|
|
|
Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-256476
|
PROSPECTUS SUPPLEMENT
(To Prospectus Dated June 2, 2021)
9,090,910 Shares of Common
Stock
Underwriter Warrants to Purchase up to 636,364 Shares of Common Stock
We are
offering 9,090,910 shares
of our common stock pursuant to this prospectus supplement and
accompanying prospectus. Each share of common stock is being sold
at a price per share equal to $0.55. In addition, in connection with the
offering, we are issuing common stock purchase warrants to the
underwriters. These warrants and the shares of common stock
issuable upon exercise of the warrants will also be registered
pursuant to the registration statement on Form S-3 of which this
prospectus supplement and the accompanying prospectus form a
part.
Our common stock is
listed on The Nasdaq Capital Market under the symbol
“AZRX.” The last reported sale price of our common
stock on July 21, 2021, was $0.7398 per share.
We are an
“emerging growth company” as that term is used in the
Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and,
as such, have elected to comply with certain reduced public company
reporting requirements for this prospectus supplement, the
accompanying prospectus and our filings with the Securities and
Exchange Commission.
This
investment involves a high degree of risk. See “Risk
Factors” on page S-5 of this prospectus supplement and
any similar section contained in the accompanying prospectus and in
the documents that are incorporated by reference herein and
therein.
|
|
Per
Share
|
Total
|
|
Public offering
price
|
$0.550
|
$5,000,000.50
|
|
Underwriting
discounts and commissions (1)
|
$0.044
|
$400,000.04
|
|
Proceeds to us,
before expenses
|
$0.506
|
$4,600,000.46
|
|
(1)
|
In addition, we
have agreed to reimburse the representative of the underwriters for
certain offering-related expenses and to issue to the
representative of the underwriters (or its designees) warrants, or
Underwriter Warrants, to purchase a number of shares of common
stock equal to 7% of the shares of common stock sold in this
offering. This prospectus supplement and the accompanying
prospectus also covers the Underwriter Warrants and the shares of
our common stock issuable upon exercise of the Underwriter
Warrants. We will pay the representative a reimbursement for
non-accountable expenses equal to $35,000, a reimbursement for
legal fees and expenses of the underwriters in the amount of
$125,000 and $15,950 for clearing fees. For additional information
about the compensation paid to the underwriters, see
“Underwriting.”
|
We have
granted the underwriters a 30-day option to purchase up to an
additional 1,363,636 shares of our common stock from us at the
public offering price per share, less underwriting discounts and
commissions. If the underwriters exercise their option in full, the
total underwriting discounts and commissions payable by us will be
approximately $460,000, and the total proceeds to us, before
expenses, will be approximately $5,290,000.
The
underwriters expect to deliver the shares of common stock on or
about July 27, 2021.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or passed upon the adequacy or accuracy of this
prospectus supplement. Any representation to the contrary is a
criminal offense.
H.C. Wainwright & Co.
The date of this prospectus supplement is July 22, 2021.
TABLE OF CONTENTS
Prospectus
Supplement
|
S-1
|
|
|
S-2
|
|
|
S-3
|
|
|
S-5
|
|
|
S-8
|
|
|
S-10
|
|
|
S-11
|
|
|
S-13
|
|
|
S-15
|
|
|
S-16
|
|
|
S-20
|
|
|
S-21
|
|
|
S-22
|
|
|
S-23
|
Prospectus
|
ii
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
15
|
|
|
17
|
|
|
21
|
|
|
21
|
|
|
22
|
|
|
23
|
|
|
24
|
ABOUT THIS PROSPECTUS
SUPPLEMENT
In this prospectus
supplement, “AzurRx,” “we,”
“us,” “our” or “ours” refer to
AzurRx BioPharma, Inc., a Delaware corporation, collectively with
our direct wholly-owned subsidiary AzurRx SAS, a company organized
under the laws of France.
All trademarks or
trade names referred to in this prospectus supplement are the
property of their respective owners. Solely for convenience, the
trademarks and trade names in this prospectus supplement are
referred to without the ® and ™ symbols, but such
references should not be construed as any indicator that their
respective owners will not assert, to the fullest extent under
applicable law, their rights thereto. We do not intend the use or
display of other companies’ trademarks and trade names to
imply a relationship with, or endorsement or sponsorship of us by,
any other companies.
This document is in
two parts. The first part is this prospectus supplement, which adds
to and updates information contained in the accompanying
prospectus. The second part, the prospectus, provides more general
information, some of which may not apply to this offering.
Generally, when we refer to this prospectus, we are referring to
both parts of this document combined. To the extent there is a
conflict between the information contained in this prospectus
supplement and the information contained in the accompanying
prospectus, you should rely on the information in this prospectus
supplement.
This prospectus
supplement and the accompanying prospectus relate to the offering
of shares of our common stock. Before buying the shares of common
stock offered hereby, we urge you to carefully read this prospectus
supplement and the accompanying prospectus, together with the
information incorporated herein by reference as described under the
headings “Where You Can Find
More Information” and “Incorporation of Certain Information by
Reference.” These documents contain important
information that you should consider when making your investment
decision. This prospectus supplement contains information about the
common stock offered hereby and may add, update or change
information in the accompanying prospectus.
You should rely
only on the information that we have provided or incorporated by
reference in this prospectus supplement and the accompanying
prospectus. Neither we nor the underwriters (or any of our or its
respective affiliates) have authorized any other person to provide
you with different information. If anyone provides you with
different or inconsistent information, you should not rely on
it.
We and the
underwriters are not making offers to sell or solicitations to buy
our securities in any jurisdiction in which an offer or
solicitation is not authorized or in which the person making that
offer or solicitation is not qualified to do so or to anyone to
whom it is unlawful to make an offer or solicitation. You should
assume that the information in this prospectus supplement and the
accompanying prospectus or any related free writing prospectus is
accurate only as of the date on the front of the document and that
any information that we have incorporated by reference is accurate
only as of the date of the document incorporated by reference,
regardless of the time of delivery of this prospectus supplement,
the accompanying prospectus or any related free writing prospectus,
or any sale of a security.
This prospectus
supplement and the accompanying prospectus contain summaries of
certain provisions contained in some of the documents described
herein, but reference is made to the actual documents for complete
information. All of the summaries are qualified in their entirety
by the actual documents. Copies of some of the documents referred
to herein have been or will be filed as exhibits to the
registration statement of which this prospectus is a part or as
exhibits to documents incorporated by reference herein, and you may
obtain copies of those documents as described below under the
headings “Where You Can Find
More Information” and “Incorporation of Certain Information by
Reference.”
|
|
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights information contained elsewhere in this
prospectus supplement. This summary does not contain all of the
information that you should consider before deciding to invest in
our securities. You should read this entire prospectus supplement
and the accompanying prospectus carefully, including the
“Risk Factors” section in this prospectus supplement
and under similar captions in the documents incorporated by
reference into this prospectus supplement. In this prospectus
supplement, unless otherwise stated or the context otherwise
requires, references to “AzurRx”,
“Company”, “we”, “us”,
“our” or similar references mean AzurRx BioPharma, Inc.
and its subsidiaries on a consolidated basis. References to
“AzurRx BioPharma” refer to AzurRx BioPharma, Inc. on
an unconsolidated basis. References to “AzurRx SAS”
refer to AzurRx SAS, AzurRx BioPharma’s wholly-owned
subsidiary through which we conduct our European
operations.
Overview
We are engaged in the research and development of
targeted, non-systemic therapies for the treatment of patients with
gastrointestinal (“GI”) diseases. Non-systemic therapies are
non-absorbable drugs that act locally, i.e. in the intestinal
lumen, skin or mucosa, without reaching an individual’s
systemic circulation. We are focused on
developing our pipeline of gut-restricted GI clinical drug
candidates, including MS1819 and niclosamide.
Our lead drug candidate
is MS1819, a recombinant lipase for the treatment of exocrine
pancreatic insufficiency (“EPI”)
in patients with cystic
fibrosis (“CF”) and chronic pancreatitis
(“CP”), currently in two
Phase 2 CF clinical trials. In March 2021, we announced topline results from
our Phase 2b OPTION 2 monotherapy trial, and in May 2021, we
announced positive interim results from the first 18 patients in
our Phase 2 Combination trial in Europe.
In 2021, we intend to
launch two new clinical programs using proprietary formulations of
niclosamide, a small
molecule with anti-helminthic, anti-viral and anti-inflammatory
properties; FW-1022, for
Severe Acute Respiratory Syndrome Coronavirus 2
(“COVID-19”)
gastrointestinal infections, and FW-420, for Grade 1 and Grade 2
Immune Checkpoint Inhibitor-Associated Colitis
(“ICI-AC”)
and diarrhea in advanced stage oncology
patients. We
initiated our Phase 2 RESERVOIR clinical trial using a proprietary
oral immediate-release tablet formulation of micronized niclosamide
(FW-1022) for the treatment of COVID-19 related GI infections in
April 2021, and we are preparing to initiate our Phase 1b/2a
PASSPORT ICI-AC trial using both an oral immediate-release tablet
and a topical rectal enema foam formulations of niclosamide
(FW-420) in the second half of 2021.
Recent Developments
Continued Nasdaq Listing
On June 15, 2021, we received a letter from the
Listing Qualifications Staff of The Nasdaq Stock Market, LLC
(“Nasdaq”) indicating that, based upon the
closing bid price of our common stock for the last 30
consecutive business days, we are not currently in compliance with
the requirement to maintain a minimum bid price of $1.00
per share for continued listing on the Nasdaq Capital Market, as
set forth in Nasdaq Listing Rule 5550(a)(2) (the
“Notice”).
The
Notice has no immediate effect on the continued listing status
of our common stock on the Nasdaq Capital Market, and,
therefore, our listing remains fully effective.
We
are provided a compliance period of 180 calendar days from the date
of the Notice, or until December 13, 2021, to regain compliance
with the minimum closing bid requirement, pursuant to Nasdaq
Listing Rule 5810(c)(3)(A). If at any time before December 13,
2021, the closing bid price of our common stock closes at or above
$1.00 per share for a minimum of 10 consecutive business days,
subject to Nasdaq’s discretion to extend this period pursuant
to Nasdaq Listing Rule 5810(c)(3)(G), Nasdaq will provide written
notification that we have achieved compliance with the minimum bid
price requirement, and the matter would be resolved. If we do not
regain compliance during the compliance period ending December 13,
2021, then Nasdaq may grant us a second 180 calendar day period to
regain compliance, provided we (i) meet the continued listing
requirement for market value of publicly-held shares and all other
initial listing standards for the Nasdaq Capital Market, other than
the minimum closing bid price requirement and (ii) notify
Nasdaq of our intent to cure the deficiency.
We
will continue to monitor the closing bid price of our common
stock and seek to regain compliance with all applicable Nasdaq
requirements within the allotted compliance periods. If we do
not regain compliance within the allotted compliance periods,
including any extensions that may be granted by Nasdaq, Nasdaq will
provide notice that our common stock will be subject to delisting.
We would then be entitled to appeal that determination to a Nasdaq
hearings panel. There can be no assurance that we will regain
compliance with the minimum bid price requirement during the
180-day compliance period, secure a second period of 180 days to
regain compliance or maintain compliance with the other Nasdaq
listing requirements.
Corporate
Information
We were
incorporated on January 30, 2014 in the State of
Delaware. In June 2014, we acquired 100% of the issued
and outstanding capital stock of AzurRx SAS. Our principal
executive offices are located at 777 Yamato Road, Suite 502, Boca
Raton, Florida 33431. Our telephone number is (561) 589-7020. We
maintain a website at www.azurrx.com. The information contained on
our website is not, and should not be interpreted to be, a part of
this prospectus supplement.
|
|
|
|
|
|
||
|
|
The
Offering
|
|
||
|
|
|
|
|
|
|
|
Shares
of common stock offered by us
|
|
9,090,910 shares of
common stock (or 10,454,546 shares of common stock if the
underwriters exercise their option to purchase additional shares in
full).
|
|
|
|
|
|
|
|
|
|
Underwriters’
option to purchase additional shares of common stock
|
|
We have granted the
underwriters an option, exercisable for 30 days from the date of
this prospectus supplement, to purchase up to an additional
1,363,636 shares of common stock.
|
|
|
|
|
|
|
|
|
|
Underwriter
Warrants offered by us
|
|
Pursuant to this
prospectus supplement and the accompanying prospectus, we will
issue the underwriters or their designees warrants to purchase up
to 636,364 shares of common stock (or if the underwriters
exercise their option to purchase additional shares of common stock
in full, up to 731,819 shares of common stock) as part of the
compensation payable to the underwriters in connection with this
offering (the “Underwriter Warrants”). See
“Underwriting.” This prospectus supplement also relates
to the offering of the shares of common stock issuable upon
exercise of the Underwriter Warrants. We do not intend to
apply for listing of the Underwriter Warrants on the Nasdaq Capital
Market or on any national securities or other national recognized
trading system.
|
|
|
|
|
|
|
|
|
|
Shares
of common stock outstanding before this offering
|
|
82,807,351 shares of common
stock.
|
|
|
|
|
|
|
|
|
|
Shares
of common stock to be outstanding after this offering
|
|
91,898,261 shares of common stock (or
93,261,897 shares of common stock if the underwriters exercise
their option to purchase additional shares in full).
|
|
|
|
|
|
|
|
|
|
Use
of proceeds
|
|
We intend to use the net proceeds from this
offering for milestone payments due under our license agreements
and for other general corporate purposes, which may include product
manufacturing, clinical development, acquisitions or investments in
complementary businesses, products or technologies, and/or
increases in working capital.
See
“Use of
Proceeds” on page S-10 of this
prospectus.
|
|
|
|
|
|
|
|
|
|
Nasdaq
symbol
|
|
Our common stock is
listed on The Nasdaq Capital Market under the symbol
“AZRX”.
|
|
|
|
|
|
|
|
|
|
Risk
Factors
|
|
Investing in our
securities involves significant risks. Before making a decision
whether to invest in our securities, please read the information
contained in or incorporated by reference under the heading
“Risk Factors”
in this prospectus, the documents we have incorporated by reference
herein, and under similar headings in other documents filed after
the date hereof and incorporated by reference into this prospectus.
