Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Evaluation of disclosure controls and procedures
Management, under the supervision and with the participation of our Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based on the evaluation of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as of December 31, 2021 were effective at the reasonable assurance level.
Management’s annual report on internal control over financial reporting .
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its evaluation under the criteria set forth in Internal Control-Integrated Framework , our management concluded that our internal control over financial reporting was effective as of December 31, 2021.
Our independent registered public accounting firm, Ernst & Young LLP, has audited the effectiveness of our internal control over financial reporting as of December 31, 2021 as stated in their attestation report which is included herein.
Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Changes in internal control over financial reporting
There have been no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Protagonist Therapeutics, Inc.
Opinion on Internal Control over Financial Reporting
We have audited Protagonist Therapeutics, Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Protagonist Therapeutics, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive loss, stockholders’ equity and cash flows for each of the two years in the period ended December 31, 2021, and the related notes, and our report dated February 28, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s annual report on internal control over financial reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Redwood City, California
February 28, 2022
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Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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PART III
Item 10. Directors, Executive Officers, and Corporate Governance
Except as set forth below, the information required by this item is incorporated by reference from our definitive Proxy Statement, under the headings “Proposal 1 – Election of Directors,” “Executive Officers,” “Director Compensation – Equity Compensation Plan Information” and, if applicable, “Delinquent Section 16(a) Reports,” to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2021.
We have adopted a Code of Business Conduct and Ethics that applies to all directors, officers and employees, including our principal executive officer and principal financial officer. The Code of Business Conduct and Ethics is posted on our website at www.protagonist-inc.com.
We intend to disclose future amendments to certain provisions of the Code of Business Conduct and Ethics, and waivers of the Code of Business Conduct and Ethics granted to executive officers and directors, on our website listed above within four business days following the date of the amendment or waiver.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from our definitive Proxy Statement, under the headings “Information Regarding the Committees of the Board of Directors – Compensation Committee,” “– Compensation Committee Interlocks and Insider Participation” and “Executive Compensation,” to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2021.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from our definitive Proxy Statement, under the heading “Security Ownership of Certain Beneficial Owners and Management,” to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2021.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from our definitive Proxy Statement, under the headings “Transactions with Related Persons and Indemnification” and “Information Regarding the Board of Directors and Corporate Governance – Independence of the Board of Directors,” to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 20, 2021.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated by reference from our definitive Proxy Statement, under the heading “Proposal 2 – Ratification of Selection of Independent Registered Public Accounting Firm,” to be filed with the SEC in connection with our 2022 Annual Meeting of Stockholders within 120 days after the end of the fiscal year ended December 31, 2021.
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PART IV
Item 15. Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this report:
(1) FINANCIAL STATEMENTS
The financial statements filed as part of this Annual Report on Form 10-K are included in Part II, Item 8 of this Annual Report on Form 10-K.
(2) FINANCIAL STATEMENT SCHEDULES
Financial statement schedules have been omitted in this Annual Report on Form 10-K because they are not applicable, not required under the instructions, or the information requested is set forth in the financial statements or related notes thereto.
(3) EXHIBITS
The exhibits listed in the accompanying Exhibit Index are filed as part of, or incorporated by reference into, this Annual Report on Form 10-K.
(4) EXHIBIT INDEX
Incorporation By Reference
Exhibit
Filed
Number
Exhibit Description
Form
SEC File No.
Exhibit
Filing Date
Herewith
3.1
Amended and Restated Certificate of Incorporation
8-K
001-37852
3.1
8/16/2016
3.2
Amended and Restated Bylaws
S-1/A
333-212476
3.2
8/1/2016
4.1
Specimen stock certificate evidencing the shares of common stock
S-1/A
333-212476
4.1
8/1/2016
4.2
Third Amended and Restated Investor Rights Agreement, by and among Protagonist Therapeutics, Inc. and the stockholders named therein, dated July 31, 2016.
