UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Amendment No. 3

Check the appropriate box:

UNUM THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

PRELIMINARY PROXY STATEMENT DATED OCTOBER 2, 2020—SUBJECT TO COMPLETION

UNUM THERAPEUTICS INC.

200 Cambridge Park Drive, Suite 2500

Cambridge, Massachusetts 02140

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To be held [●], 2020

Notice is hereby given that a special meeting of stockholders, or Special Meeting, of Unum Therapeutics Inc., or “we,” “Unum” or the “Company”, will be held online on [●], 2020 at [●] Eastern Time. You, or your proxy may attend the meeting virtually via the Internet at https://www.virtualshareholdermeeting.com/UMRX2020, where you, or your proxy, will be able to vote electronically and examine the Company’s stocklist during the Special Meeting. You will need the 16-digit control number included with these materials to attend the Special Meeting and to vote and otherwise participate in the Special Meeting. The purpose of the Special Meeting is the following:

Only Unum Therapeutics Inc. stockholders of record at the close of business on [●], 2020, will be entitled to vote at the Special Meeting and any adjournment or postponement thereof.

Your vote is important. Whether or not you are able to attend the virtual meeting, it is important that your shares be represented. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the virtual meeting, by submitting your proxy via the Internet at the address listed on the proxy card or by signing, dating and returning the proxy card.

Cambridge, Massachusetts

[●], 2020

TABLE OF CONTENTS

ANNEX A—PROPOSED AMENDMENT TO CERTIFICATE OF INCORPORATION

ANNEX B—OPINION OF LADENBURG THALMANN & CO. INC.

ANNEX C—LICENSE AGREEMENT

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PRELIMINARY PROXY STATEMENT DATED OCTOBER 2, 2020—SUBJECT TO COMPLETION

UNUM THERAPEUTICS INC.

200 Cambridge Park Drive, Suite 2500

Cambridge, Massachusetts 02140

PROXY STATEMENT

FOR THE SPECIAL MEETING OF STOCKHOLDERS

TO BE HELD [●], 2020

This proxy statement contains information about the Special Meeting of Stockholders, or the Special Meeting, of Unum Therapeutics Inc., which will be held online on [●], 2020 at [●] Eastern Time. You may attend the meeting virtually via the Internet at https://www.virtualshareholdermeeting.com/UMRX2020, where you will be able to vote electronically. The board of directors of Unum Therapeutics Inc., or Board of Directors, is using this proxy statement to solicit proxies for use at the Special Meeting. In this proxy statement, the terms “Unum,” “we,” “us,” and “our” refer to Unum Therapeutics Inc. The mailing address of our principal executive offices is Unum Therapeutics Inc., 200 Cambridge Park Drive, Suite 2500, Cambridge, Massachusetts 02140.

All properly submitted proxies will be voted in accordance with the instructions contained in those proxies. If no instructions are specified, the proxies will be voted in accordance with the recommendation of our Board of Directors with respect to each of the matters set forth in the accompanying Notice of Meeting. You may revoke your proxy at any time before it is exercised at the meeting by giving our corporate secretary written notice to that effect.

At the Special Meeting:

After careful consideration, the Board of Directors has approved the proposals referred to above, and has determined that they are advisable, fair and in the best interests of Unum’s stockholders. Accordingly, the Board of Directors recommends that stockholders vote “FOR” the issuance of Common Stock upon conversion of the Company’s Series A Preferred Stock, issued in a merger that closed on July 6, 2020 and a private placement offering that closed on July 9, 2020, “FOR” the amendment to the Certificate of Incorporation to effect the reverse stock split at a ratio of between and including 1:[●] and 1:[●], and “FOR” the adjournment or postponement of the Special Meeting if necessary to solicit additional proxies if there are not sufficient votes to approve Proposal No. 1 and/or Proposal No. 2.

Your vote is important. Whether or not you expect to attend the virtual Special Meeting, please complete, date, sign and promptly return the accompanying proxy card in the enclosed postage paid envelope to ensure that your shares will be represented and voted at the Special Meeting. You can also vote your shares via the internet or by telephone as provided in the instructions set forth in the enclosed proxy card. If you hold your shares in “street name” through a broker, you should follow the procedures provided by your broker.

We thank you for your consideration and continued support.

This proxy statement is dated [●], 2020 and is first being mailed to stockholders on or about [●], 2020.

UNUM THERAPEUTICS INC.

PROXY STATEMENT

FOR THE SPECIAL MEETING OF STOCKHOLDERS

QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING

Except as specifically indicated, the following information and all other information contained in this proxy statement does not give effect to the reverse stock split described in Proposal No. 2.

The following section provides answers to frequently asked questions about the Special Meeting. This section, however, only provides summary information. These questions and answers may not address all issues that may be important to you as a stockholder. You should carefully read this entire proxy statement, including each of the annexes.

When are this proxy statement and the accompanying materials scheduled to be sent to stockholders?

On or about [●], 2020, we will begin mailing our proxy materials, including the Notice of the Special Meeting, this proxy statement and the accompanying proxy card or, for shares held in street name (i.e. held for your account by a broker or other nominee), a voting instruction form.

Who is soliciting my vote?

Our Board of Directors is soliciting your vote for the Special Meeting.

When is the record date for the Special Meeting?

The record date for determination of stockholders entitled to vote at the Special Meeting is the close of business on [●], 2020.

How many votes can be cast by all stockholders?

There were [●] shares of our Common Stock, par value $0.001 per share, outstanding on [●], 2020, all of which are entitled to vote with respect to all matters to be acted upon at the Special Meeting. Each outstanding share of our Common Stock is entitled to one vote on each matter considered at the Special Meeting. None of our shares of undesignated preferred stock were outstanding as of [●], 2020.

Of the shares of our Common Stock issued and outstanding and entitled to vote, 6,235,903 shares of Common Stock were issued in the Merger (as described in “Proposal No. 1—General—Merger Agreement” below) and are not entitled to vote on Proposal No. 1 for purposes of the Nasdaq rules. The Company anticipates that these 6,235,903 shares of Common Stock will be voted in favor of Proposal No. 1 for purposes of adopting the proposal under Delaware law. However, to comply with Nasdaq rules, the Company will instruct the inspector of elections to conduct a separate tabulation that subtracts 6,235,903 shares from the total number of shares voted in favor of Proposal No. 1 for purposes of determining whether that proposal has been adopted.

How do I vote?

By Internet at the Special Meeting.

Instructions on how to attend and vote at the Special Meeting are described at http://www.virtualshareholdermeeting.com/UMRX2020, although Unum encourages you to vote by proxy at your earliest convenience to ensure your shares are represented, in case you later decide not to attend the Special Meeting virtually. Stockholders will need their unique 16-digit control number that accompanied the proxy materials. A technical support telephone number will be posted on the log-in page of http://www.virtualshareholdermeeting.com/UMRX2020 that you can call if you encounter any difficulties accessing the virtual meeting during the check-in or during the Special Meeting.

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By Proxy

If you will not be attending the virtual Special Meeting, you may vote by proxy. You can vote by proxy via the Internet by visiting the address listed on the proxy card, via telephone by calling the toll-free phone number listed on the proxy card or you can vote by mailing your proxy as described in the proxy materials. To ensure your shares are voted by proxy, proxies submitted by Internet or by telephone should be received by the cutoff time of [●] p.m. Eastern Time on [●], 2020. Proxies submitted by mail must be received before the start of the Special Meeting.

If you complete and submit your proxy before the Special Meeting, the persons named as proxies will vote the shares represented by your proxy in accordance with your instructions. If you submit a proxy without giving voting instructions, your shares will be voted in the manner recommended by the Board of Directors on all matters presented in this proxy statement. You may also authorize another person or persons to act for you as proxy by complying with the Amended and Restated By-laws of the Company and Section 212 of the DGCL.

How do I revoke my proxy?

You may revoke your proxy by (1) following the instructions on the proxy card and entering a new vote by mail that we receive before the start of the Special Meeting or over the Internet or by telephone by the cutoff time of [●] p.m. Eastern Time on [●], 2020, (2) attending and voting at the virtual Special Meeting (although attendance at the Special Meeting will not in and of itself revoke a proxy), or (3) by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with our Corporate Secretary. Any written notice of revocation or subsequent proxy card must be received by our Corporate Secretary prior to the taking of the vote at the Special Meeting. Such written notice of revocation or subsequent proxy card should be hand delivered to our Corporate Secretary or sent to our principal executive offices at Unum Therapeutics Inc., 200 Cambridge Park Drive, Suite 2500, Cambridge, Massachusetts 02140, Attention: Corporate Secretary.

If a broker, bank, or other nominee holds your shares, you must contact such broker, bank, or nominee in order to find out how to change your vote.

How is a quorum reached?

Our Amended and Restated Bylaws, or bylaws, provide that a majority of the shares entitled to vote, present at the virtual meeting or represented by proxy, will constitute a quorum for the transaction of business at the Special Meeting.

Under the General Corporation Law of the State of Delaware, shares that are voted “abstain” or “withheld” and “broker non-votes” (if any) are counted as present for purposes of determining whether a quorum is present at the Special Meeting. If a quorum is not present, the meeting may be adjourned until a quorum is obtained.

What proposals will be voted on at the Special Meeting?

There are three proposals scheduled to be voted on at the meeting:

What vote is required to approve each item at the Special Meeting?

You may vote “for,” “against” or “abstain” on each of the proposals being placed before our stockholders. Under our bylaws, any proposal other than an election of directors is decided by a majority of the votes properly cast for

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and against such proposal, except where a larger vote is required by law or by our Certificate of Incorporation or bylaws. To approve Proposal No. 1, stockholders holding a majority of votes properly cast at the Special Meeting must vote “FOR” the proposal (subject to the separate tabulation of votes described in “Questions and Answers About the Special Meeting—How many votes can be cast by all stockholders?”). To approve Proposal No. 2, stockholders holding a majority of the outstanding shares of our Common Stock as of the record date must vote “FOR” the proposal. If a quorum is present at the Special Meeting, the affirmative vote of the stockholders holding a majority of the votes properly cast at the Special Meeting is required for approval of Proposal No. 3 (for the purpose of soliciting additional proxies to approve Proposals No. 1 and/or 2). If a quorum is not present at the Special Meeting, the affirmative vote of the stockholders holding a majority of the voting power present in person or by proxy at the Special Meeting is required for approval of Proposal No. 3.

How is the vote counted?

If your shares are registered directly in your name, you are a “stockholder of record” who may vote at the meeting, and we are sending these proxy materials directly to you. As the stockholder of record, you have the right to direct the voting of your shares by voting over the Internet, by telephone, by returning your proxy or by voting online during the Special Meeting at https://www.virtualshareholdermeeting.com/UMRX2020.

If your shares are held in an account at a bank or at a brokerage firm or other nominee holder, you are considered the beneficial owner of shares held in “street name,” and these proxy materials are being forwarded to you by your bank, broker or other nominee who is considered the stockholder of record for purposes of voting at the Special Meeting. As the beneficial owner, you have the right to direct your bank, broker or other nominee on how to vote your shares and to participate in the Special Meeting. You should receive a proxy card and voting instructions with these proxy materials from that organization rather than from us. You will receive instructions from your bank, broker or other nominee explaining how you can vote your shares and whether they permit Internet or telephone voting. Follow the instructions from your bank, broker or other nominee included with these proxy materials, or contact your bank, broker or other nominee to request a proxy form. We encourage you to provide voting instructions to your bank, broker or other nominee by giving your proxy to them. This ensures that your shares will be voted at the Special Meeting according to your instructions.

If you hold shares through a bank, broker or other intermediary firm, the intermediary firm is subject to certain New York Stock Exchange, or NYSE, rules regarding voting. Under NYSE rules, Proposal No. 2 and Proposal No. 3 are each considered a discretionary item. This means that an intermediary firm may vote in its discretion on behalf of clients who have not furnished voting instructions on those proposals at least 10 days before the date of the Special Meeting. In contrast, Proposal No. 1 is a non-discretionary item. Intermediary firms that have not received voting instructions from their clients on this item may not vote on Proposal No. 1. A “broker non-vote” on a proposal results when shares are deemed present at the Special Meeting but the shares are not voted because the proposal is a non-discretionary item and the intermediary firm has not received instructions from its client. A broker non-vote will have no effect on the outcome of Proposal No. 1.

Abstentions, if any, would have no effect on the vote for Proposal No. 1 and, if a quorum is present at the Special Meeting, will have no effect on the vote for Proposal No. 3. Abstentions, if any, will have the same effect as a vote “AGAINST” Proposal No. 2, and, if a quorum is not present at the Special Meeting, will have the same effect as a vote “AGAINST” Proposal No. 3.

What is the Reverse Stock Split and why is it necessary?

If Proposal No. 2 is approved, the outstanding shares of Common Stock will be combined into a lesser number of shares to be determined by the Board of Directors and publicly announced by Unum. The Board of Directors believes that a reverse stock split may be desirable for a number of reasons. Unum’s Common Stock is currently listed on the Nasdaq Global Select Market, or Nasdaq. According to the applicable Nasdaq rules, in order for Unum’s Common Stock to continue to be listed on Nasdaq, Unum must satisfy certain requirements established

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by Nasdaq. The Board of Directors expects that a reverse stock split of Common Stock will increase the market price of Common Stock so that Unum will be able to maintain compliance with the relevant Nasdaq listing requirements for the foreseeable future, although Unum cannot assure that it will be able to do so. The Board of Directors intends to effect a reverse stock split, or Reverse Stock Split, of the shares of Common Stock at a ratio of between and including 1:[●] and 1:[●].

What happens if the Conversion Proposal is approved but the Reverse Stock Split Proposal is not approved?

If the Conversion Proposal is approved but the Reverse Stock Split Proposal is not approved, there will not be a sufficient number of authorized but unissued shares of our Common Stock available for all of the shares of Series A Preferred Stock to convert into shares of our Common Stock.

Who pays the cost for soliciting proxies?

We will bear the cost of soliciting proxies, including the printing, mailing and filing of this proxy statement, the proxy card and any additional information furnished to stockholders. You will need to obtain your own internet access if you choose to access the proxy materials and/or vote over the internet. Unum may use the services of its directors, officers and other employees to solicit proxies from Unum’s stockholders without additional compensation. In addition, Unum has engaged The Proxy Advisory Group, LLC, to assist in the solicitation of proxies and provide related advice and informational support, for a services fee, plus the reimbursement of customary disbursements, which are not expected to exceed $30,000 in total. Arrangements will also be made with banks, brokers, nominees, custodians and fiduciaries who are record holders of Common Stock for the forwarding of solicitation materials to the beneficial owners of Common Stock. Unum will reimburse these banks, brokers, nominees, custodians and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of solicitation materials.

How can I know the voting results?

We plan to announce the final results in a Current Report on Form 8-K to be filed with the SEC within four business days following the Special Meeting.

Who can provide me with additional information and help answer my questions?

If you would like additional copies, without charge, of this proxy statement or if you have questions about the proposals being considered at the Special Meeting, including the procedures for voting your shares, you should contact The Proxy Advisory Group, LLC, Unum’s proxy solicitor, by telephone at (212) 616-2181.

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CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement, and the documents incorporated by reference into this proxy statement, contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding: uses of proceeds; projected cash runways; future product development plans; stockholder approval of the conversion rights of the Series A Preferred Stock; and any future payouts under the CVR Agreement. The use of words such as, but not limited to, “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” and similar words expressions are intended to identify forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, our clinical results and other future conditions. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. No representations or warranties (expressed or implied) are made about the accuracy of any such forward-looking statements. We may not actually achieve the forecasts disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Such forward-looking statements are subject to a number of material risks and uncertainties including but not limited to those set forth under the caption “Risk Factors” in Unum’s most recent Annual Report on Form 10-K filed with the SEC, as well as discussions of potential risks, uncertainties, and other important factors in our subsequent filings with the SEC. Any forward-looking statement speaks only as of the date on which it was made. Neither we, nor our affiliates, advisors or representatives, undertake any obligation to publicly update or revise any forward-looking statement, whether as result of new information, future events or otherwise, except as required by law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

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PROPOSAL NO. 1: THE APPROVAL OF, UNDER APPLICABLE NASDAQ LISTING RULES, THE ISSUANCE OF SHARES OF OUR COMMON STOCK UPON CONVERSION OF THE COMPANY’S SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK

General

Merger Agreement. As previously announced, on July 6, 2020, we completed our acquisition of Kiq Bio LLC (formerly Kiq LLC), a Delaware limited liability company (“Kiq”), in accordance with the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated July 6, 2020, between the Company, Utah Merger Sub 1 LLC, a Delaware limited liability company and a wholly owned subsidiary of Unum (“First Merger Sub”), Utah Merger Sub 2 LLC, a Delaware limited liability company and wholly owned subsidiary of Unum (“Second Merger Sub”), and Kiq. Pursuant to the Merger Agreement, First Merger Sub merged with and into Kiq, pursuant to which Kiq was the surviving entity and became a wholly owned subsidiary of Unum (the “First Merger”). Immediately following the First Merger, Kiq merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity (together with the First Merger, the “Merger”). The Merger is intended to qualify as a tax-free reorganization for U.S. federal income tax purposes. The Board of Directors unanimously approved the Merger Agreement and the related transactions, and the consummation of the Merger was not subject to approval of the Unum stockholders.

Under the terms of the Merger Agreement, at the closing of the Merger on July 6, 2020, Unum issued the securityholders of Kiq 6,235,903 shares of Common Stock and 44,687 shares of Unum Series A Non-Voting Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”), which was newly created upon the filing of a Certificate of Designations of Preferences, Rights and Limitations of the Series A Non-Voting Convertible Preferred Stock with the Secretary of State of the State of Delaware (the “Certificate of Designations”) on July 6, 2020.

Pursuant to the Merger Agreement, Unum agreed to hold the Special Meeting to submit the following matters to its stockholders for their consideration: (i) the Conversion Proposal, (ii) the Reverse Stock Split Proposal, if deemed necessary by Unum, and (iii) the approval of an amendment to the certificate of incorporation of Unum to authorize sufficient shares of Common Stock for the conversion of the Series A Preferred Stock issued pursuant to the Merger Agreement and the Securities Purchase Agreement (as described below) (the “Charter Amendment Proposal”). Unum and Kiq no longer believe it is necessary to submit the Charter Amendment Proposal to Unum’s stockholders for their consideration.

Support Agreements.

In connection with the execution of the Merger Agreement, Unum and Kiq entered into stockholder support agreements (the “Support Agreements”) with Unum’s directors and certain officers and one of Unum’s largest stockholders, which collectively own an aggregate of approximately 23.0% of the outstanding shares of the Common Stock, or 27.9% of the shares of Common Stock entitled to vote on Proposal No. 1. The Support Agreements provide that, among other things, each of the stockholders has agreed to vote or cause to be voted all of the shares of Common Stock owned by such stockholder in favor of the Conversion Proposal at the Special Meeting. Each of the stockholders that have entered into the Support Agreements are entitled to vote on the Conversion Proposal. The form of Support Agreement is attached as Exhibit B to the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated into this proxy statement by reference.

Lock-up Agreements.

Concurrently and in connection with the execution of the Merger Agreement, former Kiq securityholders as of immediately prior to the Merger, and the directors and officers of Unum as of immediately following the Merger, which collectively own an aggregate of approximately 30.7% of Unum outstanding capital stock, entered into

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lock-up agreements with Unum and Kiq, pursuant to which each stockholder is subject to a 90 day lockup on the sale or transfer of shares of Common Stock held by each such stockholder at the closing of the Merger, including those shares received by Kiq securityholders in the Merger (the “Lock-up Agreements”). The form of Lock-up Agreement is attached as Exhibit C to the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated into this proxy statement by reference.

Contingent Value Rights Agreement.

Pursuant to the Merger Agreement, within 30 days following the closing of the Merger, Unum and the Rights Agent (as defined therein) executed and delivered the Contingent Value Rights Agreement (the “CVR Agreement”), dated as of August 6, 2020, by and among Unum, Computershare Inc. and Computershare Trust Company, N.A., pursuant to which each holder of Common Stock as of immediately prior to the effective time of the Merger (the “Effective Time”) is entitled to one contractual contingent value right (“CVR”) issued by Unum, subject to and in accordance with the terms and conditions of the CVR Agreement, for each share of Common Stock held by such holder. Each CVR entitles the holder thereof to receive certain Common Stock and/or cash payments from the net proceeds, if any, related to the disposition of Unum’s legacy cell therapy assets within three years following the closing of the Merger. The contingent value rights are not transferable, except in certain limited circumstances as will be provided in the CVR Agreement, will not be certificated or evidenced by any instrument and will not be registered with the SEC or listed for trading on any exchange. The CVR Agreement is filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 10, 2020, and is incorporated herein by reference.

Private Placement and Securities Purchase Agreement. On July 6, 2020, Unum entered into a Securities Purchase Agreement (the “Purchase Agreement”) with the purchasers named therein (the “Investors”). Pursuant to the Purchase Agreement, Unum agreed to sell an aggregate of approximately 118,638 shares of Series A Preferred Stock for an aggregate purchase price of $104,401,000 (collectively, the “Financing”). Each share of Series A Preferred Stock is convertible into 1,000 shares of Common Stock, as described below in “Description of the Series A Preferred Stock”. The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series A Preferred Stock are set forth in the Certificate of Designations. The closing of the Financing occurred on July 9, 2020 (the “Financing Closing Date”).

Registration Rights Agreement.

On the Financing Closing Date, in connection with the Purchase Agreement, Unum entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors. Pursuant to the Registration Rights Agreement, Unum has prepared and filed a resale registration statement with the SEC within 90 calendar days following the Financing Closing Date (the “Filing Deadline”). Unum will use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 30 calendar days of the Filing Deadline (or within 60 calendar days if the SEC reviews the registration statement). Unum also agreed, among other things, to indemnify the Investors, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and pay all fees and expenses (excluding any legal fees of the selling holder(s), and any underwriting discounts and selling commissions) incident to Unum’s obligations under the Registration Rights Agreement.

The Financing is exempt from registration pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. The Investors have acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends have been affixed to the securities issued in this transaction.

The Investors; Certain Interests.

The Investors include Venrock Healthcare Capital Partners, BVF Partners L.P., Atlas Venture, Acorn Bioventures, Perceptive Advisors LLC, RTW Investments, OrbiMed, Samsara BioCapital, Logos Capital, Ally

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Bridge Group and Commodore Capital, as well as additional undisclosed institutional investors. Due to his direct or indirect beneficial ownership of Series A Preferred Stock as a member of AVA IX LLC, an affiliate of Atlas Venture, Bruce Booth, DPhil., who served as a director of the Company from October 2014 until his resignation in connection with the Merger on July 6, 2020, has an interest in the Conversion Proposal. Also, due to their direct or indirect beneficial ownership of Series A Preferred Stock as Managing Member and Director of Research, respectively, of Fairmount Funds Management LLC, Peter Harwin and Chris Cain, who were appointed directors of the Company in connection with the Merger on July 6, 2020, have an interest in the Conversion Proposal.

