Fair Value | |
| | (in thousands) | ||||||||||
Convertible notes payable: | | | | | | | | | ||||
2020 convertible notes | | | $13,800 | | | $16,244 | | | $13,800 | | | $15,241 |
Notes payable: | | | | | | | | | ||||
2020 notes | | | 1,550 | | | 1,586 | | | 2,950 | | | 2,861 |
Other notes payable | | | 1,460 | | | 1,460 | | | 2,567 | | | 2,567 |
Small Business Administration loan | | | 150 | | | 150 | | | 150 | | | 150 |
Paycheck protection program loan | | | — | | | — | | | 890 | | | 890 |
Total notes payable | | | $16,960 | | | 19,440 | | | $20,357 | | | 21,709 |
Less: current portion | | | | | (9,996) | | | | | — | ||
Notes payable, net of current portion | | | | | $9,444 | | | | | $21,709 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
2022 | | | $6,900 | | | $1,856 | | | $8,756 |
2023 | | | 6,900 | | | 775 | | | 7,675 |
2024 | | | — | | | 379 | | | 379 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 147 | | | 147 |
Total notes payable | | | $ 13,800 | | | $3,160 | | | $ 16,960 |
Less: current portion | | | (6,900) | | | (1,856) | | | (8,756) |
Notes payable, net of current portion | | | $6,900 | | | $1,304 | | | $8,204 |
| | | | As of December 31, | |||||
Leases | | | Consolidated Balance Sheet Classification | | | 2021 | | | 2020 |
Assets: | | | | | | | |||
Operating lease assets | | | Operating lease right-of- use assets | | | $18,543 | | | $23,678 |
Finance lease assets | | | Property and equipment, net | | | 315 | | | 199 |
Total leased assets | | | | | $18,858 | | | $23,877 | |
Liabilities: | | | | | | | |||
Current: | | | | | | | |||
Operating lease liabilities | | | Operating lease liabilities | | | $5,064 | | | $4,468 |
Finance lease liabilities | | | Current portion of finance lease obligation | | | 48 | | | 166 |
Non-current: | | | | | | | |||
Operating lease liabilities | | | Operating lease liabilities, net of current portion | | | 9,415 | | | 14,479 |
Finance lease liabilities | | | Finance lease obligation, net of current portion | | | — | | | 48 |
Total lease liabilities | | | | | $14,527 | | | $19,161 |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $11,846 | | | $35,102 |
Marketable securities | | | — | | | 1,399 |
Accounts receivable | | | — | | | 5,000 |
Restricted cash, current | | | 828 | | | — |
Prepaid expenses and other current assets | | | 1,854 | | | 1,207 |
Total current assets | | | 14,528 | | | 42,708 |
Property and equipment, net | | | 60 | | | 387 |
Operating lease right-of-use assets | | | 831 | | | 18,543 |
Deposits | | | — | | | 366 |
Restricted cash | | | 50 | | | 928 |
Total assets | | | $15,469 | | | $62,932 |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,599 | | | $1,839 |
Accrued expenses and other current liabilities | | | 2,422 | | | 4,846 |
Current portion of long-term debt | | | — | | | 5,805 |
Operating lease liabilities | | | 559 | | | 5,064 |
Current portion of finance lease obligation | | | — | | | 48 |
Short-term borrowings | | | 578 | | | — |
Deferred revenue | | | 2,381 | | 5,061 | |
Total current liabilities | | | 7,539 | | | 22,663 |
Long-term debt, net of discount and current portion | | | — | | | 7,357 |
Operating lease liabilities, net of current portion | | | — | | | 9,415 |
Total liabilities | | | 7,539 | | | 39,435 |
Commitments and contingencies (Note 11) | | | | | ||
Stockholders’ equity: | | | | | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | — | | | — |
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,842,945 shares and 10,644,714 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 11 | | | 11 |
Additional paid-in capital | | | 213,458 | | | 210,799 |
Accumulated deficit | | | (205,539) | | | (187,313) |
Total stockholders’ equity | | | 7,930 | | | 23,497 |
Total liabilities and stockholders’ equity | | | $15,469 | | $62,932 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Collaboration revenue | | | $1,657 | | | $2,114 | | | $2,679 | | | $5,646 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 1,141 | | | 7,327 | | | 6,037 | | | 14,106 |
General and administrative | | | 5,557 | | | 4,712 | | | 10,382 | | | 10,764 |
Impairment loss | | | — | | | — | | | 3,901 | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | 20,320 | | | 24,870 |
Loss from operations | | | (5,041) | | (9,925) | | | (17,641) | | | (19,224) | |
Other income (expense): | | | | | | | | | ||||
Interest expense | | | (7) | | | (463) | | | (217) | | | (951) |
Interest income and other income (expense), net | | | 203 | | | (66) | | | (168) | | | (95) |
(Loss) gain on debt extinguishment | | | — | | | — | | | (200) | | | 1,134 |
Total other income (expense), net | | | 196 | | | (529) | | | (585) | | | 88 |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Net loss applicable to common shareholders | | | (4,845) | | | (10,454) | | | (18,226) | | | (19,136) |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Other comprehensive income: | | | | | | | | | ||||
Unrealized gains on marketable securities, net of tax of $0 | | | — | | | — | | | — | | | — |
Comprehensive loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $— | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $— | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $— | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $— | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $— | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $— | | | $(166,946) | | | $41,107 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash flows from operating activities: | | | | | ||
Net loss | | | $(18,226) | | | $(19,136) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Net amortization of premiums (accretion of discounts) on marketable securities | | | (1) | | | (7) |
Depreciation and amortization expense | | | 97 | | | 375 |
Non-cash lease expense | | | 1,967 | | | 2,518 |
Stock/equity-based compensation expense | | | 2,276 | | | 2,666 |
Other non-cash expense | | | — | | | 55 |
Non-cash interest expense | | | 36 | | | 284 |
Loss (gain) on debt extinguishment | | | 200 | | | (1,134) |
Impairment of right-of-use asset | | | 3,901 | | | — |
Loss on sale of property and equipment | | | 20 | | | 63 |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 5,000 | | | — |
Prepaid expenses and other current assets | | | (668) | | | (164) |
Deposits | | | 366 | | | — |
Operating lease liabilities | | | (2,076) | | | (2,157) |
Accounts payable | | | (240) | | | (5,573) |
Accrued expenses and other current liabilities | | | (3,090) | | | (4,047) |
Deferred revenue | | | (2,680) | | | (5,646) |
Net cash used in operating activities | | | (13,118) | | | (31,903) |
Cash flows from investing activities: | | | | | ||
Purchases of marketable securities | | | — | | | (9,869) |
Proceeds from sales and maturities of marketable securities | | | 1,400 | | | 6,075 |
Purchases of property and equipment | | | (53) | | | (90) |
Proceeds from sale of property and equipment | | | 263 | | | — |
Net cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash flows from financing activities: | | | | | ||
Proceeds from at the market offering | | | 383 | | | 1,313 |
Proceeds from exercise of stock options | | | — | | | 57 |
Proceeds from issuance of short-term borrowings | | | 1,742 | | | — |
Payments of principal portion of long-term debt | | | (929) | | | — |
Payments of final payoff of long term debt | | | (11,803) | | | — |
Payments of debt issuance costs related to long-term debt | | | — | | | (103) |
Payments of short-term borrowings | | | (1,164) | | | — |
Payments of finance lease obligations | | | (27) | | | (108) |
Net cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents and restricted cash | | | (23,306) | | | (34,628) |
Cash, cash equivalents and restricted cash at beginning of period | | | 36,030 | | | 82,885 |
Cash, cash equivalents and restricted cash at end of period | | | $12,724 | | | $48,257 |
Supplemental cash flow information: | | | | | ||
Cash paid for interest | | | $400 | | | $660 |
• | Pursue another strategic transaction similar to the |
• | Continue to operate its business. If the |
• | Dissolve and liquidate its assets. If the Company is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, the Company may dissolve and liquidate its assets. In that event, the Company would be required to pay all of its debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If the Company dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to the Company’s stockholders after paying the Company’s debts and other obligations and setting aside funds for commitments and contingent liabilities. |
| | Fair Value Measurements at June 30, 2022: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $11,506 | | | $— | | | $— | | | $11,506 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | — | | | — | | | — |
| | $11,506 | | | $— | | | $— | | | $11,506 |
| | Fair Value Measurements at December 31, 2021: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $— | | | $— | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | 1,399 | | | — | | | 1,399 |
| | $34,136 | | | $1,399 | | | $— | | | $35,535 |
| | June 30, 2022 | | | December 31, 2021 | |
Accrued employee compensation and benefits | | | $350 | | | $1,763 |
Accrued external research and development expenses | | | 962 | | | 1,633 |
Accrued professional fees | | | 740 | | | 901 |
Other | | | 370 | | | 549 |
| | $2,422 | | | $4,846 |
(In thousands) | | | 2022 |
Beginning balance at December 31, 2021 | | | $— |
Restructuring costs, personnel related | | | 985 |
Cash paid for restructuring costs | | | (330) |
Ending balance at March 31, 2022 | | | 655 |
Restructuring costs, personnel related | | | 412 |
Cash paid for restructuring costs | | | (765) |
Forfeitures | | | (31) |
Ending balance at June 30, 2022 | | | $271 |
| | June 30, 2022 | | | December 31, 2021 | |
Principal amount of long-term debt | | | $— | | | $12,733 |
Less: Current portion of long-term debt | | | — | | | (5,805) |
Long-term debt, net of current portion | | | — | | | 6,928 |
Debt discount, net of accretion | | | — | | | (217) |
Accrued end-of-term payment | | | — | | | 646 |
Long-term debt, net of discount and current portion | | | $— | | | $7,357 |
| | RSUs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 86,225 | | | $17.89 |
Issued | | | — | | | $— |
Vested | | | (17,624) | | | $17.89 |
Forfeited | | | (20,429) | | | $17.89 |
Unvested balance at June 30, 2022 | | | 48,172 | | | $17.89 |
| | RSAs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 305,663 | | | $3.83 |
Issued | | | — | | | $— |
Vested | | | (189,778) | | | $3.83 |
Forfeited | | | (35,725) | | | $3.83 |
Unvested balance at June 30, 2022 | | | 80,160 | | | $3.83 |
| | Number of Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value (in thousands) | |
Outstanding as of December 31, 2021 | | | 1,779,174 | | | $18.99 | | | 7.67 | | | — |
Granted | | | 17,000 | | | $2.89 | | | | | — | |
Exercised | | | — | | | — | | | | | — | |
Forfeited | | | (573,490) | | | $31.47 | | | | | — | |
Outstanding as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
Vested and expected to vest as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Research and development expenses | | | $89 | | | $355 | | | $190 | | | $746 |
General and administrative expenses | | | 983 | | | 904 | | | 2,086 | | | 1,920 |
| | $1,072 | | | $1,259 | | | $2,276 | | | $2,666 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Options to purchase common stock | | | 1,222,684 | | | 1,756,947 |
Warrants to purchase common stock or shares convertible into common stock | | | 99,986 | | | 99,986 |
Unvested RSUs | | | 48,172 | | | 112,544 |
| | 1,370,842 | | | 1,969,477 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating lease cost | | | $2,496 | | | $3,053 |
Short-term lease cost | | | — | | | — |
Variable lease cost | | | 357 | | | 272 |
Finance lease cost: | | | | | ||
Amortization of lease assets | | | 8 | | | 77 |
Interest on lease liabilities | | | 1 | | | 5 |
Total finance lease cost | | | $9 | | | $82 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | | | $2,177 | | | $2,970 |
Cash paid for amounts included in the measurement of finance lease liabilities (operating cash flows) | | | $1 | | | $5 |
Cash paid for amounts included in the measurement of finance lease liabilities (financing cash flows) | | | $27 | | | $108 |
Operating lease liabilities arising from obtaining right-of-use assets | | | $— | | | $— |
Finance lease liabilities arising from obtaining right- of-use assets | | | $— | | | $— |
Reduction in operating lease liabilities as a result of lease modifications | | | $11,844 | | | $— |
Reduction in operating right-of-use assets as a result of lease modifications | | | $11,852 | | | $— |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Weighted-average remaining lease term (in years) used for: | | | | | ||
Operating leases | | | 0.39 | | | 4.75 |
Finance leases | | | — | | | 1.11 |
Weighted-average discount rate used for: | | | | | ||
Operating leases | | | 5.85% | | | 9.08% |
Finance leases | | | — | | | 5.88% |
Year | | | Operating Leases | | | Lease Payments to be Received from Sublease | | | Net Operating Lease Payments |
2022 | | | $566 | | | $(166) | | | $400 |
2023 | | | — | | | — | | | $— |
2024 | | | — | | | — | | | $— |
2025 | | | — | | | — | | | $— |
2026 | | | — | | | — | | | $— |
Thereafter | | | — | | | — | | | $— |
Total future lease payments | | | 566 | | | (166) | | | 400 |
Less: Imputed interest | �� | | (7) | | | — | | | (7) |
Total lease liabilities | | | $559 | | | $(166) | | | $393 |
Leases | | | Condensed Consolidated Balance Sheet Classification | | | Amount |
Assets: | | | | | ||
Operating lease | | | Operating lease right-of- use assets | | | $831 |
Total leased assets | | | | | $831 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities | | | $559 |
Non-current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities, net of current portion | | | — |
Total lease liabilities | | | | | $559 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $11,144 | | | $11,470 |
Prepaid expenses and other current assets | | | 73 | | | 54 |
Total current assets | | | 11,217 | | | 11,524 |
Property and equipment, net | | | 189 | | | 241 |
Operating right-of-use asset | | | 1,872 | | | 2,462 |
Restricted cash | | | 75 | | | 75 |
Total assets | | | $13,353 | | | $14,302 |
Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $732 | | | $1,160 |
Accrued expenses and other current liabilities | | | 1,842 | | | 1,165 |
Deferred revenue | | | 1,041 | | | 8,924 |
Notes payable, current portion (with related parties $8,378 as of December 31, 2021) | | | 9,996 | | | — |
Operating lease liability, current portion | | | 737 | | | 642 |
Finance lease liabilities, current portion | | | 30 | | | 23 |
Total current liabilities | | | 14,378 | | | 11,914 |
Notes payable, net of current portion (with related parties $8,378 and $15,726 as of December 31, 2021 and 2020, respectively) | | | 9,444 | | | 21,709 |
Operating lease liability, net of current portion | | | 1,390 | | | 2,127 |
Finance lease liabilities, net of current portion | | | 90 | | | 98 |
Total liabilities | | | 25,302 | | | 35,848 |
Commitments and contingencies (Note 6) | | | | | ||
Shareholders’ deficit: | | | | | ||
Common stock, $0.0001 par value; 250,000 shares authorized as of December 31, 2021 and 2020; 67,673 and 55,934 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | | 7 | | | 6 |
Additional paid-in capital | | | 76,135 | | | 54,722 |
Accumulated deficit | | | (88,282) | | | (76,465) |
Total shareholders’ deficit attributable to Kineta, Inc. | | | (12,140) | | | (21,737) |
Noncontrolling interest | | | 191 | | | 191 |
Total shareholders’ deficit | | | (11,949) | | | (21,546) |
Total liabilities and shareholders’ deficit | | | $13,353 | | | $14,302 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Revenues: | | | | | ||
Licensing revenues | | | $7,883 | | | $8,187 |
Grant revenues | | | 1,208 | | | 2,301 |
Total revenues | | | 9,091 | | | 10,488 |
Operating expenses: | | | | | ||
Research and development | | | 15,561 | | | 9,215 |
General and administrative | | | 4,623 | | | 4,388 |
Total operating expenses | | | 20,184 | | | 13,603 |
Loss from operations | | | (11,093) | | | (3,115) |
Other (expense) income: | | | | | ||
Interest expense (with related parties $893 and $1,948 in 2021 and 2020, respectively) | | | (1,293) | | | (4,960) |
Change in fair value measurement of notes payable | | | (1,142) | | | 748 |
Gain on extinguishments of debt | | | 1,719 | | | 98 |
Other (expense) income, net | | | (8) | | | 117 |
Total other (expense) income, net | | | (724) | | | (3,997) |
Net loss | | | $ (11,817) | | | $(7,112) |
Net income attributable to noncontrolling interest | | | — | | | 940 |
Net loss attributable to Kineta, Inc. | | | $ (11,817) | | | $(8,052) |
Net loss per share, basic and diluted | | | $(0.19) | | | $(0.14) |
Weighted-average shares outstanding, basic and diluted | | | 63,346 | | | 56,521 |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Shares | | | Amount | | |||||||||||||||
Balance as of December 31, 2019, previously issued | | | 54,138 | | | $5 | | | $47,723 | | | $(68,640) | | | $(20,912) | | | $(706) | | | $(21,618) |
Change due to application of new accounting standard ASU 2020-06 | | | — | | | — | | | — | | | 249 | | | 249 | | | — | | | 249 |
Change due to application of new accounting standard ASC 842 | | | — | | | — | | | — | | | (22) | | | (22) | | | — | | | (22) |
Immaterial correction | | | — | | | — | | | 43 | | | — | | | 43 | | | (43) | | | — |
Balance as of January 1, 2020 | | | 54,138 | | | $5 | | | $ 47,766 | | | $ (68,413) | | | $(20,642) | | | $(749) | | | $(21,391) |
Issuance of common stock | | | 1,712 | | | 1 | | | 3,527 | | | — | | | 3,528 | | | — | | | 3,528 |
Issuance of common stock upon vesting of restricted stock | | | 7 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 77 | | | — | | | 18 | | | — | | | 18 | | | — | | | 18 |
Issuance of warrants to purchase common stock | | | — | | | — | | | 2,357 | | | — | | | 2,357 | | | — | | | 2,357 |
Stock-based compensation | | | — | | | — | | | 1,054 | | | — | | | 1,054 | | | — | | | 1,054 |
Net (loss) income | | | — | | | — | | | — | | | (8,052) | | | (8,052) | | | 940 | | | (7,112) |
Balance as of December 31, 2020 | | | 55,934 | | | $6 | | | $54,722 | | | $ (76,465) | | | $ (21,737) | | | $191 | | | $(21,546) |
Issuance of common stock | | | 9,396 | | | 1 | | | 16,712 | | | — | | | 16,713 | | | — | | | 16,713 |
Issuance of common stock upon extinguishment of notes payable | | | 1,360 | | | — | | | 2,570 | | | — | | | 2,570 | | | — | | | 2,570 |
Issuance of common stock to settle obligation | | | 114 | | | — | | | 250 | | | — | | | 250 | | | — | | | 250 |
Issuance of common stock upon exercise of stock options | | | 813 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon vesting of restricted stock | | | 6 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 50 | | | — | | | 27 | | | — | | | 27 | | | — | | | 27 |
