Filed Pursuant to Rule 424(b)(3)
Registration No. 333-252695
PROSPECTUS
1,460,861 shares of Common Stock
This prospectus covers the offer and resale by the selling stockholders identified in this prospectus of up to an aggregate of 1,460,861 shares of our common stock sold to the selling stockholders in a private placement on December 22, 2020, or the Private Placement.
We are not selling any shares of common stock under this prospectus and will not receive any proceeds from the sale by the selling stockholders of such shares.
Sales of the shares by the selling stockholders may occur at fixed prices, at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. The selling stockholders may sell shares to or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholders, the purchasers of the shares, or both.
We are paying the cost of registering the shares of common stock covered by this prospectus as well as various related expenses. The selling stockholders are responsible for all selling commissions, transfer taxes and other costs related to the offer and sale of their shares.
Our common stock is listed on The Nasdaq Capital Market under the symbol “YMTX.” On February 10, 2021, the last reported sale price of our common stock was $20.80 per share.
Investing in our common stock involves a high degree of risk. Before making an investment decision, please read the information under “Risk Factors” beginning on page 8 of this prospectus and under similar headings in any amendment or supplement to this prospectus or in any filing with the Securities and Exchange Commission that is incorporated by reference herein.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is February 11, 2021
| 1 | ||||
| 2 | ||||
| 4 | ||||
| 10 | ||||
| 11 | ||||
| 12 | ||||
| 15 | ||||
| 18 | ||||
| 23 | ||||
| 23 | ||||
| 23 | ||||
| 23 |
This prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this registration statement, the selling stockholders may sell from time to time in one or more offerings the common stock described in this prospectus.
We have not authorized anyone to provide you with information other than the information that we have provided or incorporated by reference in this prospectus and your reliance on any unauthorized information or representation is at your own risk. This prospectus may be used only in jurisdictions where offers and sales of these securities are permitted. You should assume that the information appearing in this prospectus is accurate only as of the date of this prospectus and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus, or any sale of our common stock. Our business, financial condition and results of operations may have changed since those dates.
Unless otherwise stated, all references in this prospectus to “we,” “us,” “our,” “Yumanity,” the “Company” and similar designations refer to Yumanity Therapeutics, Inc. This prospectus contains references to trademarks belonging to other entities. Solely for convenience, trademarks and trade names referred to in this prospectus, including logos, artwork and other visual displays, may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
1
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus, including the documents that we incorporate by reference, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but are not always, made through the use of words or phrases such as “may,” “will,” “could,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “continue,” and similar expressions, or the negative of these terms, or similar expressions. Accordingly, these statements involve estimates, assumptions, risks and uncertainties which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this prospectus, and in particular those factors referenced in the section “Risk Factors.”
This prospectus contains forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:
| • | the timing, progress and results of preclinical studies and clinical trials for our programs and product candidates, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available and our research and development programs; |
| • | our ability to recruit and enroll suitable patients in our clinical trials; |
| • | the potential attributes and benefits of our product candidates; |
| • | our ability to develop and advance product candidates into, and successfully complete, clinical studies; |
| • | the timing, scope or likelihood of regulatory filings and approvals; |
| • | our ability to obtain and maintain regulatory approval for our product candidates, and any related restrictions, limitations or warnings in the label of an approved product candidate; |
| • | the implementation of our business model and our strategic plans for our business, product candidates, technology and our discovery engine; |
| • | our commercialization, marketing and manufacturing capabilities and strategy; |
| • | the pricing and reimbursement of our product candidates, if approved; |
| • | the rate and degree of market acceptance of our product candidates, if approved; |
| • | our ability to establish or maintain collaborations or strategic relationships or obtain additional funding; |
| • | our ability to contract with and rely on third parties to assist in conducting our clinical trials and manufacturing our product candidates; |
| • | the size and growth potential of the markets for our product candidates, and our ability to serve those markets, either alone or in partnership with others; |
| • | our ability to obtain funding for our operations, including funding necessary to complete further development, approval and, if approved, commercialization of our product candidates; |
| • | the period over which we anticipate our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements; |
| • | the potential for our business development efforts to maximize the potential value of our portfolio; |
2
| • | our ability to compete with other companies currently marketing or engaged in the development of treatments for the indications that we are pursuing for our product candidates; |
| • | our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates; |
| • | our financial performance; |
| • | our ability to retain the continued service of our key professionals and to identify, hire and retain additional qualified professionals; |
| • | our expectations related to the use of our cash reserves; |
| • | our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; |
| • | the impact of laws and regulations, including without limitation recently enacted tax reform legislation; |
| • | our expectations regarding the time during which we are an emerging growth company under the JOBS Act; |
| • | the effect of COVID-19 on the foregoing; and |
| • | other risks and uncertainties, including those listed under the caption “Risk Factors.” |
These forward-looking statements are neither promises nor guarantees of future performance due to a variety of risks and uncertainties and other factors more fully discussed in the “Risk Factors” section in this prospectus, the section of any accompanying prospectus supplement entitled “Risk Factors” and the risk factors described in other documents that we file from time to time with the SEC which are incorporated by reference herein. Given these uncertainties, readers should not place undue reliance on our forward-looking statements. These forward-looking statements speak only as of the date on which the statements were made and are not guarantees of future performance. Except as may be required by applicable law, we do not undertake to update any forward-looking statements after the date of this prospectus or the respective dates of documents incorporated by reference herein or therein that include forward-looking statements.