See “Incorporation of
Certain Information by Reference” and
“Where You Can Find More
Information”.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The above
discussion is based on 82,807,351 shares of our common stock
outstanding as of July 19, 2021 and excludes up to:
●
2,720,500 shares of
common stock issuable upon exercise of stock options, with a
weighted average exercise price of $1.34 per share, under our
Amended and Restated 2014 Omnibus Equity Incentive Plan (the
“2014 Plan”);
●
387,000 shares of
awarded but unissued restricted stock and restricted stock units
under our 2014 Plan;
●
1,674,691 shares of
common stock issuable upon exercise of stock options, with a
weighted average exercise price of $0.88 per share, under our
Amended and Restated 2020 Omnibus Equity Incentive Plan (the
“2020 Plan”);
●
8,325,309 shares of
common stock available for future issuance under our 2020
Plan;
●
54,506,620 shares
of common stock issuable upon exercise of outstanding warrants,
with a weighted average exercise price of $1.02 per
share;
●
7,092,218 shares of
common stock issuable upon conversion of 676.05 shares of Series B
Convertible Preferred Stock (the “Series B Preferred
Stock”), including in respect of accrued and unpaid dividends
of approximately $255,000 through July 19,
2021;
●
189,118 shares of
common stock issuable upon conversion of Series C Convertible
Preferred Stock (the “Series C Preferred Stock”) and
7,281,336 shares of common stock issuable upon exercise of warrants
that may be issued pursuant to an exchange right, if the holders of
Series B Preferred Stock elect to exchange into our registered
direct and private placement offering from January 2021, in excess
of amounts currently underlying Series B Preferred
Stock;
●
2,836,896 shares of
common stock that may be issued pursuant to an exchange right, if
the holders of Series B Preferred Stock elect to exchange into this
offering, in excess of amounts currently underlying Series B
Preferred Stock; and
●
up to 636,364
shares of common stock (or if the underwriters exercise their
option to purchase additional shares of common stock in full, up to
731,819 shares of common stock) issuable upon exercise of warrants
with an exercise price of $0.6875 to be issued to the
representative of the underwriters or its designees in connection
with this offering.
Except as otherwise
indicated, the information in this prospectus supplement assumes
(i) no exercise of the underwriters’ option to purchase
additional shares of common stock, (ii) no exercise of the
Underwriter Warrants and (iii) no exercise of options or exercise
of warrants and no conversion of any shares of preferred stock
described above.
|
|
|
|
||
RISK FACTORS
An investment in our securities involves a high degree of risk.
Before deciding whether to purchase our securities offered by this
prospectus, you should carefully consider the risks and
uncertainties described under “Risk Factors” in our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2020, any subsequent Quarterly Report on
Form 10-Q and our other filings with the SEC, all of which are
incorporated by reference herein. If any of these risks actually
occur, our business, financial condition and results of operations
could be materially and adversely affected and we may not be able
to achieve our goals, the value of our securities could decline and
you could lose some or all of your investment. Additional risks not
presently known to us or that we currently believe are immaterial
may also significantly impair our business operations. If any of
these risks occur, our business, results of operations or financial
condition and prospects could be harmed. In that event, the market
price of our common stock and the value of the warrants could
decline, and you could lose all or part of your
investment.
Risks
Related to this Offering and our Common Stock
Investors in this offering will suffer immediate and substantial
dilution as a result of this offering.
Because the
offering price of the common stock in this offering is higher than
the as adjusted net tangible book value per share of common stock
after giving effect to this offering, you will suffer substantial
dilution in the net tangible book value of the securities you
purchase in this offering. For a further description of the
dilution that investors in this offering will experience, see
“Dilution.”
Investors in this offering will also be subject to increased
dilution upon the exercise of outstanding stock options and
warrants (including the Underwriter Warrants when
issued).
If we sell shares of our
common stock in future financings, stockholders may experience
immediate dilution and, as a result, our stock price may
decline.
To raise additional
capital, we may in the future offer additional shares of our common
stock or other securities convertible into or exchangeable for our
common stock at prices that may not be the same as the offering
price per share of common stock in this offering. We may sell
shares or other securities in any other offering at a price per
share that is less than the offering price per share paid by
investors in this offering, and investors purchasing shares or
other securities in the future could have rights superior to
existing stockholders. The price per share at which we sell
additional shares of our common stock, or securities convertible or
exchangeable into common stock, in future transactions may be
higher or lower than the price per share paid by investors in this
offering (on a fully-converted basis). Furthermore, sales of a
substantial number of shares of our common stock in the public
markets, or the perception that such sales could occur, could
depress the market price of our common stock.
We will have broad discretion in how we use the net proceeds of
this offering. We may not use these proceeds effectively, which
could affect our results of operations and cause our stock price to
decline.
We will have
considerable discretion in the application of the net proceeds of
this offering, including for any of the purposes described in the
section entitled “Use of Proceeds.” We intend to use
the net proceeds received by us from this offering for milestone payments due under our license
agreements and for other general corporate purposes, which may
include product manufacturing, clinical development, acquisitions
or investments in complementary businesses, products or
technologies, and/or increases in working capital. As a
result, investors will be relying upon management’s judgment
with only limited information about our specific intentions for the
use of the balance of the net proceeds of this offering. We may use
the net proceeds for purposes that do not yield a significant
return or any return at all for our stockholders. In addition,
pending their use, we may invest the net proceeds from this
offering in a manner that does not produce income or that loses
value.
The market price of our common stock may be volatile which could
subject us to securities class action litigation and prevent you
from being able to sell your shares at or above the offering
price.
You may be unable
to sell your shares of common stock at or above the offering price.
The market price for our common stock has been and may continue to
be volatile and subject to wide fluctuations in response to factors
including the following:
●
sales or potential
sales of substantial amounts of our common stock;
●
delay or failure in
initiating or completing pre-clinical or clinical trials or
unsatisfactory results of these trials;
●
announcements
about us or about our competitors, including clinical trial
results, regulatory approvals or new product
introductions;
●
developments
concerning our licensors or product manufacturers;
●
litigation and
other developments relating to our patents or other proprietary
rights or those of our competitors;
●
conditions in the
pharmaceutical or biotechnology industries;
●
governmental
regulation and legislation;
●
variations in our
anticipated or actual operating results;
●
change in
securities analysts’ estimates of our performance, or our
failure to meet analysts’ expectations; foreign currency
values and fluctuations; and
●
overall economic
conditions.
Many of these
factors are beyond our control. The stock markets in general, and
the market for pharmaceutical and biotechnological companies in
particular, have historically experienced extreme price and volume
fluctuations. These fluctuations often have been unrelated or
disproportionate to the operating performance of these companies.
These broad market and industry factors could reduce the market
price of our common stock, regardless of our actual operating
performance.
We will need substantial additional funding and certain terms
included in our financing transactions may prohibit us from raising
capital when needed, which would force us to delay, curtail or
eliminate one or more of our research and development programs or
commercialization efforts.
Our operations have
consumed substantial amounts of cash since inception. During the
years ended December 31, 2020 and 2019, we incurred research and
development expense of approximately $19.1 million and $8.7
million, respectively. We expect to continue to spend substantial
amounts on product development, including conducting clinical
trials for MS1819 and niclosamide and purchasing clinical trial
materials from our suppliers. We will require substantial
additional funds to support our continued research and development
activities, as well as the anticipated costs of preclinical studies
and clinical trials, regulatory approvals and potential
commercialization. We could spend our available financial resources
much faster than we currently expect.
Until such time, if
ever, as we can generate a sufficient amount of product revenue and
achieve profitability, we expect to seek to finance future cash
needs through equity and/or debt financings or corporate
collaboration and licensing arrangements. We currently have no
other commitments or agreements relating to any of these types of
transactions and we cannot be certain that additional funding will
be available on acceptable terms, or at all. If we are unable to
raise additional capital, we will have to delay, curtail or
eliminate one or more of our research and development programs. If
we are able to raise additional capital, our stockholders may
experience additional dilution, and as a result, our stock price
may decline.
Shareholders will
experience dilution by exercises of outstanding warrants and
options.
As of July 19,
2021, there were 54,506,620 shares of our common stock issuable
upon the exercise of outstanding warrants, with a weighted average
exercise price of $1.02 per share, and options to purchase an
aggregate of up to 4,395,191 shares of our common stock, with a
weighted average exercise price of $1.17 per
share.
The exercise of
such warrants and options will result in dilution of your
investment. As a result of this dilution, you may receive
significantly less than the full purchase price you paid for our
securities in the event of liquidation.
As a result of the “most favored nation” in the
Certificate of Designations, Powers, Preferences and Rights of the
Series B Preferred Stock (the “Series B Certificate of
Designations”), we may be required to issue additional
securities to the investors who purchased shares of our Series B
Preferred Stock and related warrants to purchase shares of our
common stock in a private placement in July 2020.
On July 16, 2020, we consummated a private
placement offering (the “Series B Private
Placement”) in which we
issued an aggregate of approximately 2,912.58 shares of Series B
Preferred Stock, at a price of $7,700.00 per share, initially
convertible into an aggregate of 29,125,756 shares of our common
stock at $0.77 per share, together with warrants to purchase an
aggregate of 14,562,826 shares of our common stock at an exercise
price of $0.85 per share. The Series B Preferred Stock carries a
cumulative dividend at a rate of 9.0% per annum, payable at our
option either in cash or in kind in additional shares of Series B
Preferred Stock.
Under
the Series B Certificate of Designations, in the event we effect
any issuance of common stock or common stock equivalents for cash
consideration, or a combination of units thereof (a
“Subsequent
Financing”), each holder of the Series B Preferred
Stock has the right to exchange the stated value, plus accrued and
unpaid dividends, of the Series B Preferred Stock for any
securities issued in the Subsequent Financing, in lieu of any cash
subscription payments therefor (the “Exchange Right”). As a result of
our registered direct offering and private placement consummated in
January 2021, as of July 19, 2021, we may be required to issue in
the aggregate up to 7,281.336 additional shares of Series C
Preferred Stock that are currently convertible up to 7,281,336
underlying shares of common stock, together with warrants to
purchase up to an additional 7,281,336 shares of our common stock,
to any holders of Series B Preferred Stock who elect to exercise
their Exchange Right in connection with that offering. We
anticipate that we would convert any shares of Series C Preferred
Stock to be issued pursuant to the Exchange Right into underlying
shares of common stock immediately upon issuance. Alternatively, as
a result of the offering of common stock to which this prospectus
relates, we may be required to issue up to 2,836,896 additional
shares of our common stock to any holders of Series B Preferred
Stock who elect to exercise their Exchange Right in connection with
this offering.
To
raise additional capital, we may in the future offer additional
shares of common stock or other securities convertible into or
exchangeable for our common stock at prices and other terms that
may be more favorable to investors than the terms of the January
2021 offering that were previously approved by our stockholders. As
a result, holders of Series B Preferred Stock may become entitled
to exercise their Exchange Right in connection with that future
offering. This may result in certain dilution to our stockholders
and could afford our stockholders a smaller percentage interest in
our voting power, liquidation value and aggregate book value. The
existence of the Exchange Right may make it more difficult for us
to consummate future offerings of our securities at a time and a
price that we deem appropriate and may trigger the obligation for
the Company to obtain stockholder approval in connection with our
future offerings under certain Nasdaq Listing Rules and related
guidance.
Our failure to maintain compliance with Nasdaq’s continued
listing requirements could result in the delisting of our common
stock.
On
June 15, 2021, we were notified by Nasdaq that we were not in
compliance with the minimum bid price requirements set forth
in Nasdaq Listing Rule 5550(a)(2) for continued listing on the
Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires
listed securities to maintain a minimum bid price of $1.00 per
share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a
failure to meet the minimum bid price requirement exists if the
deficiency continues for a period of 30 consecutive business days.
The notification provided that we had 180 calendar days, or until
December 13, 2021, to regain compliance with Nasdaq Listing
Rule 5550(a)(2). To regain compliance, the bid price of our common
stock must have a closing bid price of at least $1.00 per share for
a minimum of 10 consecutive business days. If we do not regain
compliance by December 13, 2021, an additional 180 days may be
granted to regain compliance, so long as we meet
the Nasdaq Capital Market continued listing requirements
(except for the bid price requirement) and
notify Nasdaq in writing of our intention to cure the
deficiency during the second compliance period. If we do not
qualify for the second compliance period or fail to regain
compliance during the second 180-day period,
then Nasdaq will notify us of its determination to delist
our common stock, at which point we will have an opportunity to
appeal the delisting determination to a hearings
panel.
No
assurance can be given that we will continue to meet applicable
Nasdaq continued listing standards. Failure to meet applicable
Nasdaq continued listing standards could result in a delisting of
our common stock, which could materially reduce the liquidity of
our common stock and result in a corresponding material reduction
in the price of our common stock. In addition, delisting could harm
our ability to raise capital through alternative financing sources
on terms acceptable to us, or at all, and may result in the
inability to advance our drug development programs, potential loss
of confidence by investors and employees, and fewer business
development opportunities.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus
supplement, the accompanying prospectus and any documents we
incorporate by reference, contain certain forward-looking
statements that involve substantial risks and uncertainties. All
statements contained in this prospectus supplement, the
accompanying prospectus and any documents we incorporate by
reference, other than statements of historical facts, are
forward-looking statements including statements regarding our
strategy, future operations, future financial position, future
revenue, projected costs, prospects, plans, objectives of
management and expected market growth. These statements involve
known and unknown risks, uncertainties and other important factors
that may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking
statements.
The words
“anticipate”, “believe”,
“estimate”, “expect”, “intend”,
“may”, “plan”, “predict”,
“project”, “target”,
“potential”, “will”, “would”,
“could”, “should”, “continue”
and similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements contain
these identifying words. These forward-looking statements include,
among other things, statements about:
●
our ability to
regain compliance with the continued listing requirements of the
Nasdaq Capital Market;
●
statements regarding the impact of
the COVID-19 pandemic and its effects on our operations, access to
capital, research and development and clinical trials and potential
disruption in the operations and business of third-party vendors,
contract research organizations (“CROs”), contract development and manufacturing
organizations (“CDMOs”), other service providers, and
collaborators with whom we conduct business;
●
availability
of capital to satisfy our working capital
requirements;
●
our current and
future capital requirements and our ability to raise additional
funds to satisfy our capital needs;
●
the accuracy of our
estimates regarding expense, future revenue and capital
requirements;
●
ability to continue
operating as a going concern;
●
our plans to
develop and commercialize our drug candidates, including MS1819 and
niclosamide;
●
our ability to
initiate and complete our clinical trials and to advance our
principal product candidates into additional clinical trials,
including pivotal clinical trials, and successfully complete such
clinical trials;
●
regulatory
developments in the U.S. and foreign countries;
●
the performance of
our third-party vendor(s), CROs, CDMOs and other third-party
non-clinical and clinical development collaborators and regulatory
service providers;
●
our ability to
obtain and maintain intellectual property protection for our core
assets;
●
the size of the
potential markets for our product candidates and our ability to
serve those markets;
●
the rate and degree
of market acceptance of our product candidates for any indication
once approved;
●
the success of
competing products and product candidates in development by others
that are or become available for the indications that we are
pursuing;
●
the loss of key
scientific, clinical and nonclinical development, and/or management
personnel, internally or from one of our third-party
collaborators;
●
other risks and
uncertainties, including those listed in the “Risk Factors” section of this
prospectus supplement, the accompanying prospectus and the
documents incorporated by reference herein; and
●
our use of proceeds
from this offering.
