Filed pursuant to Rule 424(b)(5)
Registration No. 333-230742
Prospectus Supplement
(to Prospectus dated April 24, 2019)
2,725,000 Shares of Common Stock
We are offering 2,725,000 shares of our common stock, $0.001 par
value per share directly to several institutional investors
pursuant to this prospectus supplement and the accompanying
prospectus. The offering price of the shares is $3.55. In a
concurrent private placement, we are also selling to the investors
warrants to purchase an aggregate of up to 2,725,000 shares of our
common stock at an exercise price of $3.55 per share. The private
placement warrants will be immediately exercisable and will expire
five years and six months from the closing date.
Our common stock is listed on The NASDAQ Capital Market under the
symbol “TTNP.” On January 14, 2021, the last reported sale price of
our common stock on The Nasdaq Capital Market was $3.50 per
share.
As of the date of this prospectus supplement, the aggregate market
value of our outstanding common stock held by non-affiliates, or
our public float, was approximately $43,762,000, based on 7,132,459
outstanding shares of common stock held by non-affiliates and a per
share price of $6.1356, the closing price of our common stock on
November 20, 2020, which is the highest closing sale price of our
common stock on The Nasdaq Capital Market within the prior 60 days.
We have sold $4,896,600 of securities pursuant to General
Instruction I.B.6. of Form S-3 during the prior 12 calendar month
period that ends on and includes the date of this prospectus
supplement.
Investing in our common stock involves a high degree of risk.
Before buying any of our securities, you should carefully read
“Risk Factors” on page S-6 of this prospectus supplement, and under
similar headings in the other documents that are incorporated by
reference into this prospectus supplement and the accompanying
prospectus.
We have engaged Maxim Group LLC to act as our exclusive placement
agent in connection with this offering to use its reasonable best
efforts to place the shares of common stock offered by this
prospectus supplement. We have agreed to pay the placement agent
the fees set forth in the table below.
|
|
Per Share |
|
|
Total |
|
Offering price |
|
$ |
3.55 |
|
|
$ |
9,673,750 |
|
Placement agent’s
fees (1) |
|
$ |
0.2485 |
|
|
$ |
677,162 |
|
Proceeds, before
expenses, to us |
|
$ |
3.3015 |
|
|
$ |
8,996,587 |
|
(1) |
In
addition, we have agreed to reimburse the placement agent for
certain offering-related expenses up to an aggregate of $40,000.
See “Plan of Distribution.” |
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus supplement and the
accompanying prospectus are truthful or complete. Any
representation to the contrary is a criminal offense.
Delivery of the shares of common stock being offered pursuant to
this prospectus supplement and the accompanying prospectus is
expected to be made on or about January 20, 2021, subject to
customary closing conditions.
MAXIM GROUP LLC
The date of this prospectus supplement is January 15, 2021
TABLE OF CONTENTS
Prospectus Supplement
Prospectus
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this
prospectus supplement or the accompanying prospectus. You must not
rely on any unauthorized information or representations. This
prospectus supplement and the accompanying prospectus are an offer
to sell only the securities offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus supplement and the
accompanying prospectus is current only as of their respective
dates.
ABOUT THIS PROSPECTUS
SUPPLEMENT
In April 2019, we filed with the SEC a registration statement on
Form S-3 (File No. 333-230742)
utilizing a shelf registration process relating to the securities
described in this prospectus supplement, which registration
statement was declared effective on April 24, 2019. Under this
shelf registration process, we may, from time to time, sell up to
$50 million in the aggregate of shares of common stock, shares of
preferred stock, debt securities and warrants.
This document consists of two parts. The first part is the
prospectus supplement, including the documents incorporated by
reference herein, which describes the specific terms of this
offering. The second part, the accompanying prospectus, including
the documents incorporated by reference therein, provides more
general information. In general, when we refer only to the
prospectus, we are referring to both parts of this document
combined. Before you invest, you should carefully read this
prospectus supplement, the accompanying prospectus, all information
incorporated by reference herein and therein, as well as the
additional information described under the heading “Where You Can
Find More Information.” These documents contain information you
should carefully consider when deciding whether to invest in our
securities.
This prospectus supplement may add, update or change information
contained in 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.
You should rely only on the information contained in this
prospectus supplement, the accompanying prospectus, any document
incorporated by reference herein or therein, or any free writing
prospectuses we may provide to you in connection with this
offering. Neither we nor the sales agent has authorized anyone to
provide you with any different information. We take no
responsibility for, and can provide no assurance as to the
reliability of, any other information that others may provide to
you. The information contained in this prospectus supplement, the
accompanying prospectus, and in the documents incorporated by
reference herein or therein is accurate only as of the date such
information is presented. Our business, financial condition,
results of operations and prospects may have changed since that
date.
This prospectus supplement and the accompanying prospectus do not
constitute an offer to sell or the solicitation of an offer to buy
any securities other than the shares of common stock to which it
relates, nor do this prospectus supplement and the accompanying
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.
Securities offered pursuant to the registration statement to which
this prospectus supplement relates may only be offered and sold if
not more than three years have elapsed since April 24, 2019, the
initial effective date of the registration statement, subject to
the extension of this period in compliance with applicable SEC
rules.
We 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 herein were made solely for the
benefit of the parties to such agreement, including, in some cases,
for the purpose of allocating risk among the parties to such
agreement, and should not be deemed to be a representation,
warranty or covenant to you. Moreover, such representations,
warranties or covenants were accurate only as of the date when
made. Accordingly, such representations, warranties and covenants
should not be relied on as accurately representing the current
state of our affairs.
Unless the context indicates otherwise, as used in this prospectus
supplement, the terms “Titan,” “Company,” “we,” “us” and “our”
refer to Titan Pharmaceuticals, Inc. The Titan design logo and the
marks “Titan,” “Titan Pharmaceuticals,” Probuphine® and “ProNeura™”
are the property of Titan. This prospectus supplement contains
additional trade names, trademarks and service marks of ours and of
other companies. We do not intend our use or display of other
companies’ trade names, trademarks or service marks to imply a
relationship with, or endorsement or sponsorship of us by, these
other companies.
CAUTIONARY NOTE REGARDING
FORWARD LOOKING STATEMENTS
This prospectus supplement contains “forward-looking statements”
that involve substantial risks and uncertainties. All statements
other than statements of historical facts contained in this
prospectus supplement, including statements regarding our future
results of operations and financial position, strategy and plans,
and our expectations for future operations, are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or the Exchange Act.
We have attempted to identify forward-looking statements by
terminology including “anticipates,” “believes,” “can,” “continue,”
“could,” “estimates,” “expects,” “intends,” “may,” “plans,”
“potential,” “predicts,” “should,” or “will” or the negative of
these terms or other comparable terminology. Although we do not
make forward looking statements unless we believe we have a
reasonable basis for doing so, we cannot guarantee their accuracy.
Forward-looking statements included or incorporated by reference in
this prospectus supplement or our other filings with the Securities
and Exchange Commission, or the SEC, include, but are not
necessarily limited to, those relating to uncertainties relating
to:
|
· |
our ability to raise capital; |
|
· |
the wind down of Probuphine
commercial operations; |
|
· |
financing and strategic agreements
and relationships; |
|
· |
the results of preclinical trials
of JT-09; |
|
· |
the results of clinical trials of
our nalmafene implant or other product candidates that may progress
to clinical trials; |
|
· |
difficulties or delays in the
regulatory approval process; |
|
· |
uncertainties relating to
manufacturing, sales, marketing and distribution of our drug
candidates that may be successfully developed and approved for
commercialization; |
|
· |
adverse side effects or inadequate
therapeutic efficacy of our drug candidates that could slow or
prevent product development or commercialization; |
|
· |
dependence on third party
suppliers; |
|
· |
the uncertainty of protection for
our patents and other intellectual property or trade secrets;
and |
These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks
outlined under “Risk Factors” or elsewhere in this prospectus
supplement, which may cause our or our industry’s actual results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements.
Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by which, that performance or those
results will be achieved. Forward-looking statements are based on
information available at the time they are made and/or management’s
good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual
performance or results to differ materially from what is expressed
in or suggested by the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
You should not put undue reliance on any forward-looking
statements. We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or
changes in other factors affecting forward-looking information,
except to the extent required by applicable securities laws. If we
do update one or more forward-looking statements, no inference
should be drawn that we will make additional updates with respect
to those or other forward-looking statements.
PROSPECTUS SUPPLEMENT
SUMMARY
This summary highlights selected information about our company,
this offering and information appearing elsewhere in this
prospectus supplement, in the accompanying prospectus, and in the
documents we incorporate by reference. This summary is not complete
and does not contain all the information that you should consider
before investing in our common stock. You should read this entire
prospectus supplement and the accompanying prospectus carefully,
including the “Risk Factors” contained in this prospectus
supplement beginning on page S-6, and the risk factors, financial
statements and notes incorporated by reference herein, before
making an investment decision. This prospectus supplement may add
to, update or change information in the accompanying
prospectus.
Our Company
We are a pharmaceutical company developing therapeutics utilizing
our proprietary long-term drug delivery platform, ProNeura™, for
the treatment of select chronic diseases for which steady state
delivery of a drug provides an efficacy and/or safety benefit.
ProNeura consists of a small, solid implant made from a mixture of
EVA (ethylene-vinyl acetate) and a drug substance. The resulting
product is a solid matrix that is administered subdermally,
normally in the inner upper arm, in a brief, outpatient procedure
and is removed in a similar manner at the end of the treatment
period. These procedures may be performed by trained health care
providers, or HCPs, including licensed and surgically qualified
physicians, nurse practitioners, and physician’s assistants in a
HCP’s office or other clinical setting.
Our first product based on our ProNeura technology was Probuphine,
which was approved in the United States, Canada and the European
Union, or EU, for the maintenance treatment of opioid use disorder
in clinically stable patients taking 8 mg or less a day of oral
buprenorphine, In October 2020, we announced our decision to
discontinue selling Probuphine® (buprenorphine) implant in the U.S.
and wind down our commercialization activities, and to pursue a
plan that will enable us to focus on our ProNeura-based product
development programs/
Development Programs
Kappa Opioid Agonist Peptide Program
On October 27, 2020, we entered into an Asset Purchase Agreement
with JT Pharmaceuticals, Inc., or JT Pharma, for the acquisition
and development of JT Pharma’s kappa opioid agonist peptide, or JT-
09, for use in combination with our ProNeura technology. James
McNab, a member of our board of directors, is a principal of JT
Pharma. Several years ago, we began limited laboratory work in in
collaboration with JT Pharma to assess the feasibility of
delivering JT- 09 through peptide-infused ProNeura rods in animal
models. Our initial work focused on JT-09’s ability to activate
peripheral kappa opioid receptors, with the JT ProNeura rods
potentially providing a non-addictive treatment for certain types
of pain. Recently, our collaboration with JT has pivoted to explore
the feasibility of also using JT ProNeura rods in the treatment of
chronic pruritus, a debilitating condition defined as itching of
the skin lasting longer than six weeks. In 2015, an estimated 23 –
44 million Americans suffered from chronic pruritus in the setting
of both cutaneous and systemic conditions. Current treatments
include anti-histamines, corticosteroids, and over-the- counter
lotions, all of which are relatively ineffective and may have
undesirable side-effect profiles. The antipruritic effect of kappa
opioid agonists is thought to be related to their binding to kappa
opioid receptors on keratinocytes, immune cells and peripheral itch
neurons. We believe, based on our early animal data, that
subcutaneous implantation of the JT ProNeura rods could potentially
deliver therapeutic concentrations of JT- 09 for up to six months
or longer following a single in-office procedure. We are conducting
the initial non-clinical studies designed to establish proof of
concept in an animal model. If successful, we will need to conduct
Investigational New Drug, or IND, enabling safety and pharmacology
studies.
Nalmefene Development Program
In September 2019, the National Institute for Drug Addiction, or
NIDA, awarded us an approximately $8.7 million grant over two years
for our nalmefene implant development program for the prevention of
opioid relapse following detoxification. An injectable formulation
of nalmefene was approved by the FDA in 1995 for the management and
reversal of opioid overdose, including respiratory depression. Oral
nalmefene was approved by the European Medicines Agency in 2013 for
treating alcohol dependence.
The NIDA grant provides funds for the completion of implant
formulation development, cGMP manufacturing and non-clinical
studies required for filing an IND. During the first quarter of
2020 we met with the FDA to review our non-clinical development
plans and obtain guidance regarding filing an IND. The FDA provided
clear guidance on the type of development plan that we should
follow, specifically that this product development should follow
the 505(b)(i) regulatory pathway due to the lack of safety data on
nalmefene for a long acting formulation, and the non-clinical
studies that will be required to file an IND. Based on this input,
collecting all the non-clinical chronic toxicology data will
require an additional study as well as increasing the duration of
an ongoing study that will delay filing of the IND to mid-2021. We
have discussed the change in development plan with NIDA and they
have accepted our plan to reallocate previously approved funds for
conduct of the studies.
