Delaware | | | 2834 | | | 82-1554746 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Robert Ishii Miranda Biven Megan J. Baier Catherine Riley Tzipori David G. Sharon Wilson Sonsini Goodrich & Rosati, Professional Corporation One Market Plaza San Francisco, CA 94105 (415) 733-6000 | | | Preston Klassen Chief Executive Officer Metacrine, Inc. 4225 Executive Square, Suite 600 San Diego, California 92037 (858) 369-7800 | | | Tom Coll Rama Padamanabhan Dylan Kornbluth Cooley LLP 10265 Science Center Drive, San Diego, California 92121 (858) 550-6000 |
Large accelerated filer | | | ☐ | | | | | Accelerated filer | | | ☐ | |
Non-accelerated filer | | | ☒ | | | | | Smaller reporting company | | | ☒ | |
| | | | | | Emerging growth company | | | ☒ |
| |
Sincerely, | | | Sincerely, | ||||||
| | | | | | ||||
| | /s/ BRUCE D. STEEL | | | | | /s/ PRESTON KLASSEN | ||
| | Bruce D. Steel | | | | | Preston Klassen, M.D., MHS | ||
| | Chief Executive Officer, Director | | | | | President, Chief Executive Officer, Director | ||
| | Equillium, Inc. | | | | | Metacrine, Inc. | ||
| | | | | |
Equillium, Inc. 2223 Avenida de la Playa, Suite 105 La Jolla, California 92037 (858) 240-1200 Attn: Investor Relations | | | Metacrine, Inc. 4225 Executive Square, Suite 600 San Diego, CA 92037 (858) 369-7800 Attn: Investor Relations |
• | Equillium Proposal 1: To approve the issuance of shares of Equillium common stock to Metacrine stockholders in connection with the Merger contemplated by the Agreement and Plan of Merger, dated September 6, 2022, among Equillium, Inc., Equillium Acquisition Sub, Inc., Triumph Acquisition Sub, Inc., Triumph Merger Sub, Inc. and Metacrine, Inc., as amended on October 26, 2022, and as may be further amended from time to time, or the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to the joint proxy statement/prospectus accompanying this notice. We refer to this proposal as the Equillium stock issuance proposal. |
• | Equillium Proposal 2: To approve the adjournment from time to time of the Equillium virtual special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Equillium stock issuance proposal. We refer to this proposal as the Equillium adjournment proposal. |
| | By Order of the Board of Directors, | |
| | ||
| | Bruce D. Steel | |
| | Chief Executive Officer | |
| | San Diego, California | |
| | , 2022 |
• | Metacrine Proposal 1: To adopt the Agreement and Plan of Merger, dated September 6, 2022, among Equillium, Inc., Equillium Acquisition Sub, Inc., Triumph Acquisition Sub, Inc., Triumph Merger Sub, Inc. and Metacrine, Inc., as amended on October 26, 2022, and as may be further amended from time to time, or the Merger Agreement. A copy of the Merger Agreement is attached as Annex A to the joint proxy statement/prospectus accompanying this notice. We refer to this proposal as the Metacrine merger proposal. |
• | Metacrine Proposal 2: To approve the adjournment from time to time of the Metacrine virtual special meeting, if necessary, to solicit additional proxies if there are not sufficient votes to approve the Metacrine merger proposal. We refer to this proposal as the Metacrine adjournment proposal. |
| | By Order of the Board of Directors, | |
| | ||
| | ||
| | Preston Klassen President, Chief Executive Officer | |
| | San Diego, California | |
| | , 2022 |
Q: | What is the proposed transaction? |
A: | On September 6, 2022, Equillium, Metacrine, Acquisition Sub I, Acquisition Sub II, and Merger Sub, entered into the Merger Agreement. A copy of the Merger Agreement is attached to this joint proxy statement/prospectus as Annex A. |
Q: | Why am I receiving this joint proxy statement/prospectus? |
A: | In order to complete the Merger, among other things: |
• | Equillium stockholders must vote to approve the issuance of shares of Equillium common stock to Metacrine stockholders in connection with the Merger, or the Equillium stock issuance proposal; and |
• | Metacrine stockholders must vote to adopt the Merger Agreement, or the Metacrine merger proposal. |
Q: | Who is soliciting my proxy? |
A: | Proxies in the form enclosed with this joint proxy statement/prospectus are being solicited from the Equillium stockholders by the board of directors of Equillium, or the Equillium Board. Proxies in the form enclosed with this joint proxy statement/prospectus are being solicited from the Metacrine stockholders by the board of directors of Metacrine, or the Metacrine Board. |
Q: | When and where will the meetings be held? |
A: | The Equillium virtual special meeting will be held virtually on , 2022, at p.m. (Eastern Time). There will be no physical meeting location. In order to attend the Equillium virtual special meeting, as well as vote and submit your questions during the live webcast of the meeting, you will need to visit www.virtualshareholdermeeting.com/EQ2022SM and enter the 16-digit Control Number shown on your proxy card. Please be sure to follow instructions found on your proxy card and/or voting authorization form. |
Q: | What will Metacrine stockholders receive in the Merger? |
A: | In connection with the closing of the Merger, Metacrine stockholders will have the right to receive for each share of Metacrine common stock held by such Metacrine stockholder (i) a portion of a share of Equillium common stock equal to the Exchange Ratio, plus (ii) any cash payable in lieu of fractional shares of Equillium’s common stock. The Exchange Ratio was devised so that Metacrine stockholders would, in the aggregate, receive a number of shares of Equillium common stock equal to 125% of Metacrine’s net cash at the closing of the Merger. The price of a share of Equillium common stock for purposes of determining the number of shares to be issued will be based on the 10 day trading volume weighted average calculated 10 trading days prior to the closing of the Merger. That price may be more or less than the current price or the price on the last trading day before public announcement of the Merger, but in no event will it be less than $2.70 per share or more than $4.50 per share. The Exchange Ratio will not reflect changes in the market price of Metacrine common stock and will not reflect changes in the market price of Equillium common stock, except during the 10 trading days that are 10 trading days prior to the closing of the Merger. |
Q: | After applying the Exchange Ratio, how will fractional shares be handled? |
A: | No certificate or scrip representing fractional shares of Equillium common stock will be issued in connection with the Merger, and such fractional share interests shall not entitle the owner thereof to vote or to any other rights of an Equillium stockholder. AST, acting as agent for the holders of Metacrine common stock otherwise entitled to receive fractional shares of Equillium common stock at the Closing, will aggregate all fractional shares of Equillium common stock that would otherwise have been required to be distributed and cause them to be sold in the open market for the accounts of such holders. Each holder of Metacrine common stock who would otherwise have been entitled to receive a fraction of a share of Equillium common stock will receive cash, rounded to the nearest whole cent and without interest, in an amount equal to the proceeds from such sale by AST, if any, less applicable fees and expenses, including broker fees. |
Q: | How does the Exchange Ratio affect the ownership of Equillium after completion of the Merger? |
A: | The Exchange Ratio will determine the relative ownership percentages of the current Equillium stockholders and the current Metacrine stockholders in the combined company. The Exchange Ratio will not be definitively determined until shortly prior to the closing of the Merger. |
Q: | How do Metacrine stockholders vote? |
A: | If you are a stockholder of record of Metacrine, you may vote at the Metacrine virtual special meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using the proxy card that may be delivered to you. Whether or not you plan to attend the Metacrine virtual special meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the virtual special meeting and vote even if you have already voted by proxy. |
• | VOTE DURING THE SPECIAL MEETING: To vote during the live webcast of the Metacrine virtual special meeting, you will need to visit www.virtualshareholdermeeting.com/MTCR2022SM and enter the 16-digit Control Number shown on your proxy card. Please be sure to follow instructions found on your proxy card and/or voting authorization form. Stockholders will be able to attend the Metacrine virtual special meeting platform beginning at p.m. (Eastern Time) on , 2022, by visiting www.virtualshareholdermeeting.com/MTCR2022SM. |
• | TO VOTE BY PHONE: To vote over the telephone, dial (800) 690-6903 using any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. (Eastern Time) on , 2022. Have your proxy card in hand when you call and then follow the instructions. |
• | TO VOTE BY INTERNET: You can vote over the Internet at www.proxyvote.com. Vote by 11:59 p.m. (Eastern Time) on , 2022. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to crease an electronic voting instruction form. |
• | TO VOTE BY PROXY CARD: To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered to you and return it promptly in the postage-prepaid envelope we have provided or return it to: Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you return your signed proxy card to us before the Metacrine virtual special meeting, we will vote your shares as you direct. |
Q: | How do Equillium stockholders vote? |
A: | If you are a stockholder of record of Equillium, you may vote at the Equillium virtual special meeting, vote by proxy over the telephone, vote by proxy through the internet or vote by proxy using the proxy card that may be delivered to you. Whether or not you plan to attend the Equillium virtual special meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the virtual special meeting and vote even if you have already voted by proxy. |
• | VOTE DURING THE SPECIAL MEETING: To vote during the live webcast of the Equillium virtual special meeting, you will need to visit www.virtualshareholdermeeting.com/EQ2022SM and enter the 16-digit Control Number included in your proxy card. Please be sure to follow instructions found on your proxy card and/or voting authorization form. |
• | TO VOTE BY PHONE: To vote over the telephone, dial (800) 690-6903 using any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. (Eastern Time) on , 2022. Have your proxy card in hand when you call and then follow the instructions. |
• | TO VOTE BY INTERNET: You can vote over the Internet at www.proxyvote.com. Vote by 11:59 p.m. (Eastern Time) on , 2022. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to crease an electronic voting instruction form. |
• | TO VOTE BY PROXY CARD: To vote using the proxy card, simply complete, sign and date the proxy card that may be delivered to you and return it promptly in the postage-prepaid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you return your signed proxy card to us before the Equillium virtual special meeting, we will vote your shares as you direct. |
Q: | What are the voting deadlines? |
A: | If you are an Equillium stockholder, the deadline for submitting a proxy using the Internet or the telephone is 11:59 p.m. (Eastern Time) on , 2022. If you received your special meeting materials by mail, you |
Q: | What vote is required to approve each proposal at the Equillium virtual special meeting? |
A: | Equillium Stock Issuance Proposal. Approval of the stock issuance proposal requires the affirmative vote of the holders of Equillium common stock representing a majority of the votes cast at the Equillium virtual special meeting (provided that a quorum exists). Failure to vote virtually or by proxy at the special meeting, abstentions, and broker non-votes (if any) will have no effect on the outcome of the Equillium stock issuance proposal. Shares of Equillium common stock represented by properly executed, timely received and unrevoked proxies will be voted in accordance with the instructions indicated thereon. |
Q: | What vote is required to approve each proposal at the Metacrine virtual special meeting? |
A: | Metacrine Merger Proposal. Approval of the Metacrine merger proposal requires the affirmative vote of a majority of the outstanding shares of Metacrine’s common stock. Failure to vote virtually or by proxy at the special meeting, abstentions, and broker non-votes (if any) will have the same effect as a vote against the Metacrine merger proposal. Shares of Metacrine common stock represented by properly executed, timely received and unrevoked proxies will be voted in accordance with the instructions indicated thereon. |
Q: | How does the Metacrine Board recommend that Metacrine stockholders vote? |
A: | Pursuant to an action by unanimous written consent of the Metacrine Board dated September 5, 2022, the Metacrine Board determined that the Merger Agreement and the transactions contemplated thereby were in the best interests of Metacrine and its stockholders, and approved the Merger Agreement and the Merger, the execution of the Merger Agreement and the consummation of the transactions contemplated thereby and declared advisable and recommended that Metacrine’s stockholders adopt the Merger Agreement. The Metacrine Board recommends that Metacrine stockholders vote “FOR” the Metacrine merger proposal and “FOR” the Metacrine adjournment proposal. |
Q: | How does the Equillium Board recommend that Equillium stockholders vote? |
A: | At a meeting of the Equillium Board held on September 5, 2022, the Equillium Board determined that the Merger Agreement and the transactions contemplated thereby, including the issuance of shares of Equillium common stock to the Metacrine stockholders in connection with the Merger, were in the best interests of |
Q: | How many votes do I have? |
A: | Equillium. You are entitled to one vote for each share of Equillium common stock that you owned as of the Equillium record date. As of the close of business on , 2022, there were outstanding shares of Equillium common stock. As of that date, % of the outstanding shares of Equillium common stock were beneficially owned by the directors and executive officers of Equillium. |
Q: | What will happen if I fail to vote or I abstain from voting? |
A: | Equillium. If you are an Equillium stockholder, abstentions and broker “non-votes” have no effect on the outcome of the Equillium stock issuance proposal or the Equillium adjournment proposal. Shares of Equillium common stock represented by properly executed, timely received and unrevoked proxies will be voted in accordance with the instructions indicated thereon. |
Q: | What are “broker non-votes”? |
A: | Brokers who hold shares in street name for customers have the authority to vote on “routine” proposals when they have not received instructions from beneficial owners. However, brokers are precluded from exercising their voting discretion with respect to approval of non-routine matters, such as the Equillium stock issuance proposal and the Metacrine merger proposal, and, as a result, absent specific instructions from the beneficial owner of such shares, brokers are not empowered to vote those shares, referred to generally as “broker non-votes.” Broker non-votes, if any, will be treated as shares that are present at the virtual special meeting for purposes of determining whether a quorum exists but will not be counted or deemed present virtually or by proxy for the purpose of voting on the Equillium stock issuance proposal or the Metacrine merger proposal. Broker non-votes, if any, will have the same effect as a vote against the Metacrine merger proposal. |
Q: | What constitutes a quorum? |
A: | Equillium. The holders of a majority of the voting power of Equillium’s outstanding shares of common stock entitled to vote as of the close of business on the Equillium record date must be virtually present or represented by proxy to constitute a quorum to conduct the Equillium virtual special meeting. All shares of Equillium common stock represented at the Equillium virtual special meeting, including abstentions and broker non-votes, will be treated as present for purposes of determining the presence or absence of a quorum to conduct the Equillium virtual special meeting. |
Q: | What is the difference between a stockholder of record and a “street name” holder? |
A: | If your shares are registered directly in your name, you are considered the stockholder of record with respect to those shares. If your shares are held in a stock brokerage account or by a bank, trust company or other nominee, then the broker, bank, trust company or other nominee is considered to be the stockholder of record with respect to those shares, while you are considered the beneficial owner of those shares. In the latter case, your shares are said to be held in “street name.” |
Q: | If I am a beneficial owner of shares held in street name, how do I vote? |
A: | If you are not a stockholder of record but instead hold your shares in a stock brokerage account, or if your shares are held by a bank, trust company or other nominee (that is, in street name), you must provide the record holder of your shares with instructions on how to vote your shares. If you are an Equillium stockholder but not a stockholder of record and you do not instruct your broker on how to vote your shares, your broker may not vote your shares on the Equillium stock issuance proposal or any adjournment proposal, which will have no effect on the vote on this proposal, assuming a quorum is present. If you are a Metacrine stockholder but not a stockholder of record and you do not instruct your broker on how to vote your shares, your broker may not vote your shares, which will have the same effect as a vote against the Metacrine merger proposal and, assuming a quorum is present, will have no effect on the outcome of the Metacrine adjournment proposal. |
Q: | What will happen if I return my proxy card without indicating how to vote? |
A: | If you are an Equillium stockholder of record and you sign and return your proxy card without indicating how to vote on any particular proposal, the shares of Equillium common stock represented by your proxy will be counted as present for purposes of determining the presence of a quorum for the Equillium virtual special meeting and will be voted “FOR” that proposal. |
Q: | Can I change my vote after I have returned a proxy or voting instruction card? |
A: | Yes. You can change your vote at any time before your proxy is voted at the Equillium virtual special meeting or the Metacrine virtual special meeting, as applicable. You can do this in one of four ways: |
• | you can send a signed notice of revocation; |
• | you can grant a new, valid proxy bearing a later date; |
• | you can vote again by telephone or the Internet at a later time; or |
• | if you are a holder of record, by voting at the Equillium virtual special meeting or Metacrine virtual special meeting, as applicable, which will automatically cancel any proxy previously given, or you may revoke your proxy by attending such virtual special meeting, but your attendance alone will not revoke any proxy that you have previously given. |
Q: | What should I do if I receive more than one set of voting materials? |
A: | Please vote each proxy card and voting instruction card that you receive. You may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy |
Q: | Is there a list of stockholders entitled to vote at the Equillium and Metacrine virtual special meetings? |
A: | The names of stockholders of record entitled to vote at the Equillium virtual special meeting will be available at the Equillium virtual special meeting and for 10 days prior to the Equillium virtual special meeting for any purpose germane to the special meeting, between the hours of 9:00 a.m. and 4:30 p.m. (Pacific Time), at Equillium’s principal executive offices located at 2223 Avenida de la Playa, Suite 105, La Jolla, California 92037, or by contacting Equillium’s corporate secretary. |
Q: | What happens if I am a Metacrine stockholder who sells my shares of Metacrine common stock before the Metacrine virtual special meeting? |
A: | The record date for the Metacrine virtual special meeting is earlier than the Metacrine virtual special meeting. If you transfer your shares of Metacrine common stock after the Metacrine record date but before the Metacrine virtual special meeting, you will retain your right to vote at the Metacrine virtual special meeting, but will have transferred the right to receive the merger consideration in the Merger. In order to receive the merger consideration, you must hold your shares through the effective time of the Merger. |
Q: | What happens if I am an Equillium stockholder who sells my shares of Equillium common stock before the Equillium virtual special meeting? |
A: | The record date for the Equillium virtual special meeting is earlier than the Equillium virtual special meeting. If you transfer your shares of Equillium common stock after the Equillium record date but before the Equillium virtual special meeting, you will retain your right to vote at the Equillium virtual special meeting. |
Q: | What will happen to my Metacrine stock options, restricted stock units and/or warrants at the time of the Merger? |
A: | Treatment of Restricted Stock Unit Awards. At the effective time of the Merger, each Metacrine restricted stock unit outstanding immediately prior to such time, or a Metacrine RSU, whether vested or unvested, other than Metacrine RSUs held by any former employee, former service provider or director of Metacrine, will be assumed by Equillium and converted into a restricted stock unit for a number of shares of Equillium common stock, or an assumed RSU, equal to the product of (a) the number of shares of Metacrine common stock subject to such Metacrine RSU and (b) the Exchange Ratio (with any fractional shares rounded down to the nearest whole share). Except for the change to the number and type of shares, each assumed RSU will be subject to the same terms and conditions, including vesting, as were applicable to such Metacrine RSU prior to the Merger. At the effective time of the Merger, (a) each outstanding unvested Metacrine RSU held by a former employee, former service provider or director of Metacrine will be cancelled without the payment of any consideration and (b) each outstanding vested and unexercised Metacrine RSU held by a former employee, former service provider or director of Metacrine will be cancelled and converted into a |
Q: | How will the rights of Metacrine stockholders change after the Merger? |
A: | Metacrine stockholders will receive shares of Equillium common stock in connection with the Merger and will no longer be stockholders of Metacrine following the Merger. Their rights as holders of Equillium common stock will be governed by the amended and restated certificate of incorporation of Equillium and Equillium’s amended and restated bylaws. For additional information on stockholder rights, see “Description of Capital Stock and Comparison of Rights of Equillium Stockholders and Metacrine Stockholders” beginning on page 130 of this joint proxy statement/prospectus. |
Q: | What are the material U.S. federal income tax consequences of the Merger to U.S. holders of Metacrine common stock? |
A: | For U.S. federal income tax purposes, the receipt of the merger consideration by a U.S. Holder (as defined in the section captioned “Material U.S. Federal Income Tax Consequences of the Merger” in exchange for such U.S. Holder’s shares of our common stock in the merger is generally expected to be a taxable transaction for U.S. federal income tax purposes. In that case, such exchange will result in the recognition of gain or loss in an amount measured by the difference, if any, between the fair market value of the merger consideration that such U.S. Holder receives in the merger and such U.S. Holder’s adjusted tax basis in the shares of our common stock surrendered in the merger. |
Q: | Are there any risks that I should consider in deciding how to vote? |
A: | Yes. You should read and carefully consider the risk factors set forth in the section entitled “Risk Factors” beginning on page 30 of this joint proxy statement/prospectus. You also should read and carefully consider the risk factors of Equillium and Metacrine contained in the documents that are incorporated by reference into this joint proxy statement/prospectus. |
Q: | What happens if the Merger is not completed? |
A: | If the Merger is not completed for any reason, Metacrine stockholders will not receive the merger consideration issuable under the Merger Agreement. Instead, Equillium and Metacrine will remain separate public companies, and Metacrine expects that its common stock will continue to be registered under the Exchange Act and traded on the Nasdaq. In specified circumstances, either Equillium or Metacrine may be required to pay to the other party a termination fee, as described below. |
Q: | Does Metacrine have to pay anything to Equillium if the Merger Agreement is terminated? |
A: | In certain circumstances, depending on the reasons for termination of the Merger Agreement, Metacrine may have to pay Equillium a termination fee of $1.25 million. For a discussion of the circumstances under which a termination fee is payable by Metacrine applies, see “The Merger Agreement—Termination Fees; Liability for Breach.” |
Q: | Does Equillium have to pay anything to Metacrine if the Merger Agreement is terminated? |
A: | In certain circumstances, depending on the reasons for termination of the Merger Agreement, Equillium may have to pay Metacrine a termination fee of $1.75 million. For a discussion of the circumstances under which a termination fee is payable by Equillium applies, see “The Merger Agreement—Termination Fees; Liability for Breach” |
Q: | When do you expect the Merger to be completed? |
A: | Metacrine and Equillium intend to complete the Merger as soon as reasonably practicable and currently anticipate the closing of the Merger to occur in December 2022, following the satisfaction of all the conditions to completion of the Merger. However, the Merger is subject to the satisfaction or waiver of |
