CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be Registered
|
Amount
to be
Registered
(1)
|
Proposed
Maximum
Offering Price
per Share
(2)
|
Proposed
Maximum
Aggregate
Offering Price
|
Amount of
Registration
Fee
|
|
Shares of Common
Stock, par value $0.01 per share, underlying Series K Convertible
Preferred Stock
|
6,500,000
|
$
0.73
|
$
4,745,000
|
$
549.47
|
|
Shares of Common
Stock, par value $0.01 per share
|
465,569
|
$
0.73
|
339,865
|
39.36
|
|
Total
|
6,965,569
|
|
$
5,084,865
|
$
588.83
|
|
|
(1)
|
Pursuant
to Rule 416 under the Securities Act of 1933, as amended, the
shares being registered hereunder shall be deemed to cover
additional securities to be offered to prevent dilution and thus
include such indeterminate number of shares of common stock, as may
be issuable with respect to the shares being registered hereunder
as a result of stock splits, stock dividends or similar
transactions.
|
|
|
(2)
|
Estimated
solely for purposes of calculating the registration fee pursuant to
Rule 457(c) under the Securities Act of 1933, as amended,
using the average of the high and low prices as reported on The
NASDAQ Capital Market on October 17, 2017, which was $0.73 per
share.
|
|
The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the
Securities Act of 1933, as amended, or until the Registration
Statement shall become effective on such date as the Securities and
Exchange Commission, acting pursuant to Section 8(a), may
determine.
|
|
The
information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective.
This prospectus is not an offer to sell and is not soliciting an
offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
|
|
|
|
|
|
PRELIMINARY PROSPECTUS
|
SUBJECT TO COMPLETION
|
DATED OCTOBER 19, 2017
|
6,965,569 Shares of Common Stock
We are
registering an aggregate of
6,965,569 shares (the
“Resale Shares”) of common stock, $0.01 par value per
share, of MabVax Therapeutics Holdings, Inc. (referred to herein as
“we”, “us”, “our”,
“MabVax”, “Registrant”, or the
“Company”) for resale by certain of our stockholders
identified in this prospectus (the “Selling
Stockholders”), including 6,500,000 shares of common stock
issuable upon conversion of Series K Convertible Preferred Stock
(the “Series K Preferred Stock”).
The
Selling Stockholders may offer to sell the Resale Shares at fixed
prices, at prevailing market prices at the time of sale, at varying
prices or at negotiated prices, and will pay all brokerage
commissions and discounts attributable to the sale of such shares.
The Selling Stockholders will receive all of the net proceeds from
the offering of their shares.
The
Resale Shares may be sold by the Selling Stockholders to or through
underwriters or dealers, directly to purchasers or through agents
designated from time to time. For additional information regarding
the methods of sale you should refer to the section entitled
“Plan of Distribution” in this Prospectus.
Our
common stock is quoted on The NASDAQ Capital Market under the
symbol “MBVX”. On October 17, 2017, the closing bid
price of our common stock on The NASDAQ Capital Market was $0.73
per share
Our business and an investment in our
securities involve a high degree of risk. See “Risk
Factors” beginning on page
7
of
this prospectus for a discussion of information that you should
consider before investing in our securities.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The
date of this prospectus
is ,
2017
TABLE
OF CONTENTS
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36
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38
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You
should rely only on the information contained in this prospectus or
in any free writing prospectus that we may specifically authorize
to be delivered or made available to you. We have not authorized
anyone to provide you with any information other than that
contained in this prospectus or in any free writing prospectus we
may authorize to be delivered or made available to you. We take no
responsibility for, and can provide no assurance as to the
reliability of, any other information that others may give you.
This prospectus may only be used where it is legal to offer and
sell our securities. The information in this prospectus is accurate
only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or any sale of our securities. Our
business, financial condition, results of operations and prospects
may have changed since that date. We are not making an offer of
these securities in any jurisdiction where the offer is not
permitted.
This summary highlights information contained elsewhere in this
prospectus and does not contain all of the information that you
should consider in making your investment decision. Before
investing in our common stock, you should carefully read this
entire prospectus, including our financial statements and the
related notes and the information set forth under the headings
“Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations” in each case included elsewhere in this
prospectus.
Unless the context otherwise requires, references to
“we,” “our,” “us,”
“MabVax” or the “Company” in this
prospectus mean MabVax Therapeutics Holdings, Inc. on a
consolidated basis with its wholly-owned subsidiary, MabVax
Therapeutics, Inc. (“MabVax Therapeutics”) as
applicable.
MabVax Therapeutics Holdings, Inc.
Company Background
We are a Delaware corporation, originally
incorporated in 1988 under the name Terrapin Diagnostics, Inc. in
the state of Delaware, and subsequently renamed “Telik,
Inc.” in 1998, and thereafter renamed MabVax Therapeutics
Holdings, Inc. in September 2014. Our principal corporate office is
located at 11535 Sorrento Valley Road, Suite 400, San Diego, CA
92121 and our telephone number is (858) 259-9405. On July 8, 2014,
we consummated a merger with MabVax Therapeutics, pursuant to which
our subsidiary Tacoma Acquisition Corp. merged with and into MabVax
Therapeutics, with MabVax Therapeutics surviving as our wholly
owned subsidiary. Our internet address is
www.mabvax.com
.
Information on our website is not incorporated into this
prospectus.
Business Overview
We are
a clinical-stage biotechnology company focused on the development
of antibody-based products to address unmet medical needs in the
treatment of cancer. MabVax has discovered a pipeline of
human monoclonal antibody products based on the protective immune
responses generated by patients who have been vaccinated against
targeted cancers with our proprietary vaccines. MabVax's lead
development program is centered around our HuMab-5B1 antibody,
which is fully human and discovered from the immune response of
cancer patients vaccinated with an antigen-specific vaccine during
a Phase I trial at Memorial Sloan Kettering Cancer Center, or
MSK. The antigen the antibody targets is expressed on
more than 90% of pancreatic cancers, and expressed in significant
percentages on small cell lung cancer, stomach, colon and other
cancers, making the antibody potentially broadly applicable to many
types of cancers. We have other antibody candidates that are
in preclinical development
.
Monoclonal
antibodies are produced from a single DNA sequence encoded into
multiple cells that all produce the same single antibody. We
generate our pipeline of antibody-based product candidates from
patients who have been vaccinated with proprietary vaccines
licensed from MSK. Our approach involves surveying the protective
immune response from many patients to identify a monoclonal
antibody candidate against a specific target on the surface of a
cancer cell. We believe this approach provides us with a novel
next-generation human antibody technology platform. We believe our
approach to antibody discovery allows us to identify antibody
candidates with superior performance characteristics while
minimizing many of the toxicity and off target binding drawbacks
(phenomenon occurring when antibodies bind to non-cancer cells) of
other discovery technologies
.
Our
lead clinical development program is a Phase 1 clinical trial of
our HuMab-5B1 radioimmunotherapy product that we have designated as
MVT-1075. The development of MVT-1075 is based on experience we
gained through clinical studies of 50 patients with either our
antibody we designate as MVT-5873, or our imaging agent we
designate as MVT-2163 that are discussed in more detail in our
descriptions and results to date of our clinical development
programs. We initiated the phase I study of MVT-1075 in June 2017
and intend to treat additional patients to continue to assess the
safety and potential efficacy of this treatment. Also, we intend to
continue clinical development of MVT-5873 in combination with
gemcitabine and nab-paclitaxal in first line therapy for the
treatment of patients newly diagnosed with pancreatic cancer. We
have treated two cohorts of patients in our combination therapy,
for a total of six patients to date in this study. We intend to
enroll an additional cohort of patients in the combination therapy
with the objective of confirming early observations.