Corporate Information
We were incorporated under the laws of the State of Delaware in
February 1992. Our principal executive offices are located at 400
Oyster Point Blvd., Suite 505, South San Francisco, CA 94080. Our
telephone number is (650) 244-4990.We make our SEC filings
available on the Investor Relations page of our website,
http://titanpharm.com/. Information contained on our website is not
part of this prospectus.
THE OFFERING
Common stock offered by us in this
offering |
|
2,725,000 shares |
Offering price per share |
|
$3.55 |
Common stock outstanding immediately before this
offering |
|
7,139,068 shares |
Common stock outstanding immediately after this
offering |
|
9,864,068 shares |
Use of proceeds |
|
Working capital |
Risk factors |
|
An investment in our common stock involves
substantial risks. You should read carefully the “Risk Factors”
included and incorporated by reference in this prospectus,
including the risk factors incorporated by reference from our
filings with the SEC. |
Nasdaq Capital Market symbol for common
stock |
|
“TTNP” |
Concurrent private placement |
|
In a concurrent private placement, we
are selling to the purchasers of shares of our common stock in this
offering 5.5 year warrants to purchase up to 2,725,000 shares of
our common stock at an exercise price of $3.55 per share. We will
receive gross proceeds from the concurrent private placement
transaction solely to the extent such warrants are exercised for
cash. The warrants and the shares of our common stock issuable upon
the exercise of the warrants are not being offered pursuant to this
prospectus supplement and the accompanying prospectus. See “Private
Placement Transaction.” |
The number of shares of our common stock that will be outstanding
immediately after this offering as shown above is based on
7,139,068 shares outstanding as of January 14, 2021 and
excludes:
|
· |
27,895 shares of our common stock issuable upon the exercise of
outstanding options with a weighted average exercise price of
$242.69 per share; |
|
· |
2,437,833 shares of our common stock issuable upon the exercise
of outstanding warrants with a weighted average exercise price of
$6.28 per share; |
|
· |
2,725,000 shares of common stock issuable upon exercise of the
warrants being issued in the concurrent private placement; and |
|
· |
975,228 additional shares of our common stock reserved for
future issuance under our 2015 equity incentive plan. |
In addition, all information in this prospectus supplement reflects
a one-for-30 reverse stock split of our issued and outstanding
shares of common stock, options and warrants effected on November
30, 2020 and the corresponding adjustment of all common stock
prices per share and stock option and warrant exercise prices per
share and conversion ratios.
RISK FACTORS
Investing in our securities involves a high degree of risk. You
should carefully consider the risks described below and all of the
information contained or incorporated by reference in this
prospectus, including the risk factors described in our Annual
Report on Form 10-K for the year ended December 31, 2019, our
subsequent Quarterly Reports on Form 10-Q, and all other
information contained or incorporated by reference into this
prospectus supplement and the accompanying base prospectus before
deciding whether to purchase the securities offered hereby. Our
business, financial condition, results of operations and prospects
could be materially and adversely affected by these risks.
Risks Related to This Offering
Management will have broad discretion as to the use of the
proceeds from this offering, and we may not use the proceeds
effectively.
We intend to use the net proceeds from this offering for working
capital. Our management will have broad discretion in the
application of the net proceeds from this offering and could spend
the proceeds in ways that do not improve our results of operations
or enhance the value of our common stock. Our failure to apply
these funds effectively could have a material adverse effect on our
business and cause the price of our common stock to decline.
You will experience immediate and substantial dilution in the
net tangible book value per share of the common stock you
purchase.
Since the price per share of our common stock being offered is
substantially higher than the net tangible book value per share of
our common stock, you will suffer immediate and substantial
dilution in the net tangible book value of the common stock you
purchase in this offering. Based on an offering price of $3.55 per
share, if you purchase shares of common stock in this offering, you
will suffer immediate and substantial dilution of approximately
$3.48 per share with respect to the net tangible book value of the
common stock. See the section entitled “Dilution” below for a more
detailed discussion of the dilution you will incur if you invest in
this offering.
You may experience future dilution as a result of future
equity offerings and other issuances of our common stock or other
securities. In addition, this offering and future equity offerings
and other issuances of our common stock or other securities may
adversely affect our common stock price.
In order to raise additional capital, we may in the future offer
additional shares of our common stock or other securities
convertible into or exchangeable for our common stock at prices
that may not be the same as the price per share in this offering.
We may not be able to sell shares or other securities in any other
offering at a price per share that is equal to or greater than the
price per share paid by the investor in this offering, and
investors purchasing shares or other securities in the future could
have rights superior to existing stockholders. The price per share
at which we sell additional shares of our common stock or
securities convertible into common stock in future transactions may
be higher or lower than the price per share in this offering. In
addition, we are issuing warrants to purchase 2,725,000 shares of
common stock in a concurrent private placement. You will incur
dilution upon exercise of any outstanding stock options, warrants
or upon the issuance of shares of common stock under our stock
incentive programs. In addition, the sale of shares in this
offering and any future sales of a substantial number of shares of
our common stock in the public market, or the perception that such
sales may occur, could adversely affect the price of our common
stock. We cannot predict the effect, if any, that market sales of
those shares of common stock or the availability of those shares
for sale will have on the market price of our common stock
Risks Related to Our Business
Our ProNeura development programs are at very early stages
and will require substantial additional resources that may not be
available to us.
To date, other than our work on Probuphine in OUD, and our work on
nalmefene, we have conducted only limited research and development
activities assessing our ProNeura delivery system’s applicability
in other potential indications. While the nalmefene program is
being funded in large part by NIDA, we expect that the proceeds of
this offering will only be sufficient to complete the proof of
concept work on JT-09 and we will require substantial additional
funds to support further research and development activities,
including the anticipated costs of nonclinical studies and clinical
trials, regulatory approvals and eventual commercialization of any
therapeutic based on our ProNeura platform technology. If we are
unable to obtain substantial government grants or enter into third
party collaborations to fund our ProNeura programs, we will need to
seek additional sources of financing, which may not be available on
favorable terms, if at all. If we do not succeed in obtaining the
requisite funding for our ProNeura programs, we could be forced to
discontinue product development. Furthermore, funding arrangements
with collaborative partners or others may require us to relinquish
rights to technologies, product candidates or products that we
would otherwise seek to develop or commercialize ourselves or
license rights to technologies, product candidates or products on
terms that are less favorable to us than might otherwise be
available.
Our ability to successfully develop any future product candidates
based on our ProNeura drug delivery technology is subject to the
risks of failure and delay inherent in the development of new
pharmaceutical products, including: delays in product development,
clinical testing, or manufacturing; unplanned expenditures in
product development, clinical testing, or manufacturing; failure to
receive regulatory approvals; emergence of superior or equivalent
products; inability to manufacture on our own, or through any
others, product candidates on a commercial scale; and failure to
achieve market acceptance. Importantly, if the JT-09 initial proof
of concept efforts are unsuccessful and we discontinue this
program, our future prospects could be materially adversely
impacted. Because of these risks, our research and development
efforts may not result in any commercially viable products and our
business, financial condition, and results of operations could be
materially harmed.
Clinical trials required for new product candidates are
expensive and time-consuming, and their outcome is
uncertain.
Conducting clinical trials is a lengthy, time-consuming, and
expensive process. The length of time may vary substantially
according to the type, complexity, novelty, and intended use of the
product candidate, and often can be several years or more per
trial. Delays associated with products for which we are directly
conducting clinical trials may cause us to incur additional
operating expenses. The commencement and rate of completion of
clinical trials may be delayed by many factors, including, for
example:
|
• |
inability to manufacture sufficient
quantities of qualified materials under cGMP for use in clinical
trials; |
|
• |
slower than expected rates of patient recruitment; |
|
• |
failure to recruit a sufficient number of patients;
modification of clinical trial protocols; |
|
• |
changes in regulatory requirements for clinical trials; |
|
• |
the lack of effectiveness during clinical trials; |
|
• |
the emergence of unforeseen safety issues; |
|
• |
delays, suspension, or termination
of the clinical trials due to the institutional review board
responsible for overseeing the study at a particular study site;
and |
|
• |
government or regulatory delays or “clinical holds” requiring
suspension or termination of the trials. |
The results from early clinical trials are not necessarily
predictive of results obtained in later clinical trials.
Accordingly, even if we obtain positive results from early clinical
trials, we may not achieve the same success in future clinical
trials. Clinical trials may not demonstrate statistically
significant safety and effectiveness
to obtain the requisite regulatory approvals for product
candidates. The failure of clinical trials to demonstrate safety
and effectiveness for the desired indications could cause us to
abandon a product candidate and could delay development of other
product candidates. Any delay in, or termination of, our clinical
trials could materially harm our business, financial condition, and
results of operations.
The winding down of our commercial operations may be more
costly and time-consuming than we anticipate.
The cessation of our Probuphine related commercial activities
requires us to comply with FDA and state regulatory requirements,
including those related to notifications to various stakeholders
and the continuation of adverse event reporting, as well as to
address a number of business considerations, such as termination of
third-party agreements and transfer of manufacturing equipment. The
costs and timing associated with the wind down of our commercial
operations may exceed our current estimates, requiring a
reallocation of proceeds that may limit what we can accomplish in
our product development programs unless additional financing is
procured sooner than we currently anticipate.
We face risks associated with third parties conducting
preclinical studies and clinical trials of our
products.
We depend on third-party laboratories and medical institutions to
conduct preclinical studies and clinical trials for our products
and other third-party organizations to perform data collection and
analysis, all of which must maintain both good laboratory and good
clinical practices. We also depend upon third party manufacturers
for the production of any products we may successfully develop to
comply with cGMP of the FDA, which are similarly outside our direct
control. If third party laboratories and medical institutions
conducting studies of our products fail to maintain both good
laboratory and clinical practices, the studies could be delayed or
have to be repeated.
We face risks associated with product liability lawsuits that
could be brought against us.
The testing, manufacturing, marketing and sale of human therapeutic
products entail an inherent risk of product liability claims. We
currently have a limited amount of product liability insurance,
which may not be sufficient to cover claims that may be made
against us in the event that the use or misuse of our product
candidates causes, or merely appears to have caused, personal
injury or death. In the event we are forced to expend significant
funds on defending product liability actions, and in the event
those funds come from operating capital, we will be required to
reduce our business activities, which could lead to significant
losses. Adequate insurance coverage may not be available in the
future on acceptable terms, if at all. If available, we may not be
able to maintain any such insurance at sufficient levels of
coverage and any such insurance may not provide adequate protection
against potential liabilities. Whether or not a product liability
insurance policy is obtained or maintained in the future, any
claims against us, regardless of their merit, could severely harm
our financial condition, strain our management and other resources
or destroy the prospects for commercialization of the product which
is the subject of any such claim.
We may be unable to protect our patents and proprietary
rights.
Our future success will depend to a significant extent on our
ability to:
|
• |
obtain and keep patent protection
for our products, methods and technologies on a domestic and
international basis; |
|
• |
enforce our patents to prevent others from using our
inventions; |
|
• |
maintain and prevent others from using our trade secrets;
and |
|
• |
operate and commercialize products
without infringing on the patents or proprietary rights of
others. |
We cannot assure you that our patent rights will afford any
competitive advantages, and these rights may be challenged or
circumvented by third parties. Further, patents may not be issued
on any of our pending patent applications in the U.S. or abroad.
Because of the extensive time required for development, testing and
regulatory review of a potential product, it is possible that
before a potential product can be commercialized, any related
patent may expire or remain in existence for only a short period
following commercialization, reducing or eliminating any advantage
of the patent. If we sue others for infringing our patents, a court
may determine that such patents are invalid or unenforceable. Even
if the validity of our patent rights is upheld by a court, a court
may not prevent the alleged infringement of our patent rights on
the grounds that such activity is not covered by our patent
claims.
In addition, third parties may sue us for infringing their patents.
In the event of a successful claim of infringement against us, we
may be required to:
|
• |
pay substantial damages; |
|
• |
stop using our technologies and methods; |
|
• |
stop certain research and development efforts; |
|
• |
develop non-infringing products or methods; and |
|
• |
obtain one or more licenses from third parties. |
If required, we cannot assure you that we will be able to obtain
such licenses on acceptable terms, or at all. If we are sued for
infringement, we could encounter substantial delays in development,
manufacture and commercialization of our product candidates. Any
litigation, whether to enforce our patent rights or to defend
against allegations that we infringe third party rights, will be
costly, time consuming, and may distract management from other
important tasks.
