Item 1.01 Entry Into A Material Definitive Agreement.
Explanatory Note
As previously disclosed, on June 5, 2022, Yumanity Therapeutics, Inc., a
Delaware corporation ("Yumanity"), entered into an Asset Purchase Agreement (the
"Asset Purchase Agreement") with Janssen Pharmaceutica NV ("Janssen" and the
transactions contemplated thereby, the "Asset Sale"). Concurrently with the
execution of the Asset Purchase Agreement, on June 5, 2022, Yumanity entered
into an Agreement and Plan of Merger with Kineta, Inc., a Washington corporation
("Kineta"), and Yacht Merger Sub, Inc., a Washington corporation and
wholly-owned subsidiary of Yumanity (the "Merger Agreement" and the transactions
contemplated thereby, the "Merger").
Prospectus Supplement
On December 5, 2022, Yumanity filed with the U.S. Securities and Exchange
Commission (the "SEC") a prospectus supplement on Form 424(b)(3) (the
"Prospectus Supplement") to the prospectus and proxy statement contained in the
Registration Statement as defined below. The Prospectus Supplement (i) provides
supplemental disclosures regarding the Merger to reflect the amendments to the
Merger Agreement, (ii) provides supplemental disclosures regarding the Private
Placement to reflect Amendment No. 2 to Securities Purchase Agreement and to
revise Proposal No. 3 in the Registration Statement to, among other things,
remove reference to the number of shares and purchase price of Yumanity common
stock to be issued to the PIPE Investors (as defined below) in the Private
Placement (as defined below), (iii) provides supplemental disclosures for
additional updates since the declaration of effectiveness of the Registration
Statement, including, among other things, relating to Kineta's business with
respect to the reduction in force by Kineta of 12 full-time and two part-time
employees and the resignation of Jiyoung Hwang from the Kineta board of
directors and (iv) provide a revised proxy card, reflecting revisions to
Proposal No. 3 as set forth therein.
Amendment to the Merger Agreement
On December 5, 2022, Yumanity, Merger Sub and Kineta entered into Amendment
No. 1 to the Merger Agreement ("Amendment No. 1 to the Merger Agreement") which
provided for, among other things (i) the amendment of the "Company Valuation"
(as defined in the Merger Agreement) from $194 million to $153 million, which
amendment will impact the exchange ratio for the Merger (the "Exchange Ratio"),
such that existing Yumanity securityholders will holder a larger percentage of
Yumanity common stock following the closing of the Merger than contemplated by
the terms of the Merger Agreement prior to amendment, (ii) the amendment of the
amount required to be retained by Yumanity following the issuance of a dividend
to Yumanity stockholders of record prior to the closing of the Merger from
$10 million to $7.5 million, and (iii) the amendment of the closing condition
requiring aggregate cash proceeds of the Private Placement and any Interim
Financing (as defined in the Merger Agreement) of Kineta of $27.5 million, such
that only $7.5 million must be received prior to or substantially simultaneously
with the closing of the Merger.
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Amendment to PIPE Securities Purchase Agreement
As previously reported in the Current Report on Form 8-K filed by Yumanity with
the SEC on June 6, 2022 (the "Original Report"), Yumanity previously entered
into a securities purchase agreement (the "Securities Purchase Agreement"),
dated June 5, 2022, with certain investors (the "Original PIPE Investors"),
pursuant to which, and on the terms and subject to the conditions of which, the
PIPE Investors agreed to purchase an aggregate of 14,354,067 shares (subject to
proportional adjustment for any reverse stock split) of common stock of
Yumanity, par value $0.001 per share ("Common Stock"), for $2.09 per share, for
an aggregate purchase price of $30 million, in a private placement expected to
close immediately following, and conditioned upon, the closing of the Merger
(the "Private Placement").
As previously reported in the Current Report on Form 8-K filed by Yumanity with
the SEC on October 24, 2022 (the "Second Report"), Yumanity, Kineta and each of
the Original PIPE Investors entered into an amendment to the Securities Purchase
Agreement ("Amendment No. 1 to the Securities Purchase Agreement Amendment") to
(i) amend the per share purchase price and aggregate number of shares to be
purchased, each as reflected therein, and (ii) provide for the issuance of an
aggregate of 6,031,668 warrants to purchase shares of Kineta (the "Original
Warrants").
