Filed Pursuant to Rule 424(b)(5)
Registration
No. 333-218608
PROSPECTUS SUPPLEMENT
(To Prospectus dated June 23, 2017)
SENECA BIOPHARMA, INC.
5,000,000 Shares of Common Stock
We are offering 5,000,000 shares of our
common stock, $0.01 par value per share, at a purchase price of $1.00 per share, to certain institutional investors pursuant to
this prospectus supplement and the accompanying prospectus.
Our common stock is listed on the Nasdaq
Capital Market and traded under the symbol “SNCA” The last reported sale price of our common stock on the Nasdaq Capital
Market on May 22, 2020 was $0.92 per share.
As of May 22, 2020, the aggregate market
value of the outstanding common stock held by non-affiliates, computed by reference to the closing price of $1.23 of our common
stock on May 21, 2020 was $15,115,219.08, based on 12,299,307 shares of our outstanding common stock as of May 22, 2020, of which
12,288,796 shares were held by non-affiliates. During the 12 calendar months prior to and including the date of this prospectus
(excluding this offering), we have not sold any securities pursuant to General Instruction I.B.6 of Form S-3.
Investing in our securities
involves a high degree of risk. See the section entitled “Risk Factors” appearing on pages S-9 of this prospectus
supplement and elsewhere in this prospectus supplement and the accompanying base prospectus for a discussion of information
that should be considered in connection with an investment in our securities.
We have retained H.C. Wainwright &
Co., LLC (“Wainwright”) to act as our exclusive placement agent in connection with the offer and sale of the shares
of our common stock. The placement agent has agreed to use its reasonable best efforts to sell the shares of common stock offered
by this prospectus supplement and the accompanying prospectus. We have agreed to pay the placement agent the fees set forth in
the table below, which assumes that we sell all of the shares of common stock we are offering.
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Per Share
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Total
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Offering Price
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$
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1.00
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$
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5,000,000
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Placement Agent Fees(1)(2)
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$
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0.08
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$
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400,000
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Proceeds, before expenses, to us(2)
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$
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0.92
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$
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4,600,000
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_______________
(1)
In addition, we have agreed to: (i) reimburse the placement agent for certain of its expenses and (ii) to grant the placement
agent warrants to purchase shares of our common stock as described in the section entitled “Plan of Distribution”
on page S-13 of this prospectus supplement (the “Placement Agent Warrants”).
(2)
The amount of the offering proceeds to us presented in this table does not give effect to the exercise, if any, of the Placement
Agent Warrants.
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.
We anticipate delivery of the shares will take place on or about
May 27, 2020, subject to the satisfaction or waiver of certain closing conditions.
H.C. Wainwright &
Co.
The date of this prospectus supplement is
May 22, 2020.
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
ABOUT THIS PROSPECTUS SUPPLEMENT
This prospectus supplement is part of the
registration statement on Form S-3 (File No. 333-218608) that we filed with the Securities and Exchange Commission, or the
SEC, using a “shelf” registration process to register sales of our securities under the Securities Act of 1933, as
amended, or the Securities Act. This document consists of two parts. The first part is this prospectus supplement, including the
documents incorporated by reference, which describes the specific terms of this offering. The second part is the accompanying prospectus
filed with the SEC as part of the registration statement that was declared effective by the SEC on June 23, 2017, including the
documents incorporated by reference, that gives more general information, some of which may not apply to this offering. Generally,
when we refer only to the “prospectus,” we are referring to both parts combined.
This prospectus supplement may add to,
update or change information in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement
or the accompanying prospectus. To the extent there is a conflict between the information contained in this prospectus supplement
and the accompanying prospectus, you should rely on information contained in this prospectus supplement, provided that if any statement
in, or incorporated by reference into, one of these documents is inconsistent with a statement in another document having a later
date, the statement in the document having the later date modifies or supersedes the earlier statement. Any statement so modified
will be deemed to constitute a part of this prospectus only as so modified, and any statement so superseded will be deemed not
to constitute a part of this prospectus.
We sometimes refer to the shares of common
stock offered hereby as the “securities” or “Shares”.
This prospectus supplement, the accompanying
prospectus and the documents incorporated into each by reference include important information about us, the securities being offered
and other information you should know before investing in our securities. You should also read and consider information in the
documents to which we have referred you in the section of this prospectus supplement entitled “Where You Can Find More Information.”
You should rely only on this prospectus
supplement, the accompanying prospectus and the information incorporated or deemed to be incorporated by reference in this prospectus
supplement and the accompanying prospectus as well as any free writing prospectus. We and the underwriters have not authorized
anyone to provide you with information that is in addition to or different from that contained or incorporated by reference in
this prospectus supplement and the accompanying prospectus. If anyone provides you with different or inconsistent information,
you should not rely on it. This prospectus supplement, the accompanying prospectus and any related free writing prospectus do not
constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful
to make such offer or solicitation in such jurisdiction. You should not assume that the information contained or incorporated by
reference in this prospectus supplement or the accompanying prospectus is accurate as of any date other than as of the date of
this prospectus supplement or the accompanying prospectus, as the case may be, or in the case of the documents incorporated by
reference, the date of such documents regardless of the time of delivery of this prospectus supplement and the accompanying prospectus
or any sale of our securities. Our business, financial condition, liquidity, results of operations and prospects may have changed
since those dates.
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
into this prospectus supplement or 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 agreements, and should not be deemed to
be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as
of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing
the current state of our affairs.
The industry and market data contained
or incorporated by reference in this prospectus supplement and the accompanying prospectus are based either on our management’s
own estimates or on independent industry publications, reports by market research firms or other published independent sources.
Although we believe that such data contained herein from such sources is reliable, there can be no assurance or guarantee as to
the accuracy or completeness of the information obtained from these sources. Unless otherwise indicated, all information contained
or incorporated by reference in this prospectus supplement and the accompanying prospectus concerning our industry in general or
any segment thereof, including information regarding our general expectations and market opportunity, is based on management’s
estimates using internal data, data from industry related publications, consumer research and marketing studies and other externally
obtained data.
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights
selected information appearing elsewhere in this prospectus supplement or in the accompanying prospectus or incorporated by
reference into this prospectus supplement and the accompanying prospectus and does not contain all of the information that
may be important to you or that you should consider before investing in our securities. Before making an investment decision,
you should read this prospectus supplement, the accompanying prospectus and the information incorporated by reference in this
prospectus supplement and the accompanying prospectus in their entirety, including “Risk Factors” beginning on
page S-9 of this prospectus supplement.
As used in this prospectus
supplement, unless context otherwise requires, the words “we,” “us,” “our,” “the Company,”
“Seneca” and “Registrant” refer to Seneca Biopharma, Inc. and its subsidiary. Also, any reference to “common
share” or “common stock,” refers to our $0.01 par value common stock.
Our Business
Overview
In October 2019, we changed our name from
Neuralstem, Inc. to Seneca Biopharma, Inc. Historically, we have been primarily focused on the research and development of nervous
system therapies based on our proprietary human neural stem cells and our small molecule compounds with the ultimate goal of gaining
approval from the United States Food and Drug Administration (“FDA”), and its international counterparts, to market
and commercialize such therapies. In early 2019 we commenced an in-licensing and acquisition strategy in which we are evaluating
novel therapeutics that could benefit from our development experience with the goal of developing such technologies for commercialization.
Our patented technology platform has three
core components:
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Over 300 lines of human, regionally specific neural stem cells, some of which have the potential to be used to treat serious or life-threatening diseases through direct transplantation into the central nervous system;
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Proprietary screening capability – our ability to generate human neural stem cell lines provides a platform for chemical screening and discovery of novel compounds against nervous system disorders; and
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Small molecules that resulted from Seneca’s neurogenesis screening platform that may have the potential to treat a wide variety of nervous system conditions.
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To date, our technology platform has produced
two lead assets in clinical development: our NSI-566 stem cell therapy program and our NSI-189 small molecule program. A component
of our strategy is seeking an asset sale, out-license, or global development partnerships to further development of NSI-566 and
NSI-189. We have recently initiated a formal initiative aimed at securing partners to advance the clinical development of these
two programs.
We believe this technology, in partnership
with an established biopharmaceutical company with the appropriate development expertise and financial resources, could facilitate
the development and commercialization of products for use in the treatment of a wide array of nervous system disorders including
neurodegenerative conditions and regenerative repair of acute and chronic disease. We intend to maintain these programs with the
goal of finding suitable development partners.
Clinical Programs
Historically, we have devoted our efforts
and financial resources primarily to the pre-clinical and clinical development of our small molecule compounds and our stem cell
therapeutics.
Based on our cash position, we have refocused
our development efforts primarily on our exploratory Phase 2 study of NSI-566 for the treatment of Ischemic Stroke (the results
of which we do not believe will be able to be used in connection with any regulatory submission in any territory), development
of a regulatory plan for NSI-566 in ALS and studies that are being funded by grants. At this time, we anticipate that additional
funds for these programs will be focused on maintaining the cell lines, patents, clinical material and data, and relevant licenses
associated with these clinical programs as we seek partners for further development.
Below is a description of our clinical
programs, their intended indication and current stage of development:
NSI - 566 (Stem Cells)
The human central nervous system (CNS)
has limited capacity for regeneration following injury or the onset of disease. Traditional therapies have mainly focused on minimizing
the progression or symptoms of CNS disease or injury but have not been effective at repairing the underlying cause of such disease.
The goal of our cell therapy initiatives is the regeneration of neural function which has been lost to disease or injury. We believe
that neuroprotection, neuroregeneration, and/or bridging of damaged neural circuitry may be accomplished by implantation of NSI-566
at the injury site.
Our proprietary technology enables the
isolation and large-scale expansion of regionally specific neural stem cells from all areas of the developing human brain and spinal
cord and enables the generation of commercially useful quantities of highly characterized allogeneic human neural stem cells that
can be transplanted into patients to mitigate the consequences of CNS diseases or injury. We have developed and optimized processes
that allow us to manufacture these cells under current Good Manufacturing Practices (cGMP) compliant conditions as required by
the FDA for use in clinical trials and have generated cell banks which we believe are sufficient to provide material to meet our
requirements through completion of Phase 3 studies. We have exclusive licenses for the manufacturing and use of the surgical platform
and cannula that enable administration of the cells to the spinal cord for treatment. Based on our preclinical data we believe
that our human neural stem cells will differentiate into neurons and glia after grafting into the patient and will provide neuroprotection
and stimulate neuroregeneration.
Our lead stem cell program is the spinal
cord-derived neural stem cell line, NSI-566, which is being tested for treatment of paralysis due to amyotrophic lateral sclerosis
(ALS, or Lou Gehrig’s disease), ischemic stroke, and spinal cord injury (SCI). To date we have completed Phase 1 and Phase
2 safety and dose escalation studies in subjects with ALS and a Phase 1 safety and dose escalation study in subjects with motor
deficits due to ischemic stroke. Each of these studies are currently in their long-term follow-up stage. In August 2018, we initiated
a non-GCP (Good Clinical Practice) compliant randomized, double-blind, placebo-controlled Phase 2 trial in subjects with chronic
ischemic stroke. We are also conducting a Phase 1 open label study to evaluate the safety of implanting NSI-566 in subjects with
chronic SCI.
Motor Deficits Due to Ischemic Stroke
Over 700,000 individuals suffer stroke
each year in the US, the majority of whom experience long-term functional deficits. Ischemic stroke, which accounts for about 75%
of all strokes, occurs as a result of an obstruction within a vessel supplying blood to the brain. Post-stroke motor deficits include
paralysis or weakness in arms and legs and speech impairment and can be permanent. In the US, approximately 1.8 million people
live with paralysis due to stroke. We believe that NSI-566 may provide an effective treatment for restoring motor deficits resulting
from ischemic stroke by creating new circuitry in the area of injury and promoting regeneration of neural tissue damaged by the
ischemic event.
Amyotrophic Lateral Sclerosis
Amyotrophic lateral sclerosis (“ALS”)
is a disease of the nerve cells in the brain and spinal cord that control voluntary muscle movement. In 2018 the United States
Centers for Disease Control and Prevention reported that between 16,000 and 17,000 Americans have ALS, a prevalence of 5.2 cases
per 100,000 people. In ALS, nerve cells (motor neurons) waste away or die and can no longer send messages to muscles. This eventually
leads to muscle weakening, twitching, and an inability to move the arms, legs, and body. As the condition progresses, muscles in
the chest area stop working, making it difficult or impossible to breathe. NSI-566 is under development as a potential treatment
for ALS by providing cells designed to nurture and protect the patient’s remaining motor neurons. We received orphan designation
by the FDA for NSI-566 in ALS.