Use of Proceeds. Gross proceeds from the Financing were approximately $104.4 million, with net proceeds of approximately $99.0 million, after deducting commissions and estimated offering costs. We used the net proceeds from the Financing for general corporate working capital purposes.

Description of the Series A Preferred Stock. Holders of Series A Preferred Stock are entitled to receive dividends on shares of Series A Preferred Stock equal, on an as-if-converted-to-Common-Stock basis, and in the same form as dividends actually paid on shares of the Common Stock. Except as otherwise required by law, the Series A Preferred Stock does not have voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, Unum will not, without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the Series A Preferred Stock, (b) alter or amend the Certificate of Designations, (c) amend its certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Preferred Stock, (d) increase the number of authorized shares of Series A Preferred Stock, (e) prior to the stockholder approval of the Conversion Proposal or at any time while at least 40% of the originally issued Series A Preferred Stock remains issued and outstanding, consummate a Fundamental Transaction (as defined in the Certificate of Designations) or (f) enter into any agreement with respect to any of the foregoing. The Series A Preferred Stock does not have any preemptive rights or a preference upon any liquidation, dissolution or winding-up of Unum.

Following stockholder approval of the Conversion Proposal, each share of Series A Preferred Stock is convertible into 1,000 shares of Common Stock at any time at the option of the holder thereof, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion.

Reasons for Stockholder Approval. Unum’s Common Stock is listed on the Nasdaq Global Select Market, and, as such, Unum is subject to the applicable rules of the Nasdaq Stock Market LLC, or NASDAQ Listing Rules, including NASDAQ Listing Rule 5635. In order to comply with the NASDAQ Listing Rules and to satisfy conditions under the Purchase Agreement, we are seeking stockholder approval of this Proposal No. 1. Certain sections of NASDAQ Listing Rule 5635 are generally described below:

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We are seeking stockholder approval of the Conversion Proposal in order to satisfy the requirements of NASDAQ Listing Rule 5635 with respect to the terms of the Series A Preferred Stock and the issuance of shares of Common Stock upon conversion of the Series A Preferred Stock in excess of the 20% of the voting power outstanding before the issuance.

Assuming the full conversion of the Series A Preferred Stock (with a conversion ratio of 1000:1), such securities, in the hands of the Investors and the former securityholders of Kiq, would represent approximately 80.8% of the outstanding shares of our Common Stock (based on [●] shares of our Common Stock outstanding as of [●], 2020 plus the approximately 163.3 million additional shares of our Common Stock (before giving effect to the Reverse Stock Split) that would be outstanding as a result of such conversion).

Peter Harwin and Chris Cain, who serve as Managing Member and Director of Research, respectively, of Fairmount Funds Management LLC, serve as directors of the Company. Bruce Booth, who is a member of

AVA IX LLC, an affiliate of an Investor, served as a director of the Company at the time the Investor purchased shares of Series A Preferred Stock.

The Merger Agreement requires us to submit this proposal to our stockholders at the Special Meeting. Approval of this Proposal No. 1 will constitute approval pursuant to the NASDAQ Listing Rules.

Dilution. If this Proposal No. 1 and the Reverse Stock Split Proposal are approved, existing Unum stockholders will suffer significant dilution in ownership interests and voting rights as a result of the issuance of shares of our Common Stock upon the conversion of the shares of Series A Preferred Stock. Upon conversion in full of the shares of Series A Preferred (with a conversion ratio of 1000:1), 163,323,000 additional shares of our Common Stock will be outstanding, and the ownership interest of our existing stockholders would be correspondingly reduced. The number of shares of our Common Stock described above does not give effect to any other future issuances of our Common Stock or the Reverse Stock Split. The sale into the public market of these shares also could materially and adversely affect the market price of our Common Stock.

Vote Required; Recommendation of Board of Directors

Stockholder approval of this Proposal No. 1 requires a “FOR” vote from the holders of a majority of votes properly cast at the Special Meeting (subject to the separate tabulation of votes described in “Questions and Answers About the Special Meeting—How many votes can be cast by all stockholders?” set forth above).

THE BOARD OF DIRECTORS RECOMMENDS THAT UNUM’S STOCKHOLDERS VOTE “FOR” THE APPROVAL OF, UNDER APPLICABLE NASDAQ LISTING RULES, THE ISSUANCE OF SHARES OF COMMON STOCK UPON CONVERSION OF THE SERIES A NON-VOTING CONVERTIBLE PREFERRED STOCK.

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PROPOSAL NO. 2: THE APPROVAL OF THE AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO IMPLEMENT A REVERSE STOCK SPLIT OF THE COMPANY’S OUTSTANDING COMMON STOCK

General

Our Board of Directors has approved and declared advisable an amendment to our certificate of incorporation, which would effect a reverse stock split, or Reverse Stock Split, of all issued and outstanding shares of our Common Stock, at a ratio ranging from 1-for-[●] to 1-for-[●], inclusive. Our Board of Directors has recommended that this proposed amendment be presented to our stockholders for approval. Our stockholders are being asked to approve the proposed amendment pursuant to Proposal No. 2 to effect a Reverse Stock Split of the issued and outstanding shares of Common Stock. Accordingly, effecting a Reverse Stock Split would reduce the number of outstanding shares of Common Stock.

Should we receive the required stockholder approval for Proposal No. 2, our Board of Directors will have the sole authority to elect, at any time on or prior to one-year anniversary of the Special Meeting, or [●], 2021, and without the need for any further action on the part of our stockholders, whether to effect the Reverse Stock Split and the number of whole shares of Common Stock, between and including [●] and [●], that will be combined into one share of Common Stock.

Notwithstanding approval of Proposal No. 2 by our stockholders, our Board of Directors may, at its sole option, abandon the proposed amendment and determine prior to the effectiveness of any filing with the Secretary of State of the State of Delaware not to effect any reverse stock split, as permitted under Section 242(c) of the General Corporation Law of the State of Delaware. If our Board of Directors does not implement the Reverse Stock Split on or prior to the one-year anniversary of the Special Meeting, or [●], 2021, stockholder approval would again be required prior to implementing any reverse stock split.

By approving Proposal No. 2, our stockholders will: (a) approve an amendment to our Third Amended and Restated Certificate of Incorporation pursuant to which any whole number of outstanding shares of Common Stock between and including [●] and [●] could be combined into one share of Common Stock; and (b) authorize our Board of Directors to file such amendment.

APPROVAL OF REVERSE STOCK SPLIT OF OUR COMMON STOCK (PROPOSAL NO. 2)

Our Board of Directors has adopted and is recommending that our stockholders approve an amendment to our certificate of incorporation to effect a Reverse Stock Split. The text of the proposed form of Certificate of Amendment to our Third Amended and Restated Certificate of Incorporation, which we refer to as the Certificate of Amendment, is attached hereto as Annex A.

We are proposing that our Board of Directors have the discretion to select the Reverse Stock Split ratio from within a range between and including 1-for-[●] and 1-for-[●], rather than proposing that stockholders approve a specific ratio at this time, in order to give our Board of Directors the flexibility to implement a Reverse Stock Split at a ratio that reflects the Board’s then-current assessment of the factors described below under “Criteria to be Used for Determining the Reverse Stock Split Ratio to Implement.” If Proposal No. 2 is approved, we will file the Certificate of Amendment with the Secretary of State of the State of Delaware and the Reverse Stock Split will be effective at [5:01 p.m.], Eastern time, on the date of filing of the Certificate of Amendment with the office of the Secretary of State of the State of Delaware, or such later date as is chosen by the Board of Directors and set forth in the Certificate of Amendment. Except for adjustments that may result from the treatment of fractional shares as described below, each of our stockholders will hold the same percentage of our outstanding Common Stock immediately following the Reverse Stock Split as such stockholder holds immediately prior to the Reverse Stock Split.

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To maintain our listing on The Nasdaq Global Select Market. By potentially increasing our stock price, the Reverse Stock Split would reduce the risk that our Common Stock could be delisted from The Nasdaq Capital

Market. To continue our listing on The Nasdaq Global Select Market, we must comply with Nasdaq Marketplace Rules, which requirements include a minimum bid price of $1.00 per share. On December 31, 2019, we were notified by the Nasdaq Listing Qualifications Department that we do not comply with the $1.00 minimum bid price requirement as our Common Stock had traded below the $1.00 minimum bid price for 30 consecutive business days. Prior to the expiration of the compliance period, Unum regained compliance with the minimum bid price requirement and was notified by NASDAQ of such compliance on July 20, 2020 and the matter was closed, however, there is no guarantee that Unum will remain in compliance with the minimum bid price requirement.

The Board of Directors has considered the potential harm to us and our stockholders should Nasdaq delist our Common Stock from The Nasdaq Capital Market following a transfer from The Nasdaq Global Select Market under Nasdaq Listing Rule 5810(c)(3)(A)(ii). Delisting could adversely affect the liquidity of our Common Stock since alternatives, such as the OTC Bulletin Board and the pink sheets, are generally considered to be less efficient markets. An investor likely would find it less convenient to sell, or to obtain accurate quotations in seeking to buy, our Common Stock on an over-the-counter market. Many investors likely would not buy or sell our Common Stock due to difficulty in accessing over-the-counter markets, policies preventing them from trading in securities not listed on a national exchange or for other reasons. In addition, the delisting of our Common Stock from the Nasdaq Capital Market would restrict our ability to sell shares of our Common Stock under our purchase agreement with Lincoln Park Capital Fund, LLC dated March 19, 2020.

The Board of Directors believes that the proposed Reverse Stock Split is a potentially effective means for us to maintain compliance with the $1.00 minimum bid requirement and to avoid, or at least mitigate, the likely adverse consequences of our Common Stock being delisted from The Nasdaq Capital Market by producing the immediate effect of increasing the bid price of our Common Stock.

To potentially improve the marketability and liquidity of our Common Stock. Our Board of Directors believes that the increased market price of our Common Stock expected as a result of implementing a Reverse Stock Split could improve the marketability and liquidity of our Common Stock and encourage interest and trading in our Common Stock.

Criteria to be Used for Determining the Reverse Stock Split Ratio to Implement

In determining which Reverse Stock Split ratio to implement, if any, following receipt of stockholder approval of Proposal No. 2, our Board of Directors may consider, among other things, various factors, such as:

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Effects of Reverse Stock Split

After the effective date of the Reverse Stock Split, each stockholder will own a reduced number of shares of Common Stock. However, the Reverse Stock Split will affect all of our stockholders uniformly and will not affect any stockholder’s percentage ownership interests in the Company, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share as described below. Voting rights and other rights and preferences of the holders of our Common Stock will not be affected by a Reverse Stock Split (other than as a result of the payment of cash in lieu of fractional shares). For example, a holder of 2% of the voting power of the outstanding shares of our Common Stock immediately prior to a Reverse Stock Split would continue to hold 2% (assuming there is no impact as a result of the payment of cash in lieu of issuing fractional shares) of the voting power of the outstanding shares of our Common Stock immediately after such Reverse Stock Split. The number of stockholders of record will not be affected by a Reverse Stock Split (except to the extent that any stockholder holds only a fractional share interest and receives cash for such interest after such Reverse Stock Split). The foregoing description of the effects of the Reverse Stock Split does not include the dilution in ownership interests and voting rights to existing stockholders that will occur if the Conversion Proposal is approved (see “Proposal No. 1—Dilution” above).

The principal effects of a Reverse Stock Split will be that:

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After the effective date of the Reverse Stock Split, our Common Stock would have a new committee on uniform securities identification procedures, or CUSIP number, a number used to identify our Common Stock.

Our Common Stock is currently registered under Section 12(b) of the Securities Exchange Act, and we are subject to the periodic reporting and other requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. The implementation of any proposed Reverse Stock Split will not affect the registration of our Common Stock under the Exchange Act. Our Common Stock would continue to be listed on The Nasdaq Global Select Market under the symbol “UMRX” immediately following the Reverse Stock Split, although it is likely that Nasdaq would add the letter “D” to the end of the trading symbol for a period of twenty trading days after the effective date of the Reverse Stock Split to indicate that the Reverse Stock Split had occurred.

Effective Date

The proposed Reverse Stock Split would become effective at [5:01 p.m.], Eastern time, on the date of filing of a Certificate of Amendment with the office of the Secretary of State of the State of Delaware, or such later date as is chosen by the Board of Directors and set forth in the Certificate of Amendment, which date we refer to in this Proposal No. 2 as the Reverse Split Effective Date. Except as explained below with respect to fractional shares, effective as of [5:01 p.m.], Eastern time, on the Reverse Split Effective Date, shares of Common Stock issued and outstanding immediately prior thereto will be combined, automatically and without any action on the part of us or our stockholders, into a lesser number of new shares of our Common Stock in accordance with the Reverse Stock Split ratio determined by our Board of Directors within the limits set forth in this Proposal No. 2.

Cash Payment In Lieu of Fractional Shares

No fractional shares of Common Stock will be issued as a result of the Reverse Stock Split. Instead, in lieu of any fractional shares to which a stockholder of record would otherwise be entitled as a result of the Reverse Stock Split, we will pay cash (without interest) equal to such fraction multiplied by the average of the closing sales prices of the Common Stock on The Nasdaq Global Select Market during regular trading hours for the five consecutive trading days immediately preceding the Reverse Split Effective Date (with such average closing sales prices being adjusted to give effect to the Reverse Stock Split). After the Reverse Stock Split, a stockholder otherwise entitled to a fractional interest will not have any voting, dividend or other rights with respect to such fractional interest except to receive payment as described above.

As of [●], 2020, there were [●] stockholders of record of our Common Stock. Upon stockholder approval of this Proposal No. 2, and upon effectiveness of the Certificate of Amendment effecting the Reverse Stock Split, stockholders owning, prior to the Reverse Stock Split, less than the number of whole shares of Common Stock that will be combined into one share of Common Stock in the Reverse Stock Split would no longer be stockholders. For example, if a stockholder held five shares of Common Stock immediately prior to the Reverse Stock Split and the Reverse Stock Split ratio selected by the Board was 1-for-[●], then such stockholder would cease to be a stockholder of the Company following the Reverse Stock Split and would not have any voting, dividend or other rights except to receive payment for the fractional share as described above. Based on our stockholders of record as of [●], 2020, and assuming a Reverse Stock Split ratio of 1-for-[●], we expect that cashing out fractional stockholders would not reduce the number of stockholders of record. In addition, we do not intend for this transaction to be the first step in a series of plans or proposals of a “going private transaction” within the meaning of Rule 13e-3 of the Exchange Act.

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Record and Beneficial Stockholders

If this Proposal No. 2 is approved by our stockholders, and upon effectiveness of the Certificate of Amendment effecting the Reverse Stock Split, stockholders of record as of the record date holding all of their shares of our Common Stock electronically in book-entry form under the direct registration system for securities will be automatically exchanged by the exchange agent and will receive a transaction statement at their address of record indicating the number of new post-split shares of our Common Stock they hold after the Reverse Stock Split along with payment in lieu of any fractional shares. Non-registered stockholders holding Common Stock through a bank, broker or other nominee should note that such banks, brokers or other nominees may have different procedures for processing the Reverse Stock Split and making payment for fractional shares than those that would be put in place by us for registered stockholders. If you hold your shares with such a bank, broker or other nominee and if you have questions in this regard, you are encouraged to contact your nominee.

If this Proposal No. 2 is approved by our stockholders and, upon effectiveness of the Certificate of Amendment effecting the Reverse Stock Split, stockholders of record holding some or all of their shares in certificate form will receive a letter of transmittal from the Company or its exchange agent, as soon as practicable after the Reverse Split Effective Date. Our transfer agent is expected to act as “exchange agent” for the purpose of implementing the exchange of stock certificates. Holders of pre-Reverse Stock Split shares will be asked to surrender to the exchange agent certificates representing pre-Reverse Stock Split shares in exchange for post-Reverse Stock Split shares and payment in lieu of fractional shares (if any) in accordance with the procedures to be set forth in the letter of transmittal. No new post-Reverse Stock Split share certificates will be issued. The Post-Reverse Stock Split shares will be issued in book entry form. Post-Reverse Stock Split book entry shares will only be issued to a stockholder once such stockholder has surrendered such stockholder’s outstanding certificate(s).

STOCKHOLDERS SHOULD NOT DESTROY ANY PRE-SPLIT STOCK CERTIFICATE AND SHOULD NOT SUBMIT ANY CERTIFICATES UNTIL THEY ARE REQUESTED TO DO SO.

Accounting Consequences

The par value per share of our Common Stock would remain unchanged at $0.001 per share after the Reverse Stock Split. As a result, on the Reverse Stock Split Effective Date, the stated capital on our balance sheet attributable to the Common Stock would be reduced proportionally, based on the actual Reverse Stock Split ratio, from its present amount, and the additional paid-in capital account would be credited with the amount by which the stated capital would be reduced. The net income or loss per share of Common Stock would be increased because there would be fewer shares of Common Stock outstanding. Additionally, as of the Reverse Stock Split Effective Date, Unum will adjust and proportionately decrease the number of shares of Common Stock subject to, and adjust and proportionately increase the exercise price of, all stock options to acquire Common Stock. The Reverse Stock Split would be reflected retroactively in certain of our consolidated financial statements. We do not anticipate that any other accounting consequences would arise as a result of the Reverse Stock Split.

No Appraisal Rights

Our stockholders are not entitled to dissenters’ or appraisal rights under the General Corporation Law of the State of Delaware with respect to the proposed amendment to our Third Amended and Restated Certificate of Incorporation to effect a Reverse Stock Split.

Material U.S. Federal Income Tax Considerations of the Reverse Stock Split

The following discussion summarizes certain material U.S. federal income tax considerations of the Reverse Stock Split that would be expected to apply generally to U.S. Holders (as defined below) of our Common Stock. This summary is based upon current provisions of the Internal Revenue Code of 1986, as amended, or the Code,

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existing Treasury Regulations under the Code and current administrative rulings and court decisions, all of which are subject to change or different interpretation. Any change, which may or may not be retroactive, could alter the tax consequences to us or our stockholders as described in this summary. No ruling from the U.S. Internal Revenue Service, or the IRS, has been or will be requested in connection with the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or a court would not sustain any such challenge.

No attempt has been made to comment on all U.S. federal income tax consequences of the Reverse Stock Split that may be relevant to particular U.S. Holders, including holders: (i) who are subject to special tax rules such as dealers, brokers and traders in securities, mutual funds, regulated investment companies, real estate investment trusts, insurance companies, banks or other financial institutions or tax-exempt entities; (ii) who acquired their shares in connection with stock options, stock purchase plans or other compensatory transactions; (iii) who hold their shares as a hedge or as part of a hedging, straddle, “conversion transaction”, “synthetic security”, integrated investment or any risk reduction strategy; (iv) who are partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, S corporations, or other pass-through entities or investors in such pass-through entities; (v) who do not hold their shares as capital assets for U.S. federal income tax purposes (generally, property held for investment within the meaning of Section 1221 of the Code); (vi) who hold their shares through individual retirement or other tax-deferred accounts; or (vii) who have a functional currency for United States federal income tax purposes other than the U.S. dollar.

In addition, the following discussion does not address state, local or foreign tax consequences of the Reverse Stock Split, the Medicare tax on net investment income, U.S. federal estate and gift tax, the alternative minimum tax, the rules regarding qualified small business stock within the meaning of Section 1202 of the Code, or any other aspect of any U.S. federal tax other than the income tax. The discussion assumes that for U.S. federal income tax purposes the Reverse Stock Split will not be integrated or otherwise treated as part of a unified transaction with any other transaction. Furthermore, the following discussion does not address the tax consequences of transactions effectuated before, after or at the same time as the Reverse Stock Split, whether or not they are in connection with the Reverse Stock Split.

For purposes of this discussion, a U.S. Holder means a beneficial owner of our Common Stock who is: (i) an individual who is a citizen or resident of the United States; (ii) a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States or any subdivision thereof; (iii) an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or (iv) a trust (other than a grantor trust) if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (B) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

HOLDERS OF OUR COMMON STOCK ARE ADVISED AND EXPECTED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REVERSE STOCK SPLIT IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES OF THE REVERSE STOCK SPLIT UNDER STATE, LOCAL AND FOREIGN TAX LAWS.

Tax Consequences of the Reverse Stock Split

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Prior Reverse Split Proposal

At our 2020 Annual Meeting of Stockholders held on June 9, 2020, stockholders voted on a proposal to approve the adoption of an amendment to the Certificate of Incorporation to effect a reverse stock split at a ratio of not less than one-for-five and not more than one-for-ten, such ratio and the implementation and timing of such reverse stock split to be determined in the discretion of our Board of Directors (the “Prior Reverse Split Proposal”). The Company has not effected the reverse split contemplated by the Prior Reverse Split Proposal. Because the Company effected the Merger and the Financing, it has decided not to rely on the Prior Reverse Split Proposal to effect a reverse stock split of the Common Stock. Instead, stockholders must approve this Proposal No. 2 to effect a reverse split of the Common Stock.

Vote Required; Recommendation of Board of Directors

Stockholder approval of this Proposal No. 2 requires a “FOR” vote from the holders of a majority of the outstanding shares of our Common Stock as of the record date.

THE BOARD OF DIRECTORS RECOMMENDS THAT UNUM’S STOCKHOLDERS VOTE “FOR” THE APPROVAL OF A REVERSE STOCK SPLIT AS SET FORTH IN PROPOSAL NO. 2.

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PROPOSAL NO. 3: THE APPROVAL OF THE ADJOURNMENT OF THE SPECIAL MEETING, IF NECESSARY, TO CONTINUE TO SOLICIT PROXIES

General

If the Company fails to receive a sufficient number of votes to approve Proposals Nos. 1 and/or 2, the Company may propose to adjourn or postpone the Special Meeting. The Company currently does not intend to propose adjournment or postponement at the Special Meeting if there are sufficient votes to approve Proposal No. 1 and 2.

Vote Required; Recommendation of Board of Directors

The affirmative vote of the holders of a majority of the votes properly cast at the Special Meeting is required for approval of Proposal No. 3 (for the purpose of soliciting additional proxies to approve Proposals No. 1 and/or 2), if a quorum is present at the Special Meeting. If a quorum is not present at the Special Meeting, the affirmative vote of the stockholders holding a majority of the voting power present in person or by proxy at the Special Meeting is required for approval of Proposal No. 3.

THE BOARD OF DIRECTORS RECOMMENDS THAT UNUM’S STOCKHOLDERS VOTE “FOR” PROPOSAL NO. 3 TO ADJOURN THE SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF THERE ARE NOT SUFFICIENT VOTES IN FAVOR OF PROPOSALS NO. 1 AND/OR 2.