These
forward-looking statements are only predictions and we may not
actually achieve the plans, intentions or expectations disclosed in
our forward-looking statements, so you should not place undue
reliance on our forward-looking statements. Actual results or
events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make.
We have based these forward-looking statements largely on our
current expectations and projections about future events and trends
that we believe may affect our business, financial condition and
operating results. We have included important factors in the
cautionary statements included in this prospectus supplement, as
well as certain information incorporated by reference into this
prospectus supplement and the accompanying prospectus, that could
cause actual future results or events to differ materially from the
forward-looking statements that we make. Our forward-looking
statements do not reflect the potential impact of any future
acquisitions, mergers, dispositions, joint ventures or investments
we may make.
Discussions
containing these forward-looking statements may be found, among
other places, in the sections titled “Business,”
“Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations” incorporated by reference from our most recent
Annual Report on Form 10-K for the fiscal year ended December 31,
2020 and our most recent Quarterly Report on Form 10-Q for the
quarterly period ended March 31, 2021, as well as any amendments
thereto, filed with the SEC. Additional factors are discussed under
the caption “Risk Factors” in this prospectus
supplement, the accompanying prospectus and any free writing
prospectus and under similar headings in the other documents that
are incorporated by reference into this prospectus supplement. New
risks and uncertainties arise from time to time, and it is
impossible for us to predict these events or how they may affect
us. We disclaim any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as may be required by
law.
You should read
this prospectus supplement and the accompanying prospectus with the
understanding that our actual future results may be materially
different from what we expect. We do not assume any obligation to
update any forward-looking statements whether as a result of new
information, future events or otherwise, except as required by
applicable law.
USE OF PROCEEDS
The gross proceeds
to us in this offering will be approximately $5.0 million. We
estimate that the net proceeds to us from this offering, after the
underwriting discount and paying estimated offering expenses
payable by us, will be approximately $4.3 million, or approximately
$5.0 million if the underwriters exercise in full their option to
purchase 1,363,636 additional shares, in either case assuming no
exercise of the Underwriter Warrants.
We intend to use
the net proceeds from this offering for milestone payments due under our license
agreements and for other general corporate purposes, which may
include product manufacturing, clinical development, acquisitions
or investments in complementary businesses, products or
technologies, and/or increases in working capital.
This expected use of proceeds from this offering represents our
intentions based upon our current plans and prevailing business
conditions, which could change in the future as our plans and
prevailing business conditions evolve. The amounts and timing of
our use of proceeds will vary depending on a number of factors,
including the amount of cash generated or used by our operations.
As a result, we will retain broad discretion in the allocation of
the net proceeds of this offering.
DILUTION
If you invest in
our securities in this offering, your ownership interest will be
immediately diluted to the extent of the difference between the
price per share you pay in this offering and the as adjusted net
tangible book value per share of our common stock immediately after
this offering.
Our historical net
tangible book value is the amount of our total tangible assets less
our total liabilities. Net historical tangible book value per share
is our historical net tangible book value divided by the number of
shares of common stock outstanding as of March 31, 2021. Our
historical net tangible book value as of March 31, 2021 was
approximately $9.7 million, or $0.13 per share of common
stock.
As adjusted net
tangible book value is our net tangible book value, plus the effect
of the sale of the shares of common stock at a purchase price of
$0.55, and after deducting underwriting fees and estimated expenses
payable by us. Our as adjusted net book value as of March 31, 2021
would have been approximately $14.0 million, or $0.17 per share.
This amount represents an immediate increase in as adjusted net
tangible book value of $0.04 per share to our existing
stockholders, and an immediate dilution of $0.38 per share to new
investors participating in this offering. Dilution per share to new
investors is determined by subtracting as adjusted net tangible
book value per share after this offering from the effective
offering price per share paid by new investors.
The following table
illustrates this dilution on a per share basis:
|
Public offering
price per share
|
|
$0.55
|
|
Historical net
tangible book value per share as of March 31, 2021 (1)
|
$0.13
|
|
|
Increase in net
tangible book value per share attributable to this
offering
|
$0.04
|
|
|
As adjusted net
tangible book value per share as of March 31, 2021, after giving
effect to this offering (1)
|
|
$0.17
|
|
Dilution of as
adjusted net tangible book value per share to new
investor
|
|
$0.38
|
(1)
Does not account for any net loss
since March 31, 2021 or after March 31, 2021: (i) the issuance of
an aggregate of 1,695,921 shares of common stock under the At The
Market Offering Agreement, dated May 26, 2021, for gross proceeds
of approximately $1.4 million, nor the receipt of net cash of
approximately $1.3 million from such transactions, (ii) the
issuance of an aggregate of 5,639,153 shares of common stock (and
warrants to purchase an aggregate of up to 5,639,153 shares of
common stock) in connection with the exchanges required pursuant to
the rights set forth in the Series B Certificate of Designations,
(iii) the issuance of an aggregate of 328,375 shares of common
stock in connection the exercise of warrants for gross proceeds of
approximately $264,000, nor the receipt of net cash of
approximately $264,000 from such transactions, or (iv) the issuance
of an aggregate of 217,000 shares of common stock issued to
consultants for investor relations and other services
provided.
If the underwriters
exercise their option to purchase 1,363,636 additional shares in
full, the as-adjusted net tangible book value per share after this
offering would be $0.17 per share, and the dilution in net tangible
book value per share to new investors purchasing common shares in
this offering would be $0.38 per share, after deducting
estimated underwriting discounts and commissions and estimated
offering expenses payable by us.
The above
discussion and table are based on 74,926,902 shares of common stock
outstanding on March 31, 2021 and excludes up to:
●
3,924,770 shares of
common stock issuable upon exercise of stock options, with a
weighted average exercise price of $1.20 per share, under our
Amended and Restated 2014 Omnibus Equity Incentive Plan (the
“2014 Plan”);
●
387,000 shares of
awarded but unissued restricted stock and restricted stock units
under our 2014 Plan;
●
353,685 shares of
common stock issuable upon exercise of stock options, with a
weighted average exercise price of $1.00 per share, under our
Amended and Restated 2020 Omnibus Equity Incentive Plan (the
“2020 Plan”);
●
9,646,315 shares of
common stock available for future issuance under our 2020
Plan;
●
49,392,676 shares
of common stock issuable upon exercise of outstanding warrants,
with a weighted average exercise price of $1.04 per
share;
●
12,360,554 shares
of common stock issuable upon conversion of 1,209.52 shares of
Series B Preferred Stock, including in respect of accrued and
unpaid dividends of approximately $205,000;
●
329,650
shares of common stock that would have been issuable upon
conversion of Series C Preferred Stock and 12,690,204 shares of
common stock issuable upon exercise of warrants that would have
been issuable pursuant to an exchange right if the holders of
Series B Preferred Stock elected to exchange into our registered
direct and private placement offering from January 2021 as of March
31, 2021;
●
2,836,898 shares of common stock that may
be issued pursuant to an exchange right, if the holders of Series B
Preferred Stock elect to exchange into this offering, in excess of
amounts currently underlying Series B Preferred Stock;
and
●
up to 636,364
shares of common stock (or if the underwriters exercise their
option to purchase additional shares of common stock in full, up to
731,819 shares of common stock) issuable upon exercise of warrants
with an exercise price of $0.6875 to be issued to the
representative of the underwriters or its designees in connection
with this offering.
Except as otherwise
indicated, the information in this prospectus supplement assumes
(i) no exercise of the underwriters’ option to purchase
additional shares of common stock, (ii) no exercise of the
Underwriter Warrants and (iii) no exercise of options or exercise
of warrants and no conversion of any shares of preferred stock
described above.
To the extent that
options or warrants are exercised, new options are issued under our
equity incentive plan, or we issue additional shares of common
stock in the future, there may be further dilution to investors
participating in this offering. In addition, we may choose to raise
additional capital because of market conditions or strategic
considerations, even if we believe that we have sufficient funds
for our current or future operating plans. If we raise additional
capital through the sale of equity or convertible debt securities,
the issuance of these securities could result in further dilution
to our stockholders.
DESCRIPTION OF SECURITIES WE ARE
OFFERING
Common Stock
We
are offering shares of our common stock in this offering. As of
July 19, 2021, there were 82,807,351 shares of common stock issued
and outstanding. See “Description of Capital Stock” in
the accompanying prospectus for more information regarding our
shares of common stock.
Underwriter Warrants
We are also registering hereunder the Underwriter
Warrants and the shares of common stock issuable upon exercise
thereof which we have agreed to grant to H.C. Wainwright & Co.,
LLC, or its designees, as partial consideration for the
underwriting services. The Underwriter Warrants are exercisable for
a number of our shares equal to 7.0% of the aggregate number of
shares sold to the investors in this offering. The Underwriter
Warrants will have an exercise price of $0.6875 per share (125% of the public offering price
per share), are immediately exercisable and will terminate on five
years after the date of commencement of sales in this offering. The
Underwriter Warrants are exercisable on a cashless basis if there
is not an effective registration statement covering the Underwriter
Warrants or resale of the shares of common stock issuable upon
exercise of the Underwriter Warrants and they contain customary
adjustment for stock splits and the like.
The
following summary of certain terms and provisions of the
Underwriter Warrants is not complete and is subject to, and
qualified in its entirety by, the provisions of the Underwriter
Warrants, the form of which will be filed with the SEC as an
exhibit to a Current Report on Form 8-K in connection with this
offering and incorporated by reference into the registration
statement of which this prospectus supplement forms a part. See
also “Underwriting” on page S-16 of this prospectus for
more information regarding the Underwriter Warrants.
Exercise Price
The
exercise price and number of shares issuable upon exercise is
subject to appropriate adjustment in the event of share dividends,
share splits, reorganizations or similar events affecting our
shares and the exercise price.
Exercisability
The
Underwriter Warrants will be exercisable, at the option of each
holder, in whole or in part, by delivering to us a duly executed
exercise notice accompanied by payment in full for the number of
shares purchased upon such exercise (except in the case of a
cashless exercise as discussed below). A holder (together with its
affiliates) may not exercise any portion of the Underwriter Warrant
to the extent that the holder would own more than 4.99% (or, upon
election by a holder prior to the issuance of any warrants, 9.99%)
of the outstanding shares immediately after exercise, except that
upon at least 61 days’ prior notice from the holder to us,
the holder may increase the amount of beneficial ownership of
outstanding shares after exercising the holder’s Underwriter
Warrants up to 9.99% of the number of our shares outstanding
immediately after giving effect to the exercise, as such percentage
ownership is determined in accordance with the terms of the
Underwriter Warrants.
Cashless Exercise
If,
at the time a holder exercises its Underwriter Warrants, a
registration statement registering the issuance of the shares
underlying the Underwriter Warrants under the Securities Act or
resale of the shares of common stock issuable upon exercise of the
Underwriter Warrants is not then effective or available for the
issuance of such shares, then in lieu of making the cash payment
otherwise contemplated to be made to us upon such exercise in
payment of the aggregate exercise price and subject to the nominal
value of the shares being paid up as described below, the holder
may elect instead to receive upon such exercise (either in whole or
in part) the net number of shares determined according to a formula
set forth in the Underwriter Warrants.
Fractional Shares
No
underwriter warrant for fractional shares will be issued, rather
Underwriter Warrants will be issued only for whole shares. No
fractional share will be issued upon the exercise of the
Underwriter Warrants. Rather, the number of shares to be issued
will be rounded down to the nearest whole number.
Transferability
Subject
to applicable laws, an underwriter warrant may be transferred at
the option of the holder upon surrender of the underwriter warrant
to us together with the appropriate instruments of
transfer.
Trading Market
There
is no trading market available for the Underwriter Warrants on any
securities exchange or nationally recognized trading system, and we
do not expect a trading market to develop. We do not intend to list
the Underwriter Warrants on any securities exchange or nationally
recognized trading market. Without a trading market, the liquidity
of the Underwriter Warrants will be extremely limited. The shares
issuable upon exercise of the Underwriter Warrants are currently
traded on the Nasdaq Capital Market.
Rights as a Shareholder
Except
as otherwise provided in the Underwriter Warrants or by virtue of
such holder’s ownership of shares, the holders of the
Underwriter Warrants do not have the rights or privileges of
holders of our shares, including any voting rights, until they
exercise their Underwriter Warrants.
Fundamental Transaction
In
the event of a fundamental transaction, as described in the
Underwriter Warrants and generally including any reorganization,
recapitalization or reclassification of our shares, the sale,
transfer or other disposition of all or substantially all of our
properties or assets, our consolidation or merger with or into
another person, the acquisition of more than 50% of our outstanding
shares, or any person or group becoming the beneficial owner of 50%
of the voting power represented by our outstanding shares, the
holders of the Underwriter Warrants will be entitled to receive
upon exercise of the Underwriter Warrants the kind and amount of
securities, cash or other property that the holders would have
received had they exercised the Underwriter Warrants immediately
prior to such fundamental transaction. Additionally, as more fully
described in the Underwriter Warrant, in the event of certain
fundamental transactions, the holders of Underwriter Warrants will
be entitled to receive consideration in an amount equal to the
Black Scholes value of the warrants on the date of consummation of
such transaction.
SERIES B EXCHANGE
RIGHT
Under
the Series B Certificate of Designations, each holder of the Series
B Preferred Stock has the right to exchange the stated value, plus
accrued and unpaid dividends, of the Series B Preferred Stock for
shares of common stock on a dollar-for-dollar basis with investors
in this offering, in lieu of any cash subscription payments
therefor, referred to herein as the Exchange Right. Any shares of
our common stock issued pursuant to the Exchange Right
are
anticipated to be made pursuant to exemptions provided by Section
3(a)(9) under the Securities Act, or another applicable exemption
therefrom, and accordingly will be freely transferable without
restriction upon issuance pursuant to the exemption provided by
Rule 144 under the Securities Act.