Chronic Spinal Cord Injury
SCI may result from trauma or disease affecting
the spinal cord, and is in many cases a long term, chronic and disabling neurological condition. In the US it is estimated that
there are 17,000 new cases of SCI per year, with a prevalence of 249,000-363,000 people. Chronic spinal cord injury (cSCI) refers
to the window after recovery has plateaued, beginning approximately 6-12 months after injury. We believe that NSI-566 may provide
an effective treatment for cSCI by “bridging the gap” in the spinal cord circuitry created following traumatic spinal
cord injury and providing new cells to help transmit the signal from the brain to points at or below the point of injury.
Clinical Experience with NSI-566
Ischemic Stroke
In 2013, we commenced an open label, non-GCP
compliant, Phase I safety and dose escalation study to test transplantation of NSI-566 in human subjects for the treatment of motor
deficits due to ischemic stroke. The trial was conducted at BaYi Brain Hospital in Beijing, China and sponsored by Suzhou Neuralstem,
a wholly-owned subsidiary of Seneca in China. This study was intended to evaluate the safety of direct injections of NSI-566 into
the brain and to determine the maximum safe tolerated dose. We completed dosing the final cohort, for a total of nine subjects,
in March 2016. Subjects were monitored through a 24-month observational follow-up period. Delivery of NSI-566 cells in this population
appeared to be safe and well tolerated at all doses. There were no deaths or serious adverse events related to the treatment (Zhang
et al., Stem Cells Transl Med 2019, 8(10):999-1007).
In August 2018, we initiated a non-GCP
compliant Phase 2 trial which is designed as a randomized, double-blind, placebo-controlled study. A total of 22 subjects were
randomized to receive NSI-566 stem cells (72 million cells) or sham-surgery at a 1:1 ratio. All operations were conducted at BaYi
Brain Hospital, the site of the Phase 1 study, and all follow-up assessments are being conducted by blinded, independent neurologists
at Beijing Rehabilitation Hospital. The final subject was enrolled in this study in August 2019.
Amyotrophic Lateral Sclerosis
In January 2010, we commenced a Phase 1
trial of NSI-566 in ALS at Emory University in Atlanta, Georgia. The purpose of the trial was to evaluate the safety of our proposed
treatment and procedure in a total of 15 subjects. The dosing of subjects in the Phase 1 trial, as designed, was completed in August
of 2012. We commenced a Phase 2 multisite clinical trial in subjects suffering from ALS in September of 2013 to further test the
feasibility and safety of the treatment and procedure, and maximum tolerated dose of cells. The Phase 2 dose escalation trial enrolled
15 ambulatory subjects in five different dosing cohorts.
In June 2017, 24-month Phase 2 results
and combined Phase 1 and Phase 2 data from our ALS trials were presented at the International Society for Stem Cell Research (ISSCR)
Annual Meeting, Approaches to Treating ALS, Boston, Massachusetts, by principal investigator Eva Feldman, MD, PhD, Russell N. DeJong
Professor of Neurology and Director of Research of the ALS Clinic at the University of Michigan Health. The data showed that the
intraspinal transplantation of the cells was safe and well tolerated. Subjects from both the Phase 1 and Phase 2 continue to be
monitored for long-term follow-up evaluations.
Chronic Spinal Cord Injury
In 2013, we received authorization from
the FDA to commence a Phase 1 clinical trial to treat chronic spinal cord injury. The trial, which is taking place at The University
of California, San Diego or UCSD, commenced in 2014 and the first subject was treated in October 2014. The study enrolled four
AIS A classification thoracic spinal cord injury subjects (motor and sensory complete), one to two years’ post-injury at
the time of stem cell treatment. In January of 2016, we reported six-month follow-up data on all four subjects. The stem cell treatment
was found to be safe and well-tolerated by the subjects enrolled and there were no serious adverse events. In April of 2018, we
enrolled the first subject in the second cohort of the trial, which included patients with AIS-A complete, quadriplegic, cervical
injuries involving C5-C7 of their spinal cord. The final patient of this cohort was enrolled in March 2019.
In June 2018, the study investigators published
the results of the first cohort in the journal Cell Stem Cell. The results support the potential of transplanted NSI-566 to benefit
patients with cSCI. At 18 months to 27 months after surgery, the analysis of motor and sensory function and electrophysiology showed
changes in three of the four patients after NSI-566 transplantation. There was no evidence of serious adverse events, suggesting
the procedure is well-tolerated.
Pre-Clinical Experience with NSI-566
and other candidates in our stem cell pipeline
Our preclinical studies with NSI-566 have
served to provide the foundation for our ongoing clinical trials by demonstrating performance and efficacy of this cell line in
animal models for ALS (Hefferan et al., PLoS One 2012, 7(8):e42614; Xu et al., Transplantation 2006, 82(7):865-875;
Xu et al., J Comp Neurol 2009, 514(4):297-309; Xu et al., Neurosci Lett 2011, 494(3):222-226; Yan et al., Stem
Cells 2006, 24(8):1976-1985), spinal cord injury (Cizkova et al., Neuroscience 2007, 147(2):546-560; Lu et al., Cell
2012, 150(6):1264-1273; van Gorp et al., Stem Cell Res Ther 2013, 4(3):57), and ischemic stroke (Tajiri et al., PLoS
One 2014, 9(3):e91408), and demonstrated safety in large animals (Raore et al., Spine 2011, 36(3):E164-E171; Usvald
et al., Cell Transplant 2010, 19(9):1103-1122). Additional studies involving NSI-566 or other proprietary cell lines are
directed at identifying new therapeutic candidates. These include: 1) an ongoing collaboration with investigators at the Miami
Project to Cure Paralysis to evaluate the application of NSI-566 in preclinical animal models for traumatic brain injury (Spurlock
et al., J Neurotrauma 2017, 34(11):1981-1995), and 2) evaluation of the ability of NSI-532.IGF1, a human neural stem cell
line engineered to express the trophic factor IGF1, to reverse the cognitive impact of neurodegeneration in a mouse model of Alzheimer’s
Disease (McGinley et al., Sci Rep 2018, 8(1):14776).
NSI-189 (Small Molecule Pharmaceutical
Compound)
NSI-189 represents a new chemical entity
that works through what appears to be a novel mechanism of action to stimulate neurogenesis of stem cells in the hippocampus, as
well as generation of new synapses. Because impaired hippocampal neurogenesis has been linked with depression, we conducted clinical
trials to evaluate the safety and effectiveness of NSI-189 in patients suffering from Major Depressive Disorder or MDD.
Major Depressive Disorder (MDD)
Major depressive disorder (also known as
recurrent depressive disorder, clinical depression, major depression, unipolar depression, or unipolar disorder) is a mental disorder
characterized by episodes of all-encompassing low mood accompanied by low self-esteem and loss of interest or pleasure in normally
enjoyable activities. According to the World Health Organization, MDD is the leading cause of disability in the U.S. for persons
age 15 to 44. In 2017, an estimated 17.3 million adults in the United States had at least one major depressive episode in the prior
year. This number represented 7.1% of all adults in the US. (https://www.nimh.nih.gov/health/statistics/prevalence/major-depression-among-adults.shtml).
Treatment of MDD is characterized by a high level of patient turnover due to low efficacy and high side effects. It is estimated
that 67% of patients will fail their first line therapy, 75% will then fail their second line prescription and 80% will then fail
their third line prescription (Rush et al., Control Clin Trials 2004, 25(1):119-142).
Clinical Experience with NSI-189
In 2011, we commenced a Phase 1A clinical
trial to evaluate the safety and pharmacokinetics of NSI-189 in healthy volunteers. The study enrolled 41 healthy male and female
subjects into a single ascending dose phase. No dose-limiting toxicity was observed, and no serious adverse events (AE) were noted.
This study was followed in 2012 with a Phase 1B randomized, double-blind, placebo-controlled, multiple-dose escalation study to
evaluate safety, tolerability, pharmacokinetic (PK), and pharmacodynamic (PD) effects of NSI-189 phosphate in subjects with MDD.
Trial data were presented in June 2014 at the American Society of Clinical Psychopharmacology Annual Meeting (ASCP) and published
in the journal Molecular Psychiatry (Fava et al., Mol Psychiatry 2016, 21(10):1372-1380). NSI-189 was well tolerated and
there were no serious adverse events.
In May of 2016, we initiated an exploratory
Phase 2 randomized, placebo-controlled, double-blind clinical trial for the treatment of MDD in an outpatient setting. The study
randomized 220 subjects into three cohorts: NSI-189 40 mg twice daily (BID), NSI-189 40 mg once daily (QD), or placebo, and was
conducted under the direction of study principal investigator (PI) Maurizio Fava, MD, Executive Vice Chair, Department of Psychiatry
and Executive Director, Clinical Trials Network and Institute, Massachusetts General Hospital. The study did not meet its primary
efficacy endpoint of a statistically significant reduction in depression symptoms on the Montgomery-Asberg Depression Rating Scale
(MADRS), compared to placebo. Both doses were well-tolerated with no serious adverse events reported.
On December 5, 2017, we presented an updated
analysis – including reports on all secondary scales – from the Phase 2 study of NSI-189 in MDD at the 56th American
College of Neuropsychopharmacology (ACNP) Annual Meeting. Three additional patient reported outcomes showed statistically significant
improvements in depressive and cognitive symptoms; all three patient reported outcome scales (SDQ, CPFQ, and QIDS-SR) NSI-189 reached
statistical significance over placebo.
In addition, we presented data on NSI-189’s
effect on cognition as measured by computer-administered objective tests of cognition in the MDD patients. Two different test methods
were used: Cogstate® and CogScreen®. Cogstate did not yield statistically significant results. In CogScreen® test,
NSI-189 40 mg showed statistically significant improvement (p<0.05) on objective measures of executive functioning, attention,
working memory, and memory.
NSI-189 appeared to be safe and well tolerated
with no serious adverse events. There were no clinically meaningful changes in body weight or BMI, or in sexual function inventory.
The study results have been published (Papakostas et al., Mol Psychiatry 2019, doi: 10.1038/s41380-018-0334-8).
Preclinical Experience with NSI-189
NSI-189 has shown promise in preclinical
studies evaluating its impact in animal models for a number of different disease indications, including:
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Ischemic stroke—in 2017 Tajiri and colleagues published a manuscript reporting that NSI-189 ameliorated motor and neurological deficits in a rodent model of ischemic stroke (Tajiri et al., J Cell Physiol 2017, 232(10):2731-2740).
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Radiation-induced cognitive dysfunction—in 2018 Allen and colleagues published a manuscript reporting that NSI-189 treatment could reverse cognitive deficits in rats caused by cranial irradiation, a model of cranial radiotherapy in the treatment of brain tumors (Allen et al., Radiat Res 2018, 189(4):345-353).
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Angelman syndrome—in 2019 Liu and colleagues published a manuscript reporting that NSI-189 reversed impairments in cognitive and motor deficits in a rodent model of Angelman syndrome and increased synaptic strength in sections of brains taken from these animals (Liu et al., Neuropharmacology 2019, 144:337-344). Angelman syndrome (AS) is a rare congenital genetic disorder caused by a lack of function in the UBE3A gene on the maternal 15th chromosome. It affects approximately one in 15,000 people - about 500,000 individuals globally. Symptoms of AS include developmental delay, lack of speech, seizures, and walking and balance disorders.
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Diabetes-associated peripheral neuropathy—in 2019 Jolivalt and colleagues published a manuscript reporting that NSI-189 mitigated or reversed disease-associated central and peripheral neuropathy in two rodent models of diabetes (Jolivalt et al., Diabetes 2019, (11):2143-2154). Improvements resulting from NSI-189 treatment were seen on multiple sensory and cognitive indices.
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A common theme emerging from these and
other preclinical studies has been the ability of NSI-189 to promote synaptogenesis as well as hippocampal neurogenesis, along
with its neuroprotective properties. Due to the favorable safety profile seen in the Phase I and II clinical studies of NSI-189
and the impact on cognitive measures observed in the Phase II trial in MDD patients, we feel that this asset may have potential
in treatment of one or more diseases including those described above. On August 9, 2018, NSI-189 received orphan designation for
the treatment of Angelman syndrome.