Stock-based compensation | | | — | | | — | | | 1,854 | | | — | | | 1,854 | | | — | | | 1,854 |
Net loss | | | — | | | — | | | — | | | (11,817) | | | (11,817) | | | — | | | (11,817) |
Balance as of December 31, 2021 | | | 67,673 | | | $7 | | | $ 76,135 | | | $ (88,282) | | | $ (12,140) | | | $191 | | | $(11,949) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Operating activities: | | | | | ||
Net loss | | | $(11,817) | | | $(7,112) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Noncash interest expense | | | — | | | 2,357 |
Stock-based compensation | | | 1,854 | | | 1,054 |
Change in fair value of notes payable | | | 1,142 | | | (748) |
Gain on extinguishments of debt | | | (1,719) | | | (98) |
Noncash operating lease expense | | | 590 | | | 656 |
Gain on partial termination of operating lease | | | — | | | (155) |
Depreciation and amortization | | | 79 | | | 158 |
Amortization of contract costs | | | — | | | 229 |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses and other current assets | | | (18) | | | 3,046 |
Accounts payable | | | (178) | | | (585) |
Accrued expenses and other current liabilities | | | 739 | | | (59) |
Deferred revenue | | | (7,883) | | | 4,240 |
Operating lease liability | | | (642) | | | (687) |
Net cash (used in) provided by operating activities | | | (17,853) | | | 2,296 |
Investing activities: | | | | | ||
Purchases of property and equipment | | | — | | | (6) |
Net cash used in investing activities | | | — | | | (6) |
Financing activities: | | | | | ||
Proceeds from issuance of common stock | | | 16,713 | | | 3,528 |
Proceeds from payroll protection program loan | | | 815 | | | 890 |
Proceeds from notes payable | | | — | | | 300 |
Proceeds from exercise of warrants | | | 27 | | | 18 |
Proceeds from Small Business Administration loan | | | — | | | 150 |
Repayments of notes payable | | | — | | | (820) |
Repayments of finance lease liabilities | | | (28) | | | (79) |
Net cash provided by financing activities | | | 17,527 | | | 3,987 |
Net change in cash and restricted cash | | | (326) | | | 6,277 |
Cash and restricted cash at beginning of year | | | 11,545 | | | 5,268 |
Cash and restricted cash at end of year | | | $11,219 | | | $ 11,545 |
Components of cash and restricted cash: | | | | | ||
Cash | | | $11,144 | | | $ 11,470 |
Restricted cash | | | 75 | | | 75 |
Total cash and restricted cash | | | $11,219 | | | $ 11,545 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for interest | | | $1,100 | | | $2,544 |
Supplemental disclosure of noncash financing activities: | | | | | ||
Issuance of common stock upon extinguishment of notes payable | | | $2,570 | | | $— |
Issuance of warrants to purchase common stock upon refinancing of notes payable | | | $— | | | $2,357 |
Finance lease liabilities arising from obtaining new right-of-use assets | | | $27 | | | $135 |
Issuance of common stock to settle obligation | | | $250 | | | $— |
1. | Organization and Liquidity |
2. | Summary of
|
3. | Fair Value Measurements |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $18,102 | | | $19,618 |
Change in fair value of 2020 notes | | | 1,142 | | | (748) |
Partial settlement of 2020 notes | | | (1,414) | | | (768) |
Balance at end of period | | | $17,830 | | | $ 18,102 |
4. | Balance Sheet Components |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Laboratory equipment | | | $1,058 | | | $1,031 |
Computer and software | | | 68 | | | 68 |
Leasehold improvements | | | 14 | | | 14 |
Total property and equipment | | | 1,140 | | | 1,113 |
Less: accumulated depreciation and amortization | | | 951 | | | 872 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Total property and equipment, net | | | $189 | | | $241 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Compensation and benefits | | | $790 | | | $939 |
Accrued clinical trial and preclinical costs | | | 641 | | | 33 |
Accrued interest | | | 280 | | | 86 |
Professional services | | | 99 | | | 66 |
Other | | | 32 | | | 41 |
Total accrued expense and other current liabilities | | | $1,842 | | | $1,165 |
5. | Notes Payable |
| | December 31, | ||||||||||
| | 2021 | | | 2020 | |||||||
| | Principal | | | Fair Value | | | Principal | | | Fair Value | |
| | (in thousands) | ||||||||||
Convertible notes payable: | | | | | | | | | ||||
2020 convertible notes | | | $13,800 | | | $16,244 | | | $13,800 | | | $15,241 |
Notes payable: | | | | | | | | | ||||
2020 notes | | | 1,550 | | | 1,586 | | | 2,950 | | | 2,861 |
Other notes payable | | | 1,460 | | | 1,460 | | | 2,567 | | | 2,567 |
Small Business Administration loan | | | 150 | | | 150 | | | 150 | | | 150 |
Paycheck protection program loan | | | — | | | — | | | 890 | | | 890 |
Total notes payable | | | $16,960 | | | 19,440 | | | $20,357 | | | 21,709 |
Less: current portion | | | | | (9,996) | | | | | — | ||
Notes payable, net of current portion | | | | | $9,444 | | | | | $21,709 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
2022 | | | $6,900 | | | $1,856 | | | $8,756 |
2023 | | | 6,900 | | | 775 | | | 7,675 |
2024 | | | — | | | 379 | | | 379 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 147 | | | 147 |
Total notes payable | | | $ 13,800 | | | $3,160 | | | $ 16,960 |
Less: current portion | | | (6,900) | | | (1,856) | | | (8,756) |
Notes payable, net of current portion | | | $6,900 | | | $1,304 | | | $8,204 |
| | | | As of December 31, | |||||
Leases | | | Consolidated Balance Sheet Classification | | | 2021 | | | 2020 |
Assets: | | | | | | | |||
Operating lease assets | | | Operating lease right-of- use assets | | | $18,543 | | | $23,678 |
Finance lease assets | | | Property and equipment, net | | | 315 | | | 199 |
Total leased assets | | | | | $18,858 | | | $23,877 | |
Liabilities: | | | | | | | |||
Current: | | | | | | | |||
Operating lease liabilities | | | Operating lease liabilities | | | $5,064 | | | $4,468 |
Finance lease liabilities | | | Current portion of finance lease obligation | | | 48 | | | 166 |
Non-current: | | | | | | | |||
Operating lease liabilities | | | Operating lease liabilities, net of current portion | | | 9,415 | | | 14,479 |
Finance lease liabilities | | | Finance lease obligation, net of current portion | | | — | | | 48 |
Total lease liabilities | | | | | $14,527 | | | $19,161 |
| | June 30, 2022 | | | December 31, 2021 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash and cash equivalents | | | $11,846 | | | $35,102 |
Marketable securities | | | — | | | 1,399 |
Accounts receivable | | | — | | | 5,000 |
Restricted cash, current | | | 828 | | | — |
Prepaid expenses and other current assets | | | 1,854 | | | 1,207 |
Total current assets | | | 14,528 | | | 42,708 |
Property and equipment, net | | | 60 | | | 387 |
Operating lease right-of-use assets | | | 831 | | | 18,543 |
Deposits | | | — | | | 366 |
Restricted cash | | | 50 | | | 928 |
Total assets | | | $15,469 | | | $62,932 |
Liabilities and Stockholders’ Equity | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $1,599 | | | $1,839 |
Accrued expenses and other current liabilities | | | 2,422 | | | 4,846 |
Current portion of long-term debt | | | — | | | 5,805 |
Operating lease liabilities | | | 559 | | | 5,064 |
Current portion of finance lease obligation | | | — | | | 48 |
Short-term borrowings | | | 578 | | | — |
Deferred revenue | | | 2,381 | | 5,061 | |
Total current liabilities | | | 7,539 | | | 22,663 |
Long-term debt, net of discount and current portion | | | — | | | 7,357 |
Operating lease liabilities, net of current portion | | | — | | | 9,415 |
Total liabilities | | | 7,539 | | | 39,435 |
Commitments and contingencies (Note 11) | | | | | ||
Stockholders’ equity: | | | | | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | — | | | — |
Common stock, $0.001 par value; 125,000,000 shares authorized; 10,842,945 shares and 10,644,714 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 11 | | | 11 |
Additional paid-in capital | | | 213,458 | | | 210,799 |
Accumulated deficit | | | (205,539) | | | (187,313) |
Total stockholders’ equity | | | 7,930 | | | 23,497 |
Total liabilities and stockholders’ equity | | | $15,469 | | $62,932 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Collaboration revenue | | | $1,657 | | | $2,114 | | | $2,679 | | | $5,646 |
Operating expenses: | | | | | | | | | ||||
Research and development | | | 1,141 | | | 7,327 | | | 6,037 | | | 14,106 |
General and administrative | | | 5,557 | | | 4,712 | | | 10,382 | | | 10,764 |
Impairment loss | | | — | | | — | | | 3,901 | | | — |
Total operating expenses | | | 6,698 | | | 12,039 | | | 20,320 | | | 24,870 |
Loss from operations | | | (5,041) | | (9,925) | | | (17,641) | | | (19,224) | |
Other income (expense): | | | | | | | | | ||||
Interest expense | | | (7) | | | (463) | | | (217) | | | (951) |
Interest income and other income (expense), net | | | 203 | | | (66) | | | (168) | | | (95) |
(Loss) gain on debt extinguishment | | | — | | | — | | | (200) | | | 1,134 |
Total other income (expense), net | | | 196 | | | (529) | | | (585) | | | 88 |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Net loss applicable to common shareholders | | | (4,845) | | | (10,454) | | | (18,226) | | | (19,136) |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Other comprehensive income: | | | | | | | | | ||||
Unrealized gains on marketable securities, net of tax of $0 | | | — | | | — | | | — | | | — |
Comprehensive loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2021 | | | 10,644,714 | | | $11 | | | $210,799 | | | $— | | | $(187,313) | | | $23,497 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,204 | | | — | | | — | | | 1,204 |
Issuance of common stock from at the market offering | | | 216,332 | | | — | | | 383 | | | — | | | — | | | 383 |
Vesting of restricted stock units | | | 17,624 | | | — | | | — | | | — | | | — | | | — |
Forfeiture of restricted stock awards | | | (31,930) | | | — | | | — | | | | | | | |||
Net loss | | | — | | | — | | | — | | | — | | | (13,381) | | | (13,381) |
Balances at March 31, 2022 | | | 10,846,740 | | | $11 | | | $212,386 | | | $— | | | $(200,694) | | | $11,703 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,072 | | | — | | | — | | | 1,072 |
Forfeiture of restricted stock awards | | | (3,795) | | | — | | | — | | | — | | | — | | | — |
Net loss | | | — | | | — | | | — | | | — | | | (4,845) | | | (4,845) |
Balances at June 30, 2022 | | | 10,842,945 | | | $11 | | | $213,458 | | | $— | | | $(205,539) | | | $7,930 |
| | Common Stock | | | Additional Paid-in Capital | | | Accumulated Other Comprehensive Gain (Loss) | | | Accumulated Deficit | | | Total Stockholders’ Equity | ||||
| | Shares | | | Amount | | ||||||||||||
Balances at December 31, 2020 | | | 10,193,831 | | | $10 | | | $204,007 | | | $— | | | $(147,810) | | | $56,207 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,407 | | | — | | | — | | | 1,407 |
Net loss | | | — | | | — | | | — | | | — | | | (8,682) | | | (8,682) |
Balances at March 31, 2021 | | | 10,193,831 | | | $10 | | | $205,414 | | | $— | | | $(156,492) | | | $48,932 |
Issuance of common stock from at the market offering | | | 82,132 | | | — | | | 1,313 | | | — | | | — | | | 1,313 |
Exercises of common stock options | | | 6,083 | | | — | | | 57 | | | — | | | — | | | 57 |
Stock/equity-based compensation expense | | | — | | | — | | | 1,259 | | | — | | | — | | | 1,259 |
Net loss | | | — | | | — | | | — | | | — | | | (10,454) | | | (10,454) |
Balances at June 30, 2021 | | | 10,282,046 | | | $10 | | | $208,043 | | | $— | | | $(166,946) | | | $41,107 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash flows from operating activities: | | | | | ||
Net loss | | | $(18,226) | | | $(19,136) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Net amortization of premiums (accretion of discounts) on marketable securities | | | (1) | | | (7) |
Depreciation and amortization expense | | | 97 | | | 375 |
Non-cash lease expense | | | 1,967 | | | 2,518 |
Stock/equity-based compensation expense | | | 2,276 | | | 2,666 |
Other non-cash expense | | | — | | | 55 |
Non-cash interest expense | | | 36 | | | 284 |
Loss (gain) on debt extinguishment | | | 200 | | | (1,134) |
Impairment of right-of-use asset | | | 3,901 | | | — |
Loss on sale of property and equipment | | | 20 | | | 63 |
Changes in operating assets and liabilities: | | | | | ||
Accounts receivable | | | 5,000 | | | — |
Prepaid expenses and other current assets | | | (668) | | | (164) |
Deposits | | | 366 | | | — |
Operating lease liabilities | | | (2,076) | | | (2,157) |
Accounts payable | | | (240) | | | (5,573) |
Accrued expenses and other current liabilities | | | (3,090) | | | (4,047) |
Deferred revenue | | | (2,680) | | | (5,646) |
Net cash used in operating activities | | | (13,118) | | | (31,903) |
Cash flows from investing activities: | | | | | ||
Purchases of marketable securities | | | — | | | (9,869) |
Proceeds from sales and maturities of marketable securities | | | 1,400 | | | 6,075 |
Purchases of property and equipment | | | (53) | | | (90) |
Proceeds from sale of property and equipment | | | 263 | | | — |
Net cash provided by (used in) investing activities | | | 1,610 | | | (3,884) |
Cash flows from financing activities: | | | | | ||
Proceeds from at the market offering | | | 383 | | | 1,313 |
Proceeds from exercise of stock options | | | — | | | 57 |
Proceeds from issuance of short-term borrowings | | | 1,742 | | | — |
Payments of principal portion of long-term debt | | | (929) | | | — |
Payments of final payoff of long term debt | | | (11,803) | | | — |
Payments of debt issuance costs related to long-term debt | | | — | | | (103) |
Payments of short-term borrowings | | | (1,164) | | | — |
Payments of finance lease obligations | | | (27) | | | (108) |
Net cash provided by (used in) financing activities | | | (11,798) | | | 1,159 |
Net decrease in cash, cash equivalents and restricted cash | | | (23,306) | | | (34,628) |
Cash, cash equivalents and restricted cash at beginning of period | | | 36,030 | | | 82,885 |
Cash, cash equivalents and restricted cash at end of period | | | $12,724 | | | $48,257 |
Supplemental cash flow information: | | | | | ||
Cash paid for interest | | | $400 | | | $660 |
• | Pursue another strategic transaction similar to the Merger. The Company may resume its process of evaluating other candidate companies interested in pursuing a strategic transaction and, if a candidate is identified, focus its attention on negotiating and completing such strategic transaction with such candidate. |
• | Continue to operate its business. If the Asset Sale also does not close, the Company could elect to continue to operate its business and pursue licensing or partnering transactions or utilize its intellectual property to pursue the treatment of neurodegenerative diseases. To continue to operate its business, the Company would require a significant amount of time and financial resources, and the Company would be subject to |
• | Dissolve and liquidate its assets. If the Company is unable, or does not believe that it is able, to find a suitable candidate for another strategic transaction, the Company may dissolve and liquidate its assets. In that event, the Company would be required to pay all of its debts and contractual obligations and to set aside certain reserves for commitments and contingent liabilities. If the Company dissolves and liquidates its assets, there can be no assurance as to the amount or timing of available cash that will remain for distribution to the Company’s stockholders after paying the Company’s debts and other obligations and setting aside funds for commitments and contingent liabilities. |
| | Fair Value Measurements at June 30, 2022: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $11,506 | | | $— | | | $— | | | $11,506 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | — | | | — | | | — |
| | $11,506 | | | $— | | | $— | | | $11,506 |
| | Fair Value Measurements at December 31, 2021: | ||||||||||
| | Level 1 | | | Level 2 | | | Level 3 | | | Total | |
Assets: | | | | | | | | | ||||
Cash equivalents: | | | | | | | | | ||||
Money market funds | | | $34,136 | | | $— | | | $— | | | $34,136 |
Marketable securities: | | | | | | | | | ||||
Commercial paper | | | — | | | 1,399 | | | — | | | 1,399 |
| | $34,136 | | | $1,399 | | | $— | | | $35,535 |
| | June 30, 2022 | | | December 31, 2021 | |
Accrued employee compensation and benefits | | | $350 | | | $1,763 |
Accrued external research and development expenses | | | 962 | | | 1,633 |
Accrued professional fees | | | 740 | | | 901 |
Other | | | 370 | | | 549 |
| | $2,422 | | | $4,846 |
(In thousands) | | | 2022 |
Beginning balance at December 31, 2021 | | | $— |
Restructuring costs, personnel related | | | 985 |
Cash paid for restructuring costs | | | (330) |
Ending balance at March 31, 2022 | | | 655 |
Restructuring costs, personnel related | | | 412 |
Cash paid for restructuring costs | | | (765) |
Forfeitures | | | (31) |
Ending balance at June 30, 2022 | | | $271 |
| | June 30, 2022 | | | December 31, 2021 | |
Principal amount of long-term debt | | | $— | | | $12,733 |
Less: Current portion of long-term debt | | | — | | | (5,805) |
Long-term debt, net of current portion | | | — | | | 6,928 |
Debt discount, net of accretion | | | — | | | (217) |
Accrued end-of-term payment | | | — | | | 646 |
Long-term debt, net of discount and current portion | | | $— | | | $7,357 |
| | RSUs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 86,225 | | | $17.89 |
Issued | | | — | | | $— |
Vested | | | (17,624) | | | $17.89 |
Forfeited | | | (20,429) | | | $17.89 |
Unvested balance at June 30, 2022 | | | 48,172 | | | $17.89 |
| | RSAs | | | Weighted Average Grant Date Fair Value | |
Unvested balance at December 31, 2021 | | | 305,663 | | | $3.83 |
Issued | | | — | | | $— |
Vested | | | (189,778) | | | $3.83 |
Forfeited | | | (35,725) | | | $3.83 |
Unvested balance at June 30, 2022 | | | 80,160 | | | $3.83 |
| | Number of Shares | | | Weighted Average Exercise Price | | | Weighted Average Remaining Contractual Term (in years) | | | Aggregate Intrinsic Value (in thousands) | |
Outstanding as of December 31, 2021 | | | 1,779,174 | | | $18.99 | | | 7.67 | | | — |
Granted | | | 17,000 | | | $2.89 | | | | | — | |
Exercised | | | — | | | — | | | | | — | |
Forfeited | | | (573,490) | | | $31.47 | | | | | — | |
Outstanding as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
Vested and expected to vest as of June 30, 2022 | | | 1,222,684 | | | $11.99 | | | 7.82 | | | — |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Research and development expenses | | | $89 | | | $355 | | | $190 | | | $746 |
General and administrative expenses | | | 983 | | | 904 | | | 2,086 | | | 1,920 |
| | $1,072 | | | $1,259 | | | $2,276 | | | $2,666 |
| | Three Months Ended June 30, | | | Six Months Ended June 30, | |||||||
| | 2022 | | | 2021 | | | 2022 | | | 2021 | |
Numerator: | | | | | | | | | ||||
Net loss | | | $(4,845) | | | $(10,454) | | | $(18,226) | | | $(19,136) |
Denominator: | | | | | | | | | ||||
