We cannot assure you that we will be able to comply with the standards that we are required to meet in order to maintain a listing of our common stock on The NASDAQ Capital Market. On February 2, 2017, we received a notice from the Listing Qualifications Department of the NASDAQ Stock Market indicating that, for the last 30 consecutive business days, the bid price for our common stock had closed below the minimum $1.00 per share required for continued inclusion on The NASDAQ Capital Market under NASDAQ Listing Rule 5550(a)(2). The notification letter stated that pursuant to NASDAQ Listing Rule 5810(c)(3)(A) the Company would be afforded 180 calendar days, or until August 1, 2017, to regain compliance with the minimum bid price requirement. We regained compliance with this requirement on May 25, 2017, after implementing a reverse stock split of our common stock. If we fail to continue to meet all applicable NASDAQ Capital Market requirements in the future and NASDAQ determines to delist our common stock, the delisting could substantially decrease trading in our common stock and adversely affect the market liquidity of our common stock; adversely affect our ability to obtain financing on acceptable terms, if at all, for the continuation of our operations; and harm our business. Additionally, the market price of our common stock may decline further and stockholders may lose some or all of their investment.
If we fail to maintain compliance with any NASDAQ listing requirements, we could be delisted and our stock would be considered a penny stock under regulations of the Securities and Exchange Commission, or SEC, and would therefore be subject to rules that impose additional sales practice requirements on broker-dealers who sell our securities. The additional burdens imposed upon broker-dealers by these requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of our common stock and your ability to sell our securities in the secondary market.
Anti-takeover provisions in our organizational documents and Delaware law, and the shareholder rights plan that we adopted in 2007, may discourage or prevent a change of control, even if an acquisition would be beneficial to our stockholders, which could affect our stock price adversely and prevent attempts by our stockholders to replace or remove our current management.
Our certificate of incorporation and bylaws contain provisions that could delay or prevent a change of control of our Company or changes in our Board of Directors that our stockholders might consider favorable. Some of these provisions:
authorize the issuance of preferred stock which can be created and issued by the Board of Directors without prior stockholder approval, with rights senior to those of our common stock;
provide for a classified Board of Directors, with each director serving a staggered three-year term;
prohibit our stockholders from filling board vacancies, calling special stockholder meetings, or taking action by written consent;
provide for the removal of a director only with cause and by the affirmative vote of the holders of 75% or more of the shares then entitled to vote at an election of our directors; and
require advance written notice of stockholder proposals and director nominations.
We have also adopted a shareholder rights plan that could make it more difficult for a third party to acquire, or could discourage a third party from acquiring, us or a large block of our common stock. A third party that acquires 15% or more of our common stock could suffer substantial dilution of its ownership interest under the terms of the shareholder rights plan through the issuance of common stock to all stockholders other than the acquiring person.
In addition, we are subject to the provisions of Section 203 of the Delaware General Corporation Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock. These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for stockholders or potential acquirers to obtain control of our Board of Directors or initiate actions that are opposed by our then-current Board of Directors, including a merger, tender offer, or proxy contest involving our Company. Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline.
We do not intend to pay cash dividends.
We have never declared or paid cash dividends on our capital stock. We currently intend to retain all available funds and any future earnings for use in the operation and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. In addition, the terms of our credit facility precludes us from paying any dividends. As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of potential gain for the foreseeable future.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identifyand the documents we have filed with the SEC that are incorporated by reference contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that involve substantial risks and uncertainties. In some cases, forward-looking statements are identified by terminology such asthe words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goals,” “intend,” “likely,” “may,” “will,“might,” “ongoing,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “aim,” “strategy,” “goal” or “continue”“will” and “would” or the negative of these terms, or other similar words, although not allcomparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.
Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus and the documents that we have filed with the SEC that are incorporated by reference, such statements contain these words.are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include but are not limited to, statements regarding our or our about:
•management’s expectations, hopes, beliefs, intentions or strategies regarding the future, such as our estimates regarding anticipated operating losses, future revenues and projected expenses;expenses, our expectations for commercialization of our Quell products; ourfuture liquidity and our expectations regarding our needs for and ability to raise additional capital;
•our ability to manage our expenses effectively and raise the funds needed to continue our business;
•our belief that there are unmet needs for the management of chronic pain and in the diagnosis and treatment of diabetic neuropathy and neuropathy;
•our expectations surrounding Quell and DPNCheck;
•our expected timing and our plans to develop and commercialize our products;
•our ability to meet our proposed timelines for the commercial availability of our products; the success and timing of our studies;
•our ability to obtain and maintain regulatory approval of our existing products and any future products we may develop;
•regulatory and legislative developments in the United States and foreign countries;
•the performance of our third-party manufacturers;
•our ability to obtain and maintain intellectual property protection for our products;
•the successful development of our sales and marketing capabilities;
•the size and growth of the potential markets for our products and our ability to serve those markets;
•the rate and degree of market acceptance of any future products;
•our reliance on key scientific management or personnel; and
•the payment and reimbursement methods used by private or governmental third-party payers; and other factors discussed elsewhere ingovernment third party payers.
You should refer to the section titled “Risk Factors” of this prospectus or any document incorporated by reference herein or therein. The forward-looking statements containedand in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involveother filings with the SEC for a numberdiscussion of risks, uncertainties (some of which are beyond our control) or other assumptionsimportant factors that may cause our actual results or performance to bediffer materially different from those expressed or implied by theseour forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section titled “Risk Factors.” Should one or moreAs a result of these risksfactors, we cannot assure that the forward-looking statements in this prospectus or uncertainties materialize, or should anythe documents we have filed with the SEC that are incorporated by reference will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of our assumptions prove incorrect, actual results may vary from those projectedthe significant uncertainties in these forward-looking statements.statements, these statements should not be regarded as representations or warranties by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. “Risk Factors”by law.
In addition, statements that “we believe” and “ Prospectus Summary,” as well as other sections in this prospectus or incorporated by reference into this prospectus, discuss some ofsimilar statements reflect our beliefs and opinions on the factors that could contribute to these differences.
The forward-looking statements made in this prospectus relate only to events as of the date on which therelevant subject. These statements are made. We undertake no obligationbased upon information available to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.
This prospectus also contains market data related to our business and industry. These market data include projections that are based on a number of assumptions. While we believe these assumptions to be reasonable and soundus as of the date of this prospectus, ifand while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these assumptions turn outstatements as predictions of future events.
You should read this prospectus, the documents that we have incorporated by reference herein and the documents we have filed as exhibits to the registration statement, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
USE OF PROCEEDS
We intend to use any net proceeds from the sale of the securities offered hereunder for general corporate purposes unless otherwise indicated in the applicable prospectus supplement. General corporate purposes may include the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures. We have not determined the amount of net proceeds to be incorrect, actual resultsused specifically for such purposes. As a result, our management will retain broad discretion over the allocation of the net proceeds. Pending application of the net proceeds as described above, we may initially invest the net proceeds in short-term, investment-grade, interest-bearing securities or apply them to the reduction of short-term indebtedness.
PLAN OF DISTRIBUTION
We may offer securities under this prospectus from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods. We may sell securities:
•through underwriters;
•through dealers;
•through agents;
•directly to purchasers; or
•through a combination of any of these methods of sale.
We may directly solicit offers to purchase securities, or agents may be designated to solicit such offers. We will, in the prospectus supplement relating to such offering, name any agent that could be viewed as an underwriter under the Securities Act of 1933, as amended, or the Securities Act, and describe any commissions that we must pay. Any such agent will be acting on a best efforts basis for the period of its appointment or, if indicated in the applicable prospectus supplement, on a firm commitment basis. Agents, dealers and underwriters may be customers of, engage in transactions with, or perform services for us in the ordinary course of business.
The distribution of the securities may be effected from time to time in one or more transactions:
•at a fixed price, or prices, which may be changed from time to time;
•at market prices prevailing at the time of sale;
•at prices related to such prevailing market prices; or
•at negotiated prices.
Each prospectus supplement will describe the method of distribution of the securities and any applicable restrictions.
The prospectus supplement with respect to the securities of a particular series will describe the terms of the offering of the securities, including the following:
•the name of the agent or any underwriters;
•the public offering or purchase price;
•any discounts and commissions to be allowed or paid to the agent or underwriters;
•all other items constituting underwriting compensation;
•any discounts and commissions to be allowed or paid to dealers; and
•any exchanges on which the securities will be listed.
If any underwriters or agents are utilized in the sale of the securities in respect of which this prospectus is delivered, we will enter into an underwriting agreement or other agreement with them at the time of sale to them, and we will set forth in the prospectus supplement relating to such offering the names of the underwriters or agents and the terms of the related agreement with them.
If a dealer is utilized in the sale of the securities in respect of which the prospectus is delivered, we will sell such securities to the dealer, as principal. The dealer may then resell such securities to the public at varying prices to be determined by such dealer at the time of resale.
Remarketing firms, agents, underwriters and dealers may be entitled under agreements which they may enter into with us to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for us in the ordinary course of business.
If so indicated in the applicable prospectus supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase securities from us pursuant to delayed delivery contracts providing for
payment and delivery on the date stated in the prospectus supplement. Each contract will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts, when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts will not be subject to any conditions except that:
•the purchase by an institution of the securities covered under that contract shall not at the time of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and
•if the securities are also being sold to underwriters acting as principals for their own account, the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons acting as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.
Certain of the underwriters and their associates and affiliates may be customers of, have borrowing relationships with, engage in other transactions with, and/or perform services, including investment banking services, for us or our affiliates in the ordinary course of business.
In order to facilitate the offering of the securities, any underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of the securities or any other securities the prices of which may be used to determine payments on such securities. Specifically, any underwriters may overallot in connection with the offering, creating a short position for their own accounts. In addition, to cover overallotments or to stabilize the price of the securities or of any such other securities, the underwriters may bid for, and purchase, the securities or any such other securities in the open market. Finally, in any offering of the securities through a syndicate of underwriters, the underwriting syndicate may reclaim selling concessions allowed to an underwriter or a dealer for distributing the securities in the offering if the syndicate repurchases previously distributed securities in transactions to cover syndicate short positions, in stabilization transactions or otherwise. Any of these activities may stabilize or maintain the market price of the securities above independent market levels. Any such underwriters are not required to engage in these activities and may end any of these activities at any time.
The securities may be new issues of securities and may have no established trading market. The securities may or may not be listed on a national securities exchange. We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
DESCRIPTION OF SECURITIES TO BE OFFERED
The descriptions of the securities contained in this prospectus, together with the applicable prospectus supplements, summarize the material terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus supplement relating to any securities the particular terms of the securities offered by that prospectus supplement. If we so indicate in the applicable prospectus supplement, the terms of the securities may differ from the projections basedterms we have summarized below. We will also include in the prospectus supplement information, where applicable, about material U.S. federal income tax considerations relating to the securities, and the securities exchange, if any, on these assumptions. Aswhich the securities will be listed.
We may sell from time to time, in one or more primary offerings, our common stock, preferred stock, warrants, or rights, or any combination of the foregoing.
In this prospectus, we refer to the common stock, preferred stock, warrants, or rights, or any combination of the foregoing securities to be sold by us in a result, our marketsprimary offering collectively as “securities.” The total dollar amount of all securities that we may issue under this prospectus will not exceed $50,000,000.
This prospectus may not growbe used to consummate a sale of securities unless it is accompanied by a prospectus supplement.
DESCRIPTION OF CAPITAL STOCK
The following description of our securities is intended as a summary only and is qualified in its entirety by reference to our amended and restated certificate of incorporation and amended and restated bylaws, which are filed as exhibits to the registration statement of which the prospectus forms a part, and to the applicable provisions of the Delaware General Corporation Law. We refer in this section to our amended and restated certificate of incorporation as our certificate of incorporation, and we refer to our amended and restated bylaws as our bylaws.
Authorized Capitalization
Our authorized capital stock consists of 25,000,000 shares of common stock, $0.0001 par value per share, and 5,000,000 shares of preferred stock, par value $0.001 per share, in one or more series. As of October 21, 2021, we had outstanding 6,675,397 shares of our common stock, 200 shares of our Series B convertible preferred stock, and no shares of our Series A-1, A-2, A-3, A-4, C, D, E or F convertible preferred stock. At that date, we also had an aggregate of 504,045 shares of common stock reserved for issuance upon exercise of outstanding stock options granted under our stock incentive plans.
Transfer Agent and Registrar. The transfer agent for our common stock and outstanding shares of preferred stock is American Stock Transfer & Trust Company.
Common Stock
The holders of our common stock are generally entitled to one vote for each share held on all matters submitted to a vote of the stockholders and do not have any cumulative voting rights. Except as may be required by law and in connection with some significant actions, such as mergers, consolidations, or amendments to our certificate of incorporation that affect the rights of stockholders, holders of our common stock vote together as a single class. There is no cumulative voting in the election of our directors, which means that, subject to any rights to elect directors that are granted to the holders of any class or series of preferred stock, a plurality of the votes cast at a meeting of stockholders at which a quorum is present is sufficient to elect a director. Holders of our common stock are entitled to receive proportionally any dividends declared by our Board of Directors, subject to any preferential dividend rights of outstanding preferred stock.