Our Technologies
Stem Cells
From a therapeutic
perspective, our stem cell-based technology enables the isolation and large-scale expansion of regionally specific, human neural
stem cells from all areas of the developing human brain and spinal cord thus enabling the generation of physiologically relevant
human neurons of different types. We believe that our stem cell technology will enable the replacement or supplementation of malfunctioning
or dead cells thereby creating a neurotrophic environment that offers protection to neural tissue as a way to treat disease and
injury. Many significant and currently untreatable human diseases arise from the loss or malfunction of specific cell types in
the body. Our focus is the development of effective methods to generate replacement cells from neural stem cells. We believe that
creating a neurotrophic environment by replacing damaged, malfunctioning or dead neural cells with fully functional ones may be
a useful therapeutic strategy in treating many diseases and conditions of the central nervous system.
Our Proprietary and Novel Screening Platform
Our human neural stem cell lines form the
foundation for functional cell-based assays used to screen for small molecule compounds that can impact biologically relevant outcomes
such as neurogenesis, synapse formation, and protection against toxic insults. We have developed over 300 unique stem cell lines
representing multiple different regions of the developing brain and spinal cord at multiple different time points in development,
enabling the generation of physiologically relevant human neural cells for screening, target validation, and mechanism-of-action
studies. This platform provides us with a unique and powerful tool to identify new chemical entities to treat a broad range of
nervous system conditions.
Small Molecule Pharmaceutical Compounds.
Utilizing our proprietary stem cell-based
screening capability, we have discovered and patented a series of small molecule compounds that includes NSI-189. We believe our
low molecular weight organic compounds can efficiently cross the blood/brain barrier. In mice, research indicated that the small
molecule compounds both stimulate neurogenesis of the hippocampus and increase its volume. We believe the small molecule compounds
may promote synaptogenesis and neurogenesis in the human hippocampus thereby potentially providing therapeutic benefits in indications
such as MDD and may also provide clinical benefit in indications such as Angelman Syndrome, Diabetic Neuropathy, Cognition, Stroke
and Radiation Induced Cognitive Deficit.
Research and Development
Substantial resources have been and will
be devoted to our research and development programs. Our efforts are directed at developing therapies utilizing our stem cells
and small molecule regenerative drug candidates. This research is conducted internally, through the use of third-party laboratories,
consulting companies under our direct supervision, and through collaboration with academic institutions.
Manufacturing
We currently manufacture our cells both
in-house and on an outsourced basis. We outsource the manufacturing of our pharmaceutical compounds and our clinical supply of
stem cells to cGMP compliant third-party manufacturers. We manufacture neural stem cells in-house for use in our research and collaborative
programs.
Intellectual Property
We have developed and maintain a portfolio
of patents and patent applications that form the proprietary base for our research and development efforts. We own or exclusively
license 17 United States issued and pending patents and over 77 foreign issued and pending patents in the field of regenerative
medicine, related to our stem cell technologies as well as our small molecule compounds. Our issued patents have expiration dates
ranging from 2023 through 2038.
When appropriate, we seek patent protection
for inventions in our core technologies and in ancillary technologies that support our core technologies or which we otherwise
believe will provide us with a competitive advantage. We accomplish this by filing patent applications for discoveries we make,
either alone or in collaboration with scientific collaborators and strategic partners. Typically, although not always, we file
patent applications both in the United States and in select international markets. In addition, we plan to obtain licenses or options
to acquire licenses to patent filings from other individuals and organizations that we anticipate could be useful in advancing
our research, development and commercialization initiatives and our strategic business interests.
In addition to patenting our technologies,
we also rely on confidential and proprietary information and take active measures to control access to that information, including
the use of confidentiality agreements with our employees, consultants and certain of our contractors.
Our policy is to require our employees,
consultants and significant scientific collaborators and sponsored researchers to execute confidentiality and assignment of invention
agreements upon the commencement of an employment or consulting relationship with us. These agreements generally provide that all
confidential information developed or made known to the individual by us during the course of the individual's or entity’s
relationship with us, is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case
of employees and consultants, the agreements generally provide that all inventions conceived by the individual or entity in the
course of rendering services to us shall be our exclusive property.
In-licensing or Acquisition Strategy
In addition to the development of our current
product candidates, we have initiated an in-licensing and/or acquisition strategy to further expand our product pipeline. Our in-licensing
strategy consists of evaluating novel therapeutics with the potential to be complimentary to our current technologies or that could
benefit from our development experience with the goal of developing such candidates for commercialization. We believe that this
element of our corporate strategy could provide new opportunities for product development and diversify risks inherent in focusing
on a limited product portfolio and therapeutic areas, thus potentially increasing our probability of commercial success.
Employees
As of May 22, 2020, we had seven (7) full-time
employees. We also use the services of several outside consultants in business and scientific matters.
Our Corporate Information
We were incorporated in Delaware in 2001.
On October 28, 2019, we changed our name from Neuralstem, Inc. to Seneca Biopharma, Inc. Our principal executive offices are located
at 20271 Goldenrod Lane, Germantown, Maryland 20876, and our telephone number is (301) 366-4841. Our website is located at www.senecabio.com.
We have not incorporated by reference into
this prospectus supplement the information in, or that can be accessed through, our website and you should not consider it to be
a part of this prospectus supplement.
THE OFFERING
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Issuer
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Seneca Biopharma, Inc.
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Common stock offered by us
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5,000,000 shares of common stock.
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Offering price
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$1.00 per share of common stock.
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Common stock to be outstanding after this offering
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17,299,307 shares.
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Gross Offering Proceeds
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$5,000,000.
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Use of Proceeds
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We intend to use the net proceeds received from this offering for working capital and general corporate purposes. Please see “Use of Proceeds” on page S-11.
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Risk Factors
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Investing in our securities involves a high degree
of risk. See “Risk Factors” beginning on page S-9 of this prospectus supplement and page 3 of
the accompanying prospectus, as well as the risk factors sections of any documents incorporated by reference into this
prospectus supplement.
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Market for our Common Stock
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Our common stock is listed and traded on Nasdaq Capital Market under the symbol “SNCA”
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The number of shares of our common stock
to be outstanding immediately after this offering is based on 9,428,011 shares of our common stock outstanding as of March 31,
2020;
and excludes:
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2,871,296 shares of common stock issued
since March 31, 2020;
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38,873 shares of common stock underlying
200,000 outstanding shares of Series A 4.5% Convertible Preferred Stock;
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727,830 shares of common stock underlying
outstanding options issued pursuant to our equity compensation and inducement plans having a weighted average exercise price of
$23.43 per share, but not including 737,958 stock option awards granted conditionally and subject to the approval of the Company’s
shareholders;
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4,527,320 shares of our common stock issuable
upon exercise of outstanding warrants having a weighted average exercise price of $4.37 per share;
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31,374 shares of our common stock reserved
for issuance upon the vesting and termination of certain transfer restrictions with regard to restricted stock units;
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373,524 shares of our common stock reserved
for issuance pursuant to future grants and/or award under our equity compensation and inducement plans; and
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400,000 shares of common stock reserved
for issuance upon exercise of the warrants to be issued as compensation to the placement agent in this offering, having an exercise
price of $1.25 per share.
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Except as otherwise indicated herein, all
information in this prospectus supplement, including the number of shares that will be outstanding after this offering, does not
assume or give effect to the conversion of Preferred Shares or exercise of options or warrants outstanding as of March 31, 2020
or to the exercise of the Placement Agent Warrants.
RISK FACTORS
Investing in our securities involves
a high degree of risk. Before making an investment decision, you should carefully consider the risks described below, together
with all of the other information included in this prospectus supplement, the accompanying prospectus, and the information incorporated
by reference herein and therein.
For a discussion of additional risks
associated with our business, our intellectual property, government regulation and approval of our product candidates, our industry
and an investment in our common stock, see the section entitled “Risk Factors” in our most Annual Report on Form 10-K,
for the year ended December 31, 2019, and any other subsequently filed document that is also incorporated or deemed to be incorporated
by reference in this prospectus supplement.
If any of the risks described below,
or those incorporated by reference into this prospectus supplement actually occur, our business, financial condition or results
of operations could suffer. In that case, the trading price of our common stock may decline and you may lose all or part of your
investment. The risks and uncertainties we have described are not the only ones we face. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also affect our business, financial condition and results of operations.
Certain statements below are forward-looking statements. See the information included under the heading “Note Regarding Forward-Looking
Statements.”
Our management will have broad discretion
over the use of the net proceeds from this offering, you may not agree with how we use the proceeds and the proceeds may not be
invested successfully.
Our management will have broad discretion
as to the use of the net proceeds from this offering and could use them for purposes other than those contemplated currently and
described under “Use of Proceeds” on page S-11. Accordingly, you will be relying on the judgment of our management
with regard to the use of these net proceeds, and you will not have the opportunity, as part of your investment decision, to assess
whether the proceeds are being used appropriately. It is possible that, pending their use, we may invest the net proceeds in a
way that does not yield a favorable, or any, return for our company.
There may be future sales or other
dilution of our equity, which may adversely affect the market price of our common stock.
We are generally not restricted from issuing
additional common stock, including any securities that are convertible into or exchangeable for, or that represent the right to
receive, common stock. The market price of our common stock could decline as a result of sales of common stock or securities that
are convertible into or exchangeable for, or that represent the right to receive, common stock after this offering or the perception
that such sales could occur.
You will experience immediate and
substantial dilution in the net tangible book value per share of our common stock.
The public offering price of our common
stock being offered is substantially higher than the net tangible book value per share of our common stock outstanding prior to
this offering. Therefore, if you purchase our common stock in this offering, you will incur an immediate substantial dilution of
$0.04 in net tangible book value per share from the price you paid, based on our financial statements as of March 31, 2020. If
outstanding options or warrants to purchase our common stock are exercised, you will experience additional dilution. Additionally,
certain employment agreements we entered into with members of management contain anti-dilution protection that increases the number
of common shares underlying option grants upon the issuance common stock or common stock equivalents. For a further description
of the dilution that you will experience immediately after this offering, see “Dilution.”
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying
prospectus and the other documents we have filed with the SEC that are incorporated herein by reference contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, as
well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those
expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements
that could be deemed forward-looking statements, including any projections of financing needs, revenue, expenses, earnings or losses
from operations, or other financial items, any statements of the plans, strategies and objectives of management for future operations,
any statements concerning product research, development and commercialization plans and timelines, any statements regarding safety
and efficacy of product candidates, any statements of expectation or belief and any statements of assumptions underlying any of
the foregoing. In addition, forward-looking statements may contain the words “believe,” “anticipate,” “expect,”
“estimate,” “intend,” “plan,” “project,” “will be,” “will continue,”
“will result,” “seek,” “could,” “may,” “might,” or any variations of
such words or other words with similar meanings. All forward-looking statements attributable to us or to persons acting on our
behalf are expressly qualified in their entirety by the cautionary statements and risk factors set forth in the “Risk Factors”
section and elsewhere in this prospectus supplement, in the accompanying prospectus and in our Annual Report on Form 10-K for the
year ended December 31, 2019 and any subsequent Quarterly Reports on Form 10-Q filed with the SEC.
Given these uncertainties, you should not
place undue reliance on these forward-looking statements. You should read this prospectus supplement, the accompanying prospectus
and the documents incorporated by reference in this prospectus supplement and the accompanying prospectus with the understanding
that our actual future results may be materially different from what we expect. Except as required by law, we do not undertake
any obligation to update or revise any forward-looking statements contained in this prospectus supplement, the accompanying prospectus
or such other documents, whether as a result of new information, future events or otherwise.
USE OF PROCEEDS
We estimate that the net proceeds from
this offering, after payment of placement agent fees and estimated offering expenses and other fees payable by us, will be approximately
$4.5 million.
We currently intend to use the net proceeds
from this offering to further our clinical and preclinical programs and for working capital and general corporate purposes.
We have not determined the amounts we plan
to spend on any of the areas listed above or the timing of these expenditures. As a result, our management will have broad discretion
to allocate the net proceeds from this offering. Pending application of the net proceeds as described above, we expect to invest
the net proceeds in short-term, interest-bearing, investment-grade securities.
DIVIDEND POLICY
Our business requires significant funding.
We currently plan to invest all available funds and any future earnings in our business and do not anticipate paying any cash dividends
on our common stock in the foreseeable future. We currently are prohibited by the terms of our outstanding indebtedness from paying
dividends on our common stock, except with the prior consent of our lenders.