3
This summary highlights certain information about us, the Private Placement and selected information contained elsewhere in or incorporated by reference into this prospectus. This summary is not complete and does not contain all of the information that you should consider before making an investment decision. For a more complete understanding of our company, you should read and consider carefully the more detailed information included or incorporated by reference in this prospectus and any applicable prospectus supplement, including the factors described under the heading “Risk Factors” beginning on page 8 of this prospectus, as well as the information incorporated herein by reference, before making an investment decision.
Company Overview
We are a clinical stage biopharmaceutical company dedicated to accelerating the revolution in the treatment of neurodegenerative diseases. Neurodegenerative diseases cause a progressive loss of structure and function in the brain, leaving patients with devastating damage to their nervous system and widespread functional impairment. Although treatments may help relieve some of the physical or mental symptoms associated with neurodegenerative diseases, few of the currently available therapies slow or stop the continued loss of neurons, resulting in a critical unmet need. We are specifically focused on developing novel disease-modifying therapies to treat devastating conditions, either with large or orphan disease markets, including Parkinson’s disease, dementia with Lewy bodies, multiple system atrophy, or MSA, amyotrophic lateral sclerosis, or ALS (also known as Lou Gehrig’s disease), frontotemporal lobar degeneration, or FTLD, and Alzheimer’s disease.
Our goal is to advance one new program into the clinic every year. Our lead program, YTX-7739, is now in Phase 1 clinical trials for the potential treatment and disease modification of Parkinson’s disease. YTX-7739 targets an enzyme known as stearoyl-CoA desaturase, or SCD. Inhibition of SCD in multiple cellular systems, including patient-derived neurons, as well as in a novel mouse model of Parkinson’s disease, has been demonstrated to reverse the toxicity of misfolded alpha-synuclein, or α-synuclein, a protein strongly associated with Parkinson’s disease. We recently completed enrollment of a Phase 1 single ascending dose (SAD) study of YTX-7739 in healthy volunteers, which evaluated a broad range of doses of YTX-7739. We initiated a multiple ascending dose (MAD) study in healthy volunteers in the third quarter of 2020 with results anticipated in the first quarter of 2021. A Phase 1b clinical study of YTX-7739 in patients with Parkinson’s disease is planned as a continuation of the MAD study. The Phase 1b study will assess safety, tolerability and pharmacokinetics of YTX-7739 as well as proof of biology by exploring biomarkers of target engagement and potential correlative clinical parameters such as neuroimaging measurements to monitor for early effects of YTX-7739. Early results from the Phase 1b trial are anticipated in the second quarter of 2021. Our second program, YTX-9184, also inhibits SCD but is chemically distinct from YTX-7739. Investigational new drug, or IND-enabling safety pharmacology and toxicological studies for YTX-9184 were initiated in the second quarter of 2020. We anticipate commencing the first in human studies of YTX-9184 in 2021, and intend to develop YTX-9184 for the potential treatment of dementia with Lewy bodies, which is another devasting neurodegenerative disease characterized by the abnormal accumulation of aggregates of α-synuclein. To date, none of our product candidates have advanced into late-stage development or a pivotal clinical study.
At the center of our scientific foundation is our drug discovery engine, which is based on technology licensed from the Whitehead Institute for Biomedical Research, or the Whitehead Institute, an affiliate of the Massachusetts Institute of Technology. This core technology, combined with investments and advancements by us, is designed to enable rapid screening to identify drugs with the potential to modify disease by overcoming toxicity in disease-causing gene networks. Toxicity in many neurodegenerative diseases results from an aberrant accumulation of misfolded proteins in the brain. We leverage our proprietary discovery engine to identify and screen novel drug targets and drug molecules for their ability to protect nerve cells from toxicity arising from misfolded proteins. To date, we have identified over one dozen targets, most of which have not previously been
4
linked to neurodegenerative diseases. We believe this discovery platform will allow us to replenish our pipeline as programs graduate towards the clinic. We will need substantial additional funding to continue to advance its product candidates through clinical trials.
Company Information
We were incorporated in Delaware on December 13, 2006 under the name Proteoguard, Inc. and subsequently changed our name to Proteostasis Therapeutics, Inc. on September 17, 2007. On December 22, 2020, we effected a reverse merger, pursuant to which a wholly owned subsidiary of ours merged with and into Yumanity, Inc. (formerly Yumanity Therapeutics, Inc.), or Yumanity, with Yumanity surviving as a wholly owned subsidiary of ours. On December 22, 2020, we changed our name from Proteostasis Therapeutics, Inc. to Yumanity Therapeutics, Inc. Our principal executive offices are located at 40 Guest Street, Suite 4410, Boston, MA 02135, our telephone number is (617) 409-5300 and our website address is www.yumanity.com. The information contained in or accessible through our website does not constitute part of this prospectus.
Merger Transaction
On December 22, 2020, we completed our previously announced merger transaction with Yumanity in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of August 22, 2020, as amended on November 6, 2020, or the Merger Agreement, by and among us, a wholly-owned subsidiary of ours, or Merger Sub, Yumanity Holdings, LLC, or Holdings, and Yumanity, pursuant to which Merger Sub merged with and into Yumanity, with Yumanity surviving as our wholly owned subsidiary, or the Merger. Immediately prior to the effective time of the Merger, Holdings merged with and into Yumanity and Yumanity continued to exist as the surviving corporation.