On
September 6, 2017, we announced that we have engaged Greenhill
& Co. (NYSE: GHL) to serve as a financial advisor to assist us
in exploring and evaluating strategic options with the goal of
maximizing stockholder value. We are evaluating inbound inquiries
and transaction options, as well as identifying new opportunities
which could include the acquisition of MabVax by another company,
the sale or divestiture of specific assets coupled with a reverse
merger, merging with another company, or licensing of selected
technologies. We do not have a defined timeline for the exploration
of strategic alternatives and are not confirming that the
evaluation will result in any strategic alternative being announced
or consummated. We do not intend to discuss or disclose
further developments during this process unless and until our Board
of Directors has approved a specific action or otherwise determined
that further disclosure is appropriate. While Greenhill & Co.
continues as our financial advisor, we will continue to advance our
Phase 1 clinical programs including our MVT-1075 radioimmunotherapy
clinical trial for the treatment of pancreatic, colon and lung
cancers, and our MVT-5873 clinical trial in combination with one or
more chemotherapy agents in first line therapy for patients newly
diagnosed with pancreatic cancer.
Our Growth and Core Business Strategy
Our
primary business strategy is to develop our early antibody product
candidates through proof of concept clinical trials, which may
represent either phase I or phase II clinical trials depending on
the program and extent of progress. Once through proof of concept
clinical trials, we will decide whether to license, partner or sell
those product candidates, or continue to develop the candidates
depending on several variables such as access to additional
capital, cost of later stage clinical trials, risk of such
development efforts, and the value derived from licensing,
partnering or selling those assets.
Our Clinical Development Programs and Plans for 2017
MVT-1075 – our lead development program as a
Radioimmunotherapy for Pancreatic Cancer
In June
2017, we initiated a Phase 1 clinical trial of our HuMab-5B1
radioimmunotherapy product MVT-1075 based on experience we gained
through clinical studies of 50 patients with either the naked
antibody MVT-5873, or our imaging agent MVT-2163.
MVT-1075 combines
the demonstrated targeting specificity of the HuMab-5B1 antibody
with the proven clinical success of a low-energy radiation emitter,
177Lutetium [177Lu]. We dosed MVT-1075 in our first patient in June
2017. This Phase 1 first-in-human clinical trial is an open-label,
multi-center study evaluating the safety and efficacy of MVT-1075
in up to 22 patients with CA19-9 positive malignancies. The primary
objective is to determine the maximum tolerated dose and safety
profile in patients with recurring disease who have failed prior
therapies. Secondary endpoints are to evaluate tumor response rate
and duration of response by RECIST 1.1, and to determine dosimetry
and pharmacokinetics. This dose-escalation study utilizes a
traditional 3+3 design that is commonly used by companies as a dose
escalation strategy typical for phase I trials for the treatment of
cancer. The investigative sites are Honor Health in Scottsdale,
Arizona, and Memorial Sloan Kettering Cancer Center in New York
City.
Supporting the
MVT-1075 RIT clinical investigation are the Company’s
successful Phase 1a safety and target specificity data reported at
the annual meetings of the American Society for Clinical
Oncology (ASCO) and the Society for Nuclear Medicine and
Molecular Imaging (SNMMI) in June 2017, including the clinical
results for the Company’s HuMab-5B1 products, MVT-5873,
a single agent therapeutic antibody and MVT-2163, an
immuno-PET imaging agent. The combined results from 50 patients in
the Phase 1 MVT-5873 and MVT-2163 studies, established safety and
provided significant insight into drug biodistribution and an
optimal dosing strategy, which we have incorporated into the
MVT-1075 program. In April 2017, we reported preclinical
results for MVT-1075 at the American Association of Clinical
Research (AACR) Annual Meeting, demonstrating marked suppression,
and in some instances, regression of tumor growth in xenograft
animal models of pancreatic cancer, potentially making this product
an important new therapeutic agent in the treatment of pancreatic,
colon and lung cancers.
MVT-5873 – for the Treatment of Pancreatic
Cancer
We
reported results from our Phase 1a clinical trial of 32 patients
being treated with our therapeutic antibody MVT-5873, which
was evaluated for safety and tolerability in patients with advanced
pancreatic cancer and other CA19-9 positive cancers, in a poster
presentation at the American Society of Clinical Oncology (ASCO)
Annual Meeting on June 3, 2017. The Company highlighted that the
single agent MVT-5837 appears safe and well tolerated in patients
at biologically active doses. Furthermore, all patients were
evaluated by RECIST 1.1 for tumor response, and the Company
reported 11 patients achieved stable disease in this dose
escalation safety trial of 32 patients.
The
results of the Phase 1a trial with MVT-5873 indicate that this
fully-human antibody targeting CA19-9 cancers can be administered
at doses with acceptable safety and with a potentially positive
impact on disease. CA19-9 is broadly expressed in various cancers
including pancreatic, colon, and small cell lung cancer making this
antibody potentially useful for a larger patient population.
Clinical signals from an identifiable subset of subjects enabled us
to understand those patients most likely to respond to a MVT-5873
based therapy. At the maximum tolerated dose (MTD) established in
this trial, we have demonstrated an acceptable safety margin for
the antibody.
A second arm of the
MVT-5873 Phase 1a trial is actively evaluating MVT-5873 in
combination with gemcitabine plus nab-paclitaxel in newly diagnosed
pancreatic cancer patients. Dr. Eileen O’Reilly, Associate
Director of the David M. Rubenstein Center for Pancreatic Cancer
Research, attending physician, member at Memorial Sloan Kettering
Cancer Center and Professor of Medicine at Weill Cornell Medical
College, is the lead investigator in the MVT-5873 Phase 1 clinical
trial.
MVT-2163 –as an Imaging Agent for Pancreatic
Cancer
We
reported results from our Phase 1a clinical trial of ImmunoPET
imaging agent, MVT-2163, in 12 patients with locally advanced or
metastatic adenocarcinoma of the pancreas (PDAC) or other CA19-9
positive malignancies in a poster presentation and podium talk at
the Society of Nuclear Medicine and Molecular Imaging (SNMMI)
Annual Meeting held in Denver, CO on June 10-14, 2017.
The Phase Ia
clinical trial of MVT-2163 phase I trial was intended to evaluate
our next generation diagnostic PET imaging agent in patients with
locally advanced or metastatic adenocarcinoma of the pancreas
(PDAC) or other CA19-9 positive malignancies. MVT-2163
(89Zr-HuMab-5B1) combines the well-established PET imaging
radiolabel Zirconium-89 [89Zr] with the targeting specificity of
MVT-5873. We designed the trial to establish safety,
pharmacokinetics, biodistribution, optimal time to obtain the PET
image, and the amount of MVT-5873 to be administered as a blocking
dose prior to administration of MVT-2163 to obtain optimized PET
scan images.
As of
July 2017, 12 patients had been treated in this first-in-human
trial evaluating the safety and feasibility of MVT-2163 to image
pancreatic tumors and other CA19-9 positive malignancies. MVT-2163
was administered alone and in combination with MVT-5873 and was
well tolerated in all cohorts. The only toxicities were infusion
reactions that resolved on the day of the injection, with some
patients requiring standard supportive medication.