Subject to the rates projectedpreferential rights of any other class or series of stock, all shares of our common stock have equal dividend, distribution, liquidation and other rights, and have no preference, appraisal or exchange rights, except for any appraisal rights provided by these data,Delaware law. Furthermore, holders of our common stock have no conversion, sinking fund or redemption rights, or preemptive rights to subscribe for any of our securities. Our certificate of incorporation and bylaws do not restrict the ability of a holder of our common stock to transfer his or her shares of our common stock.
In the event of our liquidation or dissolution, holders of our common stock are entitled to share ratably in all assets remaining after payment of all debts and other liabilities, subject to the prior rights of any outstanding preferred stock. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The common stock, when issued, will be duly authorized, fully paid and nonassessable.
Preferred Stock
Pursuant to our certificate of incorporation, we are authorized to issue “blank check” preferred stock, which may be issued from time to time in one or more series upon authorization by our Board of Directors. Our Board of Directors, without further approval of the stockholders, is authorized to fix the designations, powers, including voting powers, preferences and the relative, participating, optional or other special rights of the shares of each series and any qualifications, limitations and restrictions thereof. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, among other things, adversely affect the voting power or other rights of the holders of our common stock and, under certain circumstances, make it more difficult for a third party to gain control of us, discourage bids for our common stock at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition andpremium or otherwise adversely affect the market price of ourthe common stock.
SELECTED FINANCIAL DATA
The preferred stock will have the terms described below unless otherwise provided in the prospectus supplement relating to a particular series of the preferred stock. You should read the following selected financial dataprospectus supplement relating to the particular series of the preferred stock being offered for the specific terms of that series, including:
•the designation and stated value per share of the preferred stock and the number of shares offered;
•the amount of liquidation preference per share, if any;
•the price at which the preferred stock will be issued;
•the dividend rate, or method of calculation of the dividend rate, if any, the dates on which dividends will be payable, whether dividends will be cumulative or noncumulative and, if cumulative, the dates from which dividends will commence to accumulate;
•any redemption or sinking fund provisions;
•if other than the currency of the United States, the currency or currencies, including composite currencies, in which the preferred stock is denominated and/or in which payments will or may be payable;
•any conversion provisions; and
•any other rights, preferences, privileges, limitations and restrictions on the preferred stock.
The preferred stock will, when issued, be duly authorized, fully paid and nonassessable. Unless otherwise specified in the prospectus supplement, each series of the preferred stock will rank equally as to dividends and liquidation rights in all respects with each other series of preferred stock. The rights of holders of shares of each series of preferred stock will be subordinate to those of our general creditors.
Rank. Unless otherwise specified in the prospectus supplement, the preferred stock will, with respect to dividend rights and rights upon our liquidation, dissolution or winding up our affairs, rank:
•senior to all classes or series of our common stock and to all equity securities ranking junior to such preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up our affairs;
•on a parity with all equity securities issued by us, the terms of which specifically provide that such equity securities rank on a parity with the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs; and
•junior to all equity securities issued by us, the terms of which specifically provide that such equity securities rank senior to the preferred stock with respect to dividend rights or rights upon our liquidation, dissolution or winding up of our affairs.
The term “equity securities” does not include convertible debt securities.
Dividends. Holders of the preferred stock of each series will be entitled to receive, when, as and if declared by our board of directors, cash dividends at such rates and on such dates described in the prospectus supplement. Different series of preferred stock may be entitled to dividends at different rates or based on different methods of calculation. The dividend rate may be fixed or variable or both. Dividends will be payable to the holders of record as they appear on our stock books on record dates fixed by our board of directors, as specified in the applicable prospectus supplement.
Dividends on any series of the preferred stock may be cumulative or noncumulative, as described in the applicable prospectus supplement. If our board of directors does not declare a dividend payable on a dividend payment date on any series of noncumulative preferred stock, then the holders of that noncumulative preferred stock will have no right to receive a dividend for that dividend payment date, and we will have no obligation to pay the dividend accrued for that period, whether or not dividends on that series are declared payable on any future dividend payment dates. Dividends on any series of cumulative preferred stock will accrue from the date we initially issue shares of such series or such other date specified in the applicable prospectus supplement.
No full dividends may be declared or paid or funds set apart for the payment of any dividends on any parity securities unless dividends have been paid or set apart for payment on the preferred stock. If full dividends are not paid, the preferred stock will share dividends pro rata with the parity securities.
No dividends may be declared or paid or funds set apart for the payment of dividends on any junior securities unless full cumulative dividends for all dividend periods terminating on or prior to the date of the declaration or payment will have been paid or declared and a sum sufficient for the payment set apart for payment on the preferred stock.
Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of our affairs, then, before we make any distribution or payment to the holders of any common stock or any other class or series of our capital stock ranking junior to the preferred stock in the distribution of assets upon any liquidation, dissolution or winding up of our affairs, the holders of each series of preferred stock shall be entitled to receive out of assets legally available for distribution to stockholders, liquidating distributions in the amount of the liquidation preference per share set forth in the applicable prospectus supplement, plus any accrued and unpaid dividends thereon. Such dividends will not include any accumulation in respect of unpaid noncumulative dividends for prior dividend periods. Unless otherwise specified in the prospectus supplement, after payment of the full amount of their liquidating distributions, the holders of preferred stock will have no right or claim to any of our remaining assets. Upon any such voluntary or involuntary liquidation, dissolution or winding up, if our available assets are insufficient to pay the amount of the liquidating distributions on all outstanding preferred stock and the corresponding amounts payable on all other classes or series of our capital stock ranking on parity with the preferred stock and all other such classes or series of shares of capital stock ranking on parity with the preferred stock in the distribution of assets, then the holders of the preferred stock and all other such classes or series of capital stock will share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be entitled.
Upon any liquidation, dissolution or winding up, and if we have made liquidating distributions in full to all holders of preferred stock, we will distribute our remaining assets among the holders of any other classes or series of capital stock ranking junior to the preferred stock according to their respective rights and preferences and, in each case, according to their respective number of shares. For such purposes, our consolidation or merger with or into any other corporation, trust or entity, or the sale, lease or conveyance of all or substantially all of our property or business will not be deemed to constitute a liquidation, dissolution or winding up of our affairs.
Redemption. If so provided in the applicable prospectus supplement, the preferred stock will be subject to mandatory redemption or redemption at our option, as a whole or in part, in each case upon the terms, at the times and at the redemption prices set forth in such prospectus supplement.
The prospectus supplement relating to a series of preferred stock that is subject to mandatory redemption will specify the number of shares of preferred stock that shall be redeemed by us in each year commencing after a date to be specified, at a redemption price per share to be specified, together with an amount equal to all accrued and unpaid dividends thereon to the date of redemption. Unless the shares have a cumulative dividend, such accrued dividends will not include any accumulation in respect of unpaid dividends for prior dividend periods. We may pay the redemption price in cash or other property, as specified in the applicable prospectus supplement. If the redemption price for preferred stock of any series is payable only from the net proceeds of the issuance of shares of our financial statementscapital stock, the terms of such preferred stock may provide that, if no such shares of our capital stock shall have been issued or to the extent the net proceeds from any issuance are insufficient to pay in full the aggregate redemption price then due, such preferred stock shall automatically and mandatorily be converted into the applicable shares of our capital stock pursuant to conversion provisions specified in the applicable prospectus supplement.
Notwithstanding the foregoing, we will not redeem any preferred stock of a series unless:
•if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full cumulative dividends on the preferred stock for the past and current dividend period; or
•if such series of preferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full dividends for the current dividend period.
In addition, we will not acquire any preferred stock of a series unless:
•if that series of preferred stock has a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full cumulative dividends on all outstanding shares of such series of preferred stock for all past dividend periods and the related notes contained in Item 6then current dividend period; or
•if that series of Part IIpreferred stock does not have a cumulative dividend, we have declared and paid or contemporaneously declare and pay or set aside funds to pay full dividends on the preferred stock of such series for the then current dividend period.
However, at any time we may purchase or acquire preferred stock of that series (1) pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding preferred stock of such series or (2) by conversion into or exchange for shares of our Annual Reportcapital stock ranking junior to the preferred stock of such series as to dividends and upon liquidation.
If fewer than all of the outstanding shares of preferred stock of any series are to be redeemed, we will determine the number of shares that may be redeemed pro rata from the holders of record of such shares in proportion to the number of such shares held or for which redemption is requested by such holder or by any other equitable manner that we determine. Such determination will reflect adjustments to avoid redemption of fractional shares.
Unless otherwise specified in the prospectus supplement, we will mail notice of redemption at least 30 days but not more than 60 days before the redemption date to each holder of record of preferred stock to be redeemed at the address shown on Form 10-Kour stock transfer books. Each notice shall state:
•the redemption date;
•the number of shares and series of the preferred stock to be redeemed;
•the redemption price;
•the place or places where certificates for such preferred stock are to be surrendered for payment of the redemption price;
•that dividends on the shares to be redeemed will cease to accrue on such redemption date;
•the date upon which the holder’s conversion rights, if any, as to such shares shall terminate; and
•the specific number of shares to be redeemed from each such holder if fewer than all the shares of any series are to be redeemed.
If notice of redemption has been given and we have set aside the funds necessary for such redemption in trust for the fiscal year ended December 31, 2016, which are incorporatedbenefit of the holders of any shares so called for redemption, then from and after the redemption date, dividends will cease to accrue on such shares, and all rights of the holders of such shares will terminate, except the right to receive the redemption price.
Voting Rights. Holders of preferred stock will not have any voting rights, except as described in the next paragraph, as otherwise from time to time required by reference into thislaw or as indicated in the applicable prospectus except that share and per share informationsupplement.
Unless otherwise provided for any series of preferred stock, so long as any preferred stock of a series remains outstanding, we will not, without the periods ended December 31, 2016, 2015, 2014, 2013 and 2012 have been revisedaffirmative vote or consent of the holders of at least two-thirds of the preferred stock of such series outstanding at the time, given in person or by proxy, either in writing or at a meeting with each of such series voting separately as a class:
•authorize, or create, or increase the authorized or issued amount of, any class or series of shares of capital stock ranking senior to reflectsuch series of preferred stock with respect to payment of dividends or the 1-for-8 reverse stock splitdistribution of assets upon liquidation, dissolution or winding up, or reclassify any of our issuedauthorized shares of capital stock into such shares, or create, authorize or issue any obligation or security convertible into or evidencing the right to purchase any such shares; or
•amend, alter or repeal the provisions of our restated certificate or the amendment to our certificate of incorporation designating the terms for such series of preferred stock, whether by merger, consolidation or otherwise, so as to materially and adversely affect any right, preference, privilege or voting power of such series of preferred stock or the holders thereof.
Notwithstanding the preceding bullet point, if the preferred stock remains outstanding with the terms thereof materially unchanged, the occurrence of any of the events described above shall not be deemed to materially and adversely affect the rights, preferences, privileges or voting power of holders of preferred stock, even if upon the occurrence of such an event we may not be the surviving entity. In addition, any increase in the amount of (1) authorized preferred stock or the creation or issuance of any other series of preferred stock, or (2) authorized shares of such series or any other series of preferred stock, in each case ranking on parity with or junior to the preferred stock of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required will be effected, we have redeemed or called for redemption all outstanding shares of such series of preferred stock and, if called for redemption, have deposited sufficient funds in trust to effect such redemption.
Conversion Rights. The terms and conditions, if any, upon which any series of preferred stock is convertible into common stock will be set forth in the applicable prospectus supplement relating thereto. Such terms will include the number of shares of common stock effectiveinto which the shares of preferred stock are convertible, the conversion price, rate or manner of calculation thereof, the conversion period, provisions as to whether conversion will be at our option or at the closeoption of business on May 11, 2017.the holders of the preferred stock, the events requiring an adjustment of the conversion price and provisions affecting conversion in the event of the redemption.
Transfer Agent and Registrar. The selected data in this section is not intended to replace the consolidated financial statements included in our Annual Report on Form 10-Ktransfer agent and registrar for the year ended December 31, 2016, except that share and per share informationpreferred stock will be set forth in the applicable prospectus supplement.
Series B Convertible Preferred Stock Outstanding
As of October 21, 2021, we had 200 shares of our Series B convertible preferred stock with a stated value of $100 outstanding. The Series B convertible preferred stock is convertible at the option of the holder into the number of shares of common stock determined by dividing the stated value by the adjusted conversion price of $323.27, which is subject to adjustment as provided in the Certificate of Designation for the periods ended December 31, 2016, 2015, 2014, 2013Series B Preferred Stock, subject to a 9.99% ownership limitation. The Series B convertible preferred stock has no dividend rights, liquidation preference or other preferences over common stock and 2012 have been revised to reflecthas no voting rights except as provided in the 1-for-8 reverse stock split.
We have derivedCertificate of Designation, as filed with the statementsSecretary of operations data for eachState of the five years ended December 31, 2016, 2015, 2014, 2013State of Delaware, or as otherwise required by law. You should refer to the certificate of designation of preferences, rights and 2012 fromlimitations of Series B convertible preferred stock, which is included as exhibit to the audited financial statements contained in Item 6 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2016.