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THE MERGER

This section and the section entitled “The Merger Agreement” beginning on page [●] of this proxy statement describe the material aspects of the Merger, including the Merger Agreement. While Unum believes that this description covers the material terms of the Merger and the Merger Agreement, it may not contain all of the information that is important to you. You should read carefully this entire proxy statement, including the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated into this proxy statement by reference, and the other documents to which Unum has referred you. For a more detailed description of where you can find those other documents, please see the section entitled “Where You Can Find Additional Information” beginning on page [●] of this proxy statement.

Background of the Merger

The following chronology summarizes the key meetings and events that led to the signing of the merger agreement. The following chronology does not purport to catalogue every conversation among the Unum Board, the Transaction Committee (as defined below), members of Unum management or Unum’s representatives and other parties.

From time to time the Unum Board, together with Unum management, has considered various strategic business initiatives intended to strengthen its business and enhance stockholder value. These have included licensing or acquiring rights to product candidates, divesting certain product candidates or businesses, or acquisitions of or mergers with other companies with other products, product candidates or technologies.

On January 28, 2020, the Unum Board held a meeting with members of Unum management and representatives of Goodwin Procter LLP (referred to as “Goodwin”), Unum’s outside legal counsel, present. The Unum Board discussed the strategic, financial and operational challenges of operating Unum’s business given that Unum’s lead therapeutic program targeting non-Hodgkin lymphoma (ACTR707 + rituximab) had failed to demonstrate improved efficacy relative to competing programs and that key read-outs in its other therapeutic programs were delayed due to clinical operational challenges. The Unum Board also discussed the risks and challenges facing Unum as a result of its cash burn levels and declining cash position. In addition, the Unum Board also reviewed the strategic alternatives that may have been available to Unum, including the potential risks and benefits of licensing or acquiring rights to product candidates, divesting certain product candidates or businesses or entering into a business combination transaction with another company, each with a view towards enhancing value for Unum stockholders. Present for a portion of the meeting were representatives of a financial advisor selected by Unum for, among other reasons, its experience and reputation, its knowledge of and involvement in recent transactions in the life sciences industry and its familiarity with Unum. Following discussion, the Unum Board concluded that it was in the best interests of stockholders for Unum to explore its broader strategic alternatives, including partnership and in-licensing product opportunities, as well as potential business combinations. The Unum Board directed management and the financial advisor to commence a strategic process and approved the timetable discussed at the meeting. In this regard, Unum engaged the financial advisor in February 2020 to assist Unum in these activities.

Also at the meeting, the Unum Board established an advisory transaction committee (referred to as the “Transaction Committee”), for convenience in order to assist the Unum Board in exploring potential strategic alternatives, including a possible business combination transaction. Arlene Morris, Bruce Booth, DPhil. and Matthew Ros, all of whom were non-management, independent directors, and have significant experience with merger and acquisition transactions, were appointed to the Transaction Committee. The Unum Board authorized the Transaction Committee to oversee the exploration of strategic alternatives, and, in between meetings of the Unum Board, to give direction to Unum’s financial and legal advisors and to lead on behalf of Unum (or to give guidance to Unum’s representatives in connection with) any negotiations with potentially interested parties and periodically to brief the Unum Board on the status of the exploration of strategic alternatives.

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Before and after the January 28, 2020 meeting of the Unum Board and throughout the strategic processes described herein, members of Unum management, members of the Unum Board, and members of the Transaction Committee consulted with representatives from Goodwin to discuss certain legal aspects of the processes and the directors’ fiduciary duties.

From late January through March 2020, as authorized by the Unum Board and the Transaction Committee, and with the assistance of its financial advisor, management had discussions with potentially interested companies primarily regarding Unum licensing or acquiring rights to product candidates or acquisitions of other products, product candidates or technologies, as well as potential business combinations. Ultimately, no definitive proposals were received that the Unum Board believed would enhance stockholder value, and the financial advisor’s engagement was terminated. Following these discussions, the Unum Board instructed management to proceed with various strategic actions, including preserving cash available by implementing restructuring plans to prioritize resources towards advancing its preclinical program, BOXR1030, for the treatment of solid tumor cancers and terminating certain employees for cost reduction purposes. The Unum Board also authorized management to begin to explore a reverse merger with another company, as well the sale of Unum’s legacy cell therapy assets (referred to as the “Company Assets”). A reverse merger, which represents a transaction in which an Unum subsidiary would merge with and into another company, with Unum surviving as the parent company and the other company continuing as an Unum subsidiary, was considered as a potential transaction structure, given Unum’s cash position and its status as a public company. In this regard, Unum engaged Ladenburg Thalmann & Co. Inc. (“Ladenburg”) in March 2020 to assist Unum in these activities. Unum engaged Ladenburg, among other reasons, because Ladenburg is nationally recognized as having investment banking professionals with significant experience in investment banking and mergers and acquisitions transactions involving life sciences companies.

On March 2, 2020, Unum announced that it initiated a reduction in force that resulted in the termination of approximately 60% of Unum’s employee workforce in connection with Unum’s restructuring plans.

On March 26, 2020, Unum announced that it would be exploring strategic alternatives in order to maximize stockholder value and that Unum had engaged Ladenburg to act as its strategic financial advisor to assist in the strategic review process.

From late March through late April 2020, Ladenburg and Unum management made outreach to a broad selection of private and public companies in the life sciences industry. These companies consisted of private companies in the initial public offering (“IPO”) queue, private companies not in the IPO queue, private companies that had failed in earlier attempts at an IPO, companies that might be interested in purchasing certain of the Company Assets, publicly traded ex-U.S. companies seeking a Nasdaq or New York Stock Exchange listing and also public companies in the U.S. that were believed to have a strategic fit with Unum or were seeking a merger transaction as a de facto financing event. A total of 372 companies were contacted as part of Ladenburg’s and Unum’s outreach process. Of these 372 companies contacted by Ladenburg during the outreach process, 68 companies received a process letter, 38 companies executed mutual confidentiality agreements, and 23 submitted a proposal.

On May 4, 2020, a representative of a financial advisor to Kiq contacted a representative of Ladenburg to express Kiq’s interest in exploring a reverse merger transaction with Unum. Later that day Unum and Kiq executed a mutual confidentiality agreement. Because Kiq had been formed by the Fairmount Funds on April 28, 2020, it had not been included in Ladenburg’s initial outreach process.

On April 30 and May 6, 2020, the Transaction Committee met with management and representatives of Ladenburg and Goodwin to review the various proposals. Of the 23 proposals submitted, the Transaction Committee instructed Ladenburg to have five selected companies, Companies A, B, C and D and Kiq, present to the Unum Board. At the meeting, the Transaction Committee approved Karen Ferrante, M.D. joining as member of the Transaction Committee, as well as Mr. Ros’ departure from the Transaction Committee. Dr. Ferrante was added given the Transaction Committee’s expected role in assessing the value of potential merger company assets based on their clinical data and Dr. Ferrante’s previous experience in clinical development.

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Beginning on April 13, 2020, each of Companies A, B, C and D and Kiq were provided access to an online data room containing nonpublic information regarding Unum (Kiq was provided access on May 14, 2020).

From May 7 through May 11, 2020, Companies A, B, C and D and Kiq, presented to the Unum Board, management and representatives of Ladenburg.

On May 12, 2020, the Unum Board met to discuss, among other things, the selection of finalists to participate in more in-depth diligence review and discussions regarding a possible reverse merger with Unum. Members of Unum management and representatives of Ladenburg and Goodwin were present. Based on the presentations and other considerations arising from a review of the potential for a successful strategic transaction, the Unum Board concluded that, of the five parties that presented, it would enter into a further phase of diligence and discussion regarding a potential strategic transaction with Company A, Company B and Kiq, with Kiq identified as the most desired candidate based on Kiq’s product pipeline and ability to obtain financing to fund the post-closing combined company. The Unum Board discussed that Kiq had not yet submitted a written proposal, and instructed representatives of Ladenburg to request a written proposal from Kiq. Company C was not included because of concerns regarding the strength of its management team and its ability to execute a concurrent financing to support the company post-merger. Company D was not included because of fundamental technical risks related to its lead product that were identified during diligence.

On May 13, 2020, Kiq submitted a preliminary non-binding written proposal that provided for, among other things, a 83% and 17% ownership split for Kiq and Unum equityholders in the post-closing company. Kiq’s proposal indicated that it expected that concurrent with the closing of the transaction with Unum it would raise a financing for the post-closing company (referred to as a “concurrent financing”) of $50—75 million. Kiq’s proposal also indicated that it was exploring two potential transaction structures, a traditional reverse merger transaction structure and an alternative structure that would provide for an accelerated timeline using a simultaneous sign and close structure which would allow the merger and concurrent financing to close on an accelerated basis (referred to as the “alternative structure”).

On May 14, 2020, at the direction of the Unum Board and the Transaction Committee, Ladenburg sent non-binding term sheets to Company A, Company B and Kiq. The Kiq term sheet proposed a post-closing ownership split of 80% and 20% for Kiq and Unum equityholders (on a treasury stock method basis), respectively, and proposed a concurrent financing of no less than $50.0 million to be dilutive proportionally to Kiq and Unum. The term sheet also included the ability for Unum to sell the Company Assets and assumed an adjustment to the exchange ratio if Unum’s net cash was less than $10 million. Unum’s ability to sell the Company Assets was included in the term sheet because Kiq had attributed no value to the Company Assets in the proposal it submitted on May 13, 2020.

On May 15, 2020, Company A informed representatives of Ladenburg that it was no longer interested in a reverse merger transaction with Unum, but that it remained interested in an acquisition of the Company Assets. Ladenburg, at the direction of the Transaction Committee, encouraged Company A to submit a proposal for the sale of the Company Assets and contacted four other companies that had previously expressed an interest in the sale of the Company Asset.

From May 15, 2020 through June 4, 2020, Unum continued diligence discussions and term sheet negotiations with Kiq. Negotiations focused on valuations and the concurrent financing in the case of Kiq and projected cash balance and liabilities in the case of Unum. By June 4, 2020, Unum and Kiq agreed on a proposed term sheet providing for a post-closing ownership split of 73.6% and 26.4% for Kiq and Unum equityholders (on a treasury stock method basis), respectively, and proposed a concurrent financing target of $50.0 million, and no less than $35.0 million, to be dilutive proportionally to Kiq and Unum. The term sheet assumed an adjustment to the exchange ratio if Unum’s net cash was less than $17.0 million, assuming proceeds from the sale of Company Assets. The term sheet provided that the parties would consider implementing the alternative structure, with a combination of Unum common stock and newly created preferred stock being issued as consideration for the

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merger. The term sheet included the ability for Unum to sell the Company Assets and for the Unum stockholders of record at the closing to receive a contingent value right (“CVR”) to receive certain common stock and/or cash payments from the net proceeds related to the disposition of the Company Assets within three years following the closing of the merger.

By June 4, 2020, Unum and Company B had negotiated a proposed term sheet providing for a post-closing ownership split of 73.6% and 26% for Company B and Unum equityholders (on a treasury stock method basis), respectively, and proposed a concurrent financing target of $50 million to be dilutive proportionally to Company B and Unum.

On June 4, 2020, 2020, the Board met with management and representatives of Ladenburg and Goodwin present to discuss the reverse merger proposals. Representatives of Ladenburg and Unum management provided an update on the status of reverse merger proposals. The Unum Board discussed that Company A had declined interest in pursuing a reverse merger transaction, but remained interested in a sale of Company Assets. The Unum Board also discussed that based on management’s diligence, Company B was viewed as not having clinical validation, faced significant competitive risk and significant uncertainty in its ability to secure a concurrent financing. The Unum Board concluded that based on the criteria and the discussions at the prior Board meetings, Kiq’s proposal represented the best alternative to further enhance stockholder value. This conclusion was based on, among other things, the directors’ view of the valuation of the potential merger candidates, and that Kiq was the most attractive candidate because of its worldwide rights to develop and commercialize PLX9486, a highly potent and selective KIT D816V inhibitor, in multipole indications, its commitment to a concurrent financing target of $50.0 million, and no less than $35.0 million, the implementation of the alternative structure that would allow the merger and the concurrent financing to close on an expedited basis, and their belief that a merger with Kiq will create more value for Unum stockholders than any of the other proposals that the Unum Board had received or that Unum could create as a standalone company. Following discussion, the Unum Board approved the term sheet with Kiq, which included a 30 day mutual exclusivity period with an exception for the sale of the Company Assets. Later that day, Unum and Kiq executed the term sheet. At the meeting, representatives of Ladenburg and management also provided an update on the process for the sale of Company Assets.

On June 10, 2020, Goodwin provided an initial draft of the merger agreement to Kiq’s outside counsel.

From June 10 through July 5, 2020, representatives of Unum, Ladenburg, Goodwin, Kiq and Kiq’s outside counsel, had various telephonic meetings to finalize the confirmatory due diligence of the parties and discuss open points in the merger agreement and related documents.

From June 10 through July 5, 2020, representatives of Goodwin, at the direction of the Unum Board and with input from Unum management and with the benefit of the views of the directors provided at the Unum Board and Transaction Committee meetings, and Kiq’s outside counsel exchanged drafts and participated in discussions regarding the terms of the merger agreement and related documents. The items negotiated with respect to the merger agreement and related documents included, among other things: the implementation of the alternative structure; the representations and warranties to be made by the parties; the definitions of material adverse effect; the conditions to completion of the merger, including the required minimum net cash balances of Unum and the minimum amount for Kiq’s planned concurrent financing to fund to the post-closing company; the terms of the preferred stock to be issued to the Kiq equityholders as consideration for the merger; the terms of the securities purchase agreement for the concurrent financing; the terms of the CVR agreement by which the Unum stockholders would be issued a CVR with respect to the sale of the Company Assets; the composition of the board of directors and executive management team of the post-closing company; the remedies available to each party under the merger agreement; and the parties that would execute stockholder support agreements and lock-up agreements.

On June 10, 2020, an affiliate of SOTIO LLC (referred to as “Sotio”) submitted a proposal to purchase the Company Assets.

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On June 15, 2020, Company A submitted a proposal to purchase the Company Assets.

On June 16, 2020, Sotio submitted a revised proposal to purchase the Company Assets.

On June 17, 2020, the Unum Board held a meeting with members of Unum management and representatives of Ladenburg and Goodwin present. Unum’s chief executive officer, Charles Wilson, Ph.D., and representatives of Ladenburg provided an update regarding the recent discussions with Kiq and the proposals for the sale of Company Assets. After reviewing and discussing the proposals for the sale of the Company Assets, the Board approved Unum entering into a term sheet with Sotio, which included a 30 day exclusivity period, having determined that the bid provided the most value to Unum’s stockholders and that Sotio had the financial resources and ability to close a deal quickly. On June 23, 2020, Unum and Sotio executed the term sheet.

On June 18, 2020, Goodwin provided an initial draft of the CVR agreement to Kiq’s outside counsel.

On June 29, 2020, Goodwin provided an initial draft of the securities purchase agreement for the concurrent financing to Kiq’s outside counsel.

On July 2, 2020, the Transaction Committee held a meeting with members of Unum management and representatives of Ladenburg and Goodwin present. The Transaction Committee received updates on the status of the proposed transactions with Kiq and Sotio, as well as the concurrent financing.

On July 2, 2020, as authorized by the Transaction Committee, Unum extended the mutual exclusivity agreement with Kiq pursuant to which the parties agreed to negotiate exclusively until July 11, 2020.

On July 5, 2020, the Unum Board held a meeting to discuss the terms of the proposed transaction with Kiq and the concurrent financing. Members of management and representatives of Ladenburg and Goodwin were present. Representatives of Goodwin reviewed the fiduciary duties of the Unum Board with respect to the proposed merger with Kiq. Representatives of Goodwin provided an overview of the negotiation process to date with Kiq’s representatives, as well as a presentation regarding the material terms of the draft merger agreement, the draft securities purchase agreement, the draft CVR agreement, the draft stockholder support agreement and draft lock-up agreement. Representatives of Ladenburg and Goodwin discussed with the Unum Board that the exchange ratio used to establish the number of shares of Unum common stock and preferred stock to be issued to Kiq’s equityholders in the merger (referred to as the “merger shares”) provided for a 60.8% and 39.2% ownership split for the Kiq and Unum equityholders in the post-closing company, and was based on an assumed $34 million valuation of Unum and an assumed $45 million valuation for Kiq. Representatives of Ladenburg and Goodwin also discussed with the Unum Board that the transaction with Kiq would be implemented via a simultaneous sign and close structure and approval by the Unum stockholders would not be required. Representatives of Ladenburg and Goodwin also discussed with the Unum Board that Kiq had secured approximately $104.4 million for the concurrent financing. Dr. Booth, a partner in Atlas Venture and a member of the Unum Board and Transaction Committee, disclosed that Atlas Venture was an investor in the concurrent financing. Representatives of Ladenburg and Goodwin also discussed with the Unum Board that at closing the Unum stockholders of record would be issued a CVR regarding the net proceeds from the sale of the Company Assets pursuant to the CVR agreement. Dr. Wilson and representatives of Ladenburg also provided an update on the status of the sale of the Company Assets to Sotio.

Management discussed Unum’s cash burn and cash position. Management also discussed an analysis of a potential liquidation of Unum prepared by Unum, including the potential timeline for liquidation and an estimate, subject to various assumptions, of the amount that would be distributable to Unum stockholders in this scenario (which is summarized under the section entitled “—Certain Unum Management Unaudited Prospective Financial Information”, and referred to as the “liquidation plan”). In the context of reviewing the liquidation plan, the Unum Board discussed the risks, challenges, and strategic opportunities facing Unum. Following discussion and questions of management regarding various matters relating to the liquidation plan, including the

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assumptions on which the liquidation plan was based, the Unum Board approved the liquidation plan for use by Ladenburg in conducting its financial analyses of Unum.

The Unum Board discussed that Unum and Kiq had agreed that Dr. Wilson would continue serve as the chief executive officer and a director of Unum following the transaction. The Unum Board also discussed that Chris Cain, Director of Research of the Fairmount Funds and Peter Harwin, Managing Member of the Fairmount Funds would join the Unum Board in conjunction with the Kiq transaction.

Representatives of Ladenburg reviewed certain financial matters concerning Kiq and the proposed merger and rendered the oral opinion of Ladenburg, which was subsequently confirmed by the delivery of a written opinion dated July 5, 2020, to the Unum Board to the effect that as of the date of such opinion, and based upon and subject to the various assumptions made, procedures followed, matters considered, and qualifications and limitations set forth in its written opinion, the amount of Company Merger Shares (as defined in the merger agreement) was fair, from a financial point of view, to the holders of Unum Common Stock (as more fully described in the section entitled “The Merger—Opinion of Unum’s Financial Advisor” beginning on page [●] of this proxy statement).

After further discussing the advantages and risks of the proposed transaction that are described in the section entitled “The Merger—Unum’s Reasons for the Merger” beginning on page [●], and based on the discussions and deliberations at the Unum Board meetings and Transaction Committee meetings and after receiving the Transaction Committee’s favorable recommendation of the merger, the Unum Board determined unanimously that the merger agreement and the transactions contemplated by the merger agreement were fair to, and in the best interests of, Unum and its stockholders, approved and declared advisable the merger agreement and the transactions contemplated by the merger agreement, authorized management to execute the merger agreement on behalf of Unum. Dr. Booth abstained from the vote regarding the securities purchase agreement because of Atlas’ aforementioned investment in the concurrent financing.

Later on July 5 and July 6, 2020, the parties finalized and executed the merger agreement, the securities purchase agreement, the voting agreements and the lock-up agreements.

On the morning of July 6, 2020, Unum and Kiq issued a joint press release announcing the completion of Unum’s acquisition of Kiq and that Unum had entered into the securities purchase agreement to result in gross proceeds to Unum of approximately $104.4 million, and made available an investor presentation regarding the transactions.

On July 9, 2020, Unum completed the concurrent financing as a private placement of 118,638 Series A Preferred Stock to new and existing investors in exchange for gross proceeds of $104.4 million.

On August 28, 2020, Unum entered into an asset purchase agreement with Sotio, pursuant to which, among other things, Sotio agreed to acquire from Unum assets relating to its Bolt-On Chimeric Receptor (“BOXR”) technology and Autologous Cell Therapy Industrial Automation (“ACTIA”) technology (collectively, the “BOXR Platform”), for total cash consideration of up to $11.5 million, consisting of an upfront payment of $8.1 million ($1.725 million of which was placed in escrow for 90 days) and potential milestone payments of up to $3.4 million in the aggregate upon the achievement of certain milestones.

Unum’s Reasons for the Merger

In the course of its evaluation of the merger, the merger agreement and related agreements, the Unum Board held numerous meetings, consulted with its management, legal counsel and its financial advisor and reviewed a significant amount of information and, in reaching its decision to approve the merger and the merger agreement, the Unum Board considered a number of factors, including, among others, the following factors:

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The Unum Board also reviewed various reasons impacting the financial condition, results of operations and prospects of Unum, including:

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In the course of its deliberations, the Unum Board also considered a variety of risks and other countervailing factors related to entering into the Merger, including:

The foregoing information and factors considered by the Unum Board are not intended to be exhaustive but are believed to include all of the material factors considered by the Unum Board. In view of the wide variety of reasons considered in connection with its evaluation of the Merger and the complexity of these matters, the Unum Board did not find it useful to attempt, and did not attempt, to quantify, rank or otherwise assign relative weights to these reasons. In considering the reasons described above, individual members of the Unum Board may have given different weight to different reasons. The Unum Board conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, Unum’s management team, the legal and financial advisors of Unum, and considered the reasons overall to be favorable to, and to support, its determination.

Overview of KIQ

Kiq was a biopharmaceutical company focused on developing a pipeline of novel therapies to treat cancer patients. Kiq’s most advanced program, PLX9486, is a highly potent and selective KIT D816V inhibitor that is now being developed by Unum to treat systemic mastocytosis and GIST patients. Kiq acquired the rights to develop and commercialize PLX9486, which was in Phase II clinical development, as well as an additional selective KIT inhibitor, PLX0206, which was preclinical, through an exclusive license agreement, which is discussed below.

Kiq was formed as a limited liability company in Delaware on April 28, 2020. Prior to its acquisition by Unum, Kiq never had any employees, revenues or facilities and only had one asset, an exclusive License Agreement,

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dated May 27, 2020, between Plexxikon Inc. and Kiq LLC (the “License Agreement”) that it acquired in May 2020 to develop and commercialize PLX9486, as well as an additional selective KIT inhibitor, PLX0206, but Kiq had no assembled workforce or processes in place to perform the development of the license. The License Agreement is attached as Annex C to this proxy statement. Given Kiq’s short financial history and limited assets, Unum does not believe that the financial information set forth in Items 13 and 14 of Schedule 14A, with respect to Kiq, is material for Unum’s stockholders to exercise their prudent judgment with respect to the Conversion Proposal, the Reverse Stock Split Proposal or the Adjournment Proposal, and is therefore not included in this proxy statement.