Uptake of MVT-2163
was observed in primary tumors and metastases as early as day two
and continuously through day seven. Standard Uptake Values (SUV), a
measurement of activity in PET imaging, reached as high as 101 in
the study. The investors reported that the high SUVs are amongst
the highest lesion uptake values they have ever seen for a
radiolabeled antibody. Bone and soft tissue disease were readily
visualized and lesion uptake of the radiotracer was higher than
typically seen with PET imaging agents. The correlation with
Computerized Tomography (CT) scans was
high.
We reported that
administering MVT-5873 prior to dosing MVT-2163 reduces liver
uptake facilitating detection of liver metastases. In addition, we
determined that the MVT-5873 cold antibody pre-dose does not
interfere with the uptake of MVT-2163 on cancer
lesions.
In summary, the
MVT-2163 product produced acceptable safety tolerability,
pharmacokinetics and biodistribution. MVT-2163 also produced high
quality PET images identifying both primary tumor and metastatic
sites. There was a promising correlation with diagnostic CT that
warrants further studies correlating these findings with
histopathology to assess the accuracy of MVT-2163 in identifying
smaller metastatic nodes below the detection level of standard CT
scans. The continual increase in high SUV values on cancer lesions
in this study supports the use of the Company’s MVT-1075
radioimmunotherapy product which utilizes the same antibody to
deliver a radiation dose for the treatment of patients with
pancreatic, lung and colon cancers.
Plan for remainder of 2017
We intend to
continue clinical development of MVT-5873 in combination with
gemcitabine and nab-paclitaxal in first line therapy for the
treatment of patients newly diagnosed with pancreatic cancer. We
have treated two cohorts of patients for a total of six patients
through September 22, 2017 in this study; and we plan to enroll an
additional cohort of patients with the objective of confirming
early observations. We will also continue clinical development of
MVT-1075 for the treatment of locally advanced or metastatic
pancreatic cancer patients. We intend to treat additional patients
to continue to assess the safety and potential efficacy of this
treatment.
Listing Reverse Split
On
August 2, 2016, the Board approved a 1-for-7.4 reverse stock split,
or the “Listing Reverse Split.” The Listing Reverse
Split was intended to allow us to meet the minimum share price
requirement of The NASDAQ Capital Market, or NASDAQ. On August 11,
2016, we received approval from The NASDAQ Capital Market for the
listing of our common stock under the symbol “MBVX”,
subject to implementation of the Listing Reverse Split and closing
of our August 2016 public offering (the “August 2016 Public
Offering,” and the investors in the August 2016 Public
Offering, the “August 2016 Investors”). On August 16,
2016, we implemented the Listing Reverse Split, closed on the
August 2016 Public Offering and began trading on The NASDAQ Capital
Market at the open of business on August 17, 2016. Unless otherwise
stated herein, all per share amounts herein give effect to the
Listing Reverse Split.
Recent Events
July 2017 Private Placement
– On
July 27, 2017, we entered into a subscription agreement with an
accredited investor pursuant to which we agreed to sell an
aggregate of $125,000 in common stock under terms similar to the
May 2017 Public Offering, in which investors purchased common stock
at $1.75 per share. According to the subscription agreement,
investors, if meeting the minimum required investment of 25% of
their original investment in a private placement in April 2015, and
still hold their shares of common stock or Series E Convertible
Preferred Stock (“Series E Preferred Stock”) purchased
in April 2015, would be entitled to receive inducement shares of
common stock, or Series I Convertible Preferred Stock
(“Series I Preferred Stock”), at the election of the
investor who would hold in excess of 4.99% of the outstanding
shares of common stock, at the rate of 1.13 shares of common stock
or Series I Preferred Stock for every share of common stock or
Series G Convertible Preferred Stock (“Series G Preferred
Stock”) purchased in the May 2017 Public Offering, as well as
agree to amend the terms of their outstanding warrants that
currently have an exercise price of $11.10 per share, such that the
amended warrants shall have an exercise price of $2.00 per share
and no cashless exercise feature. The transaction closed on August
2, 2017. As a result of the investor meeting the minimum required
investment, the investor received an aggregate of 152,143 shares of
common stock for its investment, including 80,714 inducement
shares, and had warrants to purchase 225,225 shares of common stock
repriced from $11.10 to $2.00 per warrant
share.
The
securities referenced above were issued in reliance on the
exemption from registration afford by Rule 506 of Regulation D
and/or Section 4(a)(2) of the Securities Act
of 1933, as amended (the “Securities
Act”),
as a transaction by an issuer not involving a
public offering.
August 2017 Registered Direct
Offering
–
On August 11, 2017, we entered
into securities purchase agreements to sell 2,386.36 shares of a
new 0% Series J Convertible Preferred Stock (“Series J
Preferred Stock”) to be created with a stated value of $550
per share (the “August 2017 Offering”). The
Series J Preferred Stock is initially convertible into
approximately 3,400,000 shares of common stock at $0.55 per share,
subject to adjustment for stock splits, stock dividends,
recapitalizations, combinations, subdivisions or other similar
events and was purchased by certain existing investors of the
Company (the “Prior Investors”). The total amount of
the securities purchase agreements amounted to approximately
$1,312,500, before estimated expenses of approximately $127,000.
The Certificate of Designation for the Series J Preferred Stock
shall include a 4.99% beneficial ownership conversion blocker, a
19.99% blocker provision to comply with Nasdaq Rules until
stockholders have approved any or all shares of common stock
issuable upon conversion of the Series J Preferred Stock, and a
125% liquidation preference. All shares of the Company’s
capital stock will be junior in rank to the Series J Preferred
Stock at the time of creation, with respect to the preferences as
to dividends, distributions and payments upon the liquidation,
dissolution and winding-up of the Company, except for the
Company’s Series D Convertible Preferred Stock (“Series
D Preferred Stock”), Series E Preferred Stock, Series F
Convertible Preferred Stock (“Series F Preferred
Stock”), Series G Preferred Stock, Series H Convertible
Preferred Stock (“Series H Preferred Stock”), and
Series I Preferred Stock.
In
connection with the August 2017 Offering, we agreed with the lead
investor (the “Lead Investor”) pursuant to a Letter
Agreement, dated August 9, 2017, to issue incentive shares (the
“Incentive Shares”) to Prior Investors as an incentive
to invest in the August 2017 Offering. Such Prior Investors were
entitled to receive their pro rata share of 65,000 shares in the
form of a new Series K Preferred Stock, substantially similar to
common stock and convertible into 6,500,000 shares of common stock,
subject to stockholder approval. The stated value of each share of
Series K Preferred Stock is $0.01 and the conversion rate is the
stated value of $0.01 divided by .0001, or one hundred (100) shares
of common stock upon conversion of one (1) share of Series K
Preferred Stock, each subject to adjustment for stock splits, stock
dividends, recapitalizations, combinations, subdivisions or other
similar event, and the Series K Preferred Stock has a 4.99%
beneficial ownership conversion blocker. In the event of a
liquidation, dissolution or winding up of the Company, each share
of Series K Preferred Stock will be entitled to a per share
preferential payment equal to the par value, or $0.01 per share.