We also rely in our business on trade secrets, know-how and other
proprietary information. We seek to protect this information, in
part, through the use of confidentiality agreements with employees,
consultants, advisors and others. Nonetheless, we cannot assure you
that those agreements will provide adequate protection for our
trade secrets, know-how or other proprietary information and
prevent their unauthorized use or disclosure. To the extent that
consultants, key employees or other third parties apply
technological information independently developed by them or by
others to our proposed products, disputes may arise as to the
proprietary rights to such information, which may not be resolved
in our favor.
We must comply with extensive government
regulations.
The research, development, manufacture, labeling, storage,
record-keeping, advertising, promotion, import, export, marketing
and distribution of pharmaceutical products are subject to an
extensive regulatory approval process by the FDA in the U.S. and
comparable health authorities in foreign markets. The process of
obtaining required regulatory approvals for drugs is lengthy,
expensive and uncertain. Approval policies or regulations may
change, and the FDA and foreign authorities have substantial
discretion in the pharmaceutical approval process, including the
ability to delay, limit or deny approval of a product candidate for
many reasons. Despite the time and expense invested in clinical
development of product candidates, regulatory approval is never
guaranteed. Regulatory approval may entail limitations on the
indicated usage of a drug, which may reduce the drug’s market
potential. Even if regulatory clearance is obtained, post-market
evaluation of the products, if required, could result in
restrictions on a product’s marketing or withdrawal of the product
from the market, as well as possible civil and criminal sanctions.
Of the large number of drugs in development, only a small
percentage successfully complete the regulatory approval process
and are commercialized.
We face intense competition.
With respect to our product development programs, we face
competition from numerous companies that currently market, or are
developing, products for the treatment of the diseases and
disorders we have targeted, many of which have significantly
greater research and development capabilities, experience in
obtaining regulatory approvals and manufacturing, marketing,
financial and managerial resources than we have. We also compete
with universities and other research institutions in the
development of products, technologies and processes, as well as the
recruitment of highly qualified personnel. Our competitors may
succeed in developing technologies or products that are more
effective than the ones we have under development or that render
our proposed products or technologies noncompetitive or obsolete.
In addition, our competitors may achieve product commercialization
or patent protection earlier than we will.
We depend on a small number of employees and
consultants.
We are highly dependent on the services of a limited number of
personnel and the loss of one or more of such individuals could
substantially impair our ongoing commercialization efforts. We
compete in our hiring efforts with other pharmaceutical and
biotechnology companies and it may be difficult and could take an
extended period of time because of the limited number of
individuals in our industry with the range of skills and experience
required and because of our limited resources.
In addition, we retain scientific and clinical advisors and
consultants to assist us in all aspects of our business.
Competition to hire and retain consultants from a limited pool is
intense. Further, because these advisors are not our employees,
they may have commitments to, or consulting or advisory contracts
with, other entities that may limit their availability to us, and
typically they will not enter into non-compete agreements with us.
If a conflict of interest arises between their work for us and
their work for another entity, we may lose their services. In
addition, our advisors may have arrangements with other companies
to assist those companies in developing products or technologies
that may compete with ours.
We face potential liability related to the privacy of health
information we obtain from clinical trials sponsored by us or our
collaborators, from research institutions and our collaborators,
and directly from individuals.
Numerous federal and state laws, including state security breach
notification laws, state health information privacy laws, and
federal and state consumer protection laws, govern the collection,
use, and disclosure of personal information. In addition, most
health care providers, including research institutions from which
we or our collaborators obtain patient health information, are
subject to privacy and security regulations promulgated under the
Health Insurance Portability and Accountability Act of 1996, or
HIPAA, as amended by the Health Information Technology for Economic
and Clinical Health Act. Although we are not directly subject to
HIPAA, we could potentially be subject to criminal penalties if we,
our affiliates, or our agents knowingly obtain or disclose
individually identifiable health information maintained by a
HIPAA-covered entity in a manner that is not authorized or
permitted by HIPAA.
We face risks related to health epidemics, such as the
current COVID-19 global pandemic, that could adversely affect our
operations or financial results.
The spread of COVID-19, the novel coronavirus, including
restrictions on travel, “shelter in place” orders, and quarantine
policies put into place by businesses and state and local
governments to mitigate its transmission, may have a material
adverse effect on our business. While the duration of the pandemic
and its potential economic impact are difficult to predict, it
already has caused significant disruption in the healthcare
industry and is likely to have continuing impacts as it continues.
The travel restrictions, “shelter in place” orders, quarantine
policies, and general concerns about the spread of COVID-19 was a
significant factor in our decision to wind down our commercial
operations because of the resulting disruptions in the delivery of
healthcare to patients, our sales and marketing efforts and REMS
training activities, as well as the operations of the various parts
of our supply and distribution chain. The ultimate impact of the
COVID-19 pandemic, or any other health epidemic, is highly
uncertain and subject to change. We do not yet know the full extent
of potential impacts on our business, healthcare systems or the
global economy as a whole. As the pandemic continues, it may result
in a sustained economic downturn that could affect our ability to
access capital on reasonable terms, or at all.
Risks Related to Our Financial Condition and Need for Additional
Capital
We have incurred net losses in almost every year since our
inception and we may never achieve or sustain
profitability.
We have incurred net losses in almost every year since our
inception. Our financial statements have been prepared assuming
that we will continue as a going concern. For the years ended
December 31, 2019. and 2018, we had net losses of approximately
$16.5 million and $9.3 million, respectively, and had net cash used
in operating activities of approximately $15.4 million and $8.4
million, respectively. These net losses and negative cash flows
have had, and will continue to have, an adverse effect on our
stockholders’ equity and working capital. We expect to continue to
incur net losses and negative operating cash flow for the
foreseeable future as we wind down our commercial activities and
focus on development of ProNeura based products. The amount of
future net losses will depend, in part, on the rate of future
growth of our expenses and our ability to obtain government or
third party funding for our development programs. There can be no
assurance that we will ever achieve profitability.
We will require additional proceeds to fund our product
development programs.
We currently estimate that our available cash and cash equivalents,
together with the proceeds of this offering, will be sufficient to
meet our obligations under the debt settlement agreement, wind down
our commercial operations and fund our working capital needs and
product development efforts into the first quarter of 2022. We will
require additional funds to advance JT-09 beyond the proof of
concept stage, if successful, for which we expect to have the
results of the initial studies during the second quarter of 2021,
and to fund any of our ProNeura development programs into the
clinic and to complete the regulatory approval process necessary to
commercialize any products we might develop. While we are currently
evaluating the alternatives available to us, including government
grants and third-party collaborations for one or more of our
ProNeura programs, our efforts to address our liquidity
requirements may not be successful. There can be no assurance that
any source of capital will be available to us on acceptable
terms.
Our net operating losses and research and development tax
credits may not be available to reduce future federal and state
income tax payments.
At December 31, 2019, we had federal net operating loss and tax
credit carryforwards of approximately $268.3 million and
approximately $8.5 million, respectively, and state net operating
loss and tax credit carryforwards of approximately $108.2 million
and approximately $9.1 million, respectively, available to offset
future taxable income, if any. Current federal and state tax laws
include substantial restrictions on the utilization of net
operating loss and tax credits in the event of an ownership change
and we cannot assure you that our net operating loss and tax
carryforwards will continue to be available.
We received a loan under the Paycheck Protection Program of
the CARES Act, and all or a portion of the loan may not be
forgivable.
On April 20, 2020, we received an approximately $0.7 million PPP
Loan pursuant to the Paycheck Protection Program of the CARES Act.
The PPP Loan matures in April 2022 with an annual interest rate of
1.0%. The PPP Loan has a six month deferral of payments period and
may be prepaid at any time without penalty. The proceeds of the PPP
Loan are to be used to retain workers and maintain payroll and make
mortgage interest, lease and utility payments. Under the CARES Act,
we will be eligible to apply for forgiveness of all loan proceeds
used to pay payroll costs, rent, utilities and other qualifying
expenses during the 24-week period following receipt of the loan,
provided that we maintain our number of employees and compensation
within certain parameters during such period. Not more than 40% of
the forgiven amount may be for non-payroll costs. If the conditions
outlined in the PPP loan program are adhered to by us, all or part
of such loan could be forgiven. However, we cannot provide any
assurance that we will be eligible for loan forgiveness or that any
amount of the PPP loan will ultimately be forgiven by the SBA. Any
forgiven amounts will not be included in our taxable income.
USE OF PROCEEDS
We estimate that the net proceeds from this offering will be
approximately $8.9 million, after deducting the placement agent
fees and the estimated offering expenses payable by us. We intend
to use the proceeds for working capital, including research and
development. We may temporarily invest the net proceeds in
short-term, interest-bearing instruments or other investment-grade
securities.
DILUTION
Purchasers of shares of our common stock in this offering will
experience an immediate dilution of the net tangible book value per
share of our common stock. Our net tangible book value as of
September 30, 2020 was approximately $(897,000) or $(0.0077) per
share of our common stock. Net tangible book value per share is
equal to our total tangible assets less our total liabilities,
divided by the number of shares of our outstanding common
stock.
Dilution per share of common stock equals the difference between
the amount paid by purchasers of common stock in this offering and
the net tangible book value per share of our common stock
immediately after this offering.
Based on the sale by us in this offering of 2,725,000 shares of
common stock at an offering price of $3.55 per share, after
deducting estimated offering expenses and placement agent fees and
expenses payable by us, our pro forma net tangible book value as of
September 30, 2020 would have been approximately $8.0 million, or
$0.0666 per share of our common stock. This represents an immediate
increase in pro forma net tangible book value to existing
stockholders of $0.0743 per share of our common stock and an
immediate dilution to purchasers in this offering of $3.4834 per
share of our common stock.
The following table illustrates this per-share of our common stock
dilution:
Offering price per share of
common stock |
|
|
|
|
|
$ |
3.5500 |
|
Net tangible book value per share as of
September 30, 2020 |
|
$ |
(0.0077 |
) |
|
|
|
|
Increase in net
tangible book value per share attributable to this offering |
|
$ |
0.0743 |
|
|
|
|
|
Pro forma net
tangible book value per share as of September 30, 2020 after giving
effect to this offering |
|
|
|
|
|
$ |
0.0666 |
|
Dilution per share to
the new investor in this offering |
|
|
|
|
|
$ |
3.4834 |
|
The information above is as of September 30, 2020 and excludes, as
of that date:
|
· |
30,648 shares of our common stock issuable upon exercise of
outstanding options with a weighted average exercise price of
$222.95 per share; |
|
· |
896,116 shares of our common stock issuable upon exercise of
outstanding warrants with a weighted average exercise price of
$15.81 per share; |
|
· |
2,725,000 shares of common stock issuable upon exercise of the
warrants being issued in the concurrent private placement; and |
|
· |
28,031 additional shares of our common stock reserved for
future issuance under our 2015 equity incentive plan. |
PRIVATE PLACEMENT
TRANSACTION
Concurrently with the sale of shares of common stock in this
offering, we will issue and sell to the investor in this offering
warrants to purchase up to an aggregate of 2,725,000 shares of
common stock at an exercise price equal to $3.55 per share.
The private placement warrants and the shares of common stock
issuable upon the exercise of such warrants are not being
registered under the Securities Act, are not being offered pursuant
to this prospectus supplement and the accompanying prospectus and
are being offered pursuant to the exemption provided in Section
4(a)(2) under the Securities Act and Rule 506(b) promulgated
thereunder. Accordingly, purchasers may only sell shares of common
stock issued upon exercise of the private placement warrants
pursuant to an effective registration statement under the
Securities Act covering the resale of those shares, an exemption
under Rule 144 under the Securities Act or another applicable
exemption under the Securities Act.
Exercisability. The private placement warrants are
immediately exercisable and will expire on July 20, 2026. The
warrants will be exercisable, at the option of each holder, in
whole or in part by delivering to us a duly executed exercise
notice and, at any time a registration statement registering the
issuance of the shares of common stock underlying the warrants
under the Securities Act is effective and available for the
issuance of such shares, or an exemption from registration under
the Securities Act is available for the issuance of such shares, by
payment in full in immediately available funds for the number of
shares of common stock purchased upon such exercise. If a
registration statement registering the issuance of the shares of
common stock underlying the private placement warrants under the
Securities Act is not effective or available, the holder may, in
its sole discretion, elect to exercise the private placement
warrant through a cashless exercise, in which case the holder would
receive upon such exercise the net number of shares of common stock
determined according to the formula set forth in the warrant.
