As filed with the Securities and Exchange Commission on August 9, 2017
Registration No. 333-219385333-272404
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1)
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST WAVE BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
Delaware | 2834 | 46-4993860 |
(State or other jurisdiction of incorporation or organization) | (Primary Classification Code Number) | (I.R.S. Identification Number) |
777 Yamato Road, Suite 304
Boca Raton, Florida 33431
(561) 589-7020
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)
James Sapirstein, President, and Chief Executive Officer
First Wave BioPharma, Inc.
777 Yamato Road, Suite 304
Boca Raton, Florida 33431
(561) 589-7020
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
John D. Hogoboom, Esq. Michael J. Lerner, Esq. | Charles Phillips, Esq. | |
Lowenstein Sandler LLP 1251 Avenue New York, Telephone: (212) 262-6700 | ||
Ellenoff Grossman & Schole LLP |
Approximate date of commencement of proposed sale to the public:public: As soon as practicable after the effective date of this registration statement.statement becomes effective.
If
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and“emerging “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | x | Smaller reporting company | x | |
Emerging growth company | ¨ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]
Title of Each Class of Securities to be Registered | Amount to be Registered(1) | Proposed Maximum Aggregate Offering Price | Amount of Registration Fee | |||||||
Common stock, par value $0.0001 per share | 5,905,535 | (2) | $ | 19,192,988.75 | (3) | $ | 2,224.47 | (4) |
The NASDAQ Capital Market on July 19, 2017.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, nor is it a solicitation of offers to buy these securities, in any state where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS | SUBJECT TO COMPLETION | DATED |
Up to 6,578,947 Shares
Pre-Funded Warrants to the sale ofPurchase up to 5,905,5356,578,947 Shares of Common Stock
Common Warrants to Purchase up to 13,157,894 Shares of Common Stock
Shares of Common Stock underlying the Pre-Funded Warrants and Common Warrants
We are offering up to 6,578,947 shares of our common stock by the selling stockholders identified in this prospectus, which amount includes 289,257 shares that may be issued upon conversion of an outstanding
We are also offering up to 6,578,947 pre-funded warrants to those purchasers, whose purchase of shares of common stock in this offering would result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock following the consummation of this offering in lieu of the shares of our common stock that would result in ownership in excess of 4.99% (or, at the election of the purchaser, 9.99%). Each pre-funded warrant will be exercisable for one share of common stock at an exercise price of $0.0001 per share.
There is no established public trading market for the pre-funded warrants or common warrants, and we do not expect a market to develop. We do not intend to apply for listing of the pre-funded warrants or common warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and common warrants will be limited.
We have engaged Roth Capital Partners, LLC, or the placement agent, to act as our exclusive placement agent in connection with this offering. The placement agent has agreed to use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus. The placement agent is not purchasing or selling any of the securities we are offering and the placement agent is not required to arrange the purchase or sale of any specific number or dollar amount of securities. We have agreed to pay to the placement agent the placement agent fees set forth in the table below, which assumes that we sell all of the securities offered by this prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement. There is no minimum number of shares of securities or minimum aggregate amount of proceeds that is a condition for this offering to close. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund if we do not sell all of the securities offered hereby. Because there is no escrow account and no minimum number of securities or amount of proceeds, investors could be in a position where they have invested in us, but we have not raised sufficient proceeds in this offering to adequately fund the intended uses of the proceeds as described in this prospectus. We will bear all costs associated with the offering. See “Plan of Distribution” on page 17 of this prospectus for more information regarding these arrangements. This offering will end no later than three trading days from the date of this prospectus.
Our common stock is listed on The Nasdaq Capital Market under the symbol “FWBI.” On July 5, 2023, the last reported sale price of our common stock on The Nasdaq Capital Market was $1.52 per share. All share, common warrant and pre-funded warrant numbers are based on an assumed combined public offering price of $1.52 per share or pre-funded warrant, as applicable, and common warrant. The actual combined public offering price per share and common warrants and the actual combined public offering price per pre-funded warrant and common warrants will be determined between us and investors based on market conditions at the time of pricing, and may be at a discount to the current market price of our common stock. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final public offering price.
You should read this prospectus, and any prospectus supplement, together with additional information described under the headings “
Investing in our securities involves a high degree of risk. See “Risk Factors”the section entitled “Risk Factors” beginning on page 45 of this prospectus.
Per Share and Accompanying Common Warrants | Per Pre-Funded Warrant and Accompanying Common Warrants | Total | |||||||
Public offering price(1) | $ | $ | $ | ||||||
Placement agent fees(2) | $ | $ | $ | ||||||
Proceeds to us, before expenses(3) | $ | $ | $ |
(1) The public offering price corresponds to (x)(i) a public offering price per share of $ and (ii) a public offering price per common warrant of $ , and (y)(i) a public offering price per pre-funded warrant of $ and (ii) a public offering price per common warrant of $ .
(2) See “Plan of Distribution” for additional information about the compensation payable to the placement agent.
(3) Because there is no minimum number of securities or amount of proceeds required as a condition to closing in this offering, the actual public offering amount, placement agent fees, and proceeds to us, if any, are not presently determinable and may be substantially less than the total maximum offering amounts set forth above. We estimate the total expenses of this offering payable by us, excluding the placement agent fee, will be approximately $200,000.
The delivery of the shares of common stock and any pre-funded warrants and common warrants to purchasers is expected to be made no later than July 31, 2023.
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. Any representation to the contrary is a criminal offense.
Roth Capital Partners
The date of this prospectus is , 20172023.
We incorporate by reference important documents we have summarized ininformation into this prospectus. Since these summariesYou may not contain allobtain the information that you may find important in deciding whether to purchase our common stock, youincorporated by reference without charge by following the instructions under “Where You Can Find More Information.” You should review the full text of these documents. The registration statement and the exhibits can be obtained from the SECcarefully read this prospectus as indicatedwell as additional information described under the sections entitled “
We have not, and “
The information incorporated by reference or provided in this prospectus contains statistical data and estimates, including those dates. You should read carefullyrelating to market size and competitive position of the entiretymarkets in which we participate, that we obtained from our own internal estimates and research, as well as from industry and general publications and research, surveys and studies conducted by third parties. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable. While we believe our internal company research is reliable and the definitions of our market and industry are appropriate, neither this research nor these definitions have been verified by any independent source.
For investors outside the United States: We have not, and the placement agent has not, done anything that would permit this offering or possession or distribution of this prospectus andin any applicable prospectus supplement, as well asjurisdiction where action for that purpose is required, other than in the documents incorporated by reference inUnited States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any applicable prospectus supplement, before making an investment decision.
This prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes and other documents incorporated by reference in this prospectus, as well as the information under the caption “Risk Factors” herein and under similar headings in the other documents that are incorporated by reference into this prospectus.
i
This prospectus, and theany documents incorporatedwe incorporate by reference, herein contain certain forward-looking statements that involve substantial risks and uncertainties. All statements contained in this prospectus and any documents we incorporate by reference, other than statements of historical facts,
The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue,”“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 maintain compliance with the continued listing requirements of The Nasdaq Capital Market; | |
● | our ability to satisfy our payment obligations in connection with the acquisition of First Wave Bio, Inc. and the settlement payments; | |
● | statements regarding geopolitical events, including the war in Ukraine and their 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; | |
● | the 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 integration and effects of our acquisitions and other strategic transactions; | |
● | 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 product candidates, including adrulipase 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; and |
ii
● | other risks and uncertainties, including those listed in the “Risk Factors” section of this prospectus and the documents incorporated by reference herein. |
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 prospectusYou should read this prospectus the documents incorporated by reference herein and the documents that we have filed as exhibits to the registration statement of which this prospectus is a part completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of the forward-looking statements in this prospectus and the documents incorporated by reference herein by these cautionary statements. Except as required by law, we undertake nodo not assume any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise.otherwise, except as required by applicable law.
iii
TablePROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus. This summary does not contain all of Contents
Overview
We are engaged in the research and development of Lock-Uptargeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e. the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.