Weighted average common shares outstanding, basic and diluted | | | 10,847,734 | | | 10,195,608 | | | 10,800,473 | | | 10,194,474 |
Net loss per share, basic and diluted | | | $(0.45) | | | $(1.03) | | | $(1.69) | | | $(1.88) |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Options to purchase common stock | | | 1,222,684 | | | 1,756,947 |
Warrants to purchase common stock or shares convertible into common stock | | | 99,986 | | | 99,986 |
Unvested RSUs | | | 48,172 | | | 112,544 |
| | 1,370,842 | | | 1,969,477 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating lease cost | | | $2,496 | | | $3,053 |
Short-term lease cost | | | — | | | — |
Variable lease cost | | | 357 | | | 272 |
Finance lease cost: | | | | | ||
Amortization of lease assets | | | 8 | | | 77 |
Interest on lease liabilities | | | 1 | | | 5 |
Total finance lease cost | | | $9 | | | $82 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Cash paid for amounts included in the measurement of operating lease liabilities (operating cash flows) | | | $2,177 | | | $2,970 |
Cash paid for amounts included in the measurement of finance lease liabilities (operating cash flows) | | | $1 | | | $5 |
Cash paid for amounts included in the measurement of finance lease liabilities (financing cash flows) | | | $27 | | | $108 |
Operating lease liabilities arising from obtaining right-of-use assets | | | $— | | | $— |
Finance lease liabilities arising from obtaining right- of-use assets | | | $— | | | $— |
Reduction in operating lease liabilities as a result of lease modifications | | | $11,844 | | | $— |
Reduction in operating right-of-use assets as a result of lease modifications | | | $11,852 | | | $— |
| | As of June 30, | ||||
| | 2022 | | | 2021 | |
Weighted-average remaining lease term (in years) used for: | | | | | ||
Operating leases | | | 0.39 | | | 4.75 |
Finance leases | | | — | | | 1.11 |
Weighted-average discount rate used for: | | | | | ||
Operating leases | | | 5.85% | | | 9.08% |
Finance leases | | | — | | | 5.88% |
Year | | | Operating Leases | | | Lease Payments to be Received from Sublease | | | Net Operating Lease Payments |
2022 | | | $566 | | | $(166) | | | $400 |
2023 | | | — | | | — | | | $— |
2024 | | | — | | | — | | | $— |
2025 | | | — | | | — | | | $— |
2026 | | | — | | | — | | | $— |
Thereafter | | | — | | | — | | | $— |
Total future lease payments | | | 566 | | | (166) | | | 400 |
Less: Imputed interest | �� | | (7) | | | — | | | (7) |
Total lease liabilities | | | $559 | | | $(166) | | | $393 |
Leases | | | Condensed Consolidated Balance Sheet Classification | | | Amount |
Assets: | | | | | ||
Operating lease assets | | | Operating lease right-of- use assets | | | $831 |
Total leased assets | | | | | $831 | |
Liabilities: | | | | | ||
Current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities | | | $559 |
Non-current: | | | | | ||
Operating lease liabilities | | | Operating lease liabilities, net of current portion | | | — |
Total lease liabilities | | | | | $559 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $11,144 | | | $11,470 |
Prepaid expenses and other current assets | | | 73 | | | 54 |
Total current assets | | | 11,217 | | | 11,524 |
Property and equipment, net | | | 189 | | | 241 |
Operating right-of-use asset | | | 1,872 | | | 2,462 |
Restricted cash | | | 75 | | | 75 |
Total assets | | | $13,353 | | | $14,302 |
Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $732 | | | $1,160 |
Accrued expenses and other current liabilities | | | 1,842 | | | 1,165 |
Deferred revenue | | | 1,041 | | | 8,924 |
Notes payable, current portion (with related parties $8,378 as of December 31, 2021) | | | 9,996 | | | — |
Operating lease liability, current portion | | | 737 | | | 642 |
Finance lease liabilities, current portion | | | 30 | | | 23 |
Total current liabilities | | | 14,378 | | | 11,914 |
Notes payable, net of current portion (with related parties $8,378 and $15,726 as of December 31, 2021 and 2020, respectively) | | | 9,444 | | | 21,709 |
Operating lease liability, net of current portion | | | 1,390 | | | 2,127 |
Finance lease liabilities, net of current portion | | | 90 | | | 98 |
Total liabilities | | | 25,302 | | | 35,848 |
Commitments and contingencies (Note 6) | | | | | ||
Shareholders’ deficit: | | | | | ||
Common stock, $0.0001 par value; 250,000 shares authorized as of December 31, 2021 and 2020; 67,673 and 55,934 shares issued and outstanding as of December 31, 2021 and 2020, respectively | | | 7 | | | 6 |
Additional paid-in capital | | | 76,135 | | | 54,722 |
Accumulated deficit | | | (88,282) | | | (76,465) |
Total shareholders’ deficit attributable to Kineta, Inc. | | | (12,140) | | | (21,737) |
Noncontrolling interest | | | 191 | | | 191 |
Total shareholders’ deficit | | | (11,949) | | | (21,546) |
Total liabilities and shareholders’ deficit | | | $13,353 | | | $14,302 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Revenues: | | | | | ||
Licensing revenues | | | $7,883 | | | $8,187 |
Grant revenues | | | 1,208 | | | 2,301 |
Total revenues | | | 9,091 | | | 10,488 |
Operating expenses: | | | | | ||
Research and development | | | 15,561 | | | 9,215 |
General and administrative | | | 4,623 | | | 4,388 |
Total operating expenses | | | 20,184 | | | 13,603 |
Loss from operations | | | (11,093) | | | (3,115) |
Other (expense) income: | | | | | ||
Interest expense (with related parties $893 and $1,948 in 2021 and 2020, respectively) | | | (1,293) | | | (4,960) |
Change in fair value measurement of notes payable | | | (1,142) | | | 748 |
Gain on extinguishments of debt | | | 1,719 | | | 98 |
Other (expense) income, net | | | (8) | | | 117 |
Total other (expense) income, net | | | (724) | | | (3,997) |
Net loss | | | $ (11,817) | | | $(7,112) |
Net income attributable to noncontrolling interest | | | — | | | 940 |
Net loss attributable to Kineta, Inc. | | | $ (11,817) | | | $(8,052) |
Net loss per share, basic and diluted | | | $(0.19) | | | $(0.14) |
Weighted-average shares outstanding, basic and diluted | | | 63,346 | | | 56,521 |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Shares | | | Amount | | |||||||||||||||
Balance as of December 31, 2019, previously issued | | | 54,138 | | | $5 | | | $47,723 | | | $(68,640) | | | $(20,912) | | | $(706) | | | $(21,618) |
Change due to application of new accounting standard ASU 2020-06 | | | — | | | — | | | — | | | 249 | | | 249 | | | — | | | 249 |
Change due to application of new accounting standard ASC 842 | | | — | | | — | | | — | | | (22) | | | (22) | | | — | | | (22) |
Immaterial correction | | | — | | | — | | | 43 | | | — | | | 43 | | | (43) | | | — |
Balance as of January 1, 2020 | | | 54,138 | | | $5 | | | $ 47,766 | | | $ (68,413) | | | $(20,642) | | | $(749) | | | $(21,391) |
Issuance of common stock | | | 1,712 | | | 1 | | | 3,527 | | | — | | | 3,528 | | | — | | | 3,528 |
Issuance of common stock upon vesting of restricted stock | | | 7 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 77 | | | — | | | 18 | | | — | | | 18 | | | — | | | 18 |
Issuance of warrants to purchase common stock | | | — | | | — | | | 2,357 | | | — | | | 2,357 | | | — | | | 2,357 |
Stock-based compensation | | | — | | | — | | | 1,054 | | | — | | | 1,054 | | | — | | | 1,054 |
Net (loss) income | | | — | | | — | | | — | | | (8,052) | | | (8,052) | | | 940 | | | (7,112) |
Balance as of December 31, 2020 | | | 55,934 | | | $6 | | | $54,722 | | | $ (76,465) | | | $ (21,737) | | | $191 | | | $(21,546) |
Issuance of common stock | | | 9,396 | | | 1 | | | 16,712 | | | — | | | 16,713 | | | — | | | 16,713 |
Issuance of common stock upon extinguishment of notes payable | | | 1,360 | | | — | | | 2,570 | | | — | | | 2,570 | | | — | | | 2,570 |
Issuance of common stock to settle obligation | | | 114 | | | — | | | 250 | | | — | | | 250 | | | — | | | 250 |
Issuance of common stock upon exercise of stock options | | | 813 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon vesting of restricted stock | | | 6 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 50 | | | — | | | 27 | | | — | | | 27 | | | — | | | 27 |
Stock-based compensation | | | — | | | — | | | 1,854 | | | — | | | 1,854 | | | — | | | 1,854 |
Net loss | | | — | | | — | | | — | | | (11,817) | | | (11,817) | | | — | | | (11,817) |
Balance as of December 31, 2021 | | | 67,673 | | | $7 | | | $ 76,135 | | | $ (88,282) | | | $ (12,140) | | | $191 | | | $(11,949) |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Operating activities: | | | | | ||
Net loss | | | $(11,817) | | | $(7,112) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Noncash interest expense | | | — | | | 2,357 |
Stock-based compensation | | | 1,854 | | | 1,054 |
Change in fair value of notes payable | | | 1,142 | | | (748) |
Gain on extinguishments of debt | | | (1,719) | | | (98) |
Noncash operating lease expense | | | 590 | | | 656 |
Gain on partial termination of operating lease | | | — | | | (155) |
Depreciation and amortization | | | 79 | | | 158 |
Amortization of contract costs | | | — | | | 229 |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses and other current assets | | | (18) | | | 3,046 |
Accounts payable | | | (178) | | | (585) |
Accrued expenses and other current liabilities | | | 739 | | | (59) |
Deferred revenue | | | (7,883) | | | 4,240 |
Operating lease liability | | | (642) | | | (687) |
Net cash (used in) provided by operating activities | | | (17,853) | | | 2,296 |
Investing activities: | | | | | ||
Purchases of property and equipment | | | — | | | (6) |
Net cash used in investing activities | | | — | | | (6) |
Financing activities: | | | | | ||
Proceeds from issuance of common stock | | | 16,713 | | | 3,528 |
Proceeds from payroll protection program loan | | | 815 | | | 890 |
Proceeds from notes payable | | | — | | | 300 |
Proceeds from exercise of warrants | | | 27 | | | 18 |
Proceeds from Small Business Administration loan | | | — | | | 150 |
Repayments of notes payable | | | — | | | (820) |
Repayments of finance lease liabilities | | | (28) | | | (79) |
Net cash provided by financing activities | | | 17,527 | | | 3,987 |
Net change in cash and restricted cash | | | (326) | | | 6,277 |
Cash and restricted cash at beginning of year | | | 11,545 | | | 5,268 |
Cash and restricted cash at end of year | | | $11,219 | | | $ 11,545 |
Components of cash and restricted cash: | | | | | ||
Cash | | | $11,144 | | | $ 11,470 |
Restricted cash | | | 75 | | | 75 |
Total cash and restricted cash | | | $11,219 | | | $ 11,545 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for interest | | | $1,100 | | | $2,544 |
Supplemental disclosure of noncash financing activities: | | | | | ||
Issuance of common stock upon extinguishment of notes payable | | | $2,570 | | | $— |
Issuance of warrants to purchase common stock upon refinancing of notes payable | | | $— | | | $2,357 |
Finance lease liabilities arising from obtaining new right-of-use assets | | | $27 | | | $135 |
Issuance of common stock to settle obligation | | | $250 | | | $— |
1. | Organization and Liquidity |
2. | Summary of Significant Accounting Policies |
3. | Fair Value Measurements |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $18,102 | | | $19,618 |
Change in fair value of 2020 notes | | | 1,142 | | | (748) |
Partial settlement of 2020 notes | | | (1,414) | | | (768) |
Balance at end of period | | | $17,830 | | | $ 18,102 |
4. | Balance Sheet Components |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Laboratory equipment | | | $1,058 | | | $1,031 |
Computer and software | | | 68 | | | 68 |
Leasehold improvements | | | 14 | | | 14 |
Total property and equipment | | | 1,140 | | | 1,113 |
Less: accumulated depreciation and amortization | | | 951 | | | 872 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Total property and equipment, net | | | $189 | | | $241 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Compensation and benefits | | | $790 | | | $939 |
Accrued clinical trial and preclinical costs | | | 641 | | | 33 |
Accrued interest | | | 280 | | | 86 |
Professional services | | | 99 | | | 66 |
Other | | | 32 | | | 41 |
Total accrued expense and other current liabilities | | | $1,842 | | | $1,165 |
5. | Notes Payable |
| | December 31, | ||||||||||
| | 2021 | | | 2020 | |||||||
| | Principal | | | Fair Value | | | Principal | | | Fair Value | |
| | (in thousands) | ||||||||||
Convertible notes payable: | | | | | | | | | ||||
2020 convertible notes | | | $13,800 | | | $16,244 | | | $13,800 | | | $15,241 |
Notes payable: | | | | | | | | | ||||
2020 notes | | | 1,550 | | | 1,586 | | | 2,950 | | | 2,861 |
Other notes payable | | | 1,460 | | | 1,460 | | | 2,567 | | | 2,567 |
Small Business Administration loan | | | 150 | | | 150 | | | 150 | | | 150 |
Paycheck protection program loan | | | — | | | — | | | 890 | | | 890 |
Total notes payable | | | $16,960 | | | 19,440 | | | $20,357 | | | 21,709 |
Less: current portion | | | | | (9,996) | | | | | — | ||
Notes payable, net of current portion | | | | | $9,444 | | | | | $21,709 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
2022 | | | $6,900 | | | $1,856 | | | $8,756 |
2023 | | | 6,900 | | | 775 | | | 7,675 |
2024 | | | — | | | 379 | | | 379 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 147 | | | 147 |
Total notes payable | | | $ 13,800 | | | $3,160 | | | $ 16,960 |
Less: current portion | | | (6,900) | | | (1,856) | | | (8,756) |
Notes payable, net of current portion | | | $6,900 | | | $1,304 | | | $8,204 |
6. | Commitments and Contingencies |
Years | | | (in thousands) |
2022 | | | $909 |
2023 | | | 937 |
2024 | | | 561 |
Total undiscounted lease payments | | | 2,407 |
Less: Imputed interest | | | (280) |
Operating lease liability | | | 2,127 |
Less: Operating lease liability, current portion | | | (737) |
Operating lease liability, net of current portion | | | $1,390 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Cash paid for operating lease agreement (in thousands) | | | $ 883 | | | $1,063 |
Weighted-average remaining lease term (in years) | | | 2.6 | | | 3.6 |
Weighted-average incremental borrowing rate | | | 10% | | | 10% |
Years | | | (in thousands) |
2022 | | | $40 |
2023 | | | 40 |
2024 | | | 40 |
2025 | | | 22 |
Total undiscounted lease payments | | | 142 |
Less: Imputed interest | | | (22) |
Financing lease liabilities | | | 120 |
Less: Financing lease liabilities, current portion | | | (30) |
Financing lease liabilities, net of current portion | | | $90 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Weighted-average remaining lease term (in years) | | | 3.8 | | | 4.8 |
Weighted-average discount rate | | | 9.4% | | | 9.5% |
7. | Strategic License Agreements |
8. | Shareholders’ Deficit |
Year Issued | | | Expiration Date | | | Number Outstanding as of December 31, 2020 | | | Issued | | | Exercised | | | Expired | | | Number Outstanding as of December 31, 2021 | | | Range of Exercise Price |
2013 | | | April 2023 | | | 180 | | | — | | | — | | | — | | | 180 | | | $0.70 |
2016 | | | September 2021 | | | 83 | | | — | | | — | | | (83) | | | — | | | $1.50 |
2017 | | | March - June 2025 | | | 1,071 | | | — | | | — | | | — | | | 1,071 | | | $0.01 |
2017 | | | June - December 2022, and March - June 2025 | | | 2,493 | | | — | | | — | | | — | | | 2,493 | | | $1.04-$1.60 |
2018 | | | June - December 2022 and March - June 2025 | | | 70 | | | — | | | (14) | | | (56) | | | — | | | $1.60 |
2019 | | | January - December 2022 | | | 67 | | | — | | | (3) | | | — | | | 64 | | | $0.01-$1.85 |
2019 | | | April 2027 | | | 34 | | | — | | | — | | | — | | | 34 | | | $0.01 |
2020 | | | February - October 2023 | | | 1,091 | | | — | | | (31) | | | — | | | 1,060 | | | $0.01-$1.85 |
2021 | | | May 2024 | | | — | | | 7 | | | (2) | | | — | | | 5 | | | $0.01-$2.20 |
Total number of shares underlying warrants | | | | | 5,089 | | | 7 | | | (50) | | | (139) | | | 4,907 | | |
| | December 31, 2021 | |
| | (in thousands) | |
Shares reserved for stock options and restricted stock units to purchase common stock under equity incentive plans | | | 12,296 |
Shares reserved for future issuance of equity awards | | | 1,967 |
Shares reserved for exercise of warrants | | | 4,907 |
Shares reserved for conversion of convertible notes | | | 8,590 |
Total | | | 27,760 |
10. | Licensing Revenue Agreements |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance as of beginning of period | | | $8,924 | | | $4,684 |
Increases for payments received | | | — | | | 12,427 |
Decrease for provision of research services | | | (7,883) | | | (8,187) |
| | | | |||
Balance as of end of period | | | $1,041 | | | $8,924 |
11. | Stock-Based Compensation |
| | Outstanding Stock Options | | | Weighted-Average Exercise Price Per Share | | | Weighted-Average Remaining Contractual Term (years) | | | Aggregate Intrinsic Value | |
| | (in thousands, except per share amounts and years) | ||||||||||
Outstanding as of December 31, 2020 | | | 9,600 | | | $ 1.33 | | | 5.5 | | | $ 8,352 |
Granted | | | 1,910 | | | 1.84 | | | | | ||
Exercised | | | (813) | | | 0.50 | | | | | ||
Canceled and forfeited | | | (114) | | | 1.65 | | | | | ||
Expired | | | (360) | | | 0.70 | | | | | ||
Outstanding as of December 31, 2021 | | | 10,223 | | | $ 1.51 | | | 5.8 | | | $ 4,100 |
Exercisable as of December 31, 2021 | | | 7,716 | | | $ 1.39 | | | 5.0 | | | $ 3,948 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Expected volatility | | | 89.2% - 91.5% | | | 81.6% - 91.2% |
Expected term (years) | | | 3.0 - 6.2 years | | | 6.0 - 7.0 years |
Risk-free interest rate | | | 0.3% - 1.1% | | | 0.5% - 1.5% |
Expected dividend yield | | | 0% | | | 0% |
| | Number of Restricted Stock (RSUs) | | | Weighted- Average Grant Date Fair Value Per Share | |
| | (in thousands, except per share amounts) | ||||
Outstanding and unvested as of December 31, 2020 | | | 7 | | | $1.59 |
Granted/issued | | | 2,073 | | | 1.85 |
Vested/released | | | (6) | | | 1.59 |
Cancelled/ forfeited | | | (1) | | | 1.59 |
Outstanding and unvested as of December 31, 2021 | | | 2,073 | | | $1.85 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Research and development | | | $1,307 | | | $669 |
General and administrative | | | 547 | | | 385 |
Total stock-based compensation | | | $1,854 | | | $1,054 |
12. | Income Taxes |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred | | | (2,326) | | | (1,565) |
Change in valuation allowance | | | 2,326 | | | 1,565 |
Total | | | — | | | — |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Federal income taxes | | | 21.0% | | | 21.0% |
Research and development tax credits | | | 0.9 | | | 2.3 |
Change in valuation allowance | | | (19.7) | | | (21.9) |
Debt fair value adjustment | | | (2.0) | | | (4.8) |
Partnership income attributable to non-controlling interest | | | — | | | 2.8 |
Other, net | | | (0.2) | | | 0.6 |
Effective income tax rate | | | — | | | — |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred tax assets: | | | | | ||
Net operating losses | | | $12,362 | | | $10,252 |
Capital loss carryforward | | | 316 | | | 316 |