Exercise Limitation. A holder will not have the right
to exercise any portion of the private placement warrant if the
holder (together with its affiliates) would beneficially own in
excess of 4.99% (or, upon election of the holder, 9.99%) of the
number of shares of our common stock outstanding immediately after
giving effect to the exercise, as such percentage ownership is
determined in accordance with the terms of the warrants. However,
any holder may increase or decrease such percentage, provided that
any increase will not be effective until the 61st day after such
election.
Exercise Price Adjustment. The exercise price of the
private placement warrants is subject to appropriate adjustment in
the event of certain stock dividends and distributions, stock
splits, stock combinations, reclassifications or similar events
affecting our common stock and also upon any distributions of
assets, including cash, stock or other property to our
stockholders.
Exchange Listing. There is no established trading
market for the private placement warrants and we do not expect a
market to develop. In addition, we do not intend to apply for the
listing of the private placement warrants on any national
securities exchange or other trading market.
Fundamental Transactions. If a fundamental
transaction occurs, then the successor entity will succeed to, and
be substituted for us, and may exercise every right and power that
we may exercise and will assume all of our obligations under the
private placement warrants with the same effect as if such
successor entity had been named in the warrant itself. If holders
of our common stock are given a choice as to the securities, cash
or property to be received in a fundamental transaction, then the
holder shall be given the same choice as to the consideration it
receives upon any exercise of the private placement warrant
following such fundamental transaction. Additionally, as more fully
described in the warrant, in the event of certain fundamental
transactions, the holders of the warrants will be entitled to
receive consideration in an amount equal to the Black Scholes value
of the warrants on the date of consummation of such
transaction.
Rights as a Stockholder. Except as otherwise provided
in the private placement warrants or by virtue of such holder’s
ownership of shares of our common stock, the holder of a private
placement warrant will not have the rights or privileges of a
holder of our common stock, including any voting rights, until the
holder exercises the warrant.
Resale/Registration Rights. We are required within 30
days of the offering to file a registration statement on Form S-1
providing for the resale of the shares of common stock issued and
issuable upon the exercise of the private placement warrants.
Failure to file the resale registration statement by such date will
subject us to liquidated damages. We are required to use
commercially reasonable efforts to cause such registration to
become effective within 181 days of the date of issuance, subject
to certain exceptions, and to keep such registration statement
effective at all times until no investor owns any warrants or
shares issuable upon exercise thereof.
PLAN OF DISTRIBUTION
Maxim Group LLC has agreed to act as the exclusive lead placement
agent in connection with this offering subject to the terms and
conditions of the placement agency agreement dated January 15,
2020. We refer to Maxim Group LLC as the placement agent. The
placement agent is not purchasing or selling any of the shares of
our common stock offered by this prospectus supplement, nor is it
required to arrange the purchase or sale of any specific number or
dollar amount of shares of our common stock, but have agreed to use
its reasonable best efforts to arrange for the sale of all of the
shares of our common stock offered hereby. Therefore, we will enter
into a securities purchase agreement directly with investors in
connection with this offering and we may not sell the entire amount
of shares of our common stock offered pursuant to this prospectus
supplement. We will make offers only to a limited number
institutional accredited investors. Maxim Group LLC is also acting
as the placement agent for the private placement transaction and is
being paid a fee related to the placement of the private placement
warrants.
We have agreed to indemnify Maxim Group LLC against specified
liabilities, including liabilities under the Securities Act, and to
contribute to payments Maxim Group LLC may be required to make in
respect thereof.
We have agreed, for a period of 12 months following the date of
this prospectus supplement, to grant Maxim Group LLC the right of
first refusal to act as lead managing underwriter and book runner
and/or placement agent for any and all future public and private
equity and debt offerings undertaken by us during such period.
Pursuant to the terms of the securities purchase agreement, from
the date hereof until 45 days after the closing date of this
offering we may not issue, enter into any agreement to issue or
announce the issuance or proposed issuance of any shares of common
stock or common stock equivalents, subject to certain exceptions
set forth in the securities purchase agreement.
Fees and Expenses
We have agreed to pay the placement agent a placement agent fee
equal to 7.0% of the aggregate purchase price of the shares of our
common stock sold in this offering. The following table shows the
per share and total cash placement agent’s fees we will pay to the
placement agent in connection with the sale of the shares of our
common stock offered pursuant to this prospectus supplement and the
accompanying prospectus, assuming the purchase of all of the shares
offered hereby.
|
|
Per Share |
|
|
Total |
|
Offering price |
|
$ |
3.55 |
|
|
$ |
9,673,750 |
|
Placement agent’s
fees (1) |
|
$ |
0.2485 |
|
|
$ |
677,162 |
|
Proceeds, before
expenses, to us |
|
$ |
3.3015 |
|
|
$ |
8,996,587 |
|
In addition, we have agreed to reimburse Maxim Group LLC’s actual
out-of-pocket expenses up to $40,000.
We estimate that the total expenses of the offering payable by us,
excluding the placement agent’s fees, will be approximately
$140,000.
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 shares sold by it while acting as principal might be deemed to
be underwriting discounts or commissions under the Securities Act.
As underwriter, the placement agent would be required to comply
with the requirements of the Securities Act and the Securities
Exchange Act of 1934, as amended, or 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 by the placement agent
acting as principal. Under these rules and regulations, the
placement agent:
|
• |
may not engage in any
stabilization activity in connection with our securities;
and |
|
• |
may not bid for or purchase any
of our securities or attempt to induce any person to purchase any
of our securities, other than as permitted under the Exchange Act,
until it has completed its participation in the
distribution. |
This prospectus supplement and the accompanying prospectus may be
made available in electronic format on websites or through other
online services maintained by the placement agent or by an
affiliate. Other than this prospectus supplement and the
accompanying prospectus, the information on the placement agent’s
website and any information contained in any other website
maintained by the placement agent is not part of this prospectus
supplement and the accompanying prospectus or the registration
statement of which this prospectus supplement and the accompanying
prospectus form a part, has not been approved and/or endorsed by us
or the placement agent, and should not be relied upon by
investors.
The foregoing does not purport to be a complete statement of the
terms and conditions of the placement agency agreement and the
securities purchase agreement. A copy of the securities purchase
agreement with the purchasers will be included as an exhibit to our
Current Report on Form 8-K to be filed with the SEC and
incorporated by reference into the registration statement of which
this prospectus supplement and the accompanying prospectus form a
part. See “Information Incorporated by
Reference” and “Where You Can Find More Information.”
No action has been or will be taken in any jurisdiction (except in
the United States) that would permit a public offering of the
securities offered by this prospectus supplement and accompanying
prospectus, or the possession, circulation or distribution of this
prospectus supplement and accompanying prospectus or any other
material relating to us or the securities offered hereby in any
jurisdiction where action for that purpose is required.
Accordingly, the securities offered hereby may not be offered or
sold, directly or indirectly, and neither of this prospectus
supplement and accompanying prospectus nor any other offering
material or advertisements in connection with the securities
offered hereby may be distributed or published, in or from any
country or jurisdiction except in compliance with any applicable
rules and regulations of any such country or jurisdiction. The
placement agent may arrange to sell securities offered by this
prospectus supplement and accompanying prospectus in certain
jurisdictions outside the United States, either directly or through
affiliates, where they are permitted to do so.
Relationships
The placement agent and its affiliates may provide from time to
time in the future certain commercial banking, financial advisory,
investment banking and other services for us in the ordinary course
of their business, for which they may receive customary fees and
commissions. In addition, from time to time, the placement agent
and its affiliates may effect transactions for their own account or
the account of customers, and hold on behalf of themselves or their
customers, long or short positions in our debt or equity securities
or loans, and may do so in the future. However, except as disclosed
in this prospectus supplement, we have no present arrangements with
the placement agent for any further services.
Transfer Agent and Registrar
The transfer agent and registrar for our Common Stock is
Continental Stock Transfer & Trust Company. Its address is 17
Battery Place, 8th Floor, New York, New York 10004 and its
telephone number is (212) 509-4000.
Listing
Our common stock is traded on The Nasdaq Capital Market under the
symbol “TTNP.”
LEGAL MATTERS
The validity of the shares of common stock being offered by this
prospectus supplement will be passed upon for us by Loeb & Loeb
LLP, New York, New York. Ellenoff Grossman & Schole LLP, New
York, New York, is acting as counsel for the placement agent in
connection with the securities offered hereby.
EXPERTS
The financial statements as of and for the years ended December 31,
2019 and 2018 incorporated by reference in this prospectus
supplement constituting a part of the registration statement on
Form S-3 have been so incorporated in reliance on the report of OUM
& Co. LLP, an independent registered public accounting firm,
incorporated herein by reference, given on the authority of said
firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with the SEC a registration statement on Form S-3
under the Securities Act with respect to the securities offered by
this prospectus supplement. This prospectus supplement and the
accompanying prospectus, which are part of the registration
statement, omits certain information, exhibits, schedules and
undertakings set forth in the registration statement, as permitted
by the SEC. For further information pertaining to us and the
securities offered in this prospectus supplement, reference is made
to that registration statement and the exhibits and schedules to
the registration statement. Statements contained in this prospectus
supplement and the accompanying prospectus as to the contents or
provisions of any documents referred to in this prospectus are not
necessarily complete, and in each instance where a copy of the
document has been filed as an exhibit to the registration
statement, reference is made to the exhibit for a more complete
description of the matters involved.
We file annual, quarterly and current reports, proxy statements and
other information with the SEC. Our SEC filings can be read and
copied at the SEC’s Public Reference Room at 100 F Street, N.E.,
Washington, D.C. 20549. The public may obtain information on the
operation of the public reference room by calling the SEC at
1-800-SEC-0330. Also, the SEC maintains a website at www.sec.gov
that contains reports, proxy and information statements and other
information regarding issuers that file electronically with the
SEC, including us.
General information about our company, including our Annual Report
on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K, as well as any amendments and exhibits to those reports,
are available free of charge through our website at
www.titanpharm.com as soon as reasonably practicable after we file
them with, or furnish them to, the SEC. Information on, or than can
be accessed through, our website is not incorporated into this
prospectus supplement or other securities filings and is not a part
of these filings.
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” into this
prospectus supplement the information we file with it, which means
that we can disclose important information to you by referring you
to those documents. The information we incorporate by reference is
an important part of this prospectus supplement, and later
information that we file with the SEC will automatically update and
supersede some of this information. We incorporate by reference the
documents listed below and any future filings we make with the SEC
under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
including filings made after the date of the initial registration
statement, until we sell all of the shares covered by this
prospectus supplement or the sale of shares by us pursuant to this
prospectus supplement is terminated. In no event, however, will any
of the information that we furnish to, pursuant to Item 2.02 or
Item 7.01 of any Current Report on Form 8-K (including exhibits
related thereto) or other applicable SEC rules, rather than file
with, the SEC be incorporated by reference or otherwise be included
herein, unless such information is expressly incorporated herein by
a reference in such furnished Current Report on Form 8-K or other
furnished document. The documents we incorporate by reference
are:
|
· |
our Annual Report on Form 10-K for
the year ended December 31, 2019, filed with the SEC on March 30, 2020; |
|
· |
our Quarterly Report on Form 10-Q for the period ended March
31, 2020, filed with the SEC on May 15, 2020; |
|
· |
our Quarterly Report on Form 10-Q for the period ended June 30,
2020, filed with the SEC on
August 14, 2020; |
|
· |
our Quarterly Report on Form 10-Q for the period ended
September 30, 2020, filed with the SEC on November 16, 2020; |
|
· |
our Current Reports on Form 8-K filed with the SEC on April 24, 2020, June 25, 2020, June 29, 2020, July 16, 2020, August 5, 2020, August 12, 2020, August 13, 2020, August 20, 2020, September 1, 2020, September 14, 2020, September 18, 2020, September 24, 2020, October 15, 2020, October 26, 2020, October 28, 2020, November 2, 2020, December 1, 2020, December 3, 2020, December 17, 2020, December 31, 2020 and January 8, 2021; |
|
· |
our Definitive Proxy Statement
filed with the SEC on May 22, 2020; |
|
· |
our additional Definitive Proxy Materials filed with the SEC on
November 9, 2020; |
|
· |
our additional Definitive Proxy Materials filed with the SEC on
December 2, 2020; and |
|
· |
the description of our
common stock contained in Exhibit 4.13 to our Annual Report on Form
10-K for the year ended December 31, 2019, filed with the SEC
on March 30, 2020, including any
amendment or reports filed for the purpose of updating such
descriptions. |
Any statement contained in a document incorporated or deemed to be
incorporated by reference into this prospectus supplement will be
deemed to be modified or superseded for purposes of this prospectus
supplement to the extent that a statement contained in this
prospectus supplement or any other subsequently filed document that
is deemed to be incorporated by reference into this prospectus
supplement modifies or supersedes the statement. Any statement so
modified or superseded will not be deemed, except as so modified or
superseded, to constitute a part of this prospectus supplement.
