| PROSPECTUS SUPPLEMENT |
|
Filed Pursuant to Rule 424(b)(3) |
| (to Prospectus dated October 31, 2014) |
|
Registration No. 333-199757 |
NANOVIRICIDES, INC.
571,433 Shares of Common Stock
NanoViricides, Inc. (the “Company”)
is filing this prospectus supplement and the accompanying prospectus to register for resale 571,433 previously issued and outstanding
shares of common stock, par value $0.001 per share (the “Common Stock”) which were issued to certain holders (the
“Selling Shareholders”) as additional interest (the “Interest Shares”) to the Selling Shareholders as
holders of our 8% Coupon Series B Convertible Debentures issued (the “Debentures”). The Interest
Shares may be offered for sale by the Selling Shareholders Pursuant to the terms of the Debentures, we agreed to register the
Interest Shares on behalf of the Selling Shareholders. We will not receive any of the proceeds from the sale of the Interest Shares
by the Selling Shareholders.
The Selling Shareholders, or their pledgees,
donees, transferees or other successors in interest, may offer and sell the shares of common stock being offered by this prospectus
from time to time in public or private transactions, or both. These sales may occur at fixed prices, at market prices
prevailing at the time of sale, at prices related to prevailing market prices, or at negotiated prices. The Selling
Shareholders may sell shares to or through underwriters, broker-dealers or agents, who may receive compensation in the form of
discounts, concessions or commissions from the Selling Shareholders, the purchasers of the shares, or both. See “Plan
of Distribution” for a more complete description of the ways in which the shares may be sold.
Our Common Stock trades on the NYSE MKT
under the symbol “NNVC.” On December 9, 2014, the last reported sale price of our Common Stock on the NYSE MKT was
$3.05 per share. You are urged to obtain current market quotations of the Common Stock.
Investing in our securities involves
a high degree of risk. See “Risk Factors” beginning on page S-5 of this prospectus supplement.
Neither the Securities and Exchange
Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy
of this prospectus supplement or the accompanying prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is
December 10, 2014.
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first
part is this prospectus supplement, which describes the terms of this offering and also adds to and updates information contained
in the accompanying prospectus and the documents incorporated by reference into the accompanying prospectus. The second part is
the accompanying prospectus, which gives more general information about the shares of our common and preferred stock, warrants,
debt and other securities we may offer from time to time under our shelf registration statement, some of which may not apply to
the securities offered by this prospectus supplement. To the extent there is a conflict between the information contained in this
prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or any document incorporated
by reference therein, on the other hand, the information in this prospectus supplement shall control.
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 the accompanying 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 agreement, 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.
You should rely only on the information
contained in this prospectus supplement, the accompanying prospectus and information incorporated by reference herein and therein.
We have not authorized anyone else to provide you with different information. You should not assume that the information in this
prospectus supplement or the accompanying prospectus is accurate as of any date other than the date on the front of those documents
or that any document incorporated by reference is accurate as of any date other than its filing date. You should not consider this
prospectus supplement or the accompanying prospectus to be an offer or solicitation relating to the securities in any jurisdiction
in which such an offer or solicitation relating to the securities is not authorized. Furthermore, you should not consider this
prospectus supplement or the accompanying prospectus to be an offer or solicitation relating to the securities if the person making
the offer or solicitation is not qualified to do so, or if it is unlawful for you to receive such an offer or solicitation.
This prospectus supplement is part
of registration statements, and the amendments thereto, that we have filed with the Securities and Exchange
Commission (Registration File No. 333-199757) utilizing a “shelf” registration process. Under this shelf
registration process, we are registering for resale for the benefit of the Selling Shareholders, the previously issued and
outstanding Interest Shares using this prospectus supplement and the accompanying prospectus. In this prospectus supplement,
we provide you with specific information about the securities that we are selling in this offering. Both this prospectus
supplement and the accompanying prospectus include important information about us, our securities being offered and other
information you should know before investing. This prospectus supplement also adds, updates and changes information contained
in the accompanying prospectus. You should read this prospectus supplement and the accompanying prospectus as well as
additional information described under “Incorporation of Certain Documents by Reference” on page S-29 of this
prospectus supplement before investing in our securities.
This prospectus supplement contains summaries
of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete
information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred
to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which
this prospectus supplement is a part, and you may obtain copies of those documents as described below under the heading “Where
You Can Find More Information.”
Unless the context requires otherwise,
in this prospectus supplement and the accompanying prospectus the terms “NanoViricides,” “Company,” “we,”
“us” and “our” refer to NanoViricides, Inc., a Nevada corporation.
Prospective investors may rely only
on the information contained in this prospectus supplement. We have not authorized anyone to provide prospective investors with
different or additional information. This prospectus supplement is not an offer to sell nor is it seeking an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus supplement
is correct only as of the date of this prospectus supplement, regardless of the time of the delivery of this prospectus supplement
or any sale of these securities.
FORWARD-LOOKING INFORMATION
We caution you that
certain statements contained in this prospectus supplement that are not related to historical results are “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are predictive, that
depend upon or refer to future events or conditions, or that include words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “estimates,” “hopes,” or similar expressions
constitute forward-looking statements. They also include statements regarding:
| • | our future growth and profitability; |
| • | our competitive strengths; and |
| • | our business strategy and the trends we anticipate in the industries and economies in which we operate. |
These forward-looking
statements are based on our current expectations and are subject to a number of risks, uncertainties and assumptions. These statements
are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our
control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the
forward-looking statements. Important factors that could cause actual results to differ materially from those in forward-looking
statements include:
| • | economic downturns, reduced capital expenditures, consolidation and technological and regulatory changes in our industry; |
| • | the highly competitive nature of our industry; |
| • | our ability to attract and retain qualified managers and skilled employees; |
| • | the outcome of our plans for future operations and growth; and |
| • | the other factors referenced in this prospectus supplement, including, without limitation, under “Risk Factors.” |
We believe these forward-looking
statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current
expectations. Furthermore, forward-looking statements speak only as of the date they are made. If any of these risks or uncertainties
materialize, or if any of our underlying assumptions are incorrect, our actual results may differ significantly from the results
that we express in or imply by any of our forward-looking statements. These and other risks are detailed in this prospectus supplement,
in the accompanying prospectus, in the documents that we incorporate by reference into this prospectus supplement and the accompanying
prospectus and in other documents that we file with the Securities and Exchange Commission (the “Commission”). We do
not undertake any obligation to publicly update or revise these forward-looking statements after the date of this prospectus supplement
to reflect future events or circumstances. We qualify any and all of our forward-looking statements by these cautionary factors.
PROSPECTUS SUMMARY
This summary is
not complete and does not contain all of the information you should consider before investing in the securities offered by this
prospectus supplement and accompanying prospectus. You should read this summary together with the entire prospectus supplement
and accompanying prospectus, including our financial statements, the notes to those financial statements, and the other documents
identified under the headings “Where You Can Find More Information” and “Incorporation of Certain Documents by
Reference” in this prospectus supplement, before making an investment decision. See the Risk Factors section of this prospectus
supplement beginning on page S-7 for a discussion of the risks involved in investing in our securities.
Our Business
We are an early developmental
stage nano-biopharmaceutical company engaged in the discovery, development and commercialization of anti-viral therapeutics. We
have no customers, products or revenues to date, and may never achieve revenues or profitable operations. Our drugs are based on
several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour
Pharma, Inc., one of our principal shareholders, to which we have the licenses in perpetuity for the treatment of the following
human viral diseases:
| • | Influenza, Asian Bird Flu, and H1N1 “Swine Flu” Viruses; |
| • | Herpes Simplex Virus (HSV); |
| • | Human Immunodeficiency Virus (HIV/AIDS); |
| • | Adenoviral Conjunctivitis and Keratitis, and Ocular Indications of Herpes Simplex Types 1 & 2; |
| • | Dengue Fever types I, II, III, & IV; |
| • | Hepatitis B Virus (HBV); |
| • | Hepatitis C Virus (HCV); |
| • | Ebola and Marburg Viruses; |
| • | Japanese Encephalitis; and |
We focus our laboratory
research and pre-clinical programs on specific anti-viral solutions. We are seeking to add to our existing portfolio of products
through our internal discovery pre-clinical development programs and through an in-licensing strategy.
Company Information
Our principal executive
offices are located at 135 Wood Street, Suite 205, West Haven, Connecticut 06516. Our telephone number is (203) 937-6137. You
may also contact us or obtain additional information through our internet website address at www.nanoviricides.com. Information
contained on our website is not incorporated into this prospectus supplement and is not a part of this prospectus supplement.
Offering Summary
This summary highlights
certain information about this offering and selected information contained elsewhere in or incorporated by reference into this
prospectus supplement. This summary is not complete and does not contain all of the information that you should consider before
deciding whether to invest in shares of our common stock and warrants. For a more complete understanding of our Company and this
offering, we encourage you to read and consider carefully the more detailed information in this prospectus supplement and the accompanying
prospectus, including the information incorporated by reference into this prospectus supplement and the accompanying prospectus,
and the information referred to under the heading "RISK FACTORS" in this prospectus supplement on page S-7 and on page
7 of the accompanying prospectus, and in the documents incorporated by reference into this prospectus supplement and the accompanying
prospectus.
| Securities offered by the Selling Shareholders |
|
571,433 shares of Common Stock. See “Description of Securities” on page S-25 for a complete description of the factors you should consider carefully before deciding to invest in our Securities. |
| |
|
|
| Shares of Common Stock Outstanding After Offering |
|
58,321,521 shares of Common Stock
which includes the Interest Shares. |
| |
|
|
| Risk Factors |
|
Investing in our common shares and warrants involves a high degree of risk. Please read the information contained in and incorporated by reference under the heading "RISK FACTORS" on page S-5 of this prospectus supplement and page 3 of the accompanying prospectus, and under similar headings in the other documents, including our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q, that are incorporated by reference into this prospectus supplement and the accompanying prospectus. |
| |
|
|
| Use of proceeds |
|
The Company will not receive any proceeds from the sale of the
Interest Shares by the Selling Shareholders in this offering since they have been previously issued
to the Selling Shareholders. See “Use of Proceeds” |
| |
|
|
| Market for the Common Stock |
|
Our Common Stock trades on the NYSE MKT under the symbol “NNVC.” |
RISK FACTORS
An investment in
our securities is speculative and involves a high degree of risk. You should carefully consider the Risk Factors contained in our
most recent annual report on Form 10-K, as updated or supplemented by subsequent quarterly reports on Form 10-Q and current reports
on Form 8-K to the extent filed, each of which are incorporated herein by reference and the following Risk Factors, as the same
may be updated from time to time by our future filings under the Exchange Act, before making an investment decision. If any of
such Risk Factors actually occur, our business, results of operations, financial condition and cash flows could be materially adversely
affected, the trading price of our Common Stock could decline significantly, and you might lose all or part of your investment.
Additional risks
and uncertainties that we are unaware of or that we believe are not material at this time could also materially adversely affect
our business, financial condition or results of operations. In any case, the value of our Common Stock could decline, and you could
lose all or part of your investment, or our use of the offering proceeds may not yield a favorable return on your investment. You
should also refer to our financial statements and the notes to those statements, which are incorporated by reference in this prospectus
supplement.
Risks Relating to the Offering
The price of
our Common Stock may be volatile and your investment in our Common Stock could suffer a decline in value.
As of December 9, 2014,
the last trade price of our Common Stock, as quoted on the NYSE MKT, was $3.05. The price may fluctuate significantly in response
to a number of factors, many of which are beyond our control. These factors include:
| • | progress of our products through the regulatory process; |
| • | results of preclinical studies and clinical trials; |
| • | announcements of technological innovations or new products by us or our competitors; |
| • | government regulatory action affecting our products or our competitors' products in both the United
States and foreign countries; |
| • | developments or disputes concerning patent or proprietary rights; |
| • | general market conditions for emerging growth and pharmaceutical companies; |
| • | economic conditions in the United States or abroad; |
| • | actual or anticipated fluctuations in our operating results; |
| • | broad market fluctuations; and |
| • | changes in financial estimates by securities analysts. |
A significant
number of our Company’s shares will be eligible for sale, and their sale could depress the market price of our Company’s
stock.
As of December 9, 2014,
of approximately 58,321,511 issued and outstanding shares of our Company’s Common Stock approximately 15,999,908 shares were
restricted securities as defined under Rule 144 of the Securities Act of 1933, as amended (the “Act”) and under certain
circumstances may be resold without registration pursuant to Rule 144.
Approximately 3,086,888
shares of our restricted shares of Common Stock are held by non-affiliates who may avail themselves of the public information requirements
and sell their shares in accordance with Rule 144. As a result, some or all of these shares may be sold in accordance with Rule
144 potentially causing the price of our Company’s shares to decline.
In general, under Rule
144, a person (or persons whose shares are aggregated) who is not an Affiliate, as such term is defined in Rule 144(a)(1), of our
Company and who has satisfied a six month holding period, may sell their shares without any limitation, so long as we continue
to file our reports with the Commission. Rule 144 also permits, under certain circumstances, the sale of securities, by Affiliates
of our Company who have satisfied a one year holding, within any three-month period, a number of shares which does not exceed the
greater of 1% of the then outstanding shares of Common Stock or the average weekly trading volume of the class during the four
calendar weeks prior to such sale. Any substantial sale of our Company's Common Stock pursuant to Rule 144 may have an adverse
effect on the market price of our Company’s shares.
We do not intend
to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in our capital stock must come
from increases in the fair market value and trading price of the capital stock.
We have not paid any
cash dividends on our Common Stock and do not intend to pay cash dividends on our Common Stock in the foreseeable future. We intend
to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements, which
we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future
will be at the discretion of our board of directors and will be dependent upon our financial condition, results of operations,
capital requirements and any other factors that the board of directors decides is relevant. Therefore, any return on your investment
in our capital stock must come from increases in the fair market value and trading price of the capital stock.
We may issue
additional equity shares to fund our Company’s operational requirements which would dilute your share ownership.
Our Company's continued
viability depends on its ability to raise capital. Changes in economic, regulatory or competitive conditions may lead to cost increases.
Management may also determine that it is in the best interest of our Company to develop new services or products. In any such case
additional financing is required for our Company to meet its operational requirements. There can be no assurances that our Company
will be able to obtain such financing on terms acceptable to our Company and at times required by our Company, if at all. In such
event, our Company may be required to materially alter its business plan or curtail all or a part of its operational plans. The
sale or the proposed sale of substantial amounts of our Common Stock in the public markets may adversely affect the market price
of our Common Stock and our stock price may decline substantially.
Risks Related to the Securities Markets
and Investments in our Common Stock
If we do not meet the continued listing
standards of the NYSE MKT our common stock could be delisted from trading, which could limit investors’ ability to make transactions
in our common stock and subject us to additional trading restrictions.
Since September 25, 2013, our common stock
has been listed on the NYSE MKT, a national securities exchange, which imposes continued listing requirements with respect to listed
shares. If, however, we fail to satisfy the continued listing standards, such as, for example, the requirement that our shares
not trade “for a substantial period of time at a low price per share” or that we not dispose of our principal operating
assets or discontinue a substantial portion of our operations, among other requirements, the NYSE MKT may issue another non-compliance
letter or initiate delisting proceedings.
If our securities are delisted from trading
on the NYSE MKT and we are not able to list our securities on another exchange or to have them quoted on NASDAQ, our securities
could be quoted on the OTC Bulletin Board or on the “pink sheets.” As a result, we could face significant adverse consequences
including:
| • | a limited availability of market quotations for our securities; |
| • | a determination that our common stock is a “penny stock” which will require brokers
trading in our common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the
secondary trading market for our securities; |
| • | a limited amount of news and analyst coverage for us; and |
| • | a decreased ability to issue additional securities (including pursuant to short-form registration
statements on Form S-3 or obtain additional financing in the future). |
Our Company is subject to the periodic
reporting requirements of the Securities Exchange Act of 1934 (the “Exchange Act”), which will require us to incur
audit fees and legal fees in connection with the preparation of such reports. These additional costs will reduce or might eliminate
our profitability.