We are currently focused on developing our pipeline of gut-restricted GI clinical drug candidates, including the biologic adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients, and niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties. Our adrulipase programs are focused on the development of an oral, non-systemic, biologic capsule for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). The Company’s niclosamide programs leverage proprietary oral and topical formulations to address multiple GI conditions, including inflammatory bowel disease (“IBD”) indications and viral diseases.
We are developing our drug candidates for a host of GI diseases where there are significant unmet clinical needs and limited therapeutic options, resulting in painful, life threatening and discomforting consequences for patients.
Recent Developments
Warrant Reload and Repricing
On June 13, 2023, we entered into warrant exercise inducement offer letters (the “Inducement Letters”) with certain holders (the “Holders”) of warrants to purchase shares of our common stock (the “Existing Warrants”) pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase 1,724,332 shares of our common stock, in the aggregate, at a reduced exercise price of $1.15 per share, in exchange for our agreement to issue new warrants (the “Inducement Warrants”), on substantially the same terms as the Existing Warrants, to purchase up to 3,448,664 shares of our common stock (the “Inducement Warrant Shares”) and Underwritera cash payment of $0.125 per Inducement Warrant Share which was paid in full upon the exercise of the Existing Warrants. We received aggregate gross proceeds of approximately $2.4 million from the exercise of the Existing Warrants
Corporate Information
We were incorporated on January 30, 2014 in the State of Delaware. In June 2014, we completed an initialacquired 100% of the issued and outstanding capital stock of AzurRx SAS. In September 2021, we acquired First Wave Bio through a merger transaction, and changed our name to First Wave BioPharma, Inc. 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.firstwavebio.com. The information contained on our website is not, and should not be interpreted to be, a part of this prospectus.
The Offering
Common Stock to be Offered | Up to 6,578,947 shares of our common stock based on an assumed combined public offering price of $1.52 per share of common stock and accompanying common warrants, which is the last reported sale price of our common stock on July 5, 2023, and no sale of any pre-funded warrants. |
Pre-funded Warrants to be Offered | We are also offering to certain purchasers whose purchase of shares of common stock in this offering would otherwise result in the purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, if such purchasers so choose, pre-funded warrants to purchase shares of common stock, in lieu of shares of common stock that would otherwise result in any such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding common stock. Each pre-funded warrant will be exercisable for one share of our common stock. The purchase price of each pre-funded warrant and accompanying common warrants will equal the price at which the share of common stock and accompanying common warrants are being sold to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant will be $0.0001 per share. The pre-funded warrants will be exercisable immediately and may be exercised at any time until all of the pre-funded warrants are exercised in full. This offering also relates to the shares of common stock issuable upon exercise of any pre-funded warrants sold in this offering. For each pre-funded warrant we sell, the number of shares of common stock we are offering will be decreased on a one-for-one basis. Because we will issue two common warrants for each share of our common stock and for each pre-funded warrant to purchase one share of our common stock sold in this offering, the number of common warrants sold in this offering will not change as a result of a change in the mix of the shares of our common stock and pre-funded warrants sold. |
Common Warrants to be Offered | Common warrants to purchase up to an aggregate of 13,157,894 shares of our common stock, based on the sale of our common stock at an assumed combined public offering price of $1.52 per share of common stock and accompanying common warrants, which is the last reported sale price of our common stock on July 5, 2023. Each share of our common stock and each pre-funded warrant to purchase one share of our common stock is being sold together with two common warrants each to purchase one share of our common stock. Each common warrant will have an exercise price of $ per share (representing % of the price at which a share of common stock and accompanying common warrant are sold to the public in this offering), will be immediately exercisable and will expire on the five year anniversary of the original issuance date. The shares of common stock and pre-funded warrants, and the accompanying common warrants, as the case may be, can only be purchased together in this offering but will be issued separately and will be immediately separable upon issuance. This prospectus also relates to the offering of the shares of common stock issuable upon exercise of the common warrants. |
Common Stock to be Outstanding Immediately After this Offering | 10,787,942 shares, (assuming we sell only shares of common stock and no pre-funded warrants and assuming no exercise of the common warrants). |
Use of Proceeds | We estimate that the net proceeds from this offering will be approximately $ 9.1 million, excluding the proceeds, if any, from the cash exercise of the common warrants in this offering. We currently intend to use the net proceeds from this offering for working capital and general corporate purposes, including the further development of our product candidates. See “Use of Proceeds” for additional information. |
Risk Factors | An investment in our securities involves a high degree of risk. See “Risk Factors” beginning on page 5 of this prospectus and the other information included and incorporated by reference in this prospectus for a discussion of the risk factors you should carefully consider before deciding to invest in our securities. |
Nasdaq symbol | Our common stock is listed on The Nasdaq Capital Market under the symbol “FWBI.” There is no established public trading market for the pre-funded warrants or common warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the pre-funded warrants or common warrants on any national securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the pre-funded warrants and common warrants will be limited. |
The above discussion is based on 4,208,995 shares of our common stock outstanding as of June 30, 2023, assumes no sale of pre-funded warrants and excludes, as of that date, the following:
● | 732 shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $2,247.63 per share, under our Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”); |
● | 292 shares of awarded but unissued restricted stock under our 2014 Plan; |
● | 8,224 shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $232.64 per share, under our Amended and Restated 2020 Omnibus Equity Incentive Plan (the “2020 Plan”); |
● | 111,096 shares of awarded but unissued restricted stock units under our 2020 Plan; |
● | 1,008,096 shares of common stock available for future issuance under our 2020 Plan; |
● | 5,520,575 shares of common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $7.85 per share; |
● | 3,157 shares of common stock issuable upon conversion of Series B Preferred Stock, including in respect of accrued and unpaid dividends of approximately $0.9 million through June 30, 2023; |
● | either (x) if the holders of Series B Preferred Stock elect to exchange into our registered direct and private placement offering from January 2021, up to 3,244 additional shares of common stock issuable upon conversion of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and up to 3,244 shares of common stock issuable upon exercise of warrants or (y) if the holders of Series B Preferred Stock elect to exchange into our sales made on November 30, 2021, at a price of $549.297 per share, pursuant to our At The Market Offering Agreement dated May 26, 2021 (the “ATM Agreement”) (such price being the lowest price per share sold under the ATM Agreement to date and eligible for the holders of the Series B Preferred Stock to exchange into), up to 9,351 additional shares of common stock, in each case that may be issued pursuant to the exchange right in excess of amounts currently underlying Series B Preferred Stock; and |
● | 13,157,894 shares of common stock issuable upon exercise of the common warrants issued in this offering. |
An investment in our securities involves a high degree of risk. Before deciding whether to purchase our securities, including the shares of common stock 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, 2022, 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
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
Our management will have broad discretion in the application of the net proceeds, including for any of the purposes described in the section of this prospectus entitled “Use of Proceeds.” You will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business, cause the price of our securities to decline and delay the development of our product candidates. Pending the application of these funds, we may invest the net proceeds from this offering in a manner that does not produce income or that loses value.
You will experience immediate and substantial dilution in the net tangible book value of the shares you purchase in this offering and may experience additional dilution in the future.
The combined public offering (“IPO”)price per share of 960,000common stock and related common warrant, and the combined public offering price of each pre-funded warrant and related common warrant, will be substantially higher than the pro forma as adjusted net tangible book value per share of our common stock after giving effect to this offering. Assuming the sale of shares of our common stock and common warrants to purchase up to shares of common stock at an assumed combined public offering price of $1.52 per share and related common warrant, the closing sale price per share of our common stock on The Nasdaq Capital Market on July 5, 2023, assuming no sale of any pre-funded warrants in this offering, no exercise of the common warrants being offered in this offering and after deducting the placement agent fees and commissions and estimated offering expenses payable by us, you will incur immediate dilution in pro forma as adjusted net tangible book value of approximately $0.28 per share. As a result of the dilution to investors purchasing securities in this offering, investors may receive significantly less than the purchase price paid in this offering, if anything, in the event of the liquidation of our company. See the section entitled “Dilution” below for a more detailed discussion of the dilution you will incur if you participate in this offering. To the extent shares are issued under outstanding options and warrants at exercise prices lower than the public offering price of our common stock in this offering, you will incur further dilution.