On December 5, 2022, Yumanity, the Original PIPE Investors, and certain
additional investors (the "New PIPE Investors" and together with the Original
PIPE Investors, the "PIPE Investors") entered into Amendment No. 2 to the
Securities Purchase Agreement ("Amendment No. 2 to the Securities Purchase
Agreement Amendment") which provided for (i) the sale and issuance of up to
4,545,455 shares of Yumanity common stock at a purchase price of $1.65 per share
immediately following the effective time of the Merger (the "Effective Time"),
(ii) the sale and issuance of a number of shares of Yumanity common stock at a
purchase price equal to (a) the volume-weighted average price of Yumanity common
stock for the five (5) trading days prior to March 31, 2023 (the "VWAP"), plus
(b) 10% of the VWAP, equal to an aggregate purchase price of $22.5 million, on
March 31, 2023, (iii) the forfeiture of the Original Warrants and (iv) the
issuance to certain PIPE Investors of warrants to purchase shares of Kineta. The
warrants were issued by Kineta and will be treated in the same manner as all
other outstanding warrants of Kineta at the Effective Time and will receive a
portion of the consideration allocated to other Kineta securityholders under the
terms of the Merger Agreement. For the avoidance of doubt, the warrants are not
issued by Yumanity. Any warrants issued to a PIPE Investor will only be
exercisable following the closing of the Private Placement and will expire in
the event any PIPE Investor fails to consummate the Private Placement pursuant
to the terms of the Securities Purchase Agreement.
While the amended terms of the Private Placement will result in less proceeds
received by Yumanity from the PIPE Investors immediately following the closing
of the Merger, the total aggregate proceeds to be received by Yumanity remains
unchanged. The purchase price per share for the shares issued on March 31, 2023
is based on the VWAP, and is not currently known. As a result, the Private
Placement as amended by Amendment No. 2 to the Securities Purchase Agreement may
result in the PIPE Investors owning an increased or decreased percentage of
Yumanity Common Stock following March 31, 2023 than contemplated by Amendment
No. 1 to the Securities Purchase Agreement.
Amendment to Registration Rights Agreement
As previously reported in the Original Report, Yumanity previously entered into
a Registration Rights Agreement (the "Registration Rights Agreement"), dated
June 5, 2022, with the Original PIPE Investors concurrently with the execution
of the Securities Purchase Agreement. Pursuant to the Registration Rights
Agreement, Yumanity will prepare and file a resale registration statement with
the SEC within 60 calendar days following the closing of the Private Placement
covering the shares of Yumanity's common stock issued in the Private Placement.
Yumanity has also agreed, among other things, to indemnify the PIPE Investors
and their respective directors, officers, stockholders, members, partners,
employees and agents, and each person who controls such Original PIPE Investor,
from certain liabilities and to pay certain expenses incurred by Yumanity in
connection with the registration of the shares issued in the Private Placement.
As previously reported in the Second Report, Yumanity, Kineta and each of the
Original PIPE Investors entered into an amendment to the Registration Rights
Agreement to amend the Schedule of Purchasers attached to the Registration
Rights Agreement to reflect the number of shares purchased by each Original PIPE
Investor pursuant to the Securities Purchase Agreement.
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On December 5, 2022, Yumanity, Kineta and each of the PIPE Investors entered
into a second amendment to the Registration Rights Agreement, ("Amendment No. 2
to the Registration Rights Agreement"), to, among other things, amend the
Schedule of Purchasers attached to the Registration Rights Agreement to reflect
the number of shares purchased by each Original PIPE Investor pursuant to the
Securities Purchase Agreement.