Our Company is required to file periodic
reports with the Commission pursuant to the Exchange Act and the rules and regulations promulgated thereunder. To comply with these
requirements, our independent registered auditors will have to review our quarterly financial statements and audit our annual financial
statements. Moreover, our legal counsel will have to review and assist in the preparation of such reports. The costs charged by
these professionals for such services cannot be accurately predicted at this time, because factors such as the number and type
of transactions that we engage in and the complexity of our reports cannot be determined at this time and will have a major effect
on the amount of time to be spent by our auditors and attorneys. However, the incurrence of such costs will obviously be an expense
to our operations and thus have a negative effect on our ability to meet our overhead requirements and earn a profit. We may be
exposed to potential risks resulting from new requirements under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot provide
reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence
in our reported financial information, the trading price of our Common Stock, if a market ever develops, could drop significantly,
or we could become subject to Commission enforcement proceedings.
As currently required under Section 404
of the Sarbanes-Oxley Act of 2002, we are required to include in our annual report our assessment of the effectiveness of our internal
control over financial reporting. The Company conducted an evaluation of the effectiveness of its internal control over financial
reporting as of June 30, 2013. Based on its evaluation, the Company concluded that its internal controls over financial reporting
were effective to provide reasonable assurance that information required to be disclosed is recorded, processed, summarized and
reported within the time periods specified by the rules and forms of the Commission. The material weakness relates to a lack of
a functioning audit committee and a lack of outside directors on the Company’s Board. The report of our independent registered
public accounting firm for the period ending June 30, 2013 indicated that our internal control over financial reporting was effective
as of June 30, 2013. We expect to continue to incur additional expenses and diversion of management's time as a result of performing
the system and process evaluation, testing, and remediation required to comply with the management certification and auditor attestation
requirements.
If we continue to fail to achieve and maintain
the adequacy of our internal controls, as such standards are modified, supplemented, or amended from time to time, we may not be
able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance
with Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls, particularly those related to revenue recognition,
are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. If we cannot provide
reliable financial reports or prevent fraud, our business and operating results would be harmed, investors could lose confidence
in our reported financial information, the trading price of our Common Stock, if a market ever develops, could drop significantly,
or we could become subject to the Commission’s enforcement proceedings.
Our Common Stock may be considered a “penny stock”
and may be difficult to sell.
The Commission has adopted regulations
which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share
or an exercise price of less than $5.00 per share, subject to specific exemptions. Historically, the price of our Common Stock
has fluctuated greatly. If, the market price of the Common Stock is less than $5.00 per share it therefore may be designated as
a “penny stock” according to Commission rules. The “penny stock” rules impose additional sales practice
requirements on broker-dealers who sell securities to persons other than established customers and accredited investors (generally
those with assets in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 together with their spouse). For transactions
covered by these rules, the broker-dealer must make a special suitability determination for the purchase of securities and have
received the purchaser's written consent to the transaction before the purchase. Additionally, for any transaction involving a
penny stock, unless exempt, the broker-dealer must deliver, before the transaction, a disclosure schedule prescribed by the Commission
relating to the penny stock market. The broker-dealer also must disclose the commissions payable to both the broker-dealer and
the registered representative and current quotations for the securities. Finally, monthly statements must be sent disclosing recent
price information on the limited market in penny stocks. These additional burdens imposed on broker-dealers may restrict the ability
or decrease the willingness of broker-dealers to sell our common shares, and may result in decreased liquidity for our common shares
and increased transaction costs for sales and purchases of our common shares as compared to other securities.
Our stock price may be volatile and
your investment in our common stock could suffer a decline in value.
The price of our common stock, as quoted
on the NYSE MKT may fluctuate significantly in response to a number of factors, many of which are beyond our control. These factors
include:
| • | progress of our products through the regulatory process; |
| • | results of preclinical studies and clinical trials; |
| • | announcements of technological innovations or new products by us or our competitors; |
| • | government regulatory action affecting our products or our competitors' products in both the United
States and foreign countries; |
| • | developments or disputes concerning patent or proprietary rights; |
| • | general market conditions for emerging growth and pharmaceutical companies; |
| • | economic conditions in the United States or abroad; |
| • | actual or anticipated fluctuations in our operating results; |
| • | broad market fluctuations; and |
| • | changes in financial estimates by securities analysts. |
There is a risk of market fraud.
Shareholders should be aware that, according
to SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns
include (1) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer;
(2) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (3) boiler
room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (4) excessive
and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale dumping of the same securities
by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse
of those prices and with consequent investor losses. We are aware of the abuses that have occurred historically in the penny stock
market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate
in the market, management will strive within the confines of practical limitations to prevent the described patterns from being
established with respect to our securities. The occurrence of these patterns or practices could increase the volatility of our
share price.
Since September 25, 2013, our common stock
has been listed on the NYSE MKT national exchange. However, shareholders should be aware that the occurrence of the above-mentioned
patterns and practices cannot be entirely precluded and that the occurrence of these patterns or practices could increase the volatility
of our share price.
A registration of a significant amount
of our outstanding restricted stock may have a negative effect on the trading price of our stock.
At December 9, 2014 shareholders of the
Company had approximately 15,999,908 shares of restricted stock, or approximately 27% of the outstanding common stock. If
we were to file a registration statement including all of these shares, and the registration is allowed by the SEC, these shares
would be freely tradable upon the effectiveness of the planned registration statement. If investors holding a significant number
of freely tradable shares decide to sell them in a short period of time following the effectiveness of a registration statement,
such sales could contribute to significant downward pressure on the price of our stock.
We do not intend to pay any cash
dividends in the foreseeable future and, therefore, any return on your investment in our capital stock must come from increases
in the fair market value and trading price of the capital stock.
We have not paid any cash dividends on
our common stock and do not intend to pay cash dividends on our common stock in the foreseeable future. We intend to retain future
earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements, which we may enter
into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future will be
at the discretion of our board of directors and will be dependent upon our financial condition, results of operations, capital
requirements and any other factors that the board of directors decides is relevant. Therefore, any return on your investment in
our capital stock must come from increases in the fair market value and trading price of the capital stock.
We may issue additional equity shares
to fund the Company’s operational requirements, which would dilute share ownership.
The Company's continued viability depends
on its ability to raise capital. Changes in economic, regulatory or competitive conditions may lead to cost increases. Management
may also determine that it is in the best interest of the Company to develop new services or products. In any such case additional
financing is required for the Company to meet its operational requirements. There can be no assurances that the Company will be
able to obtain such financing on terms acceptable to the Company and at times required by the Company, if at all. In such event,
the Company may be required to materially alter its business plan or curtail all or a part of its operational plans as detailed
further in Management’s Discussion and Analysis in this Form 10-K. While the Company currently has no offers to sell its
securities to obtain financing, sale or the proposed sale of substantial amounts of our common stock in the public markets may
adversely affect the market price of our common stock and our stock price may decline substantially. In the event that the Company
is unable to raise or borrow additional funds, the Company may be required to curtail significantly its operational plans as further
detailed in Requirements for Additional Capital in the Management Discussion and Analysis of the Company’s Form 10-K.
The Company is authorized to issue up to
85,714,286 total shares of Common Stock on a post-split basis without additional approval by shareholders. As of December 9, 2014,
we had approximately 58,321,521 shares of common stock outstanding, and warrants, debentures, preferred stock and options convertible
to approximately 22,374,251 shares of common stock outstanding.
Large amounts of our common stock
will be eligible for resale under Rule 144.
As of December 9, 2014, approximately 15,999,908
issued and outstanding shares of the Company’s common stock were restricted securities as defined under Rule 144 of the Securities
Act of 1933, as amended (the “Act”) and under certain circumstances may be resold without registration pursuant to
Rule 144.
Approximately 3,086,888 shares of
our restricted shares of common stock are held by non-affiliates who may avail themselves of the public information
requirements and sell their shares in accordance with Rule 144. As a result, some or all of these shares may be sold in
accordance with Rule 144 potentially causing the price of the Company’s shares to decline.
In general, under Rule 144, a person (or
persons whose shares are aggregated) who has satisfied a six month holding period may, under certain circumstances, sell within
any three-month period a number of securities which does not exceed the greater of 1% of the then outstanding shares of common
stock or the average weekly trading volume of the class during the four calendar weeks prior to such sale. Rule 144 also permits,
under certain circumstances, the sale of securities, without any limitation, by a person who is not an Affiliate, as such term
is defined in Rule 144(a)(1), of the Company and who has satisfied a one-year holding period. Any substantial sale of the Company's
common stock pursuant to Rule 144 may have an adverse effect on the market price of the Company’s shares. This filing will
satisfy certain public information requirements necessary for such shares to be sold under Rule 144.
The requirements of complying with
the Sarbanes-Oxley act may strain our resources and distract management.
We are subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Sarbanes-Oxley Act of 2002. The costs
associated with these requirements may place a strain on our systems and resources. The Exchange Act requires that we file annual,
quarterly and current reports with respect to our business and financial condition. The Sarbanes-Oxley Act requires that we maintain
effective disclosure controls and procedures and internal controls over financial reporting. Historically, as a private company
we have maintained a small accounting staff, but in order to maintain and improve the effectiveness of our disclosure controls
and procedures and internal control over financial reporting, significant additional resources and management oversight will be
required. This includes, among other things, retaining independent public accountants. This effort may divert management’s
attention from other business concerns, which could have a material adverse effect on our business, financial condition, results
of operations and cash flows. In addition, we may need to hire additional accounting and financial persons with appropriate public
company experience and technical accounting knowledge, and we cannot assure you that we will be able to do so in a timely fashion.
Sales of additional equity securities
may adversely affect the market price of our common stock and your rights in the Company may be reduced.
We expect to continue to incur drug development
and selling, general and administrative costs, and in order to satisfy our funding requirements, we may need to sell additional
equity securities. Our stockholders may experience substantial dilution and a reduction in the price that they are able to obtain
upon sale of their shares. Also, any new securities issued may have greater rights, preferences or privileges than our existing
common stock that may adversely affect the market price of our common stock and our stock price may decline substantially.
Risks Specific to our Company
Our company is a development stage
company that has no products approved for commercial sale, never generated any revenues and may never achieve revenues or profitability.
Our company is a development stage company
that has no products approved for commercial sale, never generated any revenues and may never achieve revenues or profitability.
We are a development stage biopharmaceutical company. Currently, we have no products approved for commercial sale and, to date,
we have not generated any revenues. Our ability to generate revenue depends heavily on:
| • | demonstration and proof of principle in pre-clinical trials that a nanoviricide is safe and effective; |
| • | successful development of our first product candidates FluCide, Nanoviricide Eye Drops, HIVCide,
HerpeCide or another one of the drug candidates in our pipeline; |
| • | our ability to seek and obtain regulatory approvals, including with respect to the indications
we are seeking; |
| • | the successful commercialization of our product candidates; and |
| • | market acceptance of our products. |
All of our existing product candidates
are in early stages of development. It will be several years, if ever, until we have a commercial drug product available for resale.
If we do not successfully develop and commercialize these products, we will not achieve revenues or profitability in the foreseeable
future, if at all. If we are unable to generate revenues or achieve profitability, we may be unable to continue our operations.
We are a development stage company with
a limited operating history, making it difficult for you to evaluate our business and your investment. We are in the development
stage and our operations and the development of our proposed products are subject to all of the risks inherent in the establishment
of a new business enterprise, including but not limited to:
| • | the absence of an operating history; |
| • | the lack of commercialized products; |
| • | expected substantial and continual losses for the foreseeable future; |
| • | limited experience in dealing with regulatory issues; the lack of manufacturing experience and
limited marketing experience; |
| • | an expected reliance on third parties for the development and commercialization of our proposed
products; |
| • | a competitive environment characterized by numerous, well-established and well capitalized competitors;
and |
| • | reliance on key personnel. |
Because we are subject to these risks,
you may have a difficult time evaluating our business and your investment in our company.
Our ability to become profitable depends
primarily on the following factors:
| • | our ability to develop drugs, obtain approval for such drugs, and if approved, to successfully
commercialize our nanoviricide drug(s); |
| • | our R&D efforts, including the timing and cost of clinical trials; and |
| • | our ability to enter into favorable alliances with third-parties who can provide substantial capabilities
in clinical development,
regulatory affairs, sales, marketing and distribution. |
Even if we successfully develop and
market our drug candidates, we may not generate sufficient or sustainable revenue to achieve or sustain profitability.
We have incurred significant operating
losses and may not ever be profitable. As of September 30, 2014, we had a cash and cash equivalent balance of $41,120,652. Also,
the Company has incurred significant operating losses since its inception, resulting in an accumulated deficit of $52,645,328 at
September 30, 2014. Such losses are expected to continue for the foreseeable future. As a result of recent financings, the Company
estimates that it has sufficient cash to support current operations through the next two years.
We will need to raise substantial
additional capital in the future to fund our operations and we may be unable to raise such funds when needed and on acceptable
terms.
We currently do not have sufficient resources
to complete the development and commercialization of any of our proposed products. As of September 30, 2014, we have a cash and
cash equivalent balance of $41,120,652 which will be sufficient to fund our operations for the next two years at our budgeted rate
of expenditures.
In the event that we cannot obtain acceptable
financing, or that we are unable to secure additional financing on acceptable terms, we would be unable to complete development
of our various drug candidates. This would necessitate implementing staff reductions and operational adjustments that would include
reductions in the following business areas:
| • | research and development programs; |
| • | preclinical studies and clinical trials; material characterization studies, regulatory processes; |
| • | establishment of our own laboratory or a search for third party marketing partners to market our
products for us. |
The amount of capital we may need will
depend on many factors, including the:
| • | progress, timing and scope of our research and development programs; |
| • | progress, timing and scope of our preclinical studies and clinical trials; |
| • | time and cost necessary to obtain regulatory approvals; |
| • | time and cost necessary to establish our own marketing capabilities or to seek marketing partners; |
| • | time and cost necessary to respond to technological and market developments; |
| • | changes made or new developments in our existing collaborative, licensing and other commercial
relationships; and |
| • | new collaborative, licensing and other commercial relationships that we may establish. |
Our fixed expenses, such as rent, license
payments and other contractual commitments, may increase in the future, as we may:
| • | enter into leases for new facilities and capital equipment; |
| • | enter into additional licenses and collaborative agreements; and |
| • | incur additional expenses associated with being a public company. |
We have limited experience in drug
development and may not be able to successfully develop any drugs.
Until the formation of NanoViricide, Inc.
(the Company's predecessor prior to the reverse merger in 2005) our management and key personnel had no experience in pharmaceutical
drug development and, consequently, may not be able to successfully develop any drugs. Our ability to achieve revenues and profitability
in our business will depend, among other things, on our ability to:
| • | develop products internally or obtain rights to them from others on favorable terms; |
| • | complete laboratory testing and human studies; |
| • | obtain and maintain necessary intellectual property rights to our products; |
| • | successfully complete regulatory review to obtain requisite governmental agency approvals; |
| • | enter into arrangements with third parties to manufacture our products on our behalf; and |
| • | enter into arrangements with third parties to provide sales and marketing functions. |
Development of pharmaceutical products
is a time-consuming process, subject to a number of factors, many of which are outside of our control. Consequently, we can provide
no assurance of the successful and timely development of new drugs.
Our drug candidates are in their developmental
stage. Further development and extensive testing will be required to determine their technical feasibility and commercial viability.
Our success will depend on our ability to achieve scientific and technological advances and to translate such advances into reliable,
commercially competitive drugs on a timely basis. Drugs that we may develop are not likely to be commercially available for a few
years. The proposed development schedules for our drug candidates may be affected by a variety of factors, including technological
difficulties, proprietary technology of others, and changes in government regulation, many of which will not be within our control.
Any delay in the development, introduction or marketing of our drug candidates could result either in such drugs being marketed
at a time when their cost and performance characteristics would not be competitive in the marketplace or in the shortening of their
commercial lives. In light of the long-term nature of our projects, the unproven technology involved and the other factors described
elsewhere in “Risk Factors”, we may not be able to complete successfully the development or marketing of any drugs.