DILUTION
Our net tangible book value as of March
31, 2020, was approximately $9.3 million, or $0.99 per share of our common stock. Net tangible book value per share of our common
stock is determined by dividing total tangible assets (less total tangible liabilities) by the aggregate number of shares of our
common stock outstanding as of March 31, 2020. Dilution in net tangible book value per share represents the difference between
the amount per share paid by purchasers of shares of common stock in this public offering and the net tangible book value per share
of our common stock immediately after this offering.
After giving effect to the sale of 5,000,000
shares of common stock in this offering at a price of $1.00 per share, and after deducting estimated placement agent fees and other
estimated offering expenses paid or payable by us, our as adjusted net tangible book value as of March 31, 2020 would have been
approximately $13.8 million, or approximately $0.96 per share. This represents an immediate decrease in net tangible book value
of $0.03 per share to our existing stockholders and immediate dilution in net tangible book value of $0.04 per share to purchasers
in this offering. The following table illustrates this calculation on a per share basis:
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Offering price per share in this offering
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$
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1.00
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Net tangible book value per share as of March 31, 2020
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$
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0.99
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Decrease in as adjusted net tangible book value per share attributable to purchasers in this offering
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$
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(0.03
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)
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As adjusted net tangible book value per share immediately after this offering
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$
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0.96
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Dilution per share to purchasers in this offering
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$
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0.04
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The number of shares of our common stock
to be outstanding immediately after this offering is based on 9,428,011 shares of our common stock outstanding as of March 31,
2020;
and excludes:
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2,871,296 shares of common stock issued
since March 31, 2020;
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38,873 shares of common stock underlying
200,000 outstanding shares of Series A 4.5% Convertible Preferred Stock;
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727,830 shares of common stock underlying
outstanding options issued pursuant to our equity compensation and inducement plans having a weighted average exercise price of
$23.43 per share, but not including 737,958 stock option awards granted conditionally and subject to the approval of the Company’s
shareholders;
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4,527,320 shares of our common stock issuable
upon exercise of outstanding warrants having a weighted average exercise price of $4.37 per share;
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31,374 shares of our common stock reserved
for issuance upon the vesting and termination of certain transfer restrictions with regard to restricted stock units;
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373,524 shares of our common stock reserved
for issuance pursuant to future grants and/or award under our equity compensation and inducement plans; and
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400,000 shares of common stock reserved
for issuance upon exercise of the warrants to be issued as compensation to the placement agent in this offering, having an exercise
price of $1.25 per share.
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The above illustration of dilution per share to investors participating
in this offering assumes no exercise of options or warrants to purchase shares of our common stock, including the Placement Agent
Warrants. The exercise of any such securities will increase dilution to purchasers in this offering.
PLAN OF DISTRIBUTION
Pursuant to an engagement letter agreement
dated January 17, 2020, we have engaged H.C. Wainwright & Co., LLC (“Wainwright” or the “placement agent”)
to act as our exclusive placement agent in connection with this offering of our shares of common stock pursuant to this prospectus
supplement and accompanying prospectus. Under the terms of the engagement letter, the placement agent has agreed to be our exclusive
placement agent, on a reasonable best efforts basis, in connection with the issuance and sale by us of our shares of common stock
in this takedown from our shelf registration statement. The terms of this offering were subject to market conditions and negotiations
between us, the placement agent and prospective investors. The engagement letter does not give rise to any commitment by the placement
agent to purchase any of our shares of common stock, and the placement agent will have no authority to bind us by virtue of the
engagement letter. Further, the placement agent does not guarantee that it will be able to raise new capital in any prospective
offering. The placement agent may engage sub-agents or selected dealers to assist with this offering.
The placement agent proposes to arrange
for the sale of the shares we are offering pursuant to this prospectus supplement and accompanying prospectus to one or more investors
through securities purchase agreements directly between the purchasers and us.
We expect to deliver the shares of our
Common Stock being offered pursuant to this prospectus supplement on or about May 27, 2020, subject to the satisfaction or waiver
of customary closing conditions.
Fees and Expenses
We have agreed to pay the placement agent
a total cash fee equal to 8.0% of the gross proceeds of this offering. We will also pay the placement agent a
management fee equal to 1.0% of the gross proceeds raised in this offering, $35,000 for non-accountable expenses, an expense
allowance of up to $90,000 for legal fees and other out-of-pocket expenses, and $12,900 for certain clearing services. We estimate
the total expenses payable by us for this offering will be approximately $515,000, which amount includes the placement agent’s
fees and reimbursable expenses.
Placement Agent Warrants
In addition, we have agreed to issue to
the placement agent Placement Agent Warrants to purchase up to 400,000 shares (8.0% of the aggregate number of shares of common
stock sold in this offering). The Placement Agent Warrants have a term of five (5) years from May 22, 2020, a per share exercise
price equal to $1.25, or 125% of the offering price per share in this offering, and will be exercisable upon issuance. Pursuant
to FINRA Rule 5110(g), the Placement Agent and any shares issued upon exercise of the Placement Agent Warrants shall not be
sold, transferred, assigned, pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction
that would result in the effective economic disposition of the securities by any person for a period of 180 days immediately following
the date of effectiveness or commencement of sales of this offering, except the transfer of any security: (i) by operation
of law or by reason of our reorganization; (ii) to any FINRA member firm participating in this offering and the officers or
partners thereof, if all securities so transferred remain subject to the lock-up restriction set forth above for the remainder
of the time period; (iii) if the aggregate amount of our securities held by the placement agent or related persons do not
exceed 1% of the securities being offered; (iv) that is beneficially owned on a pro-rata basis by all equity owners of an
investment fund, provided that no participating member manages or otherwise directs investments by the fund and the participating
members in the aggregate do not own more than 10% of the equity in the fund; or (v) the exercise or conversion of any security,
if all securities remain subject to the lock-up restriction set forth above for the remainder of the time period.
Tail Financing Payments
Additionally, the placement agent will
receive a tail fee of 8% cash and 8% warrant coverage as described above with respect to any additional financing completed with
any investors that purchased common stock pursuant to this prospectus supplement within the 12-month period following the termination
of the engagement agreement.
Right of First Refusal
Additionally, for a period of ten (10)
months following the closing of the transaction contemplated herein, the placement agent will have a right of first refusal to
act as the sole book-running manager, underwriter, or placement agent for any future capital raising transactions.
Other Relationships
From time to time, the placement agent
may provide in the future various advisory, investment and commercial banking and other services to us in the ordinary course of
business, for which they have received and may continue to receive customary fees and commissions. However, except as disclosed
in this prospectus supplement, we have no present arrangements with the placement agent for any further services.
Listing
Our common stock is listed on the Nasdaq
Capital Market and traded under the symbol “SNCA” The last reported sale price of our common stock on the Nasdaq Capital
Market on May 22, 2020 was $0.92 per share.
Indemnification
We have agreed to indemnify the placement
agent and specified other persons against certain liabilities relating to or arising out of the placement agent’s activities
under the engagement letter agreement and to contribute to payments that the placement agent may be required to make in respect
of such liabilities.
Regulation M
The placement agent may be deemed to be
an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any commissions received by it and any profit
realized on the resale of the securities sold by it while acting as principal might be deemed to be underwriting discounts or commissions
under the Securities Act. As an underwriter, the placement agent would be required to comply with the requirements of the Securities
Act and the Exchange Act, including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5
and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares
of common stock by the placement agent acting as principal. Under these rules and regulations, the placement agent:
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may not engage in any stabilization activity in connection with our securities; and
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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 Exchange Act, until it has completed its participation in
the distribution.
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LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by the Silvestre Law Group, P.C., Westlake Village, California. The Silvestre Law Group,
P.C. or its affiliates or principals own approximately 1,000 of our common stock purchase warrants. The placement agent is being
represented by Ellenoff Grossman & Schole LLP, New York, New York.
EXPERTS
The financial statements incorporated in
this prospectus by reference from our Annual Reports on Form 10-K have been audited by Dixon Hughes Goodman LLP, our current
independent registered public accounting firm. Such financial statements have been so incorporated in reliance upon their
authority as experts in accounting and auditing. The firm does not have an interest in the shares being registered in the registration
statement to which this prospectus supplement forms a part.
WHERE YOU CAN FIND MORE INFORMATION
We are a public company and file annual,
quarterly and current reports, proxy statements and other information with the SEC. You may obtain copies of our public filings,
as noted in the paragraph below or by writing or telephoning us at:
Seneca Biopharma, Inc.
Attn: Investor Relations
20271 Goldenrod Lane, Floor 2
Germantown, Maryland 20876
Phone: (301)-366-4841
Our SEC filings are available to the public
over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any document we file at the
SEC’s Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. You can also inspect reports, proxy statements and other information about us at the
offices of the National Association of Securities Dealers, Reports Section, 1735 K Street, N.W., Washington, D.C. 20006. We maintain
a website at http://www.senecabio.com. Information contained in or accessible through our website does not constitute a part
of this prospectus.
This prospectus supplement and the accompanying
prospectus are part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may
be offered and sold hereunder. The registration statement, including exhibits thereto, contains additional relevant information
about us and these securities that, as permitted by the rules and regulations of the SEC, we have not included in this prospectus
supplement or the accompanying prospectus. A copy of the registration statement can be obtained at the address set forth above.
You should read the registration statement for further information about us and these securities.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC permits us to “incorporate
by reference” the information contained in documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents rather than by including them in this prospectus supplement or the accompanying prospectus.
Information that is incorporated by reference is considered to be part of this prospectus supplement, and you should read it with
the same care that you read this prospectus supplement. Later information that we file with the SEC will automatically update and
supersede the information that is either contained, or incorporated by reference, in this prospectus supplement, and will be considered
to be a part of this prospectus supplement from the date those documents are filed.
We incorporate by reference into this prospectus
supplement the following documents and information filed with the SEC:
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Our Annual Report on Form 10-K filed with the Commission on March 27, 2020, for the year ended December 31, 2019;
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Our Quarterly Report on Form 10-Q filed with the Commission on May 15, 2020 for the quarter ended March 31, 2020;
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Our Current Reports on Form 8-K filed with the Commission on April 2, 2020, April 7, 2020, April 15, 2020, and April 20, 2020 (excluding any information furnished in such reports under Item 2.02 and Item 7.01); and
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the description of our common stock and related rights contained in our registration statement on Form 8-A (File No. 001-33672), filed with the Commission on July 1, 2015, including any amendment or report filed for the purpose of updating such description.
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We also incorporate by reference into this
prospectus supplement all additional documents that we file with the SEC under the terms of Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 that are made after the date of this prospectus supplement and before the termination of
the offering of securities offered by this prospectus supplement. We are not, however, incorporating, in each case, any documents
or information that we are deemed to furnish and not file in accordance with SEC rules.
You may request a copy of any of the documents
incorporated by reference into this prospectus supplement, at no cost, by writing or telephoning us at the following address: Seneca
Biopharma, Inc., Attn: Investor Relations, 20271 Goldenrod Lane, Germantown, Maryland 20876 Phone: 301-366-4841.
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-218608
PROSPECTUS
NEURALSTEM, INC.
$100,000,000
COMMON STOCK
PREFERRED STOCK
WARRANTS
RIGHTS
PURCHASE CONTRACTS
UNITS
This prospectus will allow us to issue,
from time to time at prices and on terms to be determined at or prior to the time of the offering, up to $100,000,000 of any combination
of the securities described in this prospectus, either individually or in units. We may also offer common stock upon conversion
of or exchange for the preferred stock; common stock or preferred stock upon the exercise of warrants, rights or performance of
purchase contracts; or any combination of these securities upon the performance of purchase contracts.
This prospectus describes the general terms
of these securities and the general manner in which these securities will be offered. We will provide you with the specific terms
of any offering in one or more supplements to this prospectus. The prospectus supplements will also describe the specific manner
in which these securities will be offered and may also supplement, update or amend information contained in this document. You
should read this prospectus and any prospectus supplement, as well as any documents incorporated by reference into this prospectus
or any prospectus supplement, carefully before you invest.