There is no public market for the common warrants or pre-funded warrants being offered by us in this offering.
There is no established public trading market for the common warrants or the pre-funded warrants, and we do not expect a market to develop. In addition, we do not intend to apply to list the common warrants or pre-funded warrants on any national securities exchange or other nationally recognized trading system. Without an active market, the liquidity of the common warrants and pre-funded warrants will be limited.
The common warrants and pre-funded warrants are speculative in nature.
The common warrants and pre-funded warrants offered hereby do not confer any rights of share of common stock ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a pricefixed price. Specifically, commencing on the date of $5.50 per share and received gross proceeds of $5,280,000. Concurrent with the IPO, the Company issued certain securities, including (i) 717,540 warrants with a five-year life to certain original issuance, discount (“OID”) noteholders in exchange for their agreement not to sell their shares for six months following the IPO with an exercise price equal to the IPO price (the “Lock-Up Warrants”), and (iii) the grant of 48,000 warrants with a five-year life to the underwriters at 120%holders of the IPO price (the “Underwriter Warrants”). Both the Lock-up Warrants and the Underwriter Warrants provide the holders thereof with certain piggyback registration rights forcommon warrants may acquire the shares of common stock issuable upon exercise of the warrants.
Holders of the warrants offered hereby will have no rights as common stockholders with respect to the shares our common stock underlying the warrants until such holders exercise their warrants and service providers to purchase an aggregate totalacquire our common stock, except as otherwise provided in the warrants.
Until holders of up to 250,000the common warrants and the pre-funded warrants acquire shares of our common stock (the “
This is a best efforts offering, no minimum amount of securities is required to be sold, and Lock-Up Warrants (collectively,we may not raise the “
The placement agent has agreed to use its reasonable best efforts to solicit offers to purchase the securities in this offering. The placement agent has no obligation to buy any of the securities from us or to arrange for the Placement Agent Warrantspurchase or sale of any specific number or dollar amount of the securities. There is no required minimum number of securities that must be sold as a condition to completion of this offering. Because there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, placement agent fees and Underwriter Warrants. Uponproceeds to us are not presently determinable and may be substantially less than the maximum amounts set forth above. We may sell fewer than all of the securities offered hereby, which may significantly reduce the amount of proceeds received by us, and investors in this offering will not receive a refund in the event that we do not sell an amount of securities sufficient to support our continued operations, including our near-term continued operations. Thus, we may not raise the amount of capital we believe is required for our operations in the short-term and may need to raise additional funds, which may not be available or available on terms acceptable to us.
Purchasers who purchase our securities in this offering pursuant to a securities purchase agreement may have rights not available to purchasers that purchase without the benefit of a securities purchase agreement.
In addition to rights and remedies available to all purchasers in this offering under federal securities and state law, the purchasers that enter into a securities purchase agreement will also be able to bring claims of breach of contract against us. The ability to pursue a claim for breach of contract provides those investors with the means to enforce the covenants uniquely available to them under the securities purchase agreement including, but not limited to: (i) timely delivery of securities; (ii) agreement to not enter into any exercisefinancings for 30 days from closing; and (iii) indemnification for breach of Purchaser Warrants,contract.
We estimate that the Placement Agent Warrants ornet proceeds from the Underwriter Warrants,offering will be approximately $9.1 million, after deducting the selling stockholdersplacement agent fees and estimated offering expenses payable by us, assuming no sale of any fixed combinations of pre-funded warrants and warrants offered hereunder. If the common warrants are exercised in full for cash, the estimated net proceeds will payincrease to $29.1 million. However, because this is a best-efforts offering and there is no minimum offering amount required as a condition to the closing of this offering, the actual offering amount, the placement agent’s fees and net proceeds to us are not presently determinable and may be substantially less than the applicable exercise price, and any suchmaximum amounts set forth on the cover page of this prospectus.
We currently intend to use the net proceeds would be used primarilyfrom this offering for working capital and general corporate purposes. Wepurposes, including the further development of our product candidates. 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 pay allvary 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 fees and expenses incurred by usnet proceeds of this offering.
If you invest in connection withour securities in this registration. Weoffering, your interest will not be responsible for fees and expenses incurreddiluted immediately to the extent of the difference between the public offering price paid by the selling stockholders or any underwriting discounts or agent’s commissions.
The net tangible book value of our common stock as of March 31, 2023, was approximately $1.03 million, or approximately $0.6637 per share of common stock. Net tangible book deficit per share represents the Private Placement, (ii) 385,714amount of our total tangible assets less total liabilities divided by the total number of our shares of common stock issuable upon exerciseoutstanding as of Series A Warrants, (iii) 1,157,144March 31, 2023.
After giving effect to the sale by us in this offering of 6,578,947 shares of common stock, issuable upon exercise of Series A-1 Warrants, (iv) 289,257 shares of common stock issuable upon conversion of the Debentures, (v) 164,256 shares of common stock issuable upon exercise ofor up to 6,578,947 pre-funded warrants currently held by LPC, (vi) 164,256 shares of common stock issuable upon exercise of warrants currently held in escrow on behalf of LPC, to be issued in the event those events described above, under the heading “
Assumed combined public offering price per share and accompanying common warrant | $ | 1.52 | ||||||
Historical net tangible book value per share as of March 31, 2023 | $ | 0.6637 | ||||||
Increase in as adjusted net tangible book value per share attributable to this offering | $ | 0.5786 | ||||||
As adjusted net tangible book value per share after giving effect to this offering | $ | 1.2423 | ||||||
Dilution per share to new investors in this offering | $ | 0.2777 |
Each $0.10 increase or decrease in the assumed combined public offering price of $1.52 per share and accompanying common warrant, which was the last reported sale price of our common stock on The Nasdaq Capital Market on July 5, 2023, would increase or decrease the as adjusted net tangible book value per share by $0.0761 per share and the dilution per share to investors participating in this offering by $0.0239 per share, assuming that the number of shares and accompanying common warrants offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the placement agent fees and commissions and estimated offering expenses payable by us, and excluding the proceeds, if any, from the cash exercise of the common warrants issued in this offering.
We may also increase or decrease the number of shares we are offering. A 1.0 million share increase in the number of shares and accompanying common warrants offered by us, as set forth on the cover page of this prospectus, would increase the as adjusted net tangible book value per share by approximately $0.0204 and decrease the dilution per share to new investors participating in this offering by approximately $0.0204, based on an assumed combined public offering price of $1.52 per share and accompanying common warrant, which was the last reported sale price of our common stock on The Nasdaq Capital Market on July 5, 2023, remaining the same and after deducting the placement agent fees and commissions and estimated offering expenses payable by us, and excluding the proceeds, if any, from the exercise of the common warrants issued in this offering. Similarly, a 1.0 million share decrease in the number of shares and accompanying common warrants offered by us, as set forth on the cover page of this prospectus, would decrease the as adjusted net tangible book value per share by approximately $0.0262 and increase the dilution per share to new investors participating in this offering by approximately $0.0262, based on an assumed combined public offering price of $1.52 per share and accompanying common warrant, which was the last reported sale price of our common stock on The Nasdaq Capital Market on July 5, 2023, remaining the same and after deducting the placement agent fees and commissions and estimated offering expenses payable by us, and excluding the proceeds, if any, from the cash exercise of the common warrants issued in this offering.