We may fail to successfully develop and
commercialize our drug candidates because they:
| • | are found to be unsafe or ineffective in clinical trials; |
| • | do not receive necessary approval from the FDA or foreign regulatory agencies; |
| • | fail to conform to a changing standard of care for the diseases they seek to treat; or |
| • | are less effective or more expensive than current or alternative treatment methods. |
Drug development failure can occur at any
stage of clinical trials and as a result of many factors and there can be no assurance that we or our collaborators will reach
our anticipated clinical targets. Even if we or our collaborators complete our clinical trials, we do not know what the long-term
effects of exposure to our drug candidates will be. Furthermore, our drug candidates may be used in combination with other treatments
and there can be no assurance that such use will not lead to unique safety issues. Failure to complete clinical trials or to prove
that our drug candidates are safe and effective would have a material adverse effect on our ability to generate revenue and could
require us to reduce the scope of or discontinue our operations.
We must comply with significant and
complex government regulations, compliance with which may delay or prevent the commercialization of our drug candidates.
The R&D, manufacture and marketing
of drug candidates are subject to regulation, primarily by the FDA in the United States and by comparable authorities in other
countries. These national agencies and other federal, state, local and foreign entities regulate, among other things, R&D activities
(including testing in primates and in humans) and the testing, manufacturing, handling, labeling, storage, record keeping, approval,
advertising and promotion of the products that we are developing. Noncompliance with applicable requirements can result in various
adverse consequences, including approval delays or refusals to approve drug licenses or other applications, suspension or termination
of clinical investigations, revocation of approvals previously granted, fines, criminal prosecution, recalls or seizures of products,
injunctions against shipping drugs and total or partial suspension of production and/or refusal to allow a company to enter into
governmental supply contracts.
The process of obtaining FDA approval has
historically been costly and time consuming. Current FDA requirements for a new human drug or biological product to be marketed
in the United States include: (1) the successful conclusion of pre-clinical laboratory and animal tests, if appropriate, to gain
preliminary information on the product’s safety; (2) filing with the FDA of an IND application to conduct human clinical
trials for drugs or biologics; (3) the successful completion of adequate and well-controlled human clinical investigations to establish
the safety and efficacy of the product for its recommended use; and (4) filing by a company and acceptance and approval by the
FDA of a New Drug Application, or NDA, for a drug product or a biological license application, or BLA, for a biological product
to allow commercial distribution of the drug or biologic. A delay in one or more of the procedural steps outlined above could be
harmful to us in terms of getting our drug candidates through clinical testing and to market.
The FDA reviews the results of the clinical
trials and may order the temporary or permanent discontinuation of clinical trials at any time if it believes the drug candidate
exposes clinical subjects to an unacceptable health risk. Investigational drugs used in clinical studies must be produced in compliance
with current good manufacturing practice, or GMP, rules pursuant to FDA regulations.
Sales outside the United States of products
that we develop will also be subject to regulatory requirements governing human clinical trials and marketing for drugs and biological
products and devices. The requirements vary widely from country to country, but typically the registration and approval process
takes several years and requires significant resources. In most cases, even if the FDA has not approved a product for sale in the
United States, the product may be exported to any country if it complies with the laws of that country and has valid marketing
authorization by the appropriate authority. There are specific FDA regulations that govern this process.
We also are subject to the following risks
and obligations, related to the approval of our products:
| • | The FDA or foreign regulators may interpret data from pre-clinical testing and clinical trials
in different ways than we interpret them. |
| • | If regulatory approval of a product is granted, the approval may be limited to specific indications
or limited with respect to its distribution. |
| • | In addition, many foreign countries control pricing and coverage under their respective national
social security systems. |
| • | The FDA or foreign regulators may not approve our manufacturing processes or manufacturing facilities. |
| • | The FDA or foreign regulators may change their approval policies or adopt new regulations. |
| • | Even if regulatory approval for any product is obtained, the marketing license will be subject
to continual review, and newly discovered or developed safety or effectiveness data may result in suspension or revocation of the
marketing license. |
| • | If regulatory approval of the product candidate is granted, the marketing of that product would
be subject to adverse event reporting requirements and a general prohibition against promoting products for unapproved or “off-label”
uses. |
| • | In some foreign countries, we may be subject to official release requirements that require each
batch of the product we produce to be officially released by regulatory authorities prior to its distribution by us. |
| • | We will be subject to continual regulatory review and periodic inspection and approval of manufacturing
modifications, including compliance with current GMP regulations. |
We can provide no assurance that
our drug candidates will obtain regulatory approval or that the results of clinical studies will be favorable.
The Company reports summary of its studies
as the data become available to the Company, after analyzing and verifying same, in its press releases.
In accord with our work-plan we filed a
pre-IND application with the US FDA, and held a meeting with the US FDA for our anti-influenza drug candidate, NV-INF-1 in March,
2012. Subsequent to that, we have a developed an orally available anti-influenza drug candidate based on our nanoviricides technology.
This may be the first time ever that a targeted nanomedicine with activity when given orally has been developed and such activity
demonstrated in vivo. We are now performing certain preclinical animal studies on this drug candidate. A set of these studies is
designed to evaluate the safety and toxicology in animal models. Another set of the studies is designed to evaluate the pharmacokinetics
and pharmacodynamics of the drug in animals. In addition, we have begun to perform efficacy studies using multiple different unrelated
types and subtypes of influenza viruses in order to assess the broad-spectrum anti-influenza activity of our drug candidates. The
efficacy studies are being performed in various in vitro (cell culture) models as well as in vivo (animal) models. In addition,
we are performing certain chemical and physical characterizations, chemistry synthesis process optimizations, and quality control
and quality assurance studies. Further, we need to scale up the syntheses to a larger scale of about 1kg. These chemistry, characterization,
manufacturing, and quality studies will form part of the CMC package (Chemistry, Manufacturing, and Controls). The data will then
be used to file an IND application or its overseas equivalent, towards the goal of obtaining regulatory approval for testing the
drugs in humans.
On July 23, 2012 the Company announced
that it had retained Australian Biologics Pty. Ltd, a regulatory affairs consulting firm, to coordinate the regulatory review and
approval to conduct the first human trials in Australia for Flucide™, the Company’s broad spectrum anti-influenza drug.
Australian Biologics Pty. Ltd will also facilitate clinical trial site selection and development of clinical trial agreements which
we intend to pursue. The Company has previously retained the Biologics Consulting Group for helping us formulate our regulatory
strategy, design the studies to be performed, and develop the IND application for submission to the US FDA.
The testing, marketing and manufacturing
of any product for use in the United States will require approval from the FDA. We cannot predict with any certainty the amount
of time necessary to obtain such FDA approval and whether any such approval will ultimately be granted. Preclinical and clinical
trials may reveal that one or more products are ineffective or unsafe, in which event further development of such products could
be seriously delayed or terminated. Moreover, obtaining approval for certain products may require testing on human subjects of
substances whose effects on humans are not fully understood or documented. Delays in obtaining FDA or any other necessary regulatory
approvals of any proposed drug and failure to receive such approvals would have an adverse effect on the drug’s potential
commercial success and on our business, prospects, financial condition and results of operations. In addition, it is possible that
a proposed drug may be found to be ineffective or unsafe due to conditions or facts that arise after development has been completed
and regulatory approvals have been obtained. In this event, we may be required to withdraw such proposed drug from the market.
To the extent that our success will depend on any regulatory approvals from government authorities outside of the United States
that perform roles similar to that of the FDA, uncertainties similar to those stated above will also exist.
Even if we obtain regulatory approvals,
our marketed drug candidates will be subject to ongoing regulatory review. If we fail to comply with continuing U.S. and foreign
regulations, we could lose our approvals to market these drugs and our business would be seriously harmed.
Following any initial regulatory approval
of any drugs we may develop, we will also be subject to continuing regulatory review, including the review of adverse experiences
and clinical results that are reported after our drug candidates are made commercially available. This would include results from
any post-marketing tests or vigilance required as a condition of approval. The manufacturer and manufacturing facilities we use
to make any of our drug candidates will also be subject to periodic review and inspection by the FDA. The discovery of any previously
unknown problems with the drug, manufacturer or facility may result in restrictions on the drug or manufacturer or facility, including
withdrawal of the drug from the market. If we are required to withdraw all or more of our drugs from the market, we may be unable
to continue revenue generating operations. We do not have, and currently do not intend to develop, the ability to manufacture material
for our clinical trials or on a commercial scale. Reliance on third-party manufacturers entails risks to which we would not be
subject if we manufactured drugs ourselves, including reliance on the third-party manufacturer for regulatory compliance. Our drug
promotion and advertising is also subject to regulatory requirements and continuing FDA review.
Development of our drug candidates
requires a significant investment in R&D. Our R&D expenses in turn, are subject to variation based on a number of factors,
many of which are outside of our control. A sudden or significant increase in our R&D expenses could materially and adversely
impact our results of operations.
We have expended $28,804,060 on research
and development from inception through June 30, 2014.
We have an R&D and other costs budget
of approximately $5,000,000 for the next 12 months. In the last three years we have established lead compounds against a number
of viral diseases and completed proof of principle studies against a number of viral diseases. We now have lead drug compounds
against all Influenzas, HIV, Viral diseases of the Eye, Oral and Genital Herpes, and Dengue viruses. We are currently working on
identifying and establishing collaborations with pharmaceutical companies as well as government institutions for the purpose of
co- development of these products. Notwithstanding these efforts, we will continue the development of these drugs, as well as our
other drug development endeavors that include Rabies, Dengue viruses, and Ebola/Marburg viruses.
We currently have sufficient funds on hand
to take a drug candidate into human clinical trials. We believe we will be pursuing Injectable FlucideTM as our first
drug candidate for an IND and initiating human clinical trials. Beyond this development, we estimate that we may need approximately
an additional $10M to $15M for human development of the Oral Fluicide and Denguecide drug candidates towards IND filing over the
next 36-48 months. The additional funds will also be needed to pay additional personnel, increased subcontract costs related to
the expansion and further development of our drug pipeline, and for additional capital and operational expenditures required to
file the additional IND applications..
The Company will be unable to proceed
with its business plan beyond September 30, 2016, without obtaining additional financing of approximately $10-15 million to support
its budgeted Research and Development and other costs.
Because we expect to expend substantial
resources on R&D, our success depends in large part on the results as well as the costs of our R&D. A failure in our R&D
efforts or substantial increase in our R&D expenses would adversely affect our results of operations. R&D expenditures
are uncertain and subject to much fluctuation. Factors affecting our R&D expenses include, but are not limited to:
| • | the number and outcome of clinical studies we are planning to conduct; for example, our R&D
expenses may increase based on the number of late-stage clinical studies that we may be required to conduct; |
| • | the number of drugs entering into pre-clinical development from research; for example, there is
no guarantee that internal research efforts will succeed in generating sufficient data for us to make a positive development decision; |
| • | licensing activities, including the timing and amount of related development funding or milestone
payments; for example, we may enter into agreements requiring us to pay a significant up-front fee for the purchase of in-process
R&D that we may record as R&D expense. |
We have no experience in conducting
or supervising clinical trials and must outsource all clinical trials.
We have no experience in conducting or
supervising clinical trials that must be performed to obtain data to submit in concert with applications for approval by the Food
and Drug Administration (“FDA”). The regulatory process to obtain approval for drugs for commercial sale involves numerous
steps. Drugs are subjected to clinical trials that allow development of case studies to examine safety, efficacy, and other issues
to ensure that sale of drugs meets the requirements set forth by various governmental agencies, including the FDA. In the event
that our protocols do not meet standards set forth by the FDA, or that our data is not sufficient to allow such trials to validate
our drugs in the face of such examination, we might not be able to meet the requirements that allow our drugs to be approved for
sale.
Because we have no experience in conducting
or supervising clinical trials, we must outsource our clinical trials to third parties. We have no control over their compliance
with procedures and protocols used to complete clinical trails in accordance with standards required by the agencies that approve
drugs for sale. If these subcontractors fail to meet these standards, the validation of our drugs would be adversely affected,
causing a delay in our ability to meet revenue-generating operations.
We are subject to risks inherent
in conducting clinical trials. The risk of non compliance with FDA-approved good clinical practices by clinical investigators,
clinical sites, or data management services could delay or prevent us from developing or ever commercializing our drug candidates.
Agreements with clinical investigators
and medical institutions for clinical testing and with other third parties for data management services place substantial responsibilities
on these parties, which could result in delays in, or termination of, our clinical trials if these parties fail to perform as expected.
For example, if any of our clinical trial sites fail to comply with FDA-approved good clinical practices, we may be unable to use
the data gathered at those sites. If these clinical investigators, medical institutions or other third parties do not carry out
their contractual duties or obligations or fail to meet expected deadlines, or if the quality or accuracy of the clinical data
they obtain is compromised due to their failure to adhere to our clinical protocols or for other reasons, our clinical trials may
be extended, delayed or terminated, and we may be unable to obtain regulatory approval for or successfully commercialize our drug
candidates.
We or regulators may suspend or terminate
our clinical trials for a number of reasons. We may voluntarily suspend or terminate our clinical trials if at any time we believe
that they present an unacceptable risk to the patients enrolled in our clinical trials. In addition, regulatory agencies may order
the temporary or permanent discontinuation of our clinical trials at any time if they believe that the clinical trials are not
being conducted in accordance with applicable regulatory requirements or that they present an unacceptable safety risk to the patients
enrolled in our clinical trials.
Our clinical trial operations will be subject
to regulatory inspections at any time. If regulatory inspectors conclude that we or our clinical trial sites are not in compliance
with applicable regulatory requirements for conducting clinical trials, we may receive reports of observations or warning letters
detailing deficiencies, and we will be required to implement corrective actions. If regulatory agencies deem our responses to be
inadequate, or are dissatisfied with the corrective actions that we or our clinical trial sites have implemented, our clinical
trials may be temporarily or permanently discontinued, we may be fined, we or our investigators may be precluded from conducting
any ongoing or any future clinical trials, the government may refuse to approve our marketing applications or allow us to manufacture
or market our drug candidates or we may be criminally prosecuted. If we are unable to complete clinical trials and have our products
approved due to our failure to comply with regulatory requirements, we will be unable to commence revenue generating operations.
Efforts of government and third-party
payors to contain or reduce the costs of health care may adversely affect our revenues even if we were to develop an FDA approved
drug.
Our ability to earn sufficient returns
on our drug candidates may depend in part on the extent to which government health administration authorities, private health coverage
insurers and other organizations will provide reimbursement for the costs of such drugs and related treatments. Significant uncertainty
exists as to the reimbursement status of newly approved health care drugs, and we do not know whether adequate third-party coverage
will be available for our drug candidates. If our current and proposed drugs are not considered cost-effective, reimbursement to
the consumers may not be available or sufficient to allow us to sell drugs on a competitive basis. The failure of the government
and third-party payors to provide adequate coverage and reimbursement rates for our drug candidates could adversely affect the
market acceptance of our drug candidates, our competitive position and our financial performance.
If we fail to comply with applicable
continuing regulatory requirements, we may be subject to fines, suspension or withdrawal of regulatory approval, product recalls
and seizures, operating restrictions and criminal prosecutions.
Confidentiality agreements with employees
and others may not adequately prevent disclosure of trade secrets and other proprietary information. Disclosure of our trade secrets
or proprietary information could compromise any competitive advantage that we have.
We depend upon confidentiality agreements
with our officers, employees, consultants, and subcontractors to maintain the proprietary nature of the technology. These measures
may not afford us sufficient or complete protection, and may not afford an adequate remedy in the event of an unauthorized disclosure
of confidential information. In addition, others may independently develop technology similar to ours, otherwise avoiding the confidentiality
agreements, or produce patents that would materially and adversely affect our business, prospects, financial condition, and results
of operations.
We will rely upon licensed patents
to protect our technology. We may be unable to obtain or protect such intellectual property rights, and we may be liable for infringing
upon the intellectual property rights of others.