All shares of the Company’s capital stock will be junior in
rank to the Series K Preferred Stock at the time of creation, with
respect to the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding-up of the
Company, except for the Company’s Series D Preferred Stock,
Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred Stock
and Series J Preferred Stock.
In order to meet Nasdaq Capital
Market rules in the August 2017 Offering, we were not obligated to
issue any shares of common stock upon conversion of the Series J
Preferred Stock which would cause the Company to breach our
obligations under the rules and regulations of the Nasdaq Capital
Market, which limit the aggregate number of shares issued at a
discount to market at 19.99% of the number of shares outstanding on
the closing date of the August 2017 Offering, except that such
limitation shall not apply in the event that we obtained the
approval of our stockholders as required by the applicable rules of
the Nasdaq Capital Market for issuances of common stock in excess
of such amount. Similarly, none of the Series K Preferred Stock may
be converted into common stock until we obtained the approval of
our stockholders. On October 2, 2017, we obtained the necessary
stockholder approval.
September 11, 2017 Registered Direct Offering
–
On September 11, 2017,
we entered into an agreement to
sell 4.0 million shares of common stock at $0.50 a share for gross
proceeds of approximately $2.0 million, before estimated
expenses of $148,000. The shares were offered and sold to certain
accredited investors in a registered direct offering. Laidlaw &
Company (UK) Ltd. acted as placement agent for the offering. The
securities were offered by means of the Company’s shelf
registration statement on Form S-3 (File #333-219291) which was
declared effective on July 27, 2017 by the Securities and Exchange
Commission.
September 22, 2017 Registered Direct
Offering
– On September 22, 2017, we entered into a
subscription agreement with select accredited investors relating to
the Company’s registered direct offering, issuance and sale
of 2,016,129 shares of the Company’s common stock, $0.01 par
value per share. The purchase price per share was $0.62. The total
amount of the subscription agreements amounted to approximately
$1,250,000, before estimated expenses of approximately $35,000. The
securities were offered by means of the Company’s shelf
registration statement on Form S-3 (File #333-219291) which was
declared effective on July 27, 2017 by the Securities and Exchange
Commission.
October 10, 2017 Registered Direct
Offering
– On October 10, 2017, we entered into a
subscription agreement with select accredited investors relating to
the Company’s registered direct offering, issuance and sale
of 769,231 shares of the Company’s common stock, $0.01 par
value per share. The purchase price per share was $0.65. The total
amount of the subscription agreements amounted to $500,000, before
estimated expenses of $15,000. The securities were offered by means
of the Company’s shelf registration statement on Form S-3
(File #333-219291) which was declared effective on July 27, 2017 by
the Securities and Exchange Commission.
October 18, 2017
Preferred
Stock Exchange Agreement
– On October 18, 2017,
we entered into exchange agreements (each, an “Exchange
Agreement” and collectively, the “Exchange
Agreements”) with the holders of all of the Company’s
outstanding shares of Series F Preferred Stock, Series G Preferred
Stock and Series H Preferred Stock, pursuant to which an aggregate
of 665,281 shares of Series F Preferred Stock, 1,000,000 shares of
Series G Preferred Stock and 850 shares of Series H Preferred Stock
were exchanged for an aggregate of 58,000 newly authorized shares
of Series L Convertible Preferred Stock (the “Series L
Preferred Stock”) convertible into 9,666,667 shares of common
stock (the “Conversion Shares”), subject to a
conversion restriction (the “Series L Conversion
Restriction”) until stockholder approval is obtained. In
connection with the transaction we agreed to hold a special meeting
of stockholders to approve the Conversion
Shares.
In
order to meet Nasdaq Capital Market rules in the Exchange Agreement
and certificate of designation for the Series L Preferred Stock, we
are not obligated to issue any shares of common stock upon
conversion of the Series L Preferred Stock which would cause the
Company to breach our obligations under the rules and regulations
of the Nasdaq Capital Market, which limit the aggregate number of
shares issued at a discount to market at 19.99% of the number of
shares outstanding on the closing date of entering into the
Exchange Agreements, except that such limitation shall not apply in
the event that we obtain the approval of our stockholders as
required by the applicable rules of the Nasdaq Capital Market for
issuances of common stock in excess of such amount.
The
terms of the Exchange Agreements and Series L Preferred Stock were
determined by arms-length negotiation between the parties. No
commission or other payment was received by the Company in
connection with the Exchange Agreements. Such exchange was
conducted and the Series L Preferred Stock issuable pursuant to the
Exchange Agreements, including the Conversion Shares, were issued
pursuant to the exemption provided by Section 3(a)(9) of the
Securities Act.
Pursuant to a
registration rights agreement entered into between the Company and
the holders on October 18, 2017, we agreed to use reasonable best
efforts to file a registration statement registering the Conversion
Shares for resale within ten days of closing and cause the
registration statement to be declared effective within 30 days of
filing.
About this Offering
This
prospectus includes the resale of 6,965,569 shares of common stock,
consisting of (i) 6,500,000 shares issuable upon conversion of
outstanding shares of Series K Preferred Stock issued in connection
with the August 2017 Public Offering, (ii) 152,143 shares of common
stock issued in connection with a private placement with OPKO
Health, Inc., (iii) 100,000 shares of common stock issued to HS
Contrarian Investments, LLC as compensation for due diligence
services and (iv) 213,426 shares of common stock issued to
Sichenzia Ross Ference Kesner LLP as compensation for legal
services.
Investing in our securities involves a high degree of risk. You
should carefully consider the risks described herein and in the
documents incorporated by reference in this prospectus supplement
and the accompanying prospectus, as well as other information we
include or incorporate by reference into this prospectus supplement
and the accompanying prospectus, before making an investment
decision. Our business, financial condition or results of
operations could be materially adversely affected by the
materialization of any of these risks. The trading price of our
securities could decline due to the materialization of any of these
risks, and you may lose all or part of your investment. This
prospectus and the documents incorporated herein by reference also
contain forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those
anticipated in these forward-looking statements as a result of
certain factors, including the risks described herein and in the
documents incorporated herein by reference, including (i) our
most recent annual report on Form 10-K and quarterly reports
on Form 10-Q, each of which is on file with the SEC and is
incorporated herein by reference and (ii) other documents we
file with the SEC that are deemed incorporated by reference into
this prospectus supplement.
Risks Relating to Our Financial Condition
We will be required to raise additional funds to finance our
operations and remain a going concern; we may not be able to do so
when necessary, and/or the terms of any financings may not be
advantageous to us, requiring cutbacks in personnel.
Our
operations to date have consumed substantial amounts of cash.
Negative cash flows from our operations are expected to continue
over at least the next several years. Our cash utilization amount
is highly dependent on the progress of our product development
programs, particularly, the results of our preclinical and clinical
studies and those of our partners, the cost, timing and outcomes of
regulatory approval for our product candidates, and the rate of
recruitment of patients in our human clinical trials. In addition,
the further development of our ongoing clinical trials will depend
on upcoming analysis and results of those studies and our financial
resources at that time.
Although we have raised approximately
$4.9 million, net of offering costs, since June 30, 2017, for
various financings and offerings, we will require future additional
capital infusions including public or private financing, strategic
partnerships or other arrangements with organizations that have
capabilities and/or products that are complementary to our own
capabilities and/or products, in order to continue the development
of our product candidates. At present, we have sufficient cash to
fund operations into February 2018 assuming we do not complete any
strategic or financing transactions between now and February 2018.