The foregoing descriptions of the Securities Purchase Agreement Amendment, the
Registration Rights Agreement Amendment, Merger Agreement Amendment and the
transactions contemplated thereby are not complete and are subject to, and
qualified in their entirety by reference to, the text of the
Subscription Agreement Amendment, the Warrants and the Registration Rights
Agreement Amendment, forms of which are included as Exhibit 10.1, Exhibit 10.2
and Exhibit 10.3, respectively, to this Current Report on Form 8-K (this
"Current Report"), and incorporated herein by this reference.
Item 7.01. Regulation FD Disclosure.
On December 5, 2022, Yumanity issued a press release announcing that its Board
of Directors has declared a special cash dividend to its stockholders in
connection with the Asset Sale and Merger (the "Special Dividend"). Yumanity
estimates that the Special Dividend will be in a range of $1.34 to $1.43 per
share of Yumanity common stock payable on or before December 29, 2022 to
stockholders of record at the close of business on December 15, 2022. The
Special Dividend will be equal to the gross proceeds of the Asset Sale, net of
amounts used or retained for Yumanity's outstanding obligations and minimum cash
requirement associated with the closing of the Merger. Yumanity's minimum cash
requirement has been reduced from $10 million to $7.5 million as part of a
recent amendment to the Merger Agreement. The exact amount of the Special
Dividend will be calculated after Yumanity's outstanding obligations and net
cash position as of the actual closing date of the Merger are determined.
Payment of the Special Dividend is conditioned upon the closing of both the
Asset Sale and the Merger, which remain subject to the approval of Yumanity's
stockholders and other closing conditions. A copy of the press release is
attached hereto as Exhibit 99.1.
The information in this Item 7.01, including Exhibit 99.1 attached hereto, is
being furnished and shall not be deemed "filed" for purposes of Section 18 of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of that section, and shall not be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended (the "Securities Act"), or the Exchange Act, except as expressly set
forth by specific reference in such a filing.
Important Information and Where to Find It
This communication may be deemed to be solicitation material with respect to the
proposed transactions between Yumanity and Kineta and between Yumanity and
Janssen. In connection with the proposed transactions, on August 29, 2022,
Yumanity filed with the SEC a registration statement on Form S-4 (the "Initial
Registration Statement"), as amended by Amendment No. 1 to the Initial
Registration Statement filed with the SEC on October 3, 2022, Amendment No. 2 to
the Initial Registration Statement filed with the SEC on October 24, 2022 and
Amendment No. 3 to the Initial Registration Statement filed with the SEC on
November 4, 2022 (together with the Initial Registration Statement, the
"Registration Statement"), which contains a preliminary proxy statement and
prospectus. The Registration Statement has been declared effective by the SEC on
November 10, 2022. Yumanity subsequently filed the definitive proxy
statement/prospectus (the "Proxy Statement") on November 10, 2022, which has
been mailed to stockholders of record as of the close of business on November 4,
2022. On December 5, 2022, Yumanity filed with the SEC and mailed to
stockholders of record as of the close of business on November 4, 2022, a
supplement to the proxy statement and prospectus contained in the Registration
Statement (the "Prospectus Supplement"). Investors and securityholders of
Yumanity and Kineta are urged to read these materials when they become available
because they contain important information about Yumanity, Kineta and the
proposed transactions. This communication is not a substitute for the
Registration Statement, the Proxy Statement, the Prospectus Supplement or any
other documents that Yumanity may file with the SEC or send to securityholders
in connection with the proposed transactions. Investors and securityholders may
obtain free copies of the documents filed with the SEC, once available, on
Yumanity's website at www.yumanity.com, on the SEC's website at www.sec.gov or
by directing a request to Yumanity's Investor Relations at (212) 213-0006 ext.
331.
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This communication shall not constitute an offer to sell or the solicitation of
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements of
Section 10 of the Securities Act.
Participants in the Solicitation
Each of Yumanity, Kineta and their respective directors and executive officers
may be deemed to be participants in the solicitation of proxies from the
stockholders of Yumanity in connection with the proposed transactions.