On December 22, 2020, in connection with, and prior to the completion of, the Merger, we effected a 1-for-20 reverse stock split of our common stock, or the Reverse Stock Split. Under the terms of the Merger Agreement, we issued 0.2108 shares of our common stock for each share of Yumanity common stock outstanding immediately prior to the Merger, after taking into account the Reverse Stock Split. Immediately after the completion of the Merger, Yumanity changed its name from “Yumanity Therapeutics, Inc.” to “Yumanity, Inc.” and we changed our name from “Proteostasis Therapeutics, Inc.” to “Yumanity Therapeutics, Inc.” Yumanity was determined to be the accounting acquirer, our historical financials will be those of Yumanity and the business conducted by us became the business conducted by Yumanity.
Private Placement
On December 14, 2020, we entered into a Subscription Agreement with the selling stockholders named in this prospectus, or the Subscription Agreement, pursuant to which we sold and issued shares of our common stock, or the Private Placement, promptly after the closing of the Merger. At the closing of the Private Placement, we entered into a Registration Rights Agreement, dated December 22, 2020, with the selling stockholders named in this prospectus, or the Registration Rights Agreement.
At the closing of the Private Placement, on December 22, 2020 we sold and issued to the selling stockholders 1,460,861 shares of our common stock at a purchase price of $23.00 per share. The total purchase price paid by the selling stockholders in the closing was approximately $33.6 million.
Under the terms of the Registration Rights Agreement, we agreed to prepare and file, within 60 days after the closing, one or more registration statements with the SEC to register for resale the shares of our common stock issued under the Subscription Agreement, and generally to cause the applicable registration statements to become effective within 90 days after the closing of the Private Placement.
5
Selected Financial Data of Proteostasis Therapeutics, Inc. Reflecting Reverse Stock Split
On December 22, 2020, in connection with, and prior to the completion of, the Merger, the Company effected a 1-for-20 reverse stock split of its common stock (the “Reverse Stock Split”). No fractional shares have been issued in the Reverse Stock Split and the remaining fractions were paid out in cash.
Please see below selected financial data presenting selected share and per share data reflecting the effect of the 1-for-20 reverse stock split on all periods previously reported. We derived the selected financial data from our consolidated financial statements included in our Annual Report on Form 10-K filed with the SEC on March 10, 2020 and our consolidated financial statements included in our Quarterly Reports on Form 10-Q filed with the SEC on May 15, 2020, August 6, 2020 and November 16, 2020, as adjusted to reflect the Reverse Stock Split for all periods presented. Our results for interim periods are not necessarily indicative of the results that may be expected for the entire year.
AS REPORTED
| Years Ended December 31, | ||||||||
| (in thousands, except share and per share amounts) | 2019 | 2018 | ||||||
Net loss | $ | (59,125 | ) | $ | (61,832 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (1.16 | ) | $ | (1.61 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 51,139,531 | 38,495,103 | ||||||
Common shares outstanding at period end | 52,116,629 | 50,808,422 | ||||||
| For the Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (9,878 | ) | $ | (14,418 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (0.19 | ) | $ | (0.28 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 52,146,633 | 50,976,907 | ||||||
Common shares outstanding at period end | 52,147,656 | 51,043,158 | ||||||
| For the Three Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (8,893 | ) | $ | (20,018 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (0.17 | ) | $ | (0.39 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 52,147,656 | 51,097,456 | ||||||
Common shares outstanding at period end | 52,147,656 | 51,099,307 | ||||||
| For the Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (18,771 | ) | $ | (34,436 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (0.36 | ) | $ | (0.67 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 52,147,145 | 51,037,514 | ||||||
Common shares outstanding at period end | 52,147,656 | 51,099,307 | ||||||
6
| For the Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (8,169 | ) | $ | (12,833 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (0.16 | ) | $ | (0.25 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 52,177,557 | 51,099,307 | ||||||
Common shares outstanding at period end | 52,180,380 | 51,128,976 | ||||||
| For the Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (26,940 | ) | $ | (47,269 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (0.52 | ) | $ | (0.93 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 52,157,355 | 51,058,339 | ||||||
Common shares outstanding at period end | 52,180,380 | 51,128,976 | ||||||
AS ADJUSTED FOR ONE-FOR-TWENTY REVERSE STOCK SPLIT
| (in thousands, except share and per share amounts) | Years Ended December 31, | |||||||
| 2019 | 2018 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (59,125 | ) | $ | (61,832 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (23.12 | ) | $ | (32.12 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,556,976 | 1,924,755 | ||||||
Common shares outstanding at period end | 2,605,831 | 2,540,421 | ||||||
| For the Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (9,878 | ) | $ | (14,418 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (3.79 | ) | $ | (5.66 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,607,331 | 2,548,845 | ||||||
Common shares outstanding at period end | 2,607,382 | 2,552,157 | ||||||
| For the Three Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (8,893 | ) | $ | (20,018 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (3.41 | ) | $ | (7.84 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,607,382 | 2,554,872 | ||||||
Common shares outstanding at period end | 2,607,382 | 2,554,965 | ||||||
| For the Six Months Ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (18,771 | ) | $ | (34,436 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (7.20 | ) | $ | (13.49 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,607,357 | 2,551,875 | ||||||
Common shares outstanding at period end | 2,607,382 | 2,554,965 | ||||||
7
| For the Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (8,169 | ) | $ | (12,833 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (3.13 | ) | $ | (5.02 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,608,877 | 2,554,965 | ||||||
Common shares outstanding at period end | 2,609,019 | 2,556,448 | ||||||
| For the Nine Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| (unaudited) | ||||||||
Net loss | $ | (26,940 | ) | $ | (47,269 | ) | ||
Net loss per share attributable to common stockholders-basic and diluted | $ | (10.33 | ) | $ | (18.52 | ) | ||
Weighted-average common shares outstanding, basic and diluted | 2,607,867 | 2,552,916 | ||||||
Common shares outstanding at period end | 2,609,019 | 2,556,448 | ||||||
Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (JOBS Act). As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:
| • | reduced disclosure about our executive compensation arrangements; |
| • | no non-binding advisory votes on executive compensation or golden parachute arrangements; and |
| • | exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting. |
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
We have irrevocably elected to “opt out” of the exemption for the delayed adoption of certain accounting standards and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.
Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company” if the market value of our common stock held by non-affiliates is below $250 million (or $700 million if our annual revenue is less than $100 million) as of June 30 in any given year, which would allow us to take advantage of many of the same exemptions from disclosure requirements, including disclosure of only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
8
The Offering
Common stock offered by the selling stockholders | 1,460,861 shares | |
Terms of the offering | Each selling stockholder will determine when and how it will sell the common stock offered in this prospectus, as described in “Plan of Distribution.” | |
Use of proceeds | We will not receive any proceeds from the sale of the shares of common stock covered by this prospectus. | |
Risk factors | See “Risk Factors” beginning on page 8, for a discussion of factors you should carefully consider before deciding to invest in our common stock. | |
Nasdaq Capital Market symbol | YMTX | |
The selling stockholders named in this prospectus may offer and sell up to 1,460,861 shares of our common stock. Throughout this prospectus, when we refer to the shares of our common stock being registered on behalf of the selling stockholders for offer and resale, we are referring to the shares of common stock issued to the selling stockholders in the Private Placement as described above. When we refer to the selling stockholders in this prospectus, we are referring to the selling stockholders identified in this prospectus and, as applicable, their permitted transferees or other successors-in-interest that may be identified in a supplement to this prospectus or, if required, a post-effective amendment to the registration statement of which this prospectus is a part.
9
Investing in our securities involves a high degree of risk. You should carefully consider the risks described below and all other information contained or incorporated by reference into this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained in the applicable prospectus supplement before deciding whether to purchase any of the securities being registered pursuant to the registration statement of which this prospectus is a part. Our business, financial condition or results of operations could be materially adversely affected by the materialization of any of these risks. The trading price of our securities could decline due to the materialization of any of these risks, and you may lose all or part of your investment. Additional risks not presently known to us or that we currently believe are immaterial may also significantly impair our business operations.
Risks Related to this Offering
The number of shares being registered for sale is significant in relation to the number of outstanding shares of our Common Stock.
We have filed a registration statement of which this prospectus is a part to register the shares offered hereunder for sale into the public market by the selling stockholders. Upon registration of the shares of common stock offered hereunder, 1,026,081 shares of the common stock registered hereunder may be resold in the public market immediately without restriction. The remaining 434,780 shares of the common stock registered hereunder are currently restricted as a result of lock-up agreements but will be freely tradeable 180 days after December 22, 2020, the closing date of the Merger. These shares represent a large number of shares of our common stock, and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period the registration statement remains effective and could also affect our ability to raise equity capital.
10
We are registering the resale of 1,460,861 shares of common stock held by the selling stockholders identified below, to permit each of them, or their permitted transferees or other successors-in-interest that may be identified in a supplement to this prospectus or, if required, a post-effective amendment to the registration statement of which this prospectus is a part, to resell or otherwise dispose of these shares in the manner contemplated under the section entitled “Plan of Distribution” in this prospectus (as may be supplemented and amended).
The selling stockholders may sell some, all or none of their shares. We do not know how long the selling stockholders will hold the shares before selling them, and we currently have no agreements, arrangements or understandings with the selling stockholders regarding the sale or other disposition of any of the shares. The shares covered hereby may be offered from time to time by the selling stockholders. As a result, we cannot estimate the number of shares of common stock each of the selling stockholders will beneficially own after termination of sales under this prospectus. In addition, each of the selling stockholders may have sold, transferred or otherwise disposed of all or a portion of its shares of common stock since the date on which it provided information for the table below.
Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to our common stock. Generally, a person “beneficially owns” shares of our common stock if the person has or shares with others the right to vote those shares or to dispose of them, or if the person has the right to acquire voting or disposition rights within 60 days.
The information in the table below and the footnotes thereto regarding shares of common stock to be beneficially owned after the offering assumes the sale of all shares being offered by the selling stockholders under this prospectus. The percentage of shares owned prior to and after the offering is based on 10,193,831 shares of common stock outstanding as of January 25, 2021.