UNDERWRITING
Pursuant to
the underwriting agreement with H.C. Wainwright & Co., LLC, or
the representative, as representative of the underwriters named
below, we have agreed to issued and sell, and each underwriter has,
severally and not jointly, agreed to purchase, the number of shares
of common stock listed opposite its name below, less the
underwriting discount, on the closing date, subject to the terms
and conditions contained in the underwriting agreement. The
underwriting agreement provides that the obligations of the
underwriters are subject to certain customary conditions precedent,
representations and warranties contained therein.
|
Underwriter
|
Number
of Shares
|
|
H.C. Wainwright
& Co., LLC
|
9,090,910
|
Pursuant to the
underwriting agreement, the underwriters have agreed to purchase
all of the shares sold under the underwriting agreement if any of
these shares are purchased, other than those shares covered by the
underwriters’ option to purchase 1,363,636 additional shares
of common stock described below. The underwriters have advised us
that they do not intend to confirm sales to any account over which
they exercise discretionary authority.
Discounts,
Commissions and Expenses
The
underwriters may offer the shares of common stock from time to time
to purchasers directly or through agents, or through brokers in
brokerage transactions on Nasdaq, or to dealers in negotiated
transactions or in a combination of such methods of sale, or
otherwise, at a fixed price or prices, which may be changed,
subject to receipt and acceptance by it and subject to its right to
reject any order in whole or in part. The difference between the
price at which the underwriters purchase shares from us and the
price at which the underwriters resell such shares may be deemed
underwriting compensation. If the underwriters effect such
transactions by selling shares of common stock to or through
dealers, such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriter and/or
purchasers of shares of common stock for whom they may act as
agents or to whom they may sell as principal. Any shares sold by
the underwriters to securities dealers will be sold at the public
offering price less a selling concession not in excess of $0.02475
per share.
The
underwriters are offering the shares, subject to prior sale, when,
as and if issued to and accepted by them, subject to approval of
legal matters and other conditions specified in the underwriting
agreement. The underwriters reserve the right to withdraw, cancel
or modify offers to the public and to reject orders in whole or in
part.
We have
granted to the underwriters an option to purchase up to an
additional 1,363,636 shares of common stock (up to approximately
15% of the shares of common stock in this offering) at the public
offering price, less the underwriting discount. The option is
exercisable for 30 days.
The following table
shows the public offering price, underwriting discount and
proceeds, before expenses, to us. These amounts are shown assuming
both no exercise and full exercise of the underwriters’
option to purchase 1,363,636 additional shares.
|
Per
Share
|
Total
Without Option
|
Total
with Option
|
|
Public offering
price
|
$5,000,000.50
|
$5,750,000.30
|
|
Underwriting
discounts and commissions payable by us
|
$400,000.04
|
$460,000.02
|
|
Proceeds, before
expenses, to us
|
$4,600,000.46
|
$5,290,000.28
|
In addition, we
have agreed to issue to the representative of the underwriters or
its designees warrants, or the Underwriter Warrants, to purchase up
to 636,364 shares of common stock (or if the underwriters exercise
their option to purchase additional shares of common stock in full,
up to 731,819 shares of common stock) (representing 7% of the
aggregate number of shares of common stock sold in this offering),
at an exercise price of $0.6875 per share (representing 125%
of the public offering price for a share of common stock to be sold
in this offering). The Underwriter Warrants will be exercisable
immediately and for five years from the commencement of the sales
of this offering. The issuance of the Underwriter Warrants and the
shares issuable upon exercise of the Underwriter Warrants are
registered on the registration statement of which this prospectus
supplement forms a part.
We have agreed to
reimburse the expenses of the underwriters in the non-accountable
sum of $35,000 in connection with this offering, reimburse the
expenses of the underwriters, including its legal fees, up to
$125,000 in connection with this offering, and $15,950 for the
clearing expenses of the representative in connection with this
offering.
Right
of First Refusal
We have granted
representative a 6-month right of first refusal to act as our
exclusive underwriter or placement agent for certain future capital
raising transactions undertaken by us, provided that this offering
is consummated.
Indemnification
We have agreed to
indemnify the underwriters against certain liabilities, including
civil liabilities under the Securities Act, or to contribute to
payments that the underwriters may be required to make in respect
of those liabilities.
Lock-Up
Agreements
We have agreed to
not sell, offer to sell, contract to sell, lend, effect any
short sale, or establish or increase any “put equivalent
position” (as defined in Rule 16a-1(h) under the Exchange
Act) or liquidate or decrease any “call equivalent position
“ (as defined in Rule 16a 1(b) under the Exchange Act),
pledge, hypothecate or grant any security interest in, or in any
other way transfer or dispose of any shares of our common stock or
any options or warrants or other rights to acquire common stock or
any securities exchangeable or exercisable for or convertible into
shares of common stock, enter into any swap, hedge or similar
arrangement or agreement that transfers, in whole or in part, the
economic risk of ownership of our common stock or common stock
equivalents, announce the offering of any shares of our common
stock or common stock equivalents, file any registration statement
under the Securities Act, or publicly announce the intention to do
any of the foregoing, subject to certain exceptions, for a period
of 60 days after the date of this prospectus supplement unless we
obtain a prior written consent of the representative. This consent
may be given at any time without public notice, and the
representative may consent in its sole discretion. The exceptions
to the restriction include, among other things, the issuance of any
shares of our capital stock or securities convertible into shares
of our capital stock that are issued (i) pursuant to any options,
share bonus or other share plan or arrangement pursuant to an
incentive plan in effect as of the date of this prospectus
supplement, (ii) in an amount up to 500,000 shares of common stock
or common stock equivalents to consultants or advisors, or to their
designees, for bona fide services provided to the Company, provided
that such securities are issued as “restricted
securities” as defined in Rule 144 and carry no registration
rights that require or permit the filing of any registration
statement in connection therewith for a period of 60 days
after the date of this prospectus supplement, (iii) pursuant to a
registration statement on Form S-8 in respect of the issuance,
vesting, exercise or settlement of equity awards to officers or
directors granted or to be granted pursuant to an incentive plan in
effect as of the date of this prospectus supplement, (iv) pursuant
to the exercise of an option or warrant or upon the conversion of
any securities convertible into shares of common stock issued and
outstanding on the date of this prospectus supplement and (v) as
consideration in an acquisition, merger or similar strategic
transaction approved by a majority of the disinterested directors,
provided that such securities are issued as “restricted
securities” as defined in Rule 144 and carry no registration
rights that require or permit the filing of any registration
statement in connection therewith for a period of 60 days
after the date of this prospectus supplement, and provided that any
such issuance shall only be to a person providing us business
synergies and additional benefits in addition to the investment of
funds, but shall not include a transaction in which we are issuing
securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in
securities.
We have also agreed
for a period of one year following the closing date of this
offering not to (i) issue or sell any debt or equity securities
that are convertible into, exchangeable or exercisable for, or
include the right to receive, additional shares of common stock
either (A) at a conversion price, exercise price or exchange rate
or other price that is based upon, and/or varies with, the trading
prices of or quotations for the common stock at any time after the
initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the common stock or (ii) enter into,
or effect a transaction under, any agreement, including, but not
limited to, an equity line of credit, whereby we may issue
securities at a future determined price, subject to certain
exceptions including: (i) sales under the At The Market Offering
Agreement, dated May 26, 2021, by and between us and the
representative; (ii) sales under the Purchase Agreement, dated
November 13, 2019, by and between us and Lincoln Park Capital Fund,
LLC; and (iii) any exchanges as may be required pursuant to the
rights set forth in the Series B Certificate of
Designations.
In addition,
subject to certain limited circumstances, each of our directors and
executive officers has entered
into a lock-up agreement with the
representative.
Under the lock-up agreements, the directors and
executive officers may not, directly or indirectly, sell, offer to
sell, assign, transfer, pledge, contract to sell, enter into any
swap, hedge or similar agreement or arrangement that transfers in
whole or in part, the economic risk of ownership of, engage in any
short selling of, or otherwise dispose of, or enter into any
transaction which is designed to or could be expected to result in
the disposition of, any shares of our common stock or securities
convertible into or exchangeable for shares of our common stock, or
publicly announce any intention to do any of the foregoing, unless
such directors and executive officers obtain prior written consent
of the representative for a period of 60 days from the date of this
prospectus supplement. This consent may be given at any time
without public notice, and the representative may consent in its
sole discretion. Such lock-up restriction does
not apply to any shares of common stock acquired in this offering
by our directors and executive officers.
Price
Stabilization, Short Positions and Penalty Bids
In connection with
this offering, the underwriters may engage in stabilizing
transactions, overallotment transactions, syndicate covering
transactions and penalty bids in connection with our common
stock.
Stabilizing
transactions permit bids to purchase shares of common stock so long
as the stabilizing bids do not exceed a specified
maximum.
Overallotment
transactions involve sales by the underwriter of shares of common
stock in excess of the number of shares the underwriter is
obligated to purchase. This creates a syndicate short position
which may be either a covered short position or a naked short
position. In a covered short position, the number of shares
over-allotted by the underwriter is not greater than the number of
shares that it may purchase in the overallotment option. In a naked
short position, the number of shares involved is greater than the
number of shares in the overallotment option. The underwriter may
close out any short position by exercising its overallotment option
and/or purchasing shares in the open market.
Syndicate covering
transactions involve purchases of common stock in the open market
after the distribution has been completed in order to cover
syndicate short positions. Such a naked short position would be
closed out by buying securities in the open market. A naked short
position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
securities in the open market after pricing that could adversely
affect investors who purchase in the offering.
Penalty bids permit
the underwriters to reclaim a selling concession from a syndicate
member when the securities originally sold by the syndicate member
are purchased in a stabilizing or syndicate covering transaction to
cover syndicate short positions.
These stabilizing
transactions, syndicate covering transactions and penalty bids may
have the effect of raising or maintaining the market price of our
common stock or preventing or retarding a decline in the market
price of our common stock. As a result, the price of our common
stock in the open market may be higher than it would otherwise be
in the absence of these transactions. Neither we nor the
underwriters make any representation or prediction as to the effect
that the transactions described above may have on the price of our
common stock. These transactions may be effected on Nasdaq, in the
over-the-counter market or otherwise and, if commenced, may be
discontinued at any time.
In connection with
this offering, the underwriters also may engage in passive market
making transactions in our common stock in accordance with
Regulation M during a period before the commencement of offers or
sales of shares of our common stock in this offering and extending
through the completion of the distribution. In general, a passive
market maker must display its bid at a price not in excess of the
highest independent bid for that security. However, if all
independent bids are lowered below the passive market maker’s
bid that bid must then be lowered when specific purchase limits are
exceeded. Passive market making may stabilize the market price of
the securities at a level above that which might otherwise prevail
in the open market and, if commenced, may be discontinued at any
time.
Electronic
Distribution
A prospectus in
electronic format may be made available on the websites maintained
by the underwriters, if any, participating in this offering and the
underwriter may distribute prospectuses electronically. Other than
the prospectus in electronic format, the information on these
websites is not part of this prospectus or the registration
statement of which this prospectus forms a part, has not been
approved or endorsed by us or the underwriters, and should not be
relied upon by investors.
Other
Relationships
From time to time,
certain of the underwriters and their affiliates have provided, and
may provide in the future, various advisory, investment and
commercial banking and other services to us in the ordinary course
of business, for which they have received and may continue to
receive customary fees and commissions. However, except as
disclosed in this prospectus supplement, we have no present
arrangements with the representative for any further services. The
representative acted as placement agent for our March 2021
registered direct offering and received cash compensation of
approximately $800,000 and warrants to purchase up to 550,099
shares of common stock at an exercise price of $1.5906 per share.
The representative also served as our sales agent for an
at-the-market offering pursuant to a sales agreement dated May 26,
2021 for which the representative has received compensation of
approximately $101,872.
Transfer
Agent
The transfer agent
and registrar for our common stock is Colonial Stock Transfer
Company, Inc.
Nasdaq
listing
Our shares of
common stock are listed on the Nasdaq Capital Market under the
symbol “AZRX.”
LEGAL MATTERS
The validity of the
securities offered hereby will be passed upon for us by Lowenstein
Sandler LLP, New York, New York. Haynes and Boone, LLP, New York,
New York has acted as counsel for the underwriters in connection
with certain legal matters relating to this offering.
EXPERTS
The audited annual
consolidated financial statements of AzurRx BioPharma, Inc.
incorporated by reference in this prospectus supplement and
elsewhere in the registration statement have been incorporated by
reference in reliance upon the report of Mazars USA LLP,
independent registered public accounting firm, upon the authority
of said firm as experts in accounting and auditing. The 2020 and
2019 audited annual consolidated financial statements of AzurRx
BioPharma, Inc., as of and for the years ended December 31, 2020
and 2019, have been audited by Mazars USA LLP, independent
registered public accounting firm. The audit report dated March 31,
2021 for the 2020 audited annual consolidated financial statements
includes an explanatory paragraph which states that certain
circumstances raise substantial doubt about our ability to continue
as a going concern.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to
the informational requirements of the Exchange Act and in
accordance therewith we file annual, quarterly, and other reports,
proxy statements and other information with the SEC under the
Exchange Act. Such reports, proxy statements and other information,
including the Registration Statement, and exhibits and schedules
thereto, are available to the public through the SEC’s
website at www.sec.gov.
We make available
free of charge on or through our website our Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended, as soon as reasonably practicable after we electronically
file such material with or otherwise furnish it to the
SEC.
We have filed with
the SEC a registration statement under the Securities Act, relating
to the offering of these securities. The registration statement,
including the attached exhibits, contains additional relevant
information about us and the securities. This prospectus does not
contain all of the information set forth in the registration
statement. You can obtain a copy of the registration statement, at
prescribed rates, from the SEC at the address listed above, or for
free at www.sec.gov. The registration statement and the documents
referred to below under “Incorporation of Certain Information by
Reference” are also available on our website,
www.azurrx.com/investors/regulatory-filings.
We have not
incorporated by reference into this prospectus supplement the
information on our website, and you should not consider it to be a
part of this prospectus supplement.
INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
The following
documents filed with the SEC are incorporated by reference into
this prospectus:
●
our Annual Report
on Form 10-K for the year ended December 31, 2020, filed with the
SEC on March 31, 2021;
●
our Quarterly
Report on Form 10-Q for the period ended March 31, 2021, filed with
the SEC on May 24, 2021;
●
our Current Reports
on Form 8-K, filed with the SEC on January 4, 2021 (as amended on
January 13, 2021), January 5, 2021, January 8, 2021, February 16,
2021, February 25, 2021, March 10, 2021, June 17, 2021, July 2,
2021 and July 9, 2021 (other than any portions thereof deemed
furnished and not filed);
●
the description of
our common stock which is registered under Section 12 of the
Exchange Act, in our registration statement on Form 8-A, filed on
August 8, 2016, including any amendment or reports filed for the
purposes of updating this description, including Exhibit 4.1 to our
Annual Report on Form 10-K for the year ended December 31, 2020,
filed with the SEC on March 31, 2021.
We also incorporate by
reference all documents we file pursuant to Section 13(a), 13(c),
14 or 15 of the Exchange Act (other than any portions of filings
that are furnished rather than filed pursuant to Items 2.02 and
7.01 of a Current Report on Form 8-K) after the date of the initial
registration statement of which this prospectus supplement is a part and prior to
effectiveness of such registration statement. All documents we file
in the future pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date of this prospectus supplement and prior to the
termination of the offering are also incorporated by reference and
are an important part of this prospectus supplement.
Any statement
contained in a document incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded
for the purposes of this registration statement to the extent that
a statement contained herein or in any other subsequently filed
document which also is or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this registration
statement.
Upon
written or oral request, we will provide you without charge, a copy
of any or all of the documents incorporated by reference, other
than exhibits to those documents unless the exhibits are
specifically incorporated by reference in the documents. Any such
request should be addressed to us at: 777 Yamato Road, Suite 502,
Boca Raton, Florida 33431, Attention: Chief Financial Officer, or
made by phone at (561) 589-7020. You should rely only on
information contained in, or incorporated by reference into, this
prospectus supplement and the accompanying prospectus or any free
writing prospectus provided in connection with this offering. We
have not authorized anyone to provide you with information
different from that contained in this prospectus supplement and the
accompanying prospectus or any free writing prospectus provided in
connection with this offering or incorporated by reference in this
prospectus supplement and the accompanying prospectus. We are not
making offers to sell the securities in any jurisdiction in which
such an offer or solicitation is not authorized or to anyone to
whom it is unlawful to make such offer or
solicitation.
|
BASE PROSPECTUS
|
AzurRx BioPharma, Inc.
$150,000,000
Common Stock
Preferred Stock
Warrants
Subscription Rights
Units
We may offer, issue and sell from time to time together or
separately, in one or more offerings, any combination of (i) our
common stock, (ii) our preferred stock, which we may issue in one
or more series, (iii) warrants, (iv) subscription rights and (v)
units. The preferred stock, warrants and subscription rights may be
convertible into, or exercisable or exchangeable for, common or
preferred stock or other securities of ours. The units may consist
of any combination of the securities listed above.
The aggregate public offering price of
the securities that we may offer will not exceed
$150,000,000. We
will offer the securities in an amount and on terms that market
conditions will determine at the time of the offering. Our common
stock is listed on the Nasdaq Capital Market under the symbol
“AZRX.” The last reported sale price for our common
stock on June 1, 2021 as quoted on the Nasdaq Capital Market was
$0.86 per share. You are urged to obtain current market quotations
of our common stock. We have no preferred stock, warrants,
subscription rights or units listed on any market. Each prospectus
supplement will indicate if the securities offered thereby will be
listed on any securities exchange.
Should we offer any of the securities described in this prospectus,
we will provide you with the specific terms of the particular
securities being offered in supplements to this prospectus. You
should read this prospectus and any supplement, together with
additional information described under the headings “Where
You Can Find More Information” and “Incorporation of
Certain Information by Reference” carefully before you
invest. This prospectus may not be used to sell securities unless
accompanied by a prospectus supplement.
We may sell these securities directly to our stockholders or to
other purchasers or through agents on our behalf or through
underwriters or dealers as designated from time to time. If any
agents or underwriters are involved in the sale of any of these
securities, the applicable prospectus supplement will provide the
names of the agents or underwriters and any applicable fees,
commissions or discounts.
We are an “emerging growth company” as defined in
Section 2(a) of the Securities Act of 1933, as amended the
(“Securities Act”), and we have elected to comply with
certain reduced public company reporting requirements.
Investing in our securities involves a high degree of risk. See
“Risk Factors” beginning on page 2 of this prospectus
and the documents incorporated by reference into this prospectus
for a discussion of the risks that you should consider in
connection with an investment in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is June 2, 2021.
TABLE OF CONTENTS
|
ii
|
|
|
1
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
|
6
|
|
|
12
|
|
|
13
|
|
|
14
|
|
|
15
|
|
|
17
|
|
|
21
|
|
|
21
|
|
|
22
|
|
|
23
|
|
|
24
|
AzurRx
BioPharma, Inc. is referred to herein as “AzurRx,”
“the Company,” “we,” “us,” and
“our,” unless the context indicates
otherwise.
You may
only rely on the information contained in this prospectus and any
accompanying prospectus supplement or that we have referred you to.
We have not authorized anyone to provide you with different
information. This prospectus and any prospectus supplement do not
constitute an offer to sell or a solicitation of an offer to buy
any securities other than the securities offered by this prospectus
and the prospectus supplement. This prospectus and any prospectus
supplement do not constitute an offer to sell or a solicitation of
an offer to buy any securities in any circumstances in which such
offer or solicitation is unlawful. Neither the delivery of this
prospectus or any prospectus supplement nor any sale made hereunder
shall, under any circumstances, create any implication that there
has been no change in our affairs since the date of this prospectus
or such prospectus supplement or that the information contained by
reference to this prospectus or any prospectus supplement is
correct as of any time after its date.
ABOUT THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission, or SEC, using a
“shelf” registration process. Under this shelf
registration process, we may from time to time offer and sell, in
one or more offerings, any or all of the securities described in
this prospectus, separately or together, up to an aggregate
offering price of $150,000,000. This prospectus provides you with a
general description of our securities being offered. When we issue
the securities being offered by this prospectus, we will provide a
prospectus supplement (which term includes, as applicable, the
at-the-market sales agreement prospectus supplement filed with the
registration statement of which this prospectus forms a part) that
will contain specific information about the terms of that offering.
The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this
prospectus and any prospectus supplement together with additional
information described under the heading “Where You Can Find
More Information” and “Incorporation of Certain
Information By Reference.”
PROSPECTUS SUMMARY
The
following summary highlights some information from this prospectus.
It is not complete and does not contain all of the information that
you should consider before making an investment decision. You
should read this entire prospectus, including the “Risk
Factors” section on page 2 and the disclosures to which that
section refers you, the financial statements and related notes and
the other more detailed information appearing elsewhere or
incorporated by reference into this prospectus before investing in
any of the securities described in this prospectus.
Overview
We are engaged in the research and development of
targeted, non-systemic therapies for the treatment of patients with
gastrointestinal (“GI”) diseases. Non-systemic therapies are
non-absorbable drugs that act locally, i.e. in the intestinal
lumen, skin or mucosa, without reaching an individual’s
systemic circulation. We are focused on
developing our pipeline of gut-restricted GI clinical drug
candidates, including MS1819 and niclosamide.
Our lead drug candidate
is MS1819, a recombinant lipase for the treatment of exocrine
pancreatic insufficiency (“EPI”)
in patients with cystic
fibrosis (“CF”) and chronic pancreatitis
(“CP”), currently in two
Phase 2 CF clinical trials. In March 2021, we announced topline results from
our Phase 2b OPTION 2 monotherapy trial, and in May 2021, we
announced positive interim results from the first 18 patients in
our Phase 2 Combination trial in Europe.
In 2021, we intend to
launch two new clinical programs using proprietary formulations of
niclosamide, a small molecule
with anti-helminthic, anti-viral and anti-inflammatory
properties; FW-1022, for
Severe Acute Respiratory Syndrome Coronavirus 2
(“COVID-19”)
gastrointestinal infections, and FW-420, for Grade 1 and Grade 2
Immune Checkpoint Inhibitor-Associated Colitis
(“ICI-AC”)
and diarrhea in advanced stage oncology patients.
We initiated our Phase 2 RESERVOIR
clinical trial using a proprietary oral immediate-release tablet
formulation of micronized niclosamide (FW-1022) for the treatment
of COVID-19 related GI infections in April 2021, and we are
preparing to initiate our Phase 1b/2a PASSPORT ICI-AC trial using
both an oral immediate-release tablet and a topical rectal enema
foam formulations of niclosamide (FW-420) in the first half of
2021.
Corporate Information
We were incorporated on January 30, 2014 in the State of
Delaware. In June 2014, we acquired 100% of the issued
and outstanding capital stock of AzurRx SAS. Our principal
executive offices are located at 1615 South Congress Avenue, Suite
103, Delray Beach, Florida 33445. Our telephone number is (646)
699-7855. We maintain a website at www.azurrx.com. The information
contained on our website is not, and should not be interpreted to
be, a part of this prospectus.
Before
purchasing any of the securities you should carefully consider the
risk factors incorporated by reference in this prospectus from our
Annual Report on Form 10-K for the fiscal year ended December 31,
2020 and any subsequent updates described in our Quarterly Reports
on Form 10-Q and Current Reports on Form 8-K, as well as the risks,
uncertainties and additional information set forth in any
prospectus supplement, in our SEC reports on Forms 10-K, 10-Q and
8-K and in the other documents incorporated by reference in this
prospectus. For a description of these reports and documents, and
information about where you can find them, see “Where You Can
Find More Information” and “Incorporation of Certain
Information By Reference.” Additional risks not presently
known or that we presently consider to be immaterial could
subsequently materially and adversely affect our financial
condition, results of operations, business and
prospects.
FORWARD-LOOKING
STATEMENTS
This
prospectus, including the documents that we incorporate by
reference, contains forward-looking statements as that term is
defined in the federal securities laws. The events described in
forward-looking statements contained in this prospectus, including
the documents that we incorporate by reference, may not occur.
Generally, these statements relate to our business plans or
strategies, projected or anticipated benefits or other consequences
of our plans or strategies, financing plans, projected or
anticipated benefits from acquisitions that we may make, or
projections involving anticipated revenues, earnings or other
aspects of our operating results or financial position, and the
outcome of any contingencies. Any such forward-looking statements
are based on current expectations, estimates and projections of
management. We intend for these forward-looking statements to be
covered by the safe-harbor provisions for forward-looking
statements. Words such as “may,” “expect,”
“believe,” “anticipate,”
“project,” “plan,” “intend,”
“estimate,” and “continue,” and their
opposites and similar expressions are intended to identify
forward-looking statements. We caution you that these statements
are not guarantees of future performance or events and are subject
to a number of uncertainties, risks and other influences, many of
which are beyond our control that may influence the accuracy of the
statements and the projections upon which the statements are based.
Factors that may cause our results to materially differ from those
expressed or implied by forward-looking statements include, but are
not limited to, the risks and uncertainties discussed in the
“Risk Factors” section on page 2 of this prospectus, in
any prospectus supplement, in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2020 or in other reports we file
with the SEC.
Any one
or more of these uncertainties, risks and other influences could
materially affect our results of operations and whether
forward-looking statements made by us ultimately prove to be
accurate. Our actual results, performance and achievements could
differ materially from those expressed or implied in these
forward-looking statements. We undertake no obligation to publicly
update or revise any forward-looking statements, whether from new
information, future events or otherwise.
You
should rely only on the information in this prospectus. We have not
authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely upon it.
USE OF PROCEEDS
Unless
we inform you otherwise in the prospectus supplement relating to a
particular offering of securities, we will use the net proceeds
from the sale of the securities offered by this prospectus and the
exercise price from the exercise of any convertible securities, if
any, for general corporate purposes, which may include funding
research, development and product manufacturing, clinical trials,
acquisitions or investments in businesses, products or technologies
that are complementary to our own, increasing our working capital,
reducing indebtedness, and capital expenditures.
When
particular securities are offered, the prospectus supplement
relating to that offering will set forth our intended use of the
net proceeds received from the sale of those securities we sell.
Pending the application of the net proceeds for these purposes, we
expect to invest the proceeds in short-term, interest-bearing
instruments or other investment-grade securities.
THE SECURITIES WE MAY OFFER
General
The
descriptions of the securities contained in this prospectus,
together with the applicable prospectus supplements, summarize all
of the material terms and provisions of the various types of
securities that we may offer. We will describe in the applicable
prospectus supplement relating to any securities the particular
terms of the securities offered by that prospectus supplement. If
we indicate in the applicable prospectus supplement, the terms of
the securities may differ from the terms we have summarized below.
We may also include in the prospectus supplement information about
material United States federal income tax considerations relating
to the securities, and the securities exchange, if any, on which
the securities will be listed.
We may
sell from time to time, in one or more offerings:
●
common
stock;
●
preferred
stock;
●
subscription rights
to purchase shares of common stock or preferred stock;
●
warrants to
purchase shares of common stock or preferred stock;
and
●
units consisting of
any combination of the securities listed above.
In this
prospectus, we refer to the common stock, preferred stock,
subscription rights, warrants and units collectively as
“securities.” The total dollar amount of all securities
that we may sell pursuant to this prospectus will not exceed
$150,000,000.
This
prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
DESCRIPTION OF CAPITAL
STOCK
The following summary of the rights of our capital stock is not
complete and is subject to and qualified in its entirety by
reference to our certificate of incorporation and bylaws, copies of
which are filed as exhibits to our Annual Report on Form 10-K for
the year ended December 31, 2020, filed with the SEC on March 31,
2021, and the Certificate of Designations and forms of securities,
copies of which are filed as exhibits to the registration statement
of which this prospectus forms a part , which are incorporated by
reference herein.
General
Our authorized capital stock consists of:
●
250,000,000 shares
of common stock, par value $0.0001 per share; and
●
10,000,000 shares
of preferred stock, par value $0.0001.
As of May 21, 2021, there were
250,000,000 shares of common stock, and 10,000,000 shares of
preferred stock, of which a series of 5,194.81 shares of Series B
Convertible Preferred Stock (the “Series B Preferred
Stock”) and a
series of 75,000 shares of Series C 9.00% Convertible Junior
Preferred Stock (the “Series C Preferred
Stock”) have
been designated.