Q: | What do I need to do now? |
A: | You should carefully read and consider the information contained in and incorporated by reference into this joint proxy statement/prospectus, including its annexes. Even if you plan to attend the Equillium virtual special meeting or the Metacrine virtual special meeting virtually, after carefully reading and considering the information contained in this joint proxy statement/prospectus, please vote promptly to ensure that your shares are represented at the Equillium virtual special meeting or the Metacrine virtual special meeting, as applicable. |
Q: | Do I need to do anything with my Metacrine common stock certificates now? |
A: | No. After the Merger is completed, if you held certificates representing shares of Metacrine common stock prior to the Merger, Equillium’s exchange agent American Stock Transfer & Trust Company, LLC, or the exchange agent, will send you a letter of transmittal and instructions for exchanging your shares of Metacrine common stock for the merger consideration. Upon surrender of the certificates for cancellation along with the executed letter of transmittal and other required documents described in the instructions, a Metacrine stockholder will receive the merger consideration. The shares of Equillium common stock you receive in the Merger will be issued in book-entry form. |
Q: | Do I need to do anything with my Metacrine common stock held in book-entry form now? |
A: | No. After the Merger is completed, if you held shares of Metacrine common stock in book-entry form prior to the Merger, Equillium’s exchange agent will send you a letter of transmittal and instructions for exchanging your shares of Metacrine common stock for the merger consideration. Upon receipt of an agent’s message in customary form (or such other evidence, if any, as the exchange agent may reasonably request), along with the executed letter of transmittal and other required documents described in the instructions, a Metacrine stockholder will receive the merger consideration. The shares of Equillium common stock you receive in the Merger will be issued in book-entry form. |
Q: | Are stockholders entitled to appraisal rights? |
A: | Under Delaware law, the Metacrine stockholders are not entitled to appraisal rights in connection with the Metacrine merger proposal. |
Q: | How can I contact Equillium’s or Metacrine’s transfer agent? |
A: | You may contact Equillium’s or Metacrine’s transfer agent by writing to American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, NY 11219, or by telephoning (718) 921-8300. |
Q: | Who should I contact if I have any questions about the proxy materials or about voting? |
A: | If you have any questions about the proxy materials or if you need assistance submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should, if you are an Equillium stockholder, contact Equillium by telephone at (858) 240-1200 or by email at ir@equilliumbio.com, and, if you are a Metacrine stockholder, contact Morrow Sodali, LLC, Metacrine’s proxy solicitor, by telephone toll-free at (800) 662-5200, by email at MTCR@investor.morrowsodali.com, or by mail at 509 Madison Avenue, Suite 1206, New York, NY 10022. |
Q: | Who is the exchange agent in the Merger? |
A: | American Stock Transfer & Trust Company, LLC will be the exchange agent for the Merger. |
Q: | Where can I find more information about Equillium and Metacrine? |
A: | You can find more information about Equillium and Metacrine from the various sources described under “Where You Can Find More Information” beginning on page 141 of this joint proxy statement/prospectus. |
• | if the Merger does not close on or before 11:59 p.m. Pacific Standard time on January 2, 2023, or the termination date (provided that this termination right is not available to a party whose material breach of the Merger Agreement is the primary cause of, or resulted in, such failure to close by the termination date); |
• | if the Metacrine stockholder approval is not obtained (provided that this termination is not available to Metacrine if its material breach of any provision of the Merger Agreement is the primary cause of, or resulted in, such failure to obtain the Metacrine stockholder approval); |
• | if the Equillium stockholder approval is not obtained (provided that this termination right is not available to Equillium if its material breach of the Merger Agreement is the primary cause of, or resulted in, such failure to obtain the Equillium stockholder approval); or |
• | if any law or judgment permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and non-appealable (provided that this termination right is not available to a party if its material breach of any provision under the Merger Agreement has been the cause of, or resulted in the failure of the Merger to be consummated). |
• | Accelerated vesting of equity awards upon the Effective Time of the Merger and upon certain terminations of employment or service following the Effective Time of the Merger; |
• | Following the Effective Time, it is expected that Dr. Klassen will be appointed to the Equillium Board; |
• | Cash severance and other benefits upon certain terminations of employment or service following the Effective Time of the Merger; and |
• | Indemnification by the combined company for liabilities for acts or omissions occurring at or prior to the Effective Time of the Merger. |
• | the Equillium stock issuance proposal; and |
• | the Equillium adjournment proposal. |
• | the Metacrine merger proposal; and |
• | the Metacrine adjournment proposal. |
• | Equillium’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2021, as contained in its Annual Report on Form 10-K filed on March 23, 2022 with the SEC. |
• | Equillium’s unaudited condensed consolidated financial statements and accompanying notes as of and for the six months period ended June 30, 2022, as contained in its Quarterly Report on Form 10-Q filed on August 15, 2022 with the SEC. |
• | Metacrine’s audited consolidated financial statements and accompanying notes as of and for the year ended December 31, 2021, as contained in its Annual Report on Form 10-K filed on March 30, 2022 with SEC. |
• | Metacrine’s unaudited condensed consolidated financial statements and accompanying notes as of and for the six months period ended June 30, 2022, as contained in its Quarterly Report on Form 10-Q filed on August 9, 2022 with the SEC. |
• | The other information contained in or incorporated by reference into this filing. |
| | Equillium, Inc. | | | Metacrine, Inc. | | | Pro Forma Adjustments | | | Notes | | | Equillium, Inc. Unaudited Pro Forma Combined | |
Assets | | | | | | | | | | | |||||
Current assets: | | | | | | | | | | | |||||
Cash and cash equivalents | | | $23,808 | | | $45,348 | | | $(6,508) | | | A | | | |
| | | | | | (3,747) | | | B | | | ||||
| | | | | | (10,600) | | | C | | | ||||
| | | | | | (893) | | | B | | | ||||
| | | | | | (150) | | | D | | | 47,258 | |||
Short-term investments | | | 33,754 | | | 10,182 | | | — | | | | | 43,936 | |
Prepaid expenses and other current assets | | | 2,920 | | | 3,611 | | | — | | | | | 6,531 | |
Total current assets | | | 60,482 | | | 59,141 | | | (21,898) | | | | | 97,725 | |
Property and equipment, net | | | 451 | | | — | | | — | | | | | 451 | |
Operating lease right-of-use assets | | | 1,418 | | | — | | | — | | | | | 1,418 | |
Other assets | | | 121 | | | — | | | — | | | | | 121 | |
Total assets | | | $62,472 | | | $59,141 | | | $(21,898) | | | | | $99,715 | |
Liabilities and stockholders’ equity | | | | | | | | | | | |||||
Current liabilities: | | | | | | | | | | | |||||
Accounts payable | | | $5,091 | | | $503 | | | $— | | | | | $5,594 | |
Accrued expenses | | | 5,377 | | | 2,150 | | | — | | | | | 7,527 | |
Current portion of operating lease liabilities | | | 434 | | | — | | | — | | | | | 434 | |
Current portion of long-term notes payable | | | 4,286 | | | — | | | (4,286) | | | C | | | — |
Total current liabilities | | | 15,188 | | | 2,653 | | | (4,286) | | | | | 13,555 | |
Long-term notes payable | | | 5,992 | | | 13,616 | | | (5,992) | | | C | | | |
| | | | | | 1,384 | | | D | | | ||||
| | | | | | (150) | | | D | | | ||||
| | | | | | (208) | | | D | | | 14,642 | |||
Other non-current liabilities | | | — | | | 1,388 | | | (1,388) | | | D | | | — |
Long-term operating lease liabilities | | | 1,025 | | | — | | | — | | | | | 1,025 | |
Total liabilities | | | 22,205 | | | 17,657 | | | (10,640) | | | | | 29,222 | |
Commitments and contingencies | | | | | | | | | | | |||||
Stockholders’ equity: | | | | | | | | | | | |||||
Common Stock | | | 3 | | | 4 | | | (4) | | | E | | | |
| | | | | | 1 | | | H | | | 4 | |||
Additional paid-in capital | | | 201,936 | | | 243,595 | | | (243,595) | | | E | | | |
| | | | | | 33,346 | | | H | | | ||||
| | | | | | 208 | | | D | | | 235,490 | |||
Accumulated other comprehensive loss | | | (149) | | | (20) | | | 20 | | | E | | | (149) |
Accumulated deficit | | | (161,523) | | | (202,095) | | | 202,095 | | | E | | | |
| | | | | | (893) | | | B | | | ||||
| | | | | | (322) | | | C | | | ||||
| | | | | | (2,114) | | | I | | | (164,852) | |||
Total stockholders’ equity | | | 40,267 | | | 41,484 | | | (11,258) | | | | | 70,493 | |
Total liabilities and stockholders’ equity | | | $62,472 | | | $59,141 | | | $(21,898) | | | | | $99,715 |
| | Equillium, Inc. Historical December 31, 2021 | | | Bioniz, Inc. Historical December 31, 2021 | | | Pro Forma Adjustments (Acquisition of Bioniz) | | | Notes | | | Equillium, Inc. Unaudited Pro Forma Results (Adjusted for Acquisition of Bioniz) | | | Metacrine, Inc. Historical December 31, 2021 | | | Pro Forma Adjustments (Acquisition of Metacrine) | | | Notes | | | Equillium, Inc. Unaudited Pro Forma Results Combined | |
Research and development | | | $26,379 | | | $3,277 | | | $— | | | | | $29,656 | | | $45,474 | | | $— | | | | | $75,130 | ||
Acquired in-process research and development | | | — | | | — | | | 23,049 | | | I | | | 23,049 | | | — | | | 2,114 | | | I | | | 25,163 |
General and administrative | | | 11,407 | | | 2,181 | | | — | | | | | 13,588 | | | 15,605 | | | — | | | | | 29,193 | ||
Total operating expenses | | | 37,786 | | | 5,458 | | | 23,049 | | | | | 66,293 | | | 61,079 | | | 2,114 | | | | | 129,486 | ||
Loss from operations | | | (37,786) | | | (5,458) | | | (23,049) | | | | | (66,293) | | | (61,079) | | | (2,114) | | | | | (129,486) | ||
Other expense, net: | | | | | | | | | | | | | | | | | | | |||||||||
Interest expense | | | (1,073) | | | — | | | — | | | | | (1,073) | | | (1,202) | | | 1,073 | | | F | | | (1,202) | |
Interest income | | | 57 | | | 57 | | | 102 | | | | | | | | | — | | | | | 159 | ||||
Other expense, net | | | (250) | | | 14,997 | | | (15,000) | | | G | | | (253) | | | (28) | | | — | | | | | (281) | |
Total other expense, net | | | (1,266) | | | 14,997 | | | (15,000) | | | | | (1,269) | | | (1,128) | | | 1,073 | | | | | (1,324) | ||
Net loss | | | $(39,052) | | | $9,539 | | | $(38,049) | | | | | $(67,562) | | | $(62,207) | | | $(1,041) | | | | | $(130,810) | ||
Other comprehensive income, net: | | | | | | | | | | | | | | | | | | | |||||||||
Unrealized loss on available-for-sale securities, net | | | (59) | | | — | | | — | | | | | (59) | | | (6) | | | — | | | | | (65) | ||
Foreign currency translation gain | | | 218 | | | — | | | — | | | | | 218 | | | — | | | — | | | | | 218 | ||
Total other comprehensive income, net | | | 159 | | | — | | | — | | | | | 159 | | | (6) | | | — | | | | | 153 | ||
Comprehensive loss | | | $(38,893) | | | $9,539 | | | $(38,049) | | | | | $(67,403) | | | $(62,213) | | | $(1,041) | | | | | $(130,657) | ||
Net loss per share, basic and diluted | | | $(1.36) | | | | | | | | | $(2.01) | | | $(2.29) | | | | | | | $(2.85) | |||||
Weighted-average number of common shares outstanding, basic and diluted | | | 28,806,310 | | | | | 4,820,230 | | | H | | | 33,626,540 | | | 27,188,864 | | | (14,838,231) | | | H | | | 45,977,173 |
| | Equillium, Inc. Historical June 30, 2022 | | | Bioniz, Inc. Historical January 1- February 13, 2022 | | | Pro Forma Adjustments (Acquisition of Bioniz) | | | Notes | | | Equillium, Inc. Unaudited Pro Forma Results (Adjusted for Acquisition of Bioniz) | | | Metacrine, Inc. Historical June 30, 2022 | | | Pro Forma Adjustments (Acquisition of Metacrine) | | | Notes | | | Equillium, Inc. Unaudited Pro Forma Results Combined | |
Research and development | | | $20,251 | | | $123 | | | | | | | $20,374 | | | $8,989 | | | | | | | $29,363 | ||||
Acquired in-process research and development | | | 23,049 | | | | | (23,049) | | | I | | | — | | | | | | | | | — | ||||
General and administrative | | | 7,581 | | | 211 | | | — | | | | | 7,792 | | | 8,894 | | | | | | | 16,686 | |||
Restructuring charges | | | — | | | — | | | — | | | | | — | | | 902 | | | | | | | 902 | |||
Gain from lease termination and asset sale | | | — | | | — | | | — | | | | | — | | | (508) | | | | | | | (508) | |||
Total operating expenses | | | 50,881 | | | 334 | | | (23,049) | | | | | 28,166 | | | 18,277 | | | — | | | | | 46,443 | ||
Loss from operations | | | (50,881) | | | (334) | | | 23,049 | | | | | (28,166) | | | (18,277) | | | — | | | | | (46,443) | ||
Other expense, net: | | | | | | | | | | | | | | | | | | | |||||||||
Interest expense | | | (515) | | | — | | | — | | | | | (515) | | | (925) | | | 515 | | | F | | | (925) | |
Interest income | | | 90 | | | — | | | — | | | | | 90 | | | 90 | | | — | | | | | 180 | ||
Other expense, net | | | (240) | | | — | | | — | | | | | (240) | | | (30) | | | — | | | | | (270) | ||
Total other expense, net | | | (665) | | | — | | | — | | | | | (665) | | | (865) | | | 515 | | | | | (1,015) | ||
Net loss | | | $(51,546) | | | $(334) | | | $23,049 | | | | | $(28,831) | | | $(19,142) | | | $515 | | | | | $(47,458) | ||
Other comprehensive loss, net: | | | | | | | | | | | | | | | | | | | |||||||||
Unrealized loss on available-for-sale securities, net | | | (234) | | | — | | | — | | | | | (234) | | | (15) | | | — | | | | | (249) | ||
Foreign currency translation gain | | | 223 | | | — | | | — | | | | | 223 | | | — | | | — | | | | | 223 | ||
Total other comprehensive loss, net | | | (11) | | | — | | | — | | | | | (11) | | | (15) | | | — | | | | | (26) | ||
Comprehensive loss | | | $(51,557) | | | $(334) | | | $23,049 | | | | | $(28,842) | | | $(19,157) | | | $515 | | | | | $(47,484) | ||
Net loss per share, basic and diluted | | | $(1.56) | | | | | | | | | $(0.87) | | | $(0.45) | | | | | | | $(1.04) | |||||
Weighted-average number of common shares outstanding, basic and diluted | | | 33,085,917 | | | | | | | | | 33,085,917 | | | 42,278,932 | | | (29,928,299) | | | H | | | 45,436,550 |
Estimated number of shares of the combined company to be owned by Metacrine stockholders | | | 12,350,633 |
Multiplied by the assumed price per share of Equillium common stock(1) | | | $2.70 |
Estimated equity consideration | | | $33,346,709 |
(1) | Represents the floor price of the collar as Equillium’s stock price was trading below the floor as of October 24, 2022. The number of Equillium shares actually issued at closing will be based on the actual 10-day volume weighted average closing price of Equillium common stock calculated 10 trading days preceding the closing. |
Estimated equity consideration | | | $33,346,709 |
Estimated fair value of the outstanding Metacrine stock options and RSUs | | | $— |
Estimated fair value of the outstanding Metacrine warrants | | | $— |
Total estimated preliminary purchase consideration | | | $33,346,709 |
Description | | | Fair Value |
Assets acquired: | | | |
Cash | | | $45,275 |
Prepaid expenses and other current assets | | | 3,611 |
Total assets acquired | | | 48,886 |
Liabilities assumed: | | | |
Accounts payable | | | 503 |
Accrued expenses | | | 2,150 |
Debt | | | 15,000 |
Total liabilities assumed | | | 17,653 |
Net assets acquired | | | 31,233 |
In-Process R&D | | | 2,114 |
Adjusted value of assets acquired | | | $33,347 |
(A) | Reflects expected use of $6.5 million of Metacrine’s cash-on-hand for costs related to the closing of the Merger including costs directly attributable to the acquisition such as severance and directors and officers liability tail insurance. |
(B) | To reduce cash based on the expected transaction costs, see Note 6. |
(C) | To reflect the assumed payoff of the Equillium debt held with Oxford Finance and SVB along with a prepayment penalty fee of 1% of the outstanding principal as of June 30, 2022. |
(D) | To reflect the assumption of a $15.0 million loan with K2 HealthVentures LLC payment of a $150,000 amendment fee and warrants issued with a fair value of approximately $0.2 million. Both the amendment fee and the fair value of the warrants are recorded as a debt discount, which is classified as a contra-liability against long-term notes payable. |
(E) | To reflect the elimination of Metacrine’s historical equity accounts. |
(F) | To eliminate the historical interest expense attributed to Equillium’s debt. |
(G) | To reverse the income recognized under Bioniz during the year ended December 31, 2021 attributed to the termination of the Almirall option agreement which is considered to be a non-recurring item. |
(H) | To reflect the unaudited pro forma condensed combined basic and diluted earnings per share for the periods presented that have been adjusted by the 4,820,230 shares of common stock issued in connection with the Bioniz acquisition and the estimated 12,350,633 shares of common stock to be issued in connection with the Merger, which are assumed outstanding for the year ended December 31, 2021 for pro forma purposes, and to reflect the fair value of the estimated preliminary purchase price consideration totaling $33.3 million as an increase to common stock and additional paid-in capital in the unaudited pro forma condensed combined balance sheet as of June 30, 2022. |
(I) | To record the acquired in-process research and development in the unaudited pro forma condensed combined statement of operations and comprehensive loss for the year ended December 31, 2021 for the Bioniz and Mergers as if they were completed on January 1, 2021 and to record the acquired in-process research and development in the unaudited pro forma condensed combined balance sheets as of June 30, 2022 as if the Merger were completed on June 30, 2022. |
| | Equillium common stock | | | Metacrine common stock | |||||||||||||
Date | | | High | | | Low | | | Close | | | High | | | Low | | | Close |
September 6, 2022 | | | $2.77 | | | $2.63 | | | $2.73 | | | $0.47 | | | $0.44 | | | $0.47 |
, 2022 | | | | | | | | | | | | |
| | Equillium common stock | | | Metacrine Equivalent Per Share | |||||||||||||
Date | | | High | | | Low | | | Close | | | High | | | Low | | | Close |
September 6, 2022 | | | $2.77 | | | $2.63 | | | $2.73 | | | | | | | |||
, 2022 | | | | | | | | | | | | |
• | changes or conditions generally affecting the industries in which Equillium or Metacrine, as applicable, operate; |
• | general economic or political conditions or securities, credit, financial or other capital markets conditions, in each case in the United States or any foreign jurisdiction; |
• | any failure, in and of itself, by Equillium or Metacrine, as applicable, to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period; |
• | the public announcement or pendency of the transactions contemplated hereby; |
• | any change, in and of itself, in the market price or trading volume of Equillium’s or Metacrine’s, as applicable, securities or in its credit ratings; |
• | any change in applicable law, regulation or GAAP; |
• | geopolitical conditions, the outbreak or escalation of hostilities, any acts of war, sabotage or terrorism, or any escalation; |
• | any hurricane, tornado, flood, earthquake or other natural disaster; |
• | any epidemic, pandemic or disease outbreak (including Covid-19) and any action by a governmental entity in response thereto; |
• | any litigation arising from allegations of a breach of fiduciary duty or other violation of applicable law relating to the Merger Agreement or the transactions contemplated thereby; |
• | any adverse effects, adverse events or safety observations or reports of new side effects, adverse events or safety observations with respect to Equillium’s or Metacrine’s, as applicable, product candidates that are not reasonably expected to materially affect the likelihood or timing of FDA approval; |
• | any change or modification to any development program of Equillium; or |
• | any taking of any action required pursuant to the Merger Agreement, or not required by the Merger Agreement but taken at the written request of the other party. |
• | changes in Equillium’s and Metacrine’s respective businesses, operations, financial position or prospects; |
• | changes in market assessments of the business, operations, financial position or prospects of either company or the combined company; |
• | manipulation to affect the Exchange Ratio leading up to the Closing; |
• | market assessments of the likelihood that the Merger will be completed; |
• | interest rates, general market, political and economic conditions and other factors generally affecting the price of Equillium’s common stock; and |
• | federal, state and local legislation, governmental regulation and legal developments affecting the businesses of Metacrine or Equillium. |
• | subject to the $4.50 per share ceiling, if the 10-day volume weighted average price per share of Equillium common stock increases after the special stockholder meeting but during the window used for determining the Exchange Ratio, Metacrine stockholders can expect to receive less shares of Equillium common stock than was estimated at the time of the special stockholder meeting; and |
• | subject to the $2.70 per share floor, if the 10-day volume weighted average price per share of Equillium common stock decreases after the special stockholder meeting but during the window used for determining the Exchange Ratio, Metacrine stockholders can expect to receive more shares of Equillium common stock than was estimated at the time of the special stockholder meeting. |
• | the possibility that Equillium may be required to pay Metacrine a termination fee of $1,750,000, if the Merger is terminated under qualifying circumstances described under “The Merger Agreement – Termination Fees; Liability for Breach”; |
• | the possibility that Metacrine may be required to pay Equillium a termination fee of $1,250,000 under qualifying circumstances described under “The Merger Agreement – Termination Fees; Liability for Breach”; |
• | the incurrence of costs and expenses relating to the proposed Merger, such as financing, legal, accounting, financial advisor, filing, printing and mailing fees and expenses; |
• | the possibility that Metacrine will be unable to find another potential strategic partner, advance its product candidates, and, as a result, elect to liquidate and dissolve its business; |
• | the possibility that Equillium will be unable to raise sufficient capital or enter into one or more strategic transactions to enable it to carry on its current business plan, including its current and planned clinical trials or expand its pipeline; |
• | the possibility of a change in the trading price of Equillium common stock to the extent current trading prices reflect a market assumption that the Merger will be completed; |
• | the possibility that Equillium or Metacrine could suffer potential negative reactions from their respective employees, partners and vendors; and |
• | the possibility that Equillium or Metacrine could suffer adverse consequences associated with their respective management's focus on the Merger instead of on pursuing other opportunities that could have been beneficial to each company, in each case, without realizing any of the benefits contemplated by the Merger. |
• | Equillium’s cash flow may be insufficient to meet required payments of principal and interest, or require Equillium to dedicate a substantial portion of its cash flow to pay its debt and the interest associated with its debt rather than to other areas of its business; |
• | it may be more difficult for Equillium to obtain additional financing in the future for its operations, working capital requirements, capital expenditures, debt service or other general requirements; |
• | Equillium may be more vulnerable in the event of adverse economic and industry conditions or a downturn in its business; |
• | Equillium may be placed at a competitive disadvantage compared to its competitors that have less debt; |
• | Equillium may be subject to limitations with respect to its activities including certain future strategic transactions; and |
• | Equillium may not be able to refinance at all or on favorable terms, as its debt matures. |
• | expected timing, completion, effects and potential benefits of the Merger; |
• | statements of the plans, strategies and objectives of management with respect to the approval and closing of the Merger; |
• | Metacrine’s and Equillium’s ability to solicit a sufficient number of proxies to approve matters related to the consummation of the Merger; |
• | the expected Exchange Ratio and relative ownership percentages of the stockholders of Metacrine and Equillium in the combined company following the Closing; |
• | the expected level of Metacrine Net Cash at the Closing; |
• | the expected board of directors of Equillium; |
• | any statements regarding future economic conditions, growth rate, market opportunity or performance of the combined company; |
• | Equillium’s plans, if any, and timing to divest or enter into strategic partnerships with respect to its or Metacrine’s legacy assets; |
• | the Metacrine-Prepared Projections; |
• | research and development plans, including planned preclinical studies and clinical trials, including for itolizumab, EQ101 and EQ102; |
• | the ability to obtain or maintain the listing of Equillium common stock on Nasdaq following the Merger; |
• | Equillium’s and Metacrine’s respective officers and directors potentially having conflicts of interest with approving the Merger; |
• | economic, business, competitive, and/or regulatory factors affecting the business of Equillium and Metacrine; |