The historical financial information set forth below may not be indicative of our future performance and should be read together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our historical financial statements and notes to those statements included in Item 7 of Part II and Item 6 of Part II, respectively, of our Annual Report on Form 10-K for the year ended December 31, 2016, and any amendment or update thereto reflected in subsequent filings with the SEC, and all other annual, quarterly and other reports that we file with the SEC after the date of the initial registration statement of which this prospectus formsis a partpart.
Shareholder Rights Plan
On March 7, 2007, we entered into a Rights Agreement with American Stock Transfer & Trust Company, as rights agent, and that also are incorporated herein by reference.
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| | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, |
| | 2016 | | 2015 | | 2014 | | 2013 | | 2012 |
| | (in thousands, except per share data) |
| Revenues | $ | 12,028 |
| | $ | 7,300 |
| | $ | 5,513 |
| | $ | 5,279 |
| | $ | 7,575 |
|
| Cost of revenues | 7,113 |
| | 3,951 |
| | 2,569 |
| | 2,194 |
| | 3,589 |
|
| Gross Profit | 4,915 |
| | 3,349 |
| | 2,944 |
| | 3,085 |
| | 3,986 |
|
| Net loss | $ | (14,913 | ) | | $ | (9,187 | ) | | $ | (7,766 | ) | | $ | (8,019 | ) | | $ | (10,008 | ) |
| Deemed dividends | (19,846 | ) | | (11,883 | ) | | (2,956 | ) | | (767 | ) | | — |
|
| Net loss applicable to common stockholders | $ | (34,759 | ) | | $ | (21,070 | ) | | $ | (10,722 | ) | | $ | (8,786 | ) | | $ | (10,008 | ) |
| Net loss per common share, basic and diluted | $ | (58.21 | ) | | $ | (61.99 | ) | | $ | (49.2 | ) | | $ | (98.23 | ) | | $ | (166.9 | ) |
| Weighted average number of common shares outstanding, basic and diluted | 597,130 |
| | 339,911 |
| | 217,937 |
| | 89,441 |
| | 59,960 |
|
USE OF PROCEEDS
We will not receive anyapproved the declaration of the proceeds from the salea dividend distribution of securities by the selling security holders pursuant to this prospectus.
SELLING SECURITY HOLDERS
The shares of common stock being offered by the selling security holders are those issuable to the selling security holders upon conversion of the Series F Preferred Stock. For additional information regarding the issuance of these securities, see “Prospectus Summary —Offering of Preferred Stock” above. We are registering the shares of common stock in order to permit the selling security holders to offer the shares for resale from time to time. Except for the ownership of the Series F Preferred Stock and the transactions contemplated pursuant to the Purchase Agreement and the Engagement Letter, and except as otherwise disclosed below under “Relationships with Selling Security Holders,” the selling security holders have not had any material relationship with us within the past three years.
The table below lists the selling security holders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held byone preferred share purchase right on each of the selling security holders. The second column lists the percentage of shares of common stock beneficially owned by the selling security holders, based on their respective ownership of shares of common stock, as of September 30, 2017, assuming conversion of the Preferred Stock and exercise of the Warrants held by each such selling security holder on that date but taking account of any limitations on exercise set forth therein. The percentage of shares beneficially owned prior to the offering is based on 2,145,519 sharesoutstanding share of our common stock outstandingto shareholders of record as of September 30, 2017, which does not include, unless specifically held bythe close of business on June 8, 2007, and subsequently we entered into amendments to the Rights Agreement. Each right entitles the registered holder to purchase from us one ten-thousandth of a selling security holder, (i) 2,212,605 shares of common stock issuable upon conversion, at the option of the holder, of Series F Preferred Stock outstanding as of September 30, 2017, (ii) 2,661,597 shares of common stock issuable upon conversion, at the option of the holder, of Series E Preferred Stock outstanding as of September 30, 2017; (iii) 5,343,317 shares of common stock issuable upon the conversion, at the option of the holder, of Series D convertible preferred stock outstanding as of September 30, 2017; (iv) 1,547 shares of common stock issuable upon the conversion, at the option of the holder, of Series B convertible preferred stock outstanding as of September 30, 2017; (v) 660,702 shares of common stock issuable upon the exercise of warrants outstanding as of September 30, 2017, at a weighted average exercise price of $32.44 per share; (vi) 101,724 shares of common stock issuable upon the exercise of options outstanding as of September 30, 2017, at a weighted average exercise price of $33.95 per share; (vii) 603,353 shares of common stock available for future issuance under our 2004 Stock Option and Incentive Plan as of September 30, 2017; (viii) 6,250 shares of common stock available for future issuance under our 2009 Non-qualified Inducement Stock Plan as of September 30, 2017; and (ix) 7,062 shares of common stock available for future issuance under our 2010 Employee Stock Purchase Plan as of September 30, 2017. The number of shares in the column “Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus” represents all of the shares that the selling security holder may offer under this prospectus and does not take into account any limitations on conversion of the preferred stock.
This prospectus covers the resale of 2,661,597shares of common stock, all of which are issuable upon the conversion of shares of Series F Preferred Stock.
The Series F Preferred Stock contain limitations that prevent the holder of any Series F Preferred Stock from acquiring shares upon conversion of the Series F Preferred Stock, that would result in the number of shares beneficially owned by it and its affiliates exceeding 4.99% of the total number of sharesshare of our common stock then issued and outstanding, provided, however, that upon prior notice to us, the holder may increase this beneficial ownership limitation to up to 9.99%. The number of shares in the second column reflects these limitations. The selling security holders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
|
| | | | | | | | | | | | | | | |
Name of Selling
Security Holder | | Number of
Shares of
Common Stock
Beneficially
Owned
Prior to Offering | | | % of Shares
of Common
Stock
Beneficially
Owned
Prior
to Offering | | | Maximum Number
of Shares of
Common Stock
to be Sold
Pursuant to this
Prospectus | | | Number of
Shares of
Common Stock
Owned
After Offering | | | % of Shares
of Common
Stock Owned
After
Offering | |
| Sabby Healthcare Master Fund, Ltd. (1) | | 8,331,541 | (2) | | 9.99 | (3) | | 1,849,810 | (4) | | 6,481,731 | (6) | | 9.99 | (6) |
| Sabby Volatility Warrant Master Fund, Ltd. (1) | | 3,276,084 | (2) | | 9.99 | (3) | | 811,787 | (5) | | 2,464,297 | (6) | | 9.99 | (6) |
| |
(1) | This shareholder has indicated that Hal Mintz has voting and investment power over the shares held by it. This shareholder has indicated that Sabby Management, LLC serves as its investment manager, that Hal Mintz is the manager of Sabby Management, LLC, and that each of Sabby Management, LLC and Hal Mintz disclaim beneficial ownership over these shares except to the extent of any pecuniary interest therein. |
| |
(2) | The number of shares shown in this column reflects the aggregate number of shares of common stock beneficially owned (through the ownership of Series F Preferred Stock that is convertible into common stock) by Sabby Healthcare Master Fund, Ltd., Sabby Volatility Master Fund, Ltd., prior to the offering. All shares of Series F Preferred Stock exercisable for common stock are subject to beneficial ownership limitations and related warrant exercise restrictions so that the reporting persons cannot own more than 4.99%. Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Master Fund, Ltd. also own securities that are subject to beneficial ownership limitations so that the reporting persons cannot own more than 9.99%. |
| |
(3) | Represents the aggregate combined percentage of shares beneficially owned by Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Warrant Master Fund, Ltd. The exercise of certain warrants held by these entities are subject to a 9.99% ownership blocker. |
| |
(4) | This Registration Statement registers the resale by Sabby Healthcare Master Fund, Ltd. of 1,849,810 shares of common stock issuable upon the conversion of shares of Series F Preferred Stock as issued to Sabby Healthcare Master Fund, Ltd. in the offering, without regard for any limitations on conversion set forth in the Series F Preferred Stock. |
| |
(5) | This Registration Statement registers the resale by Sabby Volatility Warrant Master Fund, Ltd. of 811,787 shares of common stock issuable upon the conversion of Series F Preferred Stock as issued to Sabby Volatility Warrant Master Fund, Ltd. in the offering, without regard for any limitations on conversion set forth in the Series F Preferred Stock. |
| |
(6) | The number of shares shown in this column reflect the aggregate number of shares of common stock beneficially owned (through the ownership of warrants to purchase common stock) by Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Master Fund, Ltd. after the offering, assuming that all shares registered for resale by this Registration Statement are sold in the offering. The aggregate beneficial ownership of Sabby Healthcare Master Fund, Ltd. and Sabby Volatility Master Fund, Ltd. is subject to a 9.99% ownership blocker. |
Relationships with Selling Security Holders
Except as otherwise set forth below, we have not engaged in any transactions with the selling security holders since August 1, 2014.
July 2017 Private Placement of Preferred Stock; Exchange of Certain Warrants for Preferred Stock; Resetting of Exercise Price of Certain Preferred Stock
On July 12, 2017, we completed the initial closing of an offering of our securities resulting in $3.5 million in proceeds in connection with the issuance to Sabby Management, LLC and its affiliates, or Sabby, of 3,500 shares of Series FA Junior Convertible Preferred Stock at a price of $1,000 per share. Pursuant$75.00, subject to adjustment.
Initially, the termsrights are not exercisable and are attached to and trade with all shares of common stock outstanding as of, and issued subsequent to March 8, 2007. The rights will separate from the common stock and will become exercisable upon the earlier of (i) the close of business on the tenth calendar day following the first public announcement that a person or group of affiliated or associated persons, or an Acquiring Person, has acquired beneficial ownership of 15% or more of the Purchase Agreement with Sabby, we sought and obtained stockholder approval to allow us to issue an additional 3,500outstanding shares of Series F Preferred Stock to Sabby. NASDAQ Marketplace Rules require us to obtain stockholder approval prior tocommon stock, other than as a result of repurchases of stock by the issuanceCompany or potential issuancecertain inadvertent actions by usa shareholder or (ii) the close of business on the tenth business day (or such later day as our Board of Directors may determine) following the commencement of a tender offer or exchange offer that could result upon its consummation in a person or group becoming the beneficial owner of 15% or more of the outstanding shares of our common stock (or securities convertible into or exercisable for shares of our common stock)stock.
The rights may be redeemed in whole, but not in part, at a price less than the greater of book or market value if such issuance would represent 20% or more of our$0.01 per right (payable in cash, common stock or other consideration deemed appropriate by our outstanding voting power priorboard) by the board only until the earlier of (i) the time at which any person becomes an Acquiring Person or (ii) the expiration date of the Rights Agreement. Immediately upon the action of the board ordering redemption of the rights, the rights will terminate and thereafter the only right of the holders of rights will be to receive the redemption price.
The rights will expire on March 7, 2023, unless previously redeemed or exchanged by the Company. The rights distribution was not taxable to stockholders.
The above summary of the Rights Agreement does not purport to be complete. You should refer to the issuance. The second closing ofRights Agreement, as amended, which is included as an exhibit to the issuance of Series F Preferred Stock will occur within five (5) business days after the Registration Statement covering the resale of the shares underlying the Series F Preferred Stock,registration statement of which this prospectus is a part, becomes effective. part.
Certain Effects of Authorized but Unissued Stock
We have shares of common stock and preferred stock available for future issuance without stockholder approval. We may issue these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital or facilitate corporate acquisitions or for payment as a dividend on our 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, if we issue preferred stock, the issuance could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation.
Delaware Law and Certificate of Incorporation and Bylaws Provisions
Board of Directors. Our certificate of incorporation provides that:
•our Board of Directors is divided into three classes, as nearly equal in number as possible, to serve staggered terms so that approximately one-third of our board will be elected each year;
•subject to the rights of the holders of any class or series of preferred stock then outstanding, our directors may be removed (i) only with cause and (ii) only by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all of the then outstanding shares then entitled to vote at an election of directors voting together as a single class, unless otherwise specified by law; and
•any vacancy on July 10, 2017, we entered intoour Board of Directors, however occurring, including a vacancy resulting from an exchange agreement (the “Exchange Agreement”) withenlargement of the Investor pursuantboard, may only be filled by vote of a majority of the directors then in office, even if less than a quorum, or by a sole remaining director, and not by the stockholders.
These provisions could discourage, delay or prevent a change in control of our company or an acquisition of our company at a price which many stockholders may find attractive. The existence of these provisions could limit the price that investors might be willing to which we agreed to issue an aggregate of 3,621pay in the future for shares of our Series F convertible preferred stockcommon stock. These provisions may also have the effect of discouraging a third party from initiating a proxy contest, making a tender offer or attempting to change the composition or policies of our Board of Directors.
Stockholder Action; Special Meeting of Stockholders. Our certificate of incorporation and bylaws also provide that:
•stockholder action may be taken only at a conversion priceduly called and convened annual or special meeting of $2.63 per sharestockholders and then only if properly brought before the meeting;
•stockholder action may not be taken by written action in lieu of a meeting;
•special meetings of stockholders may be called only by our Board of Directors pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; and
•in order for any matter to be considered “properly brought” before a meeting, a stockholder must comply with requirements regarding specified information and advance notice to us.
These provisions could delay, until the next stockholders’ meeting, actions which are favored by the holders of a majority of our outstanding voting securities. These provisions may also discourage another person or entity from making a tender offer for our common stock, because a person or entity, even if it acquired a majority of our outstanding voting securities, would be able to take action as a stockholder only at a duly called stockholders’ meeting, and not by written consent.