The estimated consideration for the acquisition of Kiq was approximately $44 million. As the transaction does not qualify as a business combination, it will be accounted for as an asset acquisition. The Company concluded to account for this acquisition as an asset acquisition as substantially all of the fair value of the gross assets acquired was concentrated in a single identifiable asset, the license rights pursuant to the exclusive License Agreement from Plexxikon Inc.

Regulatory Matters

Neither Unum nor Kiq was required to make any filings or to obtain approvals or clearances from any antitrust regulatory authorities in the United States or other countries to consummate the Merger. In the United States, Unum must comply with applicable federal and state securities laws and the NASDAQ rules in connection with the issuance of shares of Common Stock and Series A Preferred Stock in the Merger and the Financing, including the filing with the SEC of this proxy statement.

Certain Unum Management Unaudited Prospective Financial Information

As a matter of course, Unum does not publicly disclose long-term projections of future financial results due to the inherent unpredictability and subjectivity of underlying assumptions and estimates. However, in connection with its evaluation of the merger, the Unum Board considered certain unaudited, non-public financial projections with respect to Kiq as developed by Unum management, based on discussions with and materials provided by Kiq to Unum management, industry metrics and Unum management’s judgement, for each of the calendar years ending December 31, 2020 through 2035, (referred to as the “Unum management Kiq projections”). Kiq did not provide or review the Unum management Kiq projections. The Unum management Kiq projections were provided to Unum’s financial advisor. A summary of the Unum management Kiq projections is set forth below.

The inclusion of the Unum management Kiq projections should not be deemed an admission or representation by Unum, its financial advisor or any of their respective officers, directors, affiliates, advisors, or other representatives with respect to such projections. The Unum management Kiq projections are not included to influence your views on the merger but solely to provide stockholders access to certain non-public information prepared by Unum management that was provided to the Unum Board in connection with its evaluation of the merger and to Unum’s financial advisor to assist with its financial analyses as described in the section titled “The Merger—Opinion of Unum’s Financial Advisor.” The information from the Unum management Kiq projections should be evaluated, if at all, in conjunction with the historical financial statements and other information regarding Unum and Kiq in this proxy statement.

The unaudited prospective financial information included in this document has been prepared by, and is the responsibility of, Unum’s management. The unaudited prospective financial information was not prepared with a view toward public disclosure, nor was it prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information, or GAAP. PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the accompanying unaudited prospective financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report incorporated in this proxy statement relates to Unum’s previously issued financial statements. It does not extend to the unaudited prospective financial information and should not be read to do so.

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The Unum management Kiq projections were prepared solely for internal use and in connection with Unum’s financial advisor’s work and are subjective in many respects. As a result, these Unum management Kiq projections are susceptible to multiple interpretations and periodic revisions based on actual experience and business developments. Although Unum believes its assumptions about Kiq to be reasonable, all financial projections are inherently uncertain, and Unum expects that differences will exist between actual and projected results. Although presented with numerical specificity, the Unum management Kiq projections reflect numerous variables, estimates, and assumptions made by Unum’s management at the time they were prepared, and also reflect general business, economic, market, and financial conditions and other matters, all of which are difficult to predict and many of which are beyond Unum’s control. In addition, the Unum management Kiq projections cover multiple years, and this information by its nature becomes subject to greater uncertainty with each successive year. Accordingly, there can be no assurance that the estimates and assumptions made in preparing the Unum management Kiq projections will prove accurate or that any of the Unum management Kiq projections will be realized.

The Unum management Kiq projections included certain assumptions relating to, among other things, Unum’s expectations, which may not prove to be accurate, based on information provided by Kiq relating to the gastrointestinal stromal tumor market and the systemic mastocytosis market; and revenues and cost of goods sold.

The Unum management Kiq projections are subject to many risks and uncertainties and you are urged to review the section titled “Risk Factors” beginning on page [●] of this proxy statement for a description of risk factors relating to the merger and Kiq’s business. You should also read the section titled “Cautionary Note Regarding Forward-Looking Statements” beginning on page [●] of this proxy statement for additional information regarding the risks inherent in forward-looking information such as the Unum management Kiq projections. Unum management Kiq projections that were derived or extrapolated by Unum management were not reviewed or passed upon by Kiq management, its board of directors or its advisors.

The inclusion of the Unum management Kiq projections herein should not be regarded as an indication that Unum, its financial advisor or any of their respective affiliates or representatives considered or consider the Unum management Kiq projections to be necessarily indicative of actual future events, and Unum management Kiq projections should not be relied upon as such. The Unum management Kiq projections do not take into account any circumstances or events occurring after the date they were prepared. Unum does not intend to, and disclaims any obligation to, update, correct, or otherwise revise the Unum management Kiq projections to reflect circumstances existing or arising after the date the Unum management Kiq projections were generated or to reflect the occurrence of future events, even in the event that any or all of the assumptions or other information underlying the Unum management Kiq projections are shown to be in error. Furthermore, the Unum management Kiq projections do not take into account the effect of any failure of the merger to be consummated and should not be viewed as accurate or continuing in that context. The statements set forth in this and the foregoing six paragraphs are referred to as “financial projection statements”.

In light of the foregoing factors and the uncertainties inherent in financial projections, stockholders are cautioned not to place undue reliance, if any, on the Unum management Kiq projections.

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The following table, which is subject to the financial projection statements above, presents a selected summary of the Unum management Kiq projections that were made available to the Unum Board and Unum’s financial advisor.

The revenues and expenses in the following projections have been adjusted for an assumption of a cumulative probability of success for PLX9486 in the GIST and systemic mastocytosis market of 33% (as to which there can be no assurance).

Unum Management Liquidation Analysis

At the direction of Unum’s management and with the Unum Board’s consent, Ladenburg assumed that the only material asset of Unum was its cash and that Unum did not currently, and did not intend in the future to, conduct any activity that may result in the generation of revenue. Accordingly, Ladenburg considered an appropriate measure of the implied equity value of Unum Common Stock to be the amount of cash available for distribution to Unum stockholders in an orderly liquidation of Unum. Based on information provided by Unum’s management, Ladenburg calculated the total equity value of Unum to be $28.9 million, calculated as $11.9 million of cash as of July 7, 2020 less wind-down costs of $7.2 million, which would result in a payment of $0.23 per share of Unum Common Stock, representing $0.65 less per share than the value of the equity split on a per share basis. Based on information provided by Unum’s management assuming an alternative scenario assuming proceeds to Unum of $11.5 million from the sale of the Company Assets, Ladenburg calculated the total liquidation value as $18.7 million as of July 7, 2020, would result in a payment of $0.56 per share of Unum Common Stock, representing $0.66 less per share than the value of the equity split on a per share basis. The analyses assumed a liquidation date of July 7, 2020 and that all wind-down costs were paid in full, that all remaining licenses were terminated, that employees are retained to facilitate wind-down until liquidation date, that all employee-related costs are paid in full, and, to be conservative, that no funds were retained in reserve for unknown or contingent liabilities.

Opinion of Unum’s Financial Advisor

As stated above, pursuant to an engagement letter dated March 17, 2020, Unum retained Ladenburg to act as a financial advisor in connection with the Merger and to render the Opinion to the Unum Board as to the fairness of the amount of Merger Shares (assumed at the time to be 50,923,110) to be issued to the holders of Company Membership Interests, to the stockholders of Unum. On July 5, 2020, at the request of the Unum Board, Ladenburg rendered the oral opinion, subsequently confirmed by delivery of the written opinion dated July 5, 2020, to the Unum Board, that the amount of Merger Shares to be issued to the holders of Company Membership Interests, was fair from a financial point of view, to the Unum stockholders as of the date of such Opinion and based upon the various assumptions, qualifications and limitations set forth therein.

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The full text of the Opinion is attached as Annex B to this proxy statement and is incorporated by reference. Unum encourages its stockholders to read the Opinion in its entirety for the assumptions made, procedures followed, other matters considered and limits of the review by Ladenburg. The summary of the Opinion set forth herein is qualified by reference to the full text of the Opinion. Ladenburg provided its Opinion for the sole benefit and use by the Unum Board in its consideration of the Merger. The Opinion is not a recommendation to the Unum Board or to any stockholder as to how to vote with respect to the proposed Merger or to take any other action in connection with the Merger or otherwise.

In connection with the Opinion, Ladenburg took into account an assessment of general economic, market and financial conditions as well as its experience in connection with similar transactions and securities valuations generally and, among other things:

In preparing Ladenburg’s Opinion, with Unum’s consent, Ladenburg has not ascribed any value to the CVRs to be distributed to the holders of Unum Common Stock prior to the Merger given Ladenburg’s determination that any projections underlying the analysis would be too speculative to use in Ladenburg’s analysis of the value of such rights as it relates to the fairness of the issuance of Merger Shares. For the avoidance of doubt, Ladenburg is not expressing any opinion as to the actual value of the CVRs. The terms and conditions of the Merger are more fully set forth in the Merger Agreement. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Merger Agreement. Ladenburg has, with Unum’s consent, relied upon the

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assumption that all information provided to Ladenburg by Unum and Kiq is accurate and complete in all material respects. Ladenburg expressly disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting Ladenburg’s Opinion of which Ladenburg becomes aware after the date hereof. Ladenburg has assumed there were no material changes in the assets, liabilities, financial condition, results of operations, business or prospects of Unum or Kiq since the date of the last financial statements made available to Ladenburg. Ladenburg has not obtained any independent evaluations, valuations or appraisals of the assets or liabilities of Unum or Kiq, nor has Ladenburg been furnished with such materials. In addition, Ladenburg has not evaluated the solvency or fair value of Unum or Kiq under any state or federal laws relating to bankruptcy, insolvency or similar matters. Ladenburg has been informed that the Unum’s Net Cash amount is expected to be $12.0 million at Closing. Ladenburg’s Opinion does not address any legal, tax or accounting matters related to the Merger, as to which Ladenburg has assumed that Unum and the Board of Directors have received such advice from legal, tax and accounting advisors as each has determined appropriate. Ladenburg’s Opinion addresses only the fairness of the issuance of Merger Shares, from a financial point of view, to the Unum Stockholders. Ladenburg expresses no view as to any other aspect or implication of the Merger or any other agreement or arrangement entered into in connection with the Merger. Ladenburg’s Opinion is necessarily based upon economic and market conditions and other circumstances as they exist and can be evaluated by Ladenburg on the date hereof. It should be understood that although subsequent developments may affect Ladenburg’s Opinion, Ladenburg does not have any obligation to update, revise or reaffirm Ladenburg’s Opinion and Ladenburg expressly disclaims any responsibility to do so.

Ladenburg did not consider any potential legislative or regulatory changes currently being considered or recently enacted by the United States or any foreign government, or any domestic or foreign regulatory body, or any changes in accounting methods or generally accepted accounting principles that may be adopted by the SEC, the Financial Accounting Standards Board, or any similar foreign regulatory body or board.

For purposes of rendering the Opinion, Ladenburg assumed in all respects material to Ladenburg’s analysis, that the representations and warranties of each party contained in the Merger Agreement were true and correct, that each party will perform all of the standards of the covenants and agreements required to be performed by it under the Merger Agreement and that all conditions to the consummation of the Merger will be satisfied without waiver thereof. Ladenburg assumed that the final form of the Merger Agreement was substantially similar to the last draft reviewed by Ladenburg. Ladenburg also assumed that all governmental, regulatory and other consents and approvals contemplated by the Merger Agreement will be obtained and that in the course of obtaining any of those consents no restrictions will be imposed or waivers made that would have an adverse effect on the contemplated benefits of the Merger. Ladenburg assumed that the Merger will be consummated in a manner that complies with the applicable provisions of the Securities Act, the Exchange Act and all other applicable federal and state statutes, rules and regulations. Unum informed Ladenburg, and Ladenburg assumed, that the Merger will be treated as a tax-free reorganization within the meaning of 368(a) of the Code.

It is understood that the Ladenburg Opinion is intended for the benefit and use of the Board of Directors in its consideration of the financial terms of the Merger and, except as set forth in the engagement letter with Unum, dated as of March 17, 2020 (the “Engagement Letter”), may not be used for any other purpose or reproduced, disseminated, quoted or referred to at any time, in any manner or for any purpose without our prior written consent, unless pursuant to applicable law or regulations or required by other regulatory authority by the order or ruling of a court or administrative body, except that this opinion may be included in its entirety in any filing related to the Merger to be filed with the Securities and Exchange Commission. Ladenburg’s Opinion does not address Unum’s underlying business decision to proceed with the Merger or the relative merits of the Merger compared to other alternatives available to Unum. Ladenburg expresses no opinion as to the prices or ranges of prices at which shares or the securities of any person, including Unum, will trade at any time, including following the announcement or consummation of the Merger. Ladenburg has not been requested to opine as to, and Ladenburg’s Opinion does not in any manner address, the amount or nature of compensation to any of the officers, directors or employees of any party to the Merger, or any class of such persons, relative to the compensation to be paid to the Unum Stockholders in connection with the Merger or with respect to the fairness of any such compensation.

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The issuance of the Opinion was approved by a fairness opinion committee of Ladenburg. The Opinion may not be published or otherwise used or referred to, nor shall any public reference to Ladenburg be made, without Ladenburg’s prior written consent.

Principal Financial Analyses. The following is a summary of the principal financial analyses performed by Ladenburg to arrive at its Opinion. Some of the summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data set forth in the tables without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of the financial analyses. Ladenburg performed certain procedures, including each of the financial analyses described below and reviewed with the Unum Board the assumptions on which such analyses were based and other factors, including the historical and projected financial results of Unum and Kiq.

Transaction Overview as of the Date of the Opinion

Based upon the issuance of Merger Shares of 50,923,110 at the time of the signing of the Merger Agreement, it was estimated that at the closing: (a) Kiq equity holders as of immediately prior to the Merger (excluding the shares issued in the $104.4 million Financing) will own approximately 60.8% of the fully-diluted shares of Unum Common Stock outstanding (excluding certain option holders), and (b) the Unum equity holders as of immediately prior to the Merger (excluding certain option holders) will own approximately 39.2% of the fully-diluted shares of Unum Common Stock outstanding, in each case, subject to adjustment of the Merger Shares as set forth in the Merger Agreement and described herein.

Implied Equity Value

Ladenburg has assumed an implied equity value for Kiq of $45.0 million based upon the Merger Agreement.

Implied Total Enterprise Value

For purposes of the Opinion, Ladenburg calculated an implied total enterprise value for Kiq of $45.0 million by subtracting an assumed Kiq net cash balance of approximately $0.0 million from the implied equity value of approximately $45.0 million, which was based on Kiq’s projected indebtedness, cash and cash equivalents at closing.

Analysis of Selected Initial Public Offering Transactions

Ladenburg reviewed certain publicly available information for the IPOs for two sets of companies, those who were in Phase II through Phase III stages of clinical development at the time of IPO and focused on precision oncology and those companies who were in Phase II through Phase III stages of clinical development at the time of IPO and focused on rare oncology. Although the companies referred to below were used for comparison purposes, none of these companies are directly comparable to Kiq. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the selected companies below.

With regards to the precision oncology companies, Ladenburg’s selected financial data of the six “Selected Precedent Phase II and Phase III Precision Oncology IPO Companies” were:

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The total enterprise value at IPO is defined as the pre-money equity value plus indebtedness, liquidation value of preferred stock and non-controlling interest, minus cash and cash equivalents at the time of its IPO. The Selected Precedent Phase II and Phase III Precision Oncology IPO Companies had total enterprise values between $66 million and $966 million. Ladenburg derived a median total enterprise value of $327 million for the Selected Precedent Phase II and Phase III Precision Oncology IPO Companies. Using the 25th percentile and the 75th percentile of the implied total enterprise values, Ladenburg then calculated a range of implied total equity values for Kiq (by adding an estimated $0.0 million in cash at closing), which was $158.3 million to $396.3 million. This compares to Kiq’s implied equity value as per the Merger Agreement of $45.0 million.

Selected Precedent Phase II and Phase III Precision Oncology IPO Companies

With regards to the rare oncology companies, Ladenburg’s selected financial data of the ten “Selected Precedent Phase II and Phase III Rare Oncology IPO Companies” were:

The total enterprise value at IPO is defined as the pre-money equity value plus indebtedness, liquidation value of preferred stock and non-controlling interest, minus cash and cash equivalents at the time of its IPO. The Selected Precedent Phase II and Phase III Rare Oncology IPO Companies had total enterprise values between $61 million and $4,919 million. Ladenburg derived a median total enterprise value of $296 million for the Selected Precedent Phase II and Phase III Rare Oncology IPO Companies. Using the 25th percentile and the 75th percentile of the implied total enterprise values, Ladenburg then calculated a range of implied total equity values for Kiq (by adding an estimated $0.0 million in cash at closing), which was $158.0 million to $382.4 million. This compares to Kiq’s implied equity value as per the Merger Agreement of $45.0 million.

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Selected Precedent Phase II and Phase III Rare Oncology IPO Companies

Analysis of Selected Publicly Traded Companies

Based on its experience and professional judgment and using financial screening sources and databases to find companies that share similar business characteristics to Kiq within the biopharmaceutical industry, Ladenburg selected financial data of for two sets of companies, those who are currently in Phase II through Phase III stages of clinical development and focused on precision oncology and those companies who are currently in Phase II through Phase III stages of clinical development and focused on rare oncology. Although the companies referred to below were used for comparison purposes, none of those companies is directly comparable to Kiq. Accordingly, an analysis of the results of such a comparison is not purely mathematical but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the selected companies below. The total enterprise values are based on closing stock prices on July 2, 2020.

With regards to the precision oncology companies, Ladenburg’s selected financial data of the eleven “Selected Phase II and Phase III Precision Oncology Publicly Traded Companies” were:

The Selected Phase II and Phase III Precision Oncology Publicly Traded Companies had implied total enterprise values between $32 million and $4,975 million. Ladenburg derived a median implied total enterprise value of $1,102 million for the Selected Phase II and Phase III Precision Oncology Publicly Traded Companies. Using the 25th percentile and the 75th percentile of the implied total enterprise values, Ladenburg then calculated a range of implied total equity values for Kiq (by adding an estimated $0.0 million in cash at closing), which was $632.0 million to $1,695.0 million. This compares to Kiq’s implied equity value as per the Merger Agreement of approximately $45.0 million.

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Selected Phase II and Phase III Precision Oncology Publicly Traded Companies

With regards to the rare oncology companies, Ladenburg’s selected financial data of the twenty two “Selected Phase II and Phase III Rare Oncology Publicly Traded Companies” were:

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The Selected Phase II and Phase III Rare Oncology Publicly Traded Companies had implied total enterprise values between $(8.0) million and $4,207 million. Ladenburg derived a median implied total enterprise value of $297 million for the Selected Phase II and Phase III Rare Oncology Publicly Traded Companies. Using the 25th percentile and the 75th percentile of the implied total enterprise values, Ladenburg then calculated a range of implied total equity values for Kiq (by adding an estimated $0.0 million in cash at closing), which was $65.8 million to $991.5 million. This compares to Kiq’s implied equity value as per the Merger Agreement of approximately $45.0 million.

Selected Phase II and Phase III Rare Oncology Publicly Traded Companies

Analysis of Selected Precedent M&A Transactions

Ladenburg reviewed the financial terms, to the extent the information was publicly available, of the eight most recent qualifying merger transactions of companies in the biopharmaceutical industry, which had a lead candidate in Phase II through Phase III stage of clinical development in precision or rare oncology spaces (the “Selected Precedent M&A Transactions”). Although the precedent transactions referred to below were used for comparison purposes, none of the target companies is directly comparable to Kiq. Accordingly, an analysis of the results of such a comparison is not purely mathematical, but instead involves complex considerations and judgments concerning differences in historical and projected financial and operating characteristics of the companies involved and other factors that could affect the merger value of such companies and Kiq to which they are being compared. Ladenburg reviewed the total enterprise values of the target companies (including downstream milestone payments). These transactions, including the date each was closed, were as follows below.

The Selected Precedent M&A Transactions had total implied enterprise values between $49 million and $4,623 million. Ladenburg derived a median total enterprise value of $1,643 million for the Selected Precedent M&A Transactions. Using the 25th percentile and the 75th percentile of the implied total enterprise values, Ladenburg then calculated a range of implied total enterprise values for Kiq (by adding an estimated $0.0 million

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in cash at closing), which was $447.4 million to $2,154.4 million. This compares to Kiq’s implied equity value as per the Merger Agreement of approximately $45.0 million.

Selected Precedent M&A Transactions

Discounted Cash Flow Analysis

Ladenburg estimated a range of total enterprise values for Kiq based upon the present value of Kiq’s estimated after-tax unlevered free cash flows, which are set forth above in the section entitled “The Merger—Certain Unum Management Unaudited Prospective Financial Information.” Ladenburg reviewed and analyzed the revenue and expense projections for Kiq as prepared by the management of Unum.

Unum provided certain assumptions that supported the market opportunity including market penetration data and launch years for PLX9486. The yearly revenue assumptions were derived by Unum based on their assumptions regarding the potential market for PLX9486, an analysis of the competitive landscape and data from various databases. After arriving at a set of projections, Unum further adjusted downward the revenue assumptions in the years 2025 to 2035 by 66.0% to account for the probability of success given the clinical phase of development of Kiq’s products. Please see the section entitled “The Merger—Certain Unum Management Unaudited Prospective Financial Information” for additional information on the unadjusted revenue of PLX9486. Cost of goods sold for PLX9486 was assumed to be 3% of net sales following commercialization. License and royalty payments were assumed to be 2% of net PLX9486 sales following commercialization, sales, general and administrative spend were assumed to be 15% of net PLX9486 sales following commercialization and research and development costs were assumed to be 1% of net PLX9486 sales following commercialization. Unum also further adjusted downward these expenses by 66% to account for the probability of success. Unum then subtracted all the risk-adjusted expenses in the projection period from risk-adjusted revenue. Unum assumed a 28.0% corporate tax rate when calculating unlevered free cash flow.

In performing this discounted cash flow analysis, Ladenburg utilized discount rates ranging from 13.8% to 15.8%, which were selected based on the capital asset pricing model and the estimated weighted average cost of capital of the Selected Publicly Traded Companies, which was approximately 14.8%. This discounted cash flow analysis assumed that Kiq will have no terminal value after 2035, does not take into account Kiq’s available net operating losses, if any, does not take into account stock based compensation costs, if any, and assigns no value to revenues beyond 2035.

Using a range of discount rates of 13.8% to 15.8%, Ladenburg then calculated a range of implied total equity values for Kiq (by adding an estimated $0.0 million in cash at closing), which was $71.4 million to $116.9 million. This compares to Kiq’s implied equity value as per the Merger Agreement of $45.0 million.