• | the occurrence of any other event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | satisfaction or waiver (if applicable) of the conditions to the Merger; and |
• | statements of belief and any statement of assumptions underlying any of the foregoing. |
• | Equillium Proposal 1: To approve the Equillium stock issuance proposal. |
• | Equillium Proposal 2: To approve the Equillium adjournment proposal. |
• | Equillium Stock Issuance Proposal. Approval of the Equillium stock issuance proposal requires the affirmative vote of the holders of Equillium common stock representing a majority of the votes cast on such matter at the Equillium virtual special meeting (provided that a quorum exists). |
• | Equillium Adjournment Proposal. Approval of the Equillium adjournment proposal requires the affirmative vote of the holders of shares of Equillium common stock representing a majority of votes cast on such matter at the Equillium virtual special meeting (whether or not a quorum is present). |
• | you can send a signed notice of revocation that is received by Equillium prior to your shares being voted, stating that you would like to revoke your proxy, to Equillium’s corporate secretary at Equillium’s corporate headquarters, 2223 Avenida de la Playa, Suite 105, La Jolla, California 92037; |
• | you can grant a new, valid proxy bearing a later date (by Internet, telephone or mail) that is received by Equillium prior to your shares being voted; |
• | you can vote again by telephone or the Internet at a later time; or |
• | if you are a holder of record, by voting at the Metacrine virtual special meeting, which will automatically cancel any proxy previously given, or you may revoke your proxy by attending the virtual special meeting, but your attendance alone will not revoke any proxy that you have previously given. |
• | Metacrine Proposal No. 1: To adopt the Metacrine merger proposal; and |
• | Metacrine Proposal No. 2: To approve the Metacrine adjournment proposal. |
• | Metacrine Merger Proposal. Approval of the Metacrine merger proposal requires the affirmative vote of a majority of the outstanding shares of Metacrine’s common stock. |
• | Metacrine Adjournment Proposal. Approval of the Metacrine adjournment proposal requires the affirmative vote of a majority of the shares of Metacrine common stock present virtually at the or by proxy (whether or not a quorum is present). |
• | you can send a signed notice of revocation that is received by Metacrine prior to your shares being voted, stating that you would like to revoke your proxy, to Metacrine’s corporate secretary at Metacrine’s corporate headquarters, 4225 Executive Square, Suite 600, San Diego, CA 92037; |
• | you can grant a new, valid proxy bearing a later date (by Internet, telephone or mail) that is received by Metacrine prior to your shares being voted; |
• | you can vote again by telephone or the Internet at a later time; or |
• | if you are a holder of record, by voting at the Metacrine virtual special meeting, which will automatically cancel any proxy previously given, or you may revoke your proxy by attending the virtual special meeting, but your attendance alone will not revoke any proxy that you have previously given. |
• | due organization, good standing and the requisite corporate power and authority to carry on their respective businesses; |
• | subsidiaries and equity interests; |
• | capital structure and related matters; |
• | corporate power and authority to enter into the Merger Agreement and due execution, delivery and enforceability of the Merger Agreement; |
• | absence of conflicts with organizational documents, breaches of contracts and agreements, liens upon assets and violations of applicable law resulting from the execution and delivery of the Merger Agreement and consummation of the transactions contemplated by the Merger Agreement; |
• | absence of required governmental or other third-party consents in connection with execution and delivery of the Merger Agreement and consummation of the transactions contemplated by the Merger Agreement other than as specified in the Merger Agreement; |
• | SEC filings, financial statement compliance and absence of undisclosed liabilities (other than certain specified exceptions); |
• | internal controls and procedures; |
• | absence of certain changes or events and conduct of business in the ordinary course since June 30, 2022; |
• | litigation; |
• | in the case of Metacrine, employee benefits matters and ERISA compliance; |
• | in the case of Metacrine, employee and labor matters; |
• | compliance with laws; |
• | material contracts; |
• | in the case of Metacrine, environmental matters and compliance with environmental laws; |
• | tax matters; |
• | intellectual property; |
• | regulatory matters and in the case of Metacrine, possession of necessary permits; |
• | in the case of Metacrine, insurance and title to properties; |
• | accuracy and completeness of information supplied for the inclusion or incorporation by reference in this joint proxy statement/prospectus and, in the case of Equillium, the Form S-4; |
• | in the case of Equillium, Acquisition Sub I, Acquisition Sub II and Merger Sub, ownership and operations of Merger Sub, Acquisition Sub I and Acquisition Sub II; |
• | in the case of Equillium, Acquisition Sub I, Acquisition Sub II and Merger Sub, valid issuance of shares of Equillium common stock when issued in accordance with the Merger Agreement; |
• | absence of brokers and other advisors besides VPA, in the case of Equillium and MTS Partners and its affiliate MTS in the case of Metacrine; |
• | opinions of financial advisors; |
• | inapplicability of Section 203 of the DGCL applicable to “business combinations” and any other “takeover” law; and |
• | in the case of Metacrine, anti-corruption and anti-bribery matters. |
• | changes or conditions generally affecting the industries in which such party and any of its subsidiaries operate, except to the extent such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, relative to others in such industries in respect of the business conducted in such industries; |
• | general economic or political conditions or securities, credit, financial or other capital markets conditions, in each case in the United States or any foreign jurisdiction, except to the extent such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, relative to others in the industries in which such party or any of its subsidiaries operate in respect of the business conducted in such industries; |
• | any failure, in and of itself, by such party to meet any internal or published projections, forecasts, estimates or predictions in respect of revenues, earnings or other financial or operating metrics for any period (it being understood that the facts or occurrences giving rise to or contributing to such failure may be deemed to constitute, or be taken into account in determining whether there has been, or is reasonably expected to be, a material adverse effect); |
• | the public announcement or pendency of the transactions contemplated in the Merger Agreement, including the impact thereof on the relationships, contractual or otherwise, of such party and its subsidiaries with employees, labor unions, suppliers or partners; |
• | any change, in and of itself, in the market price or trading volume of such party’s securities or in its credit ratings (it being understood that the facts or occurrences giving rise to or contributing to such change may be deemed to constitute, or be taken into account in determining whether there has been, or is reasonably expected to be, a material adverse effect); |
• | any change in applicable law, regulation or GAAP (or authoritative interpretation thereof), except to the extent such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, relative to others in the industries in which such party and its subsidiaries operate in respect of the business conducted in such industries; |
• | geopolitical conditions, the outbreak or escalation of hostilities, any acts of war (whether or not declared), sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism threatened or underway as of the date of the Merger Agreement, except to the extent such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, relative to others in the industries in which such party and any of its subsidiaries operate in respect of the business conducted in such industries; |
• | any hurricane, tornado, flood, earthquake or other natural disaster, except to the extent such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries, taken as a whole, relative to others in the industries in which such party and any of its subsidiaries operate in respect of the business conducted in such industries; |
• | any epidemic, pandemic or disease outbreak (including Covid-19) and any action by a governmental entity in response thereto, except to the extent that such fact, circumstance, effect, change, event or development has a materially disproportionate adverse effect on such party and its subsidiaries; |
• | any litigation arising from allegations of a breach of fiduciary duty or other violation of applicable law relating to the Merger Agreement or the transactions contemplated thereby; |
• | any adverse effects, adverse events or safety observations or reports of new side effects, adverse events or safety observations with respect to such party’s product candidates that are not reasonably expected to materially affect the likelihood or timing of FDA approval; |
• | any change or modification to any development program of Equillium or its affiliates; or |
• | any taking of any action required pursuant to the Merger Agreement or not required by the Merger Agreement, but in each case taken at the written request of the other party or parties thereto or any action expressly required to be taken under the Merger Agreement. |
• | (i) Declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or any combination thereof), in respect of, any of its capital stock, other equity interests or voting securities, other than dividends and distributions by a direct or indirect wholly owned subsidiary to its parent; (ii) split, combine, subdivide or reclassify any of its capital stock, other equity interests or voting securities or securities convertible into or exchangeable or exercisable for capital stock or other equity interests or voting securities, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for, its capital stock, other equity interests or voting securities, or (iii) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, Metacrine or any of its subsidiaries or any securities of Metacrine or any of its subsidiaries convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, Metacrine or any of its subsidiaries, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, other than (1) withholding of shares of Metacrine common stock to satisfy the exercise price and/or tax obligations with respect to awards granted under the existing Metacrine stock plans, (2) the acquisition by Metacrine of awards granted pursuant to the existing Metacrine stock plans in connection with the forfeiture of such awards and (3) the acquisition by Metacrine of shares of Metacrine common stock outstanding as of the date of the Merger Agreement pursuant to Metacrine’s right (under written commitments in effect as of the date of the Merger Agreement) to acquire shares of Metacrine common stock held by any officer or other employee, or individual who is an independent contractor, consultant or director, of or to any of Metacrine or any of its subsidiaries upon termination of such person’s employment or engagement by Metacrine or any of its subsidiaries; |
• | Issue, deliver, sell, grant, pledge or otherwise encumber or subject to any lien, other than liens permitted under the Merger Agreement, (except for transactions among Metacrine and its wholly owned subsidiaries) (A) any shares of capital stock of Metacrine or any of its subsidiaries, (B) any other equity interests or voting securities of Metacrine or any of its subsidiaries, (C) any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or other equity interests in, Metacrine or any of its subsidiaries or (D) any warrants, calls, options or other rights to acquire any capital stock or voting securities of, or other equity interests in, Metacrine or its subsidiaries, except, in each case of (A) through (C), for issuing shares of Metacrine common stock |
• | Amend its organizational documents (including by merger, consolidation or otherwise), or amend in any material respect the charter or organizational documents of any its subsidiaries (including by merger, consolidation or otherwise), except in each case as may be required by law; |
• | Except as required by applicable law or as required by the terms of any Metacrine benefit plan previously disclosed in writing to Equillium as provided in the Merger Agreement as in effect on the date of the Merger Agreement: (A) increase the salaries, bonus opportunities, incentive compensation or other compensation or benefits payable to any employee, consultant or independent contractor of Metacrine or any of its subsidiaries, (B) grant, announce or pay any new, retention, severance, change in control or other similar bonus or similar compensation to any employee, consultant or independent contractor of Metacrine or any of its subsidiaries, (C) establish, amend, terminate or increase the benefits or costs provided under any Metacrine benefit plan, (E) accelerate the vesting or payment of, or take any action to fund, any benefit or payment provided to employees or service providers of Metacrine or any of its subsidiaries, (D) hire, promote or terminate (without cause) any employee, consultant or independent contractor of Metacrine or any of its subsidiaries, or (F) allow for the commencement of any new offering periods under the Metacrine employee stock purchase plan; |
• | Make any material change in financial accounting methods, principles or practices, except as required by a change in GAAP (after the date of the Merger Agreement); |
• | Directly or indirectly acquire or agree to acquire in any transaction any equity interest in or business of any person (other than any transaction solely between Metacrine and one of its wholly owned subsidiaries or between wholly owned subsidiaries of Metacrine); |
• | Incur any indebtedness, except for (A) indebtedness incurred in the ordinary course of business consistent with past practice not to exceed $1,000,000 in the aggregate, (B) intercompany indebtedness among Metacrine and its wholly owned subsidiaries in the ordinary course of business consistent with past practice or (C) making borrowings under Metacrine’s credit facility (as existing on the date of the Merger Agreement) in the ordinary course of business consistent with past practice; |
• | Sell, lease (as lessor), license, covenant not to assert, mortgage and leaseback or otherwise encumber or subject to any lien (other than any lien permitted under the Merger Agreement), or otherwise dispose of any properties, rights or assets (including any intellectual property of Metacrine) that are material to Metacrine and its subsidiaries, taken as a whole (other than sales and non-exclusive licenses of products or services in the ordinary course of business consistent with past practice), except (A) pursuant to contracts or commitments in effect on the date of the Merger Agreement (or entered into after the date of the Merger Agreement without violating the terms of the Merger Agreement), including certain contracts entered into during the interim period, (B) any of the foregoing with respect to inventory in the ordinary course of business consistent with past practice, (C) any of the foregoing with respect to obsolete or worthless equipment in the ordinary course of business consistent with past practice, (D) in relation to mortgages, liens and pledges to secure indebtedness for borrowed money permitted to be incurred under the Merger Agreement and guarantees thereof or (E) for any transactions among Metacrine and its wholly owned subsidiaries in the ordinary course of business consistent with past practice; |
• | Make, or agree or commit to make, any capital expenditure not contemplated by Metacrine’s capital plan for 2022 (copies of which were previously provided to Equillium) or that exceeds the amount budgeted for any capital expenditure in such capital plan for 2022; |
• | Waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that do not create material obligations of Metacrine or any of its subsidiaries other than the payment of monetary damages (A) equal to or less than the amounts reserved with respect thereto on Metacrine’s SEC documents or (B) not in excess of $500,000 in the aggregate; |
• | Enter into, modify, amend, extend, renew, replace or terminate any collective bargaining agreement or other labor union contract applicable to the employees of Metacrine or any of its subsidiaries; |
• | Subject to a lien (other than liens permitted under the Merger Agreement), assign, transfer, convey title (in whole or in part), license, covenant not to assert, grant any right or other licenses to, or otherwise dispose of, material trademarks, trademark rights, trade names or service marks or other material intellectual property of Metacrine, or enter into licenses or agreements that impose material restrictions upon Metacrine or any of its subsidiaries with respect to material trademarks, trademark rights, trade names or service marks or other material intellectual property rights owned by any third party, in each case other than non-exclusive licenses in the ordinary course of business consistent with past practice; |
• | Other than in the ordinary course of business, materially amend or modify any material contract or enter into, materially amend or modify any contract that would be a material contract if it had been entered into prior to the date of the Merger Agreement; |
• | Except as required by applicable law, make, change or revoke any material tax election, change any method of tax accounting or annual tax accounting period, settle any claim, action or proceeding relating to any material taxes, waive any statute of limitations for any material tax claim or assessment (other than pursuant to extensions of time to file tax returns obtained in the ordinary course of business), obtain or request any material tax ruling or closing agreement, or surrender any right to obtain a material tax refund; |
• | Enter any new line of business outside of Metacrine and its subsidiaries’ existing business; |
• | Commence any clinical trial of any product candidate of Metacrine; |
• | Dissolve or liquidate Metacrine or any of its subsidiaries; or |
• | Authorize any of, or commit, resolve or agree to take any of, the foregoing actions. |
• | (A) Declare, set aside or pay any dividends on, or make any other distributions (whether in cash, stock, property or any combination thereof) in respect of, any of its capital stock, other equity interests or voting securities, other than dividends and distributions by a direct or indirect wholly owned subsidiary of Equillium to its parent, (B) split, combine, subdivide or reclassify any of its capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or other equity interests or voting securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities or (C) repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, Equillium or any of its subsidiaries or any securities of Equillium or any of its subsidiaries convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, Equillium or any of its subsidiaries, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, other than (1) the withholding of shares of Equillium common stock to satisfy the exercise price and/or tax obligations with respect to awards granted pursuant to Equillium’s stock plans, (2) the acquisition by Equillium of awards granted pursuant to Equillium’s stock plans in connection with the forfeiture of such awards and (3) the acquisition by Equillium of shares of its common stock outstanding as of the date of the Merger Agreement pursuant to its right (under written commitments in effect as of the date of the Merger Agreement) to acquire such shares of Equillium common stock held by any officer or other employee, or individual who is an independent contractor, consultant or director, of or to any of Equillium or any of its subsidiaries upon termination of such person’s employment or engagement by Equillium or any of its subsidiaries; |
• | sell, exclusively license, mortgage or otherwise encumber or subject to any lien (other than any lien permitted under the Merger Agreement), or otherwise dispose of any properties, rights or assets |
• | other than in the ordinary course of business, materially amend or modify any material contract of Equillium or enter into, materially amend or modify any contract that would be a material contract of Equillium if it had been entered into prior to the date of the Merger Agreement; |
• | issue, sell, or agree to issue or sell (1)(A) any shares of capital stock of Equillium, (B) other equity interests or voting securities of Equillium, (C) any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or other equity interests in, Equillium, (D) any warrants, calls, options or other rights to acquire any capital stock or voting securities of, or other equity interests in, Equillium, except (i) in any such case for employee compensation payments in the ordinary course of business of Equillium consistent with past practice, and (ii) that in the aggregate would not equal or exceed 20% of Equillium’s outstanding capital stock as of the date of the Merger Agreement, in each case excluding (x) the share issuable as Merger Consideration, and (y) in each case of (A)-(C), excluding shares of Equillium common stock issuable upon the exercise of options or other equity awards outstanding under Equillium’s equity incentive or stock purchase plans in accordance with their respective terms as of the date of the Merger Agreement, or (2) (a) shares of capital stock of Equillium or any of its subsidiaries, (b) other equity interests or voting securities of any subsidiary of Equillium, (c) any securities convertible into or exchangeable or exercisable for capital stock or voting securities of, or other equity interests in, any subsidiary of Equillium or (d) any warrants, calls, options or other rights to acquire any capital stock or securities of, or other equity interests in, any subsidiary of Equillium; or |
• | acquire another business or restructure, reorganize or completely or partially liquidate, in each case, to the extent that such action would, or would reasonably be expected to, (A) require the financial statements of such acquired person or business to be incorporated within Form S-4 under Regulation S-X of the Securities Act, (B) otherwise prevent, materially delay or materially impair the consummation of the Merger. |
• | Equillium using reasonable best efforts to cause the shares of Equillium common stock to be issued in the Merger to be approved for listing on the Nasdaq, subject to official notice of issuance, prior to the effective time of the Merger; |
• | Metacrine taking all actions necessary to permit the shares of Metacrine common stock and any other security issued by Metacrine or one of its subsidiaries and listed on the Nasdaq to be de-listed from the Nasdaq and de-registered under the Exchange Act as soon as possible following the effective time of the Merger; |
• | both Equillium and Metacrine and their respective boards using reasonable best efforts to take all action reasonably appropriate to ensure that no state takeover statute or similar statute or regulation is or becomes applicable to the Merger Agreement or the transactions contemplated thereunder, including the Merger, and, if any state takeover statute or similar statute or regulation becomes applicable to the |
• | both Equillium and Metacrine keeping the other party reasonably apprised of the status of matters relating to completion of the transactions contemplated under the Merger Agreement, including promptly furnishing the other with copies of notice or other communications from any third party and/or any governmental entity with respect to the Merger and the other transactions contemplated by the Merger Agreement, other than immaterial communications; and |
• | both Equillium and Metacrine providing prompt notification to the other party of any litigation related to the Merger that is brought or threatened against such party or its directors or officers and keeping the other party informed on a reasonably current basis with respect to the status thereof. The parties agree to cooperate in the defense and settlement of any such litigation, and neither party shall settle any such litigation without the prior written consent of the other party (not to be unreasonably withheld, conditioned or delayed). |
• | Approval of the Merger Agreement by holders of a majority of the outstanding shares of Metacrine common stock entitled to vote thereon. |
• | Approval of the Equillium stock issuance by the affirmative vote of a majority of the outstanding shares of Equillium common stock entitled to vote thereon. |
• | No governmental entity of competent jurisdiction shall have issued, enacted, promulgated, enforced or entered any law or judgment (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins or otherwise prohibits consummation of the Merger. |
• | Shares of Equillium common stock issuable to Metacrine’s stockholders pursuant to the Merger Agreement shall have been approved for listing on the Nasdaq, subject to official notice of issuance. |
• | The Form S-4 registration statement of which this joint proxy statement/prospectus forms a part has been declared effective by the SEC under the Securities Act and no stop order suspending the effectiveness of such Form S-4 has been issued and no proceedings for that purpose have been initiated or threatened. |