Provisions of Delaware Law Governing Business Combinations. We are subject to the “business combination” provisions of Section 203 of the Delaware General Corporation Law. In general, such provisions prohibit a publicly held Delaware corporation from engaging in any “business combination” transactions with any “interested stockholder” for a period of three years after the date on which the person became an “interested stockholder,” unless:
•prior to such date, the board of directors approved either the “business combination” or the transaction which resulted in the “interested stockholder” obtaining such status; or
•upon consummation of the transaction which 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 for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the “interested stockholder”) those shares owned by (a) persons who are directors and also officers and (b) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
•at or subsequent to such time 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.”
A “business combination” is defined to include mergers, asset sales and other transactions resulting in financial benefit to a stockholder. In general, an “interested stockholder” is a person who, together with affiliates and associates, owns 15% or more of a corporation’s voting stock or within three years did own 15% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts with respect to us and, accordingly, may discourage attempts to acquire us.
Indemnification. Our restated certificate provides that no director of our company shall be personally liable for any monetary damages for any breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the company or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware, or (iv) for any transaction from which the director derived an improper personal benefit. Our restated certificate also provides that if the General Corporation Law of the State of Delaware is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of our company shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of the State of Delaware, as so amended. The restated certificate further provides that no amendment to or repeal of these provisions shall apply to or have any effect on the liability or alleged liability of any director for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal. Our restated certificate further provides for the indemnification of our directors and officers to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, including circumstances in which indemnification is otherwise discretionary.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase 4,184,483preferred stock or common stock. We may offer warrants separately or together with one or more additional warrants, preferred stock, common stock, rights, or any combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue warrants as part of a unit, the accompanying prospectus supplement will specify whether those warrants may be separated from the other securities in the unit prior to the warrants’ expiration date. Below is a description of certain general terms and provisions of the warrants that we may offer. Further terms of the warrants will be described in the prospectus supplement.
The applicable prospectus supplement will describe the following terms of any warrants in respect of which this prospectus is being delivered:
•the specific designation and aggregate number of, and the price at which we will issue, the warrants;
•the currency or currency units in which the offering price, if any, and the exercise price are payable;
•the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
•whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of these forms;
•any applicable material U.S. federal income tax consequences;
•the identity of the warrant agent for the warrants and of any execution or paying agents, transfer agents, registrars or other agents;
•the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
•the designation and terms of the equity securities purchasable upon exercise of the warrants;
•if applicable, the designation and terms of the preferred stock, common stock, or rights, with which the warrants are issued and, the number of warrants issued with each security;
•if applicable, the date from and after which the warrants and the related preferred stock, common stock, or rights will be separately transferable;
•the number of shares of preferred stock or common stock purchasable upon exercise of a warrant and the price at which those shares may be purchased;
•if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
•information with respect to book-entry procedures, if any;
•the antidilution provisions of the warrants, if any;
•any redemption or call provisions; and
•any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
DESCRIPTION OF RIGHTS
We may issue rights to our stockholders to purchase shares of our common stock currently held by the Investor, which have been forfeited and retired. These warrants were determined by an independent valuation firm to have an aggregate fair value of $3,622,220. Following this exchange, we have 660,702 outstanding warrants to purchase ouror preferred stock. We may offer rights separately or together with one or more additional rights, preferred stock, common stock, ator warrants, or any combination of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be issued under a weighted average exercise price of $32.13 per share.
We also agreedseparate rights agreement to reset the exercise prices of 14,053 shares ofbe entered into between us and a bank or trust company, as rights agent. The rights agent will act solely as our outstanding Series D convertible preferred stock and 7,000 shares of our outstanding Series E convertible preferred stock held by Sabby to $2.63 per share, subject to receipt of shareholder approval, which we have sought and obtained at a special meeting of our shareholders.
We are using the proceeds from this offering for general working capital purposes. See “Prospectus Summary — Offering of Preferred Stock” for a complete description of the offering.
January 2017 Private Placement of Preferred Stock and Warrants; Resetting of Exercise Price of Outstanding Warrants
On January 5, 2017, we completed the initial closing of an offering of our securities resulting in approximately $4.0 million in proceedsagent in connection with the issuancecertificates relating to Sabbythe rights of (i) 4,000 sharesthe series of Series E Preferred Stock atcertificates and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms of the rights, rights agreement or rights certificates described in a priceprospectus supplement differ from any of $1,000 per share,the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to read the applicable rights agreement and (ii) Warrantsrights certificate for additional information before you decide whether to purchase 5,714,286 sharesany of our common stock. rights.
We also extendedwill provide in a prospectus supplement the terminationfollowing terms of the rights being issued:
•the date of warrantsdetermining the stockholders entitled to purchase 5,411,764the rights distribution;
•the aggregate number of shares of common stock held by Sabby from January 15, 2017 to June 28, 2022 and reset or preferred stock purchasable upon exercise of the rights;
•the exercise pricesprice;
•the aggregate number of warrants to purchase an aggregate of 11,685,732 shares of our common stock held by Sabby to $0.70 per sharerights issued;
•the date, if any, on and extended the termination dates of those warrants by an additional six months and one day. In connection with the initial closing we issued warrants to purchase 428,571 shares of our common stock to H.C. Wainwright & Co., LLC and certain related persons pursuant to the terms of an engagement letter with those parties.
2016 Private Placement of Preferred Stock and Warrants; Repurchase of Series C Convertible Preferred Stock
In June 2016, we completed an offering of securities resulting in approximately $21.3 million in proceeds in connection with the issuance to investors of (i) 21,300 shares of Series D Preferred Stock at a price of $1,000 per share, and (ii) warrants to purchase up to 11,800,554 shares of our common stock. We used $13.8 million of the proceeds from this offering to redeem all of our outstanding Series C Preferred Stock held by Sabby, and used the remainder for general working capital purposes.
2015 Private Placement of Preferred Stock and Warrants; Repurchase of Series B Convertible Preferred Stock
In December 2015, we completed an offering of securities resulting in approximately $13.8 million in proceeds in connection with the issuance to the selling security holders of (i) 13,800 shares of Series C Preferred Stock at a price of $1,000 per share, and (ii) warrants to purchase up to 10,823,528 shares of our common stock. We used $6.3 million of the proceeds from this offering to redeem our outstanding Series B convertible preferred stock, and used the remainder for general working capital purposes. In June 2016, we repurchased all outstanding shares of Series C Preferred Stock.
Public Offering of Preferred Stock and Warrants; Repurchase of Series A-4 Convertible Preferred Stock and Forfeiture of Warrants
In May 2015, we completed an underwritten public offering, or the 2015 Offering, of (i) 147,000 shares of Series B convertible preferred stock at a price of $100 per share, which is the stated value, and (ii) five year warrants to purchase up to 3,638,250 shares of common stock with an exercise price of $5.00 per share. As part of the 2015 Offering, Sabby agreed to purchase 122,000 units at the public offering price of $100 per unit. Simultaneous with the closing of the 2015 Offering, we repurchased from Sabby the then outstanding 3,206.357 shares of the Series A-4 convertible preferred stock for an aggregate purchase price of $3.2 million, which we refer to as the Repurchase. Additionally, as part of the Repurchase, Sabby agreed to forfeit warrants to purchase 392,936 shares of our common stock that were issued in connection with the original issuance of the Series A-4 convertible preferred stock, which warrants had an exercise price of $8.16. In December 2015, we repurchased 63,000 shares of Series B convertible preferred stock. Following this repurchase, as of December 31, 2015, there were 7,146 shares of Series B convertible preferred stock outstanding.
PLAN OF DISTRIBUTION
Each Selling Stockholder of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on the Nasdaq Stock Market or any other stock exchange, market or trading facility onafter which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
an exchange distribution in accordance with the rules of the applicable exchange;
privately negotiated transactions;
settlement of short sales;
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
a combination of any such methods of sale; or
any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell securities under Rule 144 under the Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.
In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
We are required to pay certain fees and expenses incurred by us incident to the registration of the securities. We have agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, theyrights will be subject to the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus. The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale of the resale securities by the Selling Stockholders.separately transferable;
We agreed to keep this prospectus effective until the earlier of (i) •the date on which the securitiesright to exercise the rights will commence, and the date on which the right will expire;
•the method by which holders of rights will be entitled to exercise;
•the conditions to the completion of the offering, if any;
•the withdrawal, termination and cancellation rights, if any;
•any applicable federal income tax considerations; and
•any other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise of the rights.
Each right will entitle the holder of rights to purchase for cash the principal amount of shares of common stock or preferred stock at the exercise price provided in the applicable prospectus supplement. Rights may be resold byexercised at any time up to the Selling Stockholders without registrationclose of business on the expiration date for the rights provided in the applicable prospectus supplement.
Holders may exercise rights as described in the applicable prospectus supplement. Upon receipt of payment and without regard to any volume or manner-of-sale limitations by reasonthe rights certificate properly completed and duly executed at the corporate trust office of Rule 144, without the requirement for us to be in compliance with the current public information under Rule 144 under the Securities Actrights agent or any other ruleoffice indicated in the prospectus supplement, we will, as soon as practicable, forward the shares of similar effectcommon stock or (ii)preferred stock, as applicable, purchasable upon exercise of the rights. If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities have been solddirectly to persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for salestandby arrangements, as described in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.prospectus supplement.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
LEGAL MATTERS
The validity of the securities we are offering will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts.Massachusetts, will pass upon the validity of the issuance of the securities offered by this prospectus for us.
EXPERTS
The financial statements incorporated in this prospectus by reference to the Annual Report on Form 10-K for the year ended December 31, 20162020 have been so incorporated in reliance on the report (which contains an explanatory paragraph relating to the Company’s ability to continue as a going concern as described in Note 1 to the financial statements) of PricewaterhouseCoopersMoody, Famiglietti, and Andronico LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We are a public companysubject to the reporting requirements of the Exchange Act, and file annual, quarterly and current reports, proxy statements and other information with the SEC. You may readThe SEC maintains an internet website at www.sec.gov that contains periodic and copy any document we file atcurrent reports, proxy and information statements, and other information regarding registrants that are filed electronically with the SEC’s Public Reference Room at Station Place, 100 F Street, N.E., Washington, D.C. 20549.SEC. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the Public Reference Room. Our SEC filings are also available to the public at the SEC’s web site at http://www.sec.gov, and on our web site at http://www.neurometrix.com. The information contained on our web site is not included or incorporated by reference into this prospectus. In addition, our common stock is listed for trading on The NASDAQ Capital Market under the symbol “NURO.” You can read and copy reports and other information concerning us at the offices of the Financial Industry Reporting Authority located at 1735 K Street, N.W., Washington, D.C. 20006.
This prospectus is only part of a Registration Statementregistration statement on Form S-3 that we have filed with the SEC under the Securities Act of 1933, as amended, and therefore omits certain information contained in the Registration Statement.registration statement. We have also filed exhibits and schedules with the Registration Statementregistration statement that are excluded from this prospectus, and you should refer to the applicable exhibit or schedule for a complete description of any statement referring to any contract or other document. You may:
inspectmay obtain a copy of the Registration Statement,registration statement, including the exhibits and schedules, without chargefrom the SEC’s website.
We also maintain a website at http://www.neurometrix.com, through which you can access our SEC filings free of charge. The information set forth on our website is not part of this prospectus.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, and subsequent information that we file later with the SEC will automatically update and supersede this information. We filed a registration statement on Form S-3 under the Securities Act with the SEC with respect to the securities we may offer pursuant to this prospectus. This prospectus omits certain information contained in the registration statement, as permitted by the SEC. You should refer to the registration statement, including the exhibits, for further information about us and the securities we may offer pursuant to this prospectus. Statements in this prospectus regarding the provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement is qualified in all respects by that reference. Copies of all or any part of the registration statement, including the documents incorporated by reference or the exhibits, may be obtained from the SEC’s website at http://www.sec.gov. The documents we are incorporating by reference are:
•our Annual Report on Form 10-K for the year ended December 31, 2020 that we filed with the SEC on January 29, 2021; •the portions of our definitive Proxy Statement on Schedule 14A for our Annual Meeting of Stockholders held on May 11, 2021, filed with the SEC on March 16, 2021, that are considered “filed” and not “furnished” under the Exchange Act; •our Current Reports on Form 8-K filed on February 26, 2021, April 15, 2021, April 27, 2021, May 11, 2021, June 11, 2021, June 25, 2021, June 30, 2021, and August 13, 2021 (except for information contained therein which is furnished rather than filed);
•the description of our common stock contained in our Registration Statement on Form 8-A filed pursuant to Section 12(g) of the Exchange Act as filed with SEC on July 19, 2004, including any subsequent amendments or reports filed for the purpose of updating such description; •the description of our preferred share purchase rights contained in our Registration Statement on Form 8-A filed pursuant to Section 12(b) of the Exchange Act as filed with the SEC on March 8, 2007, including any subsequent amendments or reports filed for the purpose of updating such description; and •all reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the termination or completion of the offering of securities under this prospectus shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing such reports and other documents.
The SEC file number for each of the documents listed above is 001-33351.