We are exploring and evaluating strategic options with the goal of
maximizing stockholder value, and currently working with our
financial advisor Greenhill.
& Co., to assist us with our
efforts.
Our
ongoing capital requirements will depend on numerous factors,
including: the progress and results of preclinical testing and
clinical trials of our product candidates under development; the
costs of complying with the FDA and other domestic and foreign
regulatory agency requirements, the progress of our research and
development programs and those of our partners; the time and costs
expended and required to obtain any necessary or desired regulatory
approvals; the resources that we devote to manufacturing
expenditures; our ability to enter into licensing arrangements,
including any unanticipated licensing arrangements that may be
necessary to enable us to continue our development and clinical
trial programs; the costs and expenses of filing, prosecuting and,
if necessary, enforcing our patent claims, or defending against
possible claims of infringement by third-party patent or other
technology rights; the cost of commercialization activities and
arrangements, if any, that we undertake; and, if and when approved,
the demand for our products, which demand depends in turn on
circumstances and uncertainties that cannot be fully known,
understood or quantified unless and until the time of approval,
including the range of indications for which any product is granted
approval. If we are unable to raise additional capital, then we may
have to substantially curtail our clinical trials which could slow
the progress in the development of our products.
We are required to obtain the consent of an existing investor, or
the Lead Investor, to certain future transactions, which may hinder
our ability to obtain future financing.
We
granted to the Lead Investor the right to approve future
transactions that require stockholder approval under the rules of
the Nasdaq Stock Market LLC or any state laws (the
“Consent”). These transactions could include offerings
of our securities, mergers, acquisitions, or sales of some or
substantially all of our assets.
Should
the Consent be required in connection with future offerings, we may
be required again to provide additional consideration, including,
but not limited to, consideration in the form of cash and/or
additional shares of our capital stock and/or securities
convertible into or exercisable for shares of our capital stock, in
order to obtain the Consent. If we are unable to obtain the
Consent when necessary for future offerings, we may be unable to
raise additional funds. An inability to raise additional funds
could have a material adverse effect on our financial condition,
results of operations, ability to conduct our business and on the
price of our common stock.
The terms of our secured debt facility require us to meet certain
operating and financial covenants and place restrictions on our
operating and financial flexibility. If we raise additional capital
through debt financing, the terms of any new debt could further
restrict our ability to operate our business.
Effective
in January 2016, we entered into a $10 million loan and
security agreement with Oxford Finance LLC, or Oxford Finance, that
is secured by a lien covering substantially all of our assets,
excluding intellectual property. As of December 31, 2016, we had an
outstanding principal balance of $5 million. The option to
draw the second $5 million expired on September 30, 2016. The loan
and security agreement contains customary affirmative and negative
covenants and events of default. The affirmative covenants include,
among others, covenants requiring us to maintain our legal
existence and governmental approvals, deliver certain financial
reports and maintain insurance coverage. The negative covenants
include, among others, restrictions on transferring collateral,
changing our business, incurring additional indebtedness, engaging
in mergers or acquisitions, paying dividends or making other
distributions, making investments and creating other liens on our
assets, in each case subject to customary exceptions. As of October
18, 2017, we were in compliance with all the covenants. If we
default under the loan agreement, the lenders may accelerate all of
our repayment obligations and take control of our pledged assets,
potentially requiring us to renegotiate our agreement on terms less
favorable to us or to immediately cease operations. Further, if we
are liquidated, the lender’s right to repayment would be
senior to the rights of the holders of our common stock and
preferred stock to receive any proceeds from the liquidation. The
lenders could declare a default upon the occurrence of any event
that they interpret as a material adverse change as defined under
the loan agreement, thereby requiring us to repay the loan
immediately or to attempt to reverse the declaration of default
through negotiation or litigation. Any declaration by the lenders
of an event of default could significantly harm our business and
prospects and could cause the price of our common stock to decline.
If we raise any additional debt financing, the terms of such
additional debt could further restrict our operating and financial
flexibility.
We have a history of losses, and we anticipate that we will
continue to incur losses in the future; our auditors have included
in their audit report an explanatory paragraph as to substantial
doubt as to our ability to continue as a going
concern.
We have
experienced net losses every year since our inception and, as of
June 30, 2017, had an accumulated deficit of $94,846,396. Our
auditors have included in their audit report a “going
concern” explanatory paragraph as to substantial doubt as to
our ability to continue as a going concern that assumes the
realization of our assets and the satisfaction of our liabilities
and commitments in the normal course of business. We anticipate
continuing to incur substantial additional losses over at least the
next several years due to, among other factors, expenses related to
the following: continuing Phase I clinical trials with the
HuMab-5B1 antibody, preclinical testing of follow-on antibody
candidates, investor and public relations, SEC compliance efforts,
anticipated research and development activities and the general and
administrative expenses associated with each of these activities.
We have not yet commercialized any product candidates. Our ability
to attain profitability will depend upon our ability to develop and
commercialize products that are effective and commercially viable,
to obtain regulatory approval for the manufacture and sale of our
products and to license or otherwise market our products
successfully. We may never achieve profitability, and even if we
do, we may not be able to sustain being profitable. If we are
unable to obtain additional capital we may be forced to license,
sell or terminate our activities with respect to promising
technologies which may require us to agree to disadvantageous terms
that will prevent us from realizing the potential value from the
results of our efforts and expenditures.
Risks Related to our Business
If we are unable to obtain required regulatory approvals, we will
be unable to market and sell our product candidates.
Our
product candidates are subject to extensive governmental
regulations relating to development, clinical trials,
manufacturing, oversight of clinical investigators, recordkeeping
and commercialization. Rigorous preclinical testing and clinical
trials and an extensive regulatory review and approval process are
required to be successfully completed in the United States and in
each foreign jurisdiction in which we offer our products before a
new drug or other product can be sold in such jurisdictions.
Satisfaction of these and other regulatory requirements is costly,
time consuming, uncertain, and subject to unanticipated delays. The
time required to obtain approval by the FDA, or the regulatory
authority in such other jurisdictions is unpredictable and often
exceeds five years following the commencement of clinical trials,
depending upon the complexity of the product candidate and the
requirements of the applicable regulatory agency.
In
connection with the clinical development of our product candidates,
we face risks that:
●
the product candidate may not prove to be safe and
efficacious;
●
patients may die or suffer serious adverse effects for reasons that
may or may not be related to the product candidate being
tested;
●
we may fail to maintain adequate records of observations and data
from our clinical trials, to establish and maintain sufficient
procedures to oversee, collect data from, and manage clinical
trials, or to monitor clinical trial sites and investigators to the
satisfaction of the FDA or other regulatory agencies;
●
the results of later-phase clinical trials may not confirm the
results of earlier clinical trials; and
●
the results from clinical trials may not meet the level of
statistical significance or clinical benefit-to-risk ratio required
by the FDA or other regulatory agencies for marketing
approval.
Only
a small percentage of product candidates for which clinical trials
are initiated receive approval for commercialization. Furthermore,
even if we do receive regulatory approval to market a product
candidate, any such approval may be subject to limitations such as
those on the indicated uses for which we may market a particular
product candidate.
Our product candidates have not completed clinical trials, and may
never demonstrate sufficient safety and efficacy in order to do
so.