| Common Stock Beneficially Owned Before Offering | Common Stock that may be Offered Pursuant to Prospectus(2) | Common Stock Beneficially Owned After Offering | ||||||||||||||
Name and Address(1) | Number | Percentage | ||||||||||||||
Fidelity Mt. Vernon Street Trust: Fidelity Series Growth Company Fund (3) | 165,225 | 19,530 | 73,696 | * | ||||||||||||
Fidelity Mt. Vernon Street Trust: Fidelity Growth Company Fund (3) | 325,344 | 106,446 | 218,898 | 2.15 | % | |||||||||||
Fidelity Growth Company Commingled Pool | 332,096 | 115,573 | 216,523 | 2.12 | % | |||||||||||
Fidelity Mt. Vernon Street Trust: Fidelity Growth Company K6 Fund (3) | 32,547 | 19,318 | 13,229 | * | ||||||||||||
Fidelity Select Portfolios: Biotechnology Portfolio (3) | 305,982 | 173,913 | 132,069 | 1.30 | % | |||||||||||
Franklin Templeton Investment Funds – Franklin Biotechnology Discovery Fund (4) | 126,586 | 126,586 | — | — | ||||||||||||
Franklin Strategic Series – Franklin Biotechnology Discovery Fund (4) | 90,804 | 90,804 | — | — | ||||||||||||
Invus Public Equities, L.P. | 217,391 | 217,391 | — | — | ||||||||||||
Stonepine Capital, LP | 252,725 | 130,434 | 122,291 | 1.20 | % | |||||||||||
Sphera Biotech Master Fund, LP | 130,434 | 130,434 | — | — | ||||||||||||
Altium Growth Fund, LP | 108,695 | 108,695 | — | — | ||||||||||||
Ikarian Capital, LLC | 219,470 | 86,956 | 132,514 | 1.30 | % | |||||||||||
12
| Common Stock Beneficially Owned Before Offering | Common Stock that may be Offered Pursuant to Prospectus(2) | Common Stock Beneficially Owned After Offering | ||||||||||||||
Name and Address(1) | Number | Percentage | ||||||||||||||
Franklin Berger(5) | 310,266 | 65,217 | 245,049 | 2.40 | % | |||||||||||
Maven Investment Partners US Limited | 43,478 | 43,478 | — | * | ||||||||||||
Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B(6) | 21,739 | 21,739 | — | * | ||||||||||||
David Arkowitz(7) | 6,747 | 4,347 | 2,400 | * | ||||||||||||
| * | Less than one percent. |
| (1) | If required, information about other selling stockholders, except for any future transferees, pledgees, donees or successors of the selling stockholders named in the table above, will be set forth in a prospectus supplement or amendment to the registration statement of which this prospectus is a part. Additionally, post-effective amendments to the registration statement will be filed to disclose any material changes to the plan of distribution from the description contained in this prospectus. |
| (2) | Assumes sale of all shares available for sale under this prospectus and no further acquisitions of shares by the selling stockholders. |
| (3) | These accounts are managed by direct or indirect subsidiaries of FMR LLC. Abigail P. Johnson is a Director, the Chairman, the Chief Executive Officer and the President of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees. |
| (4) | Franklin Advisers, Inc., or FAV, an indirectly wholly owned subsidiary of a publicly traded company, Franklin Resources, Inc., or FRI, may be deemed to be the beneficial owner of these securities for purposes of Rule 13d-3 under the Exchange Act in its capacity as the investment adviser to Franklin Strategic Series - Franklin Biotechnology Discovery Fund and Franklin Templeton Investment Funds - Franklin Biotechnology Discovery Fund pursuant to investment management contracts that grant investment and/or voting power to FAV. When an investment management contract (including a sub-advisory agreement) delegates to FAV investment discretion or voting power over the securities held in the investment advisory accounts that are subject to that agreement, FRI treats FAV as having sole investment discretion or voting authority, as the case may be, unless the agreement specifies otherwise. Accordingly, FAV reports for purposes of Section 13(d) of the Exchange Act that it has sole investment discretion and voting authority over the securities covered by any such investment management agreement, unless otherwise specifically noted. |
| (5) | Includes 7,106 shares of common stock issuable upon the exercise of options exercisable within 60 days of January 25, 2021. |
13
| (6) | Ayrton Capital LLC, the investment manager to Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B, has discretionary authority to vote and dispose of the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B and may be deemed to be the beneficial owner of these shares. Waqas Khatri, in his capacity as Managing Member of Ayrton Capital LLC, may also be deemed to have investment discretion and voting power over the shares held by Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B. Ayrton Capital LLC and Mr. Khatri each disclaim any beneficial ownership of these shares. The address of Ayrton Capital LLC is 55 Post Rd West, 2nd Floor, Westport, CT 06880. |
| (7) | Includes 2,400 shares of common stock issuable upon the exercise of options exercisable within 60 days of January 25, 2021. |
Relationship with Selling Stockholders
As discussed in greater detail above under the section “Prospectus Summary—Private Placement”, on December 14, 2020, we entered into the Subscription Agreement with the selling stockholders, pursuant to which, on December 22, 2020, we sold shares of common stock to the selling stockholders and agreed with the selling stockholders to file a registration statement to enable the resale of the shares of common stock covered by this prospectus. Other than David Arkowitz, who is a member of our Board of Directors, and Franklin Berger, who is a former member of our Board of Directors, none of the selling stockholders or any persons having control over such selling stockholders has held any position or office with us or our affiliates within the last three years or has had a material relationship with us or any of our predecessors or affiliates within the past three years, other than as a result of the ownership of our shares or other securities.
14
We are registering the shares of common stock issued to the selling stockholders to permit the resale of these shares of common stock by the holders of the shares of common stock from time to time after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling stockholders of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.
The selling stockholders may sell all or a portion of the shares of common stock beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale, in the over-the-counter market or in transactions otherwise than on these exchanges or systems or in the over-the-counter market and in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions. The selling stockholders may use any one or more of the following methods when selling shares:
| • | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| • | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| • | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| • | an exchange distribution in accordance with the rules of the applicable exchange; |
| • | privately negotiated transactions; |
| • | settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
| • | broker-dealers may agree with the selling stockholders to sell a specified number of such shares at a stipulated price per share; |
| • | through the writing or settlement of options or other hedging transactions, whether such options are listed on an options exchange or otherwise; |
| • | a combination of any such methods of sale; and |
| • | any other method permitted pursuant to applicable law. |
The selling stockholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the Securities Act, as permitted by that rule, or Section 4(1) under the Securities Act, if available, rather than under this prospectus, provided that they meet the criteria and conform to the requirements of those provisions.