As of May 21, 2021, there were 78,575,131 shares of common stock
issued and outstanding, 893.52 shares of Series B Preferred Stock
issued and outstanding and 0 shares of Series C Preferred Stock
issued and outstanding.
The
additional shares of our authorized capital stock available for
issuance may be issued at times and under circumstances so as to
have a dilutive effect on earnings per share and on the equity
ownership of the holders of our common stock. The ability of our
board of directors to issue additional shares of stock could
enhance the board’s ability to negotiate on behalf of the
stockholders in a takeover situation but could also be used by the
board to make a change of control more difficult, thereby denying
stockholders the potential to sell their shares at a premium and
entrenching current management. The following description is a
summary of the material provisions of our capital stock. You should
refer to our certificate of incorporation, as amended (the
“Charter”), and
our bylaws, as amended and restated (the “Bylaws”), both of which are on
file with the SEC as exhibits to previous SEC filings, for
additional information. The summary below is qualified by
provisions of applicable law.
Common Stock
Holders of our common stock are entitled to one
vote for each share held of record on all matters on which the
holders are entitled to vote (or consent pursuant to written
consent). Directors are elected by a plurality of the votes present
in person or represented by proxy and entitled to
vote. Our Charter and Bylaws,
do not provide for cumulative voting rights.
Holders
of our common stock are entitled to receive, ratably, dividends
only if, when and as declared by our board of directors out of
funds legally available therefor and after provision is made for
each class of capital stock having preference over the common
stock.
In
the event of our liquidation, dissolution or winding-up, the
holders of common stock are entitled to share, ratably, in all
assets remaining available for distribution after payment of all
liabilities and after provision is made for each class of capital
stock having preference over the common stock.
Holders of our common stock have no preemptive, conversion or
subscription rights, and there are no redemption or sinking fund
provisions applicable to the common stock. The rights, preferences
and privileges of the holders of common stock are subject to, and
may be adversely affected by, the rights of the holders of shares
of any series of our preferred stock that we may designate and
issue in the future.
Transfer Agent
The transfer agent and registrar for our common stock is Colonial
Stock Transfer, 66 Exchange Place, 1st Floor, Salt Lake City, Utah
84111, Tel: (801) 355-5740.
Preferred Stock
We currently have up to 10,000,000 shares of preferred stock, par
value $0.0001 per share, authorized and available for issuance in
one or more series. Our board of directors is authorized to divide
the preferred stock into any number of series, fix the designation
and number of each such series, and determine or change the
designation, relative rights, preferences, and limitations of any
series of preferred stock. The board of may increase or decrease
the number of shares initially fixed for any series, but no
decrease may reduce the number below the shares then outstanding
and duly reserved for issuance. As of May 21, 2021, 5,194.81 shares
were designated as Series B Preferred Stock, of which 893.52 were
issued and outstanding, and 75,000 were designated as Series C
Preferred Stock, of which none were issued and outstanding. This
leaves 9,919,805.19 shares of preferred stock authorized but
undesignated.
If we
offer a specific series of preferred stock under this prospectus,
we will describe the terms of the preferred stock in the prospectus
supplement for such offering and will file a copy of the
certificate establishing the terms of the preferred stock with the
SEC. To the extent required, this description will
include:
●
the title and
stated value;
●
the number of
shares offered, the liquidation preference per share and the
purchase price;
●
the dividend
rate(s), period(s) and/or payment date(s), or method(s) of
calculation for such dividends;
●
whether dividends
will be cumulative or non-cumulative and, if cumulative, the date
from which dividends will accumulate;
●
the procedures for
any auction and remarketing, if any;
●
the provisions for
a sinking fund, if any;
●
the provisions for
redemption, if applicable;
●
any listing of the
preferred stock on any securities exchange or market;
●
whether the
preferred stock will be convertible into our common stock, and, if
applicable, the conversion price (or how it will be calculated) and
conversion period;
●
voting rights, if
any, of the preferred stock;
●
a discussion of any
material and/or special U.S. federal income tax considerations
applicable to the preferred stock;
●
the relative
ranking and preferences of the preferred stock as to dividend
rights and rights upon liquidation, dissolution or winding up of
our affairs; and
●
any material
limitations on issuance of any class or series of preferred stock
ranking senior to or on a parity with the series of preferred stock
as to dividend rights and rights upon liquidation, dissolution or
winding up of our affairs.
Series B Preferred Stock
Under the Certificate
of Designations for the Series B Preferred Stock (the
“Series
B Certificate of Designations”), each share of
Series B Preferred Stock will be convertible, at the holder’s
option at any time, into our common stock at a conversion rate
equal to the quotient of (i) the $7,700 stated value (the
“Series
B Stated Value”) divided by
(ii) the initial conversion price of $0.77, subject to specified
adjustments for stock splits, cash or stock dividends,
reorganizations, reclassifications other similar events as set
forth in the Series B Certificate of Designations. In
addition, if at any time after January 16, 2021, the six month
anniversary of the date of the closing of our private placement
transaction on July 16, 2020, the closing sale price per share of
our common stock exceeds 250% of the initial conversion price, or
$1.925, for 20 consecutive trading days, then all of the
outstanding shares of Series B Preferred Stock will automatically
convert (the “Automatic Conversion”) into such number
of shares of our common stock as is obtained by multiplying the
number of shares of Series B Preferred Stock to be so converted,
plus the amount of any accrued and unpaid dividends thereon, by the
Series B Stated Value per share and dividing the result by the then
applicable conversion price.
The Series B Preferred Stock contains limitations that prevent the
holder thereof from acquiring shares of our common stock upon
conversion (including pursuant to the Automatic Conversion) that
would result in the number of shares beneficially owned by such
holder and its affiliates exceeding 9.99% of the total number of
shares of our common stock outstanding immediately after giving
effect to the conversion, which percentage may be increased or
decreased at the holder’s election not to
exceed 19.99%.
Each holder of shares
of Series B Preferred Stock, in preference and priority to the
holders of all other classes or series of our stock, is entitled to
receive dividends, commencing from the date of issuance. Such
dividends may be paid by us only when, as and if declared by our
board of directors, out of assets legally available therefore,
semiannually in arrears on the last day of June and December in
each year, commencing December 31, 2020, at the dividend rate of
9.0% per year, which is cumulative and continues to accrue on a
daily basis whether or not declared and whether or not we have
assets legally available therefore. We may pay such dividends at
our sole option either in cash or in kind in additional shares of
Series B Preferred Stock (rounded down to the nearest whole share),
provided we must pay in cash the fair value of any such fractional
shares in excess of $100.00. Under the Series B Certificate of
Designations, to the extent that applicable law or any of our
existing contractual restrictions prohibit any required issuance of
additional shares of Series B Preferred Stock as in-kind dividends
or otherwise (“Additional
Shares”), then
appropriate adjustment to the conversion price of the Series B
Preferred Stock shall be made so that the resulting number of
conversion shares includes the aggregate number of shares of our
common stock into which such Additional Shares would otherwise be
convertible.
Under the Series B
Certificate of Designations, each share of Series B Preferred Stock
carries a liquidation preference equal to the Series B Stated Value
(as adjusted thereunder) plus accrued and unpaid dividends thereon
(the “Series
B Liquidation Preference”).
In the event we effect
any issuance of common stock or common stock equivalents for cash
consideration, or a combination of units thereof (a
“Subsequent
Financing”), each holder
of the Series B Preferred Stock has the right, subject to certain
exceptions set forth in the Series B Certificate of Designations,
at its option, to exchange (in lieu of cash subscription payments)
all or some of the Series B Preferred Stock then held (with a value
per share of Series B Preferred Stock equal to the Series B
Liquidation Preference) for any securities or units issued in a
Subsequent Financing on dollar-for-dollar basis. As a result, we
may currently be required to issue additional shares of Series C
Preferred Stock to any holders of Series B Preferred Stock who
elect to exercise this right. Any shares of Series C Preferred
Stock to be issued pursuant to this right would, upon issuance, be
immediately converted into underlying shares of our common
stock.
The holders of the Series B Preferred Stock, voting as a separate
class, will have customary consent rights with respect to certain
corporate actions by us. We may not take the following actions
without the prior consent of the holders of at least a majority of
the Series B Preferred Stock then outstanding: (a) authorize,
create, designate, establish, issue or sell an increased number of
shares of Series B Preferred Stock or any other class or series of
capital stock ranking senior to or on parity with the Series B
Preferred Stock as to dividends or upon liquidation; (b) reclassify
any shares of common stock or any other class or series of capital
stock into shares having any preference or priority as to dividends
or upon liquidation superior to or on parity with any such
preference or priority of Series B Preferred Stock; (c) amend,
alter or repeal our Charter or Bylaws and the powers, preferences,
privileges, relative, participating, optional and other special
rights and qualifications, limitations and restrictions thereof,
which would adversely affect any right, preference, privilege or
voting power of the Series B Preferred Stock; (d) issue any
indebtedness or debt security, other than trade accounts payable,
insurance premium financings and/or letters of credit, performance
bonds or other similar credit support incurred in the ordinary
course of business, or amend, renew, increase, or otherwise alter
in any material respect the terms of any such indebtedness existing
as of the date of first issuance of shares of Series B Preferred
Stock; (e) redeem, purchase, or otherwise acquire or pay or declare
any dividend or other distribution on (or pay into or set aside for
a sinking fund for any such purpose) any of our capital stock; (f)
declare bankruptcy, dissolve, liquidate, or wind up our affairs;
(g) effect, or enter into any agreement to effect, a Change of
Control (as defined in the Series B Certificate of Designations);
or (h) materially modify or change the nature of our
business.
Series C Preferred Stock
Under the Certificate
of Designations for the Series C Preferred Stock (the
“Series
C Certificate of Designations”), each share of
Series C Preferred Stock will be convertible, at either the
holder’s option or at our option at any time, into common
stock at a conversion rate equal to the quotient of (i) the Series
C Stated Value of $750 plus all accrued and accumulated and unpaid
dividends on such share of Series C Preferred Stock divided by (ii)
the initial conversion price of $0.75, subject to specified
adjustments for stock splits, cash or stock dividends,
reorganizations, reclassifications other similar events as set
forth in the Series C Certificate of
Designations.
The
Series C Preferred Stock contains limitations that prevent the
holders thereof from acquiring shares of our common stock upon
conversion that would result in the number of shares beneficially
owned by any such holder and its affiliates exceeding 9.99% of the
total number of shares of our common stock outstanding immediately
after giving effect to the conversion. As a result, the Series C
Certificate of Designations provides for the issuance of pre-funded
warrants to purchase shares of our common stock, with an exercise
price of $0.001 per share and with no expiration date, if necessary
to comply with this limitation.
Each
holder of shares of Series C Preferred Stock, subject to the
preference and priority to the holders of our Series B Preferred
Stock, is entitled to receive dividends, commencing from the date
of issuance of the Series C Preferred Stock. Such dividends may be
paid only when, as and if declared by our board of directors, out
of assets legally available therefore, quarterly in arrears on the
last day of March, June, September and December in each year,
commencing on the date of issuance, at the dividend rate of 9.0%
per year. Such dividends are cumulative and continue to accrue on a
daily basis whether or not declared and whether or not we have
assets legally available therefore.
Under
the Series C Certificate of Designations, each share of Series C
Preferred Stock carries a liquidation preference equal to the
Series C Stated Value plus accrued and unpaid dividends thereon and
any other fees or liquidated damages then due and owing
thereon.
The holders of the Series C Preferred Stock have
no voting rights. We may not take the following actions without the
prior consent of the holders of at least a majority of the Series C
Preferred Stock then outstanding: (a) alter or change adversely the
powers, preferences or rights given to the Series C Preferred Stock
or alter or amend the Series C Certificate of Designations, (b)
authorize or create any class of stock ranking as to dividends,
redemption or distribution of assets upon a Liquidation (as defined
in the Series C Certificate of Designations) senior to, or
otherwise pari passu with,
the Series C Preferred Stock, (c) amend our Charter or other
charter documents in any manner that adversely affects any rights
of the holders of the Series C Preferred Stock, (d) increase the
number of authorized shares of Series C Preferred Stock, or (e)
enter into any agreement with respect to any of the
foregoing.
Transfer Agent and Registrar for Preferred Stock
The
transfer agent and registrar for any series or class of preferred
stock will be set forth in each applicable prospectus
supplement.
Anti-Takeover Effects of Certain Provisions of Delaware Law and of
Our Charter and Bylaws
Certain provisions of Delaware law, our Charter and Bylaws
discussed below may have the effect of making more difficult or
discouraging a tender offer, proxy contest or other takeover
attempt. These provisions are expected to encourage persons seeking
to acquire control of our company to first negotiate with our Board
of Directors. We believe that the benefits of increasing our
ability to negotiate with the proponent of an unfriendly or
unsolicited proposal to acquire or restructure our company outweigh
the disadvantages of discouraging these proposals because
negotiation of these proposals could result in an improvement of
their terms.
Delaware Anti-Takeover Law.
We are subject to Section 203 of
the Delaware General Corporation Law (the
“DGCL”).
Section 203 generally prohibits a public Delaware corporation
from engaging in a “business combination” with an
“interested stockholder” for a period of three years
after the date of the transaction in which the person became an
interested stockholder, unless:
●
prior to the date of the transaction, the Board of Directors of the
corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an
interested stockholder;
●
upon consummation of the transaction that resulted in the
stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the
corporation outstanding at the time the transaction commenced,
excluding specified shares; or
●
at or subsequent to the date of the transaction, the business
combination is approved by the Board of Directors and authorized at
an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the interested
stockholder.
Section 203 defines a “business combination” to
include:
●
any merger or consolidation involving the corporation and the
interested stockholder;
●
any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 10% or more of the assets of the corporation to or
with the interested stockholder;
●
subject to exceptions, any transaction that results in the issuance
or transfer by the corporation of any stock of the corporation to
the interested stockholder;
●
subject to exceptions, any transaction involving the corporation
that has the effect of increasing the proportionate share of the
stock of any class or series of the corporation beneficially owned
by the interested stockholder; or
●
the receipt by the interested stockholder of the benefit of any
loans, advances, guarantees, pledges or other financial benefits
provided by or through the corporation.