We will provide each person to whom a prospectus supplement is
delivered a copy of all of the information that has been
incorporated by reference in this prospectus supplement but not
delivered with the prospectus supplement. You may obtain copies of
these filings, at no cost, through the “Investor Relations” section
of our website (www.titanpharm.com) and you may request a copy of
these filings (other than an exhibit to any filing unless we have
specifically incorporated that exhibit by reference into the
filing), at no cost, by writing or telephoning us at the following
address:
400 Oyster Point Boulevard, Suite 505
South San Francisco, CA 94080
(650) 244-4990
Information on, or that can be accessed through, our website is not
incorporated into this prospectus supplement or other securities
filings and is not a part of these filings.
PROSPECTUS
$50,000,000
Common Stock
Preferred Stock
Debt Securities
Warrants
We may offer and sell, from time to time in one or more offerings,
any combination of common stock, preferred stock, debt securities
or warrants having a maximum aggregate offering price of
$50,000,000. When we decide to sell a particular class or series of
securities, we will provide specific terms of the offered
securities in a prospectus supplement. The prospectus supplement
may also add, update or change information contained in or
incorporated by reference into this prospectus. However, no
prospectus supplement shall offer a security that is not registered
and described in this prospectus at the time of its effectiveness.
You should read this prospectus and any prospectus supplement, as
well as the documents incorporated by reference or deemed to be
incorporated by reference into this prospectus, carefully before
you invest. This prospectus may not be used to offer or sell our
securities unless accompanied by a prospectus supplement relating
to the offered securities.
Our common stock is listed on the NASDAQ Capital Market under the
symbol “TTNP.” On April 3, 2019, the closing price of our
common stock, as reported by the NASDAQ Capital Market, was $1.65
per share and the aggregate market value of our outstanding common
stock held by non-affiliates (our “public float”) was approximately
$21.5 million. Pursuant to General Instruction I.B.6 of Form
S-3, as long as the aggregate market value of our common stock held
by non-affiliates remains below $75.0 million, we will not,
during any 12 calendar month period, sell securities registered on
the registration statement of which this prospectus is a part in a
public primary offering with a value exceeding more than one-third
of our public float. As of the date hereof, we have not offered any
securities pursuant to General Instruction I.B.6 of Form S-3 during
the 12 calendar months prior to and including the date of this
prospectus.
These securities may be sold directly by us, through dealers or
agents designated from time to time, to or through underwriters or
through a combination of these methods. See “Plan of Distribution”
in this prospectus. We may also describe the plan of distribution
for any particular offering of our securities in a prospectus
supplement. If any agents, underwriters or dealers are involved in
the sale of any securities in respect of which this prospectus is
being delivered, we will disclose their names and the nature of our
arrangements with them in a prospectus supplement. The net proceeds
we expect to receive from any such sale will also be included in a
prospectus supplement.
An investment in our securities involves a high degree of risk. See
the section entitled “Risk Factors” in our most recent Annual
Report on Form 10-K/A, as well as in any prospectus supplement
related to these specific offerings.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is April 24, 2019
TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
This prospectus is part of a Registration Statement that we filed
with the Securities and Exchange Commission (“SEC”) using a “shelf”
registration process. Under this shelf registration process, we may
offer from time to time securities having a maximum aggregate
offering price of $50,000,000. Each time we offer securities, we
will prepare and file with the SEC a prospectus supplement that
describes the specific amounts, prices and terms of the securities
we offer. The prospectus supplement also may add, update or change
information contained in this prospectus or the documents
incorporated herein by reference. You should read carefully both
this prospectus and any prospectus supplement together with
additional information described below under the caption “Where You
Can Find More Information.”
This prospectus does not contain all the information provided in
the Registration Statement we filed with the SEC. For further
information about us or our securities offered hereby, you should
refer to that Registration Statement, which you can obtain from the
SEC as described below under “Where You Can Find More
Information.”
You should rely only on the information contained or incorporated
by reference in this prospectus or any prospectus supplement. We
have not authorized any other person to provide you with different
information. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus is not an
offer to sell securities, and it is not soliciting an offer to buy
securities, in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this
prospectus or any prospectus supplement, as well as information we
have previously filed with the SEC and incorporated by reference,
is accurate as of the date of those documents only. Our business,
financial condition, results of operations and prospects may have
changed since those dates.
We may sell securities through underwriters or dealers, through
agents, directly to purchasers or through any combination of these
methods. We and our agents reserve the sole right to accept or
reject in whole or in part any proposed purchase of securities. The
prospectus supplement, which we will prepare and file with the SEC
each time we offer securities, will set forth the names of any
underwriters, agents or others involved in the sale of securities,
and any applicable fee, commission or discount arrangements with
them. See “Plan of Distribution.”
In this prospectus, unless otherwise indicated, “our company,”
“Titan,” “we,” “us” or “our” refer to Titan Pharmaceuticals, Inc.,
a Delaware corporation.
PROSPECTUS SUMMARY
This prospectus summary highlights certain information about our
company and other information contained elsewhere in this
prospectus or in documents incorporated by reference. This summary
does not contain all of the information that you should consider
before making an investment decision. You should carefully read the
entire prospectus, any prospectus supplement, including the section
entitled “Risk Factors” and the documents incorporated by reference
into this prospectus, before making an investment decision.
Probuphine® and
ProNeura™ are trademarks of our company. This Annual Report on Form
10-K/A also includes trade names and trademarks of companies other
than Titan.
The Offering
This prospectus is part of a Registration Statement that we filed
with the SEC utilizing a shelf registration process. Under this
shelf registration process, we may sell any combination of:
•
common stock;
•
preferred stock;
•
debt securities; and/or
•
warrants to purchase any of the securities listed above.
in one or more offerings up to a total dollar amount of
$50,000,000. This prospectus provides you with a general
description of the securities we may offer. Each time we sell
securities, we will provide a prospectus supplement that will
contain specific information about the terms of that specific
offering and include a discussion of any risk factors or other
special considerations that apply to those securities. The
prospectus supplement may also add, update or change information
contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with the additional
information described under the heading “Where You Can Find More
Information.”
Our Company
We are a pharmaceutical company developing therapeutics utilizing
our proprietary long-term drug delivery platform, ProNeura, for the
treatment of select chronic diseases for which steady state
delivery of a drug provides an efficacy and/or safety benefit. We
have been transitioning to a commercial stage enterprise since
May 25, 2018 when we reacquired Probuphine®
(buprenorphine) implant, or Probuphine, from our former licensee.
Probuphine is the first product based on our ProNeura technology
approved in the U.S. and Canada for the maintenance treatment of
opioid use disorder, or OUD, in eligible patients. Since the
reacquisition, we have been implementing a strategic plan aimed at
building the foundation to support an effective U.S. product
relaunch targeted at select OUD market segments best suited for
Probuphine, including the establishment of a small experienced
commercial team and the engagement of new strategic partners in the
product order and distribution process.
ProNeura consists of a small, solid rod made from a mixture of
ethylene-vinyl acetate, or EVA, and a drug substance. The resulting
product is a solid matrix that is placed subdermally, normally in
the inside part of the upper arm in a short physician office based
outpatient procedure, and is removed in a similar manner at the end
of the treatment period. The drug substance is released
continuously through the process of diffusion-controlled
dissolution, resulting in a steady rate of release generally
similar to intravenous administration thereby avoiding the
fluctuating peak and trough levels of oral dosing that often pose
problems in many disease settings. We believe that our ProNeura
long term drug delivery platform has the potential to be used in
the treatment of other chronic conditions where maintaining stable,
around the clock blood levels of a medication may benefit the
patient and improve medical outcomes. While our primary focus is on
the commercialization of Probuphine, we are also engaged in
research and development efforts on a product pipeline based on
this platform technology.
Our principal executive offices are located at 400 Oyster Point
Boulevard, South San Francisco, CA 94080. Our website is located at
www.titanpharm.com, and our telephone number is (650) 244-4990.
Information found on, or accessible through, our website is not a
part of, and is not incorporated into, this prospectus, and you
should not consider it part of this prospectus or part of any
prospectus supplement. Our website address is included in this
document as an inactive textual reference only.
RISK FACTORS
Investing in our securities involves risk. The prospectus
supplement applicable to a particular offering of securities will
contain a discussion of the risks applicable to an investment in
Titan and to the particular types of securities that we are
offering under that prospectus supplement. Before making an
investment decision, you should carefully consider the risks
described under “Risk Factors” in the applicable prospectus
supplement and the risks described in our most recent Annual Report
on Form 10-K/A for the year ended December 31, 2018, as
amended from time to time, which is incorporated herein by
reference, or any updates in our Quarterly Reports on Form 10-Q,
together with all of the other information appearing in or
incorporated by reference into this prospectus and any applicable
prospectus supplement, in light of your particular investment
objectives and financial circumstances. Our business, financial
condition or results of operations could be materially adversely
affected by any of these risks. The trading price of our securities
could decline due to any of these risks, and you may lose all or
part of your investment.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as
amended, or Securities Act, and Section 21E of the Securities
Exchange Act of 1934, or Exchange Act. Forward-looking statements
reflect the current view about future events. When used in this
prospectus, the words “anticipate,” “believe,” “estimate,”
“expect,” “future,” “intend,” “plan,” or the negative of these
terms and similar expressions, as they relate to us or our
management, identify forward-looking statements. Such statements,
include, but are not limited to, statements contained in this
prospectus relating to our business strategy, our future operating
results and liquidity and capital resources outlook.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward–looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict. Our actual
results may differ materially from those contemplated by the
forward-looking statements. They are neither statements of
historical fact nor guarantees of assurance of future performance.
We caution you therefore against relying on any of these
forward-looking statements. Important factors that could cause
actual results to differ materially from those in the
forward-looking statements include, without limitation,
uncertainties relating to the commercialization of Probuphine®,
financing and strategic agreements and relationships; difficulties
or delays in the regulatory approval process; uncertainties
relating to manufacturing, sales, marketing and distribution of our
drug candidates that may be successfully developed and approved for
commercialization; adverse side effects or inadequate therapeutic
efficacy of our drug candidates that could slow or prevent product
development or commercialization; dependence on third party
suppliers; the uncertainty of protection for our patents and other
intellectual property or trade secrets; and competition (in
addition to any other risks contained in the section entitled “Risk
Factors” of the applicable prospectus supplement). Should one or
more of these risks or uncertainties materialize, or should the
underlying assumptions prove incorrect, actual results may differ
significantly from those anticipated, believed, estimated,
expected, intended or planned.
Factors or events that could cause our actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We cannot guarantee future results, levels of
activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States,
we do not intend to update any of the forward-looking statements to
conform these statements to actual results.
USE OF PROCEEDS
Except as otherwise provided in the applicable prospectus
supplement, we intend to use the net proceeds from the sale of the
securities covered by this prospectus for general corporate
purposes, which may include, but is not limited to, working
capital, capital expenditures, research and development
expenditures and acquisitions of new technologies or businesses.
The precise amount, use and timing of the application of such
proceeds will depend upon our funding requirements and the
availability and cost of other capital. Additional information on
the use of net proceeds from an offering of securities covered by
this prospectus may be set forth in the prospectus supplement
relating to the specific offering.
DIVIDEND POLICY
We have never declared or paid dividends on our common stock and we
do not anticipate paying any cash dividends on our common stock in
the foreseeable future. Payment of cash dividends, if any, in the
future will be at the discretion of our board of directors and will
depend on applicable law and then-existing conditions, including
our financial condition, operating results, contractual
restrictions, capital requirements, business prospects and other
factors our board of directors may deem relevant. We currently
intend to retain all available funds and any future earnings to
fund the development and growth of our business.
DESCRIPTIONS OF THE SECURITIES WE MAY OFFER
The descriptions of the securities contained in this prospectus,
together with any applicable prospectus supplement, summarize all
the material terms and provisions of the various types of
securities that we may offer. We will describe in the applicable
prospectus supplement relating to a particular offering the
specific terms of the securities offered by that prospectus
supplement. We will indicate in the applicable prospectus
supplement if the terms of the securities differ from the terms we
have summarized below. We will also include in the prospectus
supplement information, where applicable, material United States
federal income tax considerations relating to the securities.