Our
product candidates are in the clinical and pre-clinical stages of
development. In order to achieve profitable operations, we alone,
or in collaboration with others, must successfully develop,
manufacture, introduce and market our products. The time frame
necessary to achieve market success for any individual product is
long and uncertain. The products we are currently developing will
require significant additional research, development and
preclinical and clinical testing prior to application for
commercial use or sale. A number of companies in the biotechnology
and pharmaceutical industries have suffered significant setbacks in
clinical trials, even after showing promising results in early or
later-stage studies or clinical trials. Although we have obtained
some favorable results to-date in preclinical studies and clinical
trials of certain of our potential products, such results may not
be indicative of results that will ultimately be obtained in or
throughout such clinical trials, and clinical trials may not show
any of our products to be safe or capable of producing a desired
result. Additionally, we may encounter problems in our clinical
trials that may cause us to delay, suspend or terminate those
clinical trials.
Further,
our research or product development efforts may not be successfully
completed, any compounds we currently have under development may
not be successfully developed into drugs, may not receive
regulatory approval on a timely basis, if at all, and competitors
may develop and bring to market products or technologies that
render our potential products obsolete. If any of these events
occur, our business would be materially and adversely
affected.
If clinical trials or regulatory approval processes for our product
candidates are prolonged, delayed or suspended, we may be unable to
commercialize our product candidates on a timely basis, which would
require us to incur additional costs and delay our receipt of any
revenue from potential product sales.
We
cannot predict whether we will encounter problems with any of our
completed, ongoing or planned clinical trials that will cause us or
any regulatory authority to delay or suspend those clinical trials
or delay the analysis of data derived from them. A number of
events, including any of the following, could delay the completion
of our ongoing and planned clinical trials and negatively impact
our ability to obtain regulatory approval for, and to market and
sell, a particular product candidate:
●
conditions imposed on us by the FDA or another foreign regulatory
authority regarding the scope or design of our clinical
trials;
●
delays in obtaining, or our inability to obtain, required approvals
from institutional review boards or other reviewing entities at
clinical sites selected for participation in our clinical
trials;
●
insufficient supply of our product candidates or other materials
necessary to conduct and complete our clinical trials;
●
slow enrollment and retention rate of subjects in our clinical
trials;
●
serious and unexpected drug-related side effects related to the
product candidate being tested; and
●
delays in meeting manufacturing and testing standards required for
production of clinical trial supplies.
Commercialization
of our product candidates may be delayed by the imposition of
additional conditions on our clinical trials by the FDA or any
other applicable foreign regulatory authority or the requirement of
additional supportive studies by the FDA or such foreign regulatory
authority. In addition, clinical trials require sufficient patient
enrollment, which is a function of many factors, including the size
of the patient population, the nature of the trial protocol, the
proximity of patients to clinical sites, the availability of
effective treatments for the relevant disease, the conduct of other
clinical trials that compete for the same patients as our clinical
trials, and the eligibility criteria for our clinical trials. Our
failure to enroll patients in our clinical trials could delay the
completion of the clinical trial beyond its expectations. In
addition, the FDA could require us to conduct clinical trials with
a larger number of subjects than we may have projected for any of
our product candidates. We may not be able to enroll a sufficient
number of patients in a timely or cost-effective manner.
Furthermore, enrolled patients may drop out of our clinical trials,
which could impair the validity or statistical significance of the
clinical trials.
We
do not know whether our clinical trials will begin as planned, will
need to be restructured, or will be completed on schedule, if at
all. Delays in our clinical trials will result in increased
development costs for our product candidates, and our financial
resources may be insufficient to fund any incremental costs. In
addition, if our clinical trials are delayed, our competitors may
be able to bring products to market before we do and the commercial
viability of our product candidates could be limited. In cases
where an outside party, such as the NCI conducts a clinical trial
on our behalf, we may not have direct involvement in discussions
with the FDA regarding the factors discussed above.
We are substantially dependent on the success of our product
candidates, MVT-1075, MVT-5873, and MVT-2163, and we cannot provide
any assurance that any of our product candidates will be
commercialized.
To
date, our main focus and the investment of a significant portion of
our efforts and financial resources has been in the development of
our product candidates, MVT-1075, MVT-5873, and MVT-2163, which are
in clinical development. Our future success depends heavily on our
ability to successfully manufacture, develop, obtain regulatory
approval, and commercialize these product candidates, which may
never occur. Before commercializing either product
candidate, we will require additional clinical trials and
regulatory approvals for which there can be no guarantee that we
will be successful. We currently generate no revenues from our
product candidates, and we may never be able to develop or
commercialize a marketable drug.
Our product candidates will remain subject to ongoing regulatory
review even if they receive marketing approval, and if we fail to
comply with continuing regulations, we could lose these approvals
and the sale of any of our approved commercial products could be
suspended.
Even
if we receive regulatory approval to market a particular product
candidate, the manufacturing, labeling, packaging, adverse event
reporting, storage, advertising, promotion, and record keeping
related to the product will remain subject to extensive regulatory
requirements. If we fail to comply with the regulatory requirements
of the FDA and other applicable domestic and foreign regulatory
authorities or discover any previously unknown problems with any
approved product, manufacturer, or manufacturing process, we could
be subject to administrative or judicially imposed sanctions,
including:
●
restrictions on the products, manufacturers, or manufacturing
processes;
●
civil or criminal penalties;
●
product seizures or detentions;
●
pressure to initiate voluntary product recalls;
●
suspension or withdrawal of regulatory approvals; and
●
refusal to approve pending applications for marketing approval of
new products or supplements to approved applications.
Our industry is highly competitive, and our product candidates may
become obsolete.
We
are engaged in a rapidly evolving field. Competition from other
pharmaceutical companies, biotechnology companies and research and
academic institutions is intense and likely to increase. Many of
those companies and institutions have substantially greater
financial, technical and human resources than we do. Those
companies and institutions also have substantially greater
experience in developing products, conducting clinical trials,
obtaining regulatory approval and in manufacturing and marketing
pharmaceutical products. Our competitors may succeed in obtaining
regulatory approval for their products more rapidly than we do.
Competitors have developed or are in the process of developing
technologies that are, or in the future may be, the basis for
competitive products. We are aware of potential competitors
developing products similar to our sarcoma vaccine, ovarian cancer
vaccine and pancreatic cancer antibodies product candidates. Our
competitors may succeed in developing products that are more
effective and/or cost competitive than those we are developing, or
that would render our product candidates less competitive or even
obsolete. In addition, one or more of our competitors may achieve
product commercialization or patent protection earlier than we do,
which could materially adversely affect our business.
If physicians and patients do not accept our future products or if
the market for indications for which any product candidate is
approved is smaller than expected, we may be unable to generate
significant revenue, if any.
Even
if any of our product candidates obtain regulatory approval, they
may not gain market acceptance among physicians, patients, and
third-party payers. Physicians may decide not to recommend our
treatments for a variety of reasons including:
●
timing of market introduction of competitive products;
●
demonstration of clinical safety and efficacy compared to other
products;
●
limited or no coverage by third-party payers;
●
convenience and ease of administration;
●
prevalence and severity of adverse side effects;
●
restrictions in the label of the drug;
●
other potential advantages of alternative treatment methods;
and
●
ineffective marketing and distribution support of its
products.
If
any of our product candidates are approved, but fail to achieve
market acceptance or such market is smaller than anticipated, we
may not be able to generate significant revenue and our business
would suffer.