Our securities may be sold directly by
us to you, through agents designated from time to time or to or through underwriters or dealers. For additional information on
the methods of sale, you should refer to the section entitled “Plan of Distribution” in this prospectus and in the
applicable prospectus supplement. If any underwriters or agents are involved in the sale of our securities with respect to which
this prospectus is being delivered, the names of such underwriters or agents and any applicable fees, commissions or discounts
and over-allotment options will be set forth in a prospectus supplement. The price to the public of such securities and the net
proceeds that we expect to receive from such sale will also be set forth in a prospectus supplement.
The aggregate market value of our outstanding
common stock held by non-affiliates was $42,236,000 based on 11,911,877 shares of outstanding
common stock as of May 31, 2017 of which approximately 9,470,044 shares were held by non-affiliates, and based on the last reported
sale price of our common stock as noted above. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell securities
pursuant to this prospectus with a value of more than one-third of the aggregate market value of our common stock held by non-affiliates
in any twelve-month period, so long as the aggregate market value of our common stock held by non-affiliates is less than $75,000,000.
In the event that subsequent to the date of this prospectus, the aggregate market value of our outstanding common stock held by
non-affiliates equals or exceeds $75,000,000, then the one-third limitation on sales shall not apply to additional sales made
during the corresponding you in reliance on this prospectus. During the prior twelve calendar months prior to, and including,
the date of this prospectus, we have not sold any securities pursuant to General Instruction I.B.6 of Form S-3.
Our common stock is listed on the NASDAQ
Capital Market under the symbol “CUR” On May 31, 2017, the last reported sale price of our common stock was $4.46
per share. The applicable prospectus supplement will contain information, where applicable, as to any other listing, if any, on
the NASDAQ Capital Market or any securities market or other securities exchange of the securities covered by the prospectus supplement.
Prospective purchasers of our securities are urged to obtain current information as to the market prices of our securities, where
applicable. Our principal executive offices are located at 20271 Goldenrod Lane, Germantown, Maryland 20876, and our telephone
number is (301) 366-4960.
INVESTING IN OUR SECURITIES INVOLVES
RISKS. YOU SHOULD REVIEW CAREFULLY THE RISKS AND UNCERTAINTIES DESCRIBED UNDER THE HEADING “RISK FACTORS” ON
PAGE 6 AND CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT AND ANY RELATED FREE WRITING PROSPECTUS AND UNDER SIMILAR HEADINGS
IN THE OTHER DOCUMENTS THAT ARE INCORPORATED BY REFERENCE INTO THIS PROSPECTUS.
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 is dated June 26,
2017
Table of Contents
ABOUT THIS PROSPECTUS
Unless the context requires
otherwise or unless otherwise noted, all references in this prospectus or any prospectus supplement to “our company,”
“we,” “our,” “Neuralstem” and “us” refer to Neuralstem, Inc. and its subsidiaries.
Also, any reference to “common share” or “common stock,” refers to our $0.01 par value common stock. Additionally,
any reference to “Series A Preferred Stock” refers to our Series A 4.5% Convertible Preferred Stock.
This prospectus is a part of a registration
statement that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process.
Under this shelf process, we may sell the securities described in this prospectus in one or more offerings. This prospectus
provides you with a general description of the securities we may offer. Each time we sell securities under this shelf registration,
we will provide a prospectus supplement that will contain specific information about the terms of that offering. We may also
authorize one or more free writing prospectuses to be provided to you that may contain material information relating to these offerings.
The prospectus supplement and any related free writing prospectus that we may authorize to be provided to you may also add, update
or change information contained in this prospectus or in any documents that we have incorporated by reference into this prospectus.
You should read this prospectus, any applicable prospectus supplement and any related free writing prospectus, together with the
information incorporated herein by reference as described under the headings “Where You Can Find More Information”
and “Incorporation by Reference.”
You should rely only on the information
that we have provided or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free
writing prospectus that we may authorize to be provided to you. We have not authorized any dealer, salesman or other person
to give any information or to make any representation other than those contained or incorporated by reference in this prospectus,
any applicable prospectus supplement or any related free writing prospectus that we may authorize to be provided to you.
You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or the accompanying
prospectus supplement. We take no responsibility for, and can provide no assurance as to the reliability of, any other information
that others may give you.
This prospectus and the accompanying supplement
to this prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered
securities to which they relate, nor do this prospectus and the accompanying supplement to this prospectus constitute an offer
to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus, any
applicable prospectus supplement or any related free writing prospectus is accurate on any date subsequent to the date set forth
on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the
date of the document incorporated by reference, even though this prospectus, any applicable prospectus supplement or any related
free writing prospectus is delivered or securities sold on a later date.
FORWARD-LOOKING STATEMENTS
The SEC encourages companies to disclose
forward-looking information so that investors can better understand a company’s future prospects and make informed investment
decisions. This prospectus and the documents we have filed with the SEC that are incorporated herein by reference contain such
“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements in connection with any
discussion of future operations or financial performance are identified by the use of words such as “may,” “anticipate,”
“estimate,” “expect,” “project,” “intend,” “plan,” “believe,”
and other words and terms of similar meaning. Forward-looking statements include, but are not limited to, statements about: our
business, operations, financial performance and condition, earnings, our prospects, our ability to raise capital to fund our operations
and business plan, the continued listing of our securities on the NASDAQ Capital Market, our ability to protect intellectual property
rights as well as regarding our industry generally. Forward–looking statements are not guarantees of performance. Such statements
are based on management’s expectations and are subject to certain factors, risks and uncertainties that may cause actual
results, outcome of events, timing and performance to differ materially from those expressed or implied by such statements. For
a summary of such factors, please refer to the section entitled “Risk Factors” in this prospectus, as updated and supplemented
by the discussion of risks and uncertainties in our most recent annual report on Form 10-K, as revised or supplemented by our subsequent
quarterly reports on Form 10-Q or our current reports on Form 8-K, as well as any amendments thereto, as filed with the SEC and
which are incorporated herein by reference. The information contained in this document is believed to be current as of the date
of this document. We do not intend to update any of the forward-looking statements after the date of this document to conform these
statements to actual results or to changes in our expectations, except as required by law.
In light of these assumptions, risks and
uncertainties, the results and events discussed in the forward-looking statements contained in this prospectus or in any document
incorporated herein by reference might not occur. Investors are cautioned not to place undue reliance on the forward-looking statements,
which speak only as of the date of this prospectus or the date of the document incorporated by reference in this prospectus. We
are not under any obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether
as a result of new information, future events or otherwise. All subsequent forward-looking statements attributable to us or to
any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to
in this section.
Our Business
Overview
We are focused on the research and development
of nervous system therapies based on our proprietary human neural stem cells and our small molecule compounds with the ultimate
goal of gaining approval from the United States Food and Drug Administration or FDA, and its international counterparts, to market
and commercialize such therapies. We are headquartered in Germantown, Maryland.
Our technology has produced three primary
assets: our NSI-189 small molecule program, our NSI-566 stem cell therapy program and our novel and proprietary chemical entity
screening platform.
Our patented technologies enable the commercial-scale
production of multiple types of central nervous system stem cells, which are under development for the potential treatment of nervous
system diseases and conditions. In addition, this ability to generate human neural stem cell lines provides a platform for chemical
screening and discovery of novel compounds that we believe may be used to stimulate the brain's capacity to regenerate neurons,
thereby potentially treating or reversing pathologies associated with certain nervous system conditions.
We have developed and maintain what we
believe is a strong portfolio of patents and patent applications that form the proprietary base for our research and development
efforts. We own or exclusively license over 20 U.S. issued and pending patents and over 120 foreign issued and pending patents
in the field of regenerative medicine, related to our stem cell technologies as well as our small molecule compounds.
We believe our technology, in combination
with our expertise, and established collaborations with major research institutions, could facilitate the development and commercialization
of products for use in the treatment of a wide array of nervous system disorders including neurodegenerative conditions and regenerative
repair of acute and chronic disease.
Recent Clinical & Business Highlights
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NSI-189 Phase 2 Major Depressive Disorder (MDD) study results expected 4 months ahead of schedule
in 3Q17. Neuralstem’s Phase 2 clinical study evaluating NSI-189 for the indication of MDD was initiated in May 2016.
The company announced 50% enrollment in September 2016 and last subject enrolled in February 2017. 220 subjects were randomized
for a 12-week interventional study with NSI-189 or placebo. Subjects completing the study are eligible to enroll in a 24-week non-interventional,
observation-only durability study, from which the results are expected in the first half of 2018.
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NSI-189 preclinical data published in the Journal of Cellular Physiology showed oral administration
of NSI-189 in rats with ischemic stroke led to a significant recovery from motor deficit. The improvements were maintained post
cessation of dosing for the additional 12-week observational period. The sustained improvement suggests that NSI-189 initiated
a host brain repair mechanism enabling tissue remodeling of the stroke brain.
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In April 2017, a new cohort (Group B) of four subjects with stable cervical injuries was added
for recruitment to the Phase 1 chronic spinal cord injury (cSCI) human clinical trial evaluating the safety and feasibility of
treatment with NSI-566. The amended protocol was approved by the U.S. Food and Drug Administration and the Institutional
Review Board at the study site, University of California San Diego (UCSD).
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NSI-566 preclinical data in a rat model of penetrating ballistic-like brain injury (PBBI) was published
in the Journal of Neurotrauma. These data showed robust engraftment and long-term survival of NSI-566 post transplantation.
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In January 2017, the Company executed a 1-for-13 reverse stock split of the Company’s common
stock. The reverse stock split enabled Neuralstem to regain compliance with the $1.00 minimum bid price condition and thereby fulfill
all of the NASDAQ Capital Market continued listing requirements.
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In March and April 2017, we received approximately $2,750,000 upon the exercise of 846,156 common
stock purchase warrants issued in our May 2016 registered offering at an exercise price of $3.25 per share. We expect that our
existing cash and cash equivalents will be sufficient to enable us to fund our anticipated level of operations based on our current
operating plans, into the third quarter of 2018.
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Clinical Development Program Review
We have devoted substantially all of our
efforts and financial resources to the pre-clinical and clinical development of our small molecule compounds and our stem cell
therapeutics. Below is a description of our most advanced clinical programs, their intended indication and current stage of development.
Clinical Pipeline:
Pipeline Summary
NSI-189 Phase 2 randomized, placebo-controlled,
double-blind clinical trial for the treatment of MDD
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In February 2017, the company announced the last subject enrolled and results expected
four months ahead of schedule in 3Q17. The first subject enrolled in May 2016 and 50% enrollment was achieved in September 2016.
The Phase 2 trial randomized 220 subjects for a 12-week interventional study with NSI-189 across three arms (40mg QD, 40mg BID
or placebo), at 12 select trial sites, all in the U.S. Eligible subjects are given the opportunity to enroll in a separate 24-week
observational study to assess durability of effect defined as the time until the start of a new antidepressant treatment (ADT).
Both the interventional and observational studies are being conducted and under the direction of study Principal Investigator (PI)
Maurizio Fava, MD, Executive Vice Chair, Department of Psychiatry and Executive Director, Clinical Trials Network and Institute,
Massachusetts General Hospital.
NSI-566 Phase 1 and 2 safety trials for
the treatment of Amyotrophic Lateral Sclerosis (ALS)
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In September 2015, nine-month Phase 2 and combined Phase 1 and Phase 2 data from
our ALS trials were presented at the American Neurological Association Meeting by Principal Investigator Eva Feldman, MD, PhD,
Director of the A. Alfred Taubman Medical Research Institute and Director of Research of the ALS Clinic at the University of Michigan
Health. The data showed that the intraspinal transplantation of the cells was safe and well tolerated. Subjects from both the Phase
1 and Phase 2 continue to be monitored for long-term follow-up evaluations.
NSI-566 Phase 1 safety trial for the treatment
of motor deficits in stroke
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In March 2016, we completed dosing the final planned cohort, for a total of nine
subjects. Subjects are currently being monitored through their 24-month observational follow-up period. The trial is being conducted
by Suzhou Neuralstem, a wholly owned subsidiary of Neuralstem in China.
NSI-566 Phase 1 safety trial for the treatment
of chronic Spinal Cord Injury (cSCI)
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In April 2017, the company announced that it had received FDA approval to recruit
a new cohort (Group B) of four subjects with stable AISA-A complete, quadriplegic, cervical injuries to the ongoing Phase 1 human
clinical trial evaluating the safety and feasibility of using NSI-566 spinal cord-derived neural stem cells to repair chronic cSCI.