We may sell from time to time, in one or more offerings:
•
shares of our common stock;
•
shares of our preferred stock;
•
debt securities in one or more series; and/or
•
warrants to purchase any of the securities listed above.
This prospectus may not be used to consummate a sale of securities
unless it is accompanied by a prospectus supplement.
Capital Stock
General
The following description of common stock and preferred stock,
together with the additional information we include in any
applicable prospectus supplement, summarizes the material terms and
provisions of the common stock and preferred stock that we may
offer under this prospectus but is not complete. For the complete
terms of our common stock and preferred stock, please refer to our
amended and restated certificate of incorporation, as may be
amended from time to time, any certificates of designation for our
preferred stock, that may be authorized from time to time, and our
bylaws, as amended from time to time. The Delaware General
Corporation Law may also affect the terms of these securities.
While the terms we have summarized below will apply generally to
any future common stock or preferred stock that we may offer, we
will describe the specific terms of any series of these securities
in more detail in the applicable prospectus supplement. If we so
indicate in a prospectus supplement, the terms of any common stock
or preferred stock we offer under that prospectus supplement may
differ from the terms we describe below.
As of April 3, 2019, our authorized capital stock consists of
125,000,000 shares of common stock, par value $0.001 per share, of
which 13,413,628 shares were issued and outstanding, and 5,000,000
shares of preferred stock, par value $0.001 per share, none of
which were issued and outstanding. The authorized and unissued
shares of common stock and preferred stock are available for
issuance without further action by our stockholders, unless such
action is required by applicable law or the rules of any stock
exchange on which our securities may be listed. Unless approval of
our stockholders is so required, our board of directors will not
seek stockholder approval for the issuance and sale of our common
stock.
Common Stock
Each holder of common stock is entitled to one vote for each share
of common stock held on all matters submitted to a vote of the
stockholders, including the election of directors. Our amended and
restated certificate of incorporation and amended and restated
bylaws do not provide for cumulative voting rights. Subject to
preferences that may be applicable to any then outstanding
preferred stock, the holders of our outstanding shares of common
stock are entitled to receive dividends, if any, as may be declared
from time to time by our board of directors out of legally
available funds. In the event of our liquidation, dissolution or
winding up, holders of common stock will be entitled to share
ratably in the net assets legally available for distribution to
stockholders after the payment of all of our debts and other
liabilities, subject to the satisfaction of any liquidation
preference granted to the holders of any outstanding shares of
preferred stock. Holders of our common stock have no preemptive,
conversion or subscription rights, and
there are no redemption
or sinking fund provisions applicable to the common stock. The
rights, preferences and privileges of the holders of common stock
are subject to, and may be adversely affected by, the rights of the
holders of shares of any series of our preferred stock that are
outstanding or that we may designate and issue in the future. All
of our outstanding shares of common stock are fully paid and
nonassessable.
Our common stock is listed on the NASDAQ Capital Market under the
symbol “TTNP.” The transfer agent and registrar for our common
stock is Continental Stock Transfer & Trust Company, New York,
New York.
Options
As of as of April 3, 2019 we had outstanding options to
purchase 1,061,644 shares of our common stock at a weighted average
exercise price of $8.09.
Preferred Stock
Our amended and restated certificate of incorporation, as amended,
provides that our board of directors may, by resolution, designate
classes of preferred stock in the future. The designated series of
preferred stock shall have such powers, designations, preferences
and relative, participation or optional or other special rights and
qualifications, limitations or restrictions as shall be expressed
in the resolution adopted by the board of directors. Once
designated by our board of directors, each series of preferred
stock will have specific financial and other terms that will be
described in a prospectus supplement. The description of the
preferred stock that is set forth in any prospectus supplement is
not complete without reference to the documents that govern the
preferred stock. These include our amended and restated certificate
of incorporation, as amended, and any certificates of designation
that our board of directors may adopt. The certificate of
designations fixes for each class or series the designations,
powers, preferences, rights, qualifications, limitations and
restrictions, including, but not limited to, some or all of the
following:
•
the number of shares constituting that series and the distinctive
designation of that series, which number may be increased or
decreased (but not below the number of shares then outstanding)
from time to time by action of the board of directors;
•
the dividend rate and the manner and frequency of payment of
dividends on the shares of that series, whether dividends will be
cumulative, and, if so, from which date;
•
whether that series will have voting rights, in addition to any
voting rights provided by law, and, if so, the terms of such voting
rights;
•
whether that series will have conversion privileges, and, if so,
the terms and conditions of such conversion, including provision
for adjustment of the conversion rate in such events as the board
of directors may determine;
•
whether or not the shares of that series will be redeemable, and,
if so, the terms and conditions of such redemption;
•
whether that series will have a sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount
of such sinking fund;
•
whether or not the shares of the series will have priority over or
be on a parity with or be junior to the shares of any other series
or class in any respect;
•
the rights of the shares of that series in the event of voluntary
or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights or priority, if any, of
payment of shares of that series; and
•
any other relative rights, preferences and limitations of that
series.
All shares of preferred stock offered hereby will, when issued, be
fully paid and non-assessable, including shares of preferred stock
issued upon the exercise of preferred stock warrants or
subscription rights, if any.
Although our board of directors has no intention at the present
time of doing so, it could authorize the issuance of a series of
preferred stock that could, depending on the terms of such series,
impede the completion of a merger, tender offer or other takeover
attempt.
Debt Securities
The following description, together with the additional information
we include in any applicable prospectus supplements, summarizes the
material terms and provisions of the debt securities that we may
offer under this prospectus. While the terms we have summarized
below will generally apply to any future debt securities we may
offer under this prospectus, we will describe the particular terms
of any debt securities that we may offer in more detail in the
applicable prospectus supplement. The terms of any debt securities
we offer under a prospectus supplement may differ from the terms we
describe below. As of the date of this prospectus, we have no
outstanding registered debt securities.
We will issue senior notes under a senior indenture, which we will
enter into with the trustee to be named in the senior indenture. We
will issue subordinated notes under a subordinated indenture, which
we will enter into with the trustee to be named in the subordinated
indenture. We have filed forms of these documents as exhibits to
the registration statement of which this prospectus is a part. We
use the term “indentures” to refer to both the senior indenture and
the subordinated indenture.
The indentures will be qualified under the Trust Indenture Act of
1939. We use the term “debenture trustee” to refer to either the
senior trustee or the subordinated trustee, as applicable.
The following summaries of material provisions of the senior notes,
the subordinated notes and the indentures are subject to, and
qualified in their entirety by reference to, all the provisions of
the indenture applicable to a particular series of debt securities.
We urge you to read the applicable prospectus supplements related
to the debt securities that we sell under this prospectus, as well
as the complete indentures that contain the terms of the debt
securities. Except as we may otherwise indicate, the terms of the
senior and the subordinated indentures are identical.
General
The terms of each series of debt securities will be established by
or pursuant to a resolution of our board of directors and set forth
or determined in the manner provided in an officers’ certificate or
by a supplemental indenture. Debt securities may be issued in
separate series without limitation as to aggregate principal
amount. We may specify a maximum aggregate principal amount for the
debt securities of any series. The particular terms of each series
of debt securities will be described in a prospectus supplement
relating to such series, including any pricing supplement. The
prospectus supplement will set forth:
•
the title;
•
the principal amount being offered, and, if a series, the total
amount authorized and the total amount outstanding;
•
any limit on the amount that may be issued;
•
whether or not we will issue the series of debt securities in
global form and, if so, the terms and who the depositary will
be;
•
the maturity date;
•
whether and under what circumstances, if any, we will pay
additional amounts on any debt securities held by a person who is
not a U.S. person for tax purposes, and whether we can redeem the
debt securities if we have to pay such additional amounts;
•
the annual interest rate, which may be fixed or variable, or the
method for determining the rate, the date interest will begin to
accrue, the dates interest will be payable and the regular record
dates for interest payment dates or the method for determining such
dates;
•
whether or not the debt securities will be secured or unsecured,
and the terms of any secured debt;
•
the terms of the subordination of any series of subordinated
debt;
•
the place where payments will be payable;
•
restrictions on transfer, sale or other assignment, if any;
•
our right, if any, to defer payment of interest and the maximum
length of any such deferral period;
•
the date, if any, after which, the conditions upon which, and the
price at which we may, at our option, redeem the series of debt
securities pursuant to any optional or provisional redemption
provisions, and any other applicable terms of those redemption
provisions;
•
the date, if any, on which, and the price at which we are
obligated, pursuant to any mandatory sinking fund or analogous fund
provisions or otherwise, to redeem, or at the holder’s option to
purchase, the series of debt securities and the currency or
currency unit in which the debt securities are payable;
•
whether the indenture will restrict our ability and/or the ability
of our subsidiaries to, among other things,:
•
incur additional indebtedness;
•
issue additional securities;
•
create liens;
•
pay dividends and make distributions in respect of our capital
stock and the capital stock of our subsidiaries;
•
redeem capital stock;
•
place restrictions on our subsidiaries’ ability to pay dividends,
make distributions or transfer assets;
•
make investments or other restricted payments;
•
sell or otherwise dispose of assets;
•
enter into sale-leaseback transactions;
•
engage in transactions with stockholders and affiliates;
•
issue or sell stock of our subsidiaries; or
•
effect a consolidation or merger;
•
whether the indenture will require us to maintain any interest
coverage, fixed charge, cash flow-based, asset-based or other
financial ratios;
•
a discussion of any material or special U.S. federal income tax
considerations applicable to the debt securities;
•
information describing any book-entry features;
•
provisions for a sinking fund purchase or other analogous fund, if
any;
•
whether the debt securities are to be offered at a price such that
they will be deemed to be offered at an “original issue discount”
as defined in paragraph (a) of Section 1273 of the
Internal Revenue Code;
•
the procedures for any auction and remarketing, if any;
•
the denominations in which we will issue the series of debt
securities, if other than denominations of $1,000 and any integral
multiple thereof;
•
if other than dollars, the currency in which the series of debt
securities will be denominated; and
•
any other specific terms, preferences, rights or limitations of, or
restrictions on, the debt securities, including any events of
default that are in addition to those described in this prospectus
or any
covenants provided with respect to the debt securities that are in
addition to those described above, and any terms that may be
required by us or advisable under applicable laws or regulations or
advisable in connection with the marketing of the debt
securities.
Conversion or Exchange Rights
We will set forth in the prospectus supplement the terms on which a
series of debt securities may be convertible into or exchangeable
for common stock or other securities of ours or a third party,
including the conversion or exchange rate, as applicable, or how it
will be calculated, and the applicable conversion or exchange
period. We will include provisions as to whether conversion or
exchange is mandatory, at the option of the holder or at our
option. We may include provisions pursuant to which the number of
our securities or the securities of a third party that the holders
of the series of debt securities receive upon conversion or
exchange would, under the circumstances described in those
provisions, be subject to adjustment, or pursuant to which those
holders would, under those circumstances, receive other property
upon conversion or exchange, for example in the event of our merger
or consolidation with another entity.
Consolidation, Merger or Sale
The indentures in the forms initially filed as exhibits to the
registration statement of which this prospectus is a part do not
contain any covenant that restricts our ability to merge or
consolidate, or sell, convey, transfer or otherwise dispose of all
or substantially all of our assets. However, any successor of ours
or the acquirer of such assets must assume all of our obligations
under the indentures and the debt securities.
If the debt securities are convertible for our other securities,
the person with whom we consolidate or merge or to whom we sell all
of our property must make provisions for the conversion of the debt
securities into securities that the holders of the debt securities
would have received if they had converted the debt securities
before the consolidation, merger or sale.
Events of Default Under the Indenture
The following are events of default under the indentures in the
forms initially filed as exhibits to the registration statement
with respect to any series of debt securities that we may
issue:
•
if we fail to pay interest when due and payable and our failure
continues for 90 days and the time for payment has not been
extended or deferred;
•
if we fail to pay the principal, sinking fund payment or premium,
if any, when due and payable and the time for payment has not been
extended or delayed;
•
if we fail to observe or perform any other covenant contained in
the debt securities or the indentures, other than a covenant
specifically relating to another series of debt securities, and our
failure continues for 90 days after we receive notice from the
debenture trustee or holders of at least 25% in aggregate principal
amount of the outstanding debt securities of the applicable series;
and
•
if specified events of bankruptcy, insolvency or reorganization
occur.
If an event of default with respect to debt securities of any
series occurs and is continuing, other than an event of default
specified in the last bullet point above, the debenture trustee or
the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series, by notice to us in
writing, and to the debenture trustee if notice is given by such
holders, may declare the unpaid principal of, premium, if any, and
accrued interest, if any, due and payable immediately. If an event
of default specified in the last bullet point above occurs with
respect to us, the principal amount of and accrued interest, if
any, of each issue of debt securities then outstanding shall be due
and payable without any notice or other action on the part of the
debenture trustee or any holder.