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request, orally or in writing, a copy of any or all of the documents incorporated herein by reference. These documents will be provided to you at no cost, by contacting:
NeuroMetrix, Inc.
4B Gill Street
Woburn, Massachusetts 01801
(781) 890-9989
Attn: Investor Relations
You may also access these documents on our website, http://www.neurometrix.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
You should rely only on information contained in, or incorporated by reference into, this prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference in this prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation.
NEUROMETRIX, INC.
$50,000,000
Common Stock
Preferred Stock
Warrants
Rights
PROSPECTUS
, 2021
THE INFORMATION IN THIS 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 PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED OCTOBER 22, 2021
PROSPECTUS
NEUROMETRIX, INC.
Up to $25,000,000
Common Stock
This prospectus contains certain information relating to the offer and sale of shares of our common stock, par value $0.0001 per share, through Ladenburg Thalmann & Co. Inc., or Ladenburg, pursuant to the At Market Issuance Sales Agreement, or the Sales Agreement, dated October 22, 2021, that we entered into with Ladenburg. In accordance with the terms of the Sales Agreement, we may in the future offer and sell shares of our common stock having an aggregate offering price of up to $25,000,000 from time to time through Ladenburg, acting as sales agent.
Our common stock is listed on The Nasdaq Capital Market under the symbol “NURO.” On October 21, 2021, the last reported sale price of our common stock on The Nasdaq Capital Market was $8.35 per share.
Sales of shares of our common stock, if any, under this prospectus may be made in sales deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended, or the Securities Act. Ladenburg is not required to sell any specific number or dollar amount of securities but will act as sales agent on a best efforts basis and use commercially reasonable efforts consistent with its normal trading and sales practices, on mutually agreed terms between us and Ladenburg. There is no arrangement for funds to be received in any escrow, trust or similar arrangement.
Ladenburg will be entitled to compensation at a commission rate of 3.0% of the gross sales price per share of common stock sold under the Sales Agreement. See “Plan of Distribution” beginning on page S-15 for additional information regarding the compensation to be paid to Ladenburg. In connection with the sale of shares of our common stock on our behalf, Ladenburg will be deemed to be an “underwriter” within the meaning of the Securities Act and the compensation of Ladenburg will be deemed to be underwriting commissions or discounts. We have also agreed to provide indemnification and contribution to Ladenburg with respect to certain liabilities, including liabilities under the Securities Act or the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Investing in our common stock involves a high degree of risk. See the information contained under “Risk Factors” beginning on page S-7 of this prospectus and the documents incorporated by reference herein. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Ladenburg Thalmann
, 2021
TABLE OF CONTENTS
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| PAGE |
| PROSPECTUS | |
| |
| ABOUT THIS PROSPECTUS | |
| PROSPECTUS SUMMARY | |
| THE OFFERING | |
| RISK FACTORS | |
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | |
| USE OF PROCEEDS | |
| DIVIDEND POLICY | |
| DILUTION | |
| PLAN OF DISTRIBUTION | |
| LEGAL MATTERS | |
| EXPERTS | |
| WHERE YOU CAN FIND MORE INFORMATION | |
| INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE | |
ABOUT THIS PROSPECTUS
This prospectus is part of a shelf registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or the SEC under the Securities Act of 1933, as amended, or the Securities Act. Under the shelf registration process, we may offer shares of our common stock having an aggregate offering price of up to $25,000,000 from time to time under this prospectus at prices and on terms to be determined by market conditions at the Public Reference Room,time of the offering.
You should rely only on the information contained or incorporated by reference in this prospectus. We have not, and the sales agent has not, authorized anyone to provide you with information that is in addition to or different from that contained or incorporated by reference in this prospectus or contained in any permitted free writing prospectuses we have authorized for use in connection with this offering. We and the sales agent take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may provide.
The information contained in this prospectus, the accompanying base prospectus and the documents incorporated by reference herein is accurate only as of their respective dates, regardless of the time of delivery of any such document or the time of any sale of shares of our common stock. Our business, assets, financial condition, results of operations and prospects may have changed since those dates. It is important for you to read and consider all information contained or incorporated by reference in this prospectus in making your investment decision. You should read this prospectus and the accompanying base prospectus, as well as the documents incorporated by reference herein, the additional information described under the section titled “Where You Can Find More Information” and “Incorporation of Certain Documents by Reference” in this prospectus and the accompanying base prospectus and any free writing prospectus that we have authorized for use in connection with this offering, before investing in our common stock.
We further note that the representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference in this prospectus or the accompanying base prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreements, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.
We are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where such offers and sales are permitted. The distribution of this prospectus and the offering of shares of our common stock in certain jurisdictions may be restricted by law. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of shares of our common stock and the distribution of this prospectus outside the United States. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the common stock to which it relates, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction.
Unless otherwise indicated, information contained in or incorporated by reference into this prospectus, the accompanying base prospectus and the documents we incorporated herein and therein concerning our industry and the markets in which we operate, including market opportunity, market position and competitive landscape, is based on information from our management’s estimates, as well as from industry publications, surveys and studies conducted by third parties. Management estimates are derived from publicly available information, our knowledge of our industry, and assumptions based on such information and knowledge, which we believe to be reasonable. In addition, while we believe that information contained in the industry publications, surveys and studies has been obtained from reliable sources, the accuracy and completeness of such information is not guaranteed, and we have not independently verified any of the data contained in these third-party sources.
This prospectus and the accompanying base prospectus, including the documents incorporated by reference herein and therein, include statements that are based on various assumptions and estimates that are subject to numerous known and unknown risks and uncertainties. Some of these risks and uncertainties are described in the section entitled “Risk Factors” beginning on page S-7 of this prospectus and described in Part I, Item 1A (Risk Factors) of our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2020, or our Annual Report, as well as the other documents we file with the SEC. These and other important factors could cause our future results to be materially different from the results expected as a result of, or implied by, these assumptions and estimates. You should read the information contained in, or incorporated by
reference into, this prospectus completely and with the understanding that future results may be materially different from and worse than what we expect. See the information included under the heading “Special Note Regarding Forward-Looking Information.”
As used in this prospectus, unless the context indicates or otherwise requires, “our Company”, “the Company”, “NeuroMetrix”, “we”, “us”, and “our” refer to NeuroMetrix, Inc., a Delaware corporation.
We have registered trademarks or applications for trademark registration for “NEUROMETRIX”, “NC-STAT”, “OptiTherapy”, “ADVANCE”, “SENSUS”, “Quell”, stylized "Q", “DPNCheck” and “NC-stat DPNCHECK”. All other trademarks, trade names and service marks included in this prospectus are the property of their respective owners. Use or display by us of other parties’ trademarks, trade dress or products is not intended to and does not imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owner.
PROSPECTUS SUMMARY
The following is a summary of what we believe to be the most important aspects of our business and the offering of our securities under this prospectus. We urge you to read this entire prospectus, including the more detailed consolidated financial statements, notes to the consolidated financial statements and other information incorporated by reference from our other filings with the SEC. Investing in our securities involves risks. Therefore, carefully consider the risk factors set forth in this prospectus and in our most recent annual and quarterly filings with the SEC, as well as other information in this prospectus and the documents incorporated by reference herein, before purchasing our securities. Each of the risk factors could adversely affect our business, operating results and financial condition, as well as adversely affect the value of an investment in our securities.
About NeuroMetrix, Inc.
NeuroMetrix develops and commercializes health care products that utilize non-invasive neurostimulation. Our core expertise in biomedical engineering has been refined over two decades of designing, building and marketing medical devices that stimulate nerves and analyze nerve response for diagnostic and therapeutic purposes. We created the market for point-of-care nerve testing and were first to market with sophisticated wearable technology for symptomatic relief of chronic pain. Our business is fully integrated with in-house capabilities spanning research and development, manufacturing, regulatory affairs and compliance, sales and marketing, product fulfillment and customer support. We derive revenues from the sale of medical devices and after-market consumable products and accessories. Our products are sold in the United States and select overseas markets. They are cleared by the U.S. Food and Drug Administration (FDA) and regulators in foreign jurisdictions where appropriate. We have two principal product categories:
•Point-of-care neuropathy diagnostic tests
•Wearable neurostimulation devices
Peripheral neuropathies, also called polyneuropathies, are diseases of the peripheral nerves. They affect about 10% of adults in the United States, with the prevalence rising to 25-50% among individuals 65 years and older. Peripheral neuropathies are associated with loss of sensation, pain, increased risk of falling, weakness, and other complications. People with peripheral neuropathies have a diminished quality of life, poor overall health and higher mortality. The most common specific cause of peripheral neuropathies, accounting for about one-third of cases, is diabetes. Diabetes is a worldwide epidemic with an estimated affected population of over 400 million people. Within the United States there are over 30 million people with diabetes and another 80 million with pre-diabetes. The annual direct cost of treating diabetes in the United States exceeds $100 billion. Although there are dangerous acute manifestations of diabetes, the primary burden of the disease is in its long-term complications which include cardiovascular disease, nerve disease and resulting conditions such as foot ulcers which may require amputation, eye disease leading to blindness, and kidney failure. The most common long-term complication of diabetes, affecting over 50% of the diabetic population, is peripheral neuropathy. Diabetic peripheral neuropathy (DPN) is the primary trigger for diabetic foot ulcers which may progress to the point of requiring amputation. People with diabetes have a 15-25% lifetime risk of foot ulcers and approximately 15% of foot ulcers lead to amputation. Foot ulcers are the most expensive complication of diabetes with a typical cost of $5,000 to $50,000 per episode. In addition, between 16% and 26% of people with diabetes suffer from chronic pain in the feet and lower legs.
Early detection of peripheral neuropathies, such as DPN, is important because there are no treatment options once the nerves have degenerated. Today’s diagnostic methods for peripheral neuropathies range from a simple monofilament test for lack of sensory perception in the feet to a nerve conduction study performed by a specialist. Our DPNCheck nerve conduction technology provides a rapid, low cost, quantitative test for peripheral neuropathies, including DPN. It addresses an important medical need and is particularly effective in screening large populations. DPNCheck has been validated in numerous clinical studies.
Chronic pain is a significant public health problem. It is defined by the National Institutes of Health (NIH) as pain lasting more than 12 weeks. This contrasts with acute pain which is a normal bodily response to injury or trauma. Chronic pain conditions include low back pain, arthritis, fibromyalgia, neuropathic pain, cancer pain and many others. Chronic pain may be triggered by an injury or there may be an ongoing cause such as disease or illness. There may also be no clear cause. Chronic pain can also lead to other health problems. These can include fatigue, sleep disturbance and mood changes, which cause difficulty in carrying out important activities and contributing to disability and despair. In general, chronic pain cannot be cured. Treatment of chronic pain is focused on reducing pain and improving function. The goal is effective pain management.
Chronic pain affects nearly 100 million adults in the United States and more than 1.5 billion people worldwide. The estimated incremental impact of chronic pain on health care costs in the United States is over $250 billion per year and lost productivity is estimated to exceed $300 billion per year. The most common approach to chronic pain management is pain medication. This includes over-the-counter (OTC) internal and external analgesics as well as prescription pain medications, both non-opioid and opioids. The approach to treatment is individualized, drug combinations may be employed, and the results are often inadequate. Side effects, including the potential for addiction are substantial. Increasingly, restrictions are being imposed on access to prescription opioids. Reflecting the complexity of chronic pain and the difficulty in treating it, we believe that inadequate relief leads 25% to 50% of pain sufferers to seek alternatives to prescription pain medications. These alternatives include nutraceuticals, acupuncture, chiropractic care, non-prescription analgesics, electrical stimulators, braces, sleeves, pads and other items. In total these pain relief products and services account for approximately $20 billion in annual out-of-pocket spending in the United States.
Nerve stimulation is a long-established category of treatment for chronic pain. This treatment approach is available through implantable devices which have both surgical and ongoing risks, such as migration of the implanted nerve stimulation leads. Non-invasive approaches involving transcutaneous electrical nerve stimulation (TENS) have achieved limited efficacy in practice due to power limitations, ineffective dosing and low patient adherence. We believe that our Quell wearable technology for chronic pain is designed to address many of the limitations of traditional TENS.
As of September 30, 2021, we had 48issued U.S. patents, 42 issued foreign patents, and 45 patent applications. Our wearable therapeutic products have 18 issued U.S. utility patents, 11 foreign utility patents, nine issued U.S. design patents plus 24 issued foreign design patents. We also have 45 utility patent applications related to our wearable therapeutic products (20 U.S. and 25 foreign). For our DPNCheck diagnostic device, 11 utility patents (four U.S. and seven foreign) were issued that cover the core technology.
With regard to our legacy neurodiagnostic products, our issued design patents began to expire in 2015, and our issued utility patents began to expire in 2017. We have additional patents and patent applications directed to other novel inventions that extend patent terms into 2022 to 2031.
CORPORATE HISTORY AND INFORMATION
NeuroMetrix was founded in June 1996 by our President and Chief Executive Officer, Shai N. Gozani, M.D., Ph.D. We originally were incorporated in Massachusetts in 1996, and we reincorporated in Delaware in 2001.
Our principal offices are located at 4B Gill Street, Woburn, Massachusetts 01801.