The table and discussion above are based on 1,549,581 shares of common stock outstanding as of March 31, 2023, and excludes, as of that date, the selling stockholderfollowing:
● | 834 shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $2,540.50 per share, under our Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”); |
● | 292 shares of awarded but unissued restricted stock under our 2014 Plan; |
● | 8,231 shares of common stock issuable upon exercise of stock options, with a weighted average exercise price of $232.70 per share, under our Amended and Restated 2020 Omnibus Equity Incentive Plan (the “2020 Plan”); |
● | 160,239 shares of awarded but unissued restricted stock units under our 2020 Plan; |
● | 149,010 shares of common stock available for future issuance under our 2020 Plan; |
● | 4,691,379 shares of common stock issuable upon exercise of outstanding warrants, with a weighted average exercise price of $7.85 per share; |
● | 3,102 shares of common stock issuable upon conversion of Series B Preferred Stock, including in respect of accrued and unpaid dividends of approximately $0.8 million through June 30, 2023; |
● | either (x) if the holders of Series B Preferred Stock elect to exchange into our registered direct and private placement offering from January 2021, up to 3,180 additional shares of common stock issuable upon conversion of Series C Preferred Stock and up to 3,180 shares of common stock issuable upon exercise of warrants or (y) if the holders of Series B Preferred Stock elect to exchange into our sales made on November 30, 2021, at a price of $549.297 per share, pursuant to our ATM Agreement (such price being the lowest price per share sold under the ATM Agreement to date), up to 9,168 additional shares of common stock, in each case that may be issued pursuant to the exchange right in excess of amounts currently underlying Series B Preferred Stock; and |
● | 13,157,894 shares of common stock issuable upon exercise of the common warrants issued in this offering. |
The information discussed above is illustrative only and will adjust based on the actual public offering price, the actual number of shares and common warrants that we offer pursuant toin this prospectusoffering, and other terms of this offering determined at pricing. Except as indicated otherwise, the discussion and table above assumes (i) no sale of pre-funded warrants, which, if sold, would reduce the number of shares of common stock that the selling stockholders will beneficially own after this offering. Except as noted below, the selling stockholders do not have, or within the past three years has not had, any material relationship with us or anywe are offering on a one-for-one basis, and (ii) no exercise of our predecessors or affiliates and the selling stockholders are not or were not affiliated with registered broker-dealers.
The following summary of the offering, the selling stockholders will not own any shares, as reflected in the column entitled “
Shares | Maximum Number of Shares Being Offered Pursuant to this Prospectus | Shares | ||||||
Beneficially Owned | Warrants | Warrants Exercisable | Debenture | Beneficially Owned After | ||||
Name of Selling | Prior to | Common | Currently | on a Later | Conversion | Offering (1) | ||
Securityholder | Offering | Stock | Exercisable | Date | Shares | Number | Percent * | |
2010 Jennings Family Revocable Trust | 23,315 | - | 23,315 | - | - | - | ** | |
ADEC Private Equity Investments, LLC | 1,676,009 | - | 699,461 | - | - | 976,548 | (2) | 8.2% |
Alexander Capital, LP | 133,710 | - | 50,000 | 83,710 | - | - | (3) | ** |
Amory Ross | 157,143 | 78,571 | 19,643 | 58,929 | - | - | ** | |
Andrea Ross | 57,146 | 28,573 | 7,143 | 21,430 | - | - | ** | |
Andrew Sanford | 16,000 | 8,000 | 2,000 | 6,000 | - | - | ** | |
Brian Herman | 10,600 | - | 10,600 | - | - | - | (4) | ** |
Brian Thebault | 171,429 | 85,714 | 21,429 | 64,286 | - | - | ** | |
Bruce Conway | 406,559 | 185,000 | 82,809 | 138,750 | - | - | ** | |
Bryan McShaine | 46,631 | - | 46,631 | - | - | - | ** | |
BTR Partners | 285,714 | 142,857 | 35,714 | 107,143 | - | - | (5) | ** |
Catherine and Raymond Marzulli | 10,944 | - | 10,944 | - | - | - | ** | |
CEDA Investments, LLC | 57,144 | 28,572 | 7,143 | 21,429 | - | - | (2) | ** |
Charlotte Ross | 57,144 | 28,572 | 7,143 | 21,429 | - | - | ** | |
Christopher Laffey | 11,138 | 5,569 | 1,392 | 4,177 | - | - | (6) | ** |
Cross River Partners LP | 142,857 | 71,429 | 17,857 | 53,571 | - | - | (7) | ** |
Dana Ross | 57,144 | 28,572 | 7,143 | 21,429 | - | - | ** | |
Daniel and Agatha Tis | 19,869 | - | 19,869 | - | - | - | ** | |
Daniel and Beth Erlanger | 32,832 | - | 32,832 | - | - | - | ** | |
Daniel Erlanger | 37,114 | - | 37,114 | - | - | - | ** | |
David Graham | 28,571 | 14,286 | 3,571 | 10,714 | - | - | ** | |
David Ide | 46,631 | - | 46,631 | - | - | - | ** | |
David Miedzygorski | 2,332 | - | 2,332 | - | - | - | ** | |
Davis Family Trust | 533,689 | - | 138,560 | - | - | 395,129 | (8) | 3.5% |
Deborah L. Millar Revocable Trust | 29,145 | - | 29,145 | - | - | - | (9) | ** |
Doug Aguililla | 4,000 | - | 4,000 | - | - | - | (10) | ** |
EBR Ventures, LLC | 700,000 | 100,000 | 25,000 | 75,000 | - | 500,000 | (2) | 4.4% |
Edward Borkowski | 236,536 | - | 34,973 | - | - | 201,563 | (11) | 1.8% |
Edward Borkowski and Nancy McCormick | 86,536 | - | 34,973 | - | - | 51,563 | (11) | ** |
Edwin W. Laffey | 6,000 | 3,000 | 750 | 2,250 | - | - | ** | |
Eugene Markowitz | 14,902 | - | 14,902 | - | - | - | ** | |
Fred Tedori | 27,907 | - | 27,907 | - | - | - | ** | |
Gene Humphreys | 8,654 | - | 3,498 | - | - | 5,156 | ** | |
Glenn Harnish and Jean Harnish JTWROS | 14,000 | 7,000 | 1,750 | 5,250 | - | - | ** | |
Gene and Catherine Salkind | 233,169 | - | 94,378 | - | - | 138,791 | 1.2% | |
Greg and Madeline Sheldon | 16,416 | - | 16,416 | - | - | - | ** | |
Greg Sheldon | 18,557 | - | 18,557 | - | - | - | ** | |
Hammermeister Revocable Familty Trust | 86,536 | - | 34,973 | - | - | 51,563 | (12) | ** |
Hans Tommy Wilhelmsen | 4,664 | - | 4,664 | - | - | - | ** | |
Harbor Watch Partners, LP | 185,714 | 92,857 | 23,214 | 69,643 | - | - | (13) | ** |
Ike McEntire | 11,657 | - | 11,657 | - | - | - | ** | |
JABCO LP | 135,878 | 57,143 | 35,878 | 42,857 | - | - | (14) | ** |
Joseph Arvay | 28,571 | 14,286 | 3,571 | 10,714 | - | - | ** | |
Joseph Kerrissey | 14,286 | 7,143 | 1,786 | 5,357 | - | - | ** | |
Joseph M. Ahearn | 57,315 | - | 23,315 | - | - | 34,000 | ** | |
Joseph M. and Pamela Longo | 57,143 | 28,571 | 7,143 | 21,429 | - | - | ** | |
Kathryn M. Parsons Revocable Trust | 67,078 | 28,571 | 17,078 | 21,429 | - | - | (15) | ** |
KC Scott Family Limited Partnership | 50,000 | 25,000 | 6,250 | 18,750 | - | - | (16) | ** |
Lee Becker | 37,143 | 18,571 | 4,643 | 13,929 | - | - | ** | |
Lincoln Park Capital Fund, LLC | 617,769 | - | 164,256 | 164,256 | 289,257 | - | (17) | ** |
Lucy Shurtleff | 34,514 | 11,429 | 14,514 | 8,571 | - | - | ** | |
Mario Wagner Okuno | 6,994 | - | 6,994 | - | - | - | ** | |
Mark and Phyllis Waxman | 19,869 | - | 19,869 | - | - | - | ** | |
Michael Slobodow | 5,829 | - | 5,829 | - | - | - | ** | |
Molly Hsu | 79,477 | - | 79,477 | - | - | - | ** | |
Netgain Financial, Inc. | 60,000 | 10,000 | 50,000 | - | - | - | (18) | ** |
Network 1 Financial Services, Inc. | 10,131 | - | 10,131 | - | - | - | (19) | ** |
Olivia Lutz Trust 2014 | 114,286 | 57,143 | 14,286 | 42,857 | - | - | (20) | ** |
Peter Cella | 11,657 | - | 11,657 | - | - | - | ** | |
PRK Partners, LP | 200,000 | 100,000 | 25,000 | 75,000 | - | - | (21) | ** |
Renee Markowitz | 24,836 | - | 24,836 | - | - | - | ** | |
Russell W. Rice | 5,829 | - | 5,829 | - | - | - | ** | |
S. Clarke Moody | 154,024 | 57,143 | 54,024 | 42,857 | - | - | ** | |
Shane Cobb | 47,611 | - | 6,136 | - | - | 41,475 | ** | |
Sierra AF 2013 Trust | 72,237 | - | 32,237 | - | - | 40,000 | (22) | ** |
Steven Montal | 216,371 | - | 32,659 | - | - | 183,712 | 1.6% | |
The Burke E Ross Jr. GST Investment Trust 2014 | 430,000 | 215,000 | 53,750 | 161,250 | - | - | (2) | ** |
Trident Partners, LTD. | 804 | - | 804 | - | - | - | (23) | ** |
ViewTrade Securities, Inc. | 3,650 | - | 3,650 | - | - | - | (24) | ** |
WallachBeth Capital, LLC | 18,815 | - | 18,815 | - | - | - | (25) | ** |
William Curtis | 28,571 | 14,286 | 3,571 | 10,714 | - | - | ** | |
William S. Goodman | 58,289 | - | 58,289 | - | - | - | ** | |
World Wide Holdings, LLC | 150,000 | - | 150,000 | - | - | - | (26) | ** |
1,552,858 | 2,658,310 | 1,405,110 | 289,257 |
General
Our authorized capital stock consists of:
● | 50,000,000 shares of common stock, par value $0.0001 per share; and |
● | 10,000,000 shares of preferred stock, par value $0.0001. |
As of June 30, 2023, there were 50,000,000 shares of Common Stock authorized, and 10,000,000 shares of preferred stock authorized, of which a series of 5,194.81 shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”), a series of 75,000 shares of Series C 9.00% Convertible Junior Preferred Stock (the “Series C Preferred Stock”), a series of 150 shares of Series D Preferred Stock, a series of 150 shares of Series E Preferred Stock, and a series of 7,000 shares of Series F Preferred Stock have been designated.