In January 2016, we reported on the interim status of the Phase 1 safety data on all four subjects with stable thoracic spinal
cord injuries; the stem cell treatment demonstrated feasibility and safety. A self-reported ability to contract some muscles below
the level of injury was confirmed via clinical and electrophysiological follow-up examinations in one of the four subjects treated.
All subjects will be followed for five years. This study is being conducted with support from the University of California, San
Diego (UCSD) School of Medicine.
Pre-Clinical Development Pipeline
Our preclinical research on NSI-189 is
focused on identifying its mechanism of action and investigating its potential utility as a broad neuroregenerative drug that can
prevent or reverse various types of central and peripheral nerve degeneration and that may have significant cognitive benefit in
diseases that impact memory and cognition. Recent preclinical data support the potential benefits of NSI-189 in other indications
beyond MDD.
Our preclinical studies with NSI-566 have
served to provide a solid foundation for our ongoing clinical trials by demonstrating performance and efficacy of this cell line
in animal models for ALS, spinal cord injury, and ischemic stroke, and demonstrated safety in large animals. Additional studies
involving NSI-566 are directed at identifying new therapeutic indications.
In addition to NSI-566 we have developed
an inventory of over 300 unique stem cell lines. These stem cell lines include cortex,
hippocampus, midbrain, hindbrain, cerebellum, and spinal cord. We believe these lines possess unique properties and represent candidates
for both transplantation-based strategies to treat disease and for screening of compound libraries to discover novel drug therapies.
Our Technologies
Our technology has produced three primary
assets: our NSI-189 small molecule program, our NSI-566 stem cell therapy program and our novel and proprietary chemical entity
screening platform.
Small Molecule Pharmaceutical Compounds.
Utilizing our
proprietary stem cell-based screening capability, we have discovered and patented a series of small molecule compounds. We believe
our low molecular weight organic compounds can efficiently cross the blood/brain barrier. In mice, research indicated that the
small molecule compounds both stimulate neurogenesis of the hippocampus and increase its volume. We believe the small molecule
compounds may promote synaptogenesis and neurogenesis in the human hippocampus in indications such as MDD.
Our portfolio of small molecule compounds
which includes NSI-189 are covered by 7 patent families related to small molecule pharmaceuticals, including granted patents in
the U.S. covering these pharmaceuticals as compositions of matter, granted patents in the U.S. and abroad covering methods of manufacture
and methods of identifying additional candidates, and granted patents and pending applications in the U.S. and abroad covering
indications for which these pharmaceuticals are useful.
Stem Cells.
Therapeutic
Characteristics
From
a therapeutic perspective, our stem cell based technology enables the isolation and large-scale expansion of regionally specific,
human neural stem cells from all areas of the developing human brain and spinal cord thus enabling the generation of physiologically
relevant human neurons of different types. We believe that our stem cell technology will enable the replacement of malfunctioning
or dead cells or the protection of neurons as a way to treat disease and injury. Many significant and currently untreatable human
diseases arise from the loss or malfunction of specific cell types in the body. Our focus is the development of effective methods
to generate replacement cells from neural stem cells. We believe that replacing damaged, malfunctioning or dead neural cells with
fully functional ones may be a useful therapeutic strategy in treating many diseases and conditions of the central nervous system.
Our Proprietary and Novel Screening
Platform
Our
human neural stem cell lines form the foundation for functional cell-based assays used to screen for small molecule compounds that
can impact biologically relevant outcomes such as neurogenesis, synapse formation, and protection against toxic insults. We
have developed over 300 unique stem cell lines representing multiple different regions of the developing brain and spinal cord
at multiple different time points in development, enabling the generation of physiologically relevant human neural cells for screening,
target validation, and mechanism-of-action studies. This platform provides us with a unique and powerful tool to identify new chemical
entities to treat a broad range of nervous system conditions. NSI-189 was discovered using our stem cell-based screening platform.
Intellectual Property
We have developed and maintain what we
believe is a strong portfolio of patents and patent applications that form the basis for our research and development efforts.
We own or exclusively license over 10 U.S. issued and pending patents and over 60 foreign issued and pending patents related to
our stem cell technologies for use in treating disease and injury. We additionally have 7 patent families related to small molecule
pharmaceuticals, including granted patents in the U.S. covering these pharmaceuticals as compositions of matter, granted patents
in the U.S. and abroad covering methods of manufacture and methods of identifying additional candidates, and granted patents and
pending applications in the U.S. and abroad covering indications for which these pharmaceuticals are useful. Our issued patents
have expiration dates ranging from 2017 through 2035. Two of our original patents covering methods and composition of matter associated
with our stem cell technologies expired in 2016. In our opinion the expiration of these patents is not material to our intellectual
property.
Operating Strategy
We generally employ
an outsourcing strategy where we outsource our preclinical and clinical development activities to contract research organizations
and academic partners. Manufacturing is also outsourced to organizations with approved facilities and manufacturing practices.
All non-critical corporate functions are outsourced as well. This model allows us to better manage cash on hand and minimize non-vital
expenditures. It also allows for us to operate with relatively fewer employees and lower fixed costs than that required by other
companies conducting similar business.
Employees
As of May 31, 2017, we had ten (10) full-time
employees. Of these full-time employees, seven (7) work on research and development and clinical operations and three (3) work
in administration. We also use the services of numerous outside consultants in business and scientific matters.
Risks Associated with our Business
Our business is subject to numerous risks,
as described under the heading “Risk Factors” contained in the applicable prospectus supplement and in any free writing
prospectuses we have authorized for use in connection with a specific offering, and under similar headings in the documents that
are incorporated by reference into this prospectus.
Our Corporate Information
We were incorporated in Delaware in 2001.
Our principal executive offices are located at 20271 Goldenrod Lane, Germantown, Maryland 20876, and our telephone number is (301)
366-4960. Our website is located at www.neuralstem.com.
We have not incorporated by reference into this report the information
in, or that can be accessed through, our website and you should not consider it to be a part of this report.
The Securities We May Offer
Under this prospectus, we may
offer shares of our common stock and preferred stock and/or warrants, rights or purchase contracts to purchase any of such securities,
either individually or in units, with a total value of up to $100,000,000, from time to time at prices and on terms to be determined
by market conditions at the time of the offering. This prospectus provides you with a general description of the securities we
may offer. Each time we offer a type or series of securities under this prospectus, we will provide a prospectus supplement that
will describe the specific amounts, prices and other important terms of the securities being offered.
The prospectus supplement may
also add, update or change information contained in this prospectus or in documents we have incorporated by reference into this
prospectus. We may sell the securities directly to investors or to or through agents, underwriters or dealers. We, and our agents
or underwriters, reserve the right to accept or reject all or part of any proposed purchase of securities. If we offer securities
through agents or underwriters, we will include in the applicable prospectus supplement:
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the names of those agents or underwriters;
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applicable fees, discounts and commissions to be paid to them;
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details regarding over-allotment options, if any; and
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the net proceeds to us.
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This prospectus may not be
used to consummate a sale of any securities unless it is accompanied by a prospectus supplement.
RISK FACTORS
Investing in our securities involves a
high degree of risk. Before deciding whether to invest in our securities, you should consider carefully the risks and uncertainties
described under the heading “Risk Factors” contained in the applicable prospectus supplement and any related free writing
prospectus, and discussed under the section entitled “Risk Factors” contained in our most recent Annual Report on Form
10-K and in our most recent Quarterly Report on Form 10-Q, as well as any amendments thereto reflected in subsequent filings with
the SEC, which are incorporated by reference into this prospectus in their entirety, together with other information in this prospectus,
the documents incorporated by reference and any free writing prospectus that we may authorize for use in connection with this offering.
The risks described in these documents are not the only ones we face, but those that we consider to be material. There may be other
unknown or unpredictable economic, business, competitive, regulatory or other factors that could have material adverse effects
on our future results. Past financial performance may not be a reliable indicator of future performance, and historical trends
should not be used to anticipate results or trends in future periods. If any of these risks actually occurs, our business, financial
condition, results of operations or cash flow could be seriously harmed. This could cause the trading price of our common stock
to decline, resulting in a loss of all or part of your investment. Please also read carefully the section above entitled “Forward-Looking
Statements.”
USE OF PROCEEDS
We cannot assure you that we will receive
any proceeds in connection with securities which may be offered pursuant to this prospectus. Unless otherwise indicated in the
applicable prospectus supplement, we intend to use any net proceeds from the sale of securities under this prospectus for general
corporate purposes, including, but not limited to, repayment of existing indebtedness, working capital, intellectual property protection
and enforcement, capital expenditures, investments and acquisitions, including acquisitions of patent portfolios. We have not determined
the amounts we plan to spend on any of the areas listed above or the timing of these expenditures. As a result, our management
will have broad discretion to allocate the net proceeds, if any, we receive in connection with securities offered pursuant to this
prospectus for any purpose. Pending application of the net proceeds as described above, we may initially invest the net proceeds
in short-term, investment-grade, interest-bearing securities or apply them to the reduction of short-term indebtedness.
PLAN OF DISTRIBUTION
General Plan of Distribution
We may offer securities under this prospectus
from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods.
We may sell the securities (i) through underwriters or dealers, (ii) through agents or (iii) directly to one or more purchasers,
or through a combination of such methods. We may distribute the securities from time to time in one or more transactions at:
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a fixed price or prices, which may be changed from time to time;
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market prices prevailing at the time of sale;
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prices related to the prevailing market prices; or
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We may directly solicit offers to purchase
the securities being offered by this prospectus. We may also designate agents to solicit offers to purchase the securities from
time to time. We will name in a prospectus supplement any underwriter or agent involved in the offer or sale of the securities.
If we utilize a dealer in the sale of the
securities being offered by this prospectus, we will sell the securities to the dealer, as principal. The dealer may then resell
the securities to the public at varying prices to be determined by the dealer at the time of resale.
If we utilize an underwriter in the sale
of the securities being offered by this prospectus, we will execute an underwriting agreement with the underwriter at the time
of sale, and we will provide the name of any underwriter in the prospectus supplement which the underwriter will use to make resales
of the securities to the public. In connection with the sale of the securities, we, or the purchasers of the securities for whom
the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter
may sell the securities to or through dealers, and the underwriter may compensate those dealers in the form of discounts, concessions
or commissions.
With respect to underwritten public offerings,
negotiated transactions and block trades, we will provide in the applicable prospectus supplement information regarding any compensation
we pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or
commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating in the distribution
of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933, as amended, or the Securities
Act, and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed
to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against
civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in
respect thereof.
If so indicated in the applicable prospectus
supplement, we will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase
securities from us pursuant to delayed delivery contracts providing for payment and delivery on the date stated in the prospectus
supplement. Each contract will be for an amount not less than, and the aggregate amount of securities sold pursuant to such contracts
shall not be less nor more than, the respective amounts stated in the prospectus supplement. Institutions with whom the contracts,
when authorized, may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational
and charitable institutions and other institutions, but shall in all cases be subject to our approval. Delayed delivery contracts
will not be subject to any conditions except that:
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the purchase by an institution of the securities covered under that contract shall not at the time
of delivery be prohibited under the laws of the jurisdiction to which that institution is subject; and
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if the securities are also being sold to underwriters acting as principals for their own account,
the underwriters shall have purchased such securities not sold for delayed delivery. The underwriters and other persons acting
as our agents will not have any responsibility in respect of the validity or performance of delayed delivery contracts.
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Certain underwriters may use this prospectus
and any accompanying prospectus supplement for offers and sales related to market-making transactions in the securities. These
underwriters may act as principal or agent in these transactions, and the sales will be made at prices related to prevailing market
prices at the time of sale. Any underwriters involved in the sale of the securities may qualify as “underwriters” within
the meaning of Section 2(a)(11) of the Securities Act. In addition, the underwriters’ commissions, discounts or concessions
may qualify as underwriters’ compensation under the Securities Act and the rules of the Financial Industry Regulatory Authority,
Inc., or FINRA.
Shares of our common stock sold pursuant
to the registration statement of which this prospectus is a part will be authorized for quotation and trading on the NASDAQ Capital
Market. The applicable prospectus supplement will contain information, where applicable, as to any other listing, if any, on the
NASDAQ Capital Market or any securities market or other securities exchange of the securities covered by the prospectus supplement.
We can make no assurance as to the liquidity of or the existence of trading markets for any of the securities.