Our corporate website address is www.neurometrix.com. The information on our website is not part of this prospectus or incorporated by reference into this prospectus, and you should not consider any information contained on, or that can be accessed through, our website in deciding whether to purchase shares of our common stock. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K and all amendments to such reports are made available free of charge through the “Investors—SEC Filings” section of our website as soon as reasonably practicable after they have been filed or furnished with the SEC.
THE OFFERING
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| Common stock offered by us: | Common stock having an aggregate offering price of up to $25,000,000. | |
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| Common stock to be outstanding after this offering: | Up to 9,639,408 shares of common stock (as more fully described in the notes following this table), assuming sales at an offering price of $8.35 per share, which was the last reported sale price of our common stock on The Nasdaq Capital Market on October 21, 2021. The actual number of shares which may be sold will vary depending on the sales price under this offering. | |
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| Plan of Distribution: | “At the market offering” that may be made from time to time on The Nasdaq Capital Market or other existing trading market for our common stock through our sales agent, Ladenburg Thalmann & Co. Inc., or Ladenburg. See “Plan of Distribution” on page S-15 of this prospectus. | |
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| Use of Proceeds: | We intend to use the net proceeds from this offering for general corporate purposes, working capital and capital expenditures. See “Use of Proceeds.” | |
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| Risk Factors: | Investing in our common stock involves risks. See “Risk Factors” beginning on page S-7 of this prospectus and under similar headings in the documents incorporated by reference herein for a discussion of the factors you should carefully consider before deciding to invest in our common stock. | |
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| Nasdaq Capital Market symbol: | “NURO” | |
The number of shares of common stock to be outstanding after this offering is based on an aggregate of 6,645,397 shares of common stock outstanding as of September 30, 2021 and excludes:
•62 shares of common stock issuable upon the conversion of shares of Series B Convertible Preferred Stock outstanding as of September 30, 2021;
•504,045 shares of common stock issuable upon the exercise of outstanding stock options issued pursuant to our Twelfth Amended and Restated 2004 Stock Option and Incentive Plan, or the 2004 Plan, at a weighted average exercise price of $3.34 per share;
•325,777 shares of common stock reserved for future issuance under the 2004 Plan as of September 30, 2021;
•143,037 shares of common stock available for sale under the Fifth Amended and Restated 2010 Employee Stock Purchase Plan, or the ESPP, as of September 30, 2021;
•1,250 shares of common stock reserved for future issuance to new employees as inducement awards upon their entering into employment with the company pursuant to our Amended and Restated 2009 Non-Qualified Inducement Stock Plan, as of September 30, 2021.
In addition, subsequent to September 30, 2021, an aggregate of 30,000 shares of common stock were issued under the 2004 Plan. Unless otherwise indicated, all information in the prospectus assumes no conversion of the Series B Convertible Preferred Stock, no exercise of the outstanding warrants and options described above, and no issuance of common stock pursuant to the 2004 Plan or the ESPP.
RISK FACTORS
Investing in our common stock involves a high degree of risk. Before making an investment decision, you should carefully consider the risks described below and in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, as well as any amendments thereto reflected in subsequent filings with the SEC, each of which are incorporated by reference in this prospectus, and all of the other information in this prospectus, including our financial statements and related notes incorporated by reference herein. If any of these risks is realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose part or all of your investment. Additional risks and uncertainties that are not yet identified or that we currently believe to be immaterial may also materially harm our business, financial condition, results of operations and prospects and could result in a complete loss of your investment.
Risks Related to This Offering and Our Common stock
If you purchase common stock in this offering, you will suffer immediate dilution of your investment.
The public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock. Therefore, if you purchase our common stock in this offering, you will pay a price per share that substantially exceeds our net tangible book value per share after giving effect to this offering. If you purchase common stock in this offering at a price of $8.35 per share, you will incur an immediate and substantial dilution in net tangible book value of $3.33 per share. For a further description of the dilution that you will experience immediately after this offering, see the section titled “Dilution.” In addition, in the past, we have issued options to acquire common stock at prices significantly below the offering price. To the extent these outstanding options are ultimately exercised, you will incur additional dilution.
Our management will have broad discretion over the use of the net proceeds from this offering, and you may not agree with how we use the proceeds and the proceeds may not be invested successfully.
Our management will have broad discretion as to the use of the net proceeds from this offering and could use them for purposes other than those contemplated at the time of this offering. Accordingly, you are 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 proceeds will be used appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any, return for NeuroMetrix.
Because we do not anticipate paying any cash dividends on our common stock in the foreseeable future, capital appreciation, if any, will be your sole source of gain.
We have never declared or paid cash dividends on our common stock. We anticipate that we will retain our earnings, if any, for future growth and therefore do not anticipate paying cash dividends in the future. As a result, only appreciation of the price of our common stock will provide a return to stockholders.
The market price of our common stock has been and is likely to continue to be highly volatile, and our stockholders may lose some or all of their investment.
The market price of our common stock is likely to be highly volatile, including in response to factors that are beyond our control. The stock market in general experiences extreme price and volume fluctuations. In particular, the market prices of securities of medical device and technology companies are extremely volatile, and experience fluctuations that are often unrelated or disproportionate to the operating performance of these companies. These broad and sector-specific market fluctuations can result in extreme fluctuations in the price of our common stock, regardless of our operating performance, and can cause our stockholders to lose some or all of their investment in the Company.
We may incur significant costs from class action litigation due to share volatility.
Our share price may fluctuate for many reasons, including as a result of public announcements regarding the progress of our development efforts or the development efforts of our collaborators and/or competitors, the addition or departure of our key personnel, variations in our quarterly operating results and changes in market valuations of medical device and technology companies. Holders of stock which has experienced significant price and trading volatility have occasionally brought securities class action litigation against the companies that issued the stock. If any of our stockholders were to bring a lawsuit of this type
against us, even if the lawsuit is without merit, we could incur substantial costs defending the lawsuit. The lawsuit could also divert the time and attention of our management, which could harm our business.
Sales of additional common stock could cause the price of our common stock to decline.
Sales of substantial amounts of our common stock in the public market, or the availability of such shares for sale, by us or others, including the issuance of common stock upon exercise of outstanding options, or the perception that such sales could occur, could adversely affect the price of our common stock.
The shares of our common stock offered under this prospectus and the accompanying base prospectus may be sold in “at-the-market” offerings, and investors who buy shares at different times will likely pay different prices.
Investors who purchase shares under this prospectus and the accompanying base prospectus at different times will likely pay different prices, and so may experience different outcomes in their investment results. We will have discretion, subject to market demand, to vary the timing, prices, and numbers of shares sold, and to determine the minimum sales price for shares sold. Investors may experience declines in the value of their shares as a result of share sales made in connection with “at-the-market” offerings at prices lower than the prices they paid.
The actual number of shares of common stock we will issue under the sales agreement, at any one time or in total, is uncertain.
The number of shares that are sold by Ladenburg will fluctuate based on the market price of the shares of our common stock during the sales period and limits we set with Ladenburg. Because the price per share of each share sold will fluctuate based on the market price of our shares of common stock during the sales period, it is not possible to predict the number of shares of common stock that will ultimately be issued.
We may need to obtain additional financing to fund our operations and, if we are unable to obtain such financing, we may be unable to complete the development and commercialization of our product candidates.
Our operations consume cash. We expect to incur further losses as we grow sales of DPNCheck and continue to commercialize Quell and we may need to obtain additional financing to fund our future operations.
We continue to face significant challenges and uncertainties and, as a result, our available capital resources may be consumed more rapidly than currently expected due to:
•decreases in sales of our products and the uncertainty of future revenues from new products;
•changes we may make to the business that affect ongoing operating expenses;
•changes we may make in our business strategy;
•regulatory developments and inquiries affecting our existing products;
•changes in our research and development spending plans; and
•other items affecting our forecasted level of expenditures and use of cash resources.
Until we can generate a sufficient amount of revenue, we may finance future cash needs through public or private financing, asset divestitures, collaborative arrangements with strategic partners, or through additional credit lines or debt financing sources. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. We may seek to access the public or private capital markets whenever conditions are favorable, even if we do not have an immediate need for additional capital at that time. In addition, if we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our potential products or proprietary technologies, or to grant licenses on terms that are not favorable to us.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents we have filed with the SEC that are incorporated by reference contain “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that involve substantial risks and uncertainties. In some cases, forward-looking statements are identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goals,” “intend,” “likely,” “may,” “might,” “ongoing,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “will” and “would” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements.
Although we believe that we have a reasonable basis for each forward-looking statement contained in this prospectus and the documents that we have filed with the SEC that are incorporated by reference, such statements are based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. Forward-looking statements include statements about:
•management’s expectations, hopes, beliefs, intentions or strategies regarding the future, such as our estimates regarding anticipated operating losses, future revenues and projected expenses, our future liquidity and our expectations regarding our needs for and ability to raise additional capital;
•our ability to manage our expenses effectively and raise the funds needed to continue our business;
•our belief that there are unmet needs for the management of chronic pain and in the diagnosis and treatment of diabetic neuropathy;
•our expectations surrounding Quell and DPNCheck;
•our expected timing and our plans to develop and commercialize our products;
•our ability to meet our proposed timelines for the commercial availability of our products;
•our ability to obtain and maintain regulatory approval of our existing products and any future products we may develop;
•regulatory and legislative developments in the United States and foreign countries;
•the performance of our third-party manufacturers;
•our ability to obtain and maintain intellectual property protection for our products;
•the successful development of our sales and marketing capabilities;
•the size and growth of the potential markets for our products and our ability to serve those markets;
•the rate and degree of market acceptance of any future products;
•our reliance on key scientific management or personnel; and
•the payment and reimbursement methods used by private or government third party payers.
You should refer to the section titled “Risk Factors” of this prospectus and in our other filings with the SEC for a discussion of important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a result of these factors, we cannot assure that the forward-looking statements in this prospectus or the documents we have filed with the SEC that are incorporated by reference will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, these statements should not be regarded as representations or warranties by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such
information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future events.
You should read this prospectus, the documents that we have incorporated by reference herein and the documents we have filed as exhibits to the registration statement, completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
USE OF PROCEEDS
We may issue and sell shares of our common stock under this prospectus having aggregate sales proceeds of up to $25,000,000 from time to time. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. There can be no assurance that we will sell any shares under or fully utilize our Sales Agreement with Ladenburg as a source of financing.
We intend to use the net proceeds from this offering, if any, for general corporate purposes, working capital and capital expenditures. We have not determined the amount of net proceeds to be used specifically for such purposes. As a result, our management will retain broad discretion over the allocation of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds of this offering.
Pending application of the net proceeds as described above, we may initially invest the net proceeds in short-term, investment-grade, interest-bearing securities or apply them to the reduction of short-term indebtedness.
DIVIDEND POLICY
We have never declared or paid any dividends on our common stock. We currently anticipate that we will retain any future earnings for the operation and expansion of our business. Accordingly, we do not currently anticipate declaring or paying any cash dividends on our common stock for the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors, subject to applicable law, and will depend on then existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and other factors our board of directors may deem relevant.
DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted to the extent of the difference between the public offering price per share in this offering and the as adjusted net tangible book value per share immediately after this offering. The net tangible book value of our common stock as of September 30, 2021 was approximately $24,228,011, or approximately $3.65 per share based upon 6,645,397 shares of common stock outstanding as of September 30, 2021. Net tangible book value per share is equal to our total tangible assets, less our total liabilities, divided by the total number of shares of common stock outstanding as of September 30, 2021.
Net tangible book value dilution per share to investors participating in this offering represents the difference between the amount per share paid by purchasers of common stock in this offering and the as adjusted net tangible book value per share immediately after this offering. After giving effect to the sale of 2,994,011 shares of common stock in this offering at an assumed public offering price of $8.35 per share, the last reported sale price of our common stock on The Nasdaq Capital Market on October 21, 2021, and after deducting underwriting discounts and commissions and estimated aggregate offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2021 would have been approximately $48,353,011, or approximately $5.02 per share. This represents an immediate increase in as adjusted net tangible book value of $1.37 per share to our existing shareholders and an immediate dilution in net tangible book value of $3.33 per share to investors participating in this offering at the public offering price.
Dilution per share to new investors is determined by subtracting as adjusted net tangible book value per share after this offering from the assumed public offering price per share paid by new investors. The following table illustrates this per share dilution to new investors:
| | | | | |
| Assumed public offering price per share | $8.35 |
| Historical net tangible book value per share as of September 30, 2021 | $3.65 |
| Increase in net tangible book value per share attributable to the offering | $1.37 |
| As adjusted net tangible book value per share after giving effect to this offering | $5.02 |
| Dilution in net tangible book value per share to investors participating in this offering | $3.33 |
The table above assumes for illustrative purposes that an aggregate of $25,000,000 in shares of common stock are sold at a price of $8.35 per share, the last reported sale price of our common stock on The Nasdaq Capital Market on October 21, 2021. The shares sold in this offering, if any, will be sold from time to time at various prices. An increase of $1.00 per share in the price at which the shares are sold from the assumed offering price of $8.35 per share shown in the table above, assuming all of our common stock in the aggregate amount of $25,000,000 is sold at that price, would increase our as adjusted net tangible book value per share after the offering to $5.19 per share and would increase the dilution in net tangible book value per share to investors participating in this offering to $4.16 per share, after deducting underwriting discounts and commissions and estimated aggregate offering expenses payable by us. A decrease of $1.00 per share in the price at which the shares are sold from the assumed offering price of $8.35 per share shown in the table above, assuming all of our common stock in the aggregate amount of $25,000,000 is sold at that price, would decrease our as adjusted net tangible book value per share after the offering to $4.81 per share and would decrease the dilution in net tangible book value per share to investors participating in this offering to $2.54 per share, after deducting underwriting discounts and commissions and estimated aggregate offering expenses payable by us.