S-1/A
333-212476
4.2
8/1/2016
4.3
Form of Indenture
S-3
333-251254
4.3
12/10/2020
4.4
Form of Common Stock Warrant
S-3
333-251254
4.5
12/10/2020
4.5
Form of Preferred Stock Warrant
S-3
333-251254
4.6
12/10/2020
4.6
Form of Debt Securities Warrant
S-3
333-251254
4.7
12/10/2020
4.7
Description of Protagonist Therapeutics, Inc.’s Securities Registered Pursuant to Section 12 of the Exchange Act
X
10.1+
Protagonist Therapeutics, Inc. 2007 Stock Option and Incentive Plan, as amended and restated, and form of option agreement, exercise notice, joinder, and adoption agreement thereunder.
S-1
333-212476
10.1
7/11/2016
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Incorporation By Reference
Exhibit
Filed
Number
Exhibit Description
Form
SEC File No.
Exhibit
Filing Date
Herewith
10.2+
Protagonist Therapeutics, Inc. 2016 Equity Incentive Plan and forms of stock option grant notice, option agreement, notice of exercise, restricted stock unit grant notice and restricted stock unit agreement thereunder.
S-1/A
333-212476
10.2
8/1/2016
10.3+
Protagonist Therapeutics, Inc. 2016 Employee Stock Purchase Plan.
S-1/A
333-212476
10.3
8/1/2016
10.4+
Form of Indemnity Agreement for Directors and Officers.
S-1/A
333-212476
10.4
8/1/2016
10.5+
Amended and Restated Protagonist Therapeutics, Inc. 2018 Inducement Plan, form of stock option grant notice, form of option agreement, form of restricted stock unit grant notice and form of restricted stock unit agreement.
8-K
001-37852
10.1
2/24/2020
10.6
Lease, dated March 6, 2017, by and between the Registrant and BMR-Pacific Research Center LP.
10-K
001-37852
10.9
3/7/2017
10.7+
Severance Agreement, dated August 1, 2016, by and between the Registrant and Dinesh Patel.
S-1/A
333-212476
10.9
8/1/2016
10.8+
Severance Agreement, dated August 1, 2016, by and between the Registrant and David Y. Liu, Ph.D.
S-1/A
333-212476
10.10
8/1/2016
10.9†
Research and Collaboration Agreement, dated June 16, 2012, by and among the Registrant, Protagonist Pty. Ltd. and Zealand Pharma A/S.
S-1
333-212476
10.17
7/11/2016
10.10†
Contract Extension Letter of Agreement, dated June 1, 2013, by and among the Registrant, Protagonist Pty. Ltd. and Zealand Pharma A/S .
S-1
333-212476
10.18
7/11/2016
10.11†
Agreement on Addition of Additional Collaboration Program, dated September 16, 2013, by and among the Registrant, Protagonist Pty. Ltd. and Zealand Pharma A/S.
S-1
333-212476
10.19
7/11/2016
10.12†
Protagonist Assumption of Responsibility, dated January 28, 2014, by and between the Registrant and Zealand Pharma A/S.
S-1
333-212476
10.20
7/11/2016
10.13†
Agreement to Assign Patent Applications, dated February 7, 2014, by and between the Registrant, Protagonist Pty. Ltd. and Zealand Pharma A/S.
S-1
333-212476
10.21
7/11/2016
10.14†
Abandonment Agreement, dated February 28, 2014, by and among the Registrant, Protagonist Pty. Ltd. and Zealand Pharma A/S.
S-1
333-212476
10.22
7/11/2016
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Incorporation By Reference
Exhibit
Filed
Number
Exhibit Description
Form
SEC File No.
Exhibit
Filing Date
Herewith
10.15
Registration Rights Agreement, dated August 8, 2018, by and between the Registrant and certain parties identified on the signature pages thereto
8-K
001-37852
4.3
8/7/2018
10.16
Securities Purchase Agreement, dated August 6, 2018, by and between the Registrant and certain purchasers identified on the signature pages thereto
S-3
333-227216
10.1
9/7/2018
10.17
Exchange Agreement, dated December 21, 2018, by and between the Registrant and Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P. and Biotechnology Value Trading Fund OS, L.P.
8-K
001-37852
10.1
12/31/2018
10.18
First Amendment, dated January 31, 2019, to Lease, dated March 6, 2017, by and between Protagonist Therapeutics, Inc., as Tenant, and BMR-Pacific Research Center LP, as Landlord .