Broker-dealers engaged by the selling stockholders may arrange for other broker-dealers to participate in sales. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal. Such commissions will be in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction will not be in excess of a customary brokerage commission in compliance with FINRA Rule 5110.
15
In connection with sales of the shares of common stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and if such short sale shall take place after the date that this Registration Statement is declared effective by the Commission, the selling stockholders may deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares, to the extent permitted by applicable law. The selling stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction). Notwithstanding the foregoing, the selling stockholders have been advised that they may not use shares registered on this registration statement to cover short sales of our common stock made prior to the date the registration statement, of which this prospectus forms a part, has been declared effective by the SEC.
The selling stockholders may, from time to time, pledge or grant a security interest in some or all of the warrants or shares of common stock owned by them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act of 1933, as amended, amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.
The selling stockholders and any broker-dealer or agents participating in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act in connection with such sales. In such event, any commissions paid, or any discounts or concessions allowed to, any such broker-dealer or agent and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Selling stockholders who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery requirements of the Securities Act and may be subject to certain statutory liabilities of, including but not limited to, Sections 11, 12 and 17 of the Securities Act and Rule 10b-5 under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Each selling stockholder has informed the Company that it is not a registered broker-dealer and does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the common stock. Upon the Company being notified in writing by a selling stockholder that any material arrangement has been entered into with a broker-dealer for the sale of common stock through a block trade, special offering, exchange distribution or secondary distribution or a purchase by a broker or dealer, a supplement to this prospectus will be filed, if required, pursuant to Rule 424(b) under the Securities Act, disclosing (i) the name of each such selling stockholder and of the participating broker-dealer(s), (ii) the number of shares involved, (iii) the price at which such the shares of common stock were sold, (iv) the commissions paid or discounts or concessions allowed to such broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not conduct any investigation to verify the information set out or incorporated by reference in this prospectus, and (vi) other facts material to the transaction.
Under the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.
16
There can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement, of which this prospectus forms a part.
Each selling stockholder and any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares of common stock.
We will pay all expenses of the registration of the shares of common stock pursuant to the Registration Rights Agreement, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky” laws; provided, however, that each selling stockholder will pay all underwriting discounts and selling commissions, if any, and any legal expenses incurred by it. We will indemnify the selling stockholders against certain liabilities, including some liabilities under the Securities Act, in accordance with a Registration Rights Agreement, or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against civil liabilities, including liabilities under the Securities Act, that may arise from any written information furnished to us by the selling stockholders specifically for use in this prospectus, in accordance with the related Registration Rights Agreements, or we may be entitled to contribution.
17
The following description sets forth certain material terms and provisions of our securities that are registered under Section 12 of the Securities Exchange Act of 1934, as amended. This description also summarizes relevant provisions of Delaware law. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, the applicable provisions of Delaware law and our amended and restated certificate of incorporation and our amended and restated by-laws, copies of which are incorporated by reference herein. We encourage you to read our amended and restated certificate of incorporation, our amended and restated by-laws and the applicable provisions of Delaware law for additional information.
Authorized Capital Stock
We are authorized to issue 125,000,000 shares of common stock, par value $0.001 per share, and 5,000,000 shares of preferred stock, par value $0.001 per share.
Common Stock
We are authorized to issue one class of common stock. Holders of our common stock are entitled to one vote for each share of common stock held of record for the election of directors and on all matters submitted to a vote of stockholders. Holders of our common stock are entitled to receive dividends ratably, if any, as may be declared by our board of directors out of legally available funds, subject to any preferential dividend rights of any preferred stock then outstanding.
Upon our dissolution, liquidation or winding up, holders of our common stock are entitled to share ratably in our net assets legally available after the payment of all our debts and other liabilities, subject to the preferential rights of any preferred stock then outstanding. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future. Except as described under “Antitakeover Effects of Delaware Law and Provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws” below, a majority vote of the holders of common stock is generally required to take action under our amended and restated certificate of incorporation and amended and restated by-laws.
The transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC.
Our common stock is listed on The Nasdaq Capital Market under the trading symbol “YMTX.”
Preferred Stock
Our board of directors are authorized, without action by the stockholders, to designate and issue up to an aggregate of 5,000,000 shares of preferred stock in one or more series. Our board of directors can designate the rights, preferences and privileges of the shares of each series and any of its qualifications, limitations or restrictions. Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible future financings and acquisitions and other corporate purposes could, under certain circumstances, have the effect of restricting dividends on our common stock, diluting the voting power of our common stock, impairing the liquidation rights of our common stock, or delaying, deferring or preventing a change in control of our company, which might harm the market price of our common stock.
18
If a specific series of preferred stock is offered under this prospectus, we will describe the terms of the preferred stock in the prospectus supplement for such offering and will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the extent required, this description will include:
| • | the title and stated value; |
| • | the number of shares offered, the liquidation preference per share and the purchase price; |
| • | the dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends; |
| • | whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate; |
| • | the procedures for any auction and remarketing, if any; |
| • | the provisions for a sinking fund, if any; |
| • | the provisions for redemption, if applicable; |
| • | any listing of the preferred stock on any securities exchange or market; |
| • | whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be calculated) and conversion period; |
| • | whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated) and exchange period; |
| • | voting rights, if any, of the preferred stock; |
| • | a discussion of any material and/or special United States federal income tax considerations applicable to the preferred stock; |
| • | the relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of Proteostasis; and |
| • | any material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of Proteostasis. |
Anti-Takeover Provisions of Our Certificate of Incorporation and By-laws and Delaware Law
Certain provisions of the Delaware General Corporation Law and of our amended and restated certificate of incorporation and amended and restated by-laws could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and, as a consequence, they might also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored hostile takeover attempts. These provisions are also designed in part to encourage anyone seeking to acquire control of us to first negotiate with our board of directors. These provisions might also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders might otherwise deem to be in their best interests. However, we believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our common stock, because, among other reasons, the negotiation of such proposals could improve their terms.