• | The representations and warranties of Metacrine contained in the Merger Agreement (except for the representations and warranties relating to (i) organization, good standing and qualification, (ii) capital structure, (iii) corporate authority and approval and (iv) brokers and finders) being true and correct as of the date of the Merger Agreement and as of the effective date of the Merger as if made at and as of such time (other than those representations and warranties that were made only as of an earlier date, which need only be true and correct as of that date) except where the failure of such representations and warranties to be true and correct (without giving effect to any limitation as to materiality or material adverse effect set forth in such representations and warranties) individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect with respect to Metacrine; |
• | The representations and warranties of Metacrine relating to (i) organization, good standing and qualification, (ii) corporate authority and approval and (iii) brokers and finders, being true and correct in all material respects, except for de minimis inaccuracies, at and as of the date of the Merger Agreement and as of the effective date of the Merger as if made at and as of such time (other than those representations and warranties that were made only as of an earlier date, which need only be true and correct as of that date); |
• | The representations and warranties of Metacrine relating to certain capitalization and related matters shall be true and correct in all respects, except for de minimis inaccuracies, at and as of the date of the Merger Agreement and at and as of the effective date of the Merger as if made at an and as of such time (except to the extent expressly made as of an earlier date, in which case as of such earlier date); |
• | Metacrine having in all material respects performed all obligations required to be performed by it under the Merger Agreement at or prior to the effective time of the Merger; |
• | No fact, circumstance, effect, change, event or development occurring after the date of the Merger Agreement that, individually or in the aggregate, has resulted, or would reasonably be likely to result, in a material adverse effect on Metacrine; |
• | Equillium’s receipt of a certificate, dated as of the effective date of the Merger, from a Metacrine senior executive officer, confirming that the conditions in the previous bullet points above have been satisfied; |
• | Equillium’s receipt of a certificate meeting the requirements of Treasury Regulation Section 1.1445-2(c)(4) to the effect that the Shares are not a “U.S. real property interest” within the meaning of Section 897 of the Code; and |
• | Metacrine’s net cash at the Closing being no less than $23,000,000. |
• | The representations and warranties of Equillium contained in the Merger Agreement (except for the representations and warranties relating to (i) organization, good standing and qualification, (ii) capital structure, (iii) corporate authority and approval and (iv) brokers and finders) being true and correct as of the date of the Merger Agreement and as of the effective date of the Merger as if made at and as of such time (other than those representations and warranties that were made only as of an earlier date, which need only be true and correct as of that date) except where the failure of such representations and warranties to be true and correct individually or in the aggregate, has not had and would not reasonably be expected to have a material adverse effect; |
• | The representations and warranties of Equillium relating to (i) organization, good standing and qualification, (ii) capital structure, (iii) corporate authority and approval and (iv) brokers and finders, being true and correct in all material respects, except for de minimis inaccuracies, at and as of the date of the date of the Merger Agreement and as of the effective date of the Merger as if made at and as of such time (other than those representations and warranties that were made only as of an earlier date, which need only be true and correct as of that date); |
• | Each of Equillium, Acquisition Sub I, Acquisition Sub II and Merger Sub having performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the effective time of the Merger; |
• | No fact, circumstance, effect, change, event or development occurring after the date of the Merger Agreement that, individually or in the aggregate, has resulted, or would reasonably be likely to result, in a material adverse effect on Equillium; and |
• | Metacrine’s receipt of a certificate, dated as of the effective date of the Merger, from an Equillium senior executive officer, confirming that the conditions in the previous bullet points above have been satisfied. |
• | by mutual written consent of Equillium and Metacrine, whether before or after the receipt of the required stockholder approvals; |
• | by either Equillium or Metacrine if the Merger is not consummated by 11:59 p.m. Pacific Standard Time on January 2, 2023, provided that such right to terminate the Merger Agreement shall not be available to any party that has breached in any material respect its obligations under the Merger Agreement in any manner that shall have been the cause of, or resulted in, the failure of the Merger to be consummated by such time and date; |
• | by either Equillium or Metacrine if any law or judgment permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and non-appealable, whether before or after the date of the Equillium stockholder approval or the Metacrine stockholder approval, provided that such right to terminate the Merger Agreement shall not be available to any party if its material breach of any provision under the Merger has been the cause of, or resulted in the failure of the Merger to be consummated; |
• | by either Equillium or Metacrine if the Metacrine stockholder approval shall not have been obtained at a meeting duly convened therefor or at any adjournment or postponement thereof at which a vote upon the adoption of the Merger Agreement was taken, provided that such right to terminate the Merger Agreement shall not be available to any party that has breached in any material respect its obligations under the Merger Agreement in any manner that shall have been the cause of the failure of Metacrine to obtain the Metacrine stockholder approval; or |
• | by either Equillium or Metacrine if the Equillium stockholder approval shall not shall not have been obtained at a meeting duly convened therefor or at any adjournment or postponement thereof at which a vote upon the issuance of shares of Equillium common stock was taken, provided that such right to terminate the Merger Agreement shall not be available to any party that has breached in any material respect its obligations under the Merger Agreement in any manner that shall have been the cause of the failure of Equillium to obtain the Equillium stockholder approval. |
• | If, prior to the time the Equillium stockholder approval is obtained, (i) the Equillium Board effects a change in recommendation, (ii) Equillium fails to include the Equillium Board recommendation in this joint proxy statement/prospectus, (iii) Equillium Board failed to publicly reaffirm its recommendation to approve the recommendation of the Equillium Board within 10 Business Days after Metacrine so requests in writing following the public disclosure of any acquisition proposal with any person other than Metacrine, (iv) a tender offer or exchange offer for outstanding shares of Equillium capital shall have been commenced (other than by Metacrine or an affiliate of Metacrine) and Equillium Board shall have recommended that the stockholders of Equillium tender their shares in such tender or exchange offer or, within 10 Business Days after the commencement of such tender or exchange offer, the Equillium Board shall have failed to recommend against acceptance of such offer; or (v) Equillium materially breaches or fails to perform its non-solicitation obligations pursuant to the Merger Agreement, or clauses (i) through (v) collectively, an Equillium triggering event; |
• | If, at any time prior to the effective time of the Merger, whether before or after the Metacrine stockholder approval is obtained, by action of the Metacrine Board if there has been a breach of any representation, warranty, covenant or agreement made by Equillium or Merger Sub in the Merger Agreement, or any such representation and warranty shall have become untrue after the date of the Merger Agreement, such that the closing conditions set forth in the Merger Agreement related to breaches of representations and warranties and performance of obligations would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured prior to the earlier of (i) 30 days following notice to Equillium from Metacrine of such breach or failure and (ii) the date that is three business days prior to January 2, 2023; provided that Metacrine shall not have the right to terminate the Merger Agreement pursuant to this provision if Metacrine is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement; or |
• | To enter into a superior proposal in accordance with the terms of the Merger Agreement at any time prior to the Metacrine stockholder approval being obtained and Metacrine pays to Equillium, prior to such termination the termination fee. |
• | If, prior to the time the Metacrine stockholder approval is obtained, (i) the Metacrine Board effects a change in recommendation, (ii) Metacrine fails to include the Metacrine Board recommendation in this joint proxy statement/prospectus, (iii) the Metacrine Board shall have failed to publicly reaffirm its recommendation to approve the recommendation by the Metacrine Board within 10 Business Days after Equillium so requests in writing following the public disclosure of any acquisition proposal with any person other than Equillium, (iv) a tender offer or exchange offer for outstanding Metacrine common stock shall have been commenced (other than by Equillium or an Affiliate of Equillium) and the Metacrine Board shall have recommended that the stockholders of Metacrine tender their shares in such tender or exchange offer or, within 10 Business Days after the commencement of such tender or exchange offer, the Metacrine Board shall have failed to recommend against acceptance of such offer, or (v) Metacrine materially breaches or fails to perform the non-solicitation provisions of the Merger Agreement, or clauses (i) through (v) collectively, a Metacrine Triggering Event; |
• | If, at any time prior to the effective time of the Merger, whether before or after the Equillium stockholder approval is obtained, by action of the Equillium Board, if there has been a breach of any representation, warranty, covenant or agreement made by Metacrine in the Merger Agreement, or any such representation and warranty shall have become untrue after the date of the Merger Agreement, such that the closing conditions set forth in the Merger Agreement related to breaches of representations and warranties and performance of obligations would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured prior to the earlier of (i) 30 days following notice to Metacrine from Equillium of such breach or failure and (ii) the date that is three business days prior to January 2, 2023; provided that Equillium shall not have the right to terminate the Merger Agreement pursuant to this provision if Equillium is then in material breach of any of its representations, warranties, covenants or agreements under the Merger Agreement; or |
• | To enter into a superior proposal in accordance with the terms of the Merger Agreement at any time prior to the Equillium stockholder approval being obtained and prior to or concurrently with such termination, Equillium pays to Metacrine the termination fee. |
• | that the proposed Merger strengthens Equillium’s cash position, better positioning Equillium to pursue continued development of its programs and will fund Equillium through important clinical milestones; |
• | the limited financing alternatives given market conditions; |
• | that the terms of the proposed Merger were considered to be favorable to financing alternatives that may have been available to Equillium; |
• | that the addition of Metacrine’s pipeline programs enables possible advancement of these programs through strategic partnership or divestiture, which Equillium believes may further benefit Equillium stockholders; and |
• | through the addition of Dr. Klassen to the Equillium Board, Equillium adds further clinical development expertise and maintains continuity with respect to the acquired Metacrine programs. |
• | its knowledge of Equillium’s business, operations, financial condition, earnings and prospects on a standalone basis and of Metacrine’s business, operations, financial condition, earnings and prospects, taking into account the results of Equillium’s due diligence review of Metacrine; |
• | the fixed percentage premium paid on Metacrine’s Net Cash provides greater certainty as to the value being paid for the cash to be delivered at the Closing; |
• | the opinion of VPA, dated September 6, 2022, to the Equillium Board, which opinion is attached hereto as Annex B, to the effect that, as of that date and based on and subject to various assumptions and limitations described in their opinion, the Merger transaction was fair, from a financial point of view, to Equillium stockholders, as more fully described below under the caption “The Merger—Opinion of Equillium’s Financial Advisor”; |
• | the terms and conditions of the Merger Agreement; and |
• | the reasonableness of the potential termination fee (i) of up to $1,250,000 which could become payable by Metacrine if the Merger Agreement is terminated in certain circumstances and (ii) of up to $1,750,000, which could become payable by Equillium if the Merger Agreement is terminated in certain circumstances. |
• | the risk that the transaction and integration costs may be greater than anticipated; |
• | the cost of the transaction, including dilution to Equillium stockholders, as compared to other potential means of raising capital; |
• | the cost, including the time spent by Equillium’s management, associated with a decision to pursue a strategic transactions to divest or otherwise monetize Metacrine’s legacy assets as a financing alternative; |
• | the impact that the announced transaction may have on Equillium’s stock price and on Equillium’s ability to raise additional capital or engage in certain business development discussions during the pre-closing period; |
• | the substantial cost of integrating the two companies; |
• | the risk of not achieving all of the anticipated synergies and the risk that strategic benefits and other anticipated benefits might not be realized or may take longer than expected to achieve; |
• | The likelihood of disruptive stockholder litigation following announcement of the Merger; |
• | Various other risks associated with Metacrine and the Merger, including the risks described in the section entitled “Risk Factors,” and the matters described under “Cautionary Statement Regarding Forward-Looking Statements.” |
• | determined that the Merger Agreement and the transactions contemplated thereby, including the Merger, are advisable and in the best interests of Metacrine and its stockholders; |
• | approved the Merger Agreement and the Merger, the execution of the Merger Agreement and the consummation of the transactions contemplated thereby; and |
• | declared advisable and recommended that Metacrine's stockholders adopt the Merger Agreement. |
• | The Merger was the result of an extensive strategic review process. The Metacrine Board considered that the Metacrine management team and, at Metacrine’s direction, MTS Partners affirmatively contacted 18 companies (including Equillium) concerning a potential merger, acquisition or strategic |
• | The opinions of MTS that were rendered orally on September 2, 2022 and October 19, 2022, and subsequently confirmed by the September MTS Opinion and October MTS Opinion, respectively, that as of the applicable date and based upon and subject to the various assumptions made, procedures followed, matters considered and qualifications and limitations set forth in the September MTS Opinion and the October MTS Opinion, as applicable, the Exchange Ratio to be received by the holders of Metacrine common stock pursuant to the offer and the Merger was fair, from a financial point of view, to such holders, as more fully described in “The Merger—Opinions of Metacrine’s Financial Advisor” below and in Annex C-1 and C-2 to this joint proxy statement/prospectus; |
• | The Metacrine Board’s belief, as a result of arm’s length negotiations with Equillium and taking into account the Metacrine Board’s familiarity with the business, operations, prospects, business strategy, assets, liabilities and general financial condition of Metacrine on a historical and prospective basis, that (i) Metacrine and its representatives negotiated the most favorable Exchange Ratio that Equillium was willing to agree to, (ii) measured against the longer-term execution risks described above, the per share merger consideration reflects a fair and favorable price for the shares of Metacrine common stock and (iii) the terms of the Merger Agreement include the most favorable terms to Metacrine in the aggregate to which Equillium was willing to agree, and which provide a high level of closing certainty; |
• | The Metacrine Board’s belief, based in part on a scientific diligence and analysis process conducted over several weeks by Metacrine’s management and reviewed with the Equillium Board, that with respect to Equillium’s product pipeline and the potential market opportunity for Equillium’s products, that Equillium’s product candidates represent a sizeable potential market opportunity, and may thereby create value for the stockholders of the combined organization and an opportunity for Metacrine’s stockholders to participate in the potential growth of the combined organization; |
• | The cash constraints of Metacrine in light of the current, historical and projected financial condition, results of operations and business of Metacrine, and the general lack of interest seen from the significant number of potential licensing partners that certain members of the Metacrine Board and Metacrine management contacted in connection with advancing and providing capital to Metacrine’s MET642 program, and the likelihood that Metacrine’s prospects as a stand-alone company were unlikely to change for the benefit of Metacrine’s stockholders in the foreseeable future; |
• | The Metacrine Board’s understanding of the business operations, financial conditions and constraints, earnings and prospects of Metacrine, including the prospects of Metacrine on a stand-alone basis; |
• | The Metacrine Board’s belief, after a thorough review of strategic alternatives and discussions with Metacrine’s management, financial advisors and legal counsel, that the Merger is more favorable to Metacrine’s stockholders than the potential value that might have resulted from other strategic options available to Metacrine, including a liquidation of Metacrine and the distribution of any available cash; |
• | The risks and delays associated with, and uncertain value and costs to Metacrine’s stockholders of, liquidating Metacrine, including, without limitation, the uncertainties of continuing cash burn while contingent liabilities are resolved and uncertainty of timing of release of cash until contingent liabilities are resolved; |
• | The fact that the estimated return to each stockholder in a liquidation of Metacrine would result in a payment of approximately $0.58 per share of Metacrine Common Stock and based on the value of the Exchange Ratio as of each of September 2, 2022 and October 19, 2022 (the dates of the respective oral fairness opinions of MTS were delivered) the implied Pro Forma Metacrine Per Share Value Range were approximately $0.76-$1.33 and $1.80-$3.60 as of September 2, 2022 and October 19, 2022, respectively. See the sections entitled “The Merger—Opinions of Metacrine’s Financial Advisor—September MTS Opinion—Pro Forma Combination Analysis” and “The Merger—Opinions of Metacrine’s Financial Advisor—October MTS Opinion—Intrinsic Value of Merger Consideration”; and |
• | The fact that Metacrine’s other potential acquirers and partners are private companies with valuations that are not validated by the public markets. |
• | The initial estimated Exchange Ratio used to establish the number of shares of Equillium common stock to be issued to Metacrine’s stockholders in the Merger was determined based on the relative valuations of Equillium and Metacrine, and thus the relative percentage ownership of Equillium’s stockholders and Metacrine’s stockholders immediately following the completion of the Merger is subject to change based on the amount of Metacrine’s Net Cash and the Equillium stock price; |
• | The limited number and nature of the conditions to Equillium’s obligation to consummate the Merger and the limited risk of non-satisfaction of such conditions as well as the likelihood that the Merger will be consummated on a timely basis; |
• | The respective rights of, and limitations on, Equillium and Metacrine under the Merger Agreement to consider certain unsolicited acquisition proposals under certain circumstances should Equillium or Metacrine receive a superior offer; |
• | The reasonableness of the potential termination fee (i) of up to $1,250,000 which could become payable by Metacrine if the Merger Agreement is terminated in certain circumstances and (ii) of up to $1,750,000, which could become payable by Equillium if the Merger Agreement is terminated in certain circumstances; and |
• | The belief that the terms of the Merger Agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable under the circumstances. |
• | The risks and delays associated with, and uncertain value and costs to Metacrine’s stockholders of, liquidating Metacrine, including, without limitation, the uncertainties of continuing cash burn while contingent liabilities are resolved and uncertainty of timing of release of cash until contingent liabilities are resolved; |
• | The Merger might not be completed in a timely manner, or at all, and the potential adverse effect of the public announcement of the Merger or delay or failure to complete the Merger on the business, operations and financial results of Metacrine, reputation of Metacrine and the ability of Metacrine to obtain financing in the future; |
• | The Merger Agreement includes a closing condition that requires Metacrine’s Net Cash be at least $23 million at the Effective Time. In the event that Metacrine’s Net Cash balance falls below this threshold, Equillium would not be obligated to, but could in its sole discretion elect to, consummate the Merger, which would result in Metacrine’s stockholders holding a smaller than expected percentage of the post-closing combined company; |
• | The likely detrimental effect on Metacrine’s cash position, stock price and ability to initiate another process and to successfully complete an alternative transaction should the Merger not be completed; |
• | (i) The $1,250,000 termination fee payable by Metacrine to Equillium under certain circumstances, including termination by Metacrine to accept and enter into a definitive agreement with respect to a superior proposal and (ii) the $1,750,000 termination fee payable by Equillium to Metacrine under certain circumstances, including termination by Equillium to accept and enter into a definitive agreement with respect to a superior proposal and (iii) the potential effect of the fees describe in clauses (i) and (ii) in deterring other potential acquirers from proposing an alternative transaction that may be more advantageous to Metacrine’s stockholders; |
• | The possible volatility, at least in the short term, of the trading price of Equillium and Metacrine common stock resulting from the announcement of the Merger; |
• | The likelihood of disruptive stockholder litigation following announcement of the Merger; |
• | The early-stage clinical data of Equillium’s product candidates, which, in the future, may not be successfully developed into products that are marketed and sold; |
• | The strategic direction of the combined company following the completion of the Merger, which will be determined by a board of directors initially comprised of a majority of the directors designated by Equillium; |
• | The expenses to be incurred in connection with the Merger and related administrative challenges associated with combining the companies, including the costs associated with any related litigation; and |
• | Various other risks associated with Metacrine and the Merger, including the risks described in the section entitled “Risk Factors” beginning on page 30 of this joint proxy statement/prospectus. |
($ in millions) | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | | | 2033E | | | 2034E | | | 2035E | | | 2036E | | | 2037E | | | 2038E |
EQ101 - Alopecia Areata | | | — | | | — | | | — | | | — | | | — | | | $30 | | | $90 | | | $180 | | | $240 | | | $288 | | | $294 | | | $300 | | | $312 | | | $318 | | | $321 | | | $324 | | | $336 |
Itolizumab Partnership Revenue | | | 28 | | | 40 | | | 9 | | | 24 | | | — | | | 8 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Total Revenue | | | $28 | | | $40 | | | $9 | | | $24 | | | — | | | $38 | | | $90 | | | $180 | | | $240 | | | $288 | | | $294 | | | $300 | | | $312 | | | $318 | | | $321 | | | $324 | | | $336 |
% Growth | | | NA | | | 42.9% | | | (78.0%) | | | 172.7% | | | (100.0%) | | | NA | | | 134.4% | | | 100.0% | | | 33.3% | | | 20.0% | | | 2.1% | | | 2.0% | | | 4.0% | | | 1.9% | | | 0.9% | | | 0.9% | | | 3.7% |
(-) COGS | | | (3) | | | (4) | | | (1) | | | (2) | | | — | | | (4) | | | (9) | | | (18) | | | (24) | | | (29) | | | (29) | | | (30) | | | (31) | | | (32) | | | (32) | | | (32) | | | (34) |
Gross Profit | | | $25 | | | $36 | | | $8 | | | $22 | | | — | | | $35 | | | $81 | | | $162 | | | $216 | | | $259 | | | $265 | | | $270 | | | $281 | | | $286 | | | $289 | | | $292 | | | $302 |
% Margin | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | NA | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% |