10-Q
001-37852
10.3
5/8/2019
10.19+
Severance Agreement, dated March 14, 2019, by and among Protagonist Therapeutics, Inc. and Suneel Gupta, Ph.D.
10-Q
001-37852
10.4
5/8/2019
10.20+
Offer Letter, by and between Protagonist Therapeutics Inc. and Donald Kalkofen, dated May 20, 2019.
8-K
001-37852
10.1
5/29/2019
10.21
Credit and Security Agreement, dated October 30, 2019, by and between Protagonist Therapeutics, Inc., MidCap Financial, and Silicon Valley Bank.
10-K
001-37852
10.25
3/10/2020
10.22
Open Market Sale Agreement SM , dated November 27, 2019, by and between Protagonist Therapeutics, Inc. and Jefferies LLC.
8-K
001-37852
10.1
11/27/2019
10.23+
Severance Agreement, dated August 4, 2020, by and between Protagonist Therapeutics, Inc. and Donald Kalkofen.
10-Q
001-37852
10.1
8/6/2020
10.24 †
Amended and Restated License and Collaboration Agreement, dated July 27, 2021, by and between Protagonist Therapeutics, Inc. and Janssen Biotech, Inc.
10-Q
001-37852
10.1
11/3/2021
10.25 †
Arbitration Resolution Agreement, dated August 4th, 2021, by and among Protagonist Therapeutics, Inc. and Zealand Pharma, A/S.
10-Q
001-37852
10.2
11/3/2021
10.26 †
Second Amendment to Lease, dated August 10, 2021, by and between Protagonist Therapeutics, Inc., as Tenant, and BMR-Pacific Research Center, LP as Landlord.
10-Q
001-37852
10.3
11/3/2021
21.1
List of Subsidiaries
X
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Incorporation By Reference
Exhibit
Filed
Number
Exhibit Description
Form
SEC File No.
Exhibit
Filing Date
Herewith
23.1
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
X
23.2
Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm
X
24.1
Power of Attorney (included in signature page of this Form 10-K)
X
31.1
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1*
Certification of Chief Executive Officer and Chief Financial Officer, as required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL Document
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
X
101.LAB
Inline XBRL Taxonomy Extension Labels Linkbase Document
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
X
104
Cover Page Interactive Data File – the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
X
+ Indicates management contract or compensatory plan, contract or agreement.
† Confidential treatment has been granted for a portion of this exhibit.
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* This certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10-K is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Protagonist Therapeutics, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of the Form 10-K, irrespective of any general incorporation language contained in such filing.
# Portions of this exhibit (indicated by hashtag) have been omitted as the registrant has determined that (i) the omitted information is not material and (ii) the omitted information would likely cause competitive harm to the registrant if publicly disclosed.
Item 16. Form 10-K Summary
None.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PROTAGONIST THERAPEUTICS, INC.
Date: February 28, 2022
By:
/s/ Dinesh V. Patel, Ph.D.
Dinesh V. Patel, Ph.D.
President, Chief Executive Officer and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dinesh V. Patel and Don Kalkofen, and each of them, his true and lawful attorneys-in-fact, with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or any of them or their substitute or substitutes may lawfully do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the dates indicated:
Signature
Title
Date
/s/ Dinesh V. Patel, Ph.D.
President, Chief Executive Officer and Director
February 28, 2022
Dinesh V. Patel, Ph.D.
(Principal Executive Officer)
/s/ Don Kalkofen
Chief Financial Officer
February 28, 2022
Don Kalkofen
(Principal Financial and Accounting Officer)
/s/ Harold E. Selick, Ph.D.
Chairman of the Board of Directors
February 28, 2022
Harold E. Selick, Ph.D.
/s/ Bryan Giraudo
Director
February 28, 2022
Bryan Giraudo
/s/ Sarah Noonberg, M.D., Ph.D.
Director
February 28, 2022
Sarah Noonberg, M.D., Ph.D.
/s/ Sarah O’Dowd
Director
February 28, 2022
Sarah O’Dowd
/s/ William D. Waddill
Director
February 28, 2022
William D. Waddill
/s/ Lewis T. Williams, M.D., Ph.D.
Director
February 28, 2022
Lewis T. Williams, M.D., Ph.D.
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