SEC Form SC 13D filed by Locust Walk Acquisition Corp.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

eFFECTOR Therapeutics, Inc.

(Name of Issuer)

Common Stock, par value $0.0001 per share

(Title of Class of Securities)

(CUSIP Number)

John Heard

Abingworth LLP

Princes House

38 Jermyn Street

London, England SW1Y 6DN

+44 20 7534 1500

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

August 25, 2021

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7 for other parties to whom copies are to be sent.

*The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

*As of August 25, 2021 (the “Event Date”), Abingworth LLP (“Abingworth LLP”) may be deemed to beneficially own an aggregate of 4,822,114 shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of eFFECTOR Therapeutics, Inc. (the “Issuer”) held by Abingworth Bioventures VI, LP (“Abingworth VI”). Excludes an earn-out rights for an aggregate of 605,338 shares of Common Stock.  Each earn-out right represents a contingent right to receive one share of the Issuer's Common Stock. The earn-out rights vest upon the Issuer's Common Stock achieving a price per share which equals or exceeds $20.00 over at least 20 trading days out of a 30 consecutive trading day period prior to August 26, 2023. As a result of the foregoing, Abingworth LLP, as the investment manager of Abingworth VI, may be deemed to beneficially own 4,822,114 shares of Common Stock held by Abingworth VI. Thus, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, Abingworth LLP may be deemed to beneficially own 11.9% of the shares of Common Stock of the Issuer deemed issued and outstanding as of the Event Date.

The foregoing beneficial ownership percentage is based upon 40,669,373 shares of Common Stock issued and outstanding as of the Event Date, based on information received from the Issuer and other public information.

* As of August 25, 2021 (the “Event Date”), Abingworth LLP (“Abingworth LLP”) may be deemed to beneficially own an aggregate of 4,822,114 shares of Common Stock, par value $0.0001 per share (the “Common Stock”), of eFFECTOR Therapeutics, Inc. (the “Issuer”) held by Abingworth Bioventures VI, LP (“Abingworth VI”). Excludes an earn-out rights for an aggregate of 605,338 shares of Common Stock.  Each earn-out right represents a contingent right to receive one share of the Issuer's Common Stock. The earn-out rights vest upon the Issuer's Common Stock achieving a price per share which equals or exceeds $20.00 over at least 20 trading days out of a 30 consecutive trading day period prior to August 26, 2023. As a result of the foregoing, Abingworth LLP, as the investment manager of Abingworth VI, may be deemed to beneficially own 4,822,114 shares of Common Stock held by Abingworth VI. Thus, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, Abingworth LLP may be deemed to beneficially own 11.9% of the shares of Common Stock of the Issuer deemed issued and outstanding as of the Event Date.

The foregoing beneficial ownership percentage is based upon 40,669,373 shares of Common Stock issued and outstanding as of the Event Date, based on information received from the Issuer and other public information.

This Schedule 13D relates to the common stock, par value $0.0001 per share (the “Common Stock”), of eFFECTOR Therapeutics, Inc., a Delaware corporation (the “Issuer”). The principal executive offices of the Issuer are located at 11120 Roselle Street, Suite A, San Diego, California 92121. Information given in response to each item shall be deemed incorporated by reference in all other items as applicable.

This statement is being filed on behalf of Abingworth Bioventures VI, LP (“Abingworth VI”), and Abingworth LLP (“Abingworth LLP” together with Abingworth VI, the “Reporting Persons”), the investment manager of Abingworth VI.

The Common Stock is held directly by Abingworth VI. Abingworth Bioventures VI GP LP ("Abingworth GP") serves as the general partner of Abingworth VI. Abingworth General Partner VI LLP, serves as the general partner of Abingworth GP. Abingworth VI (acting by its general partner Abingworth GP, acting by its general partner Abingworth General Partner VI LLP) has delegated to Abingworth LLP, all investment and dispositive power over the securities held by Abingworth VI. 

The address of the principal business office of each of the Reporting Persons is c/o Abingworth LLP, Princes House, 38 Jermyn Street, London, England SW1Y 6DN.

The principal business of Abingworth VI is to invest in and assist growth-oriented businesses in the life science and biomedical industries. The principal business of Abingworth LLP is to serve as the investment manager to certain investment funds, including Abingworth VI.

None of the Reporting Persons, the General Partners or any of their respective executive officers has, during the last five years, been convicted in a criminal proceeding.

None of the Reporting Persons, the General Partners or any of their executive officers has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

Abingworth VI is a limited partnership organized under the laws of England. Abingworth LLP is a limited liability partnership organized under the laws of England.

On August 25, 2021, pursuant to that certain Agreement and Plan of Merger, dated as of May 26, 2021 (the "Merger Agreement"), by and among the Issuer (f/k/a Locust Walk Acquisition Corp.), Locust Walk Merger Sub, Inc. ("Merger Sub"), and eFFECTOR Therapeutics, Inc. ("Old eFFECTOR"), Merger Sub merged with and into Old eFFECTOR with Old eFFECTOR surviving as a wholly owned subsidiary of the Issuer (the "Merger"). Upon consummation of the Merger, each issued and outstanding share of common stock of Old eFFECTOR was automatically cancelled and converted into approximately 0.09657 shares of Common Stock of the Issuer. Abingworth VI acquired 4,109,329 shares in the Merger. Concurrent with the closing of the Merger, Abingworth purchased 712,785 shares of Common Stock in a private placement (the “PIPE”) at a purchase price of $10.00 per share. The Common Stock purchased in the PIPE was made with investment capital for an aggregate purchase price of approximately $7,127,850. In connection with the Merger, Abingworth received an earn-out right for an aggregate of 605,338 shares of Common Stock.  Each earn-out right represents a contingent right to receive one share of the Issuer's Common Stock. The earn-out right vests upon the Issuer's Common Stock achieving a price per share which equals or exceeds $20.00 over at least 20 trading days out of a 30 consecutive trading day period prior to August 26, 2023.