Accrued expenses | | | 70 | | | 143 |
Research and development credits | | | 1,889 | | | 1,780 |
Operating lease liability | | | 472 | | | 607 |
Stock-based compensation | | | 914 | | | 813 |
Total deferred tax assets | | | 16,023 | | | 13,911 |
Less: valuation allowance | | | (14,146) | | | (11,820) |
Total deferred tax assets less valuation allowance | | | 1,877 | | | 2,091 |
Deferred tax liabilities: | | | | | ||
Partnership basis deferred | | | (1,413) | | | (1,497) |
Right-of-use asset | | | (419) | | | (544) |
Fixed assets | | | (45) | | | (50) |
Total deferred tax liabilities | | | (1,877) | | | (2,091) |
Net deferred tax assets | | | $— | | | $— |
2. | Summary of Significant Accounting Policies |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Beginning balance of unrecognized tax benefits | | | $593 | | | $548 |
Gross increases based on tax positions related to current year | | | 37 | | | 45 |
Ending balance of unrecognized tax benefits | | | $630 | | | $593 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, except per share amounts) | ||||
Numerator: | | | | | ||
Net loss attributable to Kineta, Inc. | | | $(11,817) | | | $(8,052) |
Denominator: | | | | | ||
Weighted-average common shares outstanding, basic and diluted1 | | | 63,346 | | | 56,521 |
Net loss per share, basic and diluted | | | $(0.19) | | | $(0.14) |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Common stock options | | | 10,223 | | | 9,600 |
Unvested restricted stock subject to repurchase | | | 2,073 | | | 7 |
Warrants to purchase common stock | | | 2,683 | | | 2,619 |
Vested restricted stock subject to recall | | | 813 | | | — |
Convertible notes, if converted | | | 8,590 | | | 8,590 |
Total | | | 24,382 | | | 20,816 |
| | June 30 2022 | | | December 31 2021 | |
| | (Unaudited) | | | ||
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $4,468 | | | $11,144 |
Prepaid expenses and other current assets | | | 1,123 | | | 73 |
Total current assets | | | 5,591 | | | 11,217 |
Property and equipment, net | | | 211 | | | 189 |
Operating right-of-use asset | | | 1,550 | | | 1,872 |
Restricted cash | | | 75 | | | 75 |
Total assets | | | $7,427 | | | $13,353 |
Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $4,123 | | | $732 |
Accrued expenses and other current liabilities | | | 1,983 | | | 1,842 |
Deferred revenue | | | 74 | | | 1,041 |
Notes payable, current portion (with related parties $5,916 and $8,378 as of June 30, 2022 and December 31, 2021, respectively) | | | 6,437 | | | 9,996 |
Operating lease liability, current portion | | | 789 | | | 737 |
Finance lease liabilities, current portion | | | 38 | | | 30 |
Total current liabilities | | | 13,444 | | | 14,378 |
Notes payable, net of current portion (with related parties $8,521 and $8,378 as of June 30, 2022 and December 31, 2021, respectively) | | | 12,177 | | | 9,444 |
Operating lease liability, net of current portion | | | 981 | | | 1,390 |
Finance lease liabilities, net of current portion | | | 104 | | | 90 |
Total liabilities | | | 26,706 | | | 25,302 |
| | | | |||
Commitments and contingencies (Note 6) | | | | | ||
| | | | |||
Shareholders’ deficit: | | | | | ||
Common stock, $0.0001 par value; 250,000 shares authorized as of June 30, 2022 and December 31, 2021; 69,644 and 67,673 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 7 | | | 7 |
Additional paid-in capital | | | 79,658 | | | 76,135 |
Accumulated deficit | | | (99,136) | | | (88,282) |
Total shareholders’ deficit attributable to Kineta, Inc. | | | (19,471) | | | (12,140) |
Noncontrolling interest | | | 192 | | | 191 |
Total shareholders’ deficit | | | (19,279) | | | (11,949) |
Total liabilities and shareholders’ deficit | | | $7,427 | | | $13,353 |
| | Six Months Ended, June 30, | ||||
| | 2022 | | | 2021 | |
| | | | |||
Revenues: | | | | | ||
Licensing revenues | | | $967 | | | $4,291 |
Grant revenues | | | 299 | | | 639 |
Total revenues | | | 1,266 | | | 4,930 |
Operating expenses: | | | | | ||
Research and development | | | 7,902 | | | 7,972 |
General and administrative | | | 3,434 | | | 2,412 |
Total operating expenses | | | 11,336 | | | 10,384 |
Loss from operations | | | (10,070) | | | (5,454) |
Other (expense) income: | | | | | ||
Interest expense (with related parties $901 and $429 for the six months ended June 30, 2022 and 2021, respectively) | | | (1,140) | | | (676) |
Change in fair value measurement of notes payable | | | (124) | | | (553) |
Gain on extinguishments of debt, net | | | 495 | | | 892 |
Other (expense) income, net | | | (14) | | | (16) |
Total other (expense) income, net | | | (783) | | | (353) |
Net loss | | | $(10,853) | | | $(5,807) |
Net income (loss) attributable to noncontrolling interest | | | 1 | | | (14) |
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) |
Net loss per share, basic and diluted | | | $(0.16) | | | $(0.10) |
Weighted-average shares outstanding, basic and diluted | | | 69,276 | | | 59,646 |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Shares | | | Amount | | |||||||||||||||
Balance as of December 31, 2021 | | | 67,673 | | | $7 | | | $76,135 | | | $(88,282) | | | $(12,140) | | | $191 | | | $(11,949) |
Issuance of common stock | | | 531 | | | — | | | 1,003 | | | — | | | 1,003 | | | — | | | 1,003 |
Issuance of common stock upon extinguishment of notes payable | | | 780 | | | — | | | 1,473 | | | — | | | 1,473 | | | — | | | 1,473 |
Issuance of common stock upon exercise of warrants | | | 660 | | | — | | | 7 | | | — | | | 7 | | | — | | | 7 |
Stock-based compensation | | | — | | | — | | | 1,040 | | | — | | | 1,040 | | | — | | | 1,040 |
Net (loss) income | | | — | | | — | | | — | | | (10,854) | | | (10,854) | | | 1 | | | (10,853) |
Balance as of June 30, 2022 | | | 69,644 | | | $7 | | | $79,658 | | | $(99,136) | | | $(19,471) | | | $192 | | | $(19,279) |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Amount | | | Shares | | |||||||||||||||
Balance as of December 31, 2020 | | | 55,934 | | | $6 | | | $54,722 | | | $(76,465) | | | $(21,737) | | | $191 | | | $(21,546) |
Issuance of common stock | | | 6,465 | | | 1 | | | 11,565 | | | — | | | 11,566 | | | — | | | 11,566 |
Issuance of common stock upon extinguishment of notes payable | | | 625 | | | — | | | 1,181 | | | — | | | 1,181 | | | — | | | 1,181 |
Issuance of common stock to settle obligation | | | 114 | | | — | | | 250 | | | — | | | 250 | | | — | | | 250 |
Issuance of common stock upon exercise of stock options | | | 813 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 29 | | | — | | | 23 | | | — | | | 23 | | | — | | | 23 |
Stock-based compensation | | | — | | | — | | | 1,106 | | | — | | | 1,106 | | | — | | | 1,106 |
Net loss | | | — | | | — | | | — | | | (5,793) | | | (5,793) | | | (14) | | | (5,807) |
Balance as of June 30, 2021 | | | 63,980 | | | $7 | | | $68,847 | | | $(82,258) | | | $(13,404) | | | $177 | | | $(13,227) |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating activities: | | | | | ||
Net loss | | | $(10,853) | | | $(5,807) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,040 | | | 1,106 |
Change in fair value of notes payable | | | 124 | | | 553 |
Noncash operating lease expense | | | 321 | | | 288 |
Depreciation and amortization | | | 34 | | | 46 |
Gain on extinguishments of debt, net | | | (495) | | | (892) |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses and other current assets | | | (1,051) | | | (174) |
Accounts payable | | | 3,391 | | | 931 |
Accrued expenses and other current liabilities | | | 361 | | | 232 |
Operating lease liability | | | (357) | | | (311) |
Deferred revenue | | | (967) | | | (4,291) |
Net cash used in operating activities | | | (8,452) | | | (8,319) |
Investing activities: | | | | | ||
Purchases of property and equipment | | | (15) | | | — |
Net cash used in investing activities | | | (15) | | | — |
Financing activities: | | | | | ||
Proceeds from notes payable | | | 4,800 | | | — |
Proceeds from issuance of common stock | | | 1,003 | | | 11,566 |
Proceeds from exercise of warrants | | | 7 | | | 23 |
Repayments of notes payable | | | (4,000) | | | — |
Proceeds from payroll protection program loan | | | — | | | 815 |
Repayments of finance lease liabilities | | | (19) | | | (14) |
Net cash provided by financing activities | | | 1,791 | | | 12,390 |
Net change in cash and restricted cash | | | (6,676) | | | 4,071 |
Cash and restricted cash at beginning of year | | | 11,219 | | | 11,545 |
Cash and restricted cash at end of year | | | $4,543 | | | $15,616 |
Components of cash and restricted cash: | | | | | ||
Cash | | | $4,468 | | | $15,541 |
Restricted cash | | | 75 | | | 75 |
Total cash and restricted cash | | | $4,543 | | | $15,616 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for interest | | | $804 | | | $1,058 |
Supplemental disclosure of noncash financing activities: | | | | | ||
Issuance of common stock upon extinguishment of notes payable | | | $1,473 | | | $1,181 |
Finance lease liabilities arising from obtaining new right-of-use assets | | | $41 | | | $27 |
Issuance of common stock to settle obligation | | | $— | | | $250 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $18,102 | | | $19,618 |
Change in fair value of 2020 notes | | | 1,142 | | | (748) |
Partial settlement of 2020 notes | | | (1,414) | | | (768) |
Balance at end of period | | | $17,830 | | | $ 18,102 |
4. | Balance Sheet Components |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Laboratory equipment | | | $1,058 | | | $1,031 |
Computer and software | | | 68 | | | 68 |
Leasehold improvements | | | 14 | | | 14 |
Total property and equipment | | | 1,140 | | | 1,113 |
Less: accumulated depreciation and amortization | | | 951 | | | 872 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Total property and equipment, net | | | $189 | | | $241 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Compensation and benefits | | | $790 | | | $939 |
Accrued clinical trial and preclinical costs | | | 641 | | | 33 |
Accrued interest | | | 280 | | | 86 |
Professional services | | | 99 | | | 66 |
Other | | | 32 | | | 41 |
Total accrued expense and other current liabilities | | | $1,842 | | | $1,165 |
5. | Notes Payable |
| | December 31, | ||||||||||
| | 2021 | | | 2020 | |||||||
| | Principal | | | Fair Value | | | Principal | | | Fair Value | |
| | (in thousands) | ||||||||||
Convertible notes payable: | | | | | | | | | ||||
2020 convertible notes | | | $13,800 | | | $16,244 | | | $13,800 | | | $15,241 |
Notes payable: | | | | | | | | | ||||
2020 notes | | | 1,550 | | | 1,586 | | | 2,950 | | | 2,861 |
Other notes payable | | | 1,460 | | | 1,460 | | | 2,567 | | | 2,567 |
Small Business Administration loan | | | 150 | | | 150 | | | 150 | | | 150 |
Paycheck protection program loan | | | — | | | — | | | 890 | | | 890 |
Total notes payable | | | $16,960 | | | 19,440 | | | $20,357 | | | 21,709 |
Less: current portion | | | | | (9,996) | | | | | — | ||
Notes payable, net of current portion | | | | | $9,444 | | | | | $21,709 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
2022 | | | $6,900 | | | $1,856 | | | $8,756 |
2023 | | | 6,900 | | | 775 | | | 7,675 |
2024 | | | — | | | 379 | | | 379 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 147 | | | 147 |
Total notes payable | | | $ 13,800 | | | $3,160 | | | $ 16,960 |
Less: current portion | | | (6,900) | | | (1,856) | | | (8,756) |
Notes payable, net of current portion | | | $6,900 | | | $1,304 | | | $8,204 |
6. | Commitments and Contingencies |
Years | | | (in thousands) |
2022 | | | $909 |
2023 | | | 937 |
2024 | | | 561 |
Total undiscounted lease payments | | | 2,407 |
Less: Imputed interest | | | (280) |
Operating lease liability | | | 2,127 |
Less: Operating lease liability, current portion | | | (737) |
Operating lease liability, net of current portion | | | $1,390 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Cash paid for operating lease agreement (in thousands) | | | $ 883 | | | $1,063 |
Weighted-average remaining lease term (in years) | | | 2.6 | | | 3.6 |
Weighted-average incremental borrowing rate | | | 10% | | | 10% |
Years | | | (in thousands) |
2022 | | | $40 |
2023 | | | 40 |
2024 | | | 40 |
2025 | | | 22 |
Total undiscounted lease payments | | | 142 |
Less: Imputed interest | | | (22) |
Financing lease liabilities | | | 120 |
Less: Financing lease liabilities, current portion | | | (30) |
Financing lease liabilities, net of current portion | | | $90 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Weighted-average remaining lease term (in years) | | | 3.8 | | | 4.8 |
Weighted-average discount rate | | | 9.4% | | | 9.5% |
7. | Strategic License Agreements |
8. | Shareholders’ Deficit |
Year Issued | | | Expiration Date | | | Number Outstanding as of December 31, 2020 | | | Issued | | | Exercised | | | Expired | | | Number Outstanding as of December 31, 2021 | | | Range of Exercise Price |
2013 | | | April 2023 | | | 180 | | | — | | | — | | | — | | | 180 | | | $0.70 |
2016 | | | September 2021 | | | 83 | | | — | | | — | | | (83) | | | — | | | $1.50 |
2017 | | | March - June 2025 | | | 1,071 | | | — | | | — | | | — | | | 1,071 | | | $0.01 |
2017 | | | June - December 2022, and March - June 2025 | | | 2,493 | | | — | | | — | | | — | | | 2,493 | | | $1.04-$1.60 |
2018 | | | June - December 2022 and March - June 2025 | | | 70 | | | — | | | (14) | | | (56) | | | — | | | $1.60 |
2019 | | | January - December 2022 | | | 67 | | | — | | | (3) | | | — | | | 64 | | | $0.01-$1.85 |
2019 | | | April 2027 | | | 34 | | | — | | | — | | | — | | | 34 | | | $0.01 |
2020 | | | February - October 2023 | | | 1,091 | | | — | | | (31) | | | — | | | 1,060 | | | $0.01-$1.85 |
2021 | | | May 2024 | | | — | | | 7 | | | (2) | | | — | | | 5 | | | $0.01-$2.20 |
Total number of shares underlying warrants | | | | | 5,089 | | | 7 | | | (50) | | | (139) | | | 4,907 | | |
| | December 31, 2021 | |
| | (in thousands) | |
Shares reserved for stock options and restricted stock units to purchase common stock under equity incentive plans | | | 12,296 |
Shares reserved for future issuance of equity awards | | | 1,967 |
Shares reserved for exercise of warrants | | | 4,907 |
Shares reserved for conversion of convertible notes | | | 8,590 |
Total | | | 27,760 |
10. | Licensing Revenue Agreements |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance as of beginning of period | | | $8,924 | | | $4,684 |
Increases for payments received | | | — | | | 12,427 |
Decrease for provision of research services | | | (7,883) | | | (8,187) |
| | | | |||
Balance as of end of period | | | $1,041 | | | $8,924 |
11. | Stock-Based Compensation |
| | Outstanding Stock Options | | | Weighted-Average Exercise Price Per Share | | | Weighted-Average Remaining Contractual Term (years) | | | Aggregate Intrinsic Value | |
| | (in thousands, except per share amounts and years) | ||||||||||
Outstanding as of December 31, 2020 | | | 9,600 | | | $ 1.33 | | | 5.5 | | | $ 8,352 |
Granted | | | 1,910 | | | 1.84 | | | | | ||
Exercised | | | (813) | | | 0.50 | | | | | ||
Canceled and forfeited | | | (114) | | | 1.65 | | | | | ||
Expired | | | (360) | | | 0.70 | | | | | ||
Outstanding as of December 31, 2021 | | | 10,223 | | | $ 1.51 | | | 5.8 | | | $ 4,100 |
Exercisable as of December 31, 2021 | | | 7,716 | | | $ 1.39 | | | 5.0 | | | $ 3,948 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Expected volatility | | | 89.2% - 91.5% | | | 81.6% - 91.2% |
Expected term (years) | | | 3.0 - 6.2 years | | | 6.0 - 7.0 years |
Risk-free interest rate | | | 0.3% - 1.1% | | | 0.5% - 1.5% |
Expected dividend yield | | | 0% | | | 0% |
| | Number of Restricted Stock (RSUs) | | | Weighted- Average Grant Date Fair Value Per Share | |
| | (in thousands, except per share amounts) | ||||
Outstanding and unvested as of December 31, 2020 | | | 7 | | | $1.59 |
Granted/issued | | | 2,073 | | | 1.85 |
Vested/released | | | (6) | | | 1.59 |
Cancelled/ forfeited | | | (1) | | | 1.59 |
Outstanding and unvested as of December 31, 2021 | | | 2,073 | | | $1.85 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Research and development | | | $1,307 | | | $669 |
General and administrative | | | 547 | | | 385 |
Total stock-based compensation | | | $1,854 | | | $1,054 |
12. | Income Taxes |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred | | | (2,326) | | | (1,565) |
Change in valuation allowance | | | 2,326 | | | 1,565 |
Total | | | — | | | — |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Federal income taxes | | | 21.0% | | | 21.0% |
Research and development tax credits | | | 0.9 | | | 2.3 |
Change in valuation allowance | | | (19.7) | | | (21.9) |
Debt fair value adjustment | | | (2.0) | | | (4.8) |
Partnership income attributable to non-controlling interest | | | — | | | 2.8 |
Other, net | | | (0.2) | | | 0.6 |
Effective income tax rate | | | — | | | — |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred tax assets: | | | | | ||
Net operating losses | | | $12,362 | | | $10,252 |
Capital loss carryforward | | | 316 | | | 316 |
Accrued expenses | | | 70 | | | 143 |
Research and development credits | | | 1,889 | | | 1,780 |
Operating lease liability | | | 472 | | | 607 |
Stock-based compensation | | | 914 | | | 813 |
Total deferred tax assets | | | 16,023 | | | 13,911 |
Less: valuation allowance | | | (14,146) | | | (11,820) |
Total deferred tax assets less valuation allowance | | | 1,877 | | | 2,091 |
Deferred tax liabilities: | | | | | ||
Partnership basis deferred | | | (1,413) | | | (1,497) |
Right-of-use asset | | | (419) | | | (544) |
Fixed assets | | | (45) | | | (50) |
Total deferred tax liabilities | | | (1,877) | | | (2,091) |
Net deferred tax assets | | | $— | | | $— |
2. | Summary of Significant Accounting Policies |
3. | Fair Value Measurements |
| | June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $17,830 | | | $18,102 |
Issuance of 2022 convertible notes | | | 4,800 | | | — |
Change in fair value of 2022 & 2020 notes payable | | | 124 | | | 553 |
Partial settlement of 2020 notes payable | | | (4,669) | | | (253) |
Balance at end of period | | | $18,085 | | | $18,402 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $18,102 | | | $19,618 |
Change in fair value of 2020 notes | | | 1,142 | | | (748) |
Partial settlement of 2020 notes | | | (1,414) | | | (768) |
Balance at end of period | | | $17,830 | | | $ 18,102 |
4. | Balance Sheet Components |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Laboratory equipment | | | $1,058 | | | $1,031 |
Computer and software | | | 68 | | | 68 |
Leasehold improvements | | | 14 | | | 14 |
Total property and equipment | | | 1,140 | | | 1,113 |
Less: accumulated depreciation and amortization | | | 951 | | | 872 |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Total property and equipment, net | | | $189 | | | $241 |
| June 30, | | December 31, | | | December 31, | ||||||
| | 2022 | | 2021 | | | 2021 | | 2020 | |||
| (in thousands) | | (in thousands) | |||||||||
Compensation and benefits | | $862 | | $790 | | $790 | | $939 | ||||
Accrued clinical trial and preclinical costs | | 641 | | 33 | ||||||||
