Each Reporting Person expects to continuously review such person’s investment in the Issuer and, depending on various factors including but not limited to, the price of the shares of Common Stock, the terms and conditions of the transaction, prevailing market conditions and such other considerations as such Reporting Person deems relevant, may at any time or from time to time, and subject to any required regulatory approvals, acquire additional shares of Common Stock, preferred stock or other securities convertible into or exercisable or exchangeable for Common Stock from time to time on the open market, in privately- negotiated transactions, directly from the Issuer, or upon the exercise or conversion of securities convertible into or exercisable or exchangeable for Common Stock.
Each Reporting Person also may, at any time, subject to compliance with applicable securities laws and regulatory requirements dispose or distribute some or all of its of his Common Stock or such other securities as it or he owns or may subsequently acquire depending on various factors, including but not limited to, the price of the shares, the terms and conditions of the transaction and prevailing market conditions, as well as the liquidity and diversification objectives.
Consistent with their investment intent, each Reporting Person may from time to time discuss with the Issuer’s management, directors, other shareholders and others, the Issuer’s performance, business, strategic direction, capital structure, product development program, prospects and management, as well as various ways of maximizing stockholder value, which may or may not include extraordinary transactions.
Except as indicated herein, no Reporting Person, as a stockholder of the Issuer, has any plans or proposals that relates or would result in any of the transactions or other matters specified in clauses (a) though (j) of Item 4 of Schedule 13D. Each Reporting Person may, at any time and from time to time, review or reconsider its or his position and/or change its or his purpose and/or formulate plans or proposals with respect thereto.
The information set forth in Item 6 below is incorporated by reference to this Item 4.
Item 5. Interest in Securities of the Issuer
| | (a) | The information set forth in rows 11 and 13 of the cover pages to this Schedule 13D is incorporated by reference. The percentage set forth in row 13 is based on (i) 20,084,337 outstanding shares of Common Stock, as reported by the Issuer in its Form 10-Q filed with the Securities and Exchange Commission on November 12, 2020, and (ii) 3,332,669 shares of Common Stock issued in connection with the Merger (as defined below in Item 6). |
| | (b) | The information set forth in rows 7 through 10 of the cover pages to this Schedule 13D is incorporated by reference. |
| | (c) | On January 28, 2021, (i) Xontogeny acquired 543,373 shares of Common Stock and 8,234 shares of the Issuer’s Series X Convertible Preferred Stock (the “Series X Convertible Preferred Stock”), and (ii) Perceptive Xontogeny acquired 1,933,551 shares of Common Stock and 29,303 shares of Series X Convertible Preferred Stock, each in connection with the Merger. The shares of the Issuer were acquired in exchange for all of the shares of Quellis Biosciences, Inc., a Delaware corporation (“Quellis”) held by Xontogeny and Perceptive Xontogeny prior to the Merger. On February 1, 2021, (i) the Master Fund acquired 4,851 shares of Series X Convertible Preferred Stock, and (ii) Perceptive Xontogeny acquired 1,1617 shares of Series X Convertible Preferred Stock, each in connection with the Private Placement (as defined in Item 6 below), at a purchase price of $3,009.53 per share. |
| | (d) | No person (other than the Reporting Persons) is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of Common Stock subject to this Schedule 13D. |
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Merger of Quellis and the Issuer
On January 28, 2021, the Issuer acquired Quellis pursuant to an Agreement and Plan of Merger, dated January 28, 2021 (the “Merger Agreement”), by and among the Issuer, Cabo Merger Sub I, Inc., a Delaware corporation and wholly owned subsidiary of the Issuer (“First Merger Sub”), Cabo Merger Sub II, LLC, a Delaware limited liability company and wholly owned subsidiary of the Issuer (“Second Merger Sub”), and Quellis. Pursuant to the Merger Agreement, First Merger Sub merged with and into Quellis, pursuant to which Quellis was the surviving entity and became a wholly owned subsidiary of the Issuer (the “First Merger”). Immediately following the First Merger, Quellis merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity (the “Second Merger,” together with the First Merger, the “Merger”). Under the terms of the Merger Agreement, the Issuer issued to the stockholders of Quellis (including Perceptive Xontogeny and Xontogeny) an aggregate of 3,332,669 shares of Common Stock and 50,504 shares of Series X Convertible Preferred Stock.