The foregoing description of the Merger Agreement is a summary only and is qualified in its entirety by the actual terms of the agreement, which is incorporated herein by reference. See Item 7 “Material to be Filed as Exhibits.”

On August 25, 2021, pursuant to the Merger Agreement, Merger Sub merged with and into Old eFFECTOR with Old eFFECTOR surviving as a wholly owned subsidiary of the Issuer. Upon consummation of the Merger, each issued and outstanding share of common stock of Old eFFECTOR was automatically cancelled and converted into approximately 0.09657 shares of Common stock of the Issuer. Abingworth VI acquired 4,109,329 shares in the Merger and purchased 712,785 shares in the PIPE which closed concurrently with the Merger. In connection with the Merger, Abingworth received an earn-out right for an aggregate of 605,338 shares of Common Stock.  Each earn-out right represents a contingent right to receive one share of the Issuer's Common Stock. The earn-out right vests upon the Issuer's Common Stock achieving a price per share which equals or exceeds $20.00 over at least 20 trading days out of a 30 consecutive trading day period prior to August 26, 2023.

The Reporting Persons acquired the securities reported herein for investment in the ordinary course of business because of their belief that the Issuer represents an attractive investment based on the Issuer’s business prospects and strategy. The Reporting Persons reserve the right to acquire, or cause to be acquired, additional securities of the Issuer, to dispose of, or cause to be disposed of, such securities at any time or to formulate other purposes, plans or proposals regarding the Issuer or any of its securities, to the extent deemed advisable in light of general investment and trading policies of the Reporting Persons, market conditions or other factors.

Except as set forth herein, the Reporting Persons do not have any plan or proposal that would relate to, or result in, any of the matters set forth under subsections (a) through (j) of Item 4 of Schedule 13D. However, each of the Reporting Persons reserves the right to propose or participate in future transactions which may result in one or more of such actions, including but not limited to, an extraordinary corporate transaction, such as a merger, reorganization or liquidation, sale of a material amount of assets of the Issuer or its subsidiaries, or other transactions which might have the effect of causing the Common Stock to become eligible for termination of registration under Section 12(g) of the Act. The Reporting Persons also retain the right to change their investment intent at any time, to acquire additional shares of Common Stock or other securities of the Issuer from time to time, or to sell or otherwise dispose of all or part of the Common Stock beneficially owned by them (or any shares of Common Stock into which such securities are converted) in any manner permitted by law. The Reporting Persons may engage from time to time in ordinary course transactions with financial institutions with respect to the securities described herein.

As of the date hereof, Abingworth LLP as the investment manager of Abingworth VI may be deemed to beneficially own an aggregate of 4,822,114 shares of Common Stock of the Issuer

held by Abingworth VI. This excludes an earn-out rights for an aggregate of 605,338 shares of Common Stock.  Each earn-out right represents a contingent right to receive one share of the Issuer's Common Stock. The earn-out rights vest upon the Issuer's Common Stock achieving a price per share which equals or exceeds $20.00 over at least 20 trading days out of a 30 consecutive trading day period prior to August 26, 2023. As a result of the foregoing, Abingworth LLP, as the investment manager of Abingworth VI, may be deemed to beneficially own 4,822,114 shares of Common Stock held by Abingworth VI.

As a result of the foregoing, Abingworth LLP, as the investment manager of Abingworth VI, may be deemed to beneficially own 4,822,114 shares of Common Stock held by Abingworth VI. Thus, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, Abingworth LLP may be deemed to beneficially own 11.9% of the shares of Common Stock of the Issuer deemed issued and outstanding as of the Event Date.

The foregoing beneficial ownership percentage is based upon 40,669,373 shares of Common Stock issued and outstanding as of the Event Date, based on information received from the Issuer and other public information.

Except as described herein, during the past sixty (60) days on or prior to August 25, 2021, there were no other purchases or sales of shares of Common Stock, or securities convertible into or exchangeable for shares of Common Stock, by the Reporting Persons or any person or entity for which the Reporting Persons possess voting or dispositive control over the securities thereof.

The information set forth in Items 3, 4 and 5 of this Statement is incorporated herein by reference.

Currently, Mr. Brian Gallagher, a Partner of Abingworth LLP, serves on the Board of Directors of the Issuer. Mr. Gallagher, in his capacity as a director may be entitled to receive cash compensation and equity compensation, including stock option or other equity awards, pursuant to the Issuer’s nonemployee director compensation policy, in effect from time to time.

Registration Rights

Pursuant to the terms of an Amended and Restated Registration Rights Agreement with the Issuer, dated August 25, 2021, certain holders of the Issuer’s Common Stock, including Abingworth VI are entitled to have certain shares registered for resale, pursuant to Rule 415 under the Securities Act of 1933, as amended.

The foregoing description of the Amended and Restated Registration Rights Agreement is a summary only and is qualified in its entirety by the actual terms of the agreement, which is incorporated herein by reference. See Item 7 “Material to be Filed as Exhibits.”

The following exhibit is incorporated into this Schedule 13D:

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated: September 3, 2021

Attention: Intentional misstatements or omissions of fact constitute
Federal criminal violations (See 18 U.S.C. 1001).