The summary set forth above does not purport to be a complete description of all the analyses performed by Ladenburg. The preparation of a fairness opinion involves various determinations as to the most appropriate and

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relevant methods of financial analysis and the application of these methods to the particular circumstances. Therefore, such an opinion is not readily susceptible to partial analysis or summary description. Ladenburg did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, notwithstanding the separate factors summarized above, Ladenburg believes, and advised the Unum Board, that its analyses must be

considered as a whole. Selecting portions of its analyses and the factors considered by it without considering all analyses and factors could create an incomplete view of the process underlying its Opinion. In performing its analyses, Ladenburg made numerous assumptions with respect to industry performance, business and economic conditions and other matters, many of which are beyond the control of Unum and Kiq. These analyses performed by Ladenburg are not necessarily indicative of actual values or future results, which may be significantly more or less favorable than suggested by such analyses. In addition, analyses relating to the value of businesses do not purport to be appraisals or to reflect the prices at which businesses or securities may actually be sold. Accordingly, such analyses and estimates are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors. None of Unum, Kiq, Ladenburg or any other person assumes responsibility if future results are materially different from those projected. The analyses supplied by Ladenburg and its Opinion were among several factors taken into consideration by the Unum Board in making its decision to enter into the Merger Agreement and should not be considered as determinative of such decision.

Ladenburg was selected by the Unum Board to render an opinion to the Unum Board because Ladenburg is a nationally recognized investment banking firm and because, as part of its investment banking business, Ladenburg is continually engaged in the valuation of businesses and their securities in connection with mergers, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for corporate and other purposes. In addition, in the ordinary course of its business, Ladenburg and its affiliates may trade the equity securities of Unum for its own account and for the accounts of their customers, and, accordingly, may at any time hold a long or short position in such securities. In the two years preceding the date hereof, Ladenburg has not received any fees from Unum, aside from the fees described below. In the two years preceding the date hereof, Ladenburg has not had a relationship with Kiq and has not received any fees from Kiq. Ladenburg and its affiliates may in the future seek to provide investment banking or financial advisory services to Unum and Kiq and/or certain of their respective affiliates and expect to receive fees for the rendering of these services.

Pursuant to the engagement letter between Ladenburg and Unum, Ladenburg received a transaction fee of $1,100,000 in cash at the closing of the transaction. Unum has also paid Ladenburg an initial fee of $150,000 and an Opinion fee of $250,000 upon delivery of its Opinion which was credited against the transaction fee. Additionally, Unum has agreed to reimburse Ladenburg for its out-of-pocket expenses and has agreed to indemnify Ladenburg against certain liabilities, including liabilities under the federal securities laws. The terms of the fee arrangement with Ladenburg, which are customary in transactions of this nature, were negotiated at arm’s length between Unum and Ladenburg, and the Unum Board was aware of the arrangement, including the fact that a portion of the fee payable to Ladenburg is contingent upon the completion of the Merger.

Interests of Unum’s Directors and Executive Officers in the Merger

In considering the recommendation of the Board of Directors that you vote in favor of the proposals outlined herein, you should be aware that in addition to their interests as Unum stockholders, the directors and executive officers of Unum had interests in the Merger that were different from, or in addition to, those of other Unum stockholders generally. Members of the Board of Directors were aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and the Merger. See the section entitled “Unum’s Reasons for the Merger” on page [●] of this proxy statement. Unum stockholders should take these interests into account in deciding whether to vote in favor of the proposals outlined herein. These interests, which are described in more detail below, include the interests listed below. As discussed above, the Merger has already

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been completed, and the approval of Unum stockholders was not, and is not now, required for the Merger. The Company is not seeking stockholder approval of, and you are not being asked to vote on, the Merger.

Certain Assumptions

Except as otherwise specifically noted, for purposes of quantifying the payments and benefits described in this section, the following assumptions were used:

As of September 10, 2020, Unum’s executive officers were as set forth below, who were also Unum’s executive officers as of July 6, 2020, the date of the closing of the Merger. Unum’s management team did not change as a result of the Merger.

Treatment of Equity and Equity-Based Awards

The employment of Matthew Osborne, Unum’s former Chief Financial Officer, was terminated by Unum in May 2020. Michael Vasconcelles, M.D., Unum’s former Chief Medical Officer, resigned from that position in July 2019 and entered into a consulting agreement with Unum.

For information regarding beneficial ownership of Unum common stock, other than the equity and equity-based awards described below, by each of the Company’s directors and executive officers and beneficial ownership of Unum common stock by all of such directors and executive officers as a group, please see the section entitled “Principal Stockholders.”

Treatment of Unum Options and Unum RSUs

In accordance with the Merger Agreement, the Board of Directors fully accelerated outstanding unvested Unum Options and Unum RSUs held by Unum stockholders, including Unum’s directors and executive officers,

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effective as of immediately prior to the first effective time under the Merger Agreement. The tables below shows the number of shares underlying outstanding unvested Unum Options and unvested Unum RSUs held by the Company’s executive officers as of immediately prior to the first effective time of the Merger. Matthew Osborne, Unum’s former Chief Financial Officer, and Michael Vasconcelles, M.D., Unum’s former Chief Medical Officer, held outstanding equity awards which accelerated as of immediately prior to the first effective time under the Merger Agreement. The tables below also include the number of unvested awards held by Mr. Osborne and Dr. Vasconcelles as of immediately prior to the first effective time of the Merger.

Acceleration of Unvested Unum Options Held by Executive Officers

Acceleration of Unvested Unum RSUs Held by Executive Officers

Contingent Value Rights Agreement. Pursuant to the Merger Agreement, prior to the First Effective Time, Unum declared a distribution to holders of Common Stock of record, including Unum’s directors and officers, as of immediately prior to the First Effective Time (including those shares of Common Stock issued upon settlement of Unum RSUs) of the right to receive one contingent value right for each outstanding share of Common Stock held by such stockholder as of such date (less applicable withholding taxes), each representing the right to receive contingent payments upon the occurrence of certain events set forth in, and subject to and in accordance with the terms and conditions of, the Contingent Value Rights Agreement, dated as of August 6, 2020, by and among Unum, Computershare Inc. and Computershare Trust Company, N.A.

Employment Agreements with Unum

Charles Wilson, Ph.D.

Dr. Wilson’s employment agreement provides that, in the event that Dr. Wilson’s employment is terminated by Unum without “cause” or Dr. Wilson resigns for “good reason” (as each is defined in the employment agreement), subject to the execution and effectiveness of a separation agreement, including a general release of claims in Unum’s favor, he will be entitled to receive (i) an amount equal to 12 months of base salary, payable in lump sum within 60 days after the date of termination, (ii) if Dr. Wilson is participating in our group health plan immediately prior to his termination and elects COBRA health continuation, a monthly cash payment until the earlier of 12 months following termination or the end of Dr. Wilson’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to Dr. Wilson had he remained employed with Unum, and (iii) acceleration of equity awards in an amount that would have vested if he had remained employed for an additional 12 months following the date of his termination. The employment agreement also provides that, in lieu of the payments and benefits described above, in the event that Dr. Wilson’s employment is terminated by Unum without cause or Dr. Wilson resigns for good reason, in either case within 12 months following a “change in control” (as defined in the employment agreement), subject to the execution and effectiveness of a separation agreement, including a general release of claims in Unum’s favor, he will be entitled to receive (i) a lump sum cash payment equal to 18 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) plus 150 percent of his target bonus, (ii) if Dr. Wilson

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is participating in Unum’s group health plan immediately prior to his termination, a monthly cash payment until the earlier of 18 months following termination or the end of Dr. Wilson’s COBRA health continuation period in an amount equal to the amount that we would have made to provide health insurance to him had he remained employed with Unum and (iii) full acceleration of all equity awards held by Dr. Wilson.

John Green

Pursuant to the terms of Unum’s employment agreement, if Mr. Green’s employment is terminated by Unum without cause (as defined in his employment agreement) or by Mr. Green for good reason (as defined in his employment agreement), subject to his execution of a release of potential claims against Unum, Mr. Green will be entitled to receive: (i) a lump sum in cash in an amount equal to nine months of base salary, (ii) a monthly cash payment for nine months for medical and dental benefits or Mr. Green’s COBRA health continuation period, whichever ends earlier, and (iii) acceleration of vesting on any options or other stock-based awards subject to time-based vesting in which Mr. Green would have vested if he had remained employed for an additional nine months. However, in the event that Mr. Green’s employment is terminated by Unum without cause, or Mr. Green terminates his employment with Unum for good reason, in either case within 12 months following the occurrence of a change in control (as defined in his employment agreement), in lieu of the severance payments and benefits described in the preceding sentence and subject to Mr. Green’s execution of a release of potential claims against Unum, Mr. Green will be entitled to receive: (i) a lump sum in cash in an amount equal to 12 months of base salary, (ii) a lump sum in cash in an amount equal to 100% of Mr. Green’s target bonus for the then-current year, (iii) a monthly cash payment for 12 months for medical and dental benefits or Mr. Green’s COBRA health continuation period, whichever ends earlier, and (iv) acceleration of vesting on any options or other stock-based awards subject to time-based vesting held by Mr. Green.

Jessica Sachs, M.D.

Pursuant to the terms of her employment agreement, if Dr. Sachs’ employment is terminated by Unum without cause (as defined in his employment agreement) or by Dr. Sachs for good reason (as defined in his employment agreement), subject to his execution of a release of potential claims against Unum, Dr. Sachs will be entitled to receive: (i) a lump sum in cash in an amount equal to nine months of base salary, (ii) a monthly cash payment for nine months for medical and dental benefits or Dr. Sachs’ COBRA health continuation period, whichever ends earlier, and (iii) acceleration of vesting on any options or other stock-based awards subject to time-based vesting in which Dr. Sachs would have vested if he she remained employed for an additional nine months. However, in the event that Dr. Sachs’ employment is terminated by Unum without cause, or Dr. Sachs terminates her employment with Unum for good reason, in either case within 12 months following the occurrence of a change in control (as defined in his employment agreement), in lieu of the severance payments and benefits described in the preceding sentence and subject to Dr. Sachs’ execution of a release of potential claims against Unum, Dr. Sachs will be entitled to receive: (i) a lump sum in cash in an amount equal to 12 months of base salary, (ii) a lump sum in cash in an amount equal to 100% of Dr. Sachs’ target bonus for the then-current year, (iii) a monthly cash payment for 12 months for medical and dental benefits or Dr. Sachs’ COBRA health continuation period, whichever ends earlier, and (iv) acceleration of vesting on any options or other stock-based awards subject to time-based vesting held by Dr. Sachs.

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Quantification of Severance Benefits

The estimated value of potential cash severance payments and health continuation payable pursuant to the executive officers’ employment agreements is set forth in the table below, assuming each Unum executive officer experienced a qualifying termination immediately following the consummation of the Merger and was participating in the Unum health plans immediately prior to the termination:

Retention Bonus

Pursuant to the terms of a letter agreement with John Green, Mr. Green is eligible to receive a retention bonus in the amount of $279,450 if he does not resign his employment and is not terminated for “cause” (as defined in the letter agreement) on or prior to September 30, 2020.

Director and Officer Indemnification.

Pursuant to the Merger Agreement, Unum’s directors prior to the Merger, Karen Ferrante, M.D., Arlene Morris, Matthew Ros and Chuck Wilson, Ph.D., continue to serve on the Board of Directors. In connection with the Merger Agreement, Chris Cain, Ph.D., Director of Research, Fairmount Funds, and Peter Harwin, Managing Member, Fairmount Funds, were appointed to the Board of Directors as directors. The Merger Agreement further provides that for a period of six years following the Effective Time:

In addition to the indemnification obligations required by the third amended and restated certificate of incorporation and bylaws of Unum, Unum has entered into indemnification agreements with each of its directors and executive officers. These agreements provide for the indemnification of Unum’s directors and executive officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were agents of Unum.

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Interest in the Conversion Proposal. Due to his direct or indirect beneficial ownership of Series A Preferred Stock as a member of AVA IX LLC, an affiliate of Atlas Venture, Bruce Booth, DPhil., who served as a director of the Company from October 2014 until his resignation in connection with the Merger on July 6, 2020, has an interest in the Conversion Proposal. Also, due to their direct or indirect beneficial ownership of Series A Preferred Stock as Managing Member and Director of Research, respectively, of Fairmount Funds Management LLC, Peter Harwin and Chris Cain, who were appointed directors of the Company in connection with the Merger on July 6, 2020, have an interest in the Conversion Proposal.

Quantification of Payments and Benefits

The table below sets forth for each of the Company’s named executive officers the estimated amount of compensation based on or otherwise related to the Merger and that will or may become payable to the named executive officer as a result of the completion of the Merger (i.e., on a “single-trigger” basis) or that are conditioned on a qualifying termination of employment following and in connection with, the Merger (i.e., on a “double-trigger” basis).

The potential payments in the table below are based on the following assumptions:

The amounts shown are estimates of amounts that were or could be payable to the named executive officers based on multiple assumptions that may or may not actually occur, including the assumptions described above. Some of the assumptions are based on information not currently available and, as a result, the actual amounts received by a named executive officer may differ materially from the amounts shown in the following table.

The following table and footnotes describe the benefits each named executive officers was eligible to receive in connection with the completion of the Merger.

Potential Payments to Named Executive Officers

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Federal Securities Law Consequences; Resale Restrictions

The issuance of Common Stock in the Merger to Kiq’s members and the issuance of Series A Preferred Stock in the Merger to Kiq’s members and in the Financing to the Investors were effected by means of private placements, which were exempt from registration under the Securities Act in reliance on Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D or Regulation S promulgated thereunder and such shares will be “restricted securities.” The shares of Common Stock issued in connection with the Merger were not registered under the Securities Act upon issuance and are not freely transferable. Holders of such shares may not sell their respective shares unless the shares are registered under the Securities Act or an exemption is available under the Securities Act. Additionally, the shares of Common Stock issued in the Merger to Kiq’s members are subject to the resale restrictions under the Lock-up Agreements, as further described in the section “Proposal No. 1—Lock-up Agreements” beginning on page [●] of this proxy statement. The Series A Preferred Stock issued in connection with the Merger and the Financing are not listed on any exchange. Following stockholder approval of the Conversion Proposal, each share of Series A Preferred Stock is convertible at any time at the option of the holder, into 1,000 shares of Common Stock, subject to certain limitations, including that a holder of Series A Preferred Stock is prohibited from converting shares of Series A Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than a specified percentage (to be established by the holder between 4.9% and 19.9%) of the total number of shares of Common Stock issued and outstanding immediately after giving effect to such conversion. Holders of the shares of Common Stock issued upon conversion of the Series A Preferred Stock may not sell their respective shares unless the shares are registered under the Securities Act or an exemption available under the Securities Act. In connection with the Purchase Agreement, Unum entered into a Registration Rights Agreement with the Investors, pursuant to which Unum prepared and filed a resale registration statement with the SEC within 90 calendars day following July 9, 2020, as further described in the section “Proposal No. 1—Registration Rights Agreement”).

Material U.S. Federal Income Tax Considerations of the Merger, the Issuance of the CVRs and the Reverse Stock Split

The following discussion summarizes certain material U.S. federal income tax considerations of the Merger, the issuance of the CVRs and the Reverse Stock Split that would be expected to apply generally to U.S. Holders (as defined above in the section entitled “Material U.S. Federal Income Tax Considerations of the Reverse Stock Split” beginning on page [●] of this proxy statement) of our Common Stock. This summary is based upon current provisions of the Code, existing Treasury Regulations under the Code and current administrative rulings and court decisions, all of which are subject to change or different interpretation. Any change, which may or may not be retroactive, could alter the tax consequences to us or our stockholders as described in this summary. No ruling from the U.S. Internal Revenue Service, or the IRS, has been or will be requested in connection with the Merger, the issuance of the CVRs or the Reverse Stock Split and there can be no assurance that the IRS will not challenge the statements and conclusions set forth below or a court would not sustain any such challenge.

No attempt has been made to comment on all U.S. federal income tax consequences of the Merger, the issuance of the CVRs or the Reverse Stock Split that may be relevant to particular U.S. Holders, including holders: (i) who are subject to special tax rules such as dealers, brokers and traders in securities, mutual funds, regulated investment companies, real estate investment trusts, insurance companies, banks or other financial institutions or tax-exempt entities; (ii) who acquired their shares in connection with stock options, stock purchase plans or other compensatory transactions; (iii) who hold their shares as a hedge or as part of a hedging, straddle, “conversion transaction”, “synthetic security”, integrated investment or any risk reduction strategy; (iv) who are partnerships, limited liability companies that are not treated as corporations for U.S. federal income tax purposes, S corporations, or other pass-through entities or investors in such pass-through entities; (v) who do not hold their shares as capital assets for U.S. federal income tax purposes (generally, property held for investment within the meaning of Section 1221 of the Code); (vi) who hold their shares through individual retirement or other tax-deferred accounts; or (vii) who have a functional currency for United States federal income tax purposes other than the U.S. dollar.

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In addition, the following discussion does not address state, local or foreign tax consequences of the Merger, the issuance of the CVRs or the Reverse Stock Split, the Medicare tax on net investment income, U.S. federal estate and gift tax, the alternative minimum tax, the rules regarding qualified small business stock within the meaning of Section 1202 of the Code, or any other aspect of any U.S. federal tax other than the income tax. The discussion generally assumes that for U.S. federal income tax purposes, none of the Merger, the Reverse Stock Split or the issuance of the CVRs will be integrated or otherwise treated as part of a unified transaction with any other transaction.

HOLDERS OF OUR COMMON STOCK ARE ADVISED AND EXPECTED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER, THE ISSUANCE OF THE CVRS AND THE REVERSE STOCK SPLIT IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES OF THE MERGER, THE ISSUANCE OF THE CVRS AND REVERSE STOCK SPLIT UNDER STATE, LOCAL AND FOREIGN TAX LAWS.

Merger

Unum and Kiq intend for the Merger to qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the Code. Each of Unum and Kiq agreed to use its commercially reasonable efforts to cause the Merger to qualify as a reorganization within the meaning of Section 368(a)(1)(A) of the Code, and not to permit or cause any affiliate of Unum or Kiq to, take any action, or fail to take or cause to be taken any action, which would reasonably be expected to prevent or impede the Merger from qualifying as a reorganization under Section 368(a)(1)(A) of the Code. Because of the form of the Merger, U.S. holders of Unum, as of immediately prior to the Merger, did not sell, exchange or dispose of any shares of Common Stock as a result of the Merger. Thus, there will be no material U.S. federal income tax consequences to Unum stockholders, as of immediately prior to the Merger, as a result of the Merger.

CVRs

There is substantial uncertainty as to the U.S. federal income tax treatment of the contingent value rights (“CVRs”) issued pursuant to the CVR Agreement. Specifically, there is no authority directly addressing whether the issuance of contingent value rights with characteristics similar to the CVRs should be treated as a distribution of property with respect to the corporation’s stock, a distribution of equity, a “debt instrument” or an “open transaction” for U.S. federal income tax purposes. The CVRs have certain characteristics similar to a distribution of property, a distribution of equity, a “debt instrument” and an open transaction, and there is no legal authority directly addressing what characteristics are determinative of how contingent value rights with characteristics similar to the CVRs should be taxed. As a result, it is not possible to express a definitive conclusion as to the tax treatment of the issuance of the CVRs and Unum has not requested or received an opinion of counsel regarding such treatment. U.S. Holders should consult their tax advisors with respect to the proper characterization of the receipt of the CVRs and any future payments thereunder.

Tax Consequences if Treated as a Distribution of Property. If the issuance of the CVRs is treated as a distribution of property, each U.S. Holder would be treated as receiving a distribution in an amount equal to the fair market value of the CVRs issued to such U.S. Holder on the date of the issuance. This distribution generally should be treated first as a taxable dividend to the extent of the U.S. Holder’s pro rata share of Unum’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in its Common Stock, and finally as capital gain from the sale or exchange of Common Stock with respect to any remaining value. Unum does not have a material amount of accumulated earnings and profits, and expects no or a small amount of current earnings and profits for the relevant taxable year. Thus, Unum expects most or all of this distribution would be treated as other than a dividend for U.S. federal income tax purposes. A U.S. Holder’s initial tax basis in such holder’s CVRs would equal the fair market value of such CVRs on the date of their issuance. The holding period of such CVRs would

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begin on the day after the date of issuance. In addition, if Unum were to treat the issuance of the CVRs as a distribution of property, Unum would deliver to U.S. Holders a Form 1099-DIV notifying them of the portion of the CVR value that is treated as a dividend for U.S. federal income tax purposes.

Consistent with the above treatment, any future cash payments or Common Stock payments received by a U.S. Holder on a CVR could be treated as a non-taxable return of such U.S. Holder’s adjusted tax basis in the CVR to the extent thereof, and payments in excess of such amount as ordinary income. In that case, Common Stock received would have a holding period beginning the date after receipt and a tax basis equal to such excess. U.S. Holders should consult their tax advisors with respect to the proper characterization of any future payments under the CVR Agreement.

The CVRs should generally be treated as capital assets for U.S. federal income tax purposes once issued.

Tax Consequences if Treated as a Distribution of Equity. If the issuance of the CVRs is treated as the issuance and distribution of a debt instrument, similar to the impact of the issuance is treated as the issuance of property as described above, each U.S. Holder would be treated as receiving a distribution in an amount equal to the fair market value of the CVRs issued to such U.S. Holder on the date of the issuance. Furthermore, if the issuance of the CVRs is treated as a distribution of equity, U.S. Holders would generally not recognize gain or loss as a result of the issuance of the CVRs. Depending on the fair market value of the CVRs on the date of their issuance, each U.S. Holder’s tax basis in such holder’s Common Stock would be allocated between such holder’s Common Stock and such holder’s CVRs. The holding period of such CVRs would include the U.S. Holder’s holding period of such holder’s Common Stock. Future cash payments on a CVR received by a U.S. Holder would likely be treated as dividends to the extent of the U.S. Holder’s pro rata share of Unum’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes), then as a non-taxable return of capital to the extent of the U.S. Holder’s basis in the CVR, and finally as capital gain from the sale or exchange of the CVR with respect to any remaining value. Future payments received by a U.S. Holder on a CVR in the form of Common Stock would likely be treated as a non-taxable distribution of shares of our Common Stock. Each U.S. Holder’s tax basis in such Common Stock would inlcude its basis in the CVRs and the holding period of such CVRs would include the U.S. Holder’s holding period of such holder’s CVRs.

Tax Consequences if Treated as a Debt Instrument. If the CVRs are treated as one or more “debt instruments,” then cash or Common Stock payments received with respect to the CVRs would likely be treated as payments in retirement of a “debt instrument,” except to the extent of interest imputed under the Code. If this tax treatment were to apply, interest generally would be imputed under complex rules. In such a case, a U.S. Holder would be required to include any such interest in income on an annual basis, whether or not currently paid.

Tax Consequences if Treated as an Open Transaction. If the value of the CVRs on the closing date cannot be “reasonably ascertained”, the receipt of CVRs could be treated as an “open transaction” for U.S. federal income tax purposes. In such a case, each U.S. Holder would not immediately take the CVRs into account in determining whether such holder must recognize gain, if any, on the receipt of the CVRs and such holder would take no tax basis in the CVRs. Rather, the U.S. Holder’s U.S. federal income tax consequences would be determined based on whether the CVRs were treated as a distribution of property or as debt or equity at the time the payments with respect to the CVRs are received or deemed received in accordance with the U.S. Holder’s regular method of accounting.