As of June 30, 2023, there were 4,208,995 shares of Common Stock issued and outstanding, approximately 545.94 shares of Series B Preferred Stock issued and outstanding, no shares of Series C Preferred Stock issued and outstanding, no shares of Series D Preferred Stock issued and outstanding, no shares of Series E Preferred Stock issued and outstanding, and no shares of Series F 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 reliancea 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
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 registration statementplurality 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 Co., Inc., 7840 S. 700 E., Sandy, Utah 84070, 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 June 30, 2023, approximately 5,194.81 shares were designated as Series B Preferred Stock, of which approximately 545.94 shares were issued and outstanding, 75,000 shares were designated as Series C Preferred Stock, none of which were issued and outstanding, 150 shares were designated as Series D Preferred Stock, none of which were issued and outstanding, 150 shares were designated as Series E Preferred Stock, none of which were issued and outstanding, and 7,000 shares were designated as Series F Preferred Stock, none of which were issued and outstanding.
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 Form S-1the 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 Securities Act,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 respecta 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 SECURITIES WE ARE OFFERING
We are offering up to 6,578,947 shares of our common stock and common warrants to purchase up to 13,157,894 shares of common stock. We are also offering pre-funded warrants to those purchasers whose purchase of shares of common stock in this offering would result in the securities being offered by this prospectus. This prospectus does not contain allpurchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the informationpurchaser, 9.99%) of our outstanding shares of common stock following the consummation of this offering in lieu of the registration statementshares of common stocks that would result in such excess ownership. Each pre-funded warrant will be exercisable for one share of common stock. No warrant for fractional shares of common stock will be issued, rather warrants will be issued only for whole shares of common stock. We are also registering the shares of common stock issuable from time to time upon exercise of the pre-funded warrants and its exhibits. For further information with respect to uscommon warrants offered hereby.
Common Stock
The material terms and provisions of our common stock are described under the securities offered by this prospectus, we refer you to the registration statement and its exhibits. Statements containedcaption “Description of Capital Stock” in this prospectus as toand are incorporated herein by reference.
Common Warrants
The following is a summary of certain terms and provisions of the contents of any contract or any other document referred tocommon warrants that are being offered hereby is not necessarily complete and is subject to, and qualified in each instance, we refer you toits entirety by, the copyprovisions of the contract or other documentcommon warrant, the form of which will be filed as an exhibit to the registration statement. statement of which this prospectus forms a part. Prospective investors should carefully review the terms and provisions of the form of common warrant for a complete description of the terms and conditions of the common warrants.
Duration and Exercise Price
Each common warrant offered hereby will have an exercise price equal to $ . The common warrants will be immediately exercisable and may be exercised until the fifth anniversary of these statementsthe issuance date. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting our common stock and the exercise price. The common warrants will be issued separately from the common stock or pre-funded warrants, respectively, and may be transferred separately immediately thereafter. The common warrants will be issued in certificated form only.
Exercisability
The common 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 of our common stock 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 such holder’s common warrants to the extent that the holder would own more than 4.99% of the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s common warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the common warrants.
Cashless Exercise
If, at the time a holder exercises its common warrants, a registration statement registering the issuance of the shares of common stock underlying the common warrants under the Securities Act 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, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the common warrant.
Fundamental Transactions
In the event of any fundamental transaction, as described in the common warrants and generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange offer, or reclassification of our common stock, then upon any subsequent exercise of a common warrant, the holder will have the right to receive as alternative consideration, for each share of our common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of shares of common stock of the successor or acquiring corporation or of our company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of shares of our common stock for which the common warrant is exercisable immediately prior to such event. Notwithstanding the foregoing, in the event of a fundamental transaction, the holders of the common warrants have the right to require us or a successor entity to redeem the common warrants for cash in the amount of the Black-Scholes Value (as defined in each common warrant) of the unexercised portion of the common warrants concurrently with or within 30 days following the consummation of a fundamental transaction.
However, in the event of a fundamental transaction which is not in our control, including a fundamental transaction not approved by our board of directors, the holders of the common warrants will only be entitled to receive from us or our successor entity, as of the date of consummation of such fundamental transaction the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of the common warrant that is being offered and paid to the holders of our common stock in connection with the fundamental transaction, whether that consideration is in the form of cash, stock or any combination of cash and stock, or whether the holders of our common stock are given the choice to receive alternative forms of consideration in connection with the fundamental transaction.
Transferability
Subject to applicable laws, a common warrant may be transferred at the option of the holder upon surrender of the common warrant to us together with the appropriate instruments of transfer.
Fractional Shares
No fractional shares of common stock will be issued upon the exercise of the common warrants. Rather, the number of shares of common stock to be issued will, at our election, either be rounded up to the next whole share or we will pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.
Trading Market
There is no established trading market for the common warrants, and we do not expect an active trading market to develop. We do not intend to apply to list the common warrants on any securities exchange or other trading market. Without a trading market, the liquidity of the common warrants will be extremely limited.
Right as a Stockholder
Except as otherwise provided in the common warrants or by virtue of the holder’s ownership of shares of our common stock, such holder of common warrants does not have the rights or privileges of a holder of our common stock, including any voting rights, until such holder exercises such holder’s common warrants. The common warrants will provide that the holders of the common warrants have the right to participate in distributions or dividends paid on our shares of common stock.
Waivers and Amendments
The common warrant may be modified or amended or the provisions of the common warrant waived with our and the holder’s written consent.
Pre-funded Warrants
The following summary of certain terms and provisions of the pre-funded warrants that are being offered hereby is not complete and is subject to, and qualified in all respectsits entirety by, this reference.