In order to facilitate the offering of
the securities, certain persons participating in the offering may engage in transactions that stabilize, maintain or otherwise
affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by
persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover
such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In
addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing the applicable security
in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may
be reclaimed if the securities sold by them are repurchased in connection with stabilization transactions. The effect of these
transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail
in the open market. These transactions may be discontinued at any time.
The underwriters, dealers and agents may
engage in other transactions with us, or perform other services for us, in the ordinary course of their business.
DESCRIPTION OF CAPITAL STOCK
The following is a summary of our capital
stock and provisions of our restated certificate of incorporation and restated by-laws, as they are in effect as of the date of
this prospectus. For more detailed information, please see our amended and restated certificate of incorporation and restated bylaws,
which are filed with the Securities and Exchange Commission as exhibits to the registration statement of which this prospectus
forms a part.
We are authorized to issue 300,000,000
shares of common stock, par value $0.01 per share, and 7,000,000 shares of preferred stock, par value $0.01 per share. As of May
31, 2017, we had:
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11,911,877 shares of common stock outstanding held of record by 295 stockholders, which does not
include stockholders who hold their shares in “street name”; and
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1,000,000 shares of our Series A 4.5% Convertible Preferred
Stock which is convertible into 3,887,387 shares of common stock subject to certain ownership restrictions.
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Common Stock
Holders of common stock are entitled to
one vote for each share held of record on all matters submitted to a vote of the stockholders, subject to the holder of our Series
A 4.5% Convertible Preferred Stock having the ability to appoint one director, and do not have cumulative voting rights. Subject
to preferences that may be applicable to any outstanding shares of preferred stock, holders of common stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by our board of directors out of funds legally available for
dividend payments. All shares of common stock outstanding as of the date of this prospectus are fully paid and nonassessable. The
holders of common stock have no preferences or rights of conversion, exchange, pre-emption or other subscription rights. There
are no redemption or sinking fund provisions applicable to the common stock. In the event of any liquidation, dissolution or winding-up
of our affairs, holders of common stock will be entitled to share ratably in our assets that are remaining after payment or provision
for payment of all of our debts and obligations and after liquidation payments to holders of outstanding shares of preferred stock,
if any.
Preferred Stock
Our board of directors has the authority,
without action by our stockholders, to designate and issue up to an additional 6,000,000 shares of preferred stock in one or more
series and to designate the rights, preferences, and limitations of all such series, any or all of which may be superior to the
rights of our common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock upon
the rights of the holders of common stock until our board of directors determines the specific rights of the holders of preferred
stock. However, effects of the issuance of preferred stock include restricting dividends on our common stock, diluting the voting
power of our common stock, impairing the liquidation rights of our common stock, and making it more difficult for a third party
to acquire us, which could have the effect of discouraging a third party from acquiring, or deterring a third party from paying
a premium to acquire, a majority of our outstanding voting stock. We have no present plans to issue any additional shares of our
preferred stock.
Series A 4.5% Convertible Preferred Stock
We currently have outstanding 1,000,000
shares of Series A 4.5% Convertible Preferred Stock with a stated value of $12.7895 per share and which are immediately convertible
into an aggregate of 3,887,387 shares of common stock, subject to a beneficial ownership limitation not allowing the holder to
have greater than a 19.99% voting interest. The Series A Preferred Stock has no provisions regarding subsequent securities issuances
or so called “price protection provisions.” The holders of Series A Preferred Stock shall be entitled receive 4.5%
dividends in cash or additional shares of Series A Preferred Stock if and when declared by the Company’s board of directors
in preference to the payment of any dividends on the Common Stock. The holders of Series A Preferred Stock shall have no voting
rights but shall be entitled to appoint one (1) member to our board of directors. This right to appoint a member of the board of
directors will terminate when there are less than 200,000 shares of Series A Preferred Stock outstanding.
Additionally, until the Company’s
2019 annual meeting of stockholders, subject to certain limitations, the holder of the Series A Preferred Stock has agreed not
to solicit proxies, seek to remove any member of the board of directors, contest any of our solicitations, make stockholder proposals,
vote its securities against the recommendations of our board of directors, participate in any group with respect to its voting
stock, seek to waive, amend or modify our certificate of incorporation or bylaws, or effect or participate in any tender offer;
or business combination; or acquisition or restructuring or recapitalization of the Company.
Preferred Stock in General
Our board of directors may, without further
action by our stockholders, from time to time, direct the issuance of shares of preferred stock in series and may, at the time
of issuance, determine the rights, preferences and limitations of each series, including voting rights, dividend rights and redemption
and liquidation preferences. Satisfaction of any dividend preferences of outstanding shares of preferred stock would reduce the
amount of funds available for the payment of dividends on shares of our common stock. Holders of shares of preferred stock may
be entitled to receive a preference payment in the event of any liquidation, dissolution or winding-up of our company before any
payment is made to the holders of shares of our common stock. In some circumstances, the issuance of shares of preferred stock
may render more difficult or tend to discourage a merger, tender offer or proxy contest, the assumption of control by a holder
of a large block of our securities or the removal of incumbent management. Upon the affirmative vote of our board of directors,
without stockholder approval, we may issue shares of preferred stock with voting and conversion rights which could adversely affect
the holders of shares of our common stock.
If we offer a specific series of preferred
stock under this prospectus, we will describe the terms of the preferred stock in the prospectus supplement for such offering and
will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the extent required, this description
will include:
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the title and stated value;
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the number of shares offered, the liquidation preference, if any, per share and the purchase price;
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the dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
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whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which
dividends will accumulate;
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the procedures for any auction and remarketing, if any;
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the provisions for a sinking fund, if any;
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the provisions for redemption, if applicable;
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any listing of the preferred stock on any securities exchange or market;
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whether the preferred stock will be convertible into our common stock, and, if applicable, the
conversion price (or how it will be calculated) and conversion period;
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whether the preferred stock will be exchangeable into debt securities, and, if applicable, the
exchange price (or how it will be calculated) and exchange period;
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voting rights, if any, of the preferred stock;
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a discussion of any material and/or special U.S. federal income tax considerations applicable to
the preferred stock;
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the relative ranking and preferences of the preferred stock as to dividend rights and rights upon
liquidation, dissolution or winding up of the affairs of the Company; and
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any material limitations on issuance of any class or series of preferred stock ranking pari passu
with or senior to the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of
the Company.
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Transfer Agent and Registrar
The transfer agent and registrar for our
common stock is American Stock Transfer & Trust Company. We act as the transfer agent and registrar for out Series A 4.5% Convertible
Preferred Stock. In the event we issue an preferred stock in the future pursuant to this prospectus, the transfer agent and registrar
for such preferred stock will be set forth in the applicable prospectus supplement.
Anti-Takeover Effects of Some Provisions of Delaware Law
Provisions of Delaware law could make the
acquisition of our company through a tender offer, a proxy contest or other means more difficult and could make the removal of
incumbent officers and directors more difficult. We expect these provisions to discourage coercive takeover practices and inadequate
takeover bids and to encourage persons seeking to acquire control of our company to first negotiate with our board of directors.
We believe that the benefits provided by our ability to negotiate with the proponent of an unfriendly or unsolicited proposal outweigh
the disadvantages of discouraging these proposals. We believe the negotiation of an unfriendly or unsolicited proposal could result
in an improvement of its terms.
We are subject to Section 203 of the
Delaware General Corporation Law, an anti-takeover law. In general, Section 203 prohibits a publicly held Delaware corporation
from engaging in a “business combination” with an “interested stockholder” for a period of three years
following the date the person became an interested stockholder, unless:
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Prior to the date of the transaction, the board of directors of the corporation approved either
the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
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The stockholder owned at least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the number of shares outstanding (a) shares owned by persons who
are directors and also officers, and (b) shares owned by employee stock plans in which employee participants do not have the right
to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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On or subsequent to the date of the transaction, the business combination is approved by the board
and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least
two-thirds of the outstanding voting stock that is not owned by the interested stockholder.
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Generally, a “business combination”
includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An
“interested stockholder” is a person who, together with affiliates and associates, owns or, within three years prior
to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting securities.
We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does
not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over
the market price for the shares of common stock held by stockholders.
Anti-Takeover Effects of Provisions of Our Charter Documents
Our amended and restated bylaws provides
for our board of directors to be divided into three classes serving staggered terms. Approximately one-third of the board of directors
will be elected each year. The provision for a classified board could prevent a party who acquires control of a majority of the
outstanding voting stock from obtaining control of the board of directors until the second annual stockholders meeting or longer,
following the date the acquirer obtains the controlling stock interest. The classified board provision could discourage a potential
acquirer from making a tender offer or otherwise attempting to obtain control of our company and could increase the likelihood
that incumbent directors will retain their positions. Our amended and restated bylaws provides any director or the entire Board
may be removed from office at any time, with or without cause, by the affirmative vote of the holders of at least a majority of
the voting power of the issued and outstanding shares of capital stock of the corporation then entitled to vote in the election
of directors.
Our amended and restated bylaws establish
an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed
nominations of persons for election to the board of directors. At an annual meeting, stockholders may only consider proposals or
nominations specified in the notice of meeting or brought before the meeting by or at the direction of the board of directors.
Stockholders may also consider a proposal or nomination by a person who was a stockholder of record on the record date for the
meeting, who is entitled to vote at the meeting and who has given to our Secretary timely written notice, in proper form, of his
or her intention to bring that business before the meeting. The amended and restated bylaws do not give the board of directors
the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted
at a special or annual meeting of the stockholders. However, our bylaws may have the effect of precluding the conduct of business
at a meeting if the proper procedures are not followed. These provisions may also discourage or deter a potential acquirer from
conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control
of our company.
Our amended and restated bylaws provide
that only our board of directors, the chairperson of the board or the chief executive officer (or president, in the absence of
a chief executive officer) or holders of more than twenty percent (20%) of the total voting power of the outstanding shares of
capital stock may call a special meeting of stockholders. The restriction on the ability of stockholders to call a special meeting
means that a proposal to replace the board also could be delayed until the next annual meeting.
Limitations on Liability and Indemnification
of Officers and Directors
Our amended restated certificate of incorporation
limits the liability of our officers and directors to the fullest extent permitted by the Delaware General Corporation Law, and
our restated certificate of incorporation and restated bylaws provide for indemnification of our officers and directors to the
fullest extent permitted by such law.
DESCRIPTION OF WARRANTS
As of May 31, 2017, there were warrants
to purchase 2,594,602 shares of our common stock outstanding at a weighted-average exercise price of $17.32 per share and expiration
dates between 2017 and 2022. This amount is comprised of the following warrants:
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Range of
Exercise
Prices
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Number of
Warrants
Outstanding
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Range of Expiration Dates
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$3.25 - $3.90
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911,556
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May 2021 - July 2021
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$5.80 - $6.50
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318,113
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June 2017 - March 2018
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$12.80 - $12.90
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39,296
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January 2022
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$13.20 - $13.30
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314,246
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August 2017
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$16.20 - $16.30
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174,544
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March 2020
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$18.60 - $19.80
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12,309
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March 2018 - June 2018
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$22.10 - $27.90
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153,755
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March 2019 - January 2021
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$34.50 - $39.00
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164,114
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November 2017 - October 2019
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$39.10 - $39.20
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230,772
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October 2020 - October 2021
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$47.30 - $52.20
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275,897
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January 2019 - July 2019
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2,594,602
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There is no established market for any
of our warrants.
General
We may issue warrants to purchase shares
of our common stock and/or preferred stock in one or more series together with other securities or separately,
as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions of the warrants
that we may offer. Particular terms of the warrants will be described in the warrant agreements and the prospectus supplement relating
to the warrants.
The applicable prospectus supplement will
contain, where applicable, the following terms of and other information relating to the warrants:
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the specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the currency or currency units in which the offering price, if any, and the exercise price are
payable;
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the designation, amount and terms of the securities purchasable upon exercise of the warrants;
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if applicable, the exercise price for shares of our common stock and the number of shares of common
stock to be received upon exercise of the warrants;
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if applicable, the exercise price for shares of our preferred stock, the number of shares of preferred
stock to be received upon exercise, and a description of that series of our preferred stock;
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the date on which the right to exercise the warrants will begin and the date on which that right
will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you
may exercise the warrants;
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whether the warrants will be issued in fully registered form or bearer form, in definitive or global
form or in any combination of these forms, although, in any case, the form of a warrant included in a unit will correspond to the
form of the unit and of any security included in that unit;
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any applicable material U.S. federal income tax consequences;
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if applicable, the identity of the warrant agent for the warrants and of any other depositaries, execution or
paying agents, transfer agents, registrars or other agents;
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the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the
warrants on any securities exchange;
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if applicable, the date from and after which the warrants and the common stock and/or
preferred stock will be separately transferable;
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if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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information with respect to book-entry procedures, if any;
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the anti-dilution provisions of the warrants, if any;
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any redemption or call provisions;
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whether the warrants may be sold separately or with other securities as parts of units; and
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any additional terms of the warrants, including terms, procedures and limitations relating to the
exchange and exercise of the warrants.