Accrued interest | | 615 | | 280 | | 280 | | 86 | ||||
Professional services | | 419 | | 99 | | 99 | | 66 | ||||
Accrued clinical trial and preclinical costs | | 59 | | 641 | ||||||||
Other | | 28 | | 32 | | 32 | | 41 | ||||
Total accrued expense and other current liabilities | | $1,983 | | $1,842 | | $1,842 | | $1,165 |
5. | Notes Payable |
| | June 30 2022 | | December 31 2021 | | | December 31, | |||||||||||||||||
| | | 2021 | | 2020 | |||||||||||||||||||
| | Principal | | Fair Value | | Principal | | Fair Value | | | Principal | | Fair Value | | Principal | | Fair Value | |||||||
| (in thousands) | | (in thousands) | |||||||||||||||||||||
Convertible notes payable: | | | | | | | | | ||||||||||||||||
2022 convertible notes | | $4,800 | | $5,211 | | $— | | $— | ||||||||||||||||
2020 convertible notes | | 9,800 | | 11,335 | | 13,800 | | 16,244 | | $13,800 | | $16,244 | | $13,800 | | $15,241 | ||||||||
Notes payable: | | | | | | | | | ||||||||||||||||
2020 notes | | 1,550 | | 1,539 | | 1,550 | | 1,586 | | 1,550 | | 1,586 | | 2,950 | | 2,861 | ||||||||
Other notes payable | | 379 | | 379 | | 1,460 | | 1,460 | | 1,460 | | 1,460 | | 2,567 | | 2,567 | ||||||||
Small Business Administration loan | | 150 | | 150 | | 150 | | 150 | | 150 | | 150 | | 150 | | 150 | ||||||||
Paycheck protection program loan | | — | | — | | 890 | | 890 | ||||||||||||||||
Total notes payable | | $16,679 | | 18,614 | | $16,960 | | 19,440 | | $16,960 | | 19,440 | | $20,357 | | 21,709 | ||||||||
Less: current portion | | | (6,437) | | | (9,996) | | | (9,996) | | | — | ||||||||||||
Notes payable, net of current portion | | | $12,177 | | | $9,444 | | | $9,444 | | | $21,709 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
Remaining of 2022 | | | $4,900 | | | $775 | | | $5,675 |
2023 | | | 4,900 | | | 775 | | | 5,675 |
2024 | | | 4,800 | | | 379 | | | 5,179 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
2027 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 144 | | | 144 |
Total notes payable | | | $14,600 | | | $2,079 | | | $16,679 |
Less: current portion | | | (4,900) | | | (775) | | | (5,675) |
Notes payable, net of current portion | | | $9,700 | | | $1,304 | | | $11,004 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
2022 | | | $6,900 | | | $1,856 | | | $8,756 |
2023 | | | 6,900 | | | 775 | | | 7,675 |
2024 | | | — | | | 379 | | | 379 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 147 | | | 147 |
Total notes payable | | | $ 13,800 | | | $3,160 | | | $ 16,960 |
Less: current portion | | | (6,900) | | | (1,856) | | | (8,756) |
Notes payable, net of current portion | | | $6,900 | | | $1,304 | | | $8,204 |
6. | Commitments and Contingencies |
Years | | | (in thousands) |
2022 | | | $909 |
2023 | | | 937 |
2024 | | | 561 |
Total undiscounted lease payments | | | 2,407 |
Less: Imputed interest | | | (280) |
Operating lease liability | | | 2,127 |
Less: Operating lease liability, current portion | | | (737) |
Operating lease liability, net of current portion | | | $1,390 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Cash paid for operating lease agreement (in thousands) | | | $ 883 | | | $1,063 |
Weighted-average remaining lease term (in years) | | | 2.6 | | | 3.6 |
Weighted-average incremental borrowing rate | | | 10% | | | 10% |
Years | | | (in thousands) |
2022 | | | $40 |
2023 | | | 40 |
2024 | | | 40 |
2025 | | | 22 |
Total undiscounted lease payments | | | 142 |
Less: Imputed interest | | | (22) |
Financing lease liabilities | | | 120 |
Less: Financing lease liabilities, current portion | | | (30) |
Financing lease liabilities, net of current portion | | | $90 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Weighted-average remaining lease term (in years) | | | 3.8 | | | 4.8 |
Weighted-average discount rate | | | 9.4% | | | 9.5% |
7. | Strategic License Agreements |
8. | Shareholders’ Deficit |
Year Issued | | Expiration Date | | Number Outstanding as of December 31, 2021 | | Issued | | Exercised | | Expired | | Number Outstanding as of June 30, 2022 | | Range of Exercise Price | | Expiration Date | | Number Outstanding as of December 31, 2020 | | Issued | | Exercised | | Expired | | Number Outstanding as of December 31, 2021 | | Range of Exercise Price | ||||||||||||||
2013 | | April 2023 | | 180 | | — | | — | | — | | 180 | | $0.70 | | April 2023 | | 180 | | — | | — | | — | | 180 | | $0.70 | ||||||||||||||
2016 | | September 2021 | | 83 | | — | | — | | (83) | | — | | $1.50 | ||||||||||||||||||||||||||||
2017 | | March - June 2025 | | 1,071 | | — | | (289) | | — | | 782 | | $0.01 | | March - June 2025 | | 1,071 | | — | | — | | — | | 1,071 | | $0.01 | ||||||||||||||
2017 | | September - December 2022, March - June 2025 | | 2,493 | | — | | — | | (249) | | 2,244 | | $1.04-$1.60 | | June - December 2022, and March - June 2025 | | 2,493 | | — | | — | | — | | 2,493 | | $1.04-$1.60 | ||||||||||||||
2018 | | June - December 2022 and March - June 2025 | | 70 | | — | | (14) | | (56) | | — | | $1.60 | ||||||||||||||||||||||||||||
2019 | | September - December 2022 | | 64 | | — | | (2) | | (12) | | 50 | | $0.01-$1.85 | | January - December 2022 | | 67 | | — | | (3) | | — | | 64 | | $0.01-$1.85 | ||||||||||||||
2019 | | April 2027 | | 34 | | — | | (28) | | — | | 6 | | $0.01 | | April 2027 | | 34 | | — | | — | | — | | 34 | | $0.01 | ||||||||||||||
2020 | | February - October 2023 | | 1,060 | | — | | (341) | | — | | 719 | | $0.01-$1.85 | | February - October 2023 | | 1,091 | | — | | (31) | | — | | 1,060 | | $0.01-$1.85 | ||||||||||||||
2021 | | May 2024 | | 5 | | — | | — | | — | | 5 | | $0.01-$2.20 | | May 2024 | | — | | 7 | | (2) | | — | | 5 | | $0.01-$2.20 | ||||||||||||||
Total number of shares underlying warrants | | | 4,907 | | — | | (660) | | (261) | | 3,986 | | | | 5,089 | | 7 | | (50) | | (139) | | 4,907 | |
| | ||
| | (in thousands) | |
Shares reserved for stock options and restricted stock units to purchase common stock under equity incentive plans | | | |
Shares reserved for future issuance of equity awards | | | |
Shares reserved for exercise of warrants | | | |
Shares reserved for conversion of convertible notes | | | |
Total | | |
10. | Licensing Revenue |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Balance as of beginning of period | | | $8,924 | | | $4,684 |
Increases for payments received | | | — | | | 12,427 |
Decrease for provision of research services | | | (7,883) | | | (8,187) |
| | | | |||
Balance as of end of period | | | $1,041 | | | $8,924 |
11. | Stock-Based Compensation |
| | Outstanding Stock Options | | Weighted- Average Exercise Price Per Share | | Weighted- Average Remaining Contractual Term (years) | | Aggregate Intrinsic Value | | | Outstanding Stock Options | | Weighted-Average Exercise Price Per Share | | Weighted-Average Remaining Contractual Term (years) | | Aggregate Intrinsic Value | |||||||
| (in thousands, except per share amounts and years) | | (in thousands, except per share amounts and years) | |||||||||||||||||||||
Outstanding as of December 31, 2020 | | 9,600 | | $ 1.33 | | 5.5 | | $ 8,352 | ||||||||||||||||
Granted | | 1,910 | | 1.84 | | | ||||||||||||||||||
Exercised | | (813) | | 0.50 | | | ||||||||||||||||||
Canceled and forfeited | | (114) | | 1.65 | | | ||||||||||||||||||
Expired | | (360) | | 0.70 | | | ||||||||||||||||||
Outstanding as of December 31, 2021 | | 10,223 | | $1.51 | | 5.8 | | $4,100 | | 10,223 | | $ 1.51 | | 5.8 | | $ 4,100 | ||||||||
Granted | | 1,215 | | 1.86 | | | ||||||||||||||||||
Canceled and forfeited | | (731) | | 1.73 | | | ||||||||||||||||||
Outstanding as of June 30, 2022 | | 10,707 | | $1.53 | | 5.7 | | $4,007 | ||||||||||||||||
Exercisable as of June 30, 2022 | | 8,371 | | $1.44 | | 5.0 | | $3,871 | ||||||||||||||||
Exercisable as of December 31, 2021 | | 7,716 | | $ 1.39 | | 5.0 | | $ 3,948 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Expected volatility | | | 89.2% - 91.5% | | | 81.6% - 91.2% |
Expected term (years) | | | 3.0 - 6.2 years | | | 6.0 - 7.0 years |
Risk-free interest rate | | | 0.3% - 1.1% | | | 0.5% - 1.5% |
Expected dividend yield | | | 0% | | | 0% |
| | Number of Restricted Stock (RSUs) | | | Weighted- Average Grant Date Fair Value Per Share | |
| | (in thousands, except per share amounts) | ||||
Outstanding and unvested as of December 31, 2020 | | | 7 | | | $1.59 |
Granted/issued | | | 2,073 | | | 1.85 |
Vested/released | | | (6) | | | 1.59 |
Cancelled/ forfeited | | | (1) | | | 1.59 |
Outstanding and unvested as of December 31, 2021 | | | 2,073 | | | $1.85 |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Research and development | | | $1,307 | | | $669 |
General and administrative | | | 547 | | | 385 |
Total stock-based compensation | | | $1,854 | | | $1,054 |
12. | Income Taxes |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred | | | (2,326) | | | (1,565) |
Change in valuation allowance | | | 2,326 | | | 1,565 |
Total | | | — | | | — |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
Federal income taxes | | | 21.0% | | | 21.0% |
Research and development tax credits | | | 0.9 | | | 2.3 |
Change in valuation allowance | | | (19.7) | | | (21.9) |
Debt fair value adjustment | | | (2.0) | | | (4.8) |
Partnership income attributable to non-controlling interest | | | — | | | 2.8 |
Other, net | | | (0.2) | | | 0.6 |
Effective income tax rate | | | — | | | — |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Deferred tax assets: | | | | | ||
Net operating losses | | | $12,362 | | | $10,252 |
Capital loss carryforward | | | 316 | | | 316 |
Accrued expenses | | | 70 | | | 143 |
Research and development credits | | | 1,889 | | | 1,780 |
Operating lease liability | | | 472 | | | 607 |
Stock-based compensation | | | 914 | | | 813 |
Total deferred tax assets | | | 16,023 | | | 13,911 |
Less: valuation allowance | | | (14,146) | | | (11,820) |
Total deferred tax assets less valuation allowance | | | 1,877 | | | 2,091 |
Deferred tax liabilities: | | | | | ||
Partnership basis deferred | | | (1,413) | | | (1,497) |
Right-of-use asset | | | (419) | | | (544) |
Fixed assets | | | (45) | | | (50) |
Total deferred tax liabilities | | | (1,877) | | | (2,091) |
Net deferred tax assets | | | $— | | | $— |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Beginning balance of unrecognized tax benefits | | | $593 | | | $548 |
Gross increases based on tax positions related to current year | | | 37 | | | 45 |
Ending balance of unrecognized tax benefits | | | $630 | | | $593 |
13. | Net Loss Per Share |
| | Year Ended December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands, except per share amounts) | ||||
Numerator: | | | | | ||
Net loss attributable to Kineta, Inc. | | | $(11,817) | | | $(8,052) |
Denominator: | | | | | ||
Weighted-average common shares outstanding, basic and diluted1 | | | 63,346 | | | 56,521 |
Net loss per share, basic and diluted | | | $(0.19) | | | $(0.14) |
| | December 31, | ||||
| | 2021 | | | 2020 | |
| | (in thousands) | ||||
Common stock options | | | 10,223 | | | 9,600 |
Unvested restricted stock subject to repurchase | | | 2,073 | | | 7 |
Warrants to purchase common stock | | | 2,683 | | | 2,619 |
Vested restricted stock subject to recall | | | 813 | | | — |
Convertible notes, if converted | | | 8,590 | | | 8,590 |
Total | | | 24,382 | | | 20,816 |
14. | Defined Contribution Plan |
15. | Related Party Transactions |
16. | Subsequent Events |
| | June 30 2022 | | | December 31 2021 | |
| | (Unaudited) | | | ||
Assets | | | | | ||
Current assets: | | | | | ||
Cash | | | $4,468 | | | $11,144 |
Prepaid expenses and other current assets | | | 1,123 | | | 73 |
Total current assets | | | 5,591 | | | 11,217 |
Property and equipment, net | | | 211 | | | 189 |
Operating right-of-use asset | | | 1,550 | | | 1,872 |
Restricted cash | | | 75 | | | 75 |
Total assets | | | $7,427 | | | $13,353 |
Liabilities and Shareholders’ Deficit | | | | | ||
Current liabilities: | | | | | ||
Accounts payable | | | $4,123 | | | $732 |
Accrued expenses and other current liabilities | | | 1,983 | | | 1,842 |
Deferred revenue | | | 74 | | | 1,041 |
Notes payable, current portion (with related parties $5,916 and $8,378 as of June 30, 2022 and December 31, 2021, respectively) | | | 6,437 | | | 9,996 |
Operating lease liability, current portion | | | 789 | | | 737 |
Finance lease liabilities, current portion | | | 38 | | | 30 |
Total current liabilities | | | 13,444 | | | 14,378 |
Notes payable, net of current portion (with related parties $8,521 and $8,378 as of June 30, 2022 and December 31, 2021, respectively) | | | 12,177 | | | 9,444 |
Operating lease liability, net of current portion | | | 981 | | | 1,390 |
Finance lease liabilities, net of current portion | | | 104 | | | 90 |
Total liabilities | | | 26,706 | | | 25,302 |
| | | | |||
Commitments and contingencies (Note 6) | | | | | ||
| | | | |||
Shareholders’ deficit: | | | | | ||
Common stock, $0.0001 par value; 250,000 shares authorized as of June 30, 2022 and December 31, 2021; 69,644 and 67,673 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | | | 7 | | | 7 |
Additional paid-in capital | | | 79,658 | | | 76,135 |
Accumulated deficit | | | (99,136) | | | (88,282) |
Total shareholders’ deficit attributable to Kineta, Inc. | | | (19,471) | | | (12,140) |
Noncontrolling interest | | | 192 | | | 191 |
Total shareholders’ deficit | | | (19,279) | | | (11,949) |
Total liabilities and shareholders’ deficit | | | $7,427 | | | $13,353 |
| | Six Months Ended, June 30, | ||||
| | 2022 | | | 2021 | |
| | | | |||
Revenues: | | | | | ||
Licensing revenues | | | $967 | | | $4,291 |
Grant revenues | | | 299 | | | 639 |
Total revenues | | | 1,266 | | | 4,930 |
Operating expenses: | | | | | ||
Research and development | | | 7,902 | | | 7,972 |
General and administrative | | | 3,434 | | | 2,412 |
Total operating expenses | | | 11,336 | | | 10,384 |
Loss from operations | | | (10,070) | | | (5,454) |
Other (expense) income: | | | | | ||
Interest expense (with related parties $901 and $429 for the six months ended June 30, 2022 and 2021, respectively) | | | (1,140) | | | (676) |
Change in fair value measurement of notes payable | | | (124) | | | (553) |
Gain on extinguishments of debt, net | | | 495 | | | 892 |
Other (expense) income, net | | | (14) | | | (16) |
Total other (expense) income, net | | | (783) | | | (353) |
Net loss | | | $(10,853) | | | $(5,807) |
Net income (loss) attributable to noncontrolling interest | | | 1 | | | (14) |
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) |
Net loss per share, basic and diluted | | | $(0.16) | | | $(0.10) |
Weighted-average shares outstanding, basic and diluted | | | 69,276 | | | 59,646 |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Shares | | | Amount | | |||||||||||||||
Balance as of December 31, 2021 | | | 67,673 | | | $7 | | | $76,135 | | | $(88,282) | | | $(12,140) | | | $191 | | | $(11,949) |
Issuance of common stock | | | 531 | | | — | | | 1,003 | | | — | | | 1,003 | | | — | | | 1,003 |
Issuance of common stock upon extinguishment of notes payable | | | 780 | | | — | | | 1,473 | | | — | | | 1,473 | | | — | | | 1,473 |
Issuance of common stock upon exercise of warrants | | | 660 | | | — | | | 7 | | | — | | | 7 | | | — | | | 7 |
Stock-based compensation | | | — | | | — | | | 1,040 | | | — | | | 1,040 | | | — | | | 1,040 |
Net (loss) income | | | — | | | — | | | — | | | (10,854) | | | (10,854) | | | 1 | | | (10,853) |
Balance as of June 30, 2022 | | | 69,644 | | | $7 | | | $79,658 | | | $(99,136) | | | $(19,471) | | | $192 | | | $(19,279) |
| | Common Stock | | | Additional Paid-In Capital Amount | | | Accumulated Deficit | | | Total Shareholders’ Deficit Attributable to Kineta | | | Noncontrolling Interest | | | Total Shareholders’ Deficit | ||||
| | Amount | | | Shares | | |||||||||||||||
Balance as of December 31, 2020 | | | 55,934 | | | $6 | | | $54,722 | | | $(76,465) | | | $(21,737) | | | $191 | | | $(21,546) |
Issuance of common stock | | | 6,465 | | | 1 | | | 11,565 | | | — | | | 11,566 | | | — | | | 11,566 |
Issuance of common stock upon extinguishment of notes payable | | | 625 | | | — | | | 1,181 | | | — | | | 1,181 | | | — | | | 1,181 |
Issuance of common stock to settle obligation | | | 114 | | | — | | | 250 | | | — | | | 250 | | | — | | | 250 |
Issuance of common stock upon exercise of stock options | | | 813 | | | — | | | — | | | — | | | — | | | — | | | — |
Issuance of common stock upon exercise of warrants | | | 29 | | | — | | | 23 | | | — | | | 23 | | | — | | | 23 |
Stock-based compensation | | | — | | | — | | | 1,106 | | | — | | | 1,106 | | | — | | | 1,106 |
Net loss | | | — | | | — | | | — | | | (5,793) | | | (5,793) | | | (14) | | | (5,807) |
Balance as of June 30, 2021 | | | 63,980 | | | $7 | | | $68,847 | | | $(82,258) | | | $(13,404) | | | $177 | | | $(13,227) |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Operating activities: | | | | | ||
Net loss | | | $(10,853) | | | $(5,807) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | ||
Stock-based compensation | | | 1,040 | | | 1,106 |
Change in fair value of notes payable | | | 124 | | | 553 |
Noncash operating lease expense | | | 321 | | | 288 |
Depreciation and amortization | | | 34 | | | 46 |
Gain on extinguishments of debt, net | | | (495) | | | (892) |
Changes in operating assets and liabilities: | | | | | ||
Prepaid expenses and other current assets | | | (1,051) | | | (174) |
Accounts payable | | | 3,391 | | | 931 |
Accrued expenses and other current liabilities | | | 361 | | | 232 |
Operating lease liability | | | (357) | | | (311) |
Deferred revenue | | | (967) | | | (4,291) |
Net cash used in operating activities | | | (8,452) | | | (8,319) |
Investing activities: | | | | | ||
Purchases of property and equipment | | | (15) | | | — |
Net cash used in investing activities | | | (15) | | | — |
Financing activities: | | | | | ||
Proceeds from notes payable | | | 4,800 | | | — |
Proceeds from issuance of common stock | | | 1,003 | | | 11,566 |
Proceeds from exercise of warrants | | | 7 | | | 23 |
Repayments of notes payable | | | (4,000) | | | — |
Proceeds from payroll protection program loan | | | — | | | 815 |
Repayments of finance lease liabilities | | | (19) | | | (14) |
Net cash provided by financing activities | | | 1,791 | | | 12,390 |
Net change in cash and restricted cash | | | (6,676) | | | 4,071 |
Cash and restricted cash at beginning of year | | | 11,219 | | | 11,545 |
Cash and restricted cash at end of year | | | $4,543 | | | $15,616 |
Components of cash and restricted cash: | | | | | ||
Cash | | | $4,468 | | | $15,541 |
Restricted cash | | | 75 | | | 75 |
Total cash and restricted cash | | | $4,543 | | | $15,616 |
Supplemental disclosure of cash flow information: | | | | | ||
Cash paid for interest | | | $804 | | | $1,058 |
Supplemental disclosure of noncash financing activities: | | | | | ||
Issuance of common stock upon extinguishment of notes payable | | | $1,473 | | | $1,181 |
Finance lease liabilities arising from obtaining new right-of-use assets | | | $41 | | | $27 |