(-) R&D Expenses | | | ($61) | | | ($30) | | | ($31) | | | ($30) | | | ($31) | | | ($31) | | | ($22) | | | ($23) | | | ($23) | | | ($24) | | | ($25) | | | ($25) | | | ($26) | | | ($27) | | | ($28) | | | ($29) | | | ($29) |
(-) G&A | | | (14) | | | (14) | | | (15) | | | (16) | | | (16) | | | (17) | | | (17) | | | (18) | | | (18) | | | (19) | | | (19) | | | (20) | | | (20) | | | (21) | | | (22) | | | (22) | | | (23) |
(-) Sales, Marketing, and Distribution Costs | | | — | | | — | | | — | | | — | | | (28) | | | (30) | | | (33) | | | (37) | | | (40) | | | (43) | | | (43) | | | (44) | | | (45) | | | (45) | | | (45) | | | (46) | | | (47) |
(-) Milestones and Royalties | | | — | | | — | | | — | | | — | | | — | | | (15) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
(-) Total Operating Expenses | | | ($75) | | | ($44) | | | ($45) | | | ($46) | | | ($75) | | | ($92) | | | ($72) | | | ($77) | | | ($82) | | | ($86) | | | ($87) | | | ($89) | | | ($91) | | | ($93) | | | ($95) | | | ($97) | | | ($99) |
EBIT(1) | | | ($50) | | | ($8) | | | ($37) | | | ($24) | | | ($75) | | | ($58) | | | $9 | | | $85 | | | $134 | | | $174 | | | $177 | | | $181 | | | $190 | | | $193 | | | $194 | | | $195 | | | $203 |
% Margin(2) | | | (179.2%) | | | (19.1%) | | | (424.5%) | | | (100.3%) | | | NA | | | (150.5%) | | | 10.4% | | | 47.0% | | | 55.9% | | | 60.3% | | | 60.3% | | | 60.3% | | | 60.8% | | | 60.7% | | | 60.5% | | | 60.2% | | | 60.5% |
(+) Other Income (Expense) | | | ($2) | | | ($6) | | | ($3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
EBT(3) | | | ($52) | | | ($14) | | | ($41) | | | ($24) | | | ($75) | | | ($58) | | | $9 | | | $85 | | | $134 | | | $174 | | | $177 | | | $181 | | | $190 | | | $193 | | | $194 | | | $195 | | | $203 |
(-) Taxes | | | — | | | — | | | — | | | — | | | — | | | — | | | (0) | | | (3) | | | (5) | | | (7) | | | (19) | | | (38) | | | (39) | | | (40) | | | (40) | | | (41) | | | (42) |
Net Income (Loss) | | | ($52) | | | ($14) | | | ($41) | | | ($24) | | | ($75) | | | ($58) | | | $9 | | | $81 | | | $129 | | | $167 | | | $158 | | | $143 | | | $150 | | | $153 | | | $154 | | | $154 | | | $161 |
% Margin | | | (186.8%) | | | (34.6%) | | | (463.5%) | | | (100.3%) | | | NA | | | (150.5%) | | | 10.0% | | | 45.1% | | | 53.7% | | | 57.9% | | | 53.8% | | | 47.8% | | | 48.1% | | | 48.1% | | | 47.9% | | | 47.7% | | | 48.0% |
(1) | EBIT, a non-GAAP financial measure, refers to earnings before interest and taxes. |
(2) | EBIT Margin, a non-GAAP financial measure, refers to earnings before interest and taxes divided by revenue. |
(3) | EBT, a non-GAAP financial measure, refers to earnings before taxes less other income (expenses). |
($ in millions) | | | 2022E | | | 2023E | | | 2024E | | | 2025E | | | 2026E | | | 2027E | | | 2028E | | | 2029E | | | 2030E | | | 2031E | | | 2032E | | | 2033E | | | 2034E | | | 2035E | | | 2036E | | | 2037E | | | 2038E |
Itolizumab | | | — | | | — | | | — | | | 17 | | | 26 | | | 70 | | | 118 | | | 165 | | | 249 | | | 316 | | | 368 | | | 402 | | | 435 | | | 465 | | | 480 | | | 476 | | | 458 |
EQ101 - Alopecia Areata | | | — | | | — | | | — | | | — | | | — | | | 30 | | | 90 | | | 180 | | | 240 | | | 288 | | | 294 | | | 300 | | | 312 | | | 318 | | | 321 | | | 324 | | | 336 |
Total Revenue | | | — | | | — | | | — | | | $17 | | | $26 | | | $100 | | | $208 | | | $345 | | | $489 | | | $604 | | | $662 | | | $702 | | | $747 | | | $783 | | | $801 | | | $800 | | | $794 |
% Growth | | | — | | | — | | | — | | | — | | | 53.0% | | | 282.9% | | | 107.9% | | | 65.8% | | | 41.8% | | | 23.4% | | | 9.7% | | | 6.0% | | | 6.5% | | | 4.8% | | | 2.3% | | | (0.2%) | | | (0.7%) |
(-) COGS | | | — | | | — | | | — | | | (2) | | | (3) | | | (10) | | | (21) | | | (34) | | | (49) | | | (60) | | | (66) | | | (70) | | | (75) | | | (78) | | | (80) | | | (80) | | | (79) |
Gross Profit | | | — | | | — | | | — | | | $15 | | | $24 | | | $90 | | | $187 | | | $310 | | | $440 | | | $543 | | | $596 | | | $632 | | | $673 | | | $705 | | | $721 | | | $720 | | | $714 |
% Margin | | | NA | | | NA | | | NA | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% | | | 90.0% |
(-) R&D Expenses | | | ($66) | | | ($40) | | | ($64) | | | ($71) | | | ($70) | | | ($55) | | | ($46) | | | ($35) | | | ($23) | | | ($24) | | | ($25) | | | ($25) | | | ($26) | | | ($27) | | | ($28) | | | ($29) | | | ($29) |
(-) G&A | | | (14) | | | (14) | | | (15) | | | (16) | | | (16) | | | (17) | | | (17) | | | (18) | | | (18) | | | (19) | | | (19) | | | (20) | | | (20) | | | (21) | | | (22) | | | (22) | | | (23) |
(-) Sales, Marketing, and Distribution Costs | | | — | | | — | | | (10) | | | (10) | | | (50) | | | (52) | | | (56) | | | (83) | | | (87) | | | (91) | | | (93) | | | (95) | | | (97) | | | (99) | | | (101) | | | (103) | | | (105) |
(-) Milestones and Royalties | | | — | | | — | | | — | | | (26) | | | (1) | | | (29) | | | (6) | | | (8) | | | (47) | | | (91) | | | (18) | | | (170) | | | (22) | | | (323) | | | (24) | | | (24) | | | (23) |
(-) Total Operating Expenses | | | ($80) | | | ($54) | | | ($89) | | | ($122) | | | ($137) | | | ($153) | | | ($125) | | | ($143) | | | ($176) | | | ($224) | | | ($155) | | | ($310) | | | ($165) | | | ($470) | | | ($174) | | | ($177) | | | ($180) |
EBIT(1) | | | ($80) | | | ($54) | | | ($89) | | | ($107) | | | ($113) | | | ($63) | | | $62 | | | $167 | | | $264 | | | $319 | | | $441 | | | $322 | | | $508 | | | $235 | | | $547 | | | $543 | | | $534 |
% Margin(2) | | | NA | | | NA | | | NA | | | (624.9%) | | | (434.3%) | | | (62.6%) | | | 29.9% | | | 48.5% | | | 54.0% | | | 52.8% | | | 66.6% | | | 45.8% | | | 67.9% | | | 30.0% | | | 68.3% | | | 67.8% | | | 67.3% |
(+) Other Income (Expense) | | | ($2) | | | ($6) | | | ($3) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
EBT (3) | | | ($82) | | | ($60) | | | ($92) | | | ($107) | | | ($113) | | | ($63) | | | $62 | | | $167 | | | $264 | | | $319 | | | $441 | | | $322 | | | $508 | | | $235 | | | $547 | | | $543 | | | $534 |
(-) Taxes | | | — | | | — | | | — | | | — | | | — | | | — | | | (2) | | | (7) | | | (11) | | | (13) | | | (90) | | | (67) | | | (106) | | | (49) | | | (114) | | | (113) | | | (111) |
Net Income (Loss) | | | ($82) | | | ($60) | | | ($92) | | | ($107) | | | ($113) | | | ($63) | | | $60 | | | $161 | | | $254 | | | $306 | | | $351 | | | $255 | | | $402 | | | $186 | | | $433 | | | $430 | | | $423 |
% Margin | | | NA | | | NA | | | NA | | | (624.9%) | | | (434.3%) | | | (62.6%) | | | 28.7% | | | 46.6% | | | 51.9% | | | 50.7% | | | 53.0% | | | 36.3% | | | 53.8% | | | 23.7% | | | 54.1% | | | 53.7% | | | 53.3% |
(1) | EBIT, a non-GAAP financial measure, refers to earnings before interest and taxes. |
(2) | EBIT Margin, a non-GAAP financial measure, refers to earnings before interest and taxes divided by revenue. |
(3) | EBT, a non-GAAP financial measure, refers to earnings before taxes less other income (expenses). |
• | was provided to the members of the Equillium Board (in their capacities as such) for their information and assistance in connection with their evaluation of the Merger; |
• | did not constitute a recommendation to the Equillium Board with respect to the Merger; |
• | does not constitute advice or a recommendation to any holder of Equillium common stock as to how to vote in connection with the Merger or otherwise; |
• | did not address Equillium’s underlying business or financial decision to pursue the Merger, the relative merits of the Merger as compared to any alternative business or financial strategies that might exist for Equillium, the financing of the Merger or the effects of any other transaction in which Equillium might engage; |
• | addressed only the fairness, from a financial point of view, to Equillium’s common stockholders of the Merger to be effected in accordance with the Merger Agreement; |
• | expressed no view or opinion as to any other term or aspect of the Merger, the Merger Agreement or any other agreement, transaction document or instrument contemplated by the Merger Agreement or to be entered into or amended in connection with the Merger or the fairness, financial or otherwise, of the Merger to, or of any consideration to be paid to or received by, the holders of any class of securities (except as set forth in the immediately preceding bullet point), creditors or other constituencies of Equillium; |
• | expressed no view or opinion as to the fairness, financial or otherwise, of the amount or nature of any compensation payable to or to be received by any of Equillium’s directors, officers or employees, or any class of such persons, in connection with the Merger or otherwise; and |
• | did not constitute a solvency opinion or a fair value opinion, and VPA did not evaluate the solvency or fair value of Equillium under any relevant laws relating to bankruptcy, insolvency or similar matters. |
• | reviewed a draft of the Merger Agreement dated as of September 5, 2022; |
• | reviewing certain filings of Equillium and Metacrine that are publicly available through the Electronic Data Gathering, Analysis, and Retrieval System of the Securities Exchange Commission; |
• | reviewed certain operating and financial information, provided to VPA by Equillium’s management, relating to the Equillium’s operations, earnings, cash flow, assets and liabilities; |
• | met or otherwise communicated electronically with certain members of Equillium’s senior and operating management and other advisors to discuss the Equillium’s operations, historical financial results, future prospects and projected operations and performance; |
• | reviewed other offers for, transactions in and appraisals of the common stock of Equillium; |
• | evaluated the stock price history and reported events of Equillium; |
• | reviewed publicly available data and stock market performance data of public companies VPA deemed comparable to the Company; and |
• | conducted such other studies, analyses, inquiries and investigations as VPA deemed appropriate. |
• | VPA relied upon and assumed the accuracy, completeness and reasonableness of all industry, business, financial, legal, regulatory, tax, accounting, actuarial and other information furnished by or discussed with Equillium or obtained from reputable public sources, data suppliers and other third parties. |
• | VPA (i) did not assume any responsibility, obligation or liability for the accuracy, completeness, reasonableness, achievability or independent verification of, and VPA did not independently verify, any such information (including, without limitations, any estimates); (ii) expressed no view, opinion, representation, guaranty or warranty (in each case, express or implied) regarding the reasonableness of relying upon the assurances of Equillium’s senior management that they were unaware of any facts or circumstances that would make such information (including, without limitation, estimates) incomplete, inaccurate or misleading. |
• | Specifically, with respect to (i) any estimates furnished by or discussed with Equillium, VPA was advised by Equillium’s management, and VPA assumed, that such estimates utilized in its analyses had been reasonably prepared on bases reflecting the best then-currently available estimates and judgments of Equillium’s management as to the expected future performance of Equillium, and (ii) any estimates obtained by VPA from public sources, data suppliers and other third parties, VPA assumed that such estimate was reasonable and reliable. |
• | VPA did not perform or obtain any independent appraisal of the assets or liabilities (including any contingent, derivative or off-balance sheet assets and liabilities) of Equillium or the solvency or fair value of Equillium, nor was VPA furnished with any such appraisals. |
• | VPA did not express any view or render any opinion regarding the tax consequences to Equillium or its stockholders of the Merger. VPA’s professionals are not legal, regulatory, tax, consulting, biotechnology, accounting, appraisal or actuarial experts and VPA’s opinion should not be construed as constituting advice with respect to such matters. |
• | VPA further assumed that: |
• | In all respects material to its analyses: (i) the final executed form of the Merger Agreement would not differ from the draft that VPA reviewed, (ii) Equillium, Acquisition Sub I, Merger Sub and Metacrine will comply with all terms of the Merger Agreement, and (iii) the representations and warranties of Equillium, Acquisition Sub I, Merger Sub and Metacrine contained in the Merger Agreement were true and correct and all conditions to the obligations of each party to the Merger Agreement to consummate the Merger would be satisfied without any waiver thereof; and |
• | The Merger will be consummated in a timely manner and in accordance with the terms of the Merger Agreement, without any limitations, restrictions, conditions, amendments or modifications (regulatory, tax-related or otherwise) that would have an adverse effect on Equillium or the Merger in any way material to VPA’s analyses. VPA expressed no view or opinion as to the price or range of prices at which the shares of Equillium common stock or other securities of Equillium may trade at any time, including, without limitation, subsequent to the announcement or consummation of the Merger. |
• | based its valuation and financial analyses on assumptions that it deemed reasonable, including assumptions concerning general business and economic conditions, capital markets considerations and industry-specific and company-specific factors, all of which are beyond the control of Equillium, Metacrine, and VPA; |
• | did not form a view or opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support its opinion; |
• | considered the results of all of its valuation and financial analyses and did not attribute any particular weight to any one analysis or factor; and |
• | ultimately arrived at its opinion based on the results of all of its valuation and financial analyses assessed as a whole and believes that the totality of the factors considered and the various valuation and financial analyses performed by VPA in connection with its opinion operated collectively to support its determination as to the fairness of the Merger, from a financial point of view, to Equillium’s common stockholders. |
• | Such valuation and financial analyses are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by these analyses. |
• | None of the selected precedent merger and acquisition transactions used in the precedent merger and acquisitions transactions analysis described below is identical or directly comparable to the Merger; however, such companies and transactions were selected by VPA based on its acumen and experience. |
• | In any event, the precedent merger and acquisition transactions analysis are not mathematical; rather, such analyses involve complex considerations and judgments concerning the differences in business, financial, operating and capital markets-related characteristics and other factors regarding the peer group companies and precedent merger and acquisition transactions to which Equillium and the Merger were compared. |
• | Such valuation and financial analyses do not purport to be appraisals or to reflect the prices at which any securities may trade at the present time or at any time in the future. |
All Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees |
Minimum: | | | $0.5 | | | 1.67% | | | -21.77% | | | -31.17% | | | -27.70% |
Lower (First) Quartile: | | | $2.7 | | | 11.99% | | | 6.09% | | | 2.29% | | | 3.57% |
Median: | | | $10.0 | | | 21.29% | | | 23.05% | | | 23.56% | | | 20.74% |
Average: | | | $17.8 | | | 26.22% | | | 22.08% | | | 22.74% | | | 19.91% |
Upper (Third) Quartile: | | | $25.0 | | | 35.16% | | | 36.38% | | | 38.78% | | | 32.95% |
Maximum: | | | $85.0 | | | 76.52% | | | 81.28% | | | 105.46% | | | 79.92% |
2022 Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees |
Minimum: | | | $3.5 | | | 8.07% | | | -7.86% | | | -13.36% | | | 4.12% |
Lower (First) Quartile: | | | $12.1 | | | 10.50% | | | 1.67% | | | 11.34% | | | 16.18% |
Median: | | | $15.4 | | | 15.58% | | | 24.37% | | | 43.10% | | | 49.09% |
Average: | | | $27.5 | | | 20.51% | | | 24.57% | | | 41.75% | | | 44.02% |
Upper (Third) Quartile: | | | $33.7 | | | 22.29% | | | 47.38% | | | 64.37% | | | 69.82% |
Maximum: | | | $85.0 | | | 50.52% | | | 57.37% | | | 105.46% | | | 79.92% |
2021 Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees |
Minimum: | | | $1.0 | | | 3.14% | | | -21.77% | | | -20.20% | | | -27.70% |
Lower (First) Quartile: | | | $7.5 | | | 20.38% | | | -6.16% | | | -8.46% | | | -14.98% |
Median: | | | $15.0 | | | 32.26% | | | 8.23% | | | 6.94% | | | 0.73% |
Average: | | | $19.9 | | | 35.43% | | | 18.77% | | | 13.22% | | | 9.20% |
Upper (Third) Quartile: | | | $25.1 | | | 57.00% | | | 43.48% | | | 26.38% | | | 27.98% |
All Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees | |||||||||||||||
Minimum: | | | $0.5 | | | 1.67% | | | -21.77% | | | -31.17% | | | -27.70% | |||||||||||||||
Lower (First) Quartile: | | | $2.4 | | | 14.52% | | | 5.29% | | | 2.76% | | | 3.84% | |||||||||||||||
Median: | | | $7.4 | | | 24.17% | | | 24.75% | | | 25.52% | | | 23.37% | |||||||||||||||
Average: | | | $12.2 | | | 26.66% | | | 21.66% | | | 23.23% | | | 21.13% | |||||||||||||||
Upper (Third) Quartile: | | | $19.0 | | | 35.81% | | | 37.72% | | | 40.19% | | | 34.48% | |||||||||||||||
Maximum: | | | $50.0 | | | 70.23% | | | 57.37% | | | 105.46% | | | 79.92% |
2022 Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees | |||||||||||||||
Minimum: | | | $3.5 | | | 8.07% | | | -7.86% | | | -13.36% | | | 4.12% | |||||||||||||||
Lower (First) Quartile: | | | $10.9 | | | 10.50% | | | 1.67% | | | 11.34% | | | 16.18% | |||||||||||||||
Median: | | | $14.9 | | | 15.58% | | | 24.37% | | | 43.10% | | | 49.09% | |||||||||||||||
Average: | | | $18.7 | | | 20.51% | | | 24.57% | | | 41.75% | | | 44.02% | |||||||||||||||
Upper (Third) Quartile: | | | $23.8 | | | 22.29% | | | 47.38% | | | 64.37% | | | 69.82% | |||||||||||||||
Maximum: | | | $50.0 | | | 50.52% | | | 57.37% | | | 105.46% | | | 79.92% |
2021 Transactions | | | Total Transaction Value | | | 1 Day Prior Implied Premium + Fees | | | 5 Day Prior Implied Premium + Fees | | | 10 Day Prior Implied Premium + Fees | | | 15 Day Prior Implied Premium + Fees | |||||||||||||||
Minimum: | | | $1.0 | | | 3.14% | | | -21.77% | | | -20.20% | | | -27.70% | |||||||||||||||
Lower (First) Quartile: | | | $7.5 | | | 20.38% | | | -6.16% | | | -8.46% | | | -14.98% | |||||||||||||||
Median: | | | $15.0 | | | 32.26% | | | 8.23% | | | 6.94% | | | 0.73% | |||||||||||||||
Average: | | | $19.9 | | | 35.43% | | | 18.77% | | | 13.22% | | | 9.20% | |||||||||||||||
Upper (Third) Quartile: | | | $25.1 | | | 57.00% | | | 43.48% | | | 26.38% | | | 27.98% | |||||||||||||||
Maximum: | | | $75.0 | | | 76.52% | | | 81.28% | | | 74.04% | | | 65.35% |
As of September 2, 2022 | | | $2.77 |
| | ||
5-Day VWAP | | | $2.87 |
| | ||
10-Day VWAP | | | $2.78 |
| | ||
15-Day VWAP | | | $2.65 |
| | ||
20-Day VWAP | | | $2.55 |
| | ||
3-Month VWAP | | | $2.22 |
i. | reviewed the financial terms of a draft copy of the Merger Agreement, dated as of August 31, 2022, such draft being the latest draft provided to MTS, or the Draft Merger Agreement; |
ii. | reviewed the audited consolidated financial statements of Metacrine contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Metacrine contained in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iii. | reviewed the audited consolidated financial statements of Equillium contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Equillium contained in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iv. | reviewed certain publicly available analyses and forecasts relating to Metacrine and Equillium prepared by equity analysts who report on Metacrine and Equillium; |
v. | reviewed the September Opinion Projections, and utilized per instruction of Metacrine; |
vi. | conducted discussions with members of senior management and representatives of Equillium with respect to the September Opinion Projections; |
vii. | compared the trading and valuation metrics of Equillium with publicly available information concerning other publicly-traded companies that MTS deemed relevant; |
viii. | reviewed the current and historical market prices of the Metacrine common stock and Equillium common stock, respectively, and certain publicly traded securities of such other companies, in each case, that MTS deemed relevant; |
ix. | performed a liquidation analysis of Metacrine based upon information provided to MTS by management of Metacrine; |
x. | reviewed and analyzed, based on the September Opinion Projections, the projected cash flows to be generated by Equillium to determine Equillium’s discounted cash flows; and |
xi. | performed such other financial studies, analyses and investigations, and considered such other information, as MTS deemed appropriate for the purposes of the opinion. |
Trading Period | | | VWAP |
5 Trading Days | | | $0.46 |
20 Trading Days | | | $0.48 |
60 Trading Days | | | $0.49 |
Last 6 Months | | | $0.53 |
Last 12 Months | | | $0.95 |
Since IPO | | | $1.13 |
Metric | | | Metric Range | | | Implied Price Per Share of Equillium |
Weighted Average Cost of Capital; aGVHD POS; illustrative partnership deal POS of 75% (as of 11/30/2022) | | | 13.5% – 17.5%; 40.0% – 80.0% | | | $2.80 – $5.45 |
Weighted Average Cost of Capital; aGVHD POS; illustrative partnership deal POS of 100% (as of 12/31/2022) | | | 13.5% – 17.5%; 40.0% – 80.0% | | | $5.30 – $8.30 |
• | KalVista Pharmaceuticals, Inc. |
• | MoonLake Immunotherapeutics |
• | Allakos Inc. |
• | VectivBio Holding AG |
• | Immunic Inc. |
• | Abivax Societe Anonyme |
• | Akari Therapeutics Plc |
• | X4 Pharmaceuticals, Inc. |
• | Applied Molecular Transport Inc. |
Publicly Traded Comparable Company | | | Equity Value ($ millions) |
VectivBio Holding AG | | | $105 |
Allakos Inc. | | | $135 |
Metric | | | Metric Range ($ millions) | | | Implied Equillium Price Per Share |
Equity Value | | | $105 – $135 | | | $3.10 – $3.90 |
Trading Period | | | VWAP |
5 Trading Days | | | $2.78 |
20 Trading Days | | | $2.79 |
60 Trading Days | | | $2.23 |
Last 6 Months | | | $2.63 |
Last 12 Months | | | $4.31 |
Last Two Years | | | $5.93 |
• | Metacrine Liquidation Per Share Value and Equillium DCF High Per Share Value, as of 11/30/22 |
• | Metacrine Liquidation Per Share Value and Equillium DCF Low Per Share Value, as of 11/30/22 |
• | Metacrine Liquidation Per Share Value and Equillium DCF High Per Share Value, as of 12/31/22 |
• | Metacrine Liquidation Per Share Value and Equillium DCF Low Per Share Value, as of 12/31/22 |
| | Implied Exchange Ratio | | | Implied Metacrine Pro Forma Ownership % | |||||||
Valuation Methodology | | | Low | | | High | | | Low | | | High |
Discounted Cash Flow – 11/30/22 (Using Metacrine Liquidation Value) Sensitized by Equillium Cost of Capital | | | 0.106x | | | 0.207x | | | 12.6% | | | 22.3% |
Discounted Cash Flow – 12/31/22 (Using Metacrine Liquidation Value) Sensitized by Equillium Cost of Capital | | | 0.070x | | | 0.109x | | | 8.5% | | | 12.9% |
Varying Sensitivity Inputs | | | Metacrine Liquidation Analysis Per Share Value | | | Implied Pro Forma Metacrine Per Share Value Range |
Cumulative aGVHD POS (40% – 80%) and Combined Company WACC (13.5% – 17.5%) | | | | | ||
High End of the Collar (0.151x Exchange Ratio) | | | $0.58 | | | $0.52 – $0.89 |
Implied 0.243x Exchange Ratio, (as of 09/01/2022) | | | $0.58 | | | $0.76 – $1.30 |
Low End of the Collar (0.251x Exchange Ratio) | | | $0.58 | | | $0.78 – $1.33 |
| | Based upon Fully-Diluted Shares Provided to MTS | | | Based upon Actual Fully-Diluted Shares | |
Fully-Diluted Shares | | | 47.133 million | | | 44.346 million |
Liquidation Value Per Share | | | $0.58 | | | $0.62 |
Implied Exchange Ratio | | | 0.243X | | | 0.262X |
Implied Offer Price Per Share | | | $0.68 | | | $0.73 |
i. | reviewed the Merger Agreement dated September 6, 2022; |
ii. | reviewed the audited consolidated financial statements of Metacrine contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Metacrine contained in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iii. | reviewed the audited consolidated financial statements of Equillium contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Equillium contained in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iv. | reviewed certain publicly available analyses and forecasts relating to Metacrine and Equillium prepared by equity analysts who report on Metacrine and Equillium; |
v. | reviewed the October Opinion Projections, and utilized per instruction of Metacrine; |
vi. | conducted discussions with members of senior management and representatives of Equillium with respect to the October Opinion Projections; |
vii. | compared the trading and valuation metrics of Equillium with publicly available information concerning other publicly-traded companies that MTS deemed relevant; |
viii. | reviewed the current and historical market prices of the Metacrine common stock and Equillium common stock, respectively, and certain publicly traded securities of such other companies, in each case, that MTS deemed relevant; |
ix. | performed a liquidation analysis of Metacrine based upon information provided to us by management of Metacrine; |
x. | reviewed and analyzed, based on the October Opinion Projections, the projected cash flows to be generated by Equillium to determine Equillium’s discounted cash flows; and |
xi. | performed such other financial studies, analyses and investigations, and considered such other information, as MTS deemed appropriate for the purposes of the opinion. |
Varying Sensitivity Inputs | | | Metacrine Liquidation Analysis Per Share Value | | | Implied Pro Forma Metacrine Per Share Value Range |
Cumulative aGVHD POS (40% – 80%) and the Combined Company WACC (14.0% – 18.0%) | | | | | ||
Low End of the Collar (0.282x Exchange Ratio) | | | $0.58 | | | $1.80 - $3.60 |
Trading Period | | | VWAP |
5 Trading Days | | | $0.40 |
20 Trading Days | | | $0.46 |
60 Trading Days | | | $0.48 |
Last 6 Months | | | $0.47 |
Last 12 Months | | | $0.87 |
Since IPO | | | $1.07 |
Metric | | | Metric Range | | | Implied Price Per Share of Equillium |