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Transfer Agent and Registrar
The transfer agent and registrar for any
warrants we offer will be set forth in the applicable prospectus supplement.
DESCRIPTION OF RIGHTS
General
We may issue rights to our stockholders to purchase shares of our
common stock, preferred stock or the other securities described in this prospectus. We may offer rights separately or together
with one or more additional rights, preferred stock, common stock, warrants or purchase contracts, or any combination of those
securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be issued under
a separate rights agreement. The following description sets forth certain general terms and provisions of the rights to which any
prospectus supplement may relate. The particular terms of the rights to which any prospectus supplement may relate and the extent,
if any, to which the general provisions may apply to the rights so offered will be described in the applicable prospectus supplement.
To the extent that any particular terms of the rights, rights agreement or rights certificates described in a prospectus supplement
differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus
supplement. We encourage you to read the applicable rights agreement and rights certificate for additional information before you
decide whether to purchase any of our rights.
We will provide in a prospectus supplement
the following terms of the rights being issued:
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the date of determining the stockholders entitled to the rights distribution;
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the aggregate number of shares of common stock, preferred stock or other securities purchasable
upon exercise of the rights;
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the aggregate number of rights issued;
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whether the rights are transferrable and the date, if any, on and after which the rights may be
separately transferred;
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the date on which the right to exercise the rights will commence, and the date on which the right
to exercise the rights will expire;
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the method by which holders of rights will be entitled to exercise;
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the conditions to the completion of the offering, if any;
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the withdrawal, termination and cancellation rights, if any;
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whether there are any backstop or standby purchaser or purchasers and the terms of their commitment,
if any;
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whether stockholders are entitled to oversubscription rights, if any;
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any applicable U.S. federal income tax considerations; and
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any other terms of the rights, including terms, procedures and limitations relating to the distribution,
exchange and exercise of the rights, as applicable.
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Each right will entitle the holder of rights
to purchase for cash the principal amount of shares of common stock, preferred stock or other securities at the exercise price
provided in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration
date for the rights provided in the applicable prospectus supplement.
Holders may exercise rights as described in the applicable prospectus
supplement. Upon receipt of payment and the rights certificate properly completed and duly executed at the corporate trust office
of a rights agent, if applicable, or any other office indicated in the prospectus supplement, we will, as soon as practicable,
forward the shares of common stock, preferred stock or other securities, as applicable, purchasable upon exercise of the rights.
If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to
persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including
pursuant to standby arrangements, as described in the applicable prospectus supplement.
Rights
Agent
If applicable, the rights agent for any rights we offer will be
set forth in the applicable prospectus supplement.
DESCRIPTION OF PURCHASE CONTRACTS
We may issue purchase contracts, including
contracts obligating holders to purchase from us, and for us to sell to holders, a specific or variable number of our
shares of common stock, preferred stock, warrants or rights, or securities of an entity unaffiliated with us, or any combination
of the above, at a future date or dates. Alternatively, the purchase contracts may obligate us to purchase from holders, and obligate
holders to sell to us, a specific or variable number of our shares of common stock, preferred stock, warrants,
rights or other property, or any combination of the above. The price of the securities or other property subject to the purchase
contracts may be fixed at the time the purchase contracts are issued or may be determined by reference to a specific formula described
in the purchase contracts. We may issue purchase contracts separately or as a part of units each consisting of a purchase contract
and one or more of our other securities described in this prospectus or securities of third parties, including U.S. Treasury securities,
securing the holder’s obligations under the purchase contract. The purchase contracts may require us to make periodic payments
to holders or vice versa and the payments may be unsecured or pre-funded on some basis. The purchase contracts may require holders
to secure the holder’s obligations in a manner specified in the applicable prospectus supplement.
The applicable prospectus supplement will
describe the terms of any purchase contracts in respect of which this prospectus is being delivered, including, to the extent applicable,
the following:
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whether the purchase contracts obligate the holder or us to purchase or sell, or both purchase
and sell, the securities subject to purchase under the purchase contract, and the nature and amount of each of those securities,
or the method of determining those amounts;
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whether the purchase contracts are to be prepaid;
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whether the purchase contracts are to be settled by delivery, or by reference or linkage to the
value, performance or level of the securities subject to purchase under the purchase contract;
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any acceleration, cancellation, termination or other provisions relating to the settlement of the
purchase contracts;
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any applicable U.S. federal income tax considerations; and
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whether the purchase contracts will be issued in fully registered or global form.
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The preceding description sets forth certain
general terms and provisions of the purchase contracts to which any prospectus supplement may relate. The particular terms of the
purchase contracts to which any prospectus supplement may relate and the extent, if any, to which the general provisions may apply
to the purchase contracts so offered will be described in the applicable prospectus supplement. To the extent that any particular
terms of the purchase contracts described in a prospectus supplement differ from any of the terms described above, then the terms
described above will be deemed to have been superseded by that prospectus supplement. We encourage you to read the applicable purchase
contract for additional information before you decide whether to purchase any of our purchase contracts.
DESCRIPTION OF UNITS
The following description, together with
the additional information that we include in any applicable prospectus supplements summarizes the material terms and provisions
of the units that we may offer under this prospectus. While the terms we have summarized below will apply generally to any units
that we may offer under this prospectus, we will describe the particular terms of any series of units in more detail in the applicable
prospectus supplement. The terms of any units offered under a prospectus supplement may differ from the terms described below.
We will incorporate by reference from reports
that we file with the SEC, the form of unit agreement that describes the terms of the series of units we are offering, and any
supplemental agreements, before the issuance of the related series of units. The following summaries of material terms and provisions
of the units are subject to, and qualified in their entirety by reference to, all the provisions of the unit agreement and any
supplemental agreements applicable to a particular series of units. We urge you to read the applicable prospectus supplements related
to the particular series of units that we may offer under this prospectus, as well as any related free writing prospectuses and
the complete unit agreement and any supplemental agreements that contain the terms of the units.
General
We may issue units consisting of common
stock, preferred stock, warrants, rights or purchase contacts for the purchase of common stock and/or preferred stock in one or
more series or in any combination thereof. Each unit will be issued so that the holder of the unit is also the holder of each security
included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each security included in
the unit. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held
or transferred separately, at any time or at any time before a specified date.
We will describe in the applicable prospectus
supplement the terms of the series of units being offered, including:
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the designation and terms of the units and of the securities comprising the units, including whether
and under what circumstances those securities may be held or transferred separately;
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any provisions of the governing unit agreement that differ from those described below; and
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any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the
securities comprising the units.
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The provisions described in this section,
as well as those set forth in any prospectus supplement or as described under “Description of Common Stock,” “Description
of Preferred Stock,” “Description of Warrants,” “Description of Rights” and “Description of
Purchase Contracts” will apply to each unit, as applicable, and to any common stock, preferred stock, warrant, right or purchase
contract included in each unit, as applicable.
Unit Agent
If applicable, the name and address of the unit agent for any units
we offer will be set forth in the applicable prospectus supplement.
Issuance in Series
We may issue units in such amounts and
in such numerous distinct series, if any, as we determine.
Enforceability of Rights by Holders of Units
If applicable, each unit agent will act solely as our agent under
the applicable unit agreement and will not assume any obligation or relationship of agency or trust with any holder of any unit.
A unit agent may act as unit agent for more than one series of units. If applicable, a unit agent will have no duty or responsibility
in case of any default by us under the applicable unit agreement or unit, including any duty or responsibility to initiate any
proceedings at law or otherwise, or to make any demand upon us. Any holder of a unit may, without the consent of the related unit
agent or the holder of any other unit, enforce by appropriate legal action its rights as holder under any security included in
the unit.
LEGAL MATTERS
The validity of the issuance of the securities
offered hereby will be passed upon for us by the Silvestre Law Group, P.C., Westlake Village, California. The Silvestre Law Group,
P.C. or its affiliates or principals own 4,154 shares of our common stock and 46,156
of our common stock purchase warrants.
EXPERTS
The financial statements incorporated
in this prospectus by reference from our Annual Report on Form 10-K have been audited by Stegman & Company, our prior
independent registered public accounting firm, with regarding to the year ended December 31, 2015 and Dixon Hughes Goodman LLP,
our current independent registered public accounting firm, for the year ended December 31, 2016, as stated in their respective
reports, which are each incorporated herein by reference. Such financial statements 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 are a public company and file annual,
quarterly and current reports, proxy statements and other information with the SEC. You may obtain copies of our public filings,
as noted in the paragraph below or by writing or telephoning us at:
Neuralstem, Inc.
Attn: Investor Relations
20271 Goldenrod Lane
Germantown, Maryland 20876
Phone: (301)-366-4960
We file annual, quarterly and other reports,
proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s
website at http://www.sec.gov. You may also read and copy any document we file at the SEC’s Public Reference Room
at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference
Room. You can also inspect reports, proxy statements and other information about us at the offices of the National Association
of Securities Dealers, Reports Section, 1735 K Street, N.W., Washington, D.C. 20006. We maintain a website at http://www.neuralstem.com.
Information contained in or accessible through our website does not constitute a part of this prospectus.
This prospectus supplement and the accompanying
prospectus are part of a registration statement on Form S-3 that we filed with the SEC registering the securities that may
be offered and sold hereunder. The registration statement, including exhibits thereto, contains additional relevant information
about us and these securities that, as permitted by the rules and regulations of the SEC, we have not included in this prospectus
supplement or the accompanying prospectus. A copy of the registration statement can be obtained at the address set forth above.
You should read the registration statement for further information about us and these securities.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC permits us to “incorporate
by reference” the information contained in documents we file with the SEC, which means that we can disclose important information
to you by referring you to those documents rather than by including them in this prospectus supplement or the accompanying prospectus.
Information that is incorporated by reference is considered to be part of this prospectus supplement, and you should read it with
the same care that you read this prospectus supplement. Later information that we file with the SEC will automatically update and
supersede the information that is either contained, or incorporated by reference, in this prospectus supplement, and will be considered
to be a part of this prospectus supplement from the date those documents are filed.
We incorporate by reference into this prospectus
supplement the following documents and information filed with the SEC:
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Our Annual Report on Form 10-K filed with the SEC on March 23, 2017, for the year ended December
31, 2016;
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Our Quarterly Report on Form 10-Q filed with the SEC on May 10, 2017, for the three month period
ended March 31, 2017;
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Our Definitive Proxy Statement on Form 14A for our 2017 Annual Meeting of Stockholders, filed with
the SEC on May 1, 2017;
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Our Current Reports on Form 8-K filed with the SEC on January 6, February 16 and 22, March 20 and 31,
April 13 and 19, and May 4, 18 and 24, 2017 (excluding any information furnished in such reports under Item 2.02, Item 7.01 or
Item 9.01); and
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the description of our common stock and related rights contained in our registration statement
on Form 8-A (File No. 001-33672), filed with the Commission on July 1, 2015, including any amendment or report filed for the purpose
of updating such description.
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We also incorporate by reference into this
prospectus supplement all additional documents that we file with the SEC under the terms of Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 that are made after the date of this prospectus supplement and before the termination of
the offering of securities offered by this prospectus supplement. We are not, however, incorporating, in each case, any documents
or information that we are deemed to furnish and not file in accordance with SEC rules.
You may request a copy of any of the documents
incorporated by reference into this prospectus supplement, at no cost, by writing or telephoning us at the following address: Neuralstem,
Inc., Attn: Investor Relations, 20271 Goldenrod Lane, Germantown, Maryland 20876 Phone: (301) 366-4960.
$100,000,000
NEURALSTEM, INC.
COMMON STOCK
PREFERRED STOCK
WARRANTS
RIGHTS
PURCHASE CONTRACTS
UNITS
PROSPECTUS
June 26,
2017
5,000,000 Shares of Common Stock
PROSPECTUS SUPPLEMENT
Placement Agent
H.C. Wainwright
& Co.
May 22, 2020
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