Issuance of common stock to settle obligation | | | $— | | | $250 |
1. | Organization and Liquidity |
2. | Summary of Significant Accounting Policies |
3. | Fair Value Measurements |
| | June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Balance at beginning of period | | | $17,830 | | | $18,102 |
Issuance of 2022 convertible notes | | | 4,800 | | | — |
Change in fair value of 2022 & 2020 notes payable | | | 124 | | | 553 |
Partial settlement of 2020 notes payable | | | (4,669) | | | (253) |
Balance at end of period | | | $18,085 | | | $18,402 |
4. | Balance Sheet Components |
| | June 30, | | | December 31, | |
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Compensation and benefits | | | $862 | | | $790 |
Accrued interest | | | 615 | | | 280 |
Professional services | | | 419 | | | 99 |
Accrued clinical trial and preclinical costs | | | 59 | | | 641 |
Other | | | 28 | | | 32 |
Total accrued expense and other current liabilities | | | $1,983 | | | $1,842 |
5. | Notes Payable |
| | June 30 2022 | | | December 31 2021 | |||||||
| ||||||||||||
| | Principal | | | Fair Value | | | Principal | | | Fair Value | |
| | (in thousands) | ||||||||||
Convertible notes payable: | | | | | | | | | ||||
2022 convertible notes | | | $4,800 | | | $5,211 | | | $— | | | $— |
2020 convertible notes | | | 9,800 | | | 11,335 | | | 13,800 | | | 16,244 |
Notes payable: | | | | | | | | | ||||
2020 notes | | | 1,550 | | | 1,539 | | | 1,550 | | | 1,586 |
Other notes payable | | | 379 | | | 379 | | | 1,460 | | | 1,460 |
Small Business Administration loan | | | 150 | | | 150 | | | 150 | | | 150 |
Total notes payable | | | $16,679 | | | 18,614 | | | $16,960 | | | 19,440 |
Less: current portion | | | | | (6,437) | | | | | (9,996) | ||
Notes payable, net of current portion | | | | | $12,177 | | | | | $9,444 |
| | Convertible Notes Payable | | | Notes Payable | | | Total | |
| | (in thousands) | |||||||
Years | | | | | | | |||
Remaining of 2022 | | | $4,900 | | | $775 | | | $5,675 |
2023 | | | 4,900 | | | 775 | | | 5,675 |
2024 | | | 4,800 | | | 379 | | | 5,179 |
2025 | | | — | | | — | | | — |
2026 | | | — | | | 3 | | | 3 |
2027 | | | — | | | 3 | | | 3 |
Thereafter | | | — | | | 144 | | | 144 |
Total notes payable | | | $14,600 | | | $2,079 | | | $16,679 |
Less: current portion | | | (4,900) | | | (775) | | | (5,675) |
Notes payable, net of current portion | | | $9,700 | | | $1,304 | | | $11,004 |
6. | Commitments and Contingencies |
7. | Strategic License Agreements |
8. | Shareholders’ Deficit |
Year Issued | | | Expiration Date | | | Number Outstanding as of December 31, 2021 | | | Issued | | | Exercised | | | Expired | | | Number Outstanding as of June 30, 2022 | | | Range of Exercise Price |
2013 | | | April 2023 | | | 180 | | | — | | | — | | | — | | | 180 | | | $0.70 |
2017 | | | March - June 2025 | | | 1,071 | | | — | | | (289) | | | — | | | 782 | | | $0.01 |
2017 | | | September - December 2022, March - June 2025 | | | 2,493 | | | — | | | — | | | (249) | | | 2,244 | | | $1.04-$1.60 |
2019 | | | September - December 2022 | | | 64 | | | — | | | (2) | | | (12) | | | 50 | | | $0.01-$1.85 |
2019 | | | April 2027 | | | 34 | | | — | | | (28) | | | — | | | 6 | | | $0.01 |
2020 | | | February - October 2023 | | | 1,060 | | | — | | | (341) | | | — | | | 719 | | | $0.01-$1.85 |
2021 | | | May 2024 | | | 5 | | | — | | | — | | | — | | | 5 | | | $0.01-$2.20 |
Total number of shares underlying warrants | | | | | 4,907 | | | — | | | (660) | | | (261) | | | 3,986 | | |
| | June 30, 2022 | |
| | (in thousands) | |
Shares reserved for stock options and restricted stock units to purchase common stock under equity incentive plans | | | 13,184 |
Shares reserved for future issuance of equity awards | | | 348 |
Shares reserved for exercise of warrants | | | 3,986 |
Shares reserved for conversion of convertible notes | | | 8,640 |
Total | | | 26,158 |
9. | Grant Agreements |
10. | Licensing Revenue Agreement |
Balance as of December 31, 2021 | | | $1,041 |
Decrease for provision of research services | | | (967) |
Balance as of June 30, 2022 | | | $74 |
11. | Stock-Based Compensation |
| | Outstanding Stock Options | | | Weighted- Average Exercise Price Per Share | | | Weighted- Average Remaining Contractual Term (years) | | | Aggregate Intrinsic Value | |
| | (in thousands, except per share amounts and years) | ||||||||||
Outstanding as of December 31, 2021 | | | 10,223 | | | $1.51 | | | 5.8 | | | $4,100 |
Granted | | | 1,215 | | | 1.86 | | | | | ||
Canceled and forfeited | | | (731) | | | 1.73 | | | | | ||
Outstanding as of June 30, 2022 | | | 10,707 | | | $1.53 | | | 5.7 | | | $4,007 |
Exercisable as of June 30, 2022 | | | 8,371 | | | $1.44 | | | 5.0 | | | $3,871 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
Expected volatility | | | 84.2% - 86.0% | | | 89.2% - 91.5% |
Expected term (years) | | | 3.0 - 7.0 years | | | 3.0 - 6.2 years |
Risk-free interest rate | | | 1.6% - 2.8% | | | 0.3% - 1.1% |
Expected dividend yield | | | 0% | | | 0% |
| | Number of Restricted Stock (RSUs) | | | Weighted- Average Grant Date Fair Value Per Share | |
| | (in thousands, except per share amounts) | ||||
Outstanding and unvested as of December 31, 2021 | | | 2,073 | | | $1.85 |
Granted/issued | | | 442 | | | 1.86 |
Cancelled/ forfeited | | | (38) | | | 1.85 |
Outstanding and unvested as of June 30, 2022 | | | 2,477 | | | $1.85 |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Research and development | | | $603 | | | $753 |
General and administrative | | | 437 | | | 353 |
Total stock-based compensation | | | $1,040 | | | $1,106 |
| | | |
12. | Net Loss Per Share |
| | Six Months Ended June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands, except per share amounts) | ||||
Numerator: | | | | | ||
Net loss attributable to Kineta, Inc. | | | $(10,854) | | | $(5,793) |
Denominator: | | | | | ||
Weighted-average common shares outstanding, basic and diluted1 | | | 69,276 | | | 59,646 |
Net loss per share, basic and diluted | | | $(0.16) | | | $(0.10) |
1 | Included in the denominator for the six months ended June 30, 2022 and 2021, were 2,125,000 and 2,224,000 shares of common stock warrants with an exercise price of $0.01. |
| | June 30, | ||||
| | 2022 | | | 2021 | |
| | (in thousands) | ||||
Common stock options | | | 10,707 | | | 10,607 |
Unvested restricted stock subject to repurchase | | | 2,477 | | | 2,079 |
Warrants to purchase common stock | | | 1,861 | | | 2,799 |
Vested restricted stock subject to recall | | | 813 | | | 813 |
Convertible notes, if converted | | | 8,640 | | | 8,590 |
Total | | | 24,498 | | | 24,888 |
13. | Related Party Transactions |
14. | Subsequent Events |
15. | Events Subsequent to Original Issuance of Condensed Consolidated Financial Statements |
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | ||||||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | | ||||
| | | | | |
Schedules: | |||
| | ||
Schedule A | | | Persons Executing Yumanity Stockholder Support Agreements |
Schedule B | | | Persons Executing Company Shareholder Support Agreements and Lock-up Agreements |
Schedule C | | | Investor Agreements |
Exhibits: | |||
| | ||
Exhibit A | | | Definitions |
Exhibit B | | | Form of Yumanity Stockholder Support Agreement |
Exhibit C | | | Form of Company Shareholder Support Agreement |
Exhibit D | | | Form of Lock-up Agreement |
| | if to Yumanity or Merger Sub: | ||||
| | | | |||
| | | | Yumanity Therapeutics, Inc. | ||
| | | | 40 Guest Street, Suite 4410 | ||
| | | | Boston, MA 02135 | ||
| | | | Attention: Devin Smith, Senior Vice President and General Counsel | ||
| | | | Email: dsmith@yumanity.com | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Goodwin Procter LLP | ||
| | | | 100 Northern Avenue | ||
| | | | Boston, Massachusetts 02210 | ||
| | | | Telephone: 617-570-1000 | ||
| | | | Fax: 617-523-1231 | ||
| | | | Attention: John T. Haggerty, Esq. and Jean A. Lee | ||
| | | | Email: jhaggerty@goodwinlaw.com and jeanlee@goodwinlaw.com | ||
| | | | |||
| | if to the Company: | ||||
| | | | |||
| | | | Kineta, Inc. | ||
| | | | 219 Terry Avenue North, Suite 300 | ||
| | | | Seattle, WA 98109 | ||
| | | | Attention: Shawn Iadonato, CEO | ||
| | | | Email: shawn@kineta.us | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Orrick, Herrington & Sutcliffe LLP | ||
| | | | 701 5th Avenue, Suite 5600 | ||
| | | | Seattle, WA 98104-7097 | ||
| | | Telephone: 206-839-4337 | |||
| | | | Attention: Blake Ilstrup, Hari Raman and Albert W. Vanderlaan | ||
| | | | Email: bilstrup@orrick.com, hraman@orrick.com and avanderlaan@orrick.com |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | Name: Richard Peters | ||||
| | Title: Chief Executive Officer |
| | YACHT MERGER SUB, INC. | ||||
| | | | |||
| | By: | | | /s/ Devin Smith | |
| | Name: Devin Smith | ||||
| | Title: Chief Executive Officer |
| | KINETA, INC. | ||||
| | | | |||
| | By: | | | /s/ Shawn Iadonato | |
| | Name: Shawn Iadonato | ||||
| | Title: Chief Executive Officer |
| | if to Yumanity or Merger Sub: | ||||
| | | | |||
| | | | Yumanity Therapeutics, Inc. | ||
| | | | 40 Guest Street, Suite 4410 | ||
| | | | Boston, MA 02135 | ||
| | | | Attention: Devin Smith, Senior Vice President and General Counsel | ||
| | | | Email: dsmith@yumanity.com | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Goodwin Procter LLP | ||
| | | | 100 Northern Avenue | ||
| | | | Boston, Massachusetts 02210 | ||
| | | | Telephone: 617-570-1000 | ||
| | | | Fax: 617-523-1231 | ||
| | | | Attention: John T. Haggerty, Esq. and Jean A. Lee | ||
| | | | Email: jhaggerty@goodwinlaw.com and jeanlee@goodwinlaw.com | ||
| | | | |||
| | if to the Company: | ||||
| | | | |||
| | | | Kineta, Inc. | ||
| | | | 219 Terry Avenue North, Suite 300 | ||
| | | | Seattle, WA 98109 | ||
| | | | Attention: Shawn Iadonato, CEO | ||
| | | | Email: shawn@kineta.us | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Orrick, Herrington & Sutcliffe LLP | ||
| | | | 701 5th Avenue, Suite 5600 | ||
| | | | Seattle, WA 98104-7097 | ||
| | �� | | Telephone: 206-839-4337 | ||
| | | | Attention: Blake Ilstrup, Hari Raman and Albert W. Vanderlaan | ||
| | | | Email: bilstrup@orrick.com, hraman@orrick.com and avanderlaan@orrick.com |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | Name: Richard Peters | ||||
| | Title: Chief Executive Officer |
Exhibits: | |||
| | ||
Exhibit A | | | Definitions |
Exhibit B | | | Form of Yumanity Stockholder Support Agreement |
Exhibit C | | | Form of Company Shareholder Support Agreement |
Exhibit D | | | Form of Lock-up Agreement |
| | if to Yumanity or Merger Sub: | ||||
| | | | |||
| | | | Yumanity Therapeutics, Inc. | ||
| | | | 40 Guest Street, Suite 4410 | ||
| | | | Boston, MA 02135 | ||
| | | | Attention: Devin Smith, Senior Vice President and General Counsel | ||
| | | | Email: dsmith@yumanity.com | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Goodwin Procter LLP | ||
| | | | 100 Northern Avenue | ||
| | | | Boston, Massachusetts 02210 | ||
| | | | Telephone: 617-570-1000 | ||
| | | | Fax: 617-523-1231 | ||
| | | | Attention: John T. Haggerty, Esq. and Jean A. Lee | ||
| | | | Email: jhaggerty@goodwinlaw.com and jeanlee@goodwinlaw.com | ||
| | | | |||
| | if to the Company: | ||||
| | | | |||
| | | | Kineta, Inc. | ||
| | | | 219 Terry Avenue North, Suite 300 | ||
| | | | Seattle, WA 98109 | ||
| | | | Attention: Shawn Iadonato, CEO | ||
| | | | Email: shawn@kineta.us | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Orrick, Herrington & Sutcliffe LLP | ||
| | | | 701 5th Avenue, Suite 5600 | ||
| | | | Seattle, WA 98104-7097 | ||
| | �� | | Telephone: 206-839-4337 | ||
| | | | Attention: Blake Ilstrup, Hari Raman and Albert W. Vanderlaan | ||
| | | | Email: bilstrup@orrick.com, hraman@orrick.com and avanderlaan@orrick.com |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | Name: Richard Peters | ||||
| | Title: Chief Executive Officer |
| | YACHT MERGER SUB, INC. | ||||
| | | | |||
| | By: | | | /s/ Devin Smith | |
| | Name: Devin Smith | ||||
| | Title: Chief Executive Officer |
| | KINETA, INC. | ||||
| | | | |||
| | By: | | | /s/ Shawn Iadonato | |
| | Name: Shawn Iadonato | ||||
| | Title: Chief Executive Officer |
• | “Company Outstanding Shares” means the total number of shares of Company Capital Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Company |
• | “Yumanity Allocation Percentage” means the percentage determined by (i) dividing the Yumanity Valuation by (ii) the sum of the Yumanity Valuation plus the Company Valuation. |
• | “Yumanity Outstanding Shares” means the total number of shares of Yumanity Common Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Yumanity Common Stock basis (excluding any securities issued in respect of the Concurrent Financing), but assuming, without limitation, (i) the inclusion of all options, warrants or rights to receive such shares (whether then vested or unvested, exercisable or not exercisable, including any Yumanity RSUs and Yumanity Options that are in-the-money but excluding any Yumanity Options that are out-of-the-money), whether conditional or unconditional and including any options, warrants or rights that accelerate upon or are triggered by or associated with the consummation of the Contemplated Transactions, (ii) the inclusion of all restricted stock units of Yumanity, whether conditional or unconditional, and (iii) the inclusion of shares of Yumanity Common Stock issued after the date of this Agreement and prior to the Closing. For purposes of clarity, Yumanity Outstanding Shares shall not include any shares available and reserved for future issuance under the 2016 Plan, the 2018 Plan, the 2021 Plan or the ESPP (but not issued and outstanding) as of immediately prior to the Effective Time. |
• | “Yumanity Valuation” means $34,000,000, provided, however, that the Yumanity Valuation shall be (i) increased on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is greater than $10,000,000 and (ii) reduced on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is less than $10,000,000. |
• | “Surviving Corporation Allocation Shares” means an amount equal to (i) the quotient determined by dividing the Yumanity Outstanding Shares by the Yumanity Allocation Percentage less (ii) the Yumanity Outstanding Shares. |
1. | Richard H. Peters |
2. | Devin Smith |
3. | Richard Heyman |
4. | David Arkowitz |
5. | Michael Wyzga |
6. | Cecil Pickett |
7. | Neavelle Anthony Coles |
8. | Jeffery Kelly |
1. | CBI USA, Inc. |
2. | Shawn Iadonato |
3. | Charles Magness |
1. | The Amended and Restated Voting Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
2. | The Amended and Restated Investor Rights Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
3. | The Amended and Restated First Refusal and Co-Sale Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
1. | Upon the effectiveness of this Certificate of Amendment pursuant to the DGCL, Article IV of the Certificate of Incorporation is hereby amended by adding the following paragraph to the end of the introductory paragraphs of Article IV and immediately before paragraph “A. Common Stock”: |
2. | Effective immediately upon the filing of this Certificate of Amendment with the Secretary of State of the State of Delaware (such time, the “Effective Time”), every [insert number ranging from five (5) to twenty (20),] shares of Common Stock outstanding immediately prior to the Effective Time (such shares, the “Old Common Stock”) shall automatically without further action on the part of the Company be combined into one (1) fully paid and nonassessable share of Common Stock (the “New Common Stock”), subject to the treatment of fractional shares described below. From and after the Effective Time, certificates representing the Old Common Stock shall, without the necessity of presenting the same for exchange, represent the number of shares of New Common Stock into which such Old Common Stock shall have been converted pursuant to this Certificate of Amendment. There shall be no fractional shares issued. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares of Common Stock not evenly divisible by [insert number ranging from five (5) to twenty (20),], will be entitled to receive cash in lieu of fractional shares at the value thereof on the date of the Effective Time as determined by the Board of Directors.” |
3. | The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL. |
| | By: | | | ||
| | Name: Richard Peters, M.D., Ph.D. | ||||
| | Title: President and Chief Executive Officer |
| | Very truly yours, | |
| | ||
| | /s/ Needham & Company, LLC | |
| | ||
| | NEEDHAM & COMPANY, LLC |
| | ||||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | Boston, MA 02135 | |||||
| | | | Attention: Devin Smith, Senior Vice President and General Counsel | |||||
| | | | Email: dsmith@yumanity.com | |||||
| | | | ||||||
| | ||||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | Email: jhaggerty@goodwinlaw.com and jeanlee@goodwinlaw.com | |||||
| | | | ||||||
| | ||||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | | | ||||||
| | ||||||||
| | | | ||||||
| | | | ||||||
| | | | 701 5th Avenue, Suite 5600 |
| | | | |||
| | �� | | Telephone: 206-839-4337 | ||
| | | | Attention: Blake Ilstrup, Hari Raman and Albert W. Vanderlaan | ||
| | | | Email: bilstrup@orrick.com, hraman@orrick.com and avanderlaan@orrick.com |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | | | |||
| | |||||
| |
| | ||||||||
| | | | ||||||
| | By: | | | /s/ Devin Smith | ||||
| | Name: Devin Smith | |||||||
| | Title: Chief Executive Officer |
| | KINETA, INC. | |||||||
| | | | ||||||
| | | | ||||||
| | ||||||||
| | ||||||||