The holders of a majority in principal amount of the outstanding
debt securities of an affected series may waive any default or
event of default with respect to the series and its consequences,
except defaults or events of default regarding payment of
principal, premium, if any, or interest, unless we have cured the
default or event of default in accordance with the indenture. Any
waiver shall cure the default or event of default.
Subject to the terms of the indentures, if an event of default
under an indenture shall occur and be continuing, the debenture
trustee will be under no obligation to exercise any of its rights
or powers under such indenture at the request or direction of any
of the holders of the applicable series of debt securities, unless
such holders have offered the debenture trustee reasonable
indemnity. The holders of a majority in principal amount of the
outstanding debt securities of any series will have the right to
direct the time, method and place of conducting any proceeding for
any remedy available to the debenture trustee, or exercising any
trust or power conferred on the debenture trustee, with respect to
the debt securities of that series, provided that:
•
the direction so given by the holder is not in conflict with any
law or the applicable indenture; and
•
subject to its duties under the Trust Indenture Act of 1939, the
debenture trustee need not take any action that might involve it in
personal liability or might be unduly prejudicial to the holders
not involved in the proceeding.
A holder of the debt securities of any series will only have the
right to institute a proceeding under the indentures or to appoint
a receiver or trustee, or to seek other remedies if:
•
the holder has given written notice to the debenture trustee of a
continuing event of default with respect to that series;
•
the holders of at least 25% in aggregate principal amount of the
outstanding debt securities of that series have made written
request, and such holders have offered reasonable indemnity, to the
debenture trustee to institute the proceeding as trustee; and
•
the debenture trustee does not institute the proceeding and does
not receive from the holders of a majority in aggregate principal
amount of the outstanding debt securities of that series other
conflicting directions within 90 days after the notice,
request and offer.
These limitations do not apply to a suit instituted by a holder of
debt securities if we default in the payment of the principal,
premium, if any, or interest on, the debt securities.
We will periodically file statements with the debenture trustee
regarding our compliance with specified covenants in the
indentures.
Modification of Indenture; Waiver
We and the debenture trustee may change an indenture without the
consent of any holders with respect to specific matters,
including:
•
to fix any ambiguity, defect or inconsistency in the
indenture;
•
to comply with the provisions described above under “— Consolidation, Merger or Sale”;
•
to comply with any requirements of the SEC in connection with the
qualification of any indenture under the Trust Indenture Act of
1939;
•
to evidence and provide for the acceptance of appointment hereunder
by a successor trustee;
•
to provide for uncertificated debt securities and to make all
appropriate changes for such purpose;
•
to add to, delete from, or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of
issuance, authorization and delivery of debt securities or any
series, as set forth in the indenture;
•
to provide for the issuance of and establish the form and terms and
conditions of the debt securities of any series as provided under
“— General” to establish the
form of any certifications required to be furnished pursuant to the
terms of the indenture or any series of debt securities, or to add
to the rights of the holders of any series of debt
securities;
•
to add to our covenants such new covenants, restrictions,
conditions or provisions for the protection of the holders, to make
the occurrence, or the occurrence and the continuance, of a default
in any such additional covenants, restrictions, conditions or
provisions an event of default, or to surrender any of our rights
or powers under the indenture; or
•
to change anything that does not materially adversely affect the
interests of any holder of debt securities of any series.
In addition, under the indentures, the rights of holders of a
series of debt securities may be changed by us and the debenture
trustee with the written consent of the holders of at least a
majority in aggregate principal amount of the outstanding debt
securities of each series that is affected. However, we and the
debenture trustee may only make the following changes with the
consent of each holder of any outstanding debt securities
affected:
•
extending the fixed maturity of the series of debt
securities;
•
reducing the principal amount, reducing the rate of or extending
the time of payment of interest, or reducing any premium payable
upon the redemption of any debt securities; or
•
reducing the percentage of debt securities, the holders of
which are required to consent to any amendment, supplement,
modification or waiver.
Discharge
Each indenture provides that we can elect to be discharged from our
obligations with respect to one or more series of debt securities,
except that the following obligations survive until the maturity
date or the redemption date:
•
register the transfer or exchange of debt securities of the
series;
•
replace stolen, lost or mutilated debt securities of the
series;
•
maintain paying agencies;
•
hold monies for payment in trust; and
•
appoint any successor trustee;
and the following obligations survive the maturity date or the
redemption date:
•
recover excess money held by the debenture trustee; and
•
compensate and indemnify the debenture trustee.
In order to exercise our rights to be discharged, we must deposit
with the debenture trustee money or government obligations
sufficient to pay all the principal of, any premium, if any, and
interest on, the debt securities of the series on the dates
payments are due.
Form, Exchange and Transfer
We will issue the debt securities of each series only in fully
registered form without coupons and, unless we otherwise specify in
the applicable prospectus supplement, in denominations of $1,000
and any integral multiple thereof. The indentures provide that we
may issue debt securities of a series in temporary or permanent
global form and as book-entry securities that will be deposited
with, or on behalf of, The Depository Trust Company, New York, New
York, known as DTC, or another depositary named by us and
identified in a prospectus supplement with respect to that
series.
At the option of the holder, subject to the terms of the indentures
and the limitations applicable to global securities described in
the applicable prospectus supplement, the holder of the debt
securities of any series can exchange the debt securities for other
debt securities of the same series, in any authorized denomination
and of like tenor and aggregate principal amount.
Subject to the terms of the indentures and the limitations
applicable to global securities set forth in the applicable
prospectus supplement, holders of the debt securities may present
the debt securities for exchange or for registration of transfer,
duly endorsed or with the form of transfer endorsed thereon duly
executed if so required by us or the security registrar, at the
office of the security registrar or at the office of any transfer
agent designated by us for this purpose. Unless otherwise provided
in the debt securities that the holder presents for transfer or
exchange, we will make no service charge for any registration of
transfer or exchange, but we may require payment of any taxes or
other governmental charges.
We
will name in the applicable prospectus supplement the security
registrar, and any transfer agent in addition to the security
registrar, that we initially designate for any debt securities. We
may at any time designate additional transfer agents or rescind the
designation of any transfer agent or approve a change in the office
through which any transfer agent acts, except that we will be
required to maintain a transfer agent in each place of payment for
the debt securities of each series.
If we elect to redeem the debt securities of any series, we will
not be required to:
•
issue, register the transfer of, or exchange any debt securities of
any series being redeemed in part during a period beginning at the
opening of business 15 days before the day of mailing of a
notice of redemption of any debt securities that may be selected
for redemption and ending at the close of business on the day of
the mailing; or
•
register the transfer of or exchange any debt securities so
selected for redemption, in whole or in part, except the unredeemed
portion of any debt securities we are redeeming in part.
Information Concerning the Debenture Trustee
The debenture trustee, other than during the occurrence and
continuance of an event of default under an indenture, undertakes
to perform only those duties as are specifically set forth in the
applicable indenture. Upon an event of default under an indenture,
the debenture trustee must use the same degree of care as a prudent
person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the debenture trustee is under
no obligation to exercise any of the powers given it by the
indentures at the request of any holder of debt securities unless
it is offered reasonable security and indemnity against the costs,
expenses and liabilities that it might incur.
Payment and Paying Agents
Unless we otherwise indicate in the applicable prospectus
supplement, we will make payment of the interest on any debt
securities on any interest payment date to the person in whose name
the debt securities, or one or more predecessor securities, are
registered at the close of business on the regular record date for
the interest.
We will pay principal of and any premium and interest on the debt
securities of a particular series at the office of the paying
agents designated by us, except that, unless we otherwise indicate
in the applicable prospectus supplement, we may make interest
payments by check that we will mail to the holder or by wire
transfer to certain holders. Unless we otherwise indicate in a
prospectus supplement, we will designate the corporate office of
the debenture trustee in the City of New York as our sole paying
agent for payments with respect to debt securities of each series.
We will name in the applicable prospectus supplement any other
paying agents that we initially designate for the debt securities
of a particular series. We will maintain a paying agent in each
place of payment for the debt securities of a particular
series.
All money we pay to a paying agent or the debenture trustee for the
payment of the principal of or any premium or interest on any debt
securities that remains unclaimed at the end of two years
after such principal, premium or interest has become due and
payable will be repaid to us, and the holder of the debt security
thereafter may look only to us for payment thereof.
Governing Law
The indentures and the debt securities will be governed by and
construed in accordance with the laws of the State of New York,
except to the extent that the Trust Indenture Act of 1939 is
applicable.
Subordination of Subordinated Debt Securities
The subordinated debt securities will be subordinate and junior in
priority of payment to certain of our other indebtedness to the
extent described in a prospectus supplement. The indentures in the
forms initially filed as exhibits to the registration statement of
which this prospectus is a part do not limit the amount of
indebtedness that we may incur, including senior indebtedness or
subordinated indebtedness, and do not limit us from issuing any
other debt, including secured debt or unsecured debt.
Warrants
As of as of April 3, 2019, we had outstanding:
•
Investor warrants to purchase 4,842,729 shares of our common stock
at a weighted average exercise price of $2.03.
•
Lender warrants to purchase 463,333 shares of our common stock at a
weighted average exercise price of $2.69.
•
Underwriters’ warrants to purchase 253,333 shares of our common
stock at an exercise price of $1.68.
The following description, together with the additional information
we may include in any applicable prospectus supplement, summarizes
the material terms and provisions of the warrants that we may offer
under this prospectus and any related warrant agreement and warrant
certificate. While the terms summarized below will apply generally
to any warrants that we may offer, we will describe the specific
terms of any series of warrants in more detail in the applicable
prospectus supplement. If we indicate in the prospectus supplement,
the terms of any warrants offered under that prospectus supplement
may differ from the terms described below. Specific warrant
agreements will contain additional important terms and provisions
and will be incorporated by reference as an exhibit to the
Registration Statement which includes this prospectus.
General
We may issue warrants for the purchase of common stock or preferred
stock in one or more series. We may issue warrants independently or
together with common stock or preferred stock, and the warrants may
be attached to or separate from these securities.
We will evidence each series of warrants by warrant certificates
that we may issue under a separate agreement. We may enter into a
warrant agreement with a warrant agent. Each warrant agent may be a
bank that we select which has its principal office in the United
States. We may also choose to act as our own warrant agent. We will
indicate the name and address of any such warrant agent in the
applicable prospectus supplement relating to a particular series of
warrants.
We will describe in the applicable prospectus supplement the terms
of the series of warrants, including:
•
the offering price and aggregate number of warrants offered;
•
if applicable, the designation and terms of the securities with
which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such
security;
•
if applicable, the date on and after which the warrants and the
related securities will be separately transferable;
•
in the case of warrants to purchase common stock or preferred
stock, the number or amount of shares of common stock or preferred
stock, as the case may be, purchasable upon the exercise of one
warrant and the price at which and currency in which these shares
may be purchased upon such exercise;
•
the manner of exercise of the warrants, including any cashless
exercise rights;
•
the warrant agreement under which the warrants will be
issued;
•
the effect of any merger, consolidation, sale or other disposition
of our business on the warrant agreement and the warrants;
•
anti-dilution provisions of the warrants, if any;
•
the terms of any rights to redeem or call the warrants;
•
any provisions for changes to or adjustments in the exercise price
or number of securities issuable upon exercise of the
warrants;
•
the dates on which the right to exercise the warrants will commence
and expire or, if the warrants are not continuously exercisable
during that period, the specific date or dates on which the
warrants will be exercisable;
•
the manner in which the warrant agreement and warrants may be
modified;
•
the identity of the warrant agent;
•
federal income tax consequences of holding or exercising the
warrants;
•
the terms of the securities issuable upon exercise of the
warrants;
•
any securities exchange or quotation system on which the warrants
or any securities deliverable upon exercise of the warrants may be
listed or quoted; and
•
any other specific terms, preferences, rights or limitations of or
restrictions on the warrants.
Prior to exercise of the warrants, holders of warrants will not be
entitled, by virtue of being such holders, to vote, consent,
receive dividends, receive notice as stockholders with respect to
any meeting of stockholders for the election of our directors or
any other matter, or to exercise any rights whatsoever as our
stockholders.
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities
that we specify in the applicable prospectus supplement at the
exercise price that we describe in the applicable prospectus
supplement. Unless we otherwise specify in the applicable
prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. eastern time on the
expiration date that we set forth in the applicable prospectus
supplement. After the close of business on the expiration date,
unexercised warrants will become void.