Weighted Average Cost of Capital; aGVHD POS (as of 12/31/2022) | | | 14.0% – 18.0%; 40.0% – 80.0% | | | $7.00 – $15.10 |
• | KalVista Pharmaceuticals, Inc. |
• | MoonLake Immunotherapeutics |
• | VectivBio Holding AG |
• | Immunic Inc. |
• | Abivax Societe Anonyme |
• | Akari Therapeutics Plc |
• | X4 Pharmaceuticals, Inc. |
• | Applied Molecular Transport Inc. |
Publicly Traded Comparable Company | | | Equity Value ($ millions) |
Akari Therapeutics Plc | | | $80 |
X4 Pharmaceuticals, Inc. | | | $130 |
Metric | | | Metric Range ($ millions) | | | Implied Equillium Price Per Share |
Equity Value | | | $125 – $175 | | | $3.70 – $5.05 |
Trading Period | | | VWAP |
5 Trading Days | | | $1.82 |
20 Trading Days | | | $2.34 |
60 Trading Days | | | $2.36 |
Last 6 Months | | | $2.34 |
Last 12 Months | | | $2.93 |
Last Two Years | | | $5.63 |
• | Metacrine Liquidation Per Share Value and Equillium DCF High Per Share Value, as of 12/31/22 |
• | Metacrine Liquidation Per Share Value and Equillium DCF Low Per Share Value, as of 12/31/22 |
| | Implied Exchange Ratio | | | Implied Metacrine Pro Forma Ownership % | |||||||
Valuation Methodology | | | Low | | | High | | | Low | | | High |
Discounted Cash Flow – 12/31/22 (Using Metacrine Liquidation Value) Sensitized by Equillium Cost of Capital | | | 0.039x | | | 0. 083x | | | 4.5% | | | 9.4% |
Varying Sensitivity Inputs | | | Total Pro Forma Metacrine Per Share Value Range (in millions) | | | Implied Pro Forma Metacrine Per Share Value Range |
Cumulative aGVHD POS (40% – 80%) and Combined Company WACC (14.0% - 18.0%) | | | | | ||
Low End of the Collar (0.282x Exchange Ratio) | | | $300-$615 | | | $6.30 - $12.70 |
• | At the effective time of the Merger, each Metacrine option and Metacrine RSU will receive the treatment described in the section entitled “Treatment of Metacrine Equity Awards and Warrants” beginning on page 70 of this joint proxy statement/prospectus; |
• | The expectation that following the Closing, Dr. Klassen will be appointed Equillium’s Board and be entitled to receive compensation for his services as a member of Equillium’s Board as further described below under the heading “Future Arrangements with Equillium”; |
• | Dr. Klassen and Mr. York will be eligible to receive severance benefits and accelerated vesting of equity awards in accordance with the Metacrine, Inc. Severance Benefit Plan, or the Severance Plan, as further described below under the heading “Existing Change in Control Severance Arrangements”; and |
• | At the effective time of the Merger, the unvested options held by our non-employee directors will accelerate vesting upon the Closing. |
Holder Name | | | Option/ RSU Grant Date | | | Option Expiration Date | | | Option Exercise Price ($) | | | Number of Shares of Common Stock Underlying Options as of September 15, 2022 | | | Number of Vested Shares of Common Stock Underlying Options as of September 15, 2022 | | | Number of Shares of Common Stock Underlying Options that will Accelerate Vesting upon Effective Time of Merger(1) | | | Dollar Value of Accelerated Options | | | Number of Shares of Common Stock Underlying RSUs as of September 15, 2022 | | | Number of Vested Shares of Common Stock Underlying RSUs as of September 15, 2022 | | | Number of Shares of Common Stock Underlying RSUs that will Accelerate Vesting upon Effective Time of Merger(1) | | | Dollar Value of Accelerated RSUs |
Preston Klassen, M.D., MHS(2) | | | 6/9/2020 | | | 6/8/2030 | | | $6.63 | | | 15,082 | | | 15,082 | | | | | | | | | | | | | 9 | |||||
| | 6/9/2020 | | | 6/8/2030 | | | $6.63 | | | 955,740 | | | 530,997 | | | 424,743 | | | | | | | | | | | ||||||
| | 2/10/2021 | | | 2/9/2031 | | | $10.09 | | | 39,640 | | | 9,910 | | | 29,730 | | | | | | | | | | | ||||||
| | 2/10/2021 | | | 2/9/2031 | | | $10.09 | | | 207,860 | | | 88,059 | | | 119,801 | | | | | | | | | | | ||||||
| | 6/1/2021 | | | | | | | | | | | | | | | 104,500 | | | 104,500 | | | | | |||||||||
| | 2/27/2022 | | | 2/26/2032 | | | $0.47 | | | 842,211 | | | | | 842,211 | | | | | | | | | | | |||||||
| | 2/27/2022 | | | | | | | | | | | | | | | 842,211 | | | | | 842,211 | | | $395,83 | ||||||||
Michael York(2) | | | 12/1/2021 | | | 11/30/2031 | | | $1.17 | | | 235,000 | | | | | 235,000 | | | | | | | | | | | ||||||
| | 2/27/2022 | | | 2/26/2032 | | | $0.47 | | | 210,553 | | | | | 210,553 | | | | | | | | | | | |||||||
| | 2/27/2022 | | | | | | | | | | | | | | | 210,553 | | | | | 210,553 | | | $98,960 | ||||||||
Ronald Evans, Ph.D.(3) | | | 5/24/2020 | | | 5/23/2030 | | | $6.63 | | | 11,764 | | | 8,823 | | | 2,941 | | | $825 | | | | | | | | | ||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | | |||||||
Andrew Guggenhime(3) | | | 5/24/2020 | | | 5/23/2030 | | | $6.63 | | | 11,764 | | | 8,823 | | | 2,941 | | | $825 | | | | | | | | | ||||
| | 12/20/2018 | | | 7/8/2028 | | | $3.01 | | | 62,352 | | | 62,352 | | | | | | | | | | | | | |||||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2022 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | |
Holder Name | | | Option/ RSU Grant Date | | | Option Expiration Date | | | Option Exercise Price ($) | | | Number of Shares of Common Stock Underlying Options as of September 15, 2022 | | | Number of Vested Shares of Common Stock Underlying Options as of September 15, 2022 | | | Number of Shares of Common Stock Underlying Options that will Accelerate Vesting upon Effective Time of Merger(1) | | | Dollar Value of Accelerated Options | | | Number of Shares of Common Stock Underlying RSUs as of September 15, 2022 | | | Number of Vested Shares of Common Stock Underlying RSUs as of September 15, 2022 | | | Number of Shares of Common Stock Underlying RSUs that will Accelerate Vesting upon Effective Time of Merger(1) | | | Dollar Value of Accelerated RSUs |
Richard Heyman, Ph.D.(3) | | | 5/24/2020 | | | 5/23/2030 | | | $6.63 | | | 23,529 | | | 17,647 | | | 5,882 | | | $825 | | | | | | | | | ||||
| | 12/20/2018 | | | 7/12/2028 | | | $3.01 | | | 114,313 | | | 114,313 | | | | | | | | | | | | | |||||||
| | 2/14/2018 | | | 2/13/2028 | | | $1.13 | | | 51,177 | | | 51,177 | | | | | | | | | | | | | |||||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | | |||||||
Jeffrey Jonker(3) | | | 3/17/2021 | | | 3/16/2021 | | | $8.04 | | | 33,000 | | | 15,583 | | | 17,417 | | | $825 | | | | | | | | | ||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | | |||||||
John McHutchison, AO, M.D.(3) | | | 3/5/2020 | | | 3/4/2020 | | | $6.63 | | | 62,352 | | | 51,960 | | | 10,392 | | | $825 | | | | | | | | | ||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | | |||||||
Amir Nashat, Ph.D.(3) | | | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | $825 | | | | | | | | | |||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | | |||||||
Julia Owens, Ph.D.(3) | | | 4/1/2021 | | | 3/31/2031 | | | $5.73 | | | 33,000 | | | 15,583 | | | 17,417 | | | $825 | | | | | | | | | ||||
| | 5/24/2021 | | | 5/23/2031 | | | $4.07 | | | 16,500 | | | 16,500 | | | | | | | | | | | | | |||||||
| | 5/18/2022 | | | 5/17/2032 | | | $0.42 | | | 16,500 | | | | | 16,500 | | | | | | | | | | |
(1) | The accelerated vesting numbers below assume, if applicable, that a qualifying termination of employment occurs at the effective time of the Merger. |
(2) | The executive officer’s equity awards are eligible for the acceleration rights described below under the heading “Existing Change in Control Severance Arrangements.” |
(3) | In accordance with the terms of the director’s equity award agreements, unvested equity awards will accelerate vesting in full at the effective time of the Merger. The dollar value of acccelerated options and RSUs is calculated based on the number of shares covered by the applicable Metacrine option or Metacrine RSU that are accelerating multiplied by $0.47 per share, which amount is the average closing market price of the Metacrine common stock for the first 5 business days following the first public announcement of the Merger on September 6, 2022. |
Name | | | Cash(2) | | | Equity(3) | | | Perquisites(4) | | | Total |
Preston Klassen | | | $1,156,600 | | | $395,839 | | | $28,725 | | | $1,581,164 |
Michael York | | | $588,000 | | | $98,960 | | | $29,244 | | | $716,204 |
(1) | Each of Patricia Millican, Catherine Lee, and Hubert Chen, M.D. served as executive officers for a time during the period beginning with the 2021 fiscal year. The service relationship of each has terminated prior to the Merger, and each is currently ineligible to participate in the Metacrine Severance Plan and to receive any benefits based on or otherwise relating to the Merger other than as a stockholder. |
(2) | The estimated amount for each named executive officer represents the “double-trigger” cash severance payments to which the named executive officer is expected to become entitled under the Metacrine Severance Plan in connection with a qualifying termination during the change of control period, as described in further detail in the section of this joint proxy statement/prospectus captioned “- Financial Interests of Metacrine Directors and Executive Officers in the Merger - Existing Change in Control Severance Arrangements.” The estimated amounts represent a lump sum cash payment equal to the sum of (a) each named executive officer’s base salary for 18 months in the case of Dr. Klassen and 12 months in the case of Mr. York; and (b) each named executive officer’s target annual bonus for the year of termination, based on the annual base salary and target annual bonus amount in effect as of September 2022. The following table sets forth the value of each of the base salary and target annual bonus opportunity severance benefits that may become payable to a named executive officer under the terms of the Metacrine Severance Plan. |
Name | | | Base Salary Severance | | | Target Annual Bonus Severance |
Preston Klassen | | | $867,450 | | | $289,150 |
Michael York | | | $420,000 | | | $168,000 |
(3) | The estimated amounts in this column include the value of “double-trigger” vesting acceleration of the unvested portion of each named executive officer’s outstanding Metacrine options and Metacrine RSUs to which the named executive officer is expected to become entitled under the Metacrine Severance Plan in connection with a qualifying termination during the change of control period, as described in further detail in the section of this joint proxy statement/prospectus captioned “- Financial Interests of Metacrine Directors and Executive Officers in the Merger - Existing Change in Control Severance Arrangements.” |
(4) | The estimated amounts in this column represent, for each named executive officer, company-paid continuation of post-employment, group health coverage for 18 months in the case of Dr. Klassen and 12 months in the case of Mr. York. These amounts are a “double-trigger” severance benefit to which each named executive officer may become entitled to receive under the Metacrine Severance Plan in connection with a qualifying termination of such named executive officer’s employment during the change of control period, as described in further detail in the section of this joint proxy statement/prospectus captioned “- Financial Interests of Metacrine Directors and Executive Officers in the Merger - Existing Change in Control Severance Arrangements,” and such amounts are based on coverage in effect as of September 2022. |
• | tax consequences that may be relevant to holders who may be subject to special treatment under U.S. federal income tax laws, such as financial institutions; tax-exempt organizations; S corporations, partnerships and any other entity or arrangement treated as a partnership or pass-through entity for U.S. federal income tax purposes; insurance companies; mutual funds; dealers in stocks and securities; traders in securities that elect to use the mark-to-market method of accounting for their securities; regulated investment companies; real estate investment trusts; entities subject to the U.S. anti-inversion rules; holders who hold their common stock as “qualified small business stock” for purposes of Sections 1045 and 1202 of the Code; or certain former citizens or long-term residents of the United States; |
• | tax consequences to holders holding the shares as part of a hedging, constructive sale or conversion, straddle or other risk reduction transaction; |
• | tax consequences to holders who received their shares of Metacrine common stock in a compensatory transaction or pursuant to the exercise of options or warrants or whose common stock is subject to employment-based vesting; |
• | tax consequences to U.S. Holders whose “functional currency” is not the U.S. dollar; |
• | tax consequences to holders who hold their common stock through a bank, financial institution or other entity, or a branch thereof, located, organized or resident outside the United States; |
• | tax consequences arising from the Medicare tax on net investment income; |
• | tax consequences to holders subject to special tax accounting rules as a result of any item of gross income with respect to the shares of Metacrine common stock being taken into account in an “applicable financial statement” (as defined in the Code); |
• | the U.S. federal estate, gift or alternative minimum tax consequences, if any; or |
• | any territory, state, local or non-U.S. tax consequences. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any state thereof or the District of Columbia; |
• | an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more United States persons as defined in section 7701(a)(30) of the Code; or (2) has a valid election in effect under applicable Treasury regulations to be treated as a United States person. |
• | the gain is effectively connected with a trade or business of such Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a permanent establishment maintained by such Non-U.S. Holder in the United States), in which case such gain generally will be subject to U.S. federal income tax at rates generally applicable to U.S. persons, and, if the Non-U.S. Holder is a corporation, such gain may also be subject to the branch profits tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty); |
• | such Non-U.S. Holder is an individual who is present in the United States for 183 days or more in the taxable year of the completion of the Merger, and certain other specified conditions are met, in which case such gain will be subject to U.S. federal income tax at a rate of 30 percent (or a lower rate under an applicable income tax treaty); or |
• | Metacrine is or has been a “United States real property holding corporation” as such term is defined in Section 897(c) of the Code, or USRPHC, at any time within the shorter of the five-year period preceding the Merger or such Non-U.S. Holder’s holding period with respect to the applicable shares of Metacrine common stock, or the relevant period, and, if shares of Metacrine common stock are regularly traded on an established securities market (within the meaning of Section 897(c)(3) of the Code), such Non-U.S. Holder owns (directly, indirectly or constructively) more than five percent of Metacrine common stock at any time during the relevant period, in which case such gain will be subject to U.S. federal income tax at rates generally applicable to U.S. persons (as described in the first bullet point above), except that the branch profits tax will not apply. Generally, a corporation is a USRPHC if the fair market value of its U.S. real property interests (as defined in the Code) equals or exceeds 50 percent of the sum of the fair market value of its worldwide real property interests plus its |
• | each of Equillium’s named executive officers; |
• | each of Equillium’s directors; |
• | all of Equillium’s current directors and executive officers as a group; and |
• | each person known by Equillium to be the beneficial owner of more than 5% of the outstanding shares of Equillium common stock. |
| | Beneficial Ownership | ||||
Beneficial Owner | | | Number of Shares (#) | | | Percent of Total (%) |
Greater than 5% stockholders | | | | | ||
Decheng Capital Management III (Cayman) LLC(1) | | | 4,447,308 | | | 12.9% |
Victory Capital Management, Inc.(2) | | | 4,125,667 | | | 12.0% |
Biocon SA(3) | | | 2,316,134 | | | 6.7% |
Named Executive Officers and Directors | | | | | ||
Daniel M. Bradbury(4) | | | 3,867,828 | | | 11.2% |
Bruce D. Steel(5) | | | 4,117,937 | | | 11.8% |
Stephen Connelly, Ph.D.(6) | | | 1,170,117 | | | 3.4% |
Martha J. Demski(7) | | | 88,902 | | | * |
Bala S. Manian, Ph.D.(8) | | | 109,536 | | | * |
Charles McDermott(9) | | | 108,818 | | | * |
Mark Pruzanski, M.D.(10) | | | 88,902 | | | * |
Yu (Katherine) Xu, Ph.D.(11) | | | 24,999 | | | * |
Barbara Troupin, M.D.(12) | | | 8,888 | | | * |
Dolca Thomas, M.D.(13) | | | 4,078 | | | * |
All current executive officers and directors as a group (13 persons)(14) | | | 10,441,648 | | | 29.0% |
* | Less than one percent. |
(1) | Information is based solely on a Schedule 13G filed with the SEC on February 14, 2022 by Decheng Capital Management III (Cayman), LLC, or Decheng. The Schedule 13G reports that Decheng has sole and shared voting and dispositive power with respect to 4,447,308 shares of common stock. The address of Decheng is 3000 Sand Hill Road, Building 2, Suite 110, Menlo Park, CA 94025. |
(2) | Information is based solely on a Schedule 13G/A filed with the SEC on February 1, 2022 by Victory Capital Management, Inc., or Victory. The Schedule 13G/A indicates that Victory has sole voting power with respect to 4,125,667 shares and sole dispositive power with respect to 4,125,667 shares. The address of Victory is 4900 Tiedeman Rd., 4th floor, Brooklyn, OH 44144. |
(3) | The address of Biocon SA is c/o BDO SA, Rue de l’Avenir 2, 2800 Delémont, Switzerland. |
(4) | Consists of (i) 1,838,688 shares of common stock held by BioBrit, of which Mr. Bradbury is the managing member, (ii) 742,399 shares of common stock held by The Bradbury Family 2009 Irrevocable Trust dated September 1, 2009, (iii) 565,454 shares of common stock held by Annette E Bradbury & Daniel M Bradbury TTEE Annette E Bradbury Irrev. Descendant’s Trust dated November 24, 2020, (iv) 565,454 shares of common stock held by Annette E Bradbury & Daniel M Bradbury TTEE Daniel M Bradbury Irrev. Descendant’s Trust dated November 24, 2020 and (v) 155,833 shares of common stock that Mr. Bradbury has a right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(5) | Consists of (i) 48,495 shares of common stock held by Mr. Steel, (ii) 3,232,500 shares of common stock held by Bruce D. Steel, as trustee of the Steel Family Revocable Trust dated June 5, 2002, (iii) 431,000 shares of common stock held by Kevin N. Steel, as trustee of the Sierra Kathleen Steel Trust of January 1, 2005 and (iv) 405,942 shares of common stock that Mr. Steel has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(6) | Consists of (i) 993,000 shares of common stock held by Dr. Connelly and (ii) 177,117 shares of common stock that Dr. Connelly has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(7) | Consists of (i) 23,799 shares of common stock held by the Martha J. Demski Trust Dated October 1, 1994, and (ii) 65,103 shares of common stock that Ms. Demski has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(8) | Consists of (i) 23,799 shares of common stock held by Dr. Manian, and (ii) 85,737 shares of common stock that Dr. Manian has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(9) | Consists of (i) 23,799 shares of common stock held by the McDermott Family Trust Dated November 25, 2002, and (ii) 85,019 shares of common stock that Mr. McDermott has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(10) | Consists of (i) 23,799 shares of common stock held by Dr. Pruzanski, and (ii) 65,103 shares of common stock that Dr. Pruzanski has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(11) | Consists of shares of common stock that Dr. Xu has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(12) | Consists of shares of common stock that Dr. Troupin has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
(13) | Consists of shares of common stock held by Dr. Thomas. |
(14) | Consists of (i) the shares described in Notes (4) through (13) above, (ii) 77,720 shares of common stock held by the Keyes Trust Dated September 10, 2004 and beneficially owned by Jason A. Keyes, our Chief Financial Officer, (iii) 30,664 shares of common stock held by Mr. Keyes, (iv) 177,083 shares of common stock that Mr. Keyes has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options, (v) 111,442 shares of common stock held by Christine Zedelmayer, our Chief Operating Officer, (vi) 170,694 shares of common stock that Ms. Zedelmayer has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options, (vii) 30,525 shares of common stock held by Joel Rothman, our Chief Development Officer, and (viii) 253,515 shares of common stock that Mr. Rothman has the right to acquire from us within 60 days of September 15, 2022 pursuant to the exercise of stock options. |
• | each of Metacrine's named executive officers; |
• | each of Metacrine's directors; |
• | all of Metacrine's current directors and executive officers as a group; and |
• | each person or group who beneficially owned more than 5% of the outstanding shares of Metacrine common stock. |
Name | | | Number of Shares Beneficially Owned | | | Percentage |
Named Executive Officers and Directors: | | | | | ||
Preston Klassen, M.D.(1) | | | 879,609 | | | 2.02% |
Patricia Millican(2) | | | 281,250 | | | 1.12% |
Catherine Lee(3) | | | 92,995 | | | * |
Hubert Chen, M.D.(4) | | | — | | | * |
Richard Heyman, Ph.D.(5) | | | 366,627 | | | * |
Ronald Evans, Ph.D.(6) | | | 460,473 | | | 1.07% |
Andrew Guggenhime(7) | | | 91,793 | | | * |
Jeffrey Jonker(8) | | | 33,917 | | | * |
John McHutchison, M.D.(9) | | | 71,924 | | | * |
Amir Nashat(10) | | | 16,500 | | | * |
Julia Owens, Ph.D.(11) | | | 33,917 | | | * |
All directors and executive officers as a group (9 persons)(12) | | | 1,954,760 | | | 4.39% |
| | | | |||
5% Holders: | | | | | ||
BML Investment Partners, L.P.(13) | | | 1,600,000 | | | 3.76% |
Entities affiliated with Polaris Partners VII, L.P.(14) | | | 2,894,258 | | | 6.80% |
Entities affiliated with ARCH Venture Fund VIII, L.P.(15) | | | 2,940,503 | | | 6.91% |
* | Less than 1% of the outstanding shares of common stock |
(1) | Consists of (i) 184,799 shares of common stock and (ii) 694,810 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. |
(2) | Consists of (i) 26,215 shares of common stock held by Ms. Millican in her personal capacity, (ii) 41,033 shares of common stock held by Millican Family Trust, dated March 10, 2016, or the Millican Trust, and (iii) 214,002 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. Ms. Millican is a trustee of the Millican Trust and may be deemed to beneficially own the shares held by the Millican Trust. Ms. Millican resigned from her position as Chief Financial Officer effective as of March 31, 2022. |
(3) | Consists of 92,995 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. Ms. Lee resigned from her position as EVP, General Counsel and Corporate Secretary effective as of January 28, 2022. |
(4) | Dr. Chen resigned from his position as Chief Medical Officer effective as of December 31, 2021. |
(5) | Consists of (i) 51,177 shares of common stock held by Dr. Heyman in his personal capacity, (ii) 114,506 shares of common stock held by HEYMAN FAMILY 2020 IRREV TR DTD 8/31/20 PAUL L VOGEL TTEE, or the Heyman Trust, and (iii) 200,944 shares of common stock subject to options held by Dr. Heyman in his personal capacity exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. Dr. Heyman is a trustee of the Heyman Trust and may be deemed to beneficially own the shares held by the Heyman Trust. |
(6) | Consists of (i) 424,693 shares of common stock held by Dr. Evans in his personal capacity, (ii) 9,803 shares of common stock held by Evans Potter Rev. Trust 12/29/1989, or the Evans Trust, and (iii) 25,977 shares of common stock subject to options held by Dr. Evans in his personal capacity exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. Dr. Evans is the trustee of the Evans Trust, and may be deemed to beneficially own the shares held by the Evans Trust. |
(7) | Consists of 91,793 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. |
(8) | Consists of 33,917 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. |
(9) | Consists of 71,924 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. |
(10) | Consists of 16,500 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. Also consists of the shares described in Note (12) below. Dr. Nashat is a managing member of Polaris Management, which is the sole general partner of the Polaris Funds, and may be deemed to beneficially own the shares held by Polaris Management. Dr. Nashat disclaims beneficial ownership of all of the shares owned by the Polaris Funds, except to the extent of any pecuniary interest therein. |
(11) | Consists of 33,917 shares of common stock subject to options exercisable as of September 15, 2022 or that will become exercisable within 60 days after such date. |
(12) | Includes 784,978 shares of common stock and 1,169,782 shares underlying currently exercisable options that have already vested or will vest within 60 days of September 15, 2022 held by Metacrine's current directors and executive officers. |
(13) | Based solely on information reported in a Schedule 13G filed with the SEC on February 18, 2022, and consists of 1,600,000 shares held of record by BML Investment Partners, L.P., or BML. BML is a Delaware limited partnership whose sole general partner is BML Capital Management, LLC. The managing member of BML Capital Management, LLC is Braden M. Leonard. As a result, Braden M. Leonard is deemed to be the indirect owner of the shares held directly by BML Investment Partners, L.P. Despite such shared beneficial ownership, the reporting persons disclaim that they constitute a statutory group within the meaning of Rule 13d-5(b)(1) of the Exchange Act. The address for BML is 65 E Cedar – Suite 2, Zionsville, Indiana 46077. |