Duration and Exercise Price
Each pre-funded warrant offered hereby will have an initial exercise price per share of common stock equal to $0.0001. The pre-funded warrants will be immediately exercisable and will expire when exercised in full. The exercise price and number of shares of common stock issuable upon exercise is subject to appropriate adjustment in the event of share dividends, share splits, reorganizations or similar events affecting our shares of common stock and the exercise price. Subject to the rules and regulations of the applicable trading market, we may at any time during the term of the pre-funded warrant, subject to the prior written consent of the holders, reduce the then current exercise price to any amount and for any period of time deemed appropriate by our board of directors. The pre-funded warrants will be issued in certificated form only.
Exercisability
The pre-funded 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 of common stock 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 pre-funded warrant to the extent that the holder would own more than 4.99% of the outstanding shares of common stock 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 pre-funded warrants up to 9.99% of the number of our shares of common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the pre-funded warrants. Purchasers of pre-funded warrants in this offering may also elect prior to the issuance of the pre-funded warrants to have the initial exercise limitation set at 9.99% of our outstanding shares of common stock.
Cashless Exercise
In lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the pre-funded warrants.
Fractional Shares
No fractional shares of common stock will be issued upon the exercise of the pre-funded warrants. Rather, at the Company’s election, the number of shares of common stock to be issued will be rounded up to the next whole share or the Company will pay a cash adjustment in an amount equal to such fraction multiplied by the exercise price.
Transferability
Subject to applicable laws, a pre-funded warrant may be transferred at the option of the holder upon surrender of the pre-funded warrants to us together with the appropriate instruments of transfer.
Trading Market
There is no trading market available for the pre-funded 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 pre-funded warrants on any securities exchange or nationally recognized trading market. Without a trading market, the liquidity of the pre-funded warrants will be extremely limited. The shares of common stock issuable upon exercise of the pre-funded warrants are currently traded on The Nasdaq Capital Market.
Right as a Shareholder
Except as otherwise provided in the pre-funded warrants or by virtue of such holder’s ownership of shares of common stock, the holders of the pre-funded warrants do not have the rights or privileges of holders of our shares of common stock, including any voting rights, until they exercise their pre-funded warrants. The pre-funded warrants will provide that the holders of the pre-funded warrants have the right to participate in distributions or dividends paid on our shares of common stock.
Fundamental Transaction
In the event of a fundamental transaction, as described in the pre-funded warrants and generally including any reorganization, recapitalization or reclassification of our shares of common stock, 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 of common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding shares of common stock, the holders of the pre-funded warrants will be entitled to receive upon exercise of the pre-funded warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the pre-funded warrants immediately prior to such fundamental transaction on a net exercise basis
Waivers and Amendments
The pre-funded warrant may be modified or amended or the provisions of the pre-funded warrant waived with our and the holder’s written consent.
We engaged Roth Capital Partners, LLC (“Roth” or the “placement agent”), to act as our exclusive placement agent to solicit offers to purchase the securities offered by this prospectus on a reasonable best efforts basis. Roth is not purchasing or selling any securities, nor are they required to arrange for the purchase and sale of any specific number or dollar amount of securities, other than to use their “reasonable best efforts” to arrange for the sale of the securities by us. Therefore, we may not sell the entire amount of securities being offered. There is no minimum amount of proceeds that is a condition to closing of this offering. The placement agent does not guarantee that it will be able to raise new capital in this offering. The terms of this offering were subject to market conditions and negotiations between us and prospective investors in consultation with the placement agent. The placement agent will have no authority to bind us. This offering will terminate no later than July 31, 2023, unless we decide to terminate the offering (which we may do at any time in our discretion) prior to that date. We will have one closing for all the securities purchased in this offering. The combined public offering price per share (or pre-funded warrant) and accompanying common warrant will be fixed for the duration of this offering. Roth may engage one or more sub-placement agents or selected dealers to assist with the offering.
We will enter into a securities purchase agreement directly with the institutional investors, at the investor’s option, who purchase our securities in this offering. Investors who do not enter into a securities purchase agreement shall rely solely on this prospectus in connection with the purchase of our securities in this offering.
Placement Agent Fees and Expenses
The following table shows the per share and accompanying common warrant, and per pre-funded and accompanying common warrant, and total placement agent fees we will pay in connection with the sale of the securities in this offering.
Per Share and Accompanying Common Warrant | Per Pre-Funded Warrant and Accompanying Common Warrant | Total | ||||||||
Public offering price | $ | $ | $ | |||||||
Placement agent fees | $ | $ | $ | |||||||
Proceeds to us, before expenses | $ | $ | $ |
We estimate that the total expenses of the offering, including registration, filing and listing fees, printing fees and legal and accounting expenses, but excluding placement agent fees, will be approximately $200,000, all of which are payable by us. This figure includes the placement agent’s accountable expenses, including, but not limited to, legal fees for placement agent’s legal counsel, that we have agreed to pay at the closing of the offering up to an aggregate expense reimbursement of $100,000.
Other Relationships
The placement agent acted as the placement agent in connection with the private placement consummated in March 2023 for which it has received customary fees and expenses. The placement agent may, from time to time, engage in transactions with or perform services for us in the ordinary course of its business and may continue to receive compensation from us for such services.
Determination of Offering Price
The combined public offering price per share and common warrant and the combined public offering price per pre-funded warrant and common warrant we are offering and the exercise prices and other terms of the warrants were negotiated between us and the investors, in consultation with the placement agent based on the trading of our common stock prior to this offering, among other things. Other factors considered in determining the public offering prices of the securities we are offering and the exercise prices and other terms of the warrants include the history and prospects of our company, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.
Lock-up Agreements
Each of our officers and directors have agreed to be subject to a lock-up period of 30 days following the date of this prospectus. This means that, during the applicable lock-up period, they may not offer for sale, contract to sell, or sell any shares of our common stock or any securities convertible into, or exercisable or exchangeable for, shares of our common stock subject to certain customary exceptions. In addition, we have agreed to not issue any shares of common stock or securities exercisable or convertible into shares of common stock for a period of 30 days following the closing date of this offering, subject to certain exceptions, and to not issue any securities that are subject to a price reset based on trading prices of our common stock or upon a specified or contingent event in the future, or enter into an agreement to issue securities at a future determined price, for a period of 90 days following the closing date of this offering.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Colonial Stock Transfer Company, Inc.
The Nasdaq Capital Market Listing
Our common stock is currently listed on The Nasdaq Capital Market under the symbol “FWBI.” On July 5, 2023, the reported closing price per share of our common stock was $1.52. The final public offering price will be determined between us, the placement agent and the investors in the offering, and may be at a discount to the current market price of our common stock. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final public offering price. There is no established public trading market for the common warrants or pre-funded warrants, and we do not expect such markets to develop. In addition, we do not intend to apply for a listing of the common warrants or pre-funded warrants on any national securities exchange or other nationally recognized trading system.
Indemnification
We have agreed to indemnify the placement agent against certain liabilities, including certain liabilities arising under the Securities Act, or to contribute to payments that the placement agent may be required to make for these liabilities.
Regulation M
The placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act and any fees received by it and any profit realized on the sale of the securities by it while acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. The placement agent will be required to comply with the requirements of the Securities Act and the Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of our securities by the placement agent. Under these rules and regulations, the placement agent may not (i) engage in any stabilization activity in connection with our securities; and (ii) bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until they have completed their participation in the distribution.