Holders of the warrants may exercise the warrants by delivering the
warrant certificate representing the warrants to be exercised
together with specified information, and paying the required
exercise price by the methods provided in the applicable prospectus
supplement. We will set forth on the reverse side of the warrant
certificate, and in the applicable prospectus supplement, the
information that the holder of the warrant will be required to
deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the
applicable prospectus supplement, we will issue and deliver the
securities purchasable upon such exercise. If fewer than all of the
warrants represented by the warrant certificate are exercised, then
we will issue a new warrant certificate for the remaining amount of
warrants.
The exercise price payable and the number of shares of common stock
or preferred stock purchasable upon the exercise of each equity
warrant will be subject to adjustment in certain events, including
the issuance of a stock dividend to holders of common stock or
preferred stock or a stock split, reverse stock split, combination,
subdivision or reclassification of common stock or preferred stock.
In lieu of adjusting the number of shares of common stock or
preferred stock purchasable upon exercise of each equity warrant,
we may elect to adjust the number of equity warrants. No
adjustments in the number of shares purchasable upon exercise of
the equity warrants will be required until cumulative adjustments
require an adjustment of at least 1% thereof. We may, at our
option, reduce the exercise price at any time. No fractional shares
will be issued upon exercise of warrants, but we will pay the cash
value of any fractional shares otherwise issuable. Notwithstanding
the foregoing, in case of any consolidation, merger, or sale or
conveyance of our property in its entirety or substantially in its
entirety, the holder of each outstanding equity warrant shall have
the right to the kind and amount of shares of stock and other
securities and property, including cash, receivable by a holder of
the number of shares of common stock or preferred stock into which
the equity warrant was exercisable immediately prior to such
transaction
Enforceability of Rights by Holders of Warrants
Any warrant agent will act solely as our agent under the applicable
warrant agreement and will not assume any obligation or
relationship of agency or trust with any holder of any warrant. A
single bank or
trust company may act
as warrant agent for more than one issue of warrants. A warrant
agent will have no duty or responsibility in case of any default by
us under the applicable warrant agreement or warrant, including any
duty or responsibility to initiate any proceedings at law or
otherwise, or to make any demand upon us. Any holder of a warrant
may, without the consent of the related warrant agent or the holder
of any other warrant, enforce by appropriate legal action the
holder’s right to exercise, and receive the securities purchasable
upon exercise of, its warrants in accordance with their
terms.
Governing Law
Each warrant agreement and any warrants issued under the warrant
agreements will be governed by New York law.
Units
We may issue units comprised of one or more of the other
securities described in this prospectus or in any prospectus
supplement in any combination. Each unit will be issued so that the
holder of the unit is also the holder, with the rights and
obligations of a holder, of each security included in the
unit.
PLAN OF DISTRIBUTION
We may sell the securities being offered pursuant to this
prospectus to or through underwriters, through dealers, through
agents, or directly to one or more purchasers or through a
combination of these methods. The applicable prospectus supplement
will describe the terms of the offering of the securities,
including:
•
the name or names of any underwriters, if, and if required, any
dealers or agents;
•
the purchase price of the securities and the proceeds we will
receive from the sale;
•
any underwriting discounts and other items constituting
underwriters’ compensation;
•
any discounts or concessions allowed or re-allowed or paid to
dealers; and
•
any securities exchange or market on which the securities may be
listed or traded.
We may distribute the securities from time to time in one or more
transactions at:
•
a fixed price or prices, which may be changed;
•
market prices prevailing at the time of sale;
•
prices related to such prevailing market prices; or
•
negotiated prices.
Only underwriters named in the prospectus supplement are
underwriters of the securities offered by the prospectus
supplement.
If underwriters are used in an offering, we will execute an
underwriting agreement with such underwriters and will specify the
name of each underwriter and the terms of the transaction
(including any underwriting discounts and other terms constituting
compensation of the underwriters and any dealers) in a prospectus
supplement. The securities may be offered to the public either
through underwriting syndicates represented by managing
underwriters or directly by one or more investment banking firms or
others, as designated. If an underwriting syndicate is used, the
managing underwriter(s) will be specified on the cover of the
prospectus supplement. If underwriters are used in the sale, the
offered securities will be acquired by the underwriters for their
own accounts and may be resold from time to time in one or more
transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
Any public offering price and any discounts or concessions allowed
or re-allowed or paid to dealers may be changed from time to time.
Unless otherwise set forth in the prospectus supplement, the
obligations of the underwriters to purchase the offered securities
will be subject to conditions precedent, and the underwriters will
be obligated to purchase all of the offered securities, if any are
purchased.
We may grant to the underwriters options to purchase additional
securities to cover over-allotments, if any, at the public offering
price, with additional underwriting commissions or discounts, as
may be set forth in a related prospectus supplement. The terms of
any over-allotment option will be set forth in the prospectus
supplement for those securities.
If we use a dealer in the sale of the securities being offered
pursuant to this prospectus or any prospectus supplement, 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. The names of the
dealers and the terms of the transaction will be specified in a
prospectus supplement.
We may sell the securities directly or through agents we designate
from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we will
pay the agent in the prospectus supplement.
We may authorize agents or underwriters to solicit offers by
institutional investors to purchase securities from us at the
public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. We will describe the
conditions to these contracts and the commissions we must pay for
solicitation of these contracts in the prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers
or agents may receive compensation from us or from purchasers of
the securities for whom they act as agents, in the form of
discounts, concessions or commissions. Underwriters may sell the
securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom
they may act as agents. Underwriters, dealers and agents that
participate in the distribution of the securities, and any
institutional investors or others that purchase securities directly
for the purpose of resale or distribution, may be deemed to be
underwriters, and any discounts or commissions received by them
from us and any profit on the resale of the common stock by them
may be deemed to be underwriting discounts and commissions under
the Securities Act. No FINRA member firm may receive compensation
in excess of that allowable under FINRA rules, including
Rule 5110, in connection with the offering of the
securities.
We may provide agents, underwriters and other purchasers with
indemnification against particular civil liabilities, including
liabilities under the Securities Act, or contribution with respect
to payments that the agents, underwriters or other purchasers may
make with respect to such liabilities. Agents and underwriters may
engage in transactions with, or perform services for, us in the
ordinary course of business.
To facilitate the public offering of a series of securities,
persons participating in the offering may engage in transactions
that stabilize, maintain, or otherwise affect the market price of
the securities. This may include over-allotments or short sales of
the securities, which involves the sale by persons participating in
the offering of more securities than have been sold to them by us.
In exercising the over-allotment option granted to those persons.
In addition, those persons may stabilize or maintain the price of
the securities by bidding for or purchasing securities in the open
market or by imposing penalty bids, whereby selling concessions
allowed to underwriters or dealers participating in any such
offering may be reclaimed if 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. Such transactions, if
commenced, may be discontinued at any time. We make no
representation or prediction as to the direction or magnitude of
any effect that the transactions described above, if implemented,
may have on the price of our securities.
Unless otherwise specified in the applicable prospectus supplement,
any common stock sold pursuant to a prospectus supplement will be
eligible for trading as quoted on the Nasdaq Capital Market. Any
underwriters to whom securities are sold by us for public offering
and sale may make a market in the securities, but such underwriters
will not be obligated to do so and may discontinue any market
making at any time without notice.
In order to comply with the securities laws of some states, if
applicable, the securities offered pursuant to this prospectus will
be sold in those states only through registered or licensed brokers
or dealers. In addition, in some states securities may not be sold
unless they have been registered or qualified for sale in the
applicable state or an exemption from the registration or
qualification requirement is available and complied with.
LEGAL MATTERS
Unless otherwise indicated in the applicable prospectus supplement,
the validity of the securities offered hereby will be passed upon
for us by Loeb & Loeb LLP, New York, New York. If the validity
of the securities offered hereby in connection with offerings made
pursuant to this prospectus are passed upon by counsel for the
underwriters, dealers or agents, if any, such counsel will be named
in the prospectus supplement relating to such offering.
EXPERTS
The audited financial statements as of and for the years ended
December 31, 2018 and December 31, 2017 have been
incorporated by reference in this prospectus in reliance upon the
report of OUM & Co. LLP, an independent registered public
accounting firm and their authority as experts in accounting and
auditing.
LIMITATION ON LIABILITY AND DISCLOSURE OF COMMISSION POSITION
ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law provides
that we may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal or
investigative (other than an action by us or in our right) by
reason of the fact that he is or was our director, officer,
employee or agent, or is or was serving at our request as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against
expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him or her
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he or she reasonably believed to be in
or not opposed to our best interests, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her conduct was unlawful. Section 145 further provides
that we similarly may indemnify any such person serving in any such
capacity who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by is or in
our right to procure judgment in our favor, against expenses
actually and reasonably incurred in connection with the defense or
settlement of such action or suit if he or she acted in good faith
and in a manner he reasonably believed to be in or not opposed to
our best interests and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to us unless and only to the
extent that the Delaware Court of Chancery or such other court in
which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view
of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper. In the event
that a claim for indemnification against such liabilities, other
than the payment by us of expenses incurred or paid by such
director, officer or controlling person in the successful defense
of any action, lawsuit or proceeding, is asserted by such director,
officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of counsel the
matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of
such issue.
Our certificate of incorporation, as amended, limits the liability
of our directors to the fullest extent permitted by Delaware law.
In addition, we have entered into indemnification agreements with
certain of our directors and officers whereby we have agreed to
indemnify those directors and officers to the fullest extent
permitted by law, including indemnification against expenses and
liabilities incurred in legal proceedings to which the director or
officer was, or is threatened to be made, a party by reason of the
fact that such director or officer is or was a director, officer,
employee or agent of the our company, provided that such director
or officer acted in good faith and in a manner that the director or
officer reasonably believed to be in, or not opposed to, the best
interests of our company.
We
have director and officer liability insurance to cover liabilities
our directors and officers may incur in connection with their
services to us, including matters arising under the Securities Act.
Our certificate of incorporation and bylaws also provide that we
will indemnify our directors and officers who, by reason of the
fact that he or she is one of our officers or directors of our
company, is involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative related to their
board role with the company.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the foregoing provisions, or
otherwise, we have been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
by such director, officer or controlling person in connection with
the securities being registered, we will, unless in the opinion of
our counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by us is against public policy as expressed in
the Securities Act and will be governed by the final adjudication
of such issue.
WHERE YOU CAN FIND MORE INFORMATION
This prospectus and any subsequent prospectus supplements do not
contain all of the information in the Registration Statement. We
have omitted from this prospectus some parts of the Registration
Statement as permitted by the rules and regulations of the SEC.
Statements in this prospectus concerning any document we have filed
as an exhibit to the Registration Statement or that we otherwise
filed with the SEC are not intended to be comprehensive and are
qualified in their entirety by reference to these filings. In
addition, we file annual, quarterly and current reports, proxy
statements and other information with the SEC. You may read and
copy any documents that we have filed with the SEC at the SEC’s
Public Reference Room at 100 F Street, N.E., Room 1580, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information about the operation of the Public Reference Room. The
SEC also maintains an Internet site that contains reports, proxy
and information statements and other information that we file
electronically with the SEC, including us. The SEC’s Internet site
can be found at http://www.sec.gov. In addition, we make available
on or through our Internet site copies of these reports as soon as
reasonably practicable after we electronically file or furnished
them to the SEC. Our Internet site can be found at
http:www.titanpharm.com. Our website is not a part of this
prospectus.
INFORMATION INCORPORATED BY REFERENCE
We have elected to incorporate certain information by reference
into this prospectus. By incorporating by reference, we can
disclose important information to you by referring you to other
documents we have filed or will file with the SEC. The information
incorporated by reference is deemed to be part of this prospectus,
except for information incorporated by reference that is superseded
by information contained in this prospectus. This means that you
must look at all of the SEC filings that we incorporate by
reference to determine if any statements in the prospectus or any
document previously incorporated by reference have been modified or
superseded. This prospectus incorporates by reference the documents
set forth below that we have previously filed with the SEC:
•
Our Annual Report on
Form 10-K/A for the fiscal year ended December 31, 2018,
filed on April 2, 2019;
•
Our Current Report on
Form 8-K filed on April 3, 2019; and
•
The description of the our common stock set forth in the
Registration Statement on
Form 8-A12B filed on October 8, 2015
All documents subsequently filed by the Registrant with the SEC
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act (other than documents or portions of documents deemed
to be furnished pursuant to the Exchange Act), prior to the filing
of a post-effective amendment which indicates that all securities
offered have been sold, or which deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such
documents.
Any
statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Registration Statement to the
extent that a statement contained herein, or in any other
subsequently filed document which also is incorporated or deemed to
be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a
part of this Registration Statement.