(14) | Based solely on information reported in a Schedule 13G filed with the SEC on February 12, 2021, and consists of (i) 178,942 shares of common stock held by Polaris Partners Entrepreneurs’ Fund VII, L.P., or Polaris Entrepreneurs, and (ii) 2,715,316 shares of common stock held by Polaris Partners VII, L.P., or Polaris VII and, together with Polaris Entrepreneurs, the Polaris Funds. The sole general partner of Polaris Entrepreneurs and Polaris VII is Polaris Management Co. VII, L.L.C., or Polaris Management, which may be deemed to beneficially own the shares held by Polaris Entrepreneurs and Polaris VII. Amir Nashat, Brian Chee, Bryce Youngren and David Barrett are the managing members of Polaris Management, or the Polaris Managing Members, and they may be deemed to beneficially own the shares held by Polaris Management. Each of Polaris Management and the Polaris Managing Members disclaim beneficial ownership of all of the shares owned by the Polaris Funds, except to the extent of any pecuniary interest therein. The address of Polaris Entrepreneurs and Polaris VII is One Marina Park Drive, 10th Floor, Boston, MA 02210. |
(15) | Based solely on information reported in a Schedule 13G filed with the SEC on February 2, 2021, and consists of (i) 2,781,769 shares of common stock held of record by ARCH Venture Fund VIII, L.P., or Arch Venture Fund VIII, and (ii) 158,734 shares of common stock held of record by ARCH Venture Fund VIII Overage, L.P., or AVF VIII Overage LP. ARCH Venture Partners VIII, L.P., or AVP VIII LP, as the sole general partner of ARCH Venture Fund VIII, may be deemed to beneficially own the 2,781,769 shares of common stock held of record by Arch Venture Fund VIII. ARCH Venture Partners VIII, LLC, or AVP VIII LLC, as the sole general partner of AVP VIII LP and AVF VIII Overage LP, may be deemed to beneficially own the shares held of record by Arch Venture Fund VIII and AVF VIII Overage LP. Record Shares. Keith Crandell, Robert Nelsen and Clinton Bybee, as managing directors of AVP VIII LLC, may be deemed to have shared voting and dispositive power over the shares listed in the table. Messrs. Crandell, Bybee and Nelsen disclaim beneficial ownership of such shares, except to the extent of any pecuniary interest therein. The address of Arch Venture Fund VIII and AVF VIII Overage LP is 8755 West Higgins Road, Suite 1025, Chicago, Illinois 60631. |
• | 200,000,000 shares are designated as common stock; and |
• | 10,000,000 shares are designated as preferred stock. |
EQUILLIUM | | | METACRINE |
Authorized Capital | |||
The aggregate number of shares that Equillium is authorized to issue is 210,000,000, consisting of (i) 200,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share. | | | The aggregate number of shares that Metacrine is authorized to issue is 210,000,000, consisting of (i) 200,000,000 shares of common stock, par value $0.0001 per share, and (ii) 10,000,000 shares of preferred stock, par value $0.0001 per share. |
| | ||
Outstanding Capital | |||
Common Stock. As of the Equillium record date, Equillium had shares of common stock issued and outstanding. | | | Common Stock. As of the Metacrine record date, Metacrine had shares of common stock issued and outstanding. |
EQUILLIUM | | | METACRINE |
Holders of shares of Equillium common stock do not have preemptive, subscription, or conversion rights. | | | Holders of shares of Metacrine common stock do not have preemptive, subscription, or conversion rights. |
| |
EQUILLIUM | | | METACRINE |
Holders of shares of Equillium common stock are entitled to receive dividends when and if declared by the Equillium Board out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends. | | | Holders of shares of Metacrine common stock are entitled to receive dividends when and if declared by the Metacrine Board out of funds legally available therefor, subject to any statutory or contractual restrictions on the payment of dividends. |
| | ||
Preferred Stock. The Equillium Board has the authority to issue up to 10,000,000 shares of preferred stock in one or more series. | | | Preferred Stock. The Metacrine Board has the authority to issue up to 10,000,000 shares of preferred stock in one or more series. |
EQUILLIUM | | | METACRINE |
The Equillium Board has the authority to determine the terms of each series of preferred stock, within the limits of the Equillium charter, the Equillium bylaws and Delaware law, and the Equillium Board could take that action without stockholder approval. These terms include the number of shares in a series, dividend rights, rights in liquidation, terms of redemption, conversion and exchange rights and voting rights, if any. The issuance of shares of Equillium preferred stock could delay or prevent a change in control of Equillium. | | | The Metacrine Board has the authority to determine the terms of each series of preferred stock, within the limits of the Metacrine charter, the Metacrine bylaws and Delaware law, and the Metacrine Board could take that action without stockholder approval. These terms include the number of shares in a series, dividend rights, rights in liquidation, terms of redemption, conversion and exchange rights and voting rights, if any. The issuance of shares of Metacrine preferred stock could delay or prevent a change in control of Metacrine. |
| | ||
As of the record date, Equillium does not have any preferred stock issued and outstanding. | | | As of the record date, Metacrine does not have any preferred stock issued and outstanding. |
| | ||
Voting Rights | |||
Holders of shares of Equillium common stock are entitled to one vote for each share held of record on each matter properly submitted to a vote of stockholders, provided, however, that, except as otherwise required by law, holders of Equillium common stock shall not be entitled to vote on any amendment to the Equillium charter (including any certificate of designation filed with respect to any series of preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to the Equillium charter (including any certificate of designation filed with respect to any series of preferred stock). The vote of the holders of a majority of the voting power of the stock represented at a meeting at which a quorum is present is generally required to take stockholder action, unless a different vote is required by law or specifically required by the Equillium charter or Equillium bylaws or Delaware law or applicable stock exchange rules. | | | Holders of shares of Metacrine common stock are entitled to one vote for each share held of record on each matter properly submitted to a vote of stockholders, provided, however, that, except as otherwise required by law, holders of Metacrine common stock shall not be entitled to vote on any amendment to the Metacrine charter (including any certificate of designation filed with respect to any series of preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to the Metacrine charter (including any certificate of designation filed with respect to any series of preferred stock). The vote of the holders of a majority of the voting power of the stock represented at a meeting at which a quorum is present is generally required to take stockholder action, unless a different vote is required by law or specifically required by the Metacrine charter or Metacrine bylaws or Delaware law or applicable stock exchange rules. |
| | ||
The holders of Equillium preferred stock will have such voting rights (if any) as the Equillium Board establishes, or as provided in the Equillium charter or as determined by Delaware law. | | | The holders of Metacrine preferred stock will have such voting rights (if any) as the Metacrine Board establishes, or as provided in the Metacrine charter or as determined by Delaware law. |
EQUILLIUM | | | METACRINE |
The Equillium charter does not provide for cumulative voting in the election of directors. | | | The Metacrine charter does not provide for cumulative voting in the election of directors. |
EQUILLIUM | | | METACRINE |
Amendments to the Charter | |||
Under Section 242 of the DGCL, the charter may be amended upon a resolution by the Equillium Board and approved by: | | | Under Section 242 of the DGCL, the charter may be amended upon a resolution by the Metacrine Board and approved by: |
• the holders of a majority of the voting power of outstanding shares entitled to vote, and | | | • the holders of a majority of the outstanding shares entitled to vote, and |
• a majority of the outstanding shares of each class entitled to a class vote, if any. | | | • a majority of the outstanding shares of each class entitled to a class vote, if any. |
| | ||
The Equillium charter provides that, for amendments to Article FIFTH, Article SIXTH, and Article EIGHTH of the Equillium charter, any amendment must be approved by the affirmative vote of the holders of holders of at least 66-2/3% of voting power of the outstanding shares of Equillium voting stock entitled to vote generally in the election of directors, voting together as a single class. | | | The Metacrine charter provides that, for amendments Article FIFTH, Article SIXTH, and Article EIGHTH of the Metacrine charter, any amendment must be approved by the affirmative vote of the holders of at least 66-2/3% of the voting power of all of the then outstanding shares of Metacrine's capital stock entitled to vote generally in the election of directors, voting together as a single class. |
| | ||
Amendments to the Bylaws | |||
The Equillium bylaws may be adopted, amended, or repealed by the approval of a majority of the authorized number of directors of the Equillium Board. The Equillium bylaws may also be adopted, amended or repealed with the affirmative vote of at least 66-2/3% of the voting power of all of the then-outstanding shares of Equillium’s capital stock entitled to vote generally in the election of directors, voting together as a single class. | | | The Metacrine bylaws may be adopted, amended, or repealed by the approval of a majority of the authorized number of directors of the Metacrine Board. The Metacrine bylaws may also be adopted, amended or repealed with the affirmative vote of at least 66-2/3% of the voting power of all of the then-outstanding shares of Metacrine's capital stock entitled to vote generally in the election of directors, voting together as a single class. |
| | ||
Special Meetings of Stockholders | |||
Special meetings of the stockholders, other than those required by statute, may be called at any time by (i) the Equillium Board, (ii) the chairperson of the Equillium Board, (iii) the chief executive officer or (iv) the president (in the absence of a chief executive officer), but a special meeting may not be called by any other person or persons. The Equillium Board may cancel, postpone or reschedule any previously scheduled special meeting at any time, before or after the notice for such meeting has been sent to the stockholders. | | | Special meetings of the stockholders may be called, for any purpose as is a proper matter for stockholder action under Delaware law, by (i) the chairperson of the Metacrine Board, (ii) Metacrine's chief executive officer, or (iii) the Metacrine Board pursuant to a resolution adopted by a majority of the total number of authorized directors. |
EQUILLIUM | | | METACRINE |
Stockholder Proposals and Nominations | |||
The Equillium bylaws provide that Equillium stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely | | | The Metacrine bylaws provide that Metacrine stockholders seeking to nominate candidates for election as directors or to bring business before an annual meeting of stockholders must provide timely |
EQUILLIUM | | | METACRINE |
notice of their proposal in writing to the corporate secretary. As specified in the Equillium bylaws, director nominations and the proposal of business to be considered by stockholders may be made only pursuant to a notice of meeting, at the direction of the Equillium Board or by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures that are provided in the Equillium bylaws. | | | notice of their proposal in writing to the corporate secretary. As specified in the Metacrine bylaws, director nominations and the proposal of business to be considered by stockholders may be made only pursuant to a notice of meeting, at the direction of the Metacrine Board or by a stockholder who is entitled to vote at the meeting and who has complied with the advance notice procedures that are provided in the Metacrine bylaws. |
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Generally, to be timely, a stockholder's notice must be received by Equillium’s corporate secretary at the principal executive offices of Equillium not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year's annual meeting. If the date of the annual meeting is more than 30 days before or more than 30 days after that anniversary date, however, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to that annual meeting and not later than the close of business on the 90th day prior to that annual meeting or the 10th day following the day on which Equillium first publicly announces the date of that annual meeting. | | | Generally, to be timely, a stockholder's notice must be received by Metacrine's corporate secretary at the principal executive offices of Metacrine not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year's annual meeting. If the date of the annual meeting is more than 30 days before or more than 30 days after that anniversary date, however, notice by the stockholder must be delivered not earlier than the close of business on the 120th day prior to that annual meeting and not later than the close of business on the 90th day prior to that annual meeting or the 10th day following the day on which Metacrine first publicly announces the date of that annual meeting. |
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In the event a special meeting of stockholders is called for the purpose of electing one or more directors, any stockholder entitled to vote may nominate a person or persons as specified in the Equillium bylaws, but only if the stockholder notice is delivered to the principal executive offices not later than the close of business on the 90th day prior to such special meeting or the 10th day following the day on which public announcement of the date of such special meeting is first made, whichever occurs later. | | | In the event a special meeting of stockholders is called for the purpose of electing one or more directors, any stockholder entitled to vote may nominate a person or persons as specified in the Metacrine bylaws, but only if the stockholder notice is delivered to the principal executive offices not later than the close of business on the 90th day prior to such special meeting or the 10th day following the day on which public announcement of the date of such special meeting is first made, whichever occurs later. |
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Equillium has not adopted a proxy access bylaw. | | | Metacrine has not adopted a proxy access bylaw. |
EQUILLIUM | | | METACRINE |
Action by Written Consent | |||
The Equillium charter and Equillium bylaws prohibit stockholder action by written consent. | | | The Metacrine charter prohibits stockholder action by written consent. |
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Board of Directors | |||
Number of Directors | |||
Equillium's bylaws provide that the number of directors shall be one or more and shall be fixed from time to time by resolution of the Equillium Board. The Equillium Board currently consists of nine directors. | | | The Metacrine charter provides that the number of directors will be fixed from time to time by resolution of the Metacrine Board. The Metacrine Board currently consists of eight directors. |
| |
EQUILLIUM | | | METACRINE |
Classification | |||
The Equillium Board is classified into three classes. Each director is appointed for a three-year term. | | | The Metacrine Board is classified into three classes. Each director is appointed for a three-year term. |
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Removal | |||
The Equillium charter and Equillium bylaws provide that, subject to the rights granted to any series of preferred stock, directors may only be removed for cause and only upon the affirmative vote of holders of at least 66-2/3% of the voting power of all then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class.. | | | The Metacrine charter and Metacrine bylaws provide that, subject to the rights granted to any series of preferred stock, directors may only be removed for cause and only upon the affirmative vote of holders of at least 66-2/3% of the voting power of all then outstanding shares of stock entitled to vote generally in the election of directors, voting together as a single class. |
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Vacancies | |||
The Equillium charter and Equillium bylaws provide that, subject to the rights granted to any series of preferred stock, any vacancies or newly created directorships on the Equillium Board will be filled only by affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director, unless the Equillium Board determines that any such vacancy or newly created directorship shall be filled by stockholders of a majority of the voting power of all then outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors. | | | The Metacrine charter and Metacrine bylaws provide that, subject to the rights granted to any series of preferred stock, any vacancies or newly created directorships on the Metacrine Board will be filled only by affirmative vote of a majority of the directors then in office, even though less than a quorum, or by a sole remaining director, unless the Metacrine Board determines that any such vacancy or newly created directorship shall be filled by stockholders of a majority of the voting power of all then outstanding shares of capital stock of the corporation entitled to vote generally at an election of directors. |
EQUILLIUM | | | METACRINE |
Director Liability and Indemnification | |||
Elimination of Liability of Directors. The Equillium charter provides that the liability of Equillium directors for monetary damages shall be eliminated to the fullest extent under applicable law. | | | Elimination of Liability of Directors. The Metacrine charter provides that the liability of Metacrine directors for monetary damages shall be eliminated to the fullest extent under applicable law. |
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Indemnification of Directors and Officers. The Equillium charter provides that Equillium is authorized to indemnify and advance expenses to, to the fullest extent permitted by Delaware law, directors, officers and agents of Equillium (and any other persons to which applicable law permits Equillium to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. The Equillium charter further provides that if applicable law is amended after approval by the stockholders of Article SIXTH of the Equillium charter to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to Equillium shall be eliminated or limited to the fullest extent | | | Indemnification of Directors and Officers. The Metacrine charter provides that Metacrine is authorized to indemnify and advance expenses to, to the fullest extent permitted by Delaware law, directors, officers and agents of Metacrine (and any other persons to which applicable law permits Metacrine to provide indemnification) through bylaw provisions, agreements with such agents or other persons, vote of stockholders or disinterested directors or otherwise in excess of the indemnification and advancement otherwise permitted by such applicable law. The Metacrine charter further provides that if applicable law is amended after approval by the stockholders of Article SIXTH of the Metacrine charter to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director to Metacrine shall be eliminated or limited to the fullest extent |
EQUILLIUM | | | METACRINE |
permitted by applicable law as so amended. Under Delaware law, Equillium is also authorized to carry directors' and officers' insurance to protect Equillium, its directors, officers and certain employees from some liabilities. | | | permitted by applicable law as so amended. Under Delaware law, Metacrine is also authorized to carry directors' and officers' insurance to protect Metacrine, its directors, officers and certain employees from some liabilities. |
EQUILLIUM | | | METACRINE |
The Equillium bylaws further provide that Equillium will pay the expenses (including attorneys' fees) incurred by an indemnitee in appearing at, participating in or defending any proceeding in advance of its final disposition or a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under the Equillium bylaws, by reason of fact that such indemnitee is or was a director or executive officer of Equillium or is or was serving at the request of Equillium as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, but only upon receipt of an undertaking by the Indemnitee to repay all amounts so advanced if it should be ultimately determined by final judicial decision that the indemnitee is not entitled to indemnification for such expenses under the Metacrine bylaws or otherwise. | | | The Metacrine bylaws further provide that Metacrine will pay the expenses (including attorneys' fees) incurred by an indemnitee in appearing at, participating in or defending any proceeding in advance of its final disposition or a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under the Metacrine bylaws, by reason of fact that such indemnitee is or was a director or executive officer of Metacrine or is or was serving at the request of Metacrine as a director or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of the proceeding, but only upon receipt of an undertaking by the Indemnitee to repay all amounts so advanced if it should be ultimately determined by final judicial decision that the indemnitee is not entitled to indemnification for such expenses under the Metacrine bylaws or otherwise. |
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Although Equillium's charter provides directors with protection from awards for monetary damages for breaches of their duty of care, it does not eliminate such duty. In particular, Equillium's charter has no effect on the availability of equitable remedies such as an injunction or rescission based on a director's breach of his or her duty of care. The provisions of Equillium's charter described above apply to an officer of Equillium only if he or she is a director of Equillium and is acting in his or her capacity as director, and do not apply to officers of Equillium who are not directors. | | | Although Metacrine's charter provides directors with protection from awards for monetary damages for breaches of their duty of care, it does not eliminate such duty. In particular, Metacrine's charter has no effect on the availability of equitable remedies such as an injunction or rescission based on a director's breach of his or her duty of care. The provisions of Metacrine's charter described with respect to directors above apply to an officer of Metacrine only if he or she is a director of Metacrine and is acting in his or her capacity as director, and do not apply to officers of Metacrine who are not directors. |
EQUILLIUM | | | METACRINE |
Registration Rights | |||
| | The holders of certain shares of Metacrine's common stock are entitled to certain demand registration rights. The holders of a majority of the registrable securities then outstanding can request that Metacrine register the offer and sale of their shares. Such request for registration must cover securities with anticipated aggregate proceeds of $50 million. Metacrine is obligated to effect only three such registrations. If Metacrine determines that it would be materially detrimental to Metacrine and its stockholders to effect such a demand registration, it has the right to defer such registration, not more than twice in any 12-month period. |
EQUILLIUM | | | METACRINE |
| | If Metacrine proposes to register the offer and sale of its common stock under the Securities Act, in connection with the public offering of such common stockholders of registrable securities will be entitled to certain “piggyback” registration rights allowing them to include their shares in such registration, subject to certain marketing and other limitations. As a result, whenever Metacrine proposes to file a registration statement under the Securities Act, other than with respect to a demand registration or a registration statement on Forms S-4 or S-8, the holders registrable securities are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration. |
| | METACRINE | |
| | The holders of certain shares of Metacrine's common stock are entitled to certain Form S-3 registration rights and may make a written request that Metacrine register the offer and sale of their shares on a registration statement on Form S-3 if Metacrine is eligible to file a registration statement on Form S-3 so long as the request covers securities the anticipated aggregate public offering price of which, after payment of underwriting discounts and commissions, is at least $1 million. These stockholders may make two requests for registration on Form S-3 in any 12-month period; however, Metacrine will not be required to effect a registration on Form S-3 during the period that is 30 days before Metacrine's good faith estimate of the date of filing of, and ending on a date that is 90 days after the effective date of, a Metacrine-initiated registration, provided, that Metacrine is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective. Additionally, if Metacrine determines that it would be seriously detrimental to its stockholders to effect such a registration, it has the right to defer such registration, not more than twice in any 12-month period, for a period of up to 60 days. | |
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Stockholder Rights Plan | |||
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Equillium does not have a stockholder rights plan currently in effect, but under Delaware law, the Equillium Board could adopt such a plan without stockholder approval. | | | Metacrine does not have a stockholder rights plan currently in effect, but under Delaware law, the Metacrine Board could adopt such a plan without stockholder approval. |
