UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Explanatory Note
On January 19, 2022, Zymeworks Inc. (“Zymeworks” or the “Company”) filed a Form 8-K (the “Original 8-K”) disclosing, among other items, the Company’s approval of a restructuring of the Company’s workforce (the “Restructuring”).
At the time of filing of the Original 8-K, the Company was unable in good faith to make a determination of an estimate or a range of estimates as required by paragraphs (b), (c) and (d) of Item 2.05 of Form 8-K with respect to the Restructuring. This Amendment No. 1 is being filed by the Company to provide such information. Except as set forth herein, the remainder of the original Form 8-K is unchanged.
Item 2.05 Costs Associated with Exit or Disposal Activities.
As previously disclosed, Zymeworks announced and implemented the Restructuring with the target of reducing employee headcount by at least 25% across the organization by the end of 2022. Costs under the Restructuring are expected to range from a cost of $0.5 million to a benefit of $3.5 million, and consist primarily of:
| • | Employee severance and termination benefits of approximately $5.0 million; |
| • | An offsetting non-cash benefit related to the reversal of previously recognized stock-based compensation expenses for unvested stock and restricted share unit awards of $10.5 million; and |
| • | Other restructuring charges recognized and expected to be recognized due to the reduction in headcount primarily relating to the shutdown of certain facilities and early termination of certain service contracts, for an aggregate of between approximately $2.0 million to $6.0 million. |
The Company recognized the majority of these charges in the first quarter of 2022 and anticipates settling the majority of the remaining cash costs of between $3.5 million to $7.0 million throughout 2022 as Restructuring activities complete. The Company does not expect to incur any material additional costs related to the Restructuring.
Forward-Looking Statements
This Current Report on Form 8-K contains certain forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements are identified by such words as “believe,” “expect,” “anticipate” and words of similar import and are based on current expectations that involve risks and uncertainties, such as the Company’s plans, objectives, expectations and intentions. All statements other than historical or current facts are forward-looking statements, including, without limitation, statements about the Restructuring, including the expected costs of the Restructuring and the anticipated period time over which such costs will be paid. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. These statements, like all statements in this report, speak only as of their date.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| ZYMEWORKS INC. | ||||||
| (Registrant) | ||||||
| Date: May 2, 2022 | By: | /s/ Christopher Astle | ||||
| Name: Title: |
Christopher Astle Senior Vice President and Chief Financial Officer | |||||
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