In general, Section 203 defines an “interested
stockholder” as any person that is:
●
the owner of 15% or more of the outstanding voting stock of the
corporation;
●
an affiliate or associate of the corporation who was the owner of
15% or more of the outstanding voting stock of the corporation at
any time within three years immediately prior to the relevant date;
or
●
the affiliates and associates of the above.
Under specific circumstances, Section 203 makes it more
difficult for an “interested stockholder” to effect
various business combinations with a corporation for a three-year
period, although the stockholders may, by adopting an amendment to
the corporation’s certificate of incorporation or bylaws,
elect not to be governed by this section, effective 12 months after
adoption.
Our Charter and Bylaws do not exclude us from the restrictions of
Section 203. We anticipate that the provisions of
Section 203 might encourage companies interested in acquiring
us to negotiate in advance with our Board of Directors since the
stockholder approval requirement would be avoided if a majority of
the directors then in office approve either the business
combination or the transaction that resulted in the stockholder
becoming an interested stockholder.
Charter and Bylaws.
Provisions of our Charter and Bylaws may delay or discourage
transactions involving an actual or potential change of control or
change in our management, including transactions in which
stockholders might otherwise receive a premium for their shares, or
transactions that our stockholders might otherwise deem to be in
their best interests. Therefore, these provisions could adversely
affect the price of our common stock.
Stockholder Action by Written Consent
Our
Bylaws provide that our stockholders may take action by written
consent or electronic transmission, setting forth the action so
taken, signed or e-mailed by the holders of outstanding stock
having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting for such
purpose.
Potential Effects of Authorized but Unissued Stock
We have
shares of common stock and preferred stock available for future
issuance without stockholder approval. We may utilize these
additional shares for a variety of corporate purposes, including
future public offerings to raise additional capital, to facilitate
corporate acquisitions or payment as a dividend on the capital
stock.
The
existence of unissued and unreserved common stock and preferred
stock may enable our board of directors to issue shares to persons
friendly to current management or to issue preferred stock with
terms that could render more difficult or discourage a third-party
attempt to obtain control of us by means of a merger, tender offer,
proxy contest or otherwise, thereby protecting the continuity of
our management. In addition, the board of directors has the
discretion to determine designations, rights, preferences,
privileges and restrictions, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation
preferences of each series of preferred stock, all to the fullest
extent permissible under the DGCL and subject to any limitations
set forth in our Charter. The purpose of authorizing the board of
directors to issue preferred stock and to determine the rights and
preferences applicable to such preferred stock is to eliminate
delays associated with a stockholder vote on specific issuances.
The issuance of preferred stock, while providing desirable
flexibility in connection with possible financings, acquisitions
and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire, or could discourage a
third party from acquiring, a majority of our outstanding voting
stock.
DESCRIPTION OF WARRANTS
We
summarize below some of the provisions that will apply to the
warrants unless the applicable prospectus supplement provides
otherwise. This summary may not contain all information that is
important to you. The complete terms of the warrants will be
contained in the applicable warrant certificate and warrant
agreement. These documents have been or will be included or
incorporated by reference as exhibits to the registration statement
of which this prospectus is a part. You should read the warrant
certificate and the warrant agreement. You should also read the
prospectus supplement, which will contain additional information
and which may update or change some of the information
below.
General
We may
issue, together with common or preferred stock as units or
separately, warrants for the purchase of shares of our common or
preferred stock. The terms of each warrant will be discussed in the
applicable prospectus supplement relating to the particular series
of warrants. The form(s) of certificate representing the warrants
and/or the warrant agreement will be, in each case, filed with the
SEC as an exhibit to a document incorporated by reference in the
registration statement of which this prospectus is a part on or
prior to the date of any prospectus supplement relating to an
offering of the particular warrant. The following summary of
material provisions of the warrants and the warrant agreements are
subject to, and qualified in their entirety by reference to, all
the provisions of the warrant agreement and warrant certificate
applicable to a particular series of warrants.
The
prospectus supplement relating to any series of warrants that are
offered by this prospectus will describe, among other things, the
following terms to the extent they are applicable to that series of
warrants:
●
the procedures and
conditions relating to the exercise of the warrants;
●
the number of
shares of our common or preferred stock, if any, issued with the
warrants;
●
the date, if any,
on and after which the warrants and any related shares of our
common or preferred stock will be separately
transferable;
●
the offering price
of the warrants, if any;
●
the number of
shares of our common or preferred stock which may be purchased upon
exercise of the warrants and the price or prices at which the
shares may be purchased upon exercise;
●
the date on which
the right to exercise the warrants will begin and the date on which
the right will expire;
●
a discussion of the
material United States federal income tax considerations applicable
to the exercise of the warrants;
●
anti-dilution
provisions of the warrants, if any;
●
call provisions of
the warrants, if any; and
●
any other material
terms of the warrants.
Each
warrant may entitle the holder to purchase for cash, or, in limited
circumstances, by effecting a cashless exercise for, the number of
shares of our common or preferred stock at the exercise price that
is described in the applicable prospectus supplement. Warrants will
be exercisable during the period of time described in the
applicable prospectus supplement. After that period, unexercised
warrants will be void. Warrants may be exercised in the manner
described in the applicable prospectus supplement.
A
holder of a warrant will not have any of the rights of a holder of
our common or preferred stock before the stock is purchased upon
exercise of the warrant. Therefore, before a warrant is exercised,
the holder of the warrant will not be entitled to receive any
dividend payments or exercise any voting or other rights associated
with shares of our common or preferred stock which may be purchased
when the warrant is exercised.
Transfer Agent and Registrar
The
transfer agent and registrar, if any, for any warrants will be set
forth in the applicable prospectus supplement.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We may
issue subscription rights to purchase our common stock. These
subscription rights may be offered independently or together with
any other security offered hereby and may or may not be
transferable by the stockholder receiving the subscription rights
in such offering. In connection with any offering of subscription
rights, we may enter into a standby arrangement with one or more
underwriters or other purchasers pursuant to which the underwriters
or other purchasers may be required to purchase any securities
remaining unsubscribed for after such offering.
The
prospectus supplement relating to any subscription rights we offer,
if any, will, to the extent applicable, include specific terms
relating to the offering, including some or all of the
following:
●
the price, if any,
for the subscription rights;
●
the exercise price
payable for our common stock upon the exercise of the subscription
rights;
●
the number of
subscription rights to be issued to each stockholder;
●
the number and
terms of our common stock which may be purchased per each
subscription right;
●
the extent to which
the subscription rights are transferable;
●
any other terms of
the subscription rights, including the terms, procedures and
limitations relating to the exchange and exercise of the
subscription rights;
●
the date on which
the right to exercise the subscription rights shall commence, and
the date on which the subscription rights shall
expire;
●
the extent to which
the subscription rights may include an over-subscription privilege
with respect to unsubscribed securities or an over-allotment
privilege to the extent the securities are fully subscribed;
and
●
if applicable, the
material terms of any standby underwriting or purchase arrangement
which may be entered into by us in connection with the offering of
subscription rights.
DESCRIPTION OF UNITS
We may
issue units comprised of one or more of the other securities
described in this prospectus in any combination. Each unit will be
issued so that the holder of the unit is also the holder of each
security included in the unit. Thus, the holder of a unit will have
the rights and obligations of a holder of each included security
(but, to the extent convertible securities are included in the
units, the holder of the units will be deemed the holder of the
convertible securities and not the holder of the underlying
securities). The unit agreement under which a unit is issued, if
any, may provide that the securities included in the unit may not
be held or transferred separately, at any time or at any time
before a specified date. The applicable prospectus supplement may
describe:
●
the designation and
terms of the units and of the securities comprising the units,
including whether and under what circumstances those securities may
be held or transferred separately;
●
any provisions for
the issuance, payment, settlement, transfer or exchange of the
units or of the securities comprising the units;
●
the terms of the
unit agreement governing the units;
●
United States
federal income tax considerations relevant to the units;
and
●
whether the units
will be issued in fully registered global form.
This
summary of certain general terms of units and any summary
description of units in the applicable prospectus supplement do not
purport to be complete and are qualified in their entirety by
reference to all provisions of the applicable unit agreement and,
if applicable, collateral arrangements and depositary arrangements
relating to such units. The forms of the unit agreements and other
documents relating to a particular issue of units will be filed
with the SEC each time we issue units, and you should read those
documents for provisions that may be important to you.
FORMS OF SECURITIES
To the
extent applicable, each warrant, subscription right and unit, will
be represented either by a certificate issued in definitive form to
a particular investor or by one or more global securities
representing the entire issuance of securities. Certificated
securities in definitive form and global securities will be issued
in registered form. Definitive securities name you or your nominee
as the owner of the security, and in order to transfer or exchange
these securities or to receive payments other than interest or
other interim payments, you or your nominee must physically deliver
the securities to the trustee, registrar, paying agent or other
agent, as applicable. Global securities name a depositary or its
nominee as the owner of warrants represented by these global
securities. The depositary maintains a computerized system that
will reflect each investor’s beneficial ownership of the
securities through an account maintained by the investor with its
broker/dealer, bank, trust company or other representative, as we
explain more fully below.
Global Securities
Registered Global Securities. We may
issue, to the extent applicable, warrants, subscription rights and
units, in the form of one or more fully registered global
securities that will be deposited with a depositary or its nominee
identified in the applicable prospectus supplement and registered
in the name of that depositary or nominee. In those cases, one or
more registered global securities will be issued in a denomination
or aggregate denominations equal to the portion of the aggregate
principal or face amount of the securities to be represented by
registered global securities. Unless and until it is exchanged in
whole for securities in definitive registered form, a registered
global security may not be transferred except as a whole by and
among the depositary for the registered global security, the
nominees of the depositary or any successors of the depositary or
those nominees.
If not
described below, any specific terms of the depositary arrangement
with respect to any securities to be represented by a registered
global security will be described in the prospectus supplement
relating to those securities. We anticipate that the following
provisions will apply to all depositary arrangements.
Ownership of
beneficial interests in a registered global security will be
limited to persons, called participants, that have accounts with
the depositary or persons that may hold interests through
participants. Upon the issuance of a registered global security,
the depositary will credit, on its book-entry registration and
transfer system, the participants’ accounts with the
respective principal or face amounts of the securities beneficially
owned by the participants. Any dealers, underwriters or agents
participating in the distribution of the securities will designate
the accounts to be credited. Ownership of beneficial interests in a
registered global security will be shown on, and the transfer of
ownership interests will be effected only through, records
maintained by the depositary, with respect to interests of
participants, and on the records of participants, with respect to
interests of persons holding through participants. The laws of some
states may require that some purchasers of securities take physical
delivery of these securities in definitive form. These laws may
impair your ability to own, transfer or pledge beneficial interests
in registered global securities.
So long
as the depositary, or its nominee, is the registered owner of a
registered global security, that depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the
securities represented by the registered global security for all
purposes under the applicable indenture or warrant agreement.
Except as described below, owners of beneficial interests in a
registered global security will not be entitled to have the
securities represented by the registered global security registered
in their names, will not receive or be entitled to receive physical
delivery of the securities in definitive form and will not be
considered the owners or holders of the securities under the
applicable indenture or warrant agreement. Accordingly, each person
owning a beneficial interest in a registered global security must
rely on the procedures of the depositary for that registered global
security and, if that person is not a participant, on the
procedures of the participant through which the person owns its
interest, to exercise any rights of a holder under the applicable
indenture or warrant agreement. We understand that under existing
industry practices, if we request any action of holders or if an
owner of a beneficial interest in a registered global security
desires to give or take any action that a holder is entitled to
give or take under the applicable indenture or warrant agreement,
the depositary for the registered global security would authorize
the participants holding the relevant beneficial interests to give
or take that action, and the participants would authorize
beneficial owners owning through them to give or take that action
or would otherwise act upon the instructions of beneficial owners
holding through them.
Any
payments to holders with respect to warrants represented by a
registered global security registered in the name of a depositary
or its nominee will be made to the depositary or its nominee, as
the case may be, as the registered owner of the registered global
security. None of the Company, the trustees, the warrant agents or
any other agent of the Company, the trustees or the warrant agents
will have any responsibility or liability for any aspect of the
records relating to payments made on account of beneficial
ownership interests in the registered global security or for
maintaining, supervising or reviewing any records relating to those
beneficial ownership interests.
We
expect that the depositary for any of the securities represented by
a registered global security, upon receipt of any payment of
principal, premium, interest or other distribution of underlying
securities or other property to holders on that registered global
security, will immediately credit participants’ accounts in
amounts proportionate to their respective beneficial interests in
that registered global security as shown on the records of the
depositary. We also expect that payments by participants to owners
of beneficial interests in a registered global security held
through participants will be governed by standing customer
instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or
registered in “street name,” and will be the
responsibility of those participants.
If the
depositary for any of these securities represented by a registered
global security is at any time unwilling or unable to continue as
depositary or ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, or the Exchange Act,
and a successor depositary registered as a clearing agency under
the Exchange Act is not appointed by us within 90 days, we will
issue securities in definitive form in exchange for the registered
global security that had been held by the depositary. Any
securities issued in definitive form in exchange for a registered
global security will be registered in the name or names that the
depositary gives to the relevant trustee or warrant agent or other
relevant agent of ours or theirs. It is expected that the
depositary’s instructions will be based upon directions
received by the depositary from participants with respect to
ownership of beneficial interests in the registered global security
that had been held by the depositary.
PLAN OF DISTRIBUTION
Initial Offering and Sale of Securities
Unless
otherwise set forth in a prospectus supplement accompanying this
prospectus, we may sell the securities being offered hereby, from
time to time, by one or more of the following methods:
●
to or through
underwriting syndicates represented by managing
underwriters;
●
through one or more
underwriters without a syndicate for them to offer and sell to the
public;
●
through dealers or
agents; and
●
to investors
directly in negotiated sales or in competitively bid
transactions.
Offerings of
securities covered by this prospectus also may be made into an
existing trading market for those securities in transactions at
other than a fixed price, either:
●
on or through the
facilities of the Nasdaq Capital Market or any other securities
exchange or quotation or trading service on which those securities
may be listed, quoted, or traded at the time of sale;
and/or
●
to or through a
market maker other than on the securities exchanges or quotation or
trading services set forth above.