CERTAIN DEFINITIONS For purposes of the Agreement (including this Exhibit A): “2016 Plan” shall have the meaning set forth in Section 3.3(b). “2018 Plan” shall have the meaning set forth in Section 3.3(b). “2021 Plan” shall have the meaning set forth in Section 3.3(b). “2022 Plan” shall mean the customary incentive plan that shall be subject to approval by Yumanity’s stockholders at the Yumanity Stockholders’ Meeting. “Acquisition Inquiry” shall mean, with respect to a Party, an inquiry, indication of interest or request for nonpublic information (other than an inquiry, indication of interest or request for information made or submitted by the Company, on the one hand, or Yumanity, on the other hand, to the other Party) that would reasonably be expected to lead to an Acquisition Proposal with such Party. “Acquisition Proposal” shall mean, with respect to a Party, any offer or proposal, whether written or oral (other than (i) an offer or proposal made or submitted by or on behalf of the Company or any of its Affiliates, on the one hand, or by or on behalf of Yumanity or any of its Affiliates, on the other hand, to the other Party, or (ii) an offer or proposal relating to a Permitted Asset Disposition) contemplating or otherwise relating to any Acquisition Transaction with such Party. “Acquisition Transaction” shall mean any transaction or series of transactions involving: any merger, consolidation, amalgamation, share exchange, business combination, issuance of securities, acquisition of securities, reorganization, recapitalization, tender offer, exchange offer or other similar transaction: (i) in which a Party or any of its Subsidiaries is a constituent corporation; (ii) in which a Person or “group” (as defined in the Exchange Act and the rules promulgated thereunder) of Persons directly or indirectly acquires beneficial or record ownership of securities representing more than 20% of the outstanding securities of any class of voting securities of a Party or any of its Subsidiaries; or (iii) in which a Party or any of its Subsidiaries issues securities representing more than 20% of the outstanding securities of any class of voting securities of such Party or any of its Subsidiaries; or any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 20% or more of the fair market value of the consolidated assets of a Party and its Subsidiaries, taken as a whole, other than a Permitted Asset Disposition. “Affiliates” of a Person shall mean any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by Contract or otherwise “Agreement” shall mean the Agreement and Plan of Merger to which this Exhibit A is attached, as it may be amended from time to time. “Allocation Certificate” shall have the meaning set forth in Section 5.18(a). “Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act, as amended (15 U.S.C. §78 dd-1 et seq.), the UK Bribery Act of 2010, or any other applicable anti-bribery or anti-corruption Laws. “Articles of Merger” shall have the meaning set forth in Section 1.3. “Business Day” shall mean any day other than a day on which banks in the State of New York are authorized or obligated to be closed. “Capitalization Date” shall have the meaning set forth in Section 3.3(a). “CARES Act” shall mean the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136) and all rules, any regulations and guidance issued by any Governmental Authority with respect thereto, in each case as in effect from time to time. | |||
• | “Company Outstanding Shares” means the total number of shares of Company Capital Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Company |
• | “Yumanity Allocation Percentage” means the percentage determined by (i) dividing the Yumanity Valuation by (ii) the sum of the Yumanity Valuation plus the Company Valuation. |
• | “Yumanity Outstanding Shares” means the total number of shares of Yumanity Common Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Yumanity Common Stock basis (excluding any securities issued in respect of the Concurrent Financing), but assuming, without limitation, (i) the inclusion of all options, warrants or rights to receive such shares (whether then vested or unvested, exercisable or not exercisable, including any Yumanity RSUs and Yumanity Options that are in-the-money but excluding any Yumanity Options that are out-of-the-money), whether conditional or unconditional and including any options, warrants or rights that accelerate upon or are triggered by or associated with the consummation of the Contemplated Transactions, (ii) the inclusion of all restricted stock units of Yumanity, whether conditional or unconditional, and (iii) the inclusion of shares of Yumanity Common Stock issued after the date of this Agreement and prior to the Closing. For purposes of clarity, Yumanity Outstanding Shares shall not include any shares available and reserved for future issuance under the 2016 Plan, the 2018 Plan, the 2021 Plan or the ESPP (but not issued and outstanding) as of immediately prior to the Effective Time. |
• | “Yumanity Valuation” means $34,000,000, provided, however, that the Yumanity Valuation shall be (i) increased on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is greater than $10,000,000 and (ii) reduced on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is less than $10,000,000. |
• | “Surviving Corporation Allocation Shares” means an amount equal to (i) the quotient determined by dividing the Yumanity Outstanding Shares by the Yumanity Allocation Percentage less (ii) the Yumanity Outstanding Shares. |
1. | Richard H. Peters |
2. | Devin Smith |
3. | Richard Heyman |
4. | David Arkowitz |
5. | Michael Wyzga |
6. | Cecil Pickett |
7. | Neavelle Anthony Coles |
8. | Jeffery Kelly |
1. | CBI USA, Inc. |
2. | Shawn Iadonato |
3. | Charles Magness |
1. | The Amended and Restated Voting Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
2. | The Amended and Restated Investor Rights Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
3. | The Amended and Restated First Refusal and Co-Sale Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
1. | Upon the effectiveness of this Certificate of Amendment pursuant to the DGCL, Article IV of the Certificate of Incorporation is hereby amended by adding the following paragraph to the end of the introductory paragraphs of Article IV and immediately before paragraph “A. Common Stock”: |
2. | Effective immediately upon the filing of this Certificate of Amendment with the Secretary of State of the State of Delaware (such time, the “Effective Time”), every [insert number ranging from five (5) to twenty (20),] shares of Common Stock outstanding immediately prior to the Effective Time (such shares, the “Old Common Stock”) shall automatically without further action on the part of the Company be combined into one (1) fully paid and nonassessable share of Common Stock (the “New Common Stock”), subject to the treatment of fractional shares described below. From and after the Effective Time, certificates representing the Old Common Stock shall, without the necessity of presenting the same for exchange, represent the number of shares of New Common Stock into which such Old Common Stock shall have been converted pursuant to this Certificate of Amendment. There shall be no fractional shares issued. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares of Common Stock not evenly divisible by [insert number ranging from five (5) to twenty (20),], will be entitled to receive cash in lieu of fractional shares at the value thereof on the date of the Effective Time as determined by the Board of Directors.” |
3. | The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL. |
| | By: | | | ||
| | Name: Richard Peters, M.D., Ph.D. | ||||
| | Title: President and Chief Executive Officer |
| | Very truly yours, | |
| | ||
| | /s/ Needham & Company, LLC | |
| | ||
| | NEEDHAM & COMPANY, LLC |
| | if to Yumanity or Merger Sub: | ||||
| | | | |||
| | | | Yumanity Therapeutics, Inc. | ||
| | | | 40 Guest Street, Suite 4410 | ||
| | | | Boston, MA 02135 | ||
| | | | Attention: Devin Smith, Senior Vice President and General Counsel | ||
| | | | Email: dsmith@yumanity.com | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Goodwin Procter LLP | ||
| | | | 100 Northern Avenue | ||
| | | | Boston, Massachusetts 02210 | ||
| | | | Telephone: 617-570-1000 | ||
| | | | Fax: 617-523-1231 | ||
| | | | Attention: John T. Haggerty, Esq. and Jean A. Lee | ||
| | | | Email: jhaggerty@goodwinlaw.com and jeanlee@goodwinlaw.com | ||
| | | | |||
| | if to the Company: | ||||
| | | | |||
| | | | Kineta, Inc. | ||
| | | | 219 Terry Avenue North, Suite 300 | ||
| | | | Seattle, WA 98109 | ||
| | | | Attention: Shawn Iadonato, CEO | ||
| | | | Email: shawn@kineta.us | ||
| | | | |||
| | with a copy (which shall not constitute notice) to: | ||||
| | | | |||
| | | | Orrick, Herrington & Sutcliffe LLP | ||
| | | | 701 5th Avenue, Suite 5600 | ||
| | | | Seattle, WA 98104-7097 | ||
| | �� | | Telephone: 206-839-4337 | ||
| | | | Attention: Blake Ilstrup, Hari Raman and Albert W. Vanderlaan | ||
| | | | Email: bilstrup@orrick.com, hraman@orrick.com and avanderlaan@orrick.com |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | Name: Richard Peters | ||||
| | Title: Chief Executive Officer |
| | YACHT MERGER SUB, INC. | ||||
| | | | |||
| | By: | | | /s/ Devin Smith | |
| | Name: Devin Smith | ||||
| | Title: Chief Executive Officer |
| | KINETA, INC. | ||||
| | | | |||
| | By: | | | /s/ Shawn Iadonato | |
| | Name: Shawn Iadonato | ||||
| | Title: Chief Executive Officer |
• | “Company Outstanding Shares” means the total number of shares of Company Capital Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Company |
• | “Yumanity Allocation Percentage” means the percentage determined by (i) dividing the Yumanity Valuation by (ii) the sum of the Yumanity Valuation plus the Company Valuation. |
• | “Yumanity Outstanding Shares” means the total number of shares of Yumanity Common Stock outstanding immediately prior to the Effective Time expressed on a fully diluted and as-converted to Yumanity Common Stock basis (excluding any securities issued in respect of the Concurrent Financing), but assuming, without limitation, (i) the inclusion of all options, warrants or rights to receive such shares (whether then vested or unvested, exercisable or not exercisable, including any Yumanity RSUs and Yumanity Options that are in-the-money but excluding any Yumanity Options that are out-of-the-money), whether conditional or unconditional and including any options, warrants or rights that accelerate upon or are triggered by or associated with the consummation of the Contemplated Transactions, (ii) the inclusion of all restricted stock units of Yumanity, whether conditional or unconditional, and (iii) the inclusion of shares of Yumanity Common Stock issued after the date of this Agreement and prior to the Closing. For purposes of clarity, Yumanity Outstanding Shares shall not include any shares available and reserved for future issuance under the 2016 Plan, the 2018 Plan, the 2021 Plan or the ESPP (but not issued and outstanding) as of immediately prior to the Effective Time. |
• | “Yumanity Valuation” means $34,000,000, provided, however, that the Yumanity Valuation shall be (i) increased on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is greater than $10,000,000 and (ii) reduced on a dollar-for-dollar basis by the amount that Yumanity Net Cash at Closing is less than $10,000,000. |
• | “Surviving Corporation Allocation Shares” means an amount equal to (i) the quotient determined by dividing the Yumanity Outstanding Shares by the Yumanity Allocation Percentage less (ii) the Yumanity Outstanding Shares. |
1. | Richard H. Peters |
2. | Devin Smith |
3. | Richard Heyman |
4. | David Arkowitz |
5. | Michael Wyzga |
6. | Cecil Pickett |
7. | Neavelle Anthony Coles |
8. | Jeffery Kelly |
1. | CBI USA, Inc. |
2. | Shawn Iadonato |
3. | Charles Magness |
1. | The Amended and Restated Voting Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
2. | The Amended and Restated Investor Rights Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
3. | The Amended and Restated First Refusal and Co-Sale Agreement by and among the Company and the parties named therein, dated as of September 30, 2021, as may be amended from time to time. |
1. | Upon the effectiveness of this Certificate of Amendment pursuant to the DGCL, Article IV of the Certificate of Incorporation is hereby amended by adding the following paragraph to the end of the introductory paragraphs of Article IV and immediately before paragraph “A. Common Stock”: |
2. | Effective immediately upon the filing of this Certificate of Amendment with the Secretary of State of the State of Delaware (such time, the “Effective Time”), every [insert number ranging from five (5) to twenty (20),] shares of Common Stock outstanding immediately prior to the Effective Time (such shares, the “Old Common Stock”) shall automatically without further action on the part of the Company be combined into one (1) fully paid and nonassessable share of Common Stock (the “New Common Stock”), subject to the treatment of fractional shares described below. From and after the Effective Time, certificates representing the Old Common Stock shall, without the necessity of presenting the same for exchange, represent the number of shares of New Common Stock into which such Old Common Stock shall have been converted pursuant to this Certificate of Amendment. There shall be no fractional shares issued. Stockholders who otherwise would be entitled to receive fractional shares because they hold a number of shares of Common Stock not evenly divisible by [insert number ranging from five (5) to twenty (20),], will be entitled to receive cash in lieu of fractional shares at the value thereof on the date of the Effective Time as determined by the Board of Directors.” |
3. | The foregoing amendment was duly adopted in accordance with the provisions of Section 242 of the DGCL. |
| | By: | | | ||
| | Name: Richard Peters, M.D., Ph.D. | ||||
| | Title: President and Chief Executive Officer |
| | Very truly yours, | |
| | ||
| | /s/ Needham & Company, LLC | |
| | ||
| | NEEDHAM & COMPANY, LLC |
| | | | Page | ||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
| | | | Page | ||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | |||||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | | |||
| | | |
Schedule 1.1(a) | | | Compounds |
Schedule 1.1(b) | | | Excluded Targets |
Schedule 1.1(c) | | | Targets |
Schedule 1.1(d) | | | Excluded Intellectual Property |
Schedule 2.1(b)(i) | | | Seller Wire Information |
Schedule 2.2(a)(i) | | | Seller Biological Materials |
Schedule 2.2(a)(iii) | | | Seller Registered Intellectual Property |
Schedule 2.2(a)(v) | | | Inventory |
Schedule 2.2(a)(vi) | | | Assumed Contracts |
Schedule 2.2(a)(vii) | | | Permits |
Schedule 2.6(a) | | | Purchase Price Allocation |
Schedule 3.4(a) | | | Liens |
Schedule 3.5(i) | | | Intellectual Property Licenses |
Schedule 3.5(q) | | | Specified License Agreements |
Schedule 3.6(a) | | | Excluded Contracts |
Schedule 3.7(b) | | | Material Permits |
Schedule 3.11(a) | | | Regulatory Authorizations |
Schedule 3.11(c) | | | Clinical Holds |
Schedule 3.18 | | | Related Party Transactions |
Schedule 5.1 | | | Interim Operating Covenants |
Schedule 5.11 | | | Additional Matters |
Exhibit 2.4(b)(i) | | | Form of Bill of Sale, Assignment and Assumption Agreement |
Exhibit 2.4(b)(ii) | | | Form of Patent Assignment Agreement |
| | if to Buyer, to: | |||||||
| | | | | | ||||
| | | | Janssen Pharmaceutica NV | |||||
| | | | Turnhoutseweg 30 | |||||
| | | | 2340 Beerse | |||||
| | | | Belgium | |||||
| | | | Attention: | | | President |
| | | | | | ||||
| | | | with copies (which shall not constitute notice) to: | |||||
| | | | | | ||||
| | | | Johnson & Johnson | |||||
| | | | Office of General Counsel | |||||
| | | | One Johnson & Johnson Plaza | |||||
| | | | New Brunswick, NJ 08933 | |||||
| | | | Attention: | | | General Counsel | ||
| | | | | | ||||
| | | | and | | | |||
| | | | | | ||||
| | | | Cravath, Swaine & Moore LLP | |||||
| | | | Worldwide Plaza | |||||
| | | | 825 Eighth Avenue | |||||
| | | | New York, New York 10019 | |||||
| | | | | | ||||
| | | | Attention: | | | Robert I. Townsend, III, Esq. | ||
| | | | | | Sanjay Murti, Esq. | |||
| | | | | | ||||
| | | | Email: | | | rtownsend@cravath.com | ||
| | | | | | smurti@cravath.com | |||
| | | | | | ||||
| | if to Seller, to: | |||||||
| | | | | | ||||
| | | | Yumanity Therapeutics, Inc. | |||||
| | | | 40 Guest Street, Suite 4410 | |||||
| | | | Boston, MA 02135 | |||||
| | | | | | ||||
| | | | Attention: | | | Devin Smith, Senior Vice President and General Counsel | ||
| | | | | | ||||
| | | | Email: | | | dsmith@yumanity.com | ||
| | | | | | ||||
| | | | with a copy (which shall not constitute notice) to: | |||||
| | | | | | ||||
| | | | Goodwin Procter LLP | |||||
| | | | 100 Northern Avenue | |||||
| | | | Boston, Massachusetts 02210 | |||||
| | | | | | ||||
| | | | Attention: | | | John T. Haggerty, Esq. | ||
| | | | | | Jean A. Lee | |||
| | | | | | ||||
| | | | Email: | | | jhaggerty@goodwinlaw.com | ||
| | | | | | jeanlee@goodwinlaw.com |
| | SELLER: | ||||
| | | | |||
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | | | Name: Richard Peters | ||
| | | | Title: Chief Executive Officer |
| | BUYER: | ||||
| | | | |||
| | JANSSEN PHARMACEUTICA NV | ||||
| | | | |||
| | By: | | | /s/ Marc Vankerckhoven | |
| | | | Name: Marc Vankerckhoven | ||
| | | | Title: Member Board of Directors Janssen Pharmaceutica NV | ||
| | | | |||
| | By: | | | /s/ Jan Van der Goten | |
| | | | Name: Jan Van der Goten | ||
| | | | Title: Member Board of Directors Janssen Pharmaceutica NV |
| | Very truly yours, | |
| | ||
| | /s/ Needham & Company, LLC | |
| | Needham & Company, LLC |
1 | To equal 15% of fully diluted capital following the consummation of the transactions contemplated by the Merger Agreement. |
Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statement Schedules |
(a) | Exhibits |
Exhibit No. | | | Description |
| | Agreement and Plan of Merger, dated as of June 5, 2022, by and among Yumanity Therapeutics, Inc., Yacht Merger Sub, Inc. and Kineta, Inc. (included as Annex A to the proxy statement/prospectus/information statement forming a part of this Registration Statement). | |
| | ||
| | Asset Purchase Agreement, dated as of June 5, 2022, by and between Yumanity Therapeutics, Inc. and Janssen Pharmaceutica NV (included as Annex E to the proxy statement/prospectus/information statement forming a part of this Registration Statement). | |
| | ||
| | Form of Support Agreement, dated as of June 5, 2022, by and between Yumanity Therapeutics, Inc., Kineta, Inc. and certain directors and officers of Yumanity Therapeutics, Inc. (filed as Exhibit 2.3 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on June 6, 2022 and incorporated herein by reference). | |
| | ||
| | Form of Support Agreement, by and between Yumanity Therapeutics, Inc., Kineta, Inc. and certain directors and officers and shareholders of Kineta, Inc. (filed as Exhibit 2.4 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on June 6, 2022 and incorporated herein by reference). | |
| |
Exhibit No. | | | Description |
| | Form of Lock-Up Agreement, by and among Yumanity Therapeutics, Inc., Kineta, Inc., and certain stockholders of Kineta, Inc. and Yumanity Therapeutics, Inc. (filed as Exhibit 2.5 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on June 6, 2022 and incorporated herein by reference). | |
| | ||
| | Fifth Amended and Restated Certificate of Incorporation of the Registrant (filed as Exhibit 3.1 to the Registrant’s Registration Statement on Form S-3 (File No. 333-228529) as filed with the SEC on November 23, 2018 and incorporated herein by reference). | |
| | ||
| | Certificate of Amendment of Fifth Amended and Restated Certificate of Incorporation of the Company related to the Reverse Stock Split, dated December 22, 2020 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on December 30, 2020 and incorporated herein by reference). | |
| | ||