As we evolve from a company that is primarily involved in clinical
development to a company that is also involved in
commercialization, we may encounter difficulties in expanding our
operations successfully.
As
we advance our product candidates through clinical trials, we will
need to expand our development, regulatory, manufacturing,
marketing and sales capabilities and may need to further contract
with third parties to provide these capabilities. As our operations
expand, we likely will need to manage additional relationships with
such third parties, as well as additional collaborators,
distributors, marketers and suppliers.
Maintaining
third party relationships for these purposes will impose
significant added responsibilities on members of our management and
other personnel. We must be able to: manage our development efforts
effectively; recruit and train sales and marketing personnel;
manage our participation in the clinical trials in which our
product candidates are involved effectively; and improve our
managerial, development, operational and finance systems, all of
which may impose a strain on our administrative and operational
infrastructure.
If
we enter into arrangements with third parties to perform sales,
marketing or distribution services, any product revenues that we
receive, or the profitability of these product revenues to us, are
likely to be lower than if we were to market and sell any products
that we develop without the involvement of these third parties. In
addition, we may not be successful in entering into arrangements
with third parties to sell and market our products or in doing so
on terms that are favorable to us. We likely will have little
control over such third parties, and any of them may fail to devote
the necessary resources and attention to sell and market our
products effectively. If we do not establish sales and marketing
capabilities successfully, either on our own or in collaboration
with third parties, we will not be successful in commercializing
our products.
The uncertainty associated with pharmaceutical reimbursement and
related matters may adversely affect our business.
Market
acceptance and sales of any one or more of our product candidates
will depend on reimbursement policies and may be affected by future
healthcare reform measures in the United States and in foreign
jurisdictions. Government authorities and third-party payers, such
as private health insurers and health maintenance organizations,
decide which drugs they will cover and establish payment levels. We
cannot be certain that reimbursement will be available for any of
our product candidates. Also, we cannot be certain that
reimbursement policies will not reduce the demand for, or the price
paid for, our products. If reimbursement is not available or is
available on a limited basis, we may not be able to successfully
commercialize any product candidates that we develop.
In
the United States, the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, also called the Medicare Modernization
Act, or MMA, changed the way Medicare covers and pays for
pharmaceutical products. The legislation established Medicare Part
D, which expanded Medicare coverage for outpatient prescription
drug purchases by the elderly but provided authority for limiting
the number of drugs that will be covered in any therapeutic class.
The MMA also introduced a new reimbursement methodology based on
average sales prices for physician-administered drugs.
The
United States and several foreign jurisdictions are considering, or
have already enacted, a number of legislative and regulatory
proposals to change the healthcare system in ways that could affect
our ability to sell our products profitably. Among policy makers
and payers in the United States and elsewhere, there is significant
interest in promoting changes in healthcare systems with the stated
goals of containing healthcare costs, improving quality and/or
expanding access to healthcare. In the United States, the
pharmaceutical industry has been a particular focus of these
efforts and has been significantly affected by major legislative
initiatives. We expect to experience pricing pressures in
connection with the sale of any products that it develops due to
the trend toward managed healthcare, the increasing influence of
health maintenance organizations and additional legislative
proposals.
Moreover,
the Patient Protection and Affordable Care Act, as amended by the
Health Care and Education Affordability Reconciliation Act, or
collectively, ACA, is intended to reduce the cost of health care
and substantially change the way health care is financed by both
government and private insurers. While we cannot predict what
impact on federal reimbursement policies this legislation will have
in general or on our business specifically, the ACA may result in
downward pressure on pharmaceutical reimbursement, which could
negatively affect market acceptance of, and the price we charge
for, any products we develop that receive regulatory
approval.
Our ability to generate product revenues will be diminished if our
therapies sell for inadequate prices or patients are unable to
obtain adequate levels of reimbursement.
Our
ability to commercialize our therapies, alone or with
collaborators, will depend in part on the extent to which
reimbursement will be available from private health maintenance
organizations and health insurers and other healthcare payers.
Significant uncertainty exists as to the reimbursement status of
newly approved healthcare products. Healthcare payers are
challenging the prices charged for medical products and services.
Cost control initiatives could decrease the price that we would
receive for any products in the future, which would limit our
revenue and profitability. Government and other healthcare payers
increasingly attempt to contain healthcare costs by limiting both
coverage and the level of reimbursement for drugs and therapeutics.
We might need to conduct post-marketing studies in order to
demonstrate the cost-effectiveness of any future products to such
payers’ satisfaction. Such studies might require us to commit
a significant amount of management time and financial and other
resources. Our future products might not ultimately be considered
cost-effective. Even if one of our product candidates is approved
by the FDA, insurance coverage may not be available, and
reimbursement levels may be inadequate, to cover such therapies. If
government and other healthcare payers do not provide adequate
coverage and reimbursement levels for one of our products, once
approved, market acceptance of such product could be
reduced.
We only have a limited number of employees to manage and operate
our business.
As
of October 18, 2017, we have a total of 10 full-time employees and
one part-time employee. Our focus on limiting cash utilization
requires us to manage and operate our business in a highly
efficient manner. We cannot assure you that we will be able to
retain adequate staffing levels to run our operations and/or to
accomplish all of the objectives that we otherwise would seek to
accomplish.
We depend heavily on our executive officers, directors, and
principal consultants and the loss of their services would
materially harm our business.
We
believe that our success depends, and will likely continue to
depend, upon our ability to retain the services of our current
executive officers, directors, principal consultants and others. In
addition, we have established relationships with universities,
hospitals and research institutions, which have historically
provided, and continue to provide, us with access to research
laboratories, clinical trials, facilities and patients. The loss of
the services of any of these individuals or institutions would have
a material adverse effect on our business.
Our internal computer systems, or those of our third-party service
providers, licensees, licensors, collaborators or other contractors
or consultants, may fail or suffer security breaches, which could
result in a material disruption in our business and
operations.
Despite
the implementation of security measures, our internal computer
systems and those of our current and future service providers,
licensees, licensors, collaborators and other contractors and
consultants are vulnerable to damage from computer viruses,
unauthorized access, natural disasters, terrorism, war and
telecommunication and electrical failures. While we are not aware
of any such material system failure, accident or security breach to
date, if such an event were to occur and cause interruptions in our
operations, it could result in a material disruption of our
development programs and our business operations. For example, the
loss of clinical trial data from completed, on-going or future
clinical trials could result in delays in our regulatory approval
efforts and significant costs to recover or reproduce the data.
Likewise, we rely on third parties to manufacture our drug
candidates and conduct clinical trials, and similar events relating
to their computer systems could also have a material adverse effect
on our business. To the extent that any disruption or security
breach were to result in a loss of, or damage to, our data or
applications, or inappropriate disclosure of confidential or
proprietary information, we could incur liabilities and the further
development and commercialization of our product candidates could
be delayed.
Due in part to our limited financial resources, we may fail to
select or capitalize on the most scientifically, clinically or
commercially promising or profitable indications or therapeutic
areas for our product candidates or those that are in-licensed,
and/or we may be unable to pursue the clinical trials that we would
like to pursue.
We
have limited technical, managerial and financial resources to
determine the indications on which we should focus the development
efforts related to our product candidates. Due to our limited
available financial resources, we may have curtailed clinical
development programs and activities that might otherwise have led
to more rapid progress of our product candidates through the
regulatory and development processes.