The information discussed above is illustrative only and will adjust based on the actual public offering price and other terms of this offering determined at pricing.
The table and discussion above does not include:
•62 shares of common stock issuable upon the conversion of shares of Series B Convertible Preferred Stock outstanding as of September 30, 2021;
•504,045 shares of common stock issuable upon the exercise of outstanding stock options issued pursuant to our Twelfth Amended and Restated 2004 Stock Option and Incentive Plan, or the 2004 Plan, at a weighted average exercise price of $3.34 per share;
•325,777 shares of common stock reserved for future issuance under the 2004 Plan as of September 30, 2021;
•143,037 shares of common stock available for sale under the ESPP, as of September 30, 2021;
•1,250 shares of common stock reserved for future issuance to new employees as inducement awards upon their entering into employment with the company pursuant to our Amended and Restated 2009 Non-Qualified Inducement Stock Plan, as of September 30, 2021.
In addition, subsequent to September 30, 2021, an aggregate of 30,000 shares of common stock were issued under the 2004 Plan. Unless otherwise indicated, all information in the prospectus assumes no conversion of the Series B Convertible Preferred Stock, no exercise of the outstanding warrants and options described above, and no issuance of common stock pursuant to the 2004 Plan or the ESPP.
PLAN OF DISTRIBUTION
We have entered into a sales agreement with Ladenburg, under which we may in the future offer and sell up to $25,000,000 of our shares of common stock from time to time through Ladenburg acting as agent under this prospectus. Sales of our shares of common stock, if any, under this prospectus will be made by any method that is deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act.
Each time we wish to issue and sell shares of common stock under the sales agreement, we will notify Ladenburg of the number of shares to be issued, the dates on which such sales are anticipated to be made, any limitation on the number of shares to be sold in any one day and any minimum price below which sales may not be made. Once we have so instructed Ladenburg, unless Ladenburg declines to accept the terms of such notice, Ladenburg has agreed to use its commercially reasonable efforts consistent with its normal trading and sales practices to sell such shares up to the amount specified on such terms. The obligations of Ladenburg under the sales agreement to sell our shares of common stock are subject to a number of conditions that we must meet.
The settlement of sales of shares between us and Ladenburg is generally anticipated to occur on the second trading day following the date on which the sale was made. Sales of our shares of common stock as contemplated in this prospectus will be settled through the facilities of The Depository Trust Company or by such other means as we and Ladenburg may agree upon. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.
We will pay Ladenburg a commission equal to 3.0% of the aggregate gross proceeds we receive from each sale of our shares of common stock. Because there is no minimum offering amount required as a condition to close this offering, the actual total public offering amount, commissions and proceeds to us, if any, are not determinable at this time. In addition, we have agreed to reimburse Ladenburg for the fees and disbursements of its counsel, payable upon execution of the sales agreement, in an amount not to exceed $40,000, in addition to certain ongoing disbursements of its legal counsel up to $4,000 per calendar quarter. We estimate that the total expenses for the offering, excluding any commissions or expense reimbursement payable to Ladenburg under the terms of the sales agreement, will be approximately $90,000. The remaining sale proceeds, after deducting any other transaction fees, will equal our net proceeds from the sale of such shares.
Ladenburg will provide written confirmation to us before the open on The Nasdaq Capital Market on the day following each day on which shares of common stock are sold under the sales agreement. Each confirmation will include the number of shares sold on that day, the aggregate gross proceeds of such sales and the proceeds to us.
In connection with the sale of the shares of common stock on our behalf, Ladenburg will be deemed to be an “underwriter” within the meaning of the Securities Act, and the compensation of Ladenburg will be deemed to be underwriting commissions or discounts. We have agreed to indemnify Ladenburg against certain civil liabilities, including liabilities under the Securities Act. We have also agreed to contribute to payments Ladenburg may be required to make in respect of such liabilities.
The offering of our shares of common stock pursuant to the sales agreement will terminate upon the earlier of (i) the sale of all shares of common stock subject to the sales agreement and (ii) the termination of the sales agreement as permitted therein. We and Ladenburg may each terminate the sales agreement at any time upon ten day’s prior notice.
This summary of the material provisions of the sales agreement does not purport to be a complete statement of its terms and conditions. A copy of the sales agreement is filed as an exhibit to the registration statement of which this prospectus forms a part.
Ladenburg and its affiliates have previously and may in the future provide various investment banking, commercial banking, financial advisory and other financial services for us and our affiliates, for which services they have and may in the future receive customary fees. In the course of its business, Ladenburg may actively trade our securities for its own account or for the accounts of customers, and, accordingly, Ladenburg may at any time hold long or short positions in such securities.
On February 19, 2020, we entered into an At Market Issuance Sales Agreement with Ladenburg, through which we sold an aggregate of 5,105,324 shares of our common stock through an at-the-market offering for gross proceeds of $24,730,309. We paid Ladenburg aggregate agent fees of $714,909 in connection with such sales.
This prospectus in electronic format may be made available on a website maintained by Ladenburg, and Ladenburg may distribute this prospectus electronically.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston, Massachusetts. Blank Rome LLP, New York, New York is acting as counsel to Ladenburg Thalmann & Co. Inc. in connection with this offering.
EXPERTS
The financial statements of NeuroMetrix, Inc. appearing in NeuroMetrix, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020, have been audited by Moody, Famiglietti & Andronico, LLP, independent registered public accounting firm, as set forth in their report thereon, included therein, and incorporated herein by reference. Such financial statements are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Exchange Act, and file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an internet website at www.sec.gov that contains periodic and current reports, proxy and information statements, and other information regarding registrants that are filed electronically with the SEC. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost.
This prospectus is only part of a registration statement on Form S-3 that we have filed with the SEC under the Securities Act of 1933, as amended, and therefore omits certain information contained in the registration statement. We have also filed exhibits and schedules with the registration statement that are excluded from this prospectus, and you should refer to the applicable exhibit or schedule for a complete description of any statement referring to any contract or other document. You may obtain a copy from the SEC upon payment of the fees prescribed byregistration statement, including the SEC, or
obtain a copyexhibits and schedules, from the SEC’s web site orwebsite.
We also maintain a website at http://www.neurometrix.com, through which you can access our web site.SEC filings free of charge. The information set forth on our website is not part of this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to “incorporate by reference” much of the information we file with them,into this prospectus, which means that we can disclose important information to you by referring you to those publicly available documents.another document filed separately with the SEC. The information that we incorporateincorporated by reference in this prospectus is considereddeemed to be part of this prospectus. Becauseprospectus, and subsequent information that we are incorporating by reference future filingsfile later with the SEC will automatically update and supersede this prospectus is continually updated and those future filingsinformation. We filed a registration statement on Form S-3 under the Securities Act with the SEC with respect to the securities we may modify or supersede some of the information included or incorporated inoffer pursuant to this prospectus. This prospectus omits certain information contained in the registration statement, as permitted by the SEC. You should refer to the registration statement, including the exhibits, for further information about us and the securities we may offer pursuant to this prospectus. Statements in this prospectus regarding the provisions of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement is qualified in all respects by that reference. We incorporate by reference into this prospectus the documents listed below andCopies of all or any future filings made by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (1) after the date of this prospectus and prior to the time that all of the securities offered by this prospectus are sold or the earlier termination of the offering, and (2) after the date of the initial registration statement of which this prospectus forms a part and prior to the effectiveness of the registration statement, (except in each case in whichincluding the information contained in such documents is “furnished” and not “filed”).incorporated by reference or the exhibits, may be obtained from the SEC’s website at http://www.sec.gov. The documents we are incorporating by reference as of their respective dates of filing are:
•our Annual Report on Form 10-K for the year ended December 31, 2016,2020 that we filed with the SEC on February 9, 2017;January 29, 2021; •the portions of our Definitivedefinitive Proxy Statement on Schedule 14A that are deemed "filed" for our Annual Meeting of Stockholders held on May 11, 2021, filed with the SEC on March 16, 2021, that are considered “filed” and not “furnished” under the Securities Exchange Act of 1934, as amended, filed on March 29, 2017;Act; •our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021 filed with the SEC on April 20, 2017, 22, 2021, July 20, 201722, 2021 and October 20, 2017;21, 2021; •our Current Reports on Form 8-K filed with on February 26, 2021, April 15, 2021, April 27, 2021, May 11, 2021, June 11, 2021, June 25, 2021, June 30, 2021, and August 13, 2021 (except for information contained therein which is furnished rather than filed); •the SEC on February 3, 2017, February 28, 2017, April 6, 2017, May 2 2017, May 12, 2017, July 11, 2017, and September 15, 2017;
Descriptiondescription of our common stock contained in our Registration Statement on
Form 8-A filed pursuant to Section 12(g) of the Exchange Act as filed with SEC on July 19, 2004; and2004, including any subsequent amendments or reports filed for the purpose of updating such description;Description•the description of our preferred share purchase rights contained in our Registration Statement on Form 8-A filed pursuant to Section 12(b) of the Exchange Act as filed with the SEC on March 8, 2007, (File No. 000-50856).including any subsequent amendments or reports filed for the purpose of updating such description; andExcept as set forth above,•all reports and other documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this prospectus and prior to the termination or completion of the offering of securities under this prospectus shall be deemed to be incorporated by reference in this prospectus and to be a part hereof from the date of filing such reports and other documents.
The SEC file number for each of the documents listed above is 001-33351.
Any statement contained in this prospectus or in a document incorporated or deemed to be incorporated by reference into this prospectus will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request, orally or in writing, a copy of any or all of the documents incorporated herein by reference. These documents will be provided to you at no cost, by contacting:
NeuroMetrix, Inc.
4B Gill Street
Woburn, Massachusetts 01801
(781) 890-9989
Attn: Investor Relations
You may also access these documents on our website, http://www.neurometrix.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
You should rely only on information contained in, or incorporated by reference into, this prospectus and any prospectus supplement.prospectus. We have not authorized anyone to provide you with information different from that contained in this prospectus or incorporated by reference in this prospectus. We are not making offers to sell the securities in any jurisdiction in which such an offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to anyone to whom it is unlawful to make such offer or solicitation
You may request a copy of the filings listed above, at no cost, by writing or telephoning us at the following address:
NeuroMetrix, Inc.
1000 Winter Street
Waltham, Massachusetts 02451
(781) 890-9989
Attn: Investor Relations
solicitation.
NEUROMETRIX, INC.
Common Stock
PROSPECTUS
Ladenburg Thalmann
, 2021
PART II
II.
INFORMATION NOT REQUIRED IN PROSPECTUS
| |
Item 14. Other Expenses of Issuance and Distribution
Item 14. | Other Expenses of Issuance and Distribution |
The following table sets forthexpenses incurred in connection with the Company’s estimates (othersale of the securities being registered will be borne by the registrant. Other than the SEC registration fee)fee, the amounts stated are estimates.
| | | | | | | | | | | |
| SEC registration fee | $ | 4,635 |
| Legal fees and expenses | 80,000 |
| Accounting fees and expenses | 35,000 |
| Miscellaneous | 5,365 |
| Total | $ | 125,000 |
Item 15. Indemnification of the expenses in connection with the issuanceDirectors and distribution of the securities being registered.Officers
|
| | | | |
| Item | | |
| SEC registration fee | | $ | 578.40 |
|
| Legal fees and expenses | | 15,000.00 |
|
| Accounting fees and expenses | | 10,000.00 |
|
| Printing fees | | 2,500.00 |
|
| Miscellaneous fees and expenses | | 2,500.00 |
|
| Total | | $ | 30,578.40 |
|
| |
Item 15.
| Indemnification of Directors and Officers |
Our amended and restated certificate of incorporation provides that we shall indemnify, to the fullest extent authorized by the Delaware General Corporation Law, each person who is involved in any litigation or other proceeding because such person is or was our director or officer or is or was serving as an officer or director of another entity at our request, against all expense, loss or liability reasonably incurred or suffered in connection therewith. Our amended and restated certificate of incorporation provides that the right to indemnification includes the right to be paid expenses incurred in defending any proceeding in advance of its final disposition, provided, however, that such advance payment will only be made upon delivery to us of an undertaking, by or on behalf of the director or officer, to repay all amounts so advanced if it is ultimately determined that such director is not entitled to indemnification. If we do not pay a proper claim for indemnification in full within 10 days after we receive a written claim for such indemnification, our amended and restated certificate of incorporation and our restated by-lawsbylaws authorize the claimant to bring an action against us and prescribe what constitutes a defense to such action.