Alternative Treatment of the Receipt of CVRs and the Reverse Stock Split as a Single Recapitalization. Although the matter is not free from doubt, Unum intends to treat the receipt of CVRs and the Reverse Stock Split as separate transactions for U.S. federal income tax purposes. Notwithstanding Unum’s position that the receipt of CVRs and the Reverse Stock Split are appropriately treated as separate transactions, it is possible that the IRS or a court could determine that the receipt of the CVRs and the Reverse Stock Split constitute a single “recapitalization” for U.S. federal income tax purposes. In such case, the tax consequences of the receipt of CVRs and the Reverse Stock Split would differ from those described above and would depend in part on many of

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the same considerations described above, including whether the CVRs should be treated as property, equity or debt instruments or should be subject to the “open transaction” doctrine. In general, if the CVRs are treated as property and are not subject to the “open transaction” doctrine, then a U.S. Holder could be required to recognize gain (but not loss) equal to the lesser of (i) the fair market value of the CVRs received, and (ii) the excess (if any) of (A) the sum of (1) the fair market value of the CVRs received and (2) the fair market value of the Common Stock received in the Reverse Stock Split, over (B) the U.S. Holder’s adjusted tax basis in the Common Stock surrendered in the Reverse Stock Split.

PLEASE CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE PROPER CHARACTERIZATION OF THE RECEIPT OF THE CVRs.

Reverse Stock Split

A U.S. Holder generally should not recognize gain or loss upon the Reverse Stock Split, except to the extent a U.S. Holder receives cash in lieu of a fractional share of our Common Stock. Please review the information in the section entitled “Material U.S. Federal Income Tax Considerations of the Reverse Stock Split” beginning on page [●] of this proxy statement for a more complete description of the material U.S. federal income tax consequences of the Reverse Stock Split to U.S. Holders.

The tax consequences to you of Reverse Stock Split will depend on your particular facts and circumstances. Please consult your tax advisors as to the specific tax consequences to you.

Vote Required

The Merger has already been completed, and the approval of our stockholders was not, and is not now, required for the Merger. As discussed above, the Company is not seeking stockholder approval of, and you are not being asked to vote on, the Merger.

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THE MERGER AGREEMENT

The following is a summary of the material provisions of the Merger Agreement, which is filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated into this proxy statement by reference. You should refer to the full text of the Merger Agreement for details about the transaction and the terms and conditions of the Merger Agreement, and carefully read this entire proxy statement and the other documents to which we have referred you. You should also review the section entitled “Where You Can Find Additional Information.”

The representations and warranties of the Company, Parent and Merger Sub contained in the Merger Agreement have been made solely for the benefit of the parties to the Merger Agreement. In addition, such representations and warranties (a) have been made only for purposes of the Merger Agreement, (b) have been qualified by certain documents filed with, or furnished to, the SEC by the Company prior to the date of the Merger Agreement, (c) are subject to important qualifications, limitations and supplemental information agreed to by the Company, Kiq, First Merger Sub and Second Merger Sub in connection with negotiating the terms of the Merger Agreement, (d) are subject to materiality qualifications contained in the Merger Agreement which may differ from what may be viewed as material by investors, (e) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement and (f) have been included in the Merger Agreement for the purpose of allocating risk between the Company, on the one hand, and Kiq, First Merger Sub and Second Merger Sub, on the other hand, rather than establishing matters as facts. Accordingly, the investors should not rely on the representations and warranties or any descriptions thereof as characterization of the actual state of facts or condition of the Company or Kiq or their respective subsidiaries or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

The representations and warranties in the Merger Agreement and the description of them in this proxy statement should not be read alone but instead should be read in conjunction with the other information contained in the reports, statements and filings the Company publicly files with the SEC. Such information can be found elsewhere in this proxy statement and in the public filings the Company makes with the SEC, as described in the section entitled “Where You Can Find Additional Information.”

The Merger

Upon the terms and subject to the conditions of the Merger Agreement and in accordance with the DGCL and the Delaware Limited Liability Company Act (“DLLCA”), at the effective time of the Merger (the “Effective Time”), First Merger Sub merged with and into Kiq, pursuant to which Kiq was the surviving entity and became a wholly owned subsidiary of Unum (the “First Merger”). Immediately following the First Merger, Kiq merged with and into Second Merger Sub, pursuant to which Second Merger Sub was the surviving entity (together with the First Merger, the “Merger’). As a result of the Second Merger, Second Merger Sub will continue as the surviving company of the Merger (the “Surviving Company”).

Closing and Effective Time of the Merger

The closing of the Merger occurred remotely on July 6, 2020. At the closing, the parties caused the First Merger to be consummated by executing and filing with the Secretary of State of the State of Delaware a certificate of merger with respect to the First Merger (the time at which the First Merger became effective is referred to as the “First Effective Time”) and caused the Second Merger to be consummated by executing and filing with the Secretary of State of the State of Delaware a certificate of merger with respect to the Second Merger (the time at which the Second Merger became effective is referred to as the “Second Effective Time”).

Consideration Received in the Merger

At the Effective Time, by virtue of the First Merger and without any further action on the part of the parties, the limited liability company interests of Kiq (the “Kiq Membership Interests”) outstanding immediately prior to the

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First Effective Time were converted solely into the right to receive a number of shares of Common Stock equal to the amount of Merger Shares (as defined below) multiplied by the applicable member’s percentage interest in Kiq as set forth on the allocation certificate Kiq provided to Unum. No fractional shares of Common Stock were issuable to Kiq’s members pursuant to the Merger.

“Merger Shares” means the product determined by multiplying (i) the Post-Closing Unum Share by (ii) the Kiq Allocation Percentage, in which:

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The aggregate number of shares of Common Stock pursuant to the Merger to any member of Kiq could not result in the acquisition of beneficial ownership of Unum in excess of 19.99% of the total number of shares of Common Stock outstanding immediately prior to the First Effective Time (the “Stock Consideration Cap”). As the aggregate number of shares of Common Stock issued pursuant to the Merger would have resulted in the issuance of shares of Common Stock in an amount in excess of the Stock Consideration Cap, the Company issued to Kiq’s members shares of Common Stock up to the Stock Consideration Cap and issued the remaining balance of such member’s Merger Shares in shares of Series A Preferred Stock, in each case, in accordance with the applicable member’s percentage interest in Kiq as set forth on the allocation certificate Kiq provided to Unum.

Immediately following the closing of the Merger, (i) the former members of Kiq as of immediately prior to the Merger owned approximately 60.8% of Unum on a fully-diluted basis and (ii) Unum stockholders as of immediately prior to the Merger owned approximately 39.2% of Unum on a fully-diluted basis. On a pro forma basis and based upon the number of shares of Common Stock and Series A Preferred Stock issued in the Merger and the Financing, Unum equity holders immediately prior to the acquisition will own approximately 16.2% of Unum on a fully-diluted basis.

Pursuant to the Merger Agreement, prior to the First Effective Time, Unum declared a distribution to holders of Common Stock of record as of immediately prior to the First Effective Time (including those shares of Common Stock issued upon settlement of Unum RSUs) of the right to receive one contingent value right for each outstanding share of Common Stock held by such stockholder as of such date (less applicable withholding taxes), each representing the right to receive contingent payments upon the occurrence of certain events set forth in, and subject to and in accordance with the terms and conditions of, the Contingent Value Rights Agreement, dated as of August 6, 2020, by and among Unum, Computershare Inc. and Computershare Trust Company, N.A., which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on August 10, 2020, and is incorporated herein by reference.

Determination of Unum’s Net Cash

Under the Merger Agreement, Unum’s “net cash” is defined as (a) Unum’s cash and cash equivalents determined, to the extent in accordance with GAAP, in a manner consistent with the manner in which such items were historically determined and in accordance with Unum’s audited financial statements and unaudited interim balance sheet minus (b) the sum of Unum’s consolidated short-term and long-term contractual obligations accrued at the Closing Date (but excluding deferred revenue), in each case determined in accordance with GAAP and, to the extent in accordance with GAAP, in a manner consistent with the manner in which such items were historically determined and in accordance with the financial statements (including any related notes) contained or incorporated by reference in Unum’s audited financial statements and unaudited interim balance sheet, minus (c) fees and expenses of Unum incurred in connection with the transactions contemplated by the Merger Agreement, including for the avoidance of doubt, Transaction Expenses of Utah (as defined in the Merger Agreement) to the extent unpaid as of the closing, minus (d) any and all liabilities of Unum (I) to any current or former Unum or any of its subsidiaries officer, director, employee, consultant or independent contractor (including change of control payments, retention payments, severance and other employee-, consultant- or independent contractor-related termination costs, or other payments), or (II) pursuant to any Utah Employee Plan (as defined in the Merger Agreement), including deferred compensation accrued but unpaid bonuses and accrued

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but unpaid vacation or paid time off (including related employer employment taxes on all the foregoing), minus (e) all liabilities related to Unum’s or any of its subsidiaries’ lease obligations, minus (f) all costs and expenses relating to the winding down of Unum’s or any of its subsidiaries prior research and development activities, plus (g) all prepaid expenses set forth on Section 1.1(a) of the Utah Disclosure Schedule, plus (h) expenses paid, or liabilities incurred, prior to closing, that are approved in writing to be covered by Unum’s directors’ and officers’ insurance in excess of the deductible and within overall policy limits, minus (i) any deductibles paid under applicable insurance policies taken out by Unum or any of its subsidiaries, plus (j) deposits set forth on Section 1.1(a) of the Utah Disclosure Schedule, and minus (k) any unpaid taxes of Unum and its subsidiaries for tax periods (or portions thereof) ending on or before the closing date determined in a manner consistent with past practice (to the extent such past practice is consistent with applicable law), including any payroll Taxes payable as a result of the vesting of each outstanding and unvested restricted stock unit of Unum). For avoidance of doubt, the cash and cash equivalents received in the Financing will be excluded from the calculation of Unum’s net cash.

Prior to the closing date, Unum delivered to Kiq a schedule (the “Unum Net Cash Schedule”) setting forth, in reasonable detail, Unum’s good faith, estimated calculation of Unum’s net cash, as of 11:59 p.m. on the last business day prior to the closing date, prepared and certified by Unum’s chief financial officer. Unum also made available to Kiq, as reasonably requested by Kiq, the work papers and back-up materials used or useful in preparing the Unum Net Cash Schedule and, as reasonably requested by Kiq, Unum’s accountants and counsel at reasonable times and upon reasonable notice.

Determination of Kiq’s Valuation

As discussed above, under the Merger Agreement, Kiq’s valuation is defined as the Kiq Equity Value minus (i) the Lower Kiq Net Cash Amount (if any) plus (ii) the Upper Kiq Net Cash Amount (if any).

Prior to the closing date, Kiq delivered to Unum a schedule (the “Kiq Valuation Schedule”) setting forth, in reasonable detail, Kiq’s good faith, estimated calculation of Kiq’s valuation, as of 11:59 p.m. on the last business day prior to the closing date, prepared and certified by Kiq’s manager. Kiq also made available to Unum, as reasonably requested by Unum, the work papers and back-up materials used or useful in preparing the Kiq Valuation Schedule and, as reasonably requested by Unum, Kiq’s accountants and counsel at reasonable times and upon reasonable notice.

Treatment of Equity Awards

Prior to the closing of the Merger, the Unum Board adopted appropriate resolutions and take all other actions necessary and appropriate to provide that the vesting and exercisability of each unexpired, unexercised and unvested Unum Option was accelerated in full effective as of immediately prior to the First Effective Time. The Unum Stock Plans remain in effect and each unexpired, unexercised Unum Option continues to remain outstanding after the Effective Time.

Prior to the closing of the Merger, the Unum Board adopted appropriate resolutions and take all other actions necessary and appropriate to provide that (i) the vesting of each outstanding and unvested awards of restricted stock units of Unum (“Unum RSUs”) be accelerated in full effective as of immediately prior to the First Effective Time and (ii) each outstanding and unsettled Unum RSU (including any Unum RSUs that are accelerated as stated above or upon termination of employment) were settled and each holder received, immediately prior to the First Effective Time a number of shares of Common Stock equal to the number of vested and unsettled Unum RSUs underlying such Unum RSUs.

Amendments to Unum’s Certificate of Incorporation

Stockholders of record of Common Stock on the record date for the Special Meeting will be asked to approve an amendment to the third amended and restated certificate of incorporation of Unum to effect the reverse stock

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split, which requires the affirmative vote of holders of shares representing a majority of all shares of Common Stock outstanding on the record date for the Special Meeting. The Merger Agreement provided for, if deemed necessary by Unum, an additional proposal to ask stockholders to approve an amendment to the third amended and restated certificate of incorporation of Unum to authorize sufficient Common Stock for the conversion of the Series A Preferred Stock issued pursuant to the Merger Agreement and the Purchase Agreement. Unum and Kiq no longer believe it is necessary to submit the Charter Amendment Proposal to Unum’s stockholders for their consideration.

Representations and Warranties

The Merger Agreement contains customary representations and warranties of Unum and Kiq for a transaction of this type relating to, among other things:

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The representations and warranties are, in many respects, qualified by materiality and knowledge, and did not survive the Merger, but their accuracy formed the basis of one of the conditions to the obligations of Unum and Kiq to complete the Merger.

Conditions to the Completion of the Merger

Each party’s obligation to complete the Merger was subject to the satisfaction or waiver by each of the parties, at or prior to the Merger, of various conditions, which include the following:

In addition, the obligation of Unum, First Merger Sub and Second Merger Sub to complete the Merger was further subject to the following documents, each of which must have been in full force and effect: (A) the Kiq member written consent; (B) the Company Lock-up Agreements (as defined in the merger agreement); (C) the Kiq Valuation Schedule; and (D) the allocation certificate.

The obligation Kiq to complete the Merger was further subject to the following documents, each of which must have been in full force and effect: (A) a copy of the Certificate of Designation, certified by the Secretary of State of the State of Delaware; (B) the Unum Net Cash Schedule; (C) written resignations in forms satisfactory to Kiq, dated as of the closing date and effective as of the closing executed by the officers and directors of Unum who were not to continue as officers or directors of Unum.

Proxy Statement; Company Stockholder Meeting

Unum is obligated under the Merger Agreement to call, give notice of and hold a meeting of its stockholders for the purposes of voting on the Conversion Proposal, the amendment of Unum’s third amended and restated certificate of incorporation to effect the Reverse Stock Split, if deemed necessary by Unum, and the approval of an amendment to Unum’s third amended and restated certificate of incorporation to authorize sufficient shares of Common Stock for the conversion of the Series A Preferred Stock issued pursuant to the Merger Agreement and the Securities Purchase Agreement (the “Charter Amendment Proposal”). Unum and Kiq no longer believe it is necessary to submit the Charter Amendment Proposal to Unum’s stockholders for their consideration. The Unum stockholders’ meeting shall be held as promptly as practicable after the definitive proxy statement is filed with the SEC, and in any event no later than 45 days after such date. Unum has agreed to commercially reasonable efforts to ensure that all proxies solicited in connection with the stockholders’ meeting are solicited in compliance with all applicable laws.

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Indemnification of Directors and Officers

From the effective time of the Merger through the sixth anniversary of the date on which the effective time of the Merger occurred (or July 6, 2026), each of Unum and the Surviving Company shall indemnify and hold harmless each person who was at the effective time of the Merger, or was at any time prior, or who became prior to the effective time of the Merger, a director or officer of Unum or Kiq, respectively (referred to as “D&O Indemnified Parties”), against all claims, losses, liabilities, damages, judgments, fines and reasonable fees, costs and expenses, including attorneys’ fees and disbursements (referred to as the “Costs”), incurred in connection with any claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, arising out of or pertaining to the fact that the D&O Indemnified Party is or was a director or officer of Unum or of Kiq, whether asserted or claimed prior to, at or after the effective time of the Merger, in each case, to the fullest extent permitted under the DGCL. Each D&O Indemnified Party will be entitled to advancement of expenses incurred in the defense of any such claim, action, suit, proceeding or investigation from each of Unum and the Surviving Company, jointly and severally, upon receipt by Unum or the Surviving Company from the D&O Indemnified Party of a request therefor; provided that any such person to whom expenses are advanced provides an undertaking to Unum, to the extent then required by the DGCL, to repay such advances if it is ultimately determined that such person is not entitled to indemnification. Without otherwise limiting the D&O Indemnified Parties’ rights with regards to counsel, following the effective time of the Merger, the D&O Indemnified Parties shall be entitled to continue to retain Goodwin or such other counsel selected by the D&O Indemnified Parties.

The provisions of the certificate of incorporation and bylaws of Unum with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers of Unum that are presently set forth in the certificate of incorporation and bylaws of Unum shall not be amended, modified or repealed for a period of six years from the effective time of the Merger in a manner that would adversely affect the rights thereunder of individuals who, at or prior to the effective time of the Merger, were officers or directors of Unum, unless such modification is required by applicable law. The certificate of incorporation and bylaws of the Surviving Company shall contain, and Unum shall cause the limited liability company agreement of the Surviving Company to so contain, provisions no less favorable with respect to indemnification, advancement of expenses and exculpation of present and former directors and officers as those presently set forth in the certificate of incorporation and bylaws of Unum.

From and after the effective time of the Merger, (i) the Surviving Company shall fulfill and honor in all respects the obligations of the Surviving Company to its D&O Indemnified Parties as of immediately prior to the completion of the Merger pursuant to any indemnification provisions under Kiq’s organizational documents and pursuant to any indemnification agreements between Kiq and such D&O Indemnified Parties, with respect to claims arising out of matters occurring at or prior to the effective time of the Merger and (ii) Unum shall fulfill and honor in all respects the obligations of Unum to its D&O Indemnified Parties as of immediately prior to the completion of the Merger pursuant to any indemnification provisions under Unum’s organizational documents and pursuant to any indemnification agreements between Unum and such D&O Indemnified Parties, with respect to claims arising out of matters occurring at or prior to the effective time of the Merger.

From and after the effective time of the Merger, Unum shall maintain directors’ and officers’ liability insurance policies, with an effective date as of the completion of the Merger, on commercially available terms and conditions and with coverage limits customary for U.S. public companies similarly situated to Unum.

From and after the effective time of the Merger, Unum shall pay all expenses, including reasonable attorneys’ fees, that are incurred by the persons referred to in this section in connection with their enforcement of the rights provided to such persons in this section. These provisions are intended to be in addition to the rights otherwise available to the current and former officers and directors of Unum and the Surviving Company by law, charter, statute, bylaw or agreement, and shall operate for the benefit of, and shall be enforceable by, each of the D&O Indemnified Parties, their heirs and their representatives. In the event Unum or the Surviving Company or any of

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their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity of such consolidation or Merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in each such case, proper provision shall be made so that the successors and assigns of Unum or the Surviving Company, as the case may be, shall succeed to the obligations set forth in this section. Unum shall cause the Surviving Company to perform all of the obligations of the Surviving Company under this section.

Other Agreements

Pursuant to the Merger Agreement, Unum and Kiq agreed that:

Amendment

The Merger Agreement may be amended by an instrument in writing signed on behalf of each of Unum, First Merger Sub, Second Merger Sub and Kiq.

Specific Performance

The parties to the Merger Agreement agreed that they will be entitled to an injunction, specific performance and other equitable relief to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement, this being in addition to any other remedy to which they are entitled at law or in equity.

Governing Law

The Merger Agreement is governed by and construed in accordance with the laws of the State of Delaware.

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THE FINANCING

The following is a summary of the material provisions of the Purchase Agreement, but does not purport to describe all of the terms thereof and may not contain all of the information about the Purchase Agreement that is important to you. The following summary is qualified in its entirety by reference to the complete text of the Purchase Agreement, which is filed as Exhibit 10.1 to the Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated herein by reference. You should refer to the full text of the Purchase Agreement for details about the transaction and the terms and conditions of the Purchase Agreement, and carefully read this entire proxy statement and the other documents to which we have referred you. You should also review the section entitled “Where You Can Find Additional Information.”

On July 6, 2020, the Company entered into the Purchase Agreement with the purchasers named therein (the “Investors”), pursuant to which the Company agreed to sell an aggregate of approximately 118,638 shares of Series A Preferred Stock for an aggregate purchase price of $104,401,000 (collectively, the “Financing”). The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series A Preferred Stock are set forth in the Certificate of Designations, which is filed as Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated herein by reference. The closing of the Financing occurred on July 9, 2020 (the “Financing Closing Date”).

The consummation of the Financing was subject to the satisfaction or waiver of, among other customary closing conditions, the accuracy of the representations and warranties in the Purchase Agreement, the compliance by the parties with the covenants in the Purchase Agreement, the absence of any legal order barring the Financing, no suspension in the trading of the Common Stock and the closing of the Merger. The parties were also provided with customary termination rights, including the right of either party to terminate the Purchase Agreement if the consummation of the Financing had not occurred within 30 days after the signing unless the failure of the Financing to be consummated was caused by such party.

Under the Purchase Agreement, the Company made representations and warranties with respect to the business of the Company customary for transactions of a similar nature, including, with respect to organization and qualification, subsidiaries, authorization, capitalization, non-contravention, financial statements, the non-occurrence of certain events from the date of the latest balance sheet of the Company, litigation, title to assets, intellectual property, tax matters, insurance and compliance with laws.

In addition, under the Purchase Agreement, each of the Purchasers made representations and warranties customary for transactions of a similar nature, including with respect to organization, authorization, non-contravention, investment intent, accredited investor status, certain trading activities, brokers and finders, the independent evaluation of the decision to purchase the Series A Preferred Stock and that the purchase of the Series A Preferred Stock would not result in beneficial ownership of Common Stock in excess of 19.999% of the outstanding shares of Common Stock on the Financing Closing Date.

Certain representations of the Company and the Investors are qualified in whole or in part by a materiality standard for purposes of determining whether a breach of such representations and warranties has occurred. Moreover, certain representations and warranties in the Purchase Agreement were used for the purpose of allocating risk among the parties, rather than establishing matters of facts. Accordingly, investors and securityholders should not rely on the representations and warranties in the Purchase Agreement as characterizations of actual state of facts about the parties.

The Company made certain covenants under the Purchase Agreement, including, among others the following:

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The Investors made certain covenants under the Purchase Agreement, including, among others the following:

Registration Rights Agreement.

On the Financing Closing Date, in connection with the Purchase Agreement, Unum entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Investors. The following summary is qualified in its entirety by reference to the complete text of the form of Registration Rights Agreement, which is filed as Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on July 6, 2020, and is incorporated herein by reference. You should refer to the full text of the form of Registration Rights Agreement for details about the transaction and the terms and conditions of the Registration Rights Agreement, and carefully read this entire proxy statement and the other documents to which we have referred you. You should also review the section entitled “Where You Can Find Additional Information.”