Delaware Takeover Statute
We are subject to the provisions of Section 203 of the Delaware General Corporation Law. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an
19
“interested stockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:
| • | before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
| • | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or |
| • | at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least 66 2/3% of the outstanding voting stock which is not owned by the interested stockholder. |
Section 203 defines a business combination to include:
| • | any merger or consolidation involving the corporation and the interested stockholder; |
| • | any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation; |
| • | subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder; |
| • | subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; or |
| • | the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation. |
In general, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstanding voting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.
Provisions of our Amended and Restated Certificate of Incorporation and Amended and Restated By-laws
Our amended and restated certificate of incorporation and amended and restated by-laws include a number of provisions that may have the effect of delaying, deferring or discouraging another party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts. These provisions include the items described below.
Board composition and filling vacancies
In accordance with our amended and restated certificate of incorporation, our board is divided into three classes serving staggered three-year terms, with one class being elected each year. Our amended and restated certificate of incorporation also provides that directors may be removed only for cause and then only by the affirmative vote of the holders of 75% or more of the shares then entitled to vote at an election of directors. Furthermore, any vacancy on our board of directors, however occurring, including a vacancy resulting from an increase in the size of our board, may only be filled by the affirmative vote of a majority of our directors then in office even if less than a quorum.
20
No written consent of stockholders
Our amended and restated certificate of incorporation provides that all stockholder actions are required to be taken by a vote of the stockholders at an annual or special meeting, and that stockholders may not take any action by written consent in lieu of a meeting. This limit may lengthen the amount of time required to take stockholder actions and would prevent the amendment of our by-laws or removal of directors by our stockholder without holding a meeting of stockholders.
Meetings of stockholders
Our amended and restated by-laws provide that only a majority of the members of our board of directors then in office may call special meetings of stockholders and only those matters set forth in the notice of the special meeting may be considered or acted upon at a special meeting of stockholders. Our amended and restated by-laws limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting.
Advance notice requirements
Our amended and restated by-laws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at our principal executive offices not less than 90 days or more than 120 days prior to the first anniversary date of the annual meeting for the preceding year. The notice must contain certain information specified in our amended and restated by-laws.
Amendment to certificate of incorporation and by-laws
As required by the Delaware General Corporation Law, any amendment of our amended and restated certificate of incorporation must first be approved by a majority of our board of directors, and if required by law or our amended and restated certificate of incorporation, must thereafter be approved by a majority of the outstanding shares entitled to vote on the amendment, and a majority of the outstanding shares of each class entitled to vote thereon as a class, except that the amendment of the provisions relating to stockholder action, directors, limitation of liability and the amendment of our amended and restated certificate of incorporation must be approved by not less than 75% of the outstanding shares entitled to vote on the amendment, and not less than 75% of the outstanding shares of each class entitled to vote thereon as a class. Our amended and restated by-laws may be amended by the affirmative vote of a majority vote of the directors then in office, subject to any limitations set forth in the amended and restated by-laws; and may also be amended by the affirmative vote of at least 75% of the outstanding shares entitled to vote on the amendment, or, if the board of directors recommends that the stockholders approve the amendment, by the affirmative vote of the majority of the outstanding shares entitled to vote on the amendment, in each case voting together as a single class.
Undesignated preferred stock
Our amended and restated certificate of incorporation provides for authorized shares of preferred stock. The existence of authorized but unissued shares of preferred stock may enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise. For example, if in the due exercise of its fiduciary obligations, our board of directors were to determine that a takeover proposal is not in the best interests of us or our stockholders, our board of directors could cause shares of preferred stock to be issued without stockholder approval in one or more private offerings or other transactions that might dilute the voting or other rights of the proposed acquirer or insurgent stockholder or stockholder group. In this regard, our amended and restated certificate of incorporation grants our board of
21
directors broad power to establish the rights and preferences of authorized and unissued shares of preferred stock. The issuance of shares of preferred stock could decrease the amount of earnings and assets available for distribution to holders of shares of common stock. The issuance may also adversely affect the rights and powers, including voting rights, of these holders and may have the effect of delaying, deterring or preventing a change in control of us.
Choice of forum
Our amended and restated by-laws provide that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following actions or proceedings under Delaware statutory or common law: any derivative action or proceeding brought on our behalf; any action or proceeding asserting a claim of breach of a fiduciary duty; any action or proceeding asserting a claim arising pursuant to the Delaware General Corporation Law, or DGCL, our certificate of incorporation or our by-laws (including the interpretation, application, validity or enforceability thereof); any action or proceeding as to which the DGCL confers jurisdiction to the Court of Chancery of the State of Delaware; and any action or proceeding governed by the internal affairs doctrine; provided, however, that the this provision does not apply to any causes of action arising under the Securities Act or Exchange Act. In addition, our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States shall be the sole and 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 our securities shall be deemed to have notice of and consented to these forum provisions. These forum provisions may impose additional costs on stockholders, may limit our stockholders’ ability to bring a claim in a forum they find favorable, and the designated courts may reach different judgments or results than other courts. In addition, there is uncertainty as to whether the federal forum provision for Securities Act claims will be enforced, which may impose additional costs on us and our stockholders.
