| Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On June 24, 2024, eFFECTOR Therapeutics, Inc. (the “Company”) announced it had terminated its employees in connection with the planned wind down of the Company’s operations. The Company expects to incur one-time charges and cash expenditures associated with the workforce reduction of approximately $0.6 million, primarily related to employee wages and severance payments, benefits and related termination costs. The Company expects that these charges and costs will be incurred during the quarter ended June 30, 2024.
The estimates of charges, costs and expenses that the Company expects to incur in connection with the workforce reduction are subject to a number of assumptions and actual results may differ materially from estimates.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignation of Directors
On June 21, 2024, in connection with the planned wind down of the Company’s operations, Brian M. Gallagher, Jr., Ph.D., Elizabeth P. Bhatt, Chris Ehrlich, Kristen Harrington-Smith, Barbara Klencke, M.D., Caroline Loewy and Stephen T. Worland, Ph.D., each notified the Company of their respective resignations as members of the board of directors (the “Board”) of the Company and all committees thereof. None of these resignations resulted from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.
Departure of Officers
On June 21, 2024, Stephen T. Worland, Ph.D., President and CEO, Michael Byrnes, Chief Financial Officer and Secretary, and Douglas Warner, M.D., Chief Medical Officer, ceased serving in their respective officer positions.
Appointment of Director and Officer
On June 21, 2024, the Board appointed Craig R. Jalbert, age 62, as the Company’s CEO, President, Treasurer and Secretary, and sole member of the Board. Mr. Jalbert will also serve as the Company’s principal executive officer, and as its principal financial officer and principal accounting officer. Mr. Jalbert’s term as director shall expire upon the election and qualification of his successor. Mr. Jalbert has not been appointed to any committee of the Board and as of the date hereof is not expected to be appointed to any committee of the Board.
Mr. Jalbert has served as a principal of the Foxborough, Massachusetts accounting firm of Verdolino & Lowey, P.C. since 1987. For over 30 years he has focused his practice in distressed businesses and has served, and continues to serve, in the capacities of officer and director for numerous firms in their wind-down phases.
In connection with his appointment as an officer and director of the Company, Mr. Jalbert will be compensated in the amount of $50,000 per year for a period of three years thereafter. Mr. Jalbert was appointed to the Board and as an officer of the Company pursuant to an engagement letter with the Company, executed on June 21, 2024, to assist the Company in developing a plan of wind down of the Company’s business affairs. There are no family relationships between Mr. Jalbert and any director or executive officer of the Company, and Mr. Jalbert has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
On June 24, 2024, the Company issued a press release announcing its plans to wind down its operations, seek strategic alternatives and delist from Nasdaq, which is attached as Exhibit 99.1 to this current report and is incorporated by reference herein.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