Our ability to compete effectively will
depend on our ability to maintain the proprietary nature of our technologies and the proprietary technology of others with which
we have entered into licensing agreements. We have exclusively licensed patent applications from TheraCour Pharma, Inc. and expect
to file patents of our own in the coming years. There can be no assurance that any of these patent applications will ultimately
result in the issuance of a patent with respect to the technology owned by us or licensed to us. The patent position of pharmaceutical
or biotechnology companies, including ours, is generally uncertain and involves complex legal and factual considerations. The standards
that the United States Patent and Trademark Office use to grant patents are not always applied predictably or uniformly and can
change. There is also no uniform, worldwide policy regarding the subject matter and scope of claims granted or allowable in pharmaceutical
or biotechnology patents. Accordingly, we do not know the degree of future protection for our proprietary rights or the breadth
of claims that will be allowed in any patents issued to us or to others. Further, we rely on a combination of trade secrets, know-how,
technology and nondisclosure, and other contractual agreements and technical measures to protect our rights in the technology.
If any trade secret, know-how or other technology not protected by a patent were to be disclosed to or independently developed
by a competitor, our business and financial condition could be materially adversely affected.
We do not believe that any of the drug
candidates we are currently developing infringe upon the rights of any third parties nor are they infringed upon by third parties;
however, there can be no assurance that our technology will not be found in the future to infringe upon the rights of others or
be infringed upon by others. In such a case, others may assert infringement claims against us, and should we be found to infringe
upon their patents, or otherwise impermissibly utilize their intellectual property, we might be forced to pay damages, potentially
including treble damages, if we are found to have willfully infringed on such parties’ patent rights. In addition to any
damages we might have to pay, we may be required to obtain licenses from the holders of this intellectual property, enter into
royalty agreements, or redesign our drug candidates so as not to utilize this intellectual property, each of which may prove to
be uneconomical or otherwise impossible. Conversely, we may not always be able to successfully pursue our claims against others
that infringe upon our technology and the technology exclusively licensed from the TheraCour Pharma Inc. Thus, the proprietary
nature of our technology or technology licensed by us may not provide adequate protection against competitors.
Moreover, the cost to us of any litigation
or other proceeding relating to our patents and other intellectual property rights, even if resolved in our favor, could be substantial,
and the litigation would divert our management’s efforts. Uncertainties resulting from the initiation and continuation of
any litigation could limit our ability to continue our operations.
Other companies or organizations
may assert patent rights that prevent us from developing and commercializing our drug candidates.
We are in a relatively new scientific field
that has generated many different patent applications from organizations and individuals seeking to obtain important patents in
the field. Because the field is so new, very few of these patent applications have been fully processed by government patent offices
around the world, and there is a great deal of uncertainty about which patents will issue, when, to whom, and with what claims.
It is likely that there will be significant litigation and other proceedings, such as interference proceedings in various patent
offices, relating to patent rights in the field. Others may attempt to invalidate our patents or other intellectual property rights.
Even if our rights are not directly challenged, disputes among third parties could lead to the weakening or invalidation of those
intellectual property rights.
Thus, it is possible that one or more organizations
will hold patent rights to which we will need a license. Any license required under any patent may not be made available on commercially
acceptable terms, if at all. In addition, such licenses are likely to be non-exclusive and, therefore, our competitors may have
access to the same technology licensed to us. If we fail to obtain a required license and are unable to design around a patent,
we may be unable to effectively market some of our technology and drug candidates, which could limit our ability to generate revenues
or achieve profitability and possibly prevent us from generating revenue sufficient to sustain our operations.
We are dependent upon TheraCour Pharma
Inc. for the rights to develop the products we intend to sell.
Our ability to develop, manufacture and
sell the products the Company plans to develop is derived from our “Material Licensing Agreement” with TheraCour Pharma
Inc. (“TheraCour”). While we hold the license in perpetuity, the Agreement may be terminated by TheraCour as a result
of: the insolvency or bankruptcy proceedings by or against the Company, a general assignment by the Company to is creditors, the
dissolution of the Company, cessation by the Company of business operations for ninety (90) days or more or the commencement by
the Company or an affiliate to challenge or invalidate the issued patents.
The Company does not hold the rights to
any other patents nor does the Company conduct its own research and development to develop other products to manufacture and sell.
If the Company’s Agreement with TheraCour is terminated, it is unlikely we will be able to commence revenue-generating operations
or that the Company could continue operating at all.
We lack suitable facilities for clinical
testing; reliance on third parties.
The Company does not have facilities that
could be used to conduct clinical testing. We expect to contract with third parties to conduct all clinical testing required to
obtain approvals for any drugs that we might develop. We currently outsource all clinical testing to a number of third parties
in various collaborations and service contracts. In addition, KARD Scientific is not under contract to perform studies for us,
and studies are commissioned with KARD on an as needed basis. Any of our collaborators or service providers may discontinue the
service contract or collaboration. We will then be required to modify our priorities and goals, obtain other collaborators or service
providers to replace the ones we lose, or we may even be forced to abandon certain drug development programs. In addition, any
failures by third parties to adequately perform their responsibilities may delay the submission of our proposed products for regulatory
approval, impair our ability to deliver our products on a timely basis or otherwise impair our competitive position.
We have limited manufacturing experience.
The Company has never manufactured products
in the highly regulated environment of pharmaceutical manufacturing. There are numerous regulations and requirements that must
be maintained to obtain licensure and the permits required to commence manufacturing, as well as additional requirements to continue
manufacturing pharmaceutical products. We do not own or lease facilities currently that could be used to manufacture any products
that might be developed by the Company, nor do we have the resources at this time to acquire or lease suitable facilities.
We have no sales and marketing personnel.
We are an early stage development Company
with limited resources. We do not currently have any products available for sale, so have not secured sales and marketing staff
at this early stage of operations. We cannot generate sales without sales or marketing staff and must rely on officers to provide
any sales or marketing services until such staff are secured, if ever. Even if we were to successfully develop approvable drugs,
we will not be able to sell these drugs if we or our third party manufacturers fail to comply with manufacturing regulations.
If we were to successfully develop approvable
drugs, before we can begin selling these drugs, we must obtain regulatory approval of our manufacturing facility and process or
the manufacturing facility and process of the third party or parties with whom we may outsource our manufacturing activities. In
addition, the manufacture of our products must comply with the FDA's current Good Manufacturing Practices regulations, commonly
known as GMP regulations. The GMP regulations govern quality control and documentation policies and procedures. Our manufacturing
facilities, if any in the future and the manufacturing facilities of our third party manufacturers will be continually subject
to inspection by the FDA and other state, local and foreign regulatory authorities, before and after product approval. We cannot
guarantee that we, or any potential third party manufacturer of our products, will be able to comply with the GMP regulations or
other applicable manufacturing regulations.
As of the date of this filing, we have
three employees and several consultants and independent contractors. The only consultant/contractor that we consider critical to
the Company is TheraCour, discussed in the next risk factor. KARD Scientific, another consultant/contractor is considered by the
Company important but not critical as they are replaceable with moderate difficulty. All other consultant/contractors would be
more readily replaceable. While the Company’s current operations cause it to be unlikely that we will need to grow and hire
additional consultants, contractors or employees, if future preclinical studies of our nanoviricide drugs and technology show significant
improvements in efficacy over existing drugs, we intend to expand our operations and staff materially. At that time our new employees
may include a number of key managerial, technical, financial, R&D and operations personnel who will not have been fully integrated
into our operations. We would expect the expansion of our business to place a significant strain on our limited managerial, operational
and financial resources. We have no experience in integrating multiple employees. Therefore, there is a substantial risk that we
will not be able to integrate new employees into our operations which would have a material adverse effect on our business, prospects,
financial condition and results of operations.
We license our core technology from
TheraCour Pharma Inc. and we are dependent upon them as they have exclusive development rights. If we lose the right to utilize
any of the proprietary information that is the subject of this license agreement, we may incur substantial delays and costs in
development of our drug candidates .
The Company has entered into a Material
License Agreement with TheraCour Pharma, Inc. (“TheraCour”) (an approximately 16.3% shareholder of the Company’s
common stock) whereby TheraCour has exclusive rights to develop exclusively for us, the materials that comprise the core drugs
of our planned business. TheraCour is a development stage company with limited financial resources and needs the Company’s
progress payments to further the development of the nanoviricides. The Company controls the research and work TheraCour performs
on its behalf and no costs may be incurred without the prior authorization or approval of the Company.
Development costs charged by and paid to
TheraCour Pharma, Inc. were approximately $9,374,234 since inception through September 30, 2014. No royalties are due to TheraCour
from the Company’s inception through September 30, 2014.
We depend on TheraCour and other third
parties to perform manufacturing activities effectively and on a timely basis. If these third parties fail to perform as required,
this could impair our ability to deliver our products on a timely basis or cause delays in our clinical trials and applications
for regulatory approval, and these events could harm our competitive position and adversely affect our ability to commence revenue
generating operations. The manufacturing process for pharmaceutical products is highly regulated, and regulators may shut down
manufacturing facilities that they believe do not comply with regulations. We and our manufacturers are subject to the FDA’s
current Good Manufacturing Practices, which are extensive regulations governing manufacturing processes, stability testing, record-keeping
and quality standards and similar regulations are in effect in other countries. In addition, our manufacturing operations are subject
to routine inspections by regulatory agencies.
Our collaborative relationships with
third parties could cause us to expend significant resources and incur substantial business risk with no assurance of financial
return.
We anticipate substantial reliance upon
strategic collaborations for marketing and the commercialization of our drug candidates and we may rely even more on strategic
collaborations for R&D of our other drug candidates. Our business depends on our ability to sell drugs to both government agencies
and to the general pharmaceutical market. Offering our drug candidates for non-medical applications to government agencies does
not require us to develop new sales, marketing or distribution capabilities beyond those already existing in the company. Selling
antiviral drugs, however, does require such development. We plan to sell antiviral drugs through strategic partnerships with pharmaceutical
companies. If we are unable to establish or manage such strategic collaborations on terms favorable to us in the future, our revenue
and drug development may be limited. To date, we have not entered into any strategic collaborations with third parties capable
of providing these services. In addition, we have not yet marketed or sold any of our drug candidates or entered into successful
collaborations for these services in order to ultimately commercialize our drug candidates.
If we determine to enter into R&D collaborations
during the early phases of drug development, our success will in part depend on the performance of our research collaborators.
We will not directly control the amount or timing of resources devoted by our research collaborators to activities related to our
drug candidates. Our research collaborators may not commit sufficient resources to our programs. If any research collaborator fails
to commit sufficient resources, our preclinical or clinical development programs related to this collaboration could be delayed
or terminated. Also, our collaborators may pursue existing or other development-stage products or alternative technologies in preference
to those being developed in collaboration with us. Finally, if we fail to make required milestone or royalty payments to our collaborators
or to observe other obligations in our agreements with them, our collaborators may have the right to terminate those agreements.
Manufacturers producing our drug candidates
must follow current GMP regulations enforced by the FDA and foreign equivalents. If a manufacturer of our drug candidates does
not conform to the current GMP regulations and cannot be brought up to such a standard, we will be required to find alternative
manufacturers that do conform. This may be a long and difficult process, and may delay our ability to receive FDA or foreign regulatory
approval of our drug candidates and cause us to fall behind on our business objectives.
Establishing strategic collaborations is
difficult and time-consuming. Our discussion with potential collaborators may not lead to the establishment of collaborations on
favorable terms, if at all. Potential collaborators may reject collaborations based upon their assessment of our financial, regulatory
or intellectual property position. Even if we successfully establish new collaborations, these relationships may never result in
the successful development or commercialization of our drug candidates or the generation of sales revenue. To the extent that we
enter into collaborative arrangements, our drug revenues are likely to be lower than if we directly marketed and sold any drugs
that we may develop.
Management of our relationships with our
collaborators will require:
| • | significant time and effort from our management team; |
| • | coordination of our marketing and R&D programs with the marketing and R&D priorities of
our collaborators; and |
| • | effective allocation of our resources to multiple projects. |
We employ the use of certain chemical
and biological agents and compounds that may be deemed hazardous and we are therefore subject to various environmental laws and
regulations. Compliance with these laws and regulations may result in significant costs, which could materially reduce our ability
to become profitable.
We use hazardous materials, including chemicals
and biological agents and compounds that could be dangerous to human health and safety or the environment. As appropriate, we safely
store these materials and wastes resulting from their use at our laboratory facility pending their ultimate use or disposal. We
contract with a third party to properly dispose of these materials and wastes. We are subject to a variety of federal, state and
local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these materials and wastes.
We may incur significant costs complying with environmental laws and regulations adopted in the future.
If we use biological and hazardous
materials in a manner that causes injury, we may be liable for damages.
Our R&D and manufacturing activities
will involve the use of biological and hazardous materials. Although we believe our safety procedures for handling and disposing
of these materials comply with federal, state and local laws and regulations, we cannot entirely eliminate the risk of accidental
injury or contamination from the use, storage, handling or disposal of these materials. We carry $1,000,000 casualty and general
liability insurance policies. Accordingly, in the event of contamination or injury, we could be held liable for damages or penalized
with fines in an amount exceeding our resources and insurance coverage, and our clinical trials or regulatory approvals could be
suspended.
We may not be able to attract and
retain highly skilled personnel.
Our ability to attract and retain highly
skilled personnel is critical to our operations and expansion. We face competition for these types of personnel from other pharmaceutical
companies and more established organizations, many of which have significantly larger operations and greater financial, technical,
human and other resources than us. We may not be successful in attracting and retaining qualified personnel on a timely basis,
on competitive terms, or at all. If we are not successful in attracting and retaining these personnel, our business, prospects,
financial condition and results of operations will be materially and adversely affected.
We depend upon our senior management
and their loss or unavailability could put us at a competitive disadvantage.
We currently depend upon the efforts and
abilities of our management team. The loss or unavailability of the services of any of these individuals for any significant period
of time could have a material adverse effect on our business, prospects, financial condition and results of operations. We have
not obtained, do not own, nor are we the beneficiary of key-person life insurance for all of our key personnel.
The Company believes that its two executive
officers, Eugene Seymour, Chief Executive Officer and Chief Financial Officer and Anil Diwan, President and Chairman of Board,
are critical to the success of the Company. The Company is a limited beneficiary of a certain amount of key man insurance for these
two executive officers that the Company maintains. However there can be no assurances that the amount of the key man insurance
coverage would be sufficient to provide replacement of these key officers for continuing the Company’s operations in a timely
manner, should such an event arise.
The Company also maintains a limited amount
of Directors and Officers Liability insurance coverage to protect all of its directors and executive officers taken together. There
can be no assurance that this D&O coverage will be sufficient to cover the costs of the events that may lead to its invocation,
in which case, there could be a substantial impact on the Company’s ability to continue operations, should such an unforeseen
event occur.
On March 3, 2010, the Company entered into
employment agreements with its two executive officers, Eugene Seymour, Chief Executive Officer and Chief Financial Officer and
Anil Diwan, President and Chairman of Board. Both agreements provide a minimum annual base salary of $250,000 for a term of four
years. In addition, Dr. Seymour and Dr. Diwan were eligible for an increase in base salary to $275,000 once the Company consummated
a financing with gross proceeds of at least $5,000,000. Also, the base salary is eligible to be increased to $300,000 for Dr. Seymour
and $300,000 for Dr. Diwan since the Company has been listed on a national stock exchange.
As additional compensation under the employment
agreements, the Company issued 71,429 (as adjusted) shares of the Company’s Series A Convertible Preferred Stock and shall
issue an additional 71,429 (as adjusted) shares of Series A Convertible Preferred Stock on each anniversary of the respective employment
agreements.
On March 3, 2010, the Company entered into
an employment agreement with Dr. Jayant Tatake to serve as Vice President of Research and Development. The employment agreement
provides for a term of four years with a base salary of $150,000. In addition, the Company issued 26,786 (as adjusted) shares of
Series A Convertible Preferred Stock and 35,715 (as adjusted) shares of common stock, and will issue an additional 26,786 (as adjusted)
shares of Series A Convertible Preferred Stock and 35,715 (as adjusted) shares of common stock on each anniversary date of the
agreement.
On March 3, 2010, the Company entered into
an employment agreement with Dr. Randall Barton to serve as Chief Scientific Officer. The employment agreement provides for a term
of four years with a base salary of $150,000. In addition, the Company issued 35,715 (as adjusted) shares of common stock, and
will issue an additional 35,715 (as adjusted) shares of common stock on each anniversary date of the agreement.