| | Certificate of Amendment of Fifth Amended and Restated Certificate of Incorporation of the Company related to the Name Change, dated December 22, 2020 (filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on December 30, 2020 and incorporated herein by reference). | |
| | ||
| | Third Amended and Restated Bylaws of the Registrant (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on August 24, 2020 and incorporated herein by reference). | |
| | ||
| | Specimen Common Stock Certificate (filed as Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-208735) as filed with the SEC on February 1, 2016 and incorporated herein by reference). | |
| | ||
| | Opinion of Goodwin Procter LLP. | |
| | ||
| | Tax Opinion of Orrick, Herrington & Sutcliffe LLP. | |
| | ||
| | 2016 Stock Option and Incentive Plan and forms of award agreements thereunder (filed as Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-208735) as filed with the SEC on February 1, 2016 and incorporated herein by reference). | |
| | ||
| | 2016 Employee Stock Purchase Plan (filed as Exhibit 10.15 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-208735) as filed with the SEC on February 1, 2016 and incorporated herein by reference). | |
| | ||
| | Senior Executive Cash Incentive Bonus Plan (filed as Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1/A (File No. 333-208735) as filed with the SEC on February 1, 2016 and incorporated herein by reference). | |
| | ||
| | Lease between the Registrant, as Tenant, and Ice Box, LLC, as Landlord, dated as of September 19, 2017 (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37695) as filed with the SEC on November 14, 2017 and incorporated herein by reference). | |
| | ||
| | First Amendment to Lease by and between the Registrant and Ice Box, LLC (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37695) as filed with the SEC on August 8, 2018 and incorporated herein by reference). | |
| |
Exhibit No. | | | Description |
| | Tangible Property and Exclusive Patent License Agreement, by and between Yumanity, Inc. (formerly known as Yumanity Therapeutics, Inc.), Yumanity Holdings, LLC and Whitehead Institute for Biomedical Research, dated as of February 4, 2016 (filed as Exhibit 10.16 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). |
| | ||
| | Exclusive License and Research Collaboration Agreement, by and between Yumanity, Inc. (formerly known as Yumanity Therapeutics, Inc.) and Merck Sharp & Dohme Corp., dated as of June 19, 2020 (filed as Exhibit 10.17 to the Registrant’s Registration Statement on Form S-4/A (File No. 333-248993) as filed with the SEC on October 28, 2020 and incorporated herein by reference). | |
| | ||
| | License Agreement by and between Yumanity Therapeutics, Inc. and MIL 40, LLC dated as of February 28, 2022 (field as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on March 1, 2022 and incorporated herein by reference). | |
| | ||
| | Amended and Restated Warrant Agreement to Purchase Common Stock of the Company issued to Hercules Capital, Inc., dated December 22, 2020 (filed as Exhibit 10.14 to the Registrant's Annual Report on Form 10-K (File No. 001-37695) as filed with the SEC on March 31, 2021 and incorporated herein by reference). | |
| | ||
| | Employment Agreement, by and between Yumanity, Inc. (formerly known as Yumanity Therapeutics, Inc.) and Richard Peters, M.D., Ph.D., dated as of June 30, 2019 (filed as Exhibit 10.21 to the Registrant’s Registration Statement on Form S-4/A (File No. 333-248993) as filed with the SEC on October 28, 2020 and incorporated herein by reference). | |
| | ||
| | Employment Agreement by and between Yumanity Therapeutics, Inc. and Devin W. Smith, dated as of May 14, 2021 (filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q (File No. 001-37695) as filed with the SEC on August 12, 2021 and incorporated herein by reference). | |
| | ||
| | Employment Agreement by and between Yumanity Therapeutics, Inc. and Michael D. Wyzga, dated as of July 12, 2021 (filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on August 16, 2021 and incorporated herein by reference). | |
| | ||
| | Form of indemnification agreement with Yumanity Therapeutics, Inc. directors and officers (filed as Exhibit 10.24 to the Registrant’s Registration Statement on Form S-4/A (File No. 333-248993) as filed with the SEC on October 28, 2020 and incorporated herein by reference). | |
| | ||
| | Yumanity Therapeutics, Inc. Amended and Restated 2018 Stock Option and Grant Plan and forms of award agreements thereunder (filed as Exhibit 10.7 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on December 30, 2020 and incorporated herein by reference). | |
| | ||
| | Common Unit Warrant issued to Alexandria Equities, LLC (as predecessor to Alexandria Venture Investments, LLC) on October 9, 2015 (filed as Exhibit 10.27 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). | |
| | ||
| | Common Unit Warrant issued to Redmile Capital Offshore II Master Fund, Ltd. on August 14, 2015 (filed as Exhibit 10.28 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). |
Exhibit No. | | | Description |
| | Common Unit Warrant issued to Redmile Biotechnologies Investments I AF, LP (as predecessor to Redmile Biopharma Investments I, L.P.) on August 14, 2015 (filed as Exhibit 10.29 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). | |
| |
| | Common Unit Warrant issued to Susan L. Lindquist Family Trust (as successor to the Estate of Susan L. Lindquist) dated August 14, 2015 (filed as Exhibit 10.30 to the Registrant’s Registration Statement on Form S-4/A (File No. 333-248993) as filed with the SEC on October 28, 2020 and incorporated herein by reference). | |
| | ||
| | Common Unit Warrant issued to N. Anthony Coles on August 14, 2015 (filed as Exhibit 10.31 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). | |
| | ||
| | Warrant to Purchase Limited Liability Company Interests issued to Silicon Valley Bank on June 14, 2018 (filed as Exhibit 10.32 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). | |
| | ||
| | Warrant to Purchase Limited Liability Company Interests issued to Oxford Finance LLC dated June 14, 2018 (filed as Exhibit 10.33 to the Registrant’s Registration Statement on Form S-4 (File No. 333-248993) as filed with the SEC on September 23, 2020 and incorporated herein by reference). | |
| | ||
| | Subscription Agreement, dated as of December 14, 2020 by among the Company and certain purchasers listed therein (filed as Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on December 15, 2020 and incorporated herein by reference). | |
| | ||
| | Registration Rights Agreement, dated as of December 22, 2020 by among the Company and certain purchasers listed therein (filed as Exhibit 10.5 of the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on December 30, 2020 and incorporated herein by reference). | |
| | ||
| | Yumanity Therapeutics, Inc. 2021 Inducement Plan and forms of award agreements thereunder (filed as Exhibit 99.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-256853) as filed with the SEC on June 7, 2021 and incorporated herein by reference). | |
| | ||
| | Separation Agreement by and between Yumanity Therapeutics, Inc. and Paulash Mohsen dated as of March 14, 2022 (filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-37695) as filed with the SEC on May 12, 2022 and incorporated herein by reference). | |
| | ||
| | Form of Securities Purchase Agreement, dated as of June 5, 2022, by and between the Registrant and each of the institutional investors named therein (filed as Exhibit 2.6 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on June 6, 2022 and incorporated herein by reference). | |
| | ||
| | Form of Registration Rights Agreement, dated as of June 5, 2022, by and between the Registrant and each of the institutional investors named therein (filed as Exhibit 2.7 to the Registrant’s Current Report on Form 8-K (File No. 001-37695) as filed with the SEC on June 6, 2022 and incorporated herein by reference). | |
| | ||
| | Form of Employment Agreement with certain Executive Officers of Kineta, Inc. | |
| |
Exhibit No. | | | Description |
| | Form of Indemnification Agreement with the Executive Officers and Directors of Kineta, Inc. (to be effective upon the consummation of the Merger). | |
| | ||
| | Kineta, Inc. Amended and Restated 2008 Stock Plan (the “Kineta 2008 Plan”) and associated forms. | |
| | ||
| | Kineta, Inc. 2010 Equity Incentive Plan (the “Kineta 2010 Plan”) and associated forms. | |
| | ||
| | First Amendment to Kineta 2010 Plan. | |
| | ||
| | Second Amendment to Kineta 2010 Plan. | |
| | ||
| | Kineta, Inc. 2020 Equity Incentive Plan (the “Kineta 2020 Plan”) and associated forms. | |
| | ||
| | Kineta Lease, dated as of November 19, 2010, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | First Amendment to Kineta Lease, dated as of August 12, 2011, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | Second Amendment to Kineta Lease, dated as of August 28, 2012, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | Third Amendment to Kineta Lease, dated as of February 28, 2013, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | Fourth Amendment to Kineta Lease, dated as of June 28, 2016, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | Fifth Amendment to Kineta Lease, dated as of June 30, 2020, by and between Kineta, Inc. and ARE-SEATTLE No.17, LLC. | |
| | ||
| | Option and License Agreement (VISTA), dated as of August 10, 2020, by and between GigaGen, Inc. and Kineta, Inc. | |
| | ||
| | First Amendment to Option and License Agreement (VISTA), dated as of November 19, 2020, by and between GigaGen, Inc. and Kineta, Inc. | |
| | ||
| | Option and License Agreement (CD 27), dated as of June 9, 2021, by and between GigaGen, Inc. and Kineta, Inc. | |
| | ||
| | First Amendment to Option and License Agreement (CD 27), dated as of July 31, 2022, by and between GigaGen, Inc. and Kineta, Inc. | |
| | ||
| | Exclusive Option and License Agreement (Chronic Pain), dated as of April 11, 2018, between Kineta Chronic Pain, LLC and Genentech, Inc and its Affiliates. | |
| | ||
| | First Amendment to the Exclusive Option and License Agreement (Chronic Pain), made effective as of November 27, 2019, between Kineta Chronic Pain, LLC and Genentech, Inc. and its Affiliates. | |
| | ||
| | Second Amendment to the Exclusive Option and License Agreement (Chronic Pain), made effective as of October 1, 2020, between Kineta Chronic Pain, LLC and Genentech, Inc. and its Affiliates. | |
| | ||
| | Amended and Restated Exclusive License Agreement, dated as of July 28, 2020, by and between Kineta Chronic Pain, LLC and University of Utah Research Foundation. |
Exhibit No. | | | Description |
| | First Amendment to Amended and Restated Exclusive License Agreement, dated as of December 16, 2020, by and between the University of Utah Research Foundation and Kineta Chronic Pain, LLC. | |
| |
| | SIGA Asset Purchase Agreement, dated as of August 14, 2014, by and between Kineta Four, LLC and SIGA Technologies Inc. | |
| | ||
| | Amendment No.1 to SIGA Asset Purchase Agreement, dated as of December 3, 2021, by and between Kineta Viral Hemorrhagic Fever, LLC (f/k/a Kineta Four, LLC), Kineta, Inc. and SIGA Technologies Inc. | |
| | ||
| | Master Development Services Agreement, dated as of July 9, 2021, between Samsung Biologics Co., Ltd. and Kineta, Inc. | |
| | ||
| | Development and Manufacturing Services Agreement, dated as of November 22, 2019, by and between Kineta Chronic Pain, LLC and AmbioPharm, Inc. | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to M&M Financial, LLC on October 15, 2020 (Warrant No. NVCW-413). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to M&M Financial, LLC on October 15, 2019; original warrant issued September 15, 2017 (Warrant No. NVCW-367R1). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to M&M Financial, LLC on October 15, 2019; original warrant issued September 15, 2017 (Warrant No. NVCW-368R1). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to LTO Holdings, LLC on October 15, 2020 (Warrant No. NVCW-414). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to LTO Holdings, LLC on October 15, 2019; original warrant issued September 15, 2017 (Warrant No. NVCW-367R2). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to LTO Holdings, LLC on October 15, 2019; original warrant issued September 15, 2017 (Warrant No. NVCW-368R2). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to RLB Holdings, LLC on September 1, 2017 (Warrant No. NVCW-363). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to Marion R. Foote on October 15, 2020 (Warrant No. NVCW-416). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to Marion R. Foote on November 24, 2017 (Warrant No. NVCW-372). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to Marion R. Foote on November 24, 2017 (Warrant No. NVCW-373). | |
| | ||
| | Kineta, Inc. Warrant to Purchase Shares, issued by Kineta, Inc. to Marion R. Foote on October 3, 2019 (Warrant No. NVCW-399). | |
| | ||
| | Lecura, Inc. Common Stock Purchase Agreement, dated as of December 23, 2007, by and between Lecura, Inc. and Shawn Iadonato. | |
| | ||
| | Kineta, Inc. Common Stock Purchase Agreement, dated as of June 26, 2008, by and between Kineta, Inc. and Shawn Iadonato. | |
| |
Exhibit No. | | | Description |
| | Kineta, Inc. Common Stock Purchase Agreement, dated as of May 27, 2021, by and between Kineta, Inc. and CBI USA, Inc. | |
| | ||
| | Non-Voting Common Stock Purchase Warrant, issued by Kineta, Inc. to Quayle Associates, LLC on April 1, 2013 (Warrant No. NVCW-79). | |
| | ||
| | Assignment Form of Quayle Associates, LLC to sell, assign and transfer all rights of Warrant No. NVCW-79 to Craig W. Philips, dated as of January 1, 2018. | |
| | ||
| | Assignment Form of Craig W. Philips to sell, assign and transfer all rights of Warrant No. NVCW-79 to Whetstone Ventures, LLC, dated as of January 1, 2020. | |
| | ||
| | Amendment No.1 to Non-Voting Common Stock Purchase Warrant, effective as of March 31, 2020, by and between Kineta, Inc. and Whetstone Ventures, LLC (Warrant No. NVCW-79). | |
| | ||
| | Letter from BDO USA, LLP, dated August 26, 2022, regarding change in independent registered public accounting firm. | |
| | ||
| | Subsidiaries of Yumanity Therapeutics, Inc. | |
| | ||
| | Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm to Yumanity Therapeutics, Inc. | |
| | ||
| | Consent of Marcum LLP, independent registered public accounting firm to Kineta, Inc. | |
| | ||
| | Consent of Goodwin Procter LLP (contained in Exhibit 5.1). | |
| | ||
| | Power of Attorney (included on signature page | |
| | ||
| | Form of Proxy Card for Special Meeting of Stockholders of Yumanity Therapeutics, Inc. | |
| | ||
| | Proposed Amendment to the Certificate of Incorporation of Yumanity Therapeutics, Inc. for the Yumanity Reverse Stock Split (included as Annex B to the proxy statement/prospectus/information statement forming a part of this Registration Statement). | |
| | ||
| | Proposed Kineta, Inc. 2022 Equity Incentive Plan (included as Annex G to the proxy statement/prospectus/information statement forming a part of this Registration Statement). | |
| | ||
| | Opinion of Needham & Company, LLC, financial advisor to Yumanity Therapeutics, Inc., related to the Merger (included as Annex C to the proxy statement/prospectus/information statement forming part of this Registration Statement). | |
| | ||
| | Opinion of Needham & Company, LLC, financial advisor to Yumanity Therapeutics, Inc., related to the Asset Sale (included as Annex F to the proxy statement/prospectus/information statement forming part of this Registration Statement). | |
| | ||
| | Consent of Needham & Company, LLC, financial advisor to Yumanity Therapeutics, Inc. | |
| | ||
| | Consent of Shawn Iadonato, Ph.D. to be named as director. | |
| | ||
| | Consent of Marion R. Foote, M.B.A. to be named as director. | |
| | ||
| | Consent of Raymond Bartoszek, M.B.A. to be named as director. | |
| | ||
| | Consent of Jiyoung Hwang to be named as director. | |
| |
Exhibit No. | | | Description |
| | Consent of Richard Peters, M.D., Ph.D. to be named as director. | |
| | ||
| | Consent of David Arkowitz, M.B.A. to be named as director. | |
| | ||
101.INS | | | Inline XBRL Instance Document |
| | ||
101.SCH | | | Inline XBRL Taxonomy Extension Schema Document |
| | ||
101.CAL | | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| | ||
101.DEF | | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| | ||
101.LAB | | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| | ||
101.PRE | | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| | ||
104 | | | Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101) |
| | ||
| | Filing Fee Exhibit. |
* |
# | Indicates a management contract or any compensatory plan, contract or arrangement |
+ | Portions of this Exhibit (indicated with |
++ | Certain schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC upon request. |
† | This Exhibit has been filed separately with the Secretary of the SEC without the redaction pursuant to a Confidential Treatment Request under Rule 24b-2 of the Securities Exchange Act of 1934, as amended. |
‡ | Confidential treatment has been granted by the SEC as to certain portions of this document. |
(b) | Financial Statements |
Item 22. | Undertakings |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; |
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(6) | That prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within |
(7) | That every prospectus (i) that is filed pursuant to the paragraph immediately preceding, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933 and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
(8) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
(9) | To supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
| | YUMANITY THERAPEUTICS, INC. | ||||
| | | | |||
| | By: | | | /s/ Richard Peters | |
| | | | Richard Peters | ||
| | | | President and Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Richard Peters | | | President and Chief Executive Officer (Principal Executive Officer) | | | |
Richard Peters | | | ||||
| | | | |||
/s/ Michael D. Wyzga | | | Senior Vice President and Chief Financial Officer (Principal Financial Officer) | | | |
Michael D. Wyzga | | | ||||
| | | | |||
/s/ Marie Epstein | | | Vice President, Finance (Principal Accounting Officer) | | | |
Marie Epstein | | | ||||
| | | | |||
| | Chair of the Board of Directors | | | ||
N. Anthony Coles | | | | | ||
| | | | |||
| | Director | | | ||
Patricia Allen | | | | | ||
| | | | |||
| | Director | | | ||
David Arkowitz | | | | | ||
| | | | |||
| | Director | | | ||
Kim C. Drapkin, CPA | | | | | ||
| | | | |||
| | Director | | | ||
Jeffery W. Kelly | | | | | ||
| | | | |||
| | Director | | | ||
Cecil B. Pickett | | | | | ||
| | | | |||
| | Director | | | ||
Lynne Zydowsky | | | | |
* By: | | | /s/ Richard Peters | | | |
| | Richard Peters | | | ||
| | Attorney-in-Fact | | |