Section 145 of the Delaware General Corporation Law permits a corporation to indemnify any director or officer of the corporation against expenses (including attorney’s fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in right of the corporation) brought by reason of the fact that such person is or was a director or officer of the corporation, if such person acted in good faith and in a manner that he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal action or proceeding, if he or she had no reason to believe his or her conduct was unlawful. In a derivative action, (i.e., one brought by or on behalf of the corporation), indemnification may be provided only for expenses actually and reasonably incurred by any director or officer in connection with the defense or settlement of such an action or suit if such person acted in good faith and in a manner that he or she reasonably believed to be in, or not opposed to, the best interests of the corporation, except that no indemnification shall be provided if such person shall have been adjudged to be liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine that the defendant is fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Pursuant to Section 102(b)(7) of the Delaware General Corporation Law, Article Seventh of our amended and restated certificate of incorporation eliminates the liability of a director to us or our stockholders for monetary damages for such a breach of fiduciary duty as a director, except for liabilities arising:
•from any breach of the director’s duty of loyalty to us or our stockholders;
•from acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
•under Section 174 of the Delaware General Corporation Law; and
•from any transaction from which the director derived an improper personal benefit.
As permitted by Section 145 of the Delaware General Corporation Law, we carry insurance policies insuring our directors and officers against certain liabilities that they may incur in their capacity as directors and officers.
Any underwriting agreements that we may enter into will likely provide for the indemnification of us, our controlling persons, our directors and certain of our officers by the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.
Item 16. Exhibits
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Item 16.Exhibit
Number | Exhibits | Exhibit Description | | Filed with this Report | | Incorporated by Reference herein from Form or Schedule | | Filing Date | | SEC File / Registration Number |
The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Registration Statement.
| 1.1 | | | Form of Underwriting Agreement | | | | ** | | | | |
Item 16. | Undertakings |
(a) The undersigned Registrant hereby undertakes:
| At Market Issuance Sales Agreement, dated October 22, 2021, by and between NeuroMetrix, Inc. and Ladenburg Thalmann & Co. Inc. | | X | | | | | | |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment | | Third Amended and Restated Certificate of Incorporation of NeuroMetrix, Inc. dated July 27, 2004 | | | | S-8 (Exhibit 4.1) | | 8/9/2004 | | 333-118059 |
| | | Certificate of Amendment to this Registration Statement:Restated Certificate of Incorporation of NeuroMetrix, Inc. dated September 1, 2011 | | | | 8-K (Exhibit 3.1) | | 9/1/2011 | | 001-33351 |
| | | Certificate of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated February 15, 2013 | | | | 8-K (Exhibit 3.1) | | 2/15/2013 | | 001-33351 |
| | | Certificate of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated December 1, 2015 | | | | 8-K (Exhibit 3.1) | | 12/1/2015 | | 001-33351 |
| | | Certificate of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated May 11, 2017 | | | | 8-K (Exhibit 3.1) | | 5/12/2017 | | 001-33351 |
| | | Certificate of Amendment to Restated Certificate of Incorporation of NeuroMetrix, Inc. dated November 18, 2019 | | | | 8-K (Exhibit 3.1) | | 11/18/2019 | | 001-33351 |
| | | Certificate of Designations for Series A Junior Cumulative Preferred Stock, par value $0.001 per share, dated March 7, 2007 | | | | 8-A12(b) (Exhibit 3.1) | | 3/8/2007 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series A-1 Convertible Preferred Stock, par value $0.001 per share, dated June 5, 2013 | | | | 8-K (Exhibit 3.1) | | 6/6/2013 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series A-2 Convertible Preferred Stock, par value $0.001 per share, dated June 5, 2013 | | | | 8-K (Exhibit 3.2) | | 6/6/2013 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series A-3 Convertible Preferred Stock, par value $0.001 per share, dated June 24, 2014 | | | | 8-K (Exhibit 3.1) | | 6/25/2014 | | 001-33351 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(i) | To include any prospectus required by Section 10(a)(3) | | Certificate of the Securities ActDesignation of 1933;Preferences, Rights and Limitations of Series A-4 Convertible Preferred Stock, par value $0.001 per share, dated June 24, 2014 | | | | 8-K (Exhibit 3.2) | | 6/25/2014 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock, par value $0.001 per share, dated May 26, 2015 | | | | 8-K (Exhibit 3.1) | | 5/29/2015 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock, par value $0.001 per share, dated December 30, 2015 | | | | 8-K (Exhibit 3.1) | | 12/30/2015 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock, par value $0.001 per share, dated June 3, 2016 | | | | 8-K
(Exhibit 3.1) | | 6/3/2016 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock, par value $0.001 per share, dated December 28, 2016 | | | | 8-K
(Exhibit 3.1) | | 12/29/2016 | | 001-33351 |
| | | Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock, par value $0.001 per share, dated July 10, 2017 | | | | 8-K
(Exhibit 3.1) | | 7/11/2017 | | 001-33351 |
| | | Third Amended and Restated Bylaws of NeuroMetrix, Inc. | | | | 8-K (Exhibit 3.1) | | 6/11/2021 | | 001-33351 |
| | | Specimen Certificate for Shares of Common Stock | | | | S-1/A (Exhibit 4.1) | | 7/19/2004 | | 333-115440 |
| | | Shareholder Rights Agreement, dated as of March 7, 2007, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-A12(b)
(Exhibit 4.1) | | 3/8/2007 | | 001-33351 |
| | | Amendment to Shareholder Rights Agreement, dated September 8, 2009, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.1) | | 9/14/2009 | | 001-33351 |
| | | Amendment No. 2 to Shareholder Rights Agreement, dated June 5, 2013, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.2) | | 6/6/2013 | | 001-33351 |
| | | Amendment No. 3 to Shareholder Rights Agreement, dated June 25, 2014, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.2) | | 6/25/2014 | | 001-33351 |
| | | Amendment No. 4 to Shareholder Rights Agreement, dated May 28, 2015, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-Q
(Exhibit 4.1) | | 7/23/2015 | | 001-33351 |
| | | Amendment No. 5 to Shareholder Rights Agreement, dated December 29, 2015, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.3) | | 12/30/2015 | | 001-33351 |
| | | Amendment No. 6 to Shareholder Rights Agreement, dated June 3, 2016, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.2) | | 6/3/2016 | | 001-33351 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(ii) | To reflect in the prospectus any facts | | Amendment No. 7 to Shareholder Rights Agreement, dated December 28, 2016, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.2) | | 12/29/2016 | | 001-33351 |
| | | Amendment No. 8 to Shareholder Rights Agreement, dated February 8, 2017, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-K
(Exhibit 4.2.9) | | 2/8/2017 | | 001-33351 |
| | | Amendment No. 9 to Shareholder Rights Agreement, dated July 10, 2017, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 8-K
(Exhibit 4.2) | | 7/11/2017 | | 001-33351 |
| | | Amendment No. 10 to Shareholder Rights Agreement, dated February 5, 2018, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-K
(Exhibit 4.2.11) | | 2/8/2018 | | 001-33351 |
| | | Amendment No. 11 to Shareholder Rights Agreement, dated January 21, 2019, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-K
(Exhibit 4.2.12) | | 1/24/2019 | | 001-33351 |
| | | Amendment No. 12 to Shareholder Rights Agreement, dated January 27, 2020, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-K
(Exhibit 4.3.13) | | 1/28/2020 | | 001-33351 |
| | | Amendment No. 13 to Shareholder Rights Agreement, dated January 28, 2021, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-K
(Exhibit 4.3.14) | | 1/29/2021 | | 001-33351 |
| | | Amendment No. 14 to Shareholder Rights Agreement, dated July 20, 2021, between NeuroMetrix, Inc. and American Stock Transfer & Trust Company, as Rights Agent | | | | 10-Q
(Exhibit 4.1) | | 7/22/2021 | | 001-33351 |
| 4.34 | | | Form of Certificate of Amendment or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filedDesignation with the Commission pursuantrespect to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; andPreferred Stock |
| | | ** | | | | |
(iii)4.35 | To include any material information | | Form of Warrant Agreement and Warrant Certificate | | | | ** | | | | |
| 4.36 | | | Form of Rights Agreement and Right Certificate | | | | ** | | | | |
| 4.37 | | | Form of Unit Agreement and Unit | | | | ** | | | | |
| | | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. with respect to the planlegality of distribution not previously disclosedthe securities being registered | | X | | | | | | |
| | | Consent of Moody, Famiglietti and Andronico LLP, an independent registered public accounting firm | | X | | | | | | |
| | | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. | | X | | Included in the opinion filed as Exhibit 5.1. | | | | |
| | | Powers of Attorney | | X | | Included on the signature page of this registration statement or any material change to such information in the registration statement;statement. | | | | |
Provided,
** To be filed by amendment.
Item 17. Undertakings
(a)The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the “Securities Act of 1933”);
(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of this section do not apply if the registration statement is on Form S–3 (§239.13 of this chapter)S-1, Form S-3, Form SF-3 or Form F–3 (§239.33 of this chapter)F-3 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to sectionSection 13 or sectionSection 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that are incorporated by reference in this registration statement.
(2) 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 the time shall be deemed to be the initial bona fide offering thereof.
(3) 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.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement or is containedas of the date the filed prospectus was deemed part of and included in a form ofthe registration statement; and
(ii) Each prospectus required to be filed pursuant to Rule 424(b) (§230.424(b)(2), (b)(5), or (b)(7) as part of this chapter)a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement.
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(2) | 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. |
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(3) | 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. |
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(4) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
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(i) | If the registrant is relying on Rule 430B (§230.430B of this chapter): |
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 effective date, 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 effective date.
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(A) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) (§230.424(b)(3) of this chapter) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
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(B) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) (§230.424(b)(2), (b)(5), or (b)(7) of this chapter) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 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 effective date, 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 effective date; or |
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(ii) | If the registrant is subject to Rule 430C (§230.430C of this chapter), 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 (§230.430A of this chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after 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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(5) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: |
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant 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:
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(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); |
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(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; |
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(iii) | (i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(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.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities provided by or on behalf of the undersigned registrant; and |
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(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
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(A) | The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement 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.
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(B) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, 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 it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
thereof..
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, 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 it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Waltham,Woburn, Massachusetts on October 20, 2017.22, 2021.
| | | | | | | | |
| NeuroMetrix, Inc. |
| | |
| NeuroMetrix, Inc. |
| | |
| By: | /s/ SHAI N. GOZANI, M.D. PH.D. |
| Name: | Shai N. Gozani, M.D., Ph.D. |
| Title: | Chairman, President and Chief Executive Officer |
SIGNATURES AND POWER OF ATTORNEY
We, the undersigned officers and directors of NeuroMetrix, Inc. hereby severally constitute and appoint Shai N. Gozani, M.D., Ph.D. and Thomas T. Higgins, and each of them singly, our true and lawful attorneys with full power to any of them, and to each of them singly, to sign for us and in our names in the capacities indicated below the Registration Statement on Form S-3 filed herewith and any and all amendments to said Registration Statement and generally to do all such things in our name and behalf in our capacities as officers and directors to enable NeuroMetrix, Inc. to comply with the provisions of the Securities Act of 1933, as amended, and all requirements of the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorneys, or any of them, to said Registration Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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| | | | | | | | | | | | | |
| Signature | | Title | | Date |
| | | | | |
| /s/ SHAI N. GOZANI, M.D., PH.D. | | Chairman, President and Chief Executive Officer (principal executive officer) | | October 20, 201722, 2021 |
| Shai N. Gozani, M.D., PH.D.Ph.D. | | (principal executive officer) | | |
| | | | | |
|
/s/ THOMAS T. HIGGINS | | Senior Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) | | October 20, 201722, 2021 |
| Thomas T. Higgins | | (principal financial and accounting officer) | | |
| | | | | |
| * | | Director | | October 20, 2017 |
| David E. Goodman, M.D. | | | | |
| | | | | |
| * | | Director | | October 20, 2017 |
| Nancy E. Katz | | | | |
| | | | | |
| * | | Director | | October 20, 2017 |
| Timothy R. Surgenor | | | | |
| | | | | |
| * | | Director | | October 20, 2017 |
| David Van Avermaete | | | | |
*Signed by power of attorney
/s/Thomas T. Higgins
Thomas T. Higgins
Exhibit Index
|
| | |
Exhibit
Number
| | Description |
| /s/ DAVID E. GOODMAN, M.D. | | Director | | October 22, 2021 |
| David E. Goodman, M.D. | | Certificate of Designation of Preferences, Rights and Limitations of Series F Convertible Preferred Stock.* | | |
| | | | |
| /s/ NANCY E. KATZ | | Amendment No. 9 to Shareholder Rights Agreement.*Director | | October 22, 2021 |
| Nancy E. Katz | | | | |
| | Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. ** | | |
| /s/ DAVID VAN AVERMAETE | | Director | | October 22, 2021 |
| David Van Avermaete | | Form of Securities Purchase Agreement dated as of July 10, 2017, by and among NeuroMetrix, Inc. and the purchasers named therein, as amended.* |
| |
| | Form of Registration Rights Agreement dated as of July 10, 2017, by and among NeuroMetrix, Inc. and the purchasers named therein.* |
| | |
| | Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm. |
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| | Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. (included in Exhibit 5.1). ** |
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| | Power of Attorney (included in the signature pages to the Registration Statement). ** |
*Previously filed with the Current Report on Form 8-K filed on July 11, 2017 and incorporated herein by reference.
** Previously filed.