In July 2014, the Compensation Committee
of the Board of Directors unanimously agreed that these employment agreements shall continue in effect until new employment agreements
become effective.
There are conflicts of interest among
our officers, directors and stockholders.
Certain of our executive officers and directors
and their affiliates are engaged in other activities and have interests in other entities on their own behalf or on behalf of other
persons. Neither we nor our stockholders will have any rights in these ventures or their income or profits. Specifically, Anil
Diwan owns approximately 70% of the capital stock of TheraCour Pharma, Inc. which owns approximately twenty-one and forty four
one hundredths percent (21.44%) of our Common Stock, provides the Company the nanomaterials with which it intends to develop its
products and is the holder of the intellectual property rights the Company uses to conduct its operations. While the Company is
not aware of any conflict that has arisen or any transaction that has not been conducted on an arm’s length basis to date,
Dr. Diwan may have conflicting fiduciary duties between the Company and TheraCour.
Currently, the Company does not have any
policy in place to deal with such should such a conflict arise.
In particular:
| • | Our executive officers or directors or their affiliates may have an economic interest in, or other
business relationship with, partner companies that invest in us. |
| • | Our executive officers or directors or their affiliates have interests in entities that provide
products or services to us. |
In any of these cases:
| • | Our executive officers or directors may have a conflict between our current interests and their
personal financial and other interests in another business venture. |
| • | Our executive officers or directors may have conflicting fiduciary duties to us and the other entity. |
| • | The terms of transactions with the other entity may not be subject to arm’s length negotiations
and therefore may be on terms less favorable to us than those that could be procured through arm’s length negotiations. |
We anticipate entering into contracts
with various U.S. government agencies. In contracting with government agencies, we will be subject to various federal contract
requirements. Future sales to U.S. government agencies will depend, in part, on our ability to meet these requirements, certain
of which we may not be able to satisfy.
We may enter into contracts with various
U.S. government agencies which have special contracting requirements that give the government agency various rights or impose on
the other party various obligations that can make the contracts less favorable to the non- government party. Consequently, if a
large portion of our revenue is attributable to these contracts, our business may be adversely affected should the governmental
parties exercise any of these additional rights or impose any of these additional obligations.
U.S. government contracts typically contain
unfavorable termination provisions and are subject to audit and modification by the government at its sole discretion, which subjects
us to additional risks. These risks include the ability of the U.S. government to unilaterally:
| • | suspend or prevent us for a set period of time from receiving new contracts or extending existing
contracts based on violations or suspected violations of laws or regulations; |
| • | terminate our existing contracts; |
| • | reduce the scope and value of our existing contracts; |
| • | audit and object to our contract-related costs and fees, including allocated indirect costs; |
| • | control and potentially prohibit the export of our drug candidates; and |
| • | change certain terms and conditions in our contracts. |
The U.S. government may terminate any of
its contracts with us either for its convenience or if we default by failing to perform in accordance with the contract schedule
and terms. Termination for convenience provisions generally enable us to recover only our costs incurred or committed, and settlement
expenses and profit on the work completed prior to termination. Termination for default provisions do not permit these recoveries
and make us liable for excess costs incurred by the U.S. government in procuring undelivered items from another source.
As a U.S. government contractor, we may
become subject to periodic audits and reviews. Based on the results of these audits, the U.S. government may adjust our contract-related
costs and fees, including allocated indirect costs. As part of any such audit or review, the U.S. government may review the adequacy
of, and our compliance with, our internal control systems and policies, including those relating to our purchasing, property, compensation
and/or management information systems. In addition, if an audit or review uncovers any improper or illegal activity, we may be
subject to civil and criminal penalties and administrative sanctions, including termination of our contracts, forfeiture of profits,
suspension of payments, fines and suspension or prohibition from doing business with the U.S. government. We could also suffer
serious harm to our reputation if allegations of impropriety were made against us. In addition, under U.S. government purchasing
regulations, some of our costs, including most financing costs, amortization of intangible assets, portions of our R&D costs
and some marketing expenses, may not be reimbursable or allowed under our contracts. Further, as a U.S. government contractor,
we may become subject to an increased risk of investigations, criminal prosecution, civil fraud, whistleblower lawsuits and other
legal actions and liabilities to which purely private sector companies are not.
We may fail to obtain contracts to
supply the U.S. government, and we may be unable to commercialize our drug candidates.
The U.S. government has undertaken commitments
to help secure improved countermeasures against bio-terrorism. The process of obtaining government contracts is lengthy and uncertain,
and we must compete for each contract. Moreover, the award of one government contract does not necessarily secure the award of
future contracts covering the same drug. If the U.S. government makes significant future contract awards for the supply of its
emergency stockpile to our competitors, our business will be harmed and it is unlikely that we will be able to ultimately commercialize
our competitive drug candidate.
In addition, the determination of when
and whether a drug is ready for large scale purchase and potential use will be made by the government through consultation with
a number of government agencies, including the FDA, the NIH, the CDC and the Department of Homeland Security. Congress has approved
measures to accelerate the development of bio-defense drugs through NIH funding, the review process by the FDA and the final government
procurement contracting authority. While this may help speed the approval of our drug candidates, it may also encourage competitors
to develop their own drug candidates.
The market for government stockpiling of
H5N1 medicines and other antiviral drugs in the Strategic National Stockpile is fairly new and uncertain.
At the present many governments have already
stockpiled influenza medicines for H5N1. We cannot predict with certainty the size of the market, if any for all of the antiviral
drugs that the governments may want to stockpile. Consequently, we cannot predict whether sales, if any, to governments will be
sufficient to fund our business plan and commence revenue-generating operations.
If the U.S. government fails to continue
funding bio-defense drug candidate development efforts or fails to purchase sufficient quantities of any future bio-defense drug
candidate, we may be unable to generate sufficient revenues to continue operations.
We hope to receive funding from the U.S.
government for the development of our bio-defense drug candidates. Changes in government budgets and agendas, however, may result
in future funding being decreased and de-prioritized, and government contracts typically contain provisions that permit cancellation
in the event that funds are unavailable to the government agency. Furthermore, we cannot be certain of the timing of any future
funding, and substantial delays or cancellations of funding could result from protests or challenges from third parties. If the
U.S. government fails to continue to adequately fund R&D programs, we may be unable to generate sufficient revenues to continue
operations. Similarly, if we develop a drug candidate that is approved by the FDA, but the U.S. government does not place sufficient
orders for this drug, our future business may be harmed.
Risks Related to the Biotechnology/Biopharmaceutical
Industry
The biotechnology and biopharmaceutical
industries are characterized by rapid technological developments and a high degree of competition. We may be unable to compete
with enterprises equipped with more substantial resources than us.
The biotechnology and biopharmaceutical
industries are characterized by rapid technological developments and a high degree of competition based primarily on scientific
and technological factors. These factors include the availability of patent and other protection for technology and products, the
ability to commercialize technological developments and the ability to obtain government approval for testing, manufacturing and
marketing.
Our anti-influenza drug in development,
Flucide, would compete with neuraminidase inhibitors Tamiflu and Relenza, anti-influenza drugs that are sold by Roche and Glaxo
SmithKline (GSK), respectively. Generic competitors include amantadine and rimantadine, both oral tablets that only inhibit the
replication of the influenza A virus. BioCryst Pharmaceuticals, Inc. is developing IV Infusions formulations of peramivir, an influenza
neuraminidase inhibitor, for the treatment of influenza. Peramivir is approved in Japan and had obtained emergency use authorization
in the US. Several H5N1 bird flu, and influenza novelH1N1/2009 vaccines are also in development worldwide. Several companies are
developing anti-influenza drugs and vaccines.
We have recently completed preliminary
animal studies against HIV that have resulted in the finding that certain of our drug candidates were superior to the oral HAART
cocktail in SCID-hu Thy/Liv humanized mice lethally infected with HIV-I. We thus believe that we have a very strong lead drug identified
against HIV. There are several companies with anti-HIV drugs in the market. A new drug, maraviroc from Pfizer has recently been
approved, which falls in a new class called CCR5-blockers. Prior to this, two new drugs in a new class called Integrase Inhibitors
have been approved. A drug in the class called Entry & Fusion Inhibitors, enfuvirtide, (FuzeonTM, Roche) has also been available.
Additionally, the classical drugs, NRTI’s, NNRTI’s and PI’s (protease inhibitors) are used in various combinations.
A three drug combo has been approved. A four-drug combo is expected to be approved soon. The HIVCide-I nanoviricide is expected
to act by a very different kind of mechanism, defining a new class of drugs, that is complementary to the existing classes of anti-HIV
drugs.
Our nanoviricide eye drops for viral diseases
of the eye are currently under development. We have shown significant clinical efficacy in an animal model of EKC (adenoviral epidemic
kerato-conjunctivitis). We have also shown very strong in vitro efficacy in HSV-1 reduction in cell cultures. We believe that this
drug has a very good efficacy and safety profile, based on current data. There are no approved drugs against all viral diseases
of the eye, or adenoviral EKC in particular. Several drugs are available for the treatment of herpes keratitis. Idoxuridine, vidarabine,
acyclovir and its derivatives, are among the leading ones. Aganocide is under development. We believe that the nanoviricide eye
drops should have a significant advantage in terms of reduced frequency of application needed and simple application procedure.
Our HCV drugs are at the earliest stage
of development. There are a growing number of anti-HCV drugs being sold or in advanced stages of clinical development. Two new
protease inhibitors have been approved. Companies with anti-HIV and HCV products include Bristol-Myers Squibb Company (BMS), Roche,
Boehringer Ingelheim, Merck & Co., Inc. (Merck), Abbott Laboratories, and Schering Plough, in addition to several other pharmaceutical
and biotechnology firms.
We compete with specialized biopharmaceutical
firms in the United States, Europe and elsewhere, as well as a growing number of large pharmaceutical companies that are applying
biotechnology to their operations. Many biopharmaceutical companies have focused their development efforts in the human therapeutics
area, including cancer. Many major pharmaceutical companies have developed or acquired internal biotechnology capabilities or made
commercial arrangements with other biopharmaceutical companies. These companies, as well as academic institutions, government agencies
and private research organizations, also compete with us in recruiting and retaining highly qualified scientific personnel and
consultants. Our ability to compete successfully with other companies in the pharmaceutical field will also depend to a considerable
degree on the continuing availability of capital to us.
We are aware of numerous products under
development or manufactured by competitors that are used for the prevention or treatment of certain diseases we have targeted for
drug development. Various companies are developing biopharmaceutical products that potentially directly compete with our drug candidates
even though their approach to such treatment is different.
We expect that our drug candidates under
development and in clinical trials will address major markets within the anti-viral sector. Our competition will be determined
in part by the potential indications for which drugs are developed and ultimately approved by regulatory authorities. Additionally,
the timing of the market introduction of some of our potential drugs or of competitors’ products may be an important competitive
factor. Accordingly, the relative speed with which we can develop drugs, complete pre-clinical testing, clinical trials, approval
processes and supply commercial quantities to market are important competitive factors. We expect that competition among drugs
approved for sale will be based on various factors, including product efficacy, safety, reliability, availability, price and patent
protection.
The successful development of biopharmaceuticals
is highly uncertain. A variety of factors including, pre-clinical study results or regulatory approvals, could cause us to abandon
development of our drug candidates.
Successful development of biopharmaceuticals
is highly uncertain and is dependent on numerous factors, many of which are beyond our control. Products that appear promising
in the early phases of development may fail to reach the market for several reasons including:
| • | pre-clinical study results that may show the product to be less effective than desired (e.g., the
study failed to meet its primary objectives) or to have harmful or problematic side effects; |
| • | failure to receive the necessary regulatory approvals or a delay in receiving such approvals. Among
other things, such delays may be caused by slow enrollment in clinical studies, length of time to achieve study endpoints, additional
time requirements for data analysis or a IND and later NDA, preparation, discussions with the FDA, an FDA request for additional
pre-clinical or clinical data or unexpected safety or manufacturing issues; |
| • | manufacturing costs, pricing or reimbursement issues, or other factors that make the product not
economical; and |
| • | the proprietary rights of others and their competing products and technologies that may prevent
the product from being commercialized. |
Success in pre-clinical and early clinical
studies does not ensure that large-scale clinical studies will be successful. Clinical results are frequently susceptible to varying
interpretations that may delay, limit or prevent regulatory approvals. The length of time necessary to complete clinical studies
and to submit an application for marketing approval for a final decision by a regulatory authority varies significantly from one
product to the next, and may be difficult to predict.
DILUTION
The shares of Common Stock to be sold by
the Selling Shareholders pursuant to this Prospectus Supplement are currently issued and outstanding. Accordingly, there will be
no dilution to existing stockholders as a result of this offering.
USE OF PROCEEDS
We will not receive
any of the proceeds from the sale of the shares of Common Stock sold by the Selling Shareholders.
SELLING SHAREHOLDERS
The “selling
shareholders” named in this prospectus may sell shares of our common stock registered pursuant to the registration statement
of which this prospectus forms a part. This prospectus covers the resale of 571,433 shares of common stock and associated preferred
stock purchase rights issued to the selling stockholders named in this prospectus in connection with our previously disclosed February
1, 2013 private placement. The Selling Shareholders are not required to offer any of the shares of our common stock covered by
this prospectus for resale. Since the Selling Shareholders may sell all, some or none of their shares, we cannot estimate the aggregate
number of shares that the Selling Shareholders will offer pursuant to this prospectus or that the Selling Shareholders will own
upon completion of the offering to which this prospectus relates.
Each selling stockholder
that sells shares of common stock pursuant to this prospectus may be deemed to be an “underwriter” within the meaning
of the Securities Act of 1933, as amended (the “Securities Act”). Any commissions received by a broker or dealer in
connection with resales of our common stock may be deemed to be underwriting commissions or discounts under the Securities Act.
The following
table sets forth information with respect to our common stock beneficially owned by the Selling Shareholders as of December
9, 2014. We have assumed for purposes of the table below that the Selling Shareholders will sell all of the securities
offered by this prospectus supplement. We cannot assure you that the Selling Shareholders will sell any or all of their
shares.
| | |
Shares Owned
Prior to
Offering (1) | | |
Maximum
Number of
Shares Being | | |
Shares Owned
After Offering (2) | |
| Name of Selling Stockholder | |
Number | | |
% | | |
Offered | | |
Number | | |
% | |
| Boniuk Interests, Ltd. (3) | |
| 752,382 | | |
| 1.3 | % | |
| 190,477 | | |
| 561,905 | | |
| * | |
| Boniuk Charitable Foundation (4) | |
| 380,954 | | |
| * | | |
| 190,477 | | |
| 190,947 | | |
| * | |
| Vivien Boniuk | |
| 552,381 | | |
| * | | |
| 95,239 | | |
| 457,052 | | |
| * | |
| Robert Gold | |
| 104,763 | | |
| * | | |
| 47,620 | | |
| 57,143 | | |
| * | |
David Gold
| |
| 104,763 | | |
| * | | |
| 47,620 | | |
| 57,143 | | |
| * | |
| Total | |
| 1,895,243 | | |
| 3.3 | % | |
| 571,433 | | |
| 1,324,170 | | |
| 2.3 | % |
| * |
Represents less than 1%. |
| (1) |
Based on 58,321,521 shares of our common stock outstanding as of December 9, 2014. In addition, shares underlying options and restricted stock units vesting within 60 days of December 9, 2014 are deemed outstanding for the purpose of computing the percentage ownership of the person or persons holding such options or restricted stock units, but are not deemed outstanding for computing the percentage ownership of any other persons. |
| (2) |
Assumes that the Selling Shareholders will sell all of the shares of common stock saleable pursuant to this prospectus. We cannot assure you that the Selling Shareholders will sell any or all of these shares. |
| (3) |
Does not include: warrants to purchase an additional 285,714 shares of common stock or an indeterminate number of shares of common stock issuable upon conversion of debentures held by Boniuk Interests, Ltd.; 808,963 shares of common stock and warrants to purchase an additional 571,428 shares of common stock held by Milton Boniuk and his wife; 380,954 shares of common stock held by the Boniuk Charitable Foundation; or 952,381 shares of common stock issuable upon conversion of a 10% Coupon Series C Convertible Debenture or 187,000 shares of Series A Preferred Stock held by Milton Boniuk IRA. Dr. Milton Boniuk, a member of the Company’s Board of Directors, holds voting and dispositive power over Boniuk Interests, Ltd., the Boniuk Charitable Foundation, and the Milton Boniuk IRA. |
| (4) |
Does not include an indeterminate number of shares of common stock into which the Debenture is convertible into or other securities of the Registrant held by the selling stockholder set forth in Note 3. Dr. Milton Boniuk, a member of the Company’s Board of Directors, holds voting and dispositive power over Boniuk Charitable Foundation. |
Material Relationships with Certain
Selling Shareholders
Dr. Milton Boniuk, is a member of our Board
of Directors, holds voting and dispositive power over Boniuk Charitable Foundation.