EQUILLIUM | | | METACRINE |
Business Combinations | |||
Business Combinations with Related Persons. Under Delaware law, only a majority of Equillium outstanding voting power is required to approve mergers and other business combinations between Equillium and third parties. Equillium's charter does not require that a higher percentage of outstanding voting power approve such transactions. | | | Business Combinations with Related Persons. Under Delaware law, only a majority of Metacrine outstanding voting power is required to approve mergers and other business combinations between Metacrine and third parties. Metacrine's charter does not require that a higher percentage of outstanding voting power approve such transactions. |
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Equillium has not opted out of Section 203 of the DGCL, which provides that, if a person acquires 15% or more of the outstanding voting stock of a Delaware corporation, thereby becoming an “interested stockholder”, that person may not engage in certain “business combinations” with the corporation, including mergers, purchases and sales of 10% or more of its assets, stock purchases and other transactions pursuant to which the percentage of the corporation's stock owned by the interested stockholder increases (other than on a pro rata basis) or pursuant to which the interested stockholder receives a financial benefit from the corporation, for a period of three years after becoming an interested stockholder unless one of the following exceptions applies: (i) the Equillium Board approved the acquisition of stock pursuant to which the person became an interested stockholder or the transaction that resulted in the person becoming an interested stockholder prior to the time that the person became an interested stockholder; (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder such person owned at least 85% of the outstanding voting stock of the corporation, excluding, for purposes of determining the voting stock outstanding, voting stock owned by directors who are also officers and certain employee stock plans; or (iii) the transaction is approved by the Equillium Board and by the affirmative vote of two-thirds of the outstanding voting stock which is not owned by the interested stockholder. An “interested stockholder” also includes the affiliates and associates of a 15% or more owner and any affiliate or associate of the corporation who was the owner of 15% or more of the outstanding voting stock within the three-year period prior to determine whether a person is an interested stockholder. | | | Metacrine has not opted out of Section 203 of the DGCL, which provides that, if a person acquires 15% or more of the outstanding voting stock of a Delaware corporation, thereby becoming an “interested stockholder”, that person may not engage in certain “business combinations” with the corporation, including mergers, purchases and sales of 10% or more of the assets of the corporation, stock purchases and other transactions pursuant to which the percentage of the corporation's stock owned by the interested stockholder increases (other than on a pro rata basis) or pursuant to which the interested stockholder receives a financial benefit from the corporation, for a period of three years after becoming an interested stockholder unless one of the following exceptions applies: (i) the Metacrine Board approved the acquisition of stock pursuant to which the person became an interested stockholder or the transaction that resulted in the person becoming an interested stockholder prior to the time that the person became an interested stockholder; (ii) upon consummation of the transaction that resulted in the person becoming an interested stockholder such person owned at least 85% of the outstanding voting stock of the corporation, excluding, for purposes of determining the voting stock outstanding, voting stock owned by directors who are also officers and certain employee stock plans; or (iii) the transaction is approved by the Metacrine Board and by the affirmative vote of two-thirds of the outstanding voting stock of Metacrine which is not owned by the interested stockholder. An “interested stockholder” also includes the affiliates and associates of a 15% or more owner and any affiliate or associate of the corporation who was the owner of 15% or more of the outstanding voting stock within the three-year period prior to determine whether a person is an interested stockholder. |
EQUILLIUM | | | METACRINE |
Exclusive Forum | |||
The Equillium bylaws provide that unless Equillium consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of | | | The Metacrine charter provides that unless Metacrine consents in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of |
EQUILLIUM | | | METACRINE |
Equillium, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Equillium to Equillium or Equillium's stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court's having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of Equillium shall be deemed to have notice of and consented to the provisions of such bylaw. This exclusive forum provision will not apply to claims which are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction. For instance, the provision would not apply to suits brought to enforce any liability or duty created by the Exchange Act or the rules and regulations thereunder. | | | Metacrine, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of Metacrine to Metacrine or Metacrine’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, or (iv) any action asserting a claim governed by the internal affairs doctrine shall be a state or federal court located within the state of Delaware, in all cases subject to the court's having personal jurisdiction over the indispensable parties named as defendants. Any person or entity purchasing or otherwise acquiring any interest in shares of capital stock of Metacrine shall be deemed to have notice of and consented to the provisions of such bylaw. This exclusive forum provision will not apply to claims which are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction. For instance, the provision would not apply to suits brought to enforce any liability or duty created by the Exchange Act or the rules and regulations thereunder. |
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Unless Equillium consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of Equillium’s capital stock shall be deemed to have notice of and to have consented to the provisions of Article SEVENTH of the Equillium charter. | | | Unless Metacrine consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Any person or entity purchasing or otherwise acquiring any interest in shares of Metacrine's capital stock shall be deemed to have notice of and to have consented to the provisions of Article SEVENTH of the Metacrine charter. |
• | on or before December 8, 2022, if the proposal is submitted for inclusion in Metacrine’s proxy materials for that meeting pursuant to Rule 14a-8 under the Exchange Act; or |
• | on or after the close of business on January 18, 2023, and on or before the close of business on February 17, 2023, for directors to be nominated or other proposals to be properly presented at the 2023 annual meeting that are not to be included in Metacrine’s proxy statement for the Metacrine 2023 annual meeting (or, if Metacrine holds its 2023 annual meeting of stockholders on a date that is not within 30 days of May 18, 2023, notice must be received by Metacrine’s corporate secretary at 4225 Executive Square, Suite 600, San Diego, CA 92037, no earlier than the close of business on the 120th day prior to, and no later than the close of business on the 90th day prior to, the 2023 annual meeting of stockholders or the 10th day following the day on which public announcement of the date of the Metacrine 2023 annual meeting of stockholders is first made), in which case the notice of the proposal must meet certain requirements set forth in Metacrine’s bylaws and Metacrine will not be required to include the proposal in Metacrine’s proxy materials. All stockholder proposals must comply with Metacrine’s bylaws and SEC regulations, including Rule 14a-8. |
• | Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed on March 23, 2022. |
• | Proxy Statement on Schedule 14A filed April 13, 2022. |
• | Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022 and June 30, 2022, filed on May 12, 2022 and August 15, 2022, respectively. |
• | Current Reports on Form 8-K, filed on February 16, 2022 and amended on May 2, 2022, March 2, 2022, April 25, 2022, May 9, 2022, May 25, 2022, September 6, 2022, September 26, 2022 and September 27, 2022 (other than items, documents or portions of those documents not deemed to be filed). |
• | The description of Equillium common stock set forth in the Registration Statement on Form 8-A filed with the SEC on October 5, 2018, and any amendment or report filed for the purpose of updating such description. |
• | Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed on March 30, 2022. |
• | Proxy Statement on Schedule 14A filed April 7, 2022 and amended on April 7, 2022. |
• | Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2022 and June 30, 2022, filed on May 12, 2022 and August 9, 2022, respectively. |
• | Current Reports on Form 8-K, filed on January 28, 2022, February 10, 2022, February 11, 2022, February 24, 2022, March 3, 2022, March 15, 2022, April 6, 2022, May 18, 2022, August 5, 2022, September 6, 2022, and October 11, 2022 (other than documents or portions of those documents not deemed to be filed). |
• | The description of Metacrine common stock set forth in the Registration Statement on Form 8-A filed with the SEC on September 11, 2022, and any amendment or report filed for the purpose of updating such description. |
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Exhibit A | | | Certificate of Merger | | |
| | if to Parent, Acquisition Sub or Merger Sub | ||||
| | | | |||
| | | | Equillium, Inc. | ||
| | | | 2223 Avenida de la Playa, Suite 108 | ||
| | | | La Jolla, California 92037 | ||
| | | | Attention: Bruce Steel | ||
| | | | Email: bsteel@equilliumbio.com | ||
| | | | |||
| | with copies to (which shall not constitute notice): | ||||
| | | | |||
| | | | Cooley LLP | ||
| | | | 10265 Science Center Drive | ||
| | | | San Diego, CA92121 | ||
| | | | Attention: Tom Coll and Rama Padmanabhan | ||
| | | | Email: collta@cooley.com; padmanabhan@cooley.com | ||
| | | | |||
| | if to the Company | ||||
| | | | |||
| | | | Metacrine, Inc. | ||
| | | | 3985 Sorrento Valley Blvd., Suite C | ||
| | | | San Diego, CA 92121 | ||
| | | | Attention: Preston Klassen | ||
| | | | Email: pklassen@metacrine.com | ||
| | | |
| | with copies to (which shall not constitute notice): | ||||
| | | | |||
| | | | Wilson Sonsini Goodrich & Rosati PC | ||
| | | | One Market Plaza | ||
| | | | San Francisco, CA 94105 | ||
| | | | Attention: Robert Ishii, Miranda Biven and Catherine Riley Tzipori | ||
| | | | Email: rishii@wsgr.com; mbiven@wsgr.com; crileytzipori@wsgr.com |
| | | | | |||||
| | METACRINE, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Preston Klassen | | |||
| | Name: | | | Preston Klassen, M.D., MHS | | |||
| | Its: | | | President and Chief Executive Officer | |
| | | | | |||||
| | EQUILLIUM, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Its: | | | Chief Executive Officer | | |||
| | | | | |||||
| | EQUILLIUM ACQUISITION SUB, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Its: | | | Chief Executive Officer | | |||
| | | | | |||||
| | TRIUMPH MERGER SUB, INC. | |||||||
| |||||||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Its: | | | Chief Executive Officer | |
| | | | | |||||
| | METACRINE, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Preston Klassen | | |||
| | Name: | | | Preston Klassen, M.D., MHS | | |||
| | Title: | | | President and Chief Executive Officer | | |||
| | | | | |||||
| | EQUILLIUM, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Title: | | | Chief Executive Officer | | |||
| | | | | |||||
| | EQUILLIUM ACQUISITION SUB, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Title: | | | Chief Executive Officer | | |||
| | | | | |||||
| | TRIUMPH MERGER SUB, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Title: | | | Chief Executive Officer | |
| | | | | |||||
| | TRIUMPH ACQUISITION SUB, INC. | |||||||
| | | | | |||||
| | By: | | | /s/ Bruce Steel | | |||
| | Name: | | | Bruce Steel | | |||
| | Title: | | | Chief Executive Officer | | |||
| | Date: | | | October 26, 2022 | |
1) | In the course of our analyses for rendering this Opinion, we have made such reviews, analyses, and inquiries as we have deemed necessary and appropriate under the circumstances, including, without limitation; |
2) | Reviewing documents and sources of information as we deemed appropriate, including the Transaction Documents and the Company’s financial statements; |
3) | Reviewing certain operating and financial information, including projections, provided to us by management of the Company relating to the Company’s business prospects, operations, earnings, cash flow, assets, liabilities and prospects of the Company, as furnished to us by the management; |
4) | Reviewing certain filings of the Company and the Target that are publicly available through the Electronic Data Gathering, Analysis, and Retrieval System of the Securities Exchange Commission; |
5) | Meeting or otherwise communicating electronically with certain members of the Company and the Company’s senior and operating management and other advisors to discuss the Company’s operations, historical financial results, future prospects and projected operations and performance; |
6) | Reading other offers for, transactions in and appraisals of the common stock of the Company; |
7) | Evaluating the stock price history and reported events of the Company; |
8) | Reviewing publicly available data and stock market performance data of public companies we deem comparable to the Company; and |
9) | Conducting such other studies, analyses, inquiries and investigations as we deemed appropriate. |
i. | reviewed the financial terms of a draft copy of the Merger Agreement, dated as of August 31, 2022, such draft being the latest draft provided to us (the “Draft Merger Agreement”); |
ii. | reviewed the audited consolidated financial statements of the Company contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of the Company contained in its Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iii. | reviewed the audited consolidated financial statements of Parent contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Parent contained in its Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iv. | reviewed certain publicly available analyses and forecasts relating to the Company and Parent prepared by equity analysts who report on the Company and Parent; |
v. | reviewed certain internal financial analyses and forecasts of the Company prepared by and provided to us by the management of the Company relating to the Company’s business (the “Company Projections”), and utilized per instruction of the Company; |
vi. | reviewed certain internal financial analyses and forecasts of Parent prepared by the management of Parent and adjusted and provided by the management of the Company relating to Parent’s business (the “Parent Projections”, and together with the Company Projections, the “Projections”), and utilized per instruction of the Company; |
vii. | conducted discussions with members of senior management and representatives of the Parent with respect to the Parent Projections; |
viii. | compared the trading and valuation metrics of the Parent with publicly available information concerning other publicly-traded companies, in each case, that we deemed relevant; |
ix. | reviewed the current and historical market prices of the Company Common Stock and Parent Common Stock, respectively, and certain publicly traded securities of such other companies, in each case, that we deemed relevant; |
x. | performed a liquidation analysis of the Company based upon information provided to us by management of the Company; |
xi. | reviewed and analyzed, based on the Parent Projections, the projected cash flows to be generated by Parent to determine Parent’s discounted cash flows; and |
xii. | performed such other financial studies, analyses and investigations, and considered such other information, as we deemed appropriate for the purposes of the opinion. |
i. | reviewed the financial terms of the Merger Agreement; |
ii. | reviewed the audited consolidated financial statements of the Company contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of the Company contained in its Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iii. | reviewed the audited consolidated financial statements of Parent contained in its Annual Reports on Form 10-K for the fiscal years ended December 31, 2021 and December 31, 2020, and unaudited consolidated financial statements of Parent contained in its Quarterly Report on Form 10-Q for the quarters ended March 31, 2022 and June 30, 2022; |
iv. | reviewed certain publicly available analyses and forecasts relating to the Company and Parent prepared by equity analysts who report on the Company and Parent; |
v. | reviewed certain internal financial analyses and forecasts of the Company prepared by and provided to us by the management of the Company relating to the Company’s business (the “Company Projections”), and utilized per instruction of the Company; |
vi. | reviewed certain internal financial analyses and forecasts of Parent prepared by the management of Parent and adjusted and provided by the management of the Company relating to Parent’s business (the “Parent Projections”, and together with the Company Projections, the “Projections”), and utilized per instruction of the Company; |
vii. | conducted discussions with members of senior management and representatives of the Parent with respect to the Parent Projections; |
viii. | compared the trading and valuation metrics of the Parent with publicly available information concerning other publicly-traded companies, in each case, that we deemed relevant; |
ix. | reviewed the current and historical market prices of the Company Common Stock and Parent Common Stock, respectively, and certain publicly traded securities of such other companies, in each case, that we deemed relevant; |
x. | performed a liquidation analysis of the Company based upon information provided to us by management of the Company; |
xi. | reviewed and analyzed, based on the Parent Projections, the projected cash flows to be generated by Parent to determine Parent’s discounted cash flows; and |
xii. | performed such other financial studies, analyses and investigations, and considered such other information, as we deemed appropriate for the purposes of the opinion. |
Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits |
2.1† | | | Agreement and Plan of Merger, dated September 6, 2022, among Equillium, Inc., Metacrine, Inc., Equillium Acquisition Sub, Inc., Triumph Acquisition Sub, Inc., and Triumph Merger Sub, Inc., as amended by Amendment No. 1 to Agreement and Plan of Merger, dated October 26, 2022 (attached as Annex A to the joint proxy statement/prospectus that is part of this registration statement) |
| | ||
| | Amended and Restated Certificate of Incorporation of Equillium, Inc. (incorporated by reference to Exhibit 3.1 of Equillium’s Current Report on Form 8-K, File No. 001-38692, filed on October 16, 2018) | |
| | ||
| | Amended and Restated Bylaws of Equillium, Inc. (incorporated by reference to Exhibit 3.2 of Equillium’s Current Report on Form 8-K, File No. 001-38692, filed on October 16, 2018) | |
| | ||
| | Form of common stock certificate of Equillium, Inc. (incorporated by reference to Exhibit 4.1 of Equillium’s Registration Statement on Form S-1, File No. 333-2227387, as amended, filed on September 17, 2018) | |
| | ||
5.1* | | | Opinion of Cooley LLP regarding the legality of the securities being registered |
| | ||
| | List of subsidiaries of Equillium, Inc. | |
| | ||
23.1* | | | Consent of Cooley LLP (included as part of its opinion filed as Exhibits 5.1 hereto and incorporated herein by reference) |
| | ||
| | Consent of KPMG LLP, independent registered public accounting firm (in respect of Equillium, Inc.) | |
| | ||
| | Consent of Ernst & Young LLP, independent registered public accounting firm (in respect of Metacrine, Inc.) | |
| | ||
| | Powers of Attorney (included on the signature page to this registration statement) | |
| | ||
| | Consent of Vantage Point Advisors, Inc. | |
| | ||
| | Consent of MTS Securities, LLC | |
| | ||
| | Form of Proxy Card for Equillium, Inc. special meeting | |
| | ||
99.5* | | | Form of Proxy Card for Metacrine, Inc. special meeting |
| | ||
| | Filing Fees |
* | To be filed by amendment |
† | Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally to the U.S. Securities and Exchange Commission upon request; provided, however, that the parties may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act for any document so furnished. |
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, as amended (the “Securities Act”); (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 set forth 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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 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, 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, if the registrant is subject to Rule 430C (§ 230.430C of this chapter), 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 (§ 230.430A of this chapter), 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 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 (§ 230.424 of this chapter); |
(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, for purposes of determining any liability under the Securities Act, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each |
(7) | To deliver or cause to be delivered with the prospectus, to each person to whom the prospectus is sent or given, the latest annual report, to security holders that is incorporated by reference in the prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Exchange Act; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or cause to be delivered to each person to whom the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information. |
(8) | 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 the meaning of Rule 145(c), the registrant undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. |
(9) | That every prospectus (i) that is filed pursuant to paragraph (8) above, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to this registration statement and will not be used until such amendment has become effective, and that for the purpose of determining liabilities under the Securities Act, 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. |
(10) | To respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, 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. |
(11) | 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 this registration statement when it became effective. |
(12) | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
| | EQUILLIUM, INC. | | | |||||
| | | | | |||||
| | By: | | | /s/ BRUCE D. STEEL | | |||
| | | | Bruce D. Steel | | ||||
| | | | Chief Executive Officer | |
Signature | | | Title | | | Date |
| | | | |||
/s/ BRUCE D. STEEL | | | Chief Executive Officer and Director (Principal Executive Officer) | | | October 27, 2022 |
Bruce D. Steel | | | ||||
| | | | |||
/s/ JASON A. KEYES | | | Chief Financial Officer (Principal Financial and Accounting Officer) | | | October 27, 2022 |
Jason A. Keyes | | | ||||
| | | | |||
/s/ DANIEL M. BRADBURY | | | Chairman of the Board of Directors | | | October 27, 2022 |
Daniel M. Bradbury | | | | | ||
| | | | |||
/s/ STEPHEN CONNELLY | | | Director | | | October 27, 2022 |
Stephen Connelly, Ph.D. | | | | | ||
| | | | |||
/s/ MARTHA J. DEMSKI | | | Director | | | October 27, 2022 |
Martha J. Demski | | | | | ||
| | | | |||
/s/ BALA S. MANIAN | | | Director | | | October 27, 2022 |
Bala S. Manian, Ph.D. | | | | | ||
| | | | |||
/s/ CHARLES MCDERMOTT | | | Director | | | October 27, 2022 |
Charles McDermott | | | | | ||
| | | |
Security Type
|
Security Class Title
|
Fee Calculation Rule
|
Amount Registered
|
Proposed Maximum Offering Price Per Unit
|
Maximum Aggregate Offering Price
|
Fee Rate
|
Amount of Registration Fee
|
Equity
|
Common Stock, par value $0.0001 per share
|
Other (2)
|
12,350,633 shares(1)
|
$1.65005
|
$20,379,162
|
0.00011020
|
$2,245.79
|
Total
Offering Amounts
|
$20,379,162
|
$2,245.79
|
|||||
Total Fee
Previously Paid
|
—
|
||||||
Total Fee
Offsets
|
—
|
||||||
Net Fee
Due
|
$2,245.79
|
(1) |
Relates to common stock, $0.0001 par value per share, of Equillium, Inc., a Delaware corporation, or Equillium, issuable to holders of common stock, $0.0001 par value per share, restricted stock units, warrants
and options of Metacrine, Inc., a Delaware corporation, Metacrine, in the proposed merger of Triumph Merger Sub, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Equillium, with and into Metacrine, or the Merger. The
amount of Equillium common stock to be registered is based on the estimated number of shares of Equillium common stock that are expected to be issued (or reserved for issuance) pursuant to the Merger, assuming (i) the upfront merger
consideration is equal to approximately $33,346,709, and (ii) Equillium’s price per share of common stock is equal to $2.70, the floor price set by the Agreement and Plan of Merger dated September 6, 2022, by and among Equillium, Metacrine,
Equillium Acquisition Sub, Inc., Triumph Acquisition Sub, Inc., and Triumph Merger Sub, Inc., as amended on October 26, 2022.
|
(2) |
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f) of the Securities Act of 1933, as amended, based upon the average of the high and low prices of a share of Equillium
common stock on October 24, 2022, as reported on The Nasdaq Global Market.
|