Electronic Distribution
A prospectus in electronic format may be made available on a website maintained by the placement agent and the placement agent 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 and/or endorsed by us or the information orplacement agent and should not be relied upon by investors.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents listed below that we have filed with the SEC and any future filingsare incorporated by reference into this prospectus:
● | our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 20, 2023; | |
● | our Quarterly Report on Form 10-Q for the period ended March 31, 2023 filed on May 12, 2023; | |
● | our Current Report on Form 8-K, filed on January 17, 2023, February 7, 2023, March 15, 2023, April 7, 2023, April 21, 2023 , June 16, 2023 and June 23, 2023 (other than any portions thereof deemed furnished and not filed); | |
● | our definitive proxy statement on Schedule 14A, filed on May 15, 2023; and | |
● | 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, as supplemented and updated by the description of our capital stock set forth in Exhibit 4.31 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 20, 2023, including any amendment or reports filed for the purposes of updating this description. |
We also incorporate by reference all documents we will make with the SEC under Sectionsfile pursuant to Section 13(a), 13(c), 14 or 15(d)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 filing of the registration statement of which this prospectus is a part and prior to effectiveness of such registration statement,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 untilprior to the termination of the offering are also incorporated by reference and are an important part of the shares covered by this prospectus (other than information furnished under Item 2.02 or Item 7.01 of Form 8-K):
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus willherein shall be deemed to be modified or superseded for the purposes of this prospectusregistration statement to the extent that a statement contained herein or in this prospectus or any other subsequently filed document thatwhich also is or deemed to be incorporated by reference into this prospectusherein modifies or supersedes thesuch statement. Any statementsstatement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.registration statement.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus is part of a copy of any orregistration statement we filed with the SEC. This prospectus does not contain all of the documentsinformation set forth in the registration statement and the exhibits to the registration statement. For further information with respect to us and the securities we are offering under this prospectus, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. You should rely only on the information contained in this prospectus or incorporated by reference into this prospectus. We have not authorized anyone else to provide you with different information. We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should assume that the information contained in this prospectus, or any document incorporated by reference in this prospectus, is accurate only as of the date of those respective documents, regardless of the time of delivery of this prospectus or any sale of our securities.
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 Commission under the Exchange Act. Such reports, proxy statements and other information, including the Registration Statement, and exhibits and schedules thereto, are available to these documents. You should direct any requests forthe public through the Commission’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 Commission. The registration statement and the documents referred to 760 Parkside Avenue, Downtown Biotechnology Incubator, Suite 304, Brooklyn, New York 11226 or telephoning us at (646) 699-7855.
We dohave not incorporateincorporated by reference into this prospectus the information on our website, into this prospectus or any supplement to this prospectus and you should not consider any information on, or that canit to be accessed through, our website asa part of this prospectus or any supplement toprospectus.
The validity of the securities offered hereby will be passed upon for us by Lowenstein Sandler LLP, New York, New York. The placement agent is being represented by Ellenoff Grossman & Schole LLP.
The consolidated audited financial statements incorporated by reference in this prospectus (other than those filings withand elsewhere in the SEC that we specifically incorporateregistration statement have been incorporated by reference into this prospectus).
Pre-Funded Warrants to Purchase up to 6,578,947 Shares of Common Stock
Common Warrants to Purchase up to 13,157,894 Shares of Common Stock
Shares of Common Stock underlying the Pre-Funded Warrants and Common Warrants
PRELIMINARY PROSPECTUS
Roth Capital Partners
The date of this prospectus is , 2023.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. | Other Expenses of Issuance and Distribution. |
The following table sets forthindicates the various expenses to be incurred in connection with the offering described in this registration statement, other than underwriting discounts and commissions, all of which will be bornepaid by the registrant, in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions.us. All amounts shown are estimatesestimated except for the SECSecurities and Exchange Commission registration fee.
Amount | ||||
SEC Registration Fee | $ | 3,306 | ||
FINRA Filing Fee | 5,000 | |||
Legal Fees and Expenses | 150,000 | |||
Accounting Fees and Expenses | 25,000 | |||
Transfer Agent and Registrar fees and expenses | 5,000 | |||
Miscellaneous Expenses | 5,000 | |||
Total expenses | $ | 193,306 |
Amended and Restated Bylaws
Pursuant to our bylaws, our directors and officers will be indemnified to the fullest extent allowed under the laws of the State of Delaware for their actions in their capacity as our directors and officers.
We must indemnify any person made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (“Proceeding”Proceeding”) by reason of the fact that he is or was a director, against judgments, penalties, fines, settlements and reasonable expenses (including attorney’s fees) (“Expenses”Expenses”) actually and reasonably incurred by him in connection with such Proceeding if: (a) he conducted himself in good faith, and: (i) in the case of conduct in his own official capacity with us, he reasonably believed his conduct to be in our best interests, or (ii) in all other cases, he reasonably believes his conduct to be at least not opposed to our best interests; and (b) in the case of any criminal Proceeding, he had no reasonable cause to believe his conduct was unlawful.
We must indemnify any person made a party to any Proceeding by or in the right of us, by reason of the fact that he is or was a director, against reasonable expenses actually incurred by him in connection with such proceeding if he conducted himself in good faith, and: (a) in the case of conduct in his official capacity with us, he reasonably believed his conduct to be in our best interests; or (b) in all other cases, he reasonably believed his conduct to be at least not opposed to our best interests; provided that no such indemnification may be made in respect of any proceeding in which such person shall have been adjudged to be liable to us.
No indemnification will be made by unless authorized in the specific case after a determination that indemnification of the director is permissible in the circumstances because he has met the applicable standard of conduct.
Reasonable expenses incurred by a director who is party to a proceeding may be paid or reimbursed by us in advance of the final disposition of such Proceeding in certain cases.
We have the power to purchase and maintain insurance on behalf of any person who is or was our director, officer, employee, or agent or is or was serving at our request as an officer, employee or agent of another corporation, partnership, joint venture, trust, other enterprise, or employee benefit plan against any liability asserted against him and incurred by him in any such capacity or arising out of his status as such, whether or not we would have the power to indemnify him against such liability under the provisions of the amended and restated bylaws.
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Delaware Law
We are incorporated under the laws of the State of Delaware. Section 145 of the Delaware General Corporation Law provides that a Delaware corporation may indemnify any persons who are, or are threatened to be made, parties to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such person as an officer, director, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, with respect to any criminal action or proceeding, had no reasonable cause to believe that his or her conduct was illegal. A Delaware corporation may indemnify any persons who are, or are threatened to be made, a party to any threatened, pending or completed action or suit by or in the right of the corporation by reason of the fact that such person was a director, officer, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses which such officer or director has actually and reasonably incurred. Our amended and restated certificate of incorporation and amended and restated bylaws provide for the indemnification of our directors and officers to the fullest extent permitted under the Delaware General Corporation Law.
Section 102(b)(7) of the Delaware General Corporation Law permits a corporation to provide in its certificate of incorporation that a director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duties as a director, except for liability for any:
● | transaction from which the director derives an improper personal benefit; | |
● | act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; | |
● | unlawful payment of dividends or redemption of shares; or | |
● | breach of a director’s duty of loyalty to the corporation or its stockholders. |
Our amended and restated certificate of incorporation and amended and restated bylaws include such a provision. Expenses incurred by any officer or director in defending any such action, suit or proceeding in advance of its final disposition shall be paid by us upon delivery to us of an undertaking, by or on behalf of such director or officer, to repay all amounts so advanced if it shall ultimately be determined that such director or officer is not entitled to be indemnified by us.
Section 174 of the Delaware General Corporation Law provides, among other things, that a director who willfully or negligently approves of an unlawful payment of dividends or an unlawful stock purchase or redemption may be held liable for such actions. A director who was either absent when the unlawful actions were approved, or dissented at the time, may avoid liability by causing his or her dissent to such actions to be entered in the books containing minutes of the meetings of the board of directors at the time such action occurred or immediately after such absent director receives notice of the unlawful acts.
Indemnification Agreements
As permitted by the Delaware General Corporation Law, we have entered, and intend to continue to enter, into separate indemnification agreements with each of our directors and executive officers, that require us to indemnify such persons against any and all expenses (including attorneys’ fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director, an officer or an employee of us or any of our affiliated enterprises, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.
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At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or preceding that may result in a claim for indemnification.
We have an insurance policy covering itsour officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act or otherwise.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or controlling persons, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Item 15. | Recent Sales of Unregistered Securities. |
During the three months ended March 31, 2020, the Company issued an aggregate of Unregistered Securities.
During the past three years which were not registeredmonths ended March 31, 2020, the Company issued its outside Board members an aggregate of 50 shares of Common Stock for the settlement of accounts payable in the aggregate amount of $131,137. The aggregate effective settlement price was $2,604 per share, and each individual stock issuance was based on the closing stock price of the Common Stock on the initial date the payable was accrued. Such issuance was exempt from registration under 4(a)(2) of the Securities Act and are not otherwise described inAct.