Information about the executive officers and directors of Yumanity is set forth
in Yumanity's Definitive Proxy Statement on Schedule 14A relating to the 2022
Annual Meeting of Stockholders, filed with the SEC on April 25, 2022. Other
information regarding the interests of such individuals, who may be deemed to be
participants in the solicitation of proxies for the stockholders of Yumanity, is
set forth in the Proxy Statement and will be set forth in any other relevant
documents to be filed with the SEC. You may obtain free copies of these
documents as described above.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K and the exhibit furnished herewith contain
forward-looking statements, including statements made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements may be identified by words and phrases such as "aims," "anticipates,"
"believes," "could," "designed to," "estimates," "expects," "forecasts," "goal,"
"intends," "may," "plans," "possible," "potential," "seeks," "will," and
variations of these words and phrases or similar expressions that are intended
to identify forward-looking statements. These forward-looking statements
include, without limitation, statements regarding the proposed merger between
Yumanity and Kineta and the proposed asset sale to Janssen, including whether
and when the transactions will be consummated; statements about the structure,
timing and completion of the proposed transactions; the listing of the combined
company on Nasdaq after the closing of the proposed merger; expectations
regarding the ownership structure of the combined company after the closing of
the proposed merger; the expected executive officers and directors of the
combined company; the expected cash position of each of Yumanity and Kineta and
the combined company at the closing of the proposed merger; the future
operations of the combined company; the nature, strategy and focus of the
combined company; the development and commercial potential and potential
benefits of any product candidates of the combined company; the executive and
board structure of the combined company; the location of the combined company's
corporate headquarters; anticipated preclinical and clinical drug development
activities and related timelines, including the expected timing for data and
other clinical and preclinical results; Kineta having sufficient resources to
advance its pipeline; and other statements that are not historical fact. Actual
results and the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and uncertainties,
which include, without limitation: (i) the risk that the conditions to the
closing of the proposed transactions are not satisfied, including the failure to
timely obtain stockholder approval for the transactions, if at all;
(ii) uncertainties as to the timing of the consummation of the proposed
transactions and the ability of each of Yumanity, Kineta, Janssen and the PIPE
Investors to consummate the proposed merger, asset sale or the Private
Placement, as applicable; (iii) risks related to Yumanity's ability to manage
its operating expenses and its expenses associated with the proposed
transactions pending closing; (iv) risks related to the failure or delay in
obtaining required approvals from any governmental or quasi-governmental entity
necessary to consummate the proposed transactions; (v) the risk that as a result
of adjustments to the exchange ratio, Yumanity stockholders and Kineta
shareholders could own more or less of the combined company than is currently
anticipated; (vi) risks related to the market price of Yumanity's common stock
relative to the exchange ratio; (vii) unexpected costs, charges or expenses
resulting from either or both of the proposed transactions; (viii) potential
adverse reactions or changes to business relationships resulting from the
announcement or completion of the proposed transactions; (ix) the risk that the
amount of the dividend distributed to Yumanity stockholders in connection with
the asset sale, if any, may be lower than currently anticipated; (x) risks
related to the inability of the combined company to obtain sufficient additional
capital to continue to advance these product candidates and its preclinical
programs; (xi) uncertainties in obtaining successful clinical results for
product candidates and unexpected costs that may result therefrom; (xii) risks
related to the failure to realize any value from product candidates and
preclinical programs being developed and anticipated to be developed in light of
inherent risks and difficulties involved in successfully bringing product
candidates to market; and (xiii) risks associated with the possible failure to
realize certain anticipated benefits of the proposed transactions, including
with respect to future financial and operating results. Actual results and the
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timing of events could differ materially from those anticipated in such
forward-looking statements as a result of these risks and uncertainties. These
and other risks and uncertainties are more fully described in periodic filings
. . .
Item 9.01. Financial Statements and Exhibits.
Exhibit
No. Description
10.1 Form of Amendment No. 1 to the Merger Agreement dated December 5,
2022.
10.2 Form of Amendment No. 2 to the Securities Purchase Agreement dated
December 5, 2022.
10.3 Form of Warrant, dated December 5, 2022
10.4 Form of Amendment No. 2 to the Registration Rights Agreement, dated
December 5, 2022.
99.1 Press release, dated December 5, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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