DESCRIPTION OF COMMON STOCK
General. We are
authorized to issue 85,714,286 shares of Common Stock, par value $0.001 per share. As of December 9, 2014, there were approximately
58,321,521 shares of Common Stock issued and outstanding held by approximately 6,000 holders of record.
Voting Rights. Each
holder of Common Stock is entitled to one vote for each share held on all matters submitted to a vote of the stockholders.
Dividends. Subject
to the rights of the holders of any preferred stock, the holders of Common Stock are entitled to receive ratably such dividends
as may be declared by our board of directors out of funds legally available for dividends. We have not historically declared or
paid cash dividends on our Common Stock.
Other Rights.
In the event of a liquidation, dissolution or winding up of us, holders of our Common Stock are entitled to share ratably in all
assets remaining after payment of liabilities and the liquidation preference, if any, of any then outstanding preferred stock.
Holders of our Common Stock are not entitled to preemptive rights and have no subscription, redemption or conversion privileges.
All outstanding shares of Common Stock are, and all shares of Common Stock issued by us under this prospectus supplement or that
we may issue in an offering under the accompanying prospectus will be, fully paid and nonassessable. The rights, preferences and
privileges of holders of Common Stock are subject to, and may be adversely affected by, the rights of the holders of shares of
any series of preferred stock which our board of directors has designated or may designate and that we are issuing under this prospectus
supplement or that we may issue in one or more offerings under the accompanying prospectus or at other times in the future.
Transfer Agent and
Registrar. The transfer agent and registrar for our Common Stock is Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive
South, Suite 430, Denver, Colorado 80209, (303) 282-4800.
Listing. Our
Common Stock is traded on the NYSE MKT under the symbol “NNVC.” Any Common Stock we sell under this prospectus supplement
or the accompanying prospectus, as it may be further supplemented, will be listed on the NYSE MKT.
PLAN OF DISTRIBUTION
Shares Sold by Selling
Shareholder
The Selling Shareholders
and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares on the
trading market or any other stock exchange, market or trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. The Selling Shareholders may use any one or more of the following methods when
selling shares:
· ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
· block
trades in which the broker-dealer will attempt to sell the shares 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 entered into after the date of this prospectus;
· sale
of a specified number of such shares at a stipulated price per share by agreement between the broker-dealer and the Selling Shareholder;
· a
combination of any such methods of sale;
· through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; or
· any
other method permitted pursuant to applicable law.
The Selling Shareholders
may also sell shares under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), if available,
rather than under the prospectus.
Broker-dealers engaged
by the Selling Shareholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Shareholders (or, if any broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated. The Selling Shareholders do not expect these commissions and discounts relating to its sales of shares
to exceed what is customary in the types of transactions involved.
The Selling Shareholders
and any broker-dealers or agents that are involved in selling our common stock 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 Common Stock purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. The Selling Shareholders have informed us that they do not have any agreement or understanding, directly
or indirectly, with any person to distribute the Common Stock.
The Interest Shares
will be sold only through registered or licensed brokers or dealers if required under applicable state or provincial securities
laws. In addition, in certain states or provinces, the Interest Shares may not be sold unless they have been registered or qualified
for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied
with.
Under applicable rules
and regulations under the Exchange Act, any person engaged in the distribution of the Interest Shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two business days prior to the commencement of the
distribution. In addition, the Selling Shareholders 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 shares of our common stock
by the Selling Shareholders or any other person.
LEGAL MATTERS
The validity of our securities issuable
hereunder has been passed upon for NanoViricides, Inc. by Kane Kessler, P.C., New York, New York.
EXPERTS
The financial statements
and the related financial statement schedule, incorporated in this prospectus supplement by reference from our Annual Report on
Form 10-K for the fiscal years ended June 30, 2014 and 2013 have been audited by Li & Company, PC, an independent registered
public accounting firm, as stated in their report dated September 29, 2014, which is incorporated herein by reference, and have
been so incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly
and special reports, proxy statements and other information with the Commission. You may read and copy any documents that we have
filed with the Commission at the Commission’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please
call the Commission at 1-800-SEC-0330 for further information on the public reference room. Our Securities and Exchange Commission
filings are also available to the public at the Securities and Exchange Commission’s website at http://www.sec.gov.
This prospectus supplement
and accompanying prospectus are part of a registration statement (and amendments thereto) that we filed with the Commission. This
prospectus supplement and any subsequent prospectus supplements do not contain all of the information in the registration statement
as permitted by the rules and regulations of the Commission. You can obtain a copy of the registration statement from the Commission
at the address listed above or from the Commission’s web site listed above.
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE
The Commission allows us to “incorporate
by reference” some of the documents we file with it into this prospectus supplement and accompanying prospectus, which means:
| • | we can disclose important information to you by referring you to those documents; |
| • | the information incorporated by reference is considered to be part of this prospectus supplement;
and |
| • | later information that we file with the Commission will automatically update and supersede this
incorporated information. |
We incorporate by reference the documents
listed below, which were filed with the Commission under the Exchange Act:
| • | our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, filed with the Commission
on September 29, 2013, as amended on September 30, 2014 |
| • | our Quarterly Reports on Form 10-Q for the fiscal quarters ended September 30, 2014, March 31,
2014, December 31, 2013 filed with the Commission on November 14, 2014, May 15, 2014, and February 14, 2014 |
| • | our Current Reports on Form 8-K filed on December 13, 2013; January 24, 2014; February 26, 2014;
February 28, 2014, as amended on March 19, 2014; June 2, 2014; June 25, 2014; July 9, 2014; and September 5, 2014; |
All documents filed
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (not including any information furnished under Item 2.02 or Item 7.01
of Form 8-K, which information is not incorporated by reference herein), after the date of this prospectus supplement and prior
to the termination of this offering shall be deemed to be incorporated by reference in this prospectus supplement and to be part
of this prospectus supplement from the date they are filed. In addition, all documents filed pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of the initial registration statement and prior to the effectiveness of the registration
statement of which this prospectus supplement forms a part shall be deemed to be incorporated by reference in this prospectus supplement
and to be part of this prospectus supplement from the date they are filed.
You should assume that
the information appearing in this prospectus supplement is accurate as of the date of this prospectus supplement only. Our business,
financial position and results of operations may have changed since that date.
We will provide without
charge to each person, including any beneficial owner, to whom a prospectus supplement is delivered, upon written or oral request
of that person, a copy of any and all of the information that has been incorporated by reference in this prospectus supplement
(excluding exhibits unless specifically incorporated by reference into those documents). Please direct requests to us at the following
address:
NANOVIRICIDES, INC.
135 Wood Street, Suite 205
West Haven, Connecticut 06516
Phone: (203) 937-6137
Email: info@nanoviricides.com
PROSPECTUS
NANOVIRICIDES, INC.
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
This prospectus relates
to common stock, preferred stock, debt securities, warrants and units comprised of the foregoing that we may sell from time to
time in one or more offerings up to a total public offering price of $50,000,000 on terms to be determined at the time of sale.
We will provide specific terms of these securities in supplements to this prospectus. You should read this prospectus and any supplement
carefully before you invest. This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement
for those securities.
Our common stock trades
on the NYSE MKT under the symbol “NNVC.”
These securities may
be sold directly by us, through dealers or agents designated from time to time, to or through underwriters or through a combination
of these methods. See “Plan of Distribution” in this prospectus. We may also describe the plan of distribution for
any particular offering of these securities in any applicable prospectus supplement. If any agents, underwriters or dealers are
involved in the sale of any securities in respect of which this prospectus is being delivered, we will disclose their names and
the nature of our arrangements with them in a prospectus supplement. The net proceeds we expect to receive from any such sale will
also be included in a prospectus supplement.
See “RISK FACTORS” on page
3 for information you should consider before buying these securities.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
This prospectus
may not be used to sell securities unless accompanied by a prospectus supplement.
This prospectus is not an offer to sell
any securities in any state where the offer is not permitted.
The date of this prospectus is November
7, 2014.
Prospective investors may rely only
on the information contained in this prospectus. We have not authorized anyone to provide prospective investors with different
or additional information. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus,
regardless of the time of the delivery of this prospectus or any sale of these securities.
TABLE OF CONTENTS
IMPORTANT INFORMATION ABOUT THIS PROSPECTUS
This prospectus is
part of a “shelf” registration statement that we filed with the United States Securities and Exchange Commission, or
the “SEC”. By using a shelf registration statement, we may sell any combination of the securities described in this
prospectus from time to time in one or more offerings. We may use this prospectus to offer and sell up to a total of $50,000,000
of our securities. This prospectus provides you only with a general description of the securities we may offer. Each time we sell
securities, we will provide a supplement to this prospectus that contains specific information about the terms of the securities
offered. The supplement may also add, update or change information contained in this prospectus. Before purchasing any securities,
you should carefully read both this prospectus and any supplement, together with the additional information described under the
heading “Incorporation of Certain Documents by Reference” found on page 14.
You should rely only
on the information contained herein or incorporated by reference in this prospectus and the supplement. We have not authorized
any other person to provide you with different information. If anyone provides you with different or inconsistent information,
you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this prospectus, as well as information we previously filed with
the SEC and incorporated herein by reference, is accurate as of the date on the front cover of this prospectus only. Our business,
financial condition, results of operations and prospects may have changed since that date.
We will not use this
prospectus to offer and sell securities unless it is accompanied by a supplement that more fully describes the securities being
offered and the terms of the offering.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
INFORMATION
We are making this
statement pursuant to the safe harbor provisions for forward-looking statements described in the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are not historical facts but are the intent, belief, or current expectations
of our business and industry. We make statements in this prospectus, including statements that are incorporated by reference, that
are forward-looking. When used in this prospectus or in any other presentation, statements which are not historical in nature,
including the words “anticipate,” “estimate,” “could,” “should,” “may,”
“plan,” “seek,” “expect,” “believe,” “intend,” “target,”
“project” and similar expressions are intended to identify forward-looking statements. They also include statements
regarding:
| • | our future growth and profitability; |
| • | our competitive strengths; and |
| • | our business strategy and the trends we anticipate in the industries and economies in which we operate. |
These forward-looking
statements are based on our current expectations and are subject to a number of risks, uncertainties and assumptions. These statements
are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our
control, are difficult to predict, and could cause actual results to differ materially from those expressed or forecasted in the
forward-looking statements. Important factors that could cause actual results to differ materially from those in forward-looking
statements include:
| • | economic downturns, reduced capital expenditures, consolidation and technological and regulatory changes in our industry; |
| • | the highly competitive nature of our industry; |
| • | our ability to attract and retain qualified managers and skilled employees; |
| • | the outcome of our plans for future operations and growth; and |
| • | the other factors referenced in this prospectus, including, without limitation, under “Risk Factors.” |
We believe these forward-looking
statements are reasonable; however, you should not place undue reliance on any forward-looking statements, which are based on current
expectations. Furthermore, forward-looking statements speak only as of the date they are made. If any of these risks or uncertainties
materialize, or if any of our underlying assumptions are incorrect, our actual results may differ significantly from the results
that we express in or imply by any of our forward-looking statements. These and other risks are detailed in this prospectus, in
any supplements to this prospectus, in the documents that we incorporate by reference into this prospectus and in other documents
that we file with the SEC. We do not undertake any obligation to publicly update or revise these forward-looking statements after
the date of this prospectus to reflect future events or circumstances. We qualify any and all of our forward-looking statements
by these cautionary factors.
ABOUT NANOVIRICIDES, INC.
This summary highlights
selected information and does not contain all the information that is important to you. You should carefully read this prospectus,
any applicable prospectus supplement and the documents we have referred you to in “Incorporation of Certain Documents by
Reference” on page 14 of this prospectus for information about us and our financial statements as well as “where you
can find more information” on page 14.
Except where the
context otherwise requires, the terms “we,” “us,” “our” or “Nanoviricides” refer
to NanoViricides, Inc.
Our Business
We are an early developmental
stage nano-biopharmaceutical company engaged in the discovery, development and commercialization of anti-viral therapeutics. We
have no customers, products or revenues to date, and may never achieve revenues or profitable operations. Our drugs are based on
several patents, patent applications, provisional patent applications, and other proprietary intellectual property held by TheraCour
Pharma, Inc., one of our principal shareholders, to which we have the licenses in perpetuity for the treatment of the following
human viral diseases:
| • | Influenza, Asian Bird Flu, and H1N1 “Swine Flu” Viruses; |
| • | Herpes Simplex Virus (HSV); |
| • | Human Immunodeficiency Virus (HIV/AIDS); |
| • | Adenoviral Conjunctivitis and Keratitis, and Ocular Indications of Herpes Simplex Types 1 & 2. |
| • | Dengue Fever types I, II, III, & IV; |
| • | Hepatitis B Virus (HBV); |
| • | Hepatitis C Virus (HCV); |
| • | Ebola and Marburg Viruses; |
| • | Japanese Encephalitis; and |
We focus our laboratory
research and pre-clinical programs on specific anti-viral solutions. We are seeking to add to our pipeline of drug candidates through
our internal discovery pre-clinical development programs and through an in-licensing strategy.
Company Information
Our principal executive
offices are located at 135 Wood Street, Suite 205, West Haven, Connecticut 06516. Our telephone number is 203-937-6137. You may
also contact us or obtain additional information through our internet website address at www.nanoviricides.com. Information contained
on our website is not incorporated into this prospectus and is not a part of this prospectus.
RISK FACTORS
You should carefully
consider the Risk Factors contained in our most recent annual report on Form 10-K, as updated or supplemented by subsequent quarterly
reports on Form 10-Q and current reports on Form 8-K to the extent filed, each of which are incorporated herein by reference and
in the supplement to this prospectus before buying any offered securities, as the same may be updated from time to time by our
future filings under the Exchange Act.
USE OF PROCEEDS
Unless the applicable
prospectus supplement states otherwise, we expect to use the net proceeds of the sale of these securities for general corporate
purposes, which may include research and development of pharmaceutical candidates, collaborative arrangements with other companies,
repayment of existing indebtedness, working capital, capital expenditures, acquisitions, joint ventures and stock repurchase programs.
As of the date of this prospectus, we have not identified as probable any specific material proposed uses of these proceeds. If,
as of the date of any prospectus supplement, we have identified any such uses, then we will describe them in the prospectus supplement.
The amount of securities offered from time to time pursuant to this prospectus and any prospectus supplement, and the precise amounts
and timing of the application of net proceeds from the sale of those securities, will depend upon our funding requirements. If
we elect at the time of an issuance of securities to make different or more specific use of proceeds than described in this prospectus,
such use will be described in the prospectus supplement relating to those securities.
PLAN OF DISTRIBUTION
We may sell securities
to one or more underwriters or dealers for public offering and sale by them, or we may sell the securities to investors directly
or through one or more agents or broker dealers, including those engaged solely as agents to facilitate the direct sale of securities
to particular investors. The applicable prospectus supplement will set forth the terms of the offering and the method of distribution
and will identify any firms acting as underwriters, dealers or agents in connection with the offering, including:
| • | the name or names of any underwriters; |
| • | the purchase price of the securities; |
| • | any underwriting discounts and other items constituting underwriters’ compensation; |
| • | any public offering price and the net proceeds we will receive from such sale; |
| • | any discounts or concessions allowed or reallowed or paid to dealers; and |
| • | any securities exchange or market on which the securities offered in the prospectus supplement
may be listed. |
We may distribute
our securities from time to time in one or more transactions at a fixed price or prices, which may be changed, or at prices determined
as the prospectus supplement specifies, including at negotiated prices and in “at-the-market” offerings. We may sell
our securities through a rights offering, forward contracts or similar arrangements.