Those
at-the-market offerings, if any, will be conducted by underwriters
acting as principal or agent of the Company, who may also be
third-party sellers of securities as described above. The
prospectus supplement with respect to the offered securities will
set forth the terms of the offering of the offered securities,
including:
●
the name or names
of any underwriters, dealers or agents;
●
the purchase price
of the offered securities and the proceeds to us from such
sale;
●
any underwriting
discounts and commissions or agency fees and other items
constituting underwriters’ or agents’
compensation;
●
any initial public
offering price and any discounts or concessions allowed or
reallowed or paid to dealers;
●
any securities
exchange on which such offered securities may be listed;
and
●
any underwriter,
agent or dealer involved in the offer and sale of any series of the
securities.
The
distribution of the securities may be effected from time to time in
one or more transactions:
●
at fixed prices,
which may be changed;
●
at market prices
prevailing at the time of the sale;
●
at varying prices
determined at the time of sale; or
●
at negotiated
prices.
Each
prospectus supplement will set forth the manner and terms of an
offering of securities including:
●
whether that
offering is being made to underwriters, through agents or directly
to the public;
●
the rules and
procedures for any auction or bidding process, if
used;
●
the
securities’ purchase price or initial public offering price;
and
●
the proceeds we
anticipate from the sale of the securities, if any.
In
addition, we may enter into derivative or hedging transactions with
third parties, or sell securities not covered by this prospectus to
third parties in privately negotiated transactions. The applicable
prospectus supplement may indicate, in connection with such a
transaction, that the third parties may sell securities covered by
and pursuant to this prospectus and an applicable prospectus
supplement. If so, the third party may use securities pledged by us
or borrowed from us or others to settle such sales and may use
securities received from us to close out any related short
positions. We may also loan or pledge securities covered by this
prospectus and an applicable prospectus supplement to third
parties, who may sell the loaned securities or, in an event of
default in the case of a pledge, sell the pledged securities
pursuant to this prospectus and the applicable prospectus
supplement.
Sales Through Underwriters
If
underwriters are used in the sale of some or all of the securities
covered by this prospectus, the underwriters will acquire the
securities for their own account. The underwriters may resell the
securities, either directly to the public or to securities dealers,
at various times in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The obligations of the underwriters
to purchase the securities will be subject to certain conditions.
Unless indicated otherwise in a prospectus supplement, the
underwriters will be obligated to purchase all the securities of
the series offered if any of the securities are
purchased.
Any
initial public offering price and any concessions allowed or
reallowed to dealers may be changed intermittently.
Sales Through Agents
Unless
otherwise indicated in the applicable prospectus supplement, when
securities are sold through an agent, the designated agent will
agree, for the period of its appointment as agent, to use specified
efforts to sell the securities for our account and will receive
commissions from us as will be set forth in the applicable
prospectus supplement.
Securities bought
in accordance with a redemption or repayment under their terms also
may be offered and sold, if so indicated in the applicable
prospectus supplement, in connection with a remarketing by one or
more firms acting as principals for their own accounts or as agents
for us. Any remarketing firm will be identified and the terms of
its agreement, if any, with us and its compensation will be
described in the prospectus supplement. Remarketing firms may be
deemed to be underwriters in connection with the securities
remarketed by them.
If so
indicated in the applicable prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers by certain
specified institutions to purchase securities at a price set forth
in the prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a future date specified in
the prospectus supplement. These contracts will be subject only to
those conditions set forth in the applicable prospectus supplement,
and the prospectus supplement will set forth the commissions
payable for solicitation of these contracts.
Direct Sales
We may
also sell offered securities directly to institutional investors or
others. In this case, no underwriters or agents would be involved.
The terms of such sales will be described in the applicable
prospectus supplement.
General Information
Broker-dealers,
agents or underwriters may receive compensation in the form of
discounts, concessions or commissions from us and/or the purchasers
of securities for whom such broker-dealers, agents or underwriters
may act as agents or to whom they sell as principal, or both. This
compensation to a particular broker-dealer might be in excess of
customary commissions.
Underwriters,
dealers and agents that participate in any distribution of the
offered securities may be deemed “underwriters” within
the meaning of the Securities Act , so any discounts or commissions
they receive in connection with the distribution may be deemed to
be underwriting compensation. Those underwriters and agents may be
entitled, under their agreements with us, to indemnification by us
against certain civil liabilities, including liabilities under the
Securities Act, or to contribution by us to payments that they may
be required to make in respect of those civil liabilities. Certain
of those underwriters or agents may be customers of, engage in
transactions with, or perform services for, us or our affiliates in
the ordinary course of business. We will identify any underwriters
or agents, and describe their compensation, in a prospectus
supplement. Any institutional investors or others that purchase
offered securities directly, and then resell the securities, may be
deemed to be underwriters, and any discounts or commissions
received by them from us and any profit on the resale of the
securities by them may be deemed to be underwriting discounts and
commissions under the Securities Act.
We will
file a supplement to this prospectus, if required, pursuant to Rule
424(b) under the Securities Act, if we enter into any material
arrangement with a broker, dealer, agent or underwriter for the
sale of securities through a block trade, special offering,
exchange distribution or secondary distribution or a purchase by a
broker or dealer. Such prospectus supplement will
disclose:
●
the name of any
participating broker, dealer, agent or underwriter;
●
the number and type
of securities involved;
●
the price at which
such securities were sold;
●
any securities
exchanges on which such securities may be listed;
●
the commissions
paid, or discounts or concessions allowed, to any such broker,
dealer, agent or underwriter, where applicable; and
●
other facts
material to the transaction.
In
order to facilitate the offering of certain securities under this
prospectus or an applicable prospectus supplement, certain persons
participating in the offering of those securities may engage in
transactions that stabilize, maintain or otherwise affect the price
of those securities during and after the offering of those
securities. Specifically, if the applicable prospectus supplement
permits, the underwriters of those securities may over-allot or
otherwise create a short position in those securities for their own
account by selling more of those securities than have been sold to
them by us and may elect to cover any such short position by
purchasing those securities in the open market.
In
addition, the underwriters may stabilize or maintain the price of
those securities by bidding for or purchasing those securities in
the open market and may impose penalty bids, under which selling
concessions allowed to syndicate members or other broker-dealers
participating in the offering are reclaimed if securities
previously distributed in the offering are repurchased in
connection with stabilization transactions or otherwise. The effect
of these transactions may be to stabilize or maintain the market
price of the securities at a level above that which might otherwise
prevail in the open market. The imposition of a penalty bid may
also affect the price of securities to the extent that it
discourages resales of the securities. No representation is made as
to the magnitude or effect of any such stabilization or other
transactions. Such transactions, if commenced, may be discontinued
at any time.
In
order to comply with the securities laws of certain states, if
applicable, the securities must be sold in such jurisdictions only
through registered or licensed brokers or dealers. In addition, in
certain states the securities may not be sold unless they have been
registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is
available and is complied with.
Rule
15c6-1 under the Exchange Act generally requires that trades in the
secondary market settle in two business days, unless the parties to
any such trade expressly agree otherwise. Your prospectus
supplement may provide that the original issue date for your
securities may be more than two scheduled business days after the
trade date for your securities. Accordingly, in such a case, if you
wish to trade securities on any date prior to the second business
day before the original issue date for your securities, you will be
required, by virtue of the fact that your securities initially are
expected to settle in more than two scheduled business days after
the trade date for your securities, to make alternative settlement
arrangements to prevent a failed settlement.
This
prospectus, any applicable prospectus supplement and any applicable
pricing supplement in electronic format may be made available on
the Internet sites of, or through other online services maintained
by, us and/or one or more of the agents and/or dealers
participating in an offering of securities, or by their affiliates.
In those cases, prospective investors may be able to view offering
terms online and, depending upon the particular agent or dealer,
prospective investors may be allowed to place orders
online.
Other
than this prospectus, any applicable prospectus supplement and any
applicable pricing supplement in electronic format, the information
on our website or the website of any agent or dealer, and any
information contained in any other website maintained by any agent
or dealer:
●
is not part of this
prospectus, any applicable prospectus supplement or any applicable
pricing supplement or the registration statement of which they form
a part;
●
has not been
approved or endorsed by us or by any agent or dealer in its
capacity as an agent or dealer, except, in each case, with respect
to the respective website maintained by such entity;
and
●
should not be
relied upon by investors.
There
can be no assurance that we will sell all or any of the securities
offered by this prospectus.
This
prospectus may also be used in connection with any issuance of
common stock or preferred stock upon exercise of a warrant if such
issuance is not exempt from the registration requirements of the
Securities Act.
In
addition, we may issue the securities as a dividend or distribution
or in a subscription rights offering to our existing
securityholders. In some cases, we or dealers acting with us or on
our behalf may also purchase securities and reoffer them to the
public by one or more of the methods described above. This
prospectus may be used in connection with any offering of our
securities through any of these methods or other methods described
in the applicable prospectus supplement.
LEGAL MATTERS
Unless
otherwise indicated in the applicable prospectus supplement, the
validity of the securities offered hereby will be passed upon for
us by Lowenstein Sandler LLP, New York, New York. If the validity
of the securities offered hereby in connection with offerings made
pursuant to this prospectus are passed upon by counsel for the
underwriters, dealers or agents, if any, such counsel will be named
in the prospectus supplement relating to such
offering.
EXPERTS
The audited annual consolidated financial statements of AzurRx
BioPharma, Inc. incorporated by reference in this prospectus and
elsewhere in the registration statement have been incorporated by
reference in reliance upon the report of Mazars USA LLP,
independent registered public accounting firm, upon the authority
of said firm as experts in accounting and auditing. The 2020 and
2019 audited annual consolidated financial statements of AzurRx
BioPharma, Inc., as of and for the years ended December 31, 2020
and 2019, have been audited by Mazars USA LLP, independent
registered public accounting firm. The audit report dated March 31,
2021 for the 2020 audited annual consolidated financial statements
includes an explanatory paragraph which states that certain
circumstances raise substantial doubt about our ability to continue
as a going concern.
DISCLOSURE OF COMMISSION POSITION
ON INDEMNIFICATION FOR SECURITIES ACT
LIABILITIES
Section
145 of the DGCL provides that we may indemnify any person who was
or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal or investigative (other than an action by
us or in our right) by reason of the fact that he is or was our
director, officer, employee or agent, or is or was serving at our
request as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement actually and reasonably
incurred by him or her in connection with such action, suit or
proceeding if he acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to our best interests,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
Section 145 further provides that we similarly may indemnify any
such person serving in any such capacity who was or is a party or
is threatened to be made a party to any threatened, pending or
completed action or suit by is or in our right to procure judgment
in our favor, against expenses actually and reasonably incurred in
connection with the defense or settlement of such action or suit if
he or she acted in good faith and in a manner he reasonably
believed to be in or not opposed to our best interests and except
that no indemnification shall be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to
be liable to us unless and only to the extent that the Delaware
Court of Chancery or such other court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Our
Charter limits the liability of our directors to the fullest extent
permitted by Delaware law. In addition, we have entered into
indemnification agreements with certain of our directors and
officers whereby we have agreed to indemnify those directors and
officers to the fullest extent permitted by law, including
indemnification against expenses and liabilities incurred in legal
proceedings to which the director or officer was, or is threatened
to be made, a party by reason of the fact that such director or
officer is or was a director, officer, employee or agent of the
Company, provided that such director or officer acted in good faith
and in a manner that the director or officer reasonably believed to
be in, or not opposed to, the best interests of the
Company.
We have
director and officer liability insurance to cover liabilities our
directors and officers may incur in connection with their services
to us, including matters arising under the Securities Act. Our
Charter and Bylaws also provide that we will indemnify our
directors and officers who, by reason of the fact that he or she is
one of our officers or directors of our company, is involved in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, related to their board role with the
company.
Insofar
as indemnification for liabilities arising under the Securities Act
may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have been
advised that in the opinion of the SEC such indemnification is
against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such
indemnification by us is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of
such issue.
WHERE YOU CAN FIND MORE
INFORMATION
We are
subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and in accordance therewith file
annual, quarterly and current reports, proxy statements and other
information with the SEC. The SEC maintains a website that contains
reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC. The
address of the SEC’s website is www.sec.gov.
We make
available free of charge on or through our website at
www.pioneerpowersolutions.com, our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934, as amended,
as soon as reasonably practicable after we electronically file such
material with or otherwise furnish it to the SEC.
We have
filed with the SEC a registration statement under the Securities
Act, relating to the offering of these securities. The registration
statement, including the attached exhibits, contains additional
relevant information about us and the securities. This prospectus
does not contain all of the information set forth in the
registration statement. You can obtain a copy of the registration
statement for free at www.sec.gov. The registration statement and
the documents referred to below under “Incorporation of
Certain Information By Reference” are also available on our
website, www.azurrx.com.
We have
not incorporated by reference into this prospectus the information
on our website, and you should not consider it to be a part of this
prospectus.
INCORPORATION OF
CERTAIN INFORMATION BY REFERENCE
The following documents filed with the SEC are incorporated by
reference into this prospectus:
●
our Annual Report on Form 10-K for the year ended December 31,
2020, filed with the SEC on March 31, 2021;
●
our Quarterly Report on Form 10-Q for the period ended March 31,
2021, filed with the SEC on May 24, 2021;
●
our Current Report on Form 8-K, filed with the SEC on January 4,
2021 (as amended on January 13, 2021), January 5, 2021, January 8,
2021, February 16, 2021, February 25, 2021 and March 10, 2021
(other than any portion thereof deemed furnished and not
filed);
●
the description of our common stock which is registered under
Section 12 of the Exchange Act, in our registration statement on
Form 8-A, filed with the SEC on August 8, 2016, including any
amendment or reports filed for the purposes of updating this
description, including Exhibit 4.1 to our Annual Report on Form
10-K for the year ended December 31, 2020, filed with the SEC on
March 31, 2021.
We also incorporate by reference all documents we file pursuant to
Section 13(a), 13(c), 14 or 15 of the Exchange Act (other than any
portions of filings that are furnished rather than filed pursuant
to Items 2.02 and 7.01 of a Current Report on Form 8-K) after the
date of the initial registration statement of which this prospectus
is a part and prior to effectiveness of such registration
statement. All documents we file in the future pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this prospectus and prior to the termination of the offering are
also incorporated by reference and are an important part of this
prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for the purposes of this registration statement to the
extent that a statement contained herein or in any other
subsequently filed document which also is or deemed to be
incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part
of this registration statement.
9,090,910 Shares of Common Stock
Underwriter Warrants to Purchase up to 636,364 Shares of
Common Stock
PROSPECTUS SUPPLEMENT
H.C.
Wainwright & Co.
July 22, 2021