Limitations on Liability and Indemnification of Officers and Directors
Our amended and restated certificate of incorporation and amended and restated by-laws limit the liability of our officers and directors to the fullest extent permitted by the Delaware General Corporation Law and provides that we will indemnify them to the fullest extent permitted by such law.
Registration Rights
Certain holders of shares of our common stock, or their permitted transferees, are entitled to rights with respect to the registration of these securities under the Securities Act. These rights are provided under the terms of a stockholders’ agreement between us and the holders of our preferred stock. The stockholders’ agreement includes demand registration rights, short-form registration rights and piggyback registration rights. All fees, costs and expenses of underwritten registrations under the stockholders’ agreement will be borne by us and all selling expenses, including underwriting discounts and selling commissions, will be borne by the holders of the shares being registered.
If we register any of our securities either for our own account or for the account of other security holders, the holders of these shares are entitled to include their shares in the registration. Subject to certain exceptions contained in the stockholders’ agreement, we and the underwriters may limit the number of shares included in the underwritten offering if the underwriters determine in good faith that marketing factors require a limitation of the number of shares to be underwritten.
22
Certain legal matters, including the validity of the shares of common stock offered pursuant to this registration statement, will be passed upon for us by Goodwin Procter LLP, Boston, Massachusetts.
The financial statements of Proteostasis Therapeutics, Inc. incorporated in this prospectus by reference to the Annual Report on Form 10-K of Proteostasis Therapeutics, Inc. for the year ended December 31, 2019 have been so incorporated in reliance on the report (which contains an emphasis of matter paragraph relating to Proteostasis Therapeutics, Inc.’s requirement for additional financing to fund future operations as described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
The audited historical financial statements of Yumanity Holdings, LLC included as Exhibit 99.4 of Yumanity Therapeutics, Inc.’s (formerly Proteostasis Therapeutics, Inc.) Amendment No. 1 to the Current Report on Form 8-K dated December 22, 2020 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to Yumanity Holdings, LLC’s ability to continue as a going concern as described in Note 1 to the financial statements) of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We must comply with the informational requirements of the Exchange Act, and we are required to file reports and proxy statements and other information with the SEC. You may read and copy these reports, proxy statements and other information on the SEC’s website at http://www.sec.gov, which contains reports, proxy and information statements and other information regarding issuers like us that file electronically with the SEC. We maintain a website at www.yumanity.com. The information contained in, or that can be accessed through, our website is not incorporated by reference herein and is not part of this prospectus.
Statements contained in this prospectus as to the contents of any contract or other document are not necessarily complete, and in each instance we refer you to the copy of the contract or document filed as an exhibit to the registration statement, each such statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” information that we file with it, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. Information in this prospectus supersedes information incorporated by reference that we filed with the SEC prior to the date of this prospectus, while information that we file later with the SEC will automatically update and supersede the information in this prospectus. We also incorporate by reference into this prospectus the documents listed below and any future filings made by us with the SEC (other than current reports or portions thereof furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items and other portions of documents that are furnished, but not filed, pursuant to applicable rules promulgated by the SEC) that are filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial filing of the registration
23
statement of which this prospectus is a part and prior to effectiveness of the registration statement, and (ii) after the effectiveness of the registration statement but prior to the termination of the offering of the securities covered by this prospectus:
| • | our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020; |
| • | the information specifically incorporated by reference into our Annual Report on Form 10-K for the year ended December 31, 2019 from our definitive proxy statement on Schedule 14A (other than information furnished rather than filed), which was filed with the SEC on April 29, 2020; |
| • | our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020, June 30, 2020 and September 30, 2020, filed with the SEC on May 15, 2020, August 6, 2020 and November 16, 2020, respectively; |
| • | our Current Reports on Form 8-K filed on January 13, 2020, January 22, 2020, February 24, 2020, July 1, 2020, August 24, 2020, September 17, 2020, November 6, 2020, December 4, 2020, December 9, 2020, December 15, 2020, December 16, 2020, December 30, 2020 (as amended on February 3, 2021) and February 10, 2021 (in each case, except for information contained therein which is furnished rather than filed); |
| • | The description of our common stock contained in our registration statement on Form 8-A (File No. 001-37695) filed with the SEC on February 10, 2016, under the Exchange Act, including any amendment or report filed for the purpose of updating such description. |
We will furnish without charge to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, a copy of any document incorporated by reference. Requests should be addressed to 40 Guest Street, Suite 4410, Boston, MA 02135 or may be made telephonically at (617) 409-5300.
In accordance with Rule 412 of the Securities Act, any statement contained in a document incorporated by reference herein shall be deemed modified or superseded to the extent that a statement contained herein or in any other subsequently filed document that also is or is deemed to be incorporated by reference herein modifies or supersedes such statement.
24
PROSPECTUS
1,460,861 shares
Common Stock
February 11, 2021
We have not authorized any dealer, salesperson or other person to give any information or represent anything not contained in this prospectus. You must not rely on any unauthorized information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus does not offer to sell any securities in any jurisdiction where it is unlawful. Neither the delivery of this prospectus, nor any sale made hereunder, shall create any implication that the information in this prospectus is correct after the date hereof.