Pursuant to the Registration Rights Agreement, Unum has prepared and filed a resale registration statement with the SEC within 90 calendar days following the Financing Closing Date (the “Filing Deadline”). Unum will use its reasonable best efforts to cause this registration statement to be declared effective by the SEC within 30 calendar days of the Filing Deadline (or within 60 calendar days if the SEC reviews the registration statement). Unum also agreed, among other things, to indemnify the Investors, their officers, directors, members, employees and agents, successors and assigns under the registration statement from certain liabilities and pay all fees and expenses (excluding any legal fees of the selling holder(s), and any underwriting discounts and selling commissions) incident to Unum’s obligations under the Registration Rights Agreement.

The Financing is exempt from registration pursuant to Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, as a transaction by an issuer not involving a public offering. The Investors have acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends have been affixed to the securities issued in this transaction.

The Financing has already been completed, and the approval of our stockholders was not, and is not now, required for the Financing. As discussed above, the Company is not seeking stockholder approval of, and you are not being asked to vote on, the Financing.

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RISK FACTORS

You should consider the following factors in evaluating whether to approve, in accordance with Nasdaq Listing Rule 5635, the issuance of Common Stock upon conversion of the Series A Preferred Stock issued in the Merger and the Financing and the amendment to Unum’s third amended and restated certificate of incorporation to effect a reverse stock split of Common Stock. These factors should be considered in conjunction with the other information included or incorporated by reference by Unum in this proxy statement.

Risks Related to Our Financial Position and Need for Additional Capital

We have incurred net losses in every year since our inception and anticipate that we will continue to incur net losses in the future.

We are a clinical-stage biopharmaceutical company with a limited operating history. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not profitable and have incurred losses in each period since our inception in March 2014. Our net losses were $7.4 million and $10.5 million for the three months ended June 30, 2020 and 2019 and $13.5 million and $22.2 million for the six months ended June 30, 2020 and 2019. As of June 30, 2020, we had an accumulated deficit of $137.4 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our research and development of, and seek regulatory approvals for, product candidates.

As of December 31, 2019, we had identified conditions and events that raise substantial doubt about our ability to continue as a going concern. As of December 31, 2019, management had assessed this risk in accordance with the requirements of Accounting Standards Update, or ASU, No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Accounting Standards Codification, or ASC, Subtopic 205-40), or ASC 205-40. Based on our recurring losses and cash outflows from operations, since our inception, an expectation of continuing operating losses and cash outflows from operations for the foreseeable future, and the removal of revenues generated under the Collaboration Agreement with Seattle Genetics as a result of the termination of that Agreement, we had concluded that there is substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. As of June 30, 2020, we had cash and cash equivalents of $21.3 million. We expect that our current cash and cash equivalents, including the $104.4 million we received on July 9, 2020 from the Series A Preferred Stock private placement, will be sufficient to fund our operating expenses and capital expenditure requirements beyond 2022.

There can be no assurance that the products under development by us will be approved for sale in the United States or elsewhere. Furthermore, there can be no assurance that if such products are approved, they will be successfully commercialized, which would have an adverse effect on our business prospects, financial condition and results of operation.

Even if we succeed in commercializing one or more of our product candidates, we will continue to incur substantial research and development and other expenditures to develop and market additional product candidates. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

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We may require substantial additional funding. If we fail to obtain additional financing when needed, or on attractive terms, we may be unable to complete the development and commercialization of our product candidates.

Our operations have consumed substantial amounts of cash since inception. As of June 30, 2020, we had working capital of $15.7 million and capital resources consisting of cash and cash equivalents of $21.3 million. We expect to continue to spend substantial amounts to continue the clinical and preclinical development of our product candidates, including our planned clinical trials for PLX9486. If approved, we will require significant additional amounts in order to launch and commercialize our product candidates.

Our operating plan includes our efforts to advance our clinical programs for PLX9486, for the treatment of systemic mastocytosis (SM) and Gastrointestinal Stromal Tumors (GIST); to fund the wind down of ACTR707 used in combination with rituximab for adult patients with r/r B cell non-Hodgkin lymphoma, ACTR087 used in combination with rituximab for adult patients with r/r non-Hodgkin lymphoma, in 2019, and ACTR707 used in combination with trastuzumab for patients with HER2+ cancers; and to develop product candidates in earlier stages of development, and any additional product candidates that we select, to expand headcount and internal capabilities, and for working capital and other general corporate purposes. We will need to raise additional funds to progress into clinical development any additional product candidates that we may select. Additionally, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control. We may require additional capital for the further development and commercialization of our product candidates and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate.

We cannot be certain that additional funding will be available on acceptable terms, or at all. If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back or discontinue the development or commercialization of our product candidates or other research and development initiatives. Our license agreements may also be terminated if we are unable to meet the payment obligations under the agreements. We could be required to seek collaborators for our product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to our product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms may include liquidation or other preferences that adversely affect your rights as a stockholder. The incurrence of indebtedness would result in increased fixed payment obligations and could involve certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms unfavorable to us.

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We may expend our limited resources to pursue a particular product candidate or indication, or platform technology, and fail to capitalize on product candidates or indications or platform technology that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we focus on research programs and product candidates that we identify for specific indications. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on current and future research and development programs and product candidates for specific indications may not yield any commercially viable programs. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such product candidate.

Risks Related to the Discovery and Development of Our Drug Candidates

Our business is highly dependent on the success of our future PLX9486 programs for the treatment of SM and GIST and any other potential product candidates that we develop.

Our business and future success depend on our ability to obtain regulatory approval of and then successfully commercialize our PLX9486 program and other product candidates that we develop. All of our product candidates are in the early stages of development and will require additional preclinical and clinical development, regulatory review and approval, substantial investment, access to sufficient commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales.

Clinical trials are expensive, time-consuming, and difficult to design and implement.

Human clinical trials are expensive and difficult to design and implement, in part because they are subject to rigorous regulatory requirements. We are unable to predict when or if our drug or any of our drug candidates will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of any drug candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. Clinical testing is expensive, difficult to design and implement, and can take many years to complete and is uncertain as to the outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, interim or preliminary results of a clinical trial do not necessarily predict final results, and results for one indication may not be predictive of the success in additional indications. In particular, the small number of patients in our early clinical trials may make the results of these trials less predictive of the outcome of later clinical trials. There is typically an extremely high rate of attrition from the failure of product candidates proceeding through clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy, insufficient durability of efficacy, or unacceptable safety issues, notwithstanding promising results in earlier trials. Most product candidates that commence clinical trials are never approved as products.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to obtain marketing approval or commercialize our drug or drug candidates, including:

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Our product development costs will increase if we experience delays in preclinical studies or clinical trials or in obtaining marketing approvals. We do not know whether any of our planned preclinical studies or clinical trials will begin on a timely basis or at all, will need to be restructured, or will be completed on schedule, or at all. Our ongoing trials continue to generate additional data that may be requested by the FDA. The FDA may request additional information or data and any such requests could result in clinical trial delays. Furthermore, the FDA could place a clinical hold, either another partial clinical hold or a full clinical hold, on our trials if they are not satisfied with the information we provide to them, which could result in delays for the trial. Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our drug candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our drug candidates and may harm our business and results of operations.

We may utilize companion diagnostics in our planned clinical trials in the future in order to identify appropriate patient populations. If a satisfactory companion diagnostic is not commercially available, we may be required to create or obtain one that would be subject to regulatory approval requirements. The process of obtaining or creating such diagnostic is time consuming and costly.

Since the number of patients that we have dosed in our Phase 1 clinical trials is small, the results from such clinical trials may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.

A study design that is considered appropriate for regulatory approval includes a sufficiently large sample size with appropriate statistical power, as well as proper control of bias, to allow a meaningful interpretation of the results. The preliminary results of trials with smaller sample sizes can be disproportionately influenced by the impact the treatment had on a few individuals, which limits the ability to generalize the results across a broader

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community, thus making the study results less reliable than studies with a larger number of patients. As a result, there may be less certainty that such product candidates would achieve a statistically significant effect in any future clinical trials. If we conduct any future clinical trials, we may not achieve a statistically significant result or the same level of statistical significance, if any, that we may have seen in prior clinical trials. Additionally, our inability to dose a sufficient number of patients in our clinical trials could result in significant delays and could require us to abandon one or more clinical trials altogether. Delays in our clinical trials may result in increased development costs for our drug candidates, which would cause the value of our company to decline and limit our ability to obtain additional financing.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

We may experience difficulties in patient enrollment in our clinical trials for a variety of reasons. The timely completion of clinical trials in accordance with their protocols depends, among other things, on our ability to enroll a sufficient number of patients who remain in the study until its conclusion. The enrollment of patients depends on many factors, including:

In addition, our clinical trials will compete with other clinical trials for product candidates that are in the same therapeutic areas as our product candidates, and this competition will reduce the number and types of patients available to us because some patients who might have opted to enroll in our trials may instead opt to enroll in a trial being conducted by one of our competitors. Since the number of qualified clinical investigators is limited, we expect to conduct some of our clinical trials at the same clinical trial sites that some of our competitors use, which will reduce the number of patients who are available for our clinical trials at such clinical trial sites. Moreover, because our product candidates represent a departure from more commonly used methods for cancer treatment, potential patients and their doctors may be inclined to use conventional therapies, such as chemotherapy and hematopoietic stem cell transplantation, rather than enroll patients in any future clinical trial. Delays in patient enrollment may result in increased costs or may affect the timing or outcome of our ongoing and planned clinical trials, which could prevent completion or commencement of these trials and adversely affect our ability to advance the development of our product candidates.

Interim, “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available, may be interpreted differently if additional data are disclosed, and are subject to audit and verification procedures that could result in material changes in the final data.

From time to time, we may publicly disclose preliminary or “top-line” data from our clinical trials, which may be based on a preliminary analysis of then-available data in a summary or “top-line” format, and the results and

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related findings may change as more patient data become available, may be interpreted differently if additional data are disclosed at a later time and are subject to audit and verification procedures that could result in material changes in the final data. If additional results from our clinical trials are not viewed favorably, our ability to obtain approval for and commercialize our drug candidates, our business, operating results, prospects, or financial condition may be harmed and our stock price may decrease.

We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the preliminary or top-line results that we report may differ from future results of the same trials, or different conclusions or considerations may qualify such results, once additional data have been disclosed and/or are received and fully evaluated. Such data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published. As a result, preliminary and “top-line” data should be viewed with caution until the final data are available. We may also disclose interim data from our clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available. Adverse differences between preliminary or interim data and final data could significantly harm our business prospects.

Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions, or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular drug candidate or product, and our business in general. Additionally, our Phase 1 /2 clinical trial of PLX9486 was an open-label trial and future trials we may conduct may be open-label trials. An “open-label” clinical trial is one where both the patient and investigator know whether the patient is receiving the investigational product candidate or either an existing approved drug or placebo. Most typically, open-label clinical trials test only the investigational product candidate and sometimes may do so at different dose levels. Open-label clinical trials are subject to various limitations that may exaggerate any therapeutic effect as patients may be subject to a “patient bias” where patients perceive their symptoms to have improved merely due to their awareness of receiving an experimental treatment. Moreover, patients selected for early clinical studies often include those patients with the most severe symptoms, which may have improved notwithstanding the new treatment. In addition, open-label clinical trials may be subject to an “investigator bias” where those assessing and reviewing the physiological outcomes of the clinical trials are aware of which patients have received treatment and may interpret the information of the treated group more favorably given this knowledge.

We may not be able to file investigational new drug applications (INDs) or IND amendments or clinical trial authorization applications (CTAs) to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA or other regulatory authorities may not permit us to proceed.

Our timing of filing INDs or CTAs on our product candidates is dependent on further research. We cannot be sure that submission of an IND or CTA will result in the FDA or other regulatory authority allowing further clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such clinical trials. Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trials set forth in an IND or CTA, we cannot guarantee that such regulatory authorities will not change their requirements in the future. These considerations also apply to new clinical trials we may submit as amendments to existing INDs or CTAs.

We have limited experience as a company conducting clinical trials or managing a manufacturing facility for our product candidates.

We have limited experience as a company in conducting clinical trials. In part because of this lack of experience, we cannot be certain that our ongoing clinical trials will be completed on time or if the planned clinical trials will begin or be completed on time, if at all. Large-scale trials would require significant additional financial and

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management resources and reliance on third-party clinical investigators, contract research organizations (CROs), or consultants. Relying on third-party clinical investigators or CROs may force us to encounter delays that are outside of our control.

In the future, we also intend to operate our own manufacturing facility, which will require significant resources, and we have limited experience as a company in expanding or managing a manufacturing facility. In part because of this lack of experience, we cannot be certain that our manufacturing facility will be completed on time, if at all, or if the planned clinical trials will begin or be completed on time, if at all. In part because of our inexperience, we may have unacceptable or inconsistent product quality success rates and yields, and we may be unable to maintain adequate quality control, quality assurance and qualified personnel. In addition, if we switch from one manufacturing facility to our own manufacturing facility for one or more of our product candidates in the future, we may need to conduct additional preclinical studies to bridge our modified product candidates to earlier versions. Failure to successfully create and operate our proposed manufacturing facility could adversely affect the commercial viability of our product candidates.

If serious adverse events or unacceptable side effects are identified during the development of our drug candidates, we may need to abandon or limit such development.

If our drug candidates are associated with serious adverse events or undesirable side effects in clinical trials or have characteristics that are unexpected, we may need to abandon their development, limit development to more narrow uses or subpopulations in which the serious adverse events, undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective or highlight these risks, side effects, or other characteristics in the approved product label. In pharmaceutical development, many drugs that initially show promise in early-stage testing for treating cancer may later be found to cause side effects that prevent further development of the drug. Currently marketed therapies for the treatment of cancer are generally limited to some extent by their toxicity. In addition, some of our drug candidates would be chronic therapies or be used in pediatric populations, for which safety concerns may be particularly important. Use of our drug candidates as monotherapies may also result in adverse events consistent in nature with other marketed therapies. In addition, if used in combination with other therapies in the future, our drug candidates may exacerbate adverse events associated with the therapy. If serious adverse events or unexpected side effects are identified during development, we may be required to develop a Risk Evaluation and Mitigation Strategy (REMS) to mitigate those serious safety risks, which could impose significant distribution and/or use restrictions on our products.

The current pandemic of the novel coronavirus, or COVID-19, and the future outbreak of other highly infectious or contagious diseases, could seriously harm our development efforts, increase our costs and expenses and have a material adverse effect on our business, financial condition and results of operations.

The extent to which the COVID-19 pandemic, or the future outbreak of any other highly infectious or contagious diseases, impacts our operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of such pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic may adversely affect our business, financial condition and results of operations, including the below:

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We may choose not to develop a potential product candidate, or we may suspend, deprioritize or terminate one or more discovery programs or preclinical or clinical product candidates or programs.

At any time and for any reason, we may determine that one or more of our discovery programs or preclinical or clinical product candidates or programs does not have sufficient potential to warrant the allocation of resources toward such program or product candidate. Accordingly, we may choose not to develop a potential product candidate or elect to suspend, deprioritize or terminate one or more of our discovery programs or preclinical or clinical product candidates or programs. If we suspend, deprioritize or terminate a program or product candidate in which we have invested significant resources, we will have expended resources on a program or product candidate that will not provide a full return on our investment and may have missed the opportunity to have allocated those resources to potentially more productive uses, including existing or future programs or product candidates. For example, we concluded enrollment in our ATTCK-20-2 study in the first half of 2019 as a result of emerging clinical data from our Phase 1 ATTCK-20-03 trial, the continuing progress in our ATTCK-20-03 trial, and our desire to efficiently manage resources for our clinical programs. In November 2019, we announced our decision to deprioritize our hematologic programs, to shift our focus to our solid tumor programs and the suspension of further dose escalation in the ATTCK-17-01 trial, pending review of next steps with our collaboration partner, Seattle Genetics. On January 16, 2020, we and Seattle Genetics announced an agreement to terminate the ATTCK-17-01 Phase 1 clinical trial and other research activities under the Collaboration Agreement. In March 2020, we announced the decision to conclude the remaining Phase 1 clinical trials, ATTCK-20-03 and ATTCK-34-01, to focus on development of BOXR1030 and the BOXR platform.

If we fail to develop additional product candidates, our commercial opportunity will be limited.

We are developing a pipeline of product candidates and intend to pursue clinical development of PLX9486 to target SM and GIST and any other product candidates. Developing, obtaining regulatory approval for and commercializing additional product candidates will require substantial additional funding beyond the net proceeds from our initial public offering (IPO) and concurrent private placement with Seattle Genetics, Inc. (Concurrent Private Placement) and issuance of shares in a private placement in 2020 and is prone to the risks of failure inherent in medical product development. We cannot provide you any assurance that we will be able to successfully advance any of these additional product candidates through the development process.

Even if we receive FDA approval to market additional product candidates for the treatment of cancer, we cannot assure you that any such product candidates will be successfully commercialized, widely accepted in the marketplace or more effective than other commercially available alternatives. If we are unable to successfully develop and commercialize additional product candidates, our commercial opportunity will be limited. Moreover, a failure in obtaining regulatory approval of additional product candidates may have a negative effect on the approval process of any other, or result in losing approval of any approved product candidate.

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We may form or seek collaborations or strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such collaborations, alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations, or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to our product candidates and any future product candidates that we may develop. In particular, we may seek to enter into collaborations with our PLX9486 program and other collaborations to progress the clinical development of the PLX9486 program. Any of these relationships may require us to incur non-recurring and other charges, increase our near and long-term expenditures, issue securities that dilute our existing stockholders or disrupt our management and business.

In addition, we face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for our product candidates because they may be deemed to be at too early of a stage of development for collaborative effort and third parties may not view our product candidates as having the requisite potential to demonstrate safety and efficacy and obtain marketing approval.

Further, collaborations involving our product candidates are subject to numerous risks, which may include the following:

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Even if we are successful in entering into a collaboration with respect to the development and/or commercialization of one or more product candidates, there is no guarantee that the collaboration will be successful. As a result, a collaboration may not result in the successful development or commercialization of our product candidates.

The incidence and prevalence for target patient populations of our drug candidates have not been established with precision. If the market opportunities for our drug candidates are smaller than we estimate or if any approval that we obtain is based on a narrower definition of the patient population, our revenue potential and ability to achieve profitability will be adversely affected.

The precise incidence and prevalence for GIST and SM are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our drug candidates, are based on estimates, which are inherently uncertain.

The total addressable market opportunity for PLX9486, and any other drug candidates we may produce will ultimately depend upon, among other things, the diagnosis criteria included in the final label for our future approved drugs for sale for these indications, acceptance by the medical community and patient access, drug pricing, and reimbursement. The number of patients in our targeted commercial markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our drug, or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

The commercial success of any future approved drugs, including PLX9486, will depend upon the degree of market acceptance by physicians, patients, third-party payors, and others in the medical community.

The commercial success of PLX9486, and of any future approved drugs, will depend in part on market acceptance by physicians, patients, third-party payors, and others in the medical community. For example, current cancer treatments, such as surgery, existing targeted therapies, chemotherapy, and radiation therapy, are well established in the medical community, and doctors may continue to rely on these treatments. If PLX9486 and any future approved drugs do not achieve an adequate level of acceptance, we may not generate significant product revenues and we may not become profitable. The degree of market acceptance of PLX9486 and of any current or future drug candidates, if approved for commercial sale, will depend on a number of factors, including:

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Even if a potential drug displays a favorable efficacy and safety profile in preclinical and clinical studies, market acceptance of the drug will not be known until after it is launched. Our efforts to educate the medical community and third-party payors on the benefits of our drug may require significant resources and may never be successful. Our efforts to educate the marketplace may require more resources than are required by the therapies marketed by our competitors. Any of these factors may cause PLX9486, or any future approved drugs, to be unsuccessful or less successful than anticipated.

We currently have no marketing and sales organization and have no experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, if approved, we may not be able to generate product revenue.

We currently have no sales, marketing or distribution capabilities and have no experience in marketing products. We intend to develop an in-house marketing organization and sales force, which will require significant capital expenditures, management resources and time. We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

If we are unable or decide not to establish internal sales, marketing and distribution capabilities, we will pursue collaborative arrangements regarding the sales and marketing of our products, if approved. However, there can be no assurance that we will be able to establish or maintain such collaborative arrangements, or if we are able to do so, that they will have effective sales forces. Any revenue we receive will depend upon the efforts of such third parties, which may not be successful. We may have little or no control over the marketing and sales efforts of such third parties and our revenue from product sales may be lower than if we had commercialized our product candidates ourselves. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.

A variety of risks associated with marketing our product candidates internationally could materially adversely affect our business.

We plan to seek regulatory approval of our product candidates outside of the United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

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These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.

The development and commercialization of new pharmaceutical and biotechnology products is highly competitive. We face competition with respect to our current clinical-stage drug candidates and will face competition with respect to any drug candidates that we may seek to develop or commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies, and biotechnology companies worldwide. There are a number of large pharmaceutical and biotechnology companies that currently market and sell products or are pursuing the development of products for the treatment of the disease indications for which we are developing our drug candidates. Some of these competitive products and therapies are based on scientific approaches that are similar to our approach, and others are based on entirely different approaches. Potential competitors also include academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for research, development, manufacturing, and commercialization.

Specifically, there are a large number of pharmaceutical and biotechnology companies developing or marketing treatments for cancer that would be competitive with PLX9486 and the drug candidates we are developing, if such drug candidates are approved. Many of these companies are developing cancer therapeutics that are also kinase inhibitors. Specifically, there are a number of large pharmaceutical companies and biotechnology companies marketing small molecule drugs or biologic drugs for the treatment of GIST, including Blueprint Medicines Corporation (BPMC), Novartis AG (Novartis), Pfizer, Inc. (Pfizer), and Bayer AG. We are also aware of pharmaceutical and biotechnology companies developing drugs for the treatment of GIST and/or SM including AB Sciences S.A., ARIAD Pharmaceuticals, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited, Arog Pharmaceuticals, Inc., AstraZeneca plc, BPMC, Chia Tai Tianqing Pharmaceutical Group CO., LTD, Celldex Therapeutics, Inc., Daiichi Sankyo Company, Limited, Deciphera

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Pharmaceuticals, LLC, Exelixis, Inc., Immunicum AB, Jiangsu HengRui, Inc., Ningbo Tai Kang Medical Technology Co. Ltd., Novartis, Taiho Pharmaceutical Co. Ltd, and Xencor, Inc. Some of these competitors are further along in their clinical development programs than we are in ours.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are approved for broader indications or patient populations, are approved for specific sub-populations, are more convenient or are less expensive than PLX9486 or any other products that we may develop. Our competitors also may obtain FDA or other marketing approval for their products more rapidly than any approval we may obtain for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining marketing approvals, and marketing and selling approved products than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller and other early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific, management, and sales and marketing personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates.