Any underwriting discounts
or other compensation which we pay to underwriters or agents in connection with the offering of our securities, and any discounts,
concessions or commissions which underwriters allow to dealers, will be set forth in the prospectus supplement. Underwriters may
sell our securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions
from the underwriters and commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of our securities may be deemed to be underwriters under the Securities Act and any discounts or
commissions they receive from us and any profit on the resale of our securities they realize may be deemed to be underwriting discounts
and commissions under the Securities Act. Any such underwriter or agent will be identified, and any such compensation received
from us, will be described in the applicable supplement to this prospectus. Unless otherwise set forth in the supplement to this
prospectus relating thereto, the obligations of the underwriters or agents to purchase our securities will be subject to conditions
precedent and the underwriters will be obligated to purchase all our offered securities if any are purchased. The public offering
price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
Any common stock sold
pursuant to this prospectus and applicable prospectus supplement, will be eligible for trading on the NYSE MKT or such other stock
exchange that our securities are trading upon.
Underwriters and their
controlling persons, dealers and agents may be entitled, under agreements entered into with us to indemnification against and contribution
toward specific civil liabilities, including liabilities under the Securities Act.
The securities being
offered under this prospectus, other than our common stock, will be new issues of securities with no established trading market
and unless otherwise specified in the applicable prospectus supplement. It has not presently been established whether the underwriters,
if any, as identified in a prospectus supplement, will make a market in the securities. If the underwriters make a market in the
securities, the market making may be discontinued at any time without notice. We cannot provide any assurance as to the liquidity
of the trading market for the securities.
Unless the applicable
prospectus supplement states otherwise, the obligations of the underwriters to purchase the offered securities will be subject
to certain conditions contained in an underwriting agreement that we will enter into with the underwriters at the time of the sale
to them. The underwriters will be obligated to purchase all of the securities of the series offered if any of the securities are
purchased, unless the applicable prospectus supplement says otherwise. Any initial public offering price and any discounts or concessions
allowed, reallowed or paid to dealers may be changed from time to time.
In connection with
any offering, the underwriters may purchase and sell securities in the open market. Any underwriter may engage in short sales,
over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation M under the
Exchange Act. Stabilizing transactions permit bidders to purchase the underlying security so long as the stabilizing bids do not
exceed a specified maximum. Short covering transactions involve purchases of the securities in the open market after the distribution
is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when
the securities originally sold by the dealer are purchased in a covering transaction to cover short positions. Those activities
may cause the price of the securities to be higher than it would otherwise be. The underwriters may engage in these activities
on any exchange or other market in which the securities may be traded. If commenced, the underwriters may discontinue these activities
at any time.
We
may also sell securities pursuant to an “equity line of credit”. In such event, we will enter into a common stock purchase
agreement with the purchaser to be named therein, which will be described in a Current Report on Form 8-K that we will file with
the SEC. In that Form 8-K, we will describe the total amount of securities that we may require the purchaser to purchase under
the purchase agreement and the other terms of purchase, and any rights that the purchaser is granted to
purchase securities from us. In addition to our issuance of shares of common stock to the equity line purchaser pursuant to the
purchase agreement, this prospectus (and the applicable prospectus supplement or post-effective amendment) also covers the resale
of those shares from time to time by the equity line purchaser to the public. The equity line purchaser will be considered an “underwriter”
within the meaning of Section 2(a)(11) of the Securities Act. Its resales may be effected through a number of methods, including
without limitation, ordinary brokerage transactions and transactions in which the broker solicits purchasers and block trades in
which the broker or dealer so engaged will attempt to sell the shares as agent, but may position and resell a portion of the block
as principal to facilitate the transaction. The equity line purchaser will be bound by various anti-manipulation rules
of the SEC and may not, for example, engage in any stabilization activity in connection with its resales of our securities and
may not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities other than
as permitted under the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Fees and Commissions
In compliance with
the guidelines of the Financial Industry Regulatory Authority, or “FINRA,” the aggregate maximum discount, commission
or agency fees or other items constituting underwriting compensation to be received by any FINRA member or independent broker-dealer
will not exceed 8% of any offering pursuant to this prospectus and any applicable prospectus supplement or other offering materials,
as the case may be; however, it is anticipated that the maximum commission or discount to be received in any particular offering
of securities will be significantly less than this amount.
If 5% or more of the
net proceeds of any offering of securities made under this prospectus will be received by a FINRA member participating in the offering
or affiliates or associated persons of such FINRA member, the offering will be conducted in accordance with NASD Conduct Rule 2720.
THE SECURITIES
WE MAY OFFER
We
may sell from time to time, in one or more offerings: common stock; preferred stock, debt securities; and/or warrants or units
comprised of any combination of the foregoing. The descriptions of the securities contained in this prospectus summarize the material
general terms and provisions of the various types of securities that we may offer. We will describe in the applicable prospectus
supplement relating to any securities the particular terms of the securities offered by that prospectus supplement. If we indicate
in the applicable prospectus supplement, the terms of the securities may differ from the terms we have summarized below. We will
also include in the prospectus supplement information, where applicable, about material United States federal income tax considerations
relating to the securities, and the securities exchange or market, if any, on which the securities will be listed.
The
following summary describes the material terms of our capital stock and is subject to, and qualified in its entirety by, our articles
of incorporation and bylaws that are included as exhibits to certain of the documents incorporated by reference below and by the
provisions of applicable Nevada law. We refer you to the foregoing documents and to Nevada law for a detailed description of the
provisions summarized below.
DESCRIPTION
OF COMMON STOCK
General
We
are authorized to issue 85,714,286 shares of common stock, $.001 par value. As of October 29, 2014, there were approximately 56,450,600
shares of common stock issued and outstanding held by approximately 188 holders of record.
If we offer shares
of our common stock for sale under this prospectus, we will provide a prospectus supplement that describes the terms of the offering,
including the number of shares offered and the offering price.
Voting Rights
Each
holder of common stock is entitled to one vote for each share held on all matters submitted to a vote of the stockholders.
Dividends
Subject
to the rights of the holders of any preferred stock, the holders of common stock are entitled to receive ratably such dividends
as may be declared by our board of directors out of funds legally available for dividends. We have not historically declared or
paid cash dividends on our common stock.
Other Rights
In
the event of a liquidation, dissolution or winding up of us, holders of our common stock are entitled to share ratably in all assets
remaining after payment of liabilities and the liquidation preference, if any, of any then outstanding preferred stock. Holders
of our common stock are not entitled to preemptive rights and have no subscription, redemption or conversion privileges. All outstanding
shares of common stock are, and all shares of common stock issued by us in an offering under this prospectus and the applicable
prospectus supplement will be, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock
are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which our
board of directors may designate and that we may issue in one or more offerings under this prospectus or at other times in the
future.
Transfer Agent and Registrar
The
transfer agent and registrar for our common stock is Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive South, Suite 430,
Denver, Colorado 80209, (303) 282-4800.
Listing
Our
common stock is listed on the NYSE MKT under the symbol “NNVC.” Any common stock we sell under this prospectus, as
it may be supplemented, will be listed on the NYSE MKT.
DESCRIPTION
OF PREFERRED STOCK
General
We
are authorized to issue up to 5,714,286 shares of preferred stock in one or more series, with such designations, preferences and
relative, participating, option and other special rights, qualifications, limitations or restrictions as determined by our board
of directors, without any further vote or action by our stockholders, including dividend rights, conversion rights, voting rights,
redemption rights and terms of redemption and liquidation preferences. On February 15, 2010, our board had designated an aggregate
of 2,857,143 split-adjusted shares of preferred stock as Series A Convertible Preferred Stock (the “Series A Preferred Stock”).
On April 28, 2014, our board amended the designation to 4,000,000 shares of Series A Preferred Stock and as of October 29, 2014,
3,220,079 shares of Series A Preferred Stock are issued or outstanding and no other shares of preferred stock are issued and outstanding.
On April 1, 2011, our board had designated an aggregate of 2,000,000 shares of preferred stock as Series B Convertible Preferred
Stock (the “Series B”) and no shares of Series B Preferred Stock are issued or outstanding, and no shares are available
for issuance. On June 27, 2012, our board had designated an aggregate of 5,000 shares of preferred stock as Series C Convertible
Preferred Stock (the “Series C”) and no shares of Series C Preferred Stock are issued or outstanding. No other shares
of preferred stock are issued and outstanding.
Our
board may fix the number of shares constituting any series and the designations of these series by adopting a certificate of designation
relating to each series. The prospectus supplement relating to each series will specify the terms of the preferred stock, including:
| • | the number of shares we are offering; |
| • | the offering price for those shares; |
| • | the maximum number of shares in the series and the distinctive designation thereof; |
| • | the terms on which dividends will be paid, if any; |
| • | the terms on which the shares will be redeemed, if at all; |
| • | the liquidation preference, if any; |
| • | the terms of any retirement or sinking fund for the purchase or redemption of the shares of the series; |
| • | the terms and conditions, if any, on which the shares of the series will be convertible into, or exchangeable for, shares of
any other class or classes of capital stock; |
| • | the voting rights, if any, on the shares of the series; |
| • | any securities exchange or market on which the shares will be listed; and |
| • | any other preferences and relative, participating, operation or other special rights or qualifications, limitations or restrictions
of the shares |
You
should also refer to the applicable certificate of designation for complete information about the terms, preferences and rights
related to a particular series of our preferred stock, which we will incorporate as an exhibit to the registration statement of
which this prospectus is a part. The prospectus supplement will contain a description of United States federal income tax consequences
relating to the preferred stock, to the extent applicable.
Our
issuance of preferred stock may have the effect of delaying or preventing a change in control. Our issuance of preferred stock
could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affect
the rights and powers, including voting rights, of the holders of common stock. The issuance of preferred stock could have the
effect of decreasing the market price of our common stock.
Series A Convertible Preferred Stock
The
Series A Preferred Stock is convertible into shares of the our Common Stock at the rate of three and one-half shares of Common
Stock per share of Series A converted, solely upon a “change of control”. A change of control is defined as (a) an
acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated
under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by
contract or otherwise) of in excess of 40% of the voting securities of the Company (other than by means of conversion or exercise
of the Series A Preferred Stock and the Securities issued together with the Series A Preferred Stock), (b) the Company merges into
or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such
transaction, the stockholders of the Company immediately prior to such transaction own less than 60% of the aggregate voting power
of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its
Intellectual Property to another Person and the stockholders of the Company prior to such transaction own less than 60% of the
aggregate voting power of the acquiring entity immediately after the transaction, or (d) the execution by the Company of an agreement
to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (c) above.
The Series A Preferred Stock votes at the rate of nine votes per share, together with the Common Stock, on all matters to which
shareholders of the Company are entitled to vote. Holders of the Series A Preferred Stock are not entitled to receive dividends
or any liquidation preference upon the liquidation, dissolution, or winding up of the Company.
DESCRIPTION
OF DEBT SECURITIES
General
The
debt securities that we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The
debt securities may constitute either senior or subordinated debt securities, and in either case may be either secured or unsecured. Any
debt securities that we offer and sell will be our direct obligations. Debt securities may be issued in one or more series. All
debt securities of any one series need not be issued at the same time, and unless otherwise provided, a series of debt securities
may be reopened, with the required consent of the holders of outstanding debt securities, for issuance of additional debt securities
of that series or to establish additional terms of that series of debt securities (with such additional terms applicable only to
unissued or additional debt securities of that series). The form of indenture has been filed as an exhibit to the registration
statement of which this prospectus is a part and is subject to any amendments or supplements that we may enter into with the trustee(s),
however, we may issue debt securities not subject to the indenture provided such terms of debt securities are not otherwise required
to be set forth in the indenture. The material terms of the indenture are summarized below and we refer you to the indenture for
a detailed description of these material terms. Additional or different provisions that are applicable to a particular series of
debt securities will, if material, be described in a prospectus supplement relating to the offering of debt securities of that
series. These provisions may include, among other things and to the extent applicable, the following:
| • | the title of the debt securities, including, as applicable, whether the debt securities will be
issued as senior debt securities, senior subordinated debt securities or subordinated debt securities,
any subordination provisions particular to the series of debt securities; |
| • | any limit on the aggregate principal amount of the debt securities; |
| • | whether the debt securities are senior debt securities or subordinated debt securities and applicable
subordination provisions, if any; |
| • | whether the debt securities will be secured or unsecured; |
| • | if other than 100% of the aggregate principal amount, the percentage of the aggregate principal
amount at which we will sell the debt securities, such as an original issuance discount; |
| • | the date or dates, whether fixed or extendable, on which the principal of the debt securities will
be payable; |
| • | the rate or rates, which may be fixed or variable, at which the debt securities will bear interest,
if any, the date or dates from which any such interest will accrue, the interest payment dates on which we will pay any such interest,
the basis upon which interest will be calculated if other than that of a 360-day year consisting of twelve 30-day months, and,
in the case of registered securities, the record dates for the determination of holders to whom interest is payable; |
| • | the place or places where the principal of and any premium or interest on the debt securities will
be payable and where the debt securities may be surrendered for conversion or exchange; |
| • | whether we may, at our option, redeem the debt securities, and if so, the price or prices at which,
the period or periods within which, and the terms and conditions upon which, we may redeem the debt securities, in whole or in
part, pursuant to any sinking fund or otherwise; |
| • | if other than 100% of the aggregate principal amount thereof, the portion of the principal amount
of the debt securities which will be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy,
or, if applicable, which is convertible or exchangeable; |
| • | any obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking
fund or analogous provisions or at the option of a holder of debt securities, and the price or prices at which, the currency in
which and the period or periods within which, and the terms and conditions upon which, the debt securities will be redeemed, purchased
or repaid, in whole or in part, pursuant to any such obligation, and any provision for the remarketing of the debt securities; |
| • | the issuance of debt securities as registered securities or unregistered securities or both, and
the rights of the holders of the debt securities to exchange unregistered securities for registered securities, or vice versa,
and the circumstances under which any such exchanges, if permitted, may be made; |
| • | the denominations, which may be in United States Dollars
or in any foreign currency, in which the debt securities will be issued, if other than denominations of $1,000 and any integral
multiple thereof; |
| • | whether the debt securities will be issued in the form of certificated debt securities, and if
so, the form of the debt securities (or forms thereof if unregistered and registered securities are issuable in that series), including
the legends required by law or as we deem necessary or appropriate, the form of any coupons or temporary global security which
may be issued and the forms of any other certificates which may be required under the indenture or which we may require in connection
with the offering, sale, delivery or exchange of the debt securities; |
| • | if other than United States Dollars, the currency or currencies in which payments of principal,
interest and other amounts payable with respect to the debt securities will be denominated, payable, redeemable or repurchasable,
as the case may be; |
| • | whether the debt securities may be issuable in tranches; |
| • | the obligations, if any, we may have to permit the conversion or exchange of the debt securities
into common stock, preferred stock or other capital stock or property, or a combination thereof, and the terms and conditions upon
which such conversion or exchange will be effected (including conversion price or exchange ratio), and any limitations on the ownership
or transferability of the securities or property into which the debt securities may be converted or exchanged; |
| • | if other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the debt securities; |
| • | any deletions from, modifications of or additions to the events of default with respect to the
debt securities or the right of the Trustee or the holders of the debt securities in connection with events of default; |
| • | any deletions from, modifications of or additions to the covenants with respect to the debt securities; |
| • | if the amount of payments of principal of, and make-whole amount, if any, and interest on the debt
securities may be determined with reference to an index, the manner in which such amount will be determined; |
| • | whether the debt securities will be issued in whole or in part in the global form of one or more
debt securities and, if so, the depositary for such debt securities, the circumstances under which any such debt security may be
exchanged for debt securities registered in the name of, and under which any transfer of debt securities may be registered in the
name of, any person other than such depositary or its nominee, and any other provisions regarding such debt securities; |
| • | whether, under what circumstances and the currency in which, we will pay additional amounts on
the debt securities to any holder of the debt securities who is not a United States person in respect of any tax, assessment or
governmental charge and, if so, whether we will have the option to redeem such debt securities rather than pay such additional
amounts, and the terms of any such option; |
| • | whether the debt securities will be secured by any collateral and, if so, a general description
of the collateral and the terms of any related security, pledge or other agreements; |
| • | the persons to whom any interest on the debt securities will be payable, if other than the registered
holders thereof on the regular record date therefor; and |
| • | any other material terms or conditions upon which the debt securities will be issued. |
Unless
otherwise indicated in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons
and in denominations of $1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year
of twelve 30 day months. If any interest payment date or the maturity date falls on a day that is not a business day, then
the payment will be made on the next business day without additional interest and with the same effect as if it were made on the
originally scheduled date. “Business day” means any calendar day that is not a Saturday, Sunday or legal holiday in
New York, New York, and on which the trustee and commercial banks are open for business in New York, New York.