During the accompanying prospectus:
During the three months ended March 31, 2019, the Company issued an aggregate of 14 shares of its Common Stock to outside members of its Board as payment of Board fees with an aggregate grant date fair value of $72,600, that was recorded as part of G&A expense. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.
On July 16, 2020, we sold 100issued an aggregate of 2,912.583005 shares of Series AB Convertible Preferred Stock, and 3,584,321at a price of $7,700.00 per share, initially convertible into an aggregate of 13,869 shares of common stock.
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During the Company issuedperiod from April 6, 2020 through May 22, 2020, we sold an aggregate of 105,000640 shares of restricted stockCommon Stock pursuant to an equity line agreement, from which we derived approximately $869,000 in net proceeds. The sales of these shares under the Company’s non-executive membersequity line agreement was exempt from registration under the Securities Act of its board1933, as amended, in reliance upon Section 4(a)(2) (or Regulation D promulgated thereunder).
On January 5, 2021, in a private placement offering we sold to an investor 5,333.3333 shares of directors.
On January 8, 2021, in connection with entering into a license agreement with a third party, we entered into a securities purchase agreement where we issued 3,290.1960 shares of Series C Preferred Stock, initially convertible into an aggregate of 1,566 shares of Common Stock, at an initial stated value of $750.00 per share and a conversion price of $1,575.00 per share. The Series C Preferred Stock issued, together with any Common Stock issuable upon conversion, were issued pursuant towithout registration under the exemption from registrationSecurities Act in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering.
On September 13, 2021, in connection with the merger with First Wave Bio, Inc., we issued the former stockholders of 1933, as amended, and Rule 506First Wave Bio, Inc. approximately 2,971 shares of Regulation D promulgated thereunder,common stock. The common stock was issued without registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) of the recipient’s statusSecurities Act as transactions not involving a public offering.
During the three months ended March 31, 2022, we issued an “accredited investor” as definedaggregate of 429 shares of common stock to consultants with a grant date fair value of approximately $119,000 for investor relations services provided. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.
On July 15, 2022, in Rule 501(a)a private placement offering, we sold to investors 150 shares of RegulationSeries D except forPreferred Stock, which is convertible into an aggregate of 4,761 shares of common stock, 150 shares of Series E Preferred Stock, convertible into an aggregate of 4,761 shares of common stock, Series D Warrants to purchase up to an aggregate of 9,522 shares of common stock, with an exercise price of $31.50 and an expiration term of five years from its initial exercise date. The aggregate gross proceeds from the restricted stock grants which were issuedoffering, excluding the net proceeds, if any from the exercise of the Series D Warrants was approximately $300,000. The issuance of these securities was made pursuant to Rule 701 or Rule 506.Section 4(a)(2) of the Securities Act, and the rules promulgated thereunder, to accredited investors.
On November 20, 2022, in a private placement offering, we sold to an investor pre-funded warrants to purchase up to an aggregate of 595,238 shares of common stock and common warrants to purchase up to an aggregate of 1,190,476 shares of common stock at a purchase price of $4.1993 per pre-funded warrant and accompanying common warrant. The common warrants had an exercise price of $5.3795 per share and will expire five and one-half years from the initial exercise date. The aggregate gross proceeds from the offering, excluding the net proceeds, if any, from the exercise of the common warrants was approximately $2.5 million. The issuance of these securities was made pursuant to Section 4(a)(2) of the Securities Act, and the rules promulgated thereunder, to an accredited investor.
On March 12, 2023, in a private placement offering, we sold to an investor 128,000 shares of common stock, pre-funded warrants to purchase up to an aggregate of 895,018 shares of common stock and common warrants to purchase up to an aggregate of 2,046,036 shares of common stock at a purchase price of $3.91 per share and accompanying common warrant. The common warrants had an exercise price of $3.66 per share and will expire five years from the initial exercise date. The aggregate gross proceeds from the offering, excluding the net proceeds, if any, from the exercise of the common warrants was approximately $4.0 million. The issuance of these securities was made pursuant to Section 4(a)(2) of the Securities Act, and the rules promulgated thereunder, to an accredited investor.
On June 13, 2023, we entered into warrant exercise inducement offer letters with certain holders of warrants to purchase shares of common stock pursuant to which the holders agreed to exercise for cash their existing warrants to purchase 1,724,332 shares of common stock, in the aggregate, at a reduced exercise price of $1.15 per share, in exchange for new warrants issued in a private placement offering to purchase up to 3,448,664 shares of common stock and a cash payment of $0.125 per warrant share which was paid in full upon the exercise of the existing warrants. The aggregate gross proceeds from the offering, excluding the net proceeds, if any, from the exercise of the new warrants was approximately $2.4 million. The issuance of the new warrants was made pursuant to Section 4(a)(2) of the Securities Act, and the rules promulgated thereunder, to an accredited investor.
On July 3, 2023, we issued 50,000 shares of restricted common stock to a consultant with a grant date fair value of approximately $76,000 for investor relations services provided. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.
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Item 16. | Exhibits. |
The list of exhibits following exhibits are filed as partthe signature page of this Registration Statement:
Item 17. | ||
Undertakings |
(1) The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i)
(ii)
(iii)
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(b) That, for the purpose of determining any liability under the Securities Act, of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(d) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided,effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
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(e) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant hereby undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 of this chapter);
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(2) The undersigned registrant hereby undertakes to deliver or cause to be delivered withthat, for purposes of determining any liability under the prospectus, toSecurities Act, each person to whomfiling of the prospectus is sent or given, the latestregistrant’s annual report pursuant to security holdersSection 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the prospectusregistration statement shall be deemed to be a new registration statement relating to the securities offered therein, and furnished pursuantthe offering of such securities at that time shall be deemed to and meetingbe the requirementsinitial bona fide offering thereof.
(3) The undersigned registrant hereby undertakes that:
(a) For purposes of Rule 14a-3 or Rule 14c-3determining any liability under the Securities Exchange Act, the information omitted from the form of 1934;prospectus filed as part of this registration statement in reliance on Rule 430A and where interim financial information requiredcontained in a form of prospectus filed by the undersigned registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be presented by Article 3part of Regulation S-X are not set forth inthis registration statement as of the time it was declared effective; and
(b) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus to deliver, or causeshall be deemed to be delivereda new registration statement relating to each personthe securities offered therein, and the offering of such securities at that time shall be deemed to whombe the prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the prospectus to provide such interim financial information.
(4) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted for ourto directors, officers and controlling persons of the Registrantregistrant pursuant to our Articles of Incorporation or Amended and Restated Bylaws,the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange CommissionSEC 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 Registrantregistrant 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, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by the registrantit is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 andregistrant has duly caused this registration statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Brooklyn, New York,Boca Raton, State of Florida, on August 9, 2017.
By: | /s/ James Sapirstein | ||
Name: | James Sapirstein | ||
Title: | President, (Principal Executive Officer) | ||
By: | /s/ Sarah Romano | ||
Name: | Sarah Romano | ||
Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicatedand on the dates indicated.
Signature | Title | Date | ||
/s/ | President, Chief Executive Officer and (Principal Executive Officer) | |||
James Sapirstein | ||||
/s/ | (Principal Financial Officer and Principal Accounting Officer) | |||
Sarah Romano | ||||
Director | ||||
Edward J. Borkowski | ||||
Director | ||||
Charles Casamento | ||||
Director | ||||
* | Director | July 6, 2023 | ||
Alastair Riddell |
* By | /s/ James Sapirstein | |
James Sapirstein | ||
Attorney-in-fact |
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^ | To be Previously. |
* | Filed herewith. |
# | Certain portions of this exhibit (indicated by “[*****]”) have been omitted as we have determined (1) it is not material and (2) is the type that the Company treats as private or confidential. |
## | Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplementally copies of any of the omitted schedules upon request by the SEC. |
† | Indicates a management contract or compensation plan, contract or arrangement. |
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