We face an inherent risk of product liability as a result of the clinical testing of our product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, a failure to warn of dangers inherent in the product, negligence, strict liability or a breach of warranties. Claims could also be asserted under state consumer protection acts. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

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Failure to obtain or retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop, alone or with corporate collaborators. Although we have clinical trial insurance, our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts. Even if our agreements with any future corporate collaborators entitle us to indemnification against losses, such indemnification may not be available or adequate should any claim arise.

Risks Related to Our Reliance on Third Parties

We currently rely and for the foreseeable future will continue to rely on third parties to conduct our clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

We depend and will depend upon independent investigators and collaborators, such as medical institutions, CROs, commercial manufacturing organizations (CMOs) and strategic partners to conduct our preclinical studies and clinical trials under agreements with us. We expect to have to negotiate budgets and contracts with CROs, trial sites and CMOs which may result in delays to our development timelines and increased costs. We will rely heavily on these third parties over the course of our clinical trials, and we control only certain aspects of their activities. As a result, we have less direct control over the conduct, timing and completion of these clinical trials and the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities. We and these third parties are required to comply with good clinical practices (GCPs), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of these third parties fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. We cannot assure you that, upon inspection, such regulatory authorities will determine that any of our clinical trials comply with the GCP regulations. In addition, our clinical trials must be conducted under current good manufacturing practices (cGMP) regulations and will require a large number of test patients. Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process. Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Any third parties conducting our clinical trials are not and will not be our employees and, except for remedies available to us under our agreements with such third parties, we cannot control whether or not they devote sufficient time and resources to our ongoing, clinical and nonclinical product candidates. These third parties may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf. If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval of or successfully commercialize our product candidates. As a result, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed.

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Switching or adding third parties to conduct our clinical trials involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

We contract with third parties for the manufacture of our drug candidates for preclinical development and clinical trials. This reliance on third parties increases the risk that we will not have sufficient quantities of our drug candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts.

We do not currently own or operate, nor do we have any plans to establish in the future, any manufacturing facilities or personnel. We rely, and expect to continue to rely, on third parties for the manufacture of our drug candidates for preclinical development and clinical testing, as well as for the commercial manufacture of our current and future drugs. This reliance on third parties increases the risk that we will not have sufficient quantities of our drug candidates or such quantities at an acceptable cost or quality, which could delay, prevent or impair our development or commercialization efforts.

The facilities used by our contract manufacturers to manufacture our drug candidates must be approved by the FDA pursuant to inspections that will be conducted after we submit our marketing applications to the FDA. We do not control the manufacturing process of, and will be completely dependent on, our contract manufacturers for compliance with cGMPs in connection with the manufacture of our drug candidates. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of our drug candidates or is unable to conduct inspections necessary to approve these facilities due to delays or disruptions caused by the COVID-19 pandemic, or if the FDA or a comparable regulatory authority withdraws any such approval in the future, we may be delayed in obtaining approval of these facilities for the manufacture of our drug candidates or need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our drug candidates, if approved. Further, our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of drug candidates or drugs, if approved, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect our business and supplies of our drug candidates.

In response to the COVID-19 pandemic, on March 10, 2020 the FDA announced its intention to postpone most inspections of foreign manufacturing facilities and products while local, national and international conditions warrant. On March 18, 2020, the FDA announced its intention to temporarily postpone routine surveillance inspections of domestic manufacturing facilities and provided guidance regarding the conduct of clinical trials which the FDA continues to update. As of June 23, 2020, the FDA noted it was conducting mission critical domestic and foreign inspections to ensure compliance of manufacturing facilities with FDA quality standards. However, the FDA may not be able to maintain this pace and delays or setbacks are possible in the future. Beginning the week of July 20, 2020, FDA began to work toward resuming prioritized domestic inspections, and as described in an FDA statement on July 10, 2020, the FDA has developed a rating system to assist in determining when and where it is safest to conduct prioritized domestic inspections. Regulatory authorities outside the U.S. may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic and may experience delays in their regulatory activities.

We do not have long-term supply agreements with all of our contract manufacturers, and purchase our required drug supply, including the API, drug product and drug substance used in our drug candidates, on a purchase order

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basis with certain contract manufacturers. In addition, we may be unable to establish or maintain any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish and maintain agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:

For our other potential products, if we are not able to negotiate commercial supply terms with any such third-party manufacturers, we may be unable to commercialize our products if they were to be approved, and our business and financial condition would be materially harmed. If we are forced to accept unfavorable terms for our relationships with any such third-party manufacturer, our business and financial condition would be materially harmed.

Third-party manufacturers may not be able to comply with the FDA’s cGMP regulations or similar regulatory requirements outside of the U.S. Our failure, or the failure of our third-party manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, seizures or voluntary recalls of drug candidates or products, operating restrictions, and criminal prosecutions, any of which could significantly and adversely affect supplies of our products. Third-party manufacturers’ failure to achieve and maintain high manufacturing standards, in accordance with applicable regulatory requirements, or the incidence of manufacturing errors, also could result in patient injury or death, product shortages, delays or failures in product testing or delivery, cost overruns, or other problems that could seriously harm our business. Third-party manufacturers often encounter difficulties involving production yields, quality control, and quality assurance, as well as shortages of qualified personnel.

Our drug candidates may compete with other drug candidates for access to manufacturing facilities. As a result, we may not obtain access to these facilities on a priority basis or at all. There are a limited number of manufacturers that operate under cGMP regulations and that might be capable of manufacturing for us.

Our current and anticipated future dependence upon others for the manufacture of our drug candidates could result in significant delays or gaps in availability of such drugs or drug candidates and may adversely affect our future profit margins and our ability to commercialize any drugs that receive marketing approval on a timely and competitive basis.

The third parties upon whom we rely for the supply of the API, drug substance and drug product used in PLX9486 are our sole source of supply, and the loss of any of these suppliers could significantly harm our business.

The API, drug substance and drug product used in PLX9486 are currently supplied to us from single-source suppliers. Our ability to successfully develop our drug candidates, supply our drug candidates for clinical trials and to ultimately supply our commercial drugs in quantities sufficient to meet the market demand, depends in

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part on our ability to obtain the API, drug substance and drug product for these drugs in accordance with regulatory requirements and in sufficient quantities for clinical testing and commercialization. We will need to enter into arrangements to establish redundant or second-source supply of some of the API, drug product or drug substance. If any of our suppliers ceases its operations for any reason or is unable or unwilling to supply API, drug product or drug substance in sufficient quantities or on the timelines necessary to meet our needs, including as a result of the COVID-19 pandemic, it could significantly and adversely affect our business, the supply of our current or future drug candidates or any future approved drugs and our financial condition.

For PLX9486 and any other product candidates, we intend to identify and qualify additional manufacturers to provide such API, drug substance and drug product prior to submission of a New Drug Application (NDA) to the FDA and/or a Marketing Authorization Application (MAA) to the EMA. We are not certain, however, that our single-source suppliers will be able to meet our demand for their products, either because of the nature of our agreements with those suppliers, our limited experience with those suppliers or our relative importance as a customer to those suppliers. It may be difficult for us to assess their ability to timely meet our demand in the future based on past performance. While our suppliers have generally met our demand for their products on a timely basis in the past, they may subordinate our needs in the future to their other customers.

Establishing additional or replacement suppliers for the API, drug substance and drug product used in our drug candidates or any future approved drugs, if required, may not be accomplished quickly. If we are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory approval, which could result in further delay. While we seek to maintain adequate inventory of the API, drug substance and drug product used in our current or future drug candidates and any future approved drugs, any interruption or delay in the supply of components or materials, or our inability to obtain such API, drug substance and drug product from alternate sources at acceptable prices in a timely manner could impede, delay, limit or prevent our development efforts, which could harm our business, results of operations, financial condition and prospects.

If our third-party manufacturers use hazardous materials in a manner that causes injury or violates applicable law, we may be liable for damages.

Our research and development activities involve the controlled use of potentially hazardous substances, including chemical, by our third-party manufacturers. Our manufacturers are subject to federal, state and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical and hazardous materials. Although we believe that our manufacturers’ procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from medical or hazardous materials. As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. In the event of an accident, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical or hazardous materials. Compliance with applicable environmental laws and regulations is expensive, and current or future environmental regulations may impair our research, development and production efforts, which could harm our business, prospects, financial condition or results of operations.

Risks Related to Our Intellectual Property

We depend on intellectual property licensed from third parties and termination of any of these licenses could result in the loss of significant rights, which would harm our business.

We are dependent on patents, know-how and proprietary technology, both our own and licensed from others. Aspects of the ACTR technology are subject to a license from St. Jude Children’s Research Hospital (St. Jude’s) and the National University of Singapore (NUS). PLX9486 and other molecules are subject to a license from Plexxikon Inc.

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We are currently, and expect in the future to be, party to material license or collaboration agreements. These agreements typically impose numerous obligations, such as diligence and payment obligations. Any termination of these licenses could result in the loss of significant rights and could harm our ability to commercialize our product candidates. These licenses do and future licenses may include provisions that impose obligations and restrictions on us. For example, our license agreement with St. Jude’s and NUS imposes some limitations on our ability to assign the license to a party other than an affiliate. This could delay or otherwise negatively impact a transaction that we may wish to enter into.

Disputes may also arise between us and our licensors regarding intellectual property subject to a license agreement, including:

If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license, as we are for intellectual property that we own, which are described below. If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

If our efforts to protect the proprietary nature of the intellectual property related to our technologies are not adequate, we may not be able to compete effectively in our market.

We rely upon a combination of patents, confidentiality agreements, trade secret protection and license agreements to protect the intellectual property related to our technologies. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market.

Currently, we have patents issued from our in-licensed portfolio under our license agreement with Plexxikon Inc. in multiple territories, including but not limited to, AU, EP (validated in DE, FR, and GB), JP, US, SG, and ZA. Except for a ZA patent for PLX9486 and PLX0206, no other patents have issued from the patent applications that we own or in-license. We anticipate additional patent applications will be filed both in the United States and in other countries, as appropriate. However, we cannot predict:

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Composition of matter patents for biological and pharmaceutical products, such as ACTR-based product candidates, are generally considered to be the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use. We have obtained issuances of composition of matter claims in one European patent from the licensed-in portfolio for PLX9486 and PLX0206. We, however, cannot be certain that the claims in our pending patent applications covering composition of matter of our product candidates will be considered patentable by the United States Patent and Trademark Office (USPTO), or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered patentable by courts in the United States or foreign countries. Method of use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may induce or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain. The patent applications that we own and in-license may fail to result in issued patents with claims that cover our product candidates or uses thereof in the United States or in other foreign countries. Even if the patents do successfully issue, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable. Furthermore, even if they are unchallenged, our patents and patent applications may not adequately protect our intellectual property or prevent others from designing around our claims. If the breadth or strength of protection provided by the patent applications we hold with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop, and threaten our ability to commercialize, our product candidates. Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates under patent protection would be reduced. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we were the first to file any patent application related to our product candidates. Furthermore, for United States applications in which all claims are entitled to a priority date before March 16, 2013, an interference proceeding can be provoked by a third-party or instituted by the USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications. Various post grant review proceedings, such as inter partes review and post grant review, are available for any interested third party to challenge the patentability of claims issued in patents to us. While these post grant review proceedings have been used less frequently to invalidate biotech patents, they have been successful regarding other technologies, and these relatively new procedures are still changing, and those changes might affect future results.

In addition to the protection afforded by patents, we seek to rely on trade secret protection, confidentiality agreements, and license agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. Although we require all of our employees to assign their inventions to us, and require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, we cannot be certain that our trade secrets and other confidential proprietary information will not be disclosed or that competitors will not otherwise gain access to our trade secrets or independently develop substantially equivalent information and techniques. Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States. As a result, we may encounter significant problems in protecting and defending our intellectual property both in the United States and abroad. If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, operating results and financial condition.

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Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

Our commercial success depends in part on our avoiding infringement of the patents and proprietary rights of third parties. There is a substantial amount of litigation involving patents and other intellectual property rights in the biotechnology and pharmaceutical industries, as well as administrative proceedings for challenging patents, including interference, reexamination, and post grant review proceedings before the USPTO or oppositions and other comparable proceedings in foreign jurisdictions. Numerous U.S. and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may give rise to claims of infringement of the patent rights of others.

Third parties may assert that we are employing their proprietary technology without authorization. Generally, conducting clinical trials and other development activities in the United States is not considered an act of infringement. If and when PLX9486 or another product candidate is approved by the FDA, a third party may then seek to enforce its patent by filing a patent infringement lawsuit against us. While we do not believe that any claims that could otherwise materially adversely affect commercialization of our product candidates, if approved, are valid and enforceable, we may be incorrect in this belief, or we may not be able to prove it in a litigation. In this regard, patents issued in the U.S. by law enjoy a presumption of validity that can be rebutted only with evidence that is “clear and convincing,” a heightened standard of proof. There may be third-party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates. Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may infringe. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents. Moreover, we may fail to identify relevant patents or incorrectly conclude that a patent is invalid, not enforceable, exhausted, or not infringed by our activities. If any third-party patents were held by a court of competent jurisdiction to cover the manufacturing process of our product candidates, constructs or molecules used in or formed during the manufacturing process, or any final product itself, the holders of any such patents may be able to block our ability to commercialize the product candidate unless we obtained a license under the applicable patents, or until such patents expire or they are finally determined to be held invalid or unenforceable. Similarly, if any third-party patent were held by a court of competent jurisdiction to cover aspects of our formulations, processes for manufacture or methods of use, including combination therapy or patient selection methods, the holders of any such patent may be able to block our ability to develop and commercialize the product candidate unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable. In either case, such a license may not be available on commercially reasonable terms or at all. If we are unable to obtain a necessary license to a third-party patent on commercially reasonable terms, or at all, our ability to commercialize our product candidates may be impaired or delayed, which could in turn significantly harm our business.

Parties making claims against us may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize our product candidates. Defense of these claims, regardless of their merit, could involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure. We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms. Furthermore, even in the absence of litigation, we may need or may choose to obtain licenses from third parties to advance our research or allow commercialization of our product candidates. We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. In that event, we would be unable to further develop and commercialize our product candidates, which could harm our business significantly.

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We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

Presently we have rights to certain intellectual property, through licenses from third parties and under patent applications that we own or will own, related to ACTR087, ACTR707, and PLX9486 constructs, and certain other product candidates. Because additional product candidates may require the use of proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights. In addition, while we have patent rights or are pursuing patent rights directed to certain ACTR constructs and PLX9486 we may not be able to obtain intellectual property to broad ACTR constructs and PLX9486 in certain jurisdictions.

Our product candidates may also require specific formulations to work effectively and efficiently and these rights may be held by others. Similarly, efficient production or delivery of our product candidates may also require specific compositions or methods, and the rights to these may be owned by third parties. We may be unable to acquire or in-license any compositions, methods of use, processes or other third-party intellectual property rights from third parties that we identify. Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology. Moreover, the specific antibodies that will be used with our product candidates may be covered by the intellectual property rights of others.

The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidates. More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming and unsuccessful.

Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming. In addition, in an infringement proceeding, a court may decide that one or more of our patents is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated, held unenforceable, or interpreted narrowly and could put our patent applications at risk of not issuing. Defense of these claims, regardless of their merit, would involve substantial litigation expense and would be a substantial diversion of employee resources from our business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

Post-grant proceedings, including interference proceedings, provoked by third parties or brought by the USPTO may be necessary to determine the validity or priority of inventions with respect to our patents or those of our licensors. An unfavorable outcome could result in a loss of our current patent rights and could require us to cease using the related technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if the prevailing party does not offer us a license on commercially reasonable terms. Litigation or post-grant proceedings may result in a decision adverse to our interests and, even if we are successful, may result in substantial costs and distract our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our trade secrets or confidential information, particularly in countries where the laws may not protect those rights as fully as in the United States.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

Periodic maintenance fees on any issued patent are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of the patent. The USPTO and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent application process. While an inadvertent lapse can in many cases be cured by payment of a late fee or by other means in accordance with the applicable rules, there are situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Noncompliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents. In such an event, our competitors might be able to enter the market, which would have a material adverse effect on our business.

Issued patents covering our product candidates could be found invalid or unenforceable if challenged in court or the USPTO.

If we or one of our licensing partners initiate legal proceedings against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent covering our product candidate, as applicable, is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace, and there are numerous grounds upon which a third party can assert invalidity or unenforceability of a patent. Third parties may also raise similar claims before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, inter parties review, post grant review, and equivalent proceedings in foreign jurisdictions (e.g., opposition proceedings). Such proceedings could result in revocation or amendment to our patents in such a way that they no longer cover our product candidates. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our patent counsel and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on our product candidates. Such a loss of patent protection could have a material adverse impact on our business.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States continues to adapt to wide-ranging patent reform legislation that became effective starting in 2012. Moreover, recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might

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obtain in the future. Changes in the laws and regulations governing patents in other jurisdictions could similarly have an adverse effect on our ability to obtain and effectively enforce our patent rights.

We have less robust foreign intellectual property rights and may not be able to protect our intellectual property rights throughout the world.

Certain of our key patent families (covering the ACTR087 construct) have been filed in the United States, as well as in numerous jurisdictions outside the United States, and we are pursuing subgeneric claims prior to expiration of applicable deadlines (including a patent family covering the ACTR707 construct). We also plan to pursue claims covering the PLX9486 product in the United States and in jurisdictions outside the United States. However, we have less robust intellectual property rights outside the United States, and, in particular, we may not be able to pursue generic coverage of the ACTR platform outside of the United States. Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing. Most of our patent portfolio is at the very early stage. We will need to decide whether and in which jurisdictions to pursue protection for the various inventions in our portfolio prior to applicable deadlines.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biopharmaceutical products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

We generally enter into confidentiality and intellectual property assignment agreements with our employees, consultants, and contractors. These agreements generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property. However, those agreements may not be honored and may not effectively assign intellectual property rights to us. Moreover, there may be some circumstances, where we are unable to negotiate for such ownership rights. Disputes regarding ownership or inventorship of intellectual property can also arise in other contexts, such as collaborations and sponsored research. If we are subject to a dispute challenging our rights in or to patents or other intellectual property, such a dispute could be expensive and time consuming. If we were unsuccessful, we could lose valuable rights in intellectual property that we regard as our own.

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We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

We have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information of these third parties or our employees’ former employers or our consultants’ or contractors’ current or former clients or customers. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees. If we are not successful, we could lose access or exclusive access to valuable intellectual property.

Numerous factors may limit any potential competitive advantage provided by our intellectual property rights.

The degree of future protection afforded by our intellectual property rights, whether owned or in-licensed, is uncertain because intellectual property rights have limitations, and may not adequately protect our business, provide a barrier to entry against our competitors or potential competitors, or permit us to maintain our competitive advantage. Moreover, if a third party has intellectual property rights that cover the practice of our technology, we may not be able to fully exercise or extract value from our intellectual property rights. The following examples are illustrative:

Should any of these events occur, they could significantly harm our business and results of operation.

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Risks Related to Regulatory Approval of Our Drug Candidates and Other Legal Compliance Matters

The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our product candidates.

We currently have one drug candidates in clinical development and their risk of failure is high. We are unable to predict when or if any of our drug candidates will prove effective or safe in humans or will obtain marketing approval. Before obtaining marketing approval from regulatory authorities for the sale of any drug candidate, we must complete preclinical development and then conduct extensive clinical trials to demonstrate the safety and efficacy of our drug candidates in humans. Clinical testing is expensive, difficult to design and implement, and can take many years to complete and is uncertain as to the outcome. A failure of one or more clinical trials can occur at any stage of testing. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and interim or preliminary results of a clinical trial do not necessarily predict final results. In particular, the small number of patients in our early clinical trials may make the results of these trials less predictive of the outcome of later clinical trials. In addition, although we observed encouraging preliminary efficacy results including disease control rates, objective response rates (best response), and progression free survival in our Phase 1 trial of PLX9486, the primary objectives were to determine the safety, tolerability, and maximum tolerated dose of PLX9486 and to determine a recommended Phase 2 dose and not to demonstrate efficacy. The assessments of efficacy from the Phase 1 clinical trial of PLX9486 were not designed to demonstrate statistical significance and may not be predictive of the results of further clinical trials of PLX9486. These factors also apply to any future Phase 1 and Phase 1b/2 trials for other future drug candidates. We did not observe a maximum tolerated dose in the dose escalation stage of our Phase 1 trial of PLX9486.

We may experience numerous unforeseen events during, or as a result of, clinical trials that could delay or prevent our ability to obtain marketing approval or commercialize our drug candidates, including:

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While PLX9486 is highly potent and selective KIT D816V inhibitor that is being developed to treat systemic mastocytosis and Gastrointestinal Solid Tumor patients, we may find that patients treated with PLX9486 have or develop mutations that confer resistance to treatment. If patients have or develop resistance to treatment with our drug candidates, we may be unable to successfully complete our clinical trials, and may not be able to obtain regulatory approval of, and commercialize, our drug candidates.

Our product development costs will increase if we experience delays in preclinical studies or clinical trials or in obtaining marketing approvals. We do not know whether any of our planned preclinical studies or clinical trials will begin on a timely basis or at all, will need to be restructured, or will be completed on schedule, or at all. We expect presenting additional data from our future clinical trials that may be requested by the FDA. The FDA may request additional information or data and any such requests could result in clinical trial delays. Furthermore, the FDA could place a clinical hold, either another partial clinical hold or a full clinical hold, on our PLX9486 trials if they are not satisfied with the information we provide to them, which could result in delays for the trial. Significant preclinical study or clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our drug candidates or allow our competitors to bring products to market before we do and impair our ability to successfully commercialize our drug candidates and may harm our business and results of operations.

We may utilize companion diagnostics in our planned clinical trials in the future in order to identify appropriate patient populations for our drug candidates. If a satisfactory companion diagnostic is not commercially available, we may be required to create or obtain one that would be subject to regulatory approval requirements. The process of obtaining or creating such diagnostic is time consuming and costly.

The FDA may disagree with our regulatory plan and we may fail to obtain regulatory approval of our product candidates.

We plan to advance our lead product candidate, PLX9486, into clinical trials in the future. If we believe the Phase 1 data are compelling, we plan to advance that product candidate in further clinical development for the treatment of GIST patients, we are pursuing development of the compound in patients living with advanced systemic mastocytosis (ASM) and indolent systemic mastocytosis (ISM) to discuss with the FDA the potential to move to a registration trial upon completion of the future clinical trials of that product candidate. However, the general approach for FDA approval of a drug is dispositive data from two adequate and well-controlled, Phase 3 clinical trials of the drug in the relevant patient population. Phase 3 clinical trials typically involve hundreds of patients, have significant costs and take years to complete. The FDA may not believe our accelerated approval strategy to move directly to a registration trial upon completion of the current or future Phase 1 clinical trials is warranted and may require a Phase 3 clinical trial or trials prior to approval. Our clinical trial results may also not support approval. In addition, our product candidates could fail to receive regulatory approval for many reasons, including the following:

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