Unless we inform you
otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment with all
of our other unsubordinated debt. The subordinated debt securities will rank junior in right of payment and be subordinate to all
of our unsubordinated debt.
Unless
otherwise indicated in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities
under the indenture. We may act as paying agent under the indenture.
The
prospectus supplement will contain a description of United States federal income tax consequences relating to the debt securities,
to the extent applicable.
Covenants
The
applicable prospectus supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries,
if any, from incurring, issuing, assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from paying
dividends or acquiring any of our or its capital stock.
Consolidation,
Merger and Transfer of Assets
The
indenture permits a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or
substantially all of our property and assets, provided that:
| • | the resulting or acquiring entity, if other than us, is organized and existing under the laws of
a United States jurisdiction and assumes all of our responsibilities and liabilities under the indenture, including the payment
of all amounts due on the debt securities and performance of the covenants in the indenture; |
| • | immediately after the transaction, and giving effect to the transaction, no event of default under
the indenture exists; and |
| • | we have delivered to the trustee an officers’ certificate stating that the transaction and,
if a supplemental indenture is required in connection with the transaction, the supplemental indenture comply with the indenture
and that all conditions precedent to the transaction contained in the indenture have been satisfied. |
If
we consolidate or merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with
the terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the
debt securities with the same effect as if it had been an original party to the indenture and the debt securities. As a result,
such successor entity may exercise our rights and powers under the indenture and the debt securities, in our name and, except in
the case of a lease, we will be released from all our liabilities and obligations under the indenture and under the debt securities.
Notwithstanding
the foregoing, we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer,
such entity is our wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or
our other wholly owned subsidiaries, if any, own all of the outstanding capital stock.
Modification and Waiver
Under
the indenture, some of our rights and obligations and some of the rights of the holders of the debt securities may be modified
or amended with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities
affected by the modification or amendment. However, the following modifications and amendments will not be effective against any
holder without its consent:
| • | a change in the stated maturity date of any payment of principal or interest; |
| • | a reduction in the principal amount of or interest on any debt securities; |
| • | an alteration or impairment of any right to convert at the rate or upon the terms provided in the
indenture; |
| • | a change in the currency in which any payment on the debt securities is payable; |
| • | an impairment of a holder’s right to sue us for the enforcement of payments due on the debt
securities; or |
| • | a reduction in the percentage of outstanding debt securities required to consent to a modification
or amendment of the indenture or required to consent to a waiver of compliance with certain provisions of the indenture or certain
defaults under the indenture. |
Under
the indenture, the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on
behalf of all holders of the debt securities:
| • | waive compliance by us with certain restrictive provisions of the indenture; and |
| • | waive any past default under the indenture in accordance with the applicable provisions of the
indenture, except a default in the payment of the principal of or interest on any series of debt securities. |
Events of Default
Unless
we indicate otherwise in the applicable prospectus supplement, “event of default” under the indenture will mean, with
respect to any series of debt securities, any of the following:
| • | failure to pay interest on any debt security for 30 days after the payment is due; |
| • | failure to pay the principal of any debt security when due, either at maturity, upon redemption,
by declaration or otherwise; |
| • | failure on our part to observe or perform any other covenant or agreement in the indenture that
applies to the debt securities for 90 days after we have received written notice of the failure to perform in the manner specified
in the indenture; and |
| • | certain events of bankruptcy, insolvency or reorganization. |
Remedies Upon
an Event of Default
If
an event of default occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of such series may declare the entire principal of all the debt securities to be due and payable immediately,
except that, if the event of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal
of all of the debt securities of such series will become due and payable immediately without any act on the part of the trustee
or holders of the debt securities. If such a declaration occurs, the holders of a majority of the aggregate principal amount of
the outstanding debt securities of such series can, subject to conditions, rescind the declaration.
The
indenture requires us to furnish to the trustee not less often than annually, a certificate from our principal executive officer,
principal financial officer or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance
with all conditions and covenants under the indenture. The trustee may withhold notice to the holders of debt securities of any
default, except defaults in the payment of principal of or interest on any debt securities if the trustee in good faith determines
that the withholding of notice is in the best interests of the holders. For purposes of this paragraph, “default” means
any event which is, or after notice or lapse of time or both would become, an event of default under the indenture.
The
trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any
holders of debt securities, unless the holders offer the trustee satisfactory security or indemnity. If satisfactory security or
indemnity is provided, then, subject to other rights of the trustee, the holders of a majority in aggregate principal amount of
the outstanding debt securities may direct the time, method and place of:
| • | conducting any proceeding for any remedy available to the trustee; or |
| • | exercising any trust or power conferred upon the trustee. |
The
holder of a debt security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:
| • | the holder has previously given the trustee written notice of a continuing event of default; |
| • | the holders of not less than a majority in aggregate principal amount of the outstanding debt securities
have made a written request of, and offered reasonable indemnity to, the trustee to begin such proceeding; |
| • | the trustee has not started such proceeding within 60 days after receiving the request; and |
| • | no direction inconsistent with such written request has been given to the trustee under the indenture. |
However,
the holder of any debt security will have an absolute right to receive payment of principal of and interest on the debt security
when due and to institute suit to enforce this payment.
Satisfaction and Discharge; Defeasance
Satisfaction
and Discharge of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time,
| • | we have paid the principal of and interest on all the debt securities of any series, except for
debt securities which have been destroyed, lost or stolen and which have been replaced or paid in accordance with the indenture,
as and when the same shall have become due and payable, or |
| • | we have delivered to the trustee for cancellation all debt securities of any series theretofore
authenticated, except for debt securities of such series which have been destroyed, lost or stolen and which have been replaced
or paid as provided in the indenture, or |
| • | all the debt securities of such series not theretofore delivered to the trustee for cancellation
have become due and payable, or are by their terms are to become due and payable within one year or are to be called for redemption
within one year, and we have deposited with the trustee, in trust, sufficient money or government obligations, or a combination
thereof, to pay the principal, any interest and any other sums due on the debt securities, on the dates the payments are due or
become due under the indenture and the terms of the debt securities, |
then
the indenture shall cease to be of further effect with respect to the debt securities of such series, except for:
| • | rights of registration of transfer and exchange, and our right of optional redemption; |
| • | substitution of mutilated, defaced, destroyed, lost or stolen debt securities; |
| • | rights of holders to receive payments of principal thereof and interest thereon upon the original
stated due dates therefor (but not upon acceleration) and remaining rights of the holders to receive mandatory sinking fund payments,
if any; |
| • | the rights, obligations and immunities of the trustee under the indenture; and |
| • | the rights of the holders of such series of debt securities as beneficiaries thereof with respect
to the property so deposited with the trustee payable to all or any of them. |
Defeasance
and Covenant Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect
to any debt securities of any series either:
| • | to defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”),
with certain exceptions described below; or |
| • | to be released from our obligations with respect to such debt securities under such covenants as
may be specified in the applicable prospectus supplement, and any omission to comply with those obligations will not constitute
a default or an event of default with respect to such debt securities (“covenant defeasance”). |
We
must comply with the following conditions before the defeasance or covenant defeasance can be effected:
| • | we must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms
of an irrevocable trust agreement in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit
of the holders of such debt securities, sufficient money or government obligations, or a combination thereof, to pay the principal,
any interest and any other sums on the due dates for those payments; and |
| • | we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt
securities will not recognize income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance,
as the case may be, to be effected with respect to such debt securities and will be subject to federal income tax on the same amount,
in the same manner and at the same times as would be the case if such defeasance or covenant defeasance, as the case may be, had
not occurred. |
In
connection with defeasance, any irrevocable trust agreement contemplated by the indenture must include, among other things, provision
for:
| • | payment of the principal of and interest on such debt securities, if any, appertaining thereto
when due (by redemption, sinking fund payments or otherwise), |
| • | the payment of the expenses of the trustee incurred or to be incurred in connection with carrying
out such trust provisions, |
| • | rights of registration, transfer, substitution and exchange of such debt securities in accordance
with the terms stated in the indenture, and |
| • | continuation of the rights, obligations and immunities of the trustee as against the holders of
such debt securities as stated in the indenture. |
The
accompanying prospectus supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance
with respect to the debt securities of a particular series.
Global Securities
Unless
otherwise indicated in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the
form of one or more global debt securities representing all or part of that series of debt securities. This means that we will
not issue certificates for that series of debt securities to the holders. Instead, a global debt security representing that series
will be deposited with, or on behalf of, a securities depositary and registered in the name of the depositary or a nominee of the
depositary. Any such depositary must be a clearing agency registered under the Exchange Act. We will describe the specific terms
of the depositary arrangement with respect to a series of debt securities to be represented by a global security in the applicable
prospectus supplement.
Notices
We
will give notices to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice
in respect of unregistered securities or coupon securities, we may give notice by publication in a newspaper of general circulation
in New York, New York.
Governing Law
The
particular terms of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities.
Any indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended
from time to time following their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited
in the amount of debt securities that we may issue, and neither the senior debt securities nor the subordinated debt securities
will be secured by any of our property or assets. Thus, by owning debt securities, you are one of our unsecured creditors.
Regarding the
Trustee
From
time to time, we may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the
indenture or its affiliates in the ordinary course of business.
DESCRIPTION
OF WARRANTS
We
may offer to sell warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus
supplement. In particular, we may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one
or more series. We may also issue warrants independently or together with other securities and the warrants may be attached to
or separate from those securities.
We
will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into
the warrant agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus
supplement relating to a particular series of warrants.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
| • | the offering price and aggregate number of warrants offered; |
| • | the currency for which the warrants may be purchased; |
| • | if applicable, the designation and terms of the securities with which the warrants are issued and
the number of warrants issued with each such security or each principal amount of such security; |
| • | if applicable, the date on and after which the warrants and the related securities will be separately
transferable; |
| • | in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable
upon exercise of one warrant and the price at, and currency in which, this principal amount of debt securities may be purchased
upon such exercise; |
| • | in the case of warrants to purchase common stock or preferred stock, the number of shares of common
stock or preferred stock, as the case may be, purchasable upon the exercise of one warrant and the price at which these shares
may be purchased upon such exercise; |
| • | the effect of any merger, consolidation, sale or other disposition of our business on the warrant
agreement and the warrants; |
| • | the terms of any rights to redeem or call the warrants; |
| • | any provisions for changes to or adjustments in the exercise price or number of securities issuable
upon exercise of the warrants; |
| • | the dates on which the right to exercise the warrants will commence and expire; |
| • | the manner in which the warrant agreement and warrants may be modified; |
| • | certain United States federal income tax consequences of holding or exercising the warrants; |
| • | the terms of the securities issuable upon exercise of the warrants; and |
| • | any other specific material terms, preferences, rights or limitations of or restrictions on the
warrants. |
You
may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with other requested
information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable
prospectus supplement. We will set forth in the applicable prospectus supplement the information that the holder of the warrant
will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the office of the warrant agent
or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon
such exercise. If you exercise fewer than all of the warrants represented by the warrant certificate, then we will issue you a
new warrant certificate for the remaining amount of warrants.
You
will not have any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise them.
Accordingly, you will not be entitled to, among other things, vote or receive dividend payments or similar distributions on the
securities you can purchase upon exercise of the warrants.
The
information provided above is only a summary of the terms under which we may offer warrants for sale. Accordingly, please carefully
review the applicable warrant agreement for more information about the specific terms and conditions of these warrants before investing
in us. In addition, please carefully review the information provided in the applicable prospectus supplement, which contains additional
information that is important for you to consider in evaluating an investment in our securities.
LEGAL MATTERS
Certain legal matters
with respect to the validity of the securities offered under this prospectus and any supplement hereto will be passed upon for
us by Kane Kessler, P.C., New York, New York. Counsel for any underwriter or agents will be noted in the applicable prospectus
supplement.
EXPERTS
The financial statements
and the related financial statement schedule, incorporated in this Prospectus by reference from our Annual Report on Form 10-K
for the year ended June 30, 2014 have been audited by Li & Company, PC, an independent registered public accounting firm, as
stated in their report dated September 29, 2014, which is incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND
MORE INFORMATION
We file annual, quarterly
and special reports, proxy statements and other information with the SEC. You may read and copy any documents that we have filed
with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330
for further information on the public reference room. Our Securities and Exchange Commission filings are also available to the
public at the Securities and Exchange Commission’s website at http://www.sec.gov.
This prospectus is
part of a registration statement that we filed with the SEC. This prospectus and any subsequent prospectus supplements do not contain
all of the information in the registration statement as permitted by the rules and regulations of the SEC. You can obtain a copy
of the registration statement from the SEC at the address listed above or from the SEC’s web site listed above.
INCORPORATION OF
CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us
to “incorporate by reference” some of the documents we file with it into this prospectus, which means:
| • | we can disclose important information to you by referring you to those documents; |
| • | the information incorporated by reference is considered to be part of this prospectus; and |
| • | later information that we file with the SEC will automatically update and supersede this incorporated
information. |
We incorporate by
reference the documents listed below, which were filed with the SEC under the Exchange Act:
| • | our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, filed with the SEC
on September 29, 2014, and as amended on September 30, 2014; |
| • | our Form 8-K (Item 8.01) filed September 5, 2014; |
| • | our Form 8-K (Items 1.01, 2.03, 3.02 and 9.01) filed July 9, 2014; |
| • | our Form 8-K (Item 3.03) filed June 25, 2014; |
| • | our Form 8-K (Item 7.01 and 9.01) filed on June 2, 2014; |
| • | our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2014, filed with the SEC
on May 15, 2014; |
| • | our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2013, filed with the
SEC on November 14, 2013, and as amended on November 18, 2013; |
| • | our Form 8-K (Item 3.03) filed on February 26, 2014 and as amended on February 28, 2014; and |
| • | our Quarterly Report on Form 10-Q for the fiscal quarter ended December 31, 2013, filed with the
SEC on February 14, 2014. |
All documents filed
under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (not including any information furnished under Item 2.02 or Item 7.01
of Form 8-K, which information is not incorporated by reference herein), after the date of this prospectus and prior to the termination
of this offering shall be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the
date they are filed. In addition, all documents filed pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after
the date of the initial registration statement and prior to the effectiveness of the registration statement of which this prospectus
forms a part shall be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the date
they are filed.
You should assume
that the information appearing in this prospectus is accurate as of the date of this prospectus only. Our business, financial position
and results of operations may have changed since that date.
We will provide without
charge to each person, including any beneficial owner, to whom a prospectus is delivered, upon written or oral request of that
person, a copy of any and all of the information that has been incorporated by reference in this prospectus (excluding exhibits
unless specifically incorporated by reference into those documents). Please direct requests to us at the following address:
NANOVIRICIDES, INC.
135 Wood Street
Suite 205
West Haven, Connecticut 06516
(203) 937-6137
NANOVIRICIDES, INC.
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
Units
We have not authorized any dealer, salesperson
or other person to give you written information other than this prospectus or to make representations as to matters not stated
in this prospectus. You must not rely on unauthorized information. This prospectus is not an offer to sell these securities or
our solicitation of your offer to buy the securities in any jurisdiction where that would not be permitted or legal. Neither the
delivery of this prospectus nor any of the sales made hereunder after the date of this prospectus shall create an implication that
the information contained herein or our affairs have not changed since the date hereof.
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