We
may make incorrect determinations with regard to the indications
and clinical trials on which to focus the available resources that
we do have. Furthermore, we cannot assure you that we will be able
to retain adequate staffing levels to run our operations and/or to
accomplish all of the objectives that we otherwise would seek to
accomplish. Our decisions to allocate our research, management and
financial resources toward particular indications or therapeutic
areas for our product candidates may not lead to the development of
viable commercial products and may divert resources from better
opportunities. Similarly, our decisions to delay or terminate drug
development programs may also cause us to miss valuable
opportunities.
If the third parties on which we rely for the conduct of our
clinical trials and results do not perform our clinical trial
activities in accordance with good clinical practices and related
regulatory requirements, we may be unable to obtain regulatory
approval for or commercialize our product candidates.
We
use independent clinical investigators and other third-party
service providers to conduct and/or oversee the clinical trials of
our product candidates and expect to continue to do so for the
foreseeable future. We rely heavily on these parties for successful
execution of our clinical trials. Nonetheless, we are responsible
for confirming that each of our clinical trials is conducted in
accordance with the FDA’s requirements and our general
investigational plan and protocol.
The
FDA requires us and our clinical investigators to comply with
regulations and standards, commonly referred to as good clinical
practices, for conducting and recording and reporting the results
of clinical trials to assure that data and reported results are
credible and accurate and that the trial participants are
adequately protected. Our reliance on third parties that we do not
control does not relieve us of these responsibilities and
requirements. Third parties may not complete activities on schedule
or may not conduct our clinical trials in accordance with
regulatory requirements or the respective trial plans and
protocols. The failure of these third parties to carry out their
obligations could delay or prevent the development, approval and
commercialization of our product candidates or result in
enforcement action against us.
We have limited manufacturing capacity and have relied on, and
expect to continue to rely on, third-party manufacturers to produce
our product candidates.
We
do not own or operate manufacturing facilities for the production
of clinical or commercial quantities of our product candidates, and
we lack the resources and the capabilities to do so. As a result,
we currently rely, and expect to rely for the foreseeable future,
on third-party manufacturers to supply our product candidates.
Reliance on third-party manufacturers entails risks to which we
would not be subject if we manufactured our product candidates or
products ourselves, including:
●
reliance on third-parties for manufacturing process development,
regulatory compliance and quality assurance;
●
limitations on supply availability resulting from capacity and
scheduling constraints of third-parties;
●
the possible breach of manufacturing agreements by third-parties
because of factors beyond our control; and
●
the possible termination or non-renewal of the manufacturing
agreements by the third-party, at a time that is costly or
inconvenient to us.
If
we do not maintain our key manufacturing relationships, we may fail
to find replacement manufacturers or develop our own manufacturing
capabilities, which could delay or impair our ability to obtain
regulatory approval for our products and substantially increases
our costs or deplete profit margins, if any. If we do find
replacement manufacturers, we may not be able to enter into
agreements with them on terms and conditions favorable to us and
there could be a substantial delay before new facilities could be
qualified and registered with the FDA and other foreign regulatory
authorities.
The
FDA and other foreign regulatory authorities require manufacturers
to register manufacturing facilities. The FDA and corresponding
foreign regulators also inspect these facilities to confirm
compliance with current cGMPs. Contract manufacturers may face
manufacturing or quality control problems causing drug substance
production and shipment delays or a situation where the contractor
may not be able to maintain compliance with the applicable cGMP
requirements. Any failure to comply with cGMP requirements or other
FDA, EMA and comparable foreign regulatory requirements could
adversely affect our clinical research activities and our ability
to develop our product candidates and market our products following
approval.
Our
current and anticipated future dependence upon others for the
manufacture of our product candidates may adversely affect our
future profit margins and our ability to develop our product
candidates and commercialize any products that receive regulatory
approval on a timely basis.
If product liability lawsuits are successfully brought against us,
we may incur substantial liabilities and may be required to limit
commercialization of our product candidates and any products that
we may develop.
The
testing and marketing of medical products entail an inherent risk
of product liability. Although we are not aware of any historical
or anticipated product liability claims or specific causes for
concern, if we cannot successfully defend ourselves against product
liability claims, we may incur substantial liabilities or be
required to limit commercialization of our product candidates and
any products that we may develop. In addition, product liability
claims may also result in withdrawal of clinical trial volunteers,
injury to our reputation and decreased demand for any products that
we may commercialize. We currently carry product liability
insurance that covers our clinical trials up to a $5.0 million
annual aggregate limit. We will need to increase the amount of
coverage if and when we have a product that is commercially
available. If we are unable to obtain sufficient product liability
insurance at an acceptable cost, potential product liability claims
could prevent or inhibit the commercialization of any products that
we may develop, alone or with corporate partners.
We have been, and in the future may be, subject to securities class
action lawsuits and stockholder derivative actions. These, and
potential similar or related litigation, could result in
substantial damages and may divert management’s time and
attention from our business.
We
have been, and may in the future be, the target of securities class
actions or stockholder derivative claims. Any such actions or
claims could result in substantial damages and may divert
management’s time and attention from our
business.
Risks Related to our Intellectual Property
It is difficult and costly to protect our proprietary rights, and
we may not be able to ensure their protection.
We have
been issued patents, applied for other patents, and intend on
continuing to seek additional patent protection for our families of
antibodies from our antibody development program, our vaccines,
methods of use and other compounds that we
discover. However, any or all of such compounds, methods
or new uses of known compounds may not be subject to effective
patent protection. Further, the development of regimens for the
administration of our vaccines, which involve specifications for
the frequency, timing and amount of dosages, has been, and we
believe may continue to be, important to our efforts, although
those processes, as such, may not be patentable. In addition, our
issued patents may be declared invalid or our competitors may find
ways to avoid the claims in the patents.
Our
commercial success will depend, in part, on our ability to obtain
and maintain patent protection, protect our trade secrets and
operate without infringing on the proprietary rights of others. Our
commercial success will also depend, in part, on our ability to
market our product candidates during the term of our patent
protection. For example, certain patents including in
foreign countries within our portfolio expired in 2014 and can no
longer be relied on for protection in those countries. As of
October 18, 2017, we were the exclusive licensee or sole assignee
of 14 granted United States patents, 4 pending United States patent
applications, 7 international patents and 19 pending international
patent applications. The patent position of
pharmaceutical and biotechnology firms like us are generally highly
uncertain and involves complex legal and factual questions,
resulting in both an apparent inconsistency regarding the breadth
of claims allowed in United States patents and general uncertainty
as to their legal interpretation and enforceability. No
absolute policy regarding the breadth of claims allowed in
biopharmaceutical patents has emerged to date in the United States
or in many foreign jurisdictions. Changes in either the patent laws
or in interpretations of patent laws in the United States and
foreign jurisdictions may diminish the value of our intellectual
property. Accordingly, we cannot predict the breadth of claims that
may be enforced in the patents that we currently own or that may be
issued from the applications we have filed or may file in the
future or that we have licensed or may license from third parties,
including MSK for the vaccine antigen patents. Further, if any
patents we obtain or license are deemed invalid or unenforceable,
it could impact our ability to commercialize or license our
technology. Thus, patent applications assigned or
exclusively licensed to us may not result in patents being issued,
any issued patents assigned or exclusively licensed to us may not
provide us with competitive protection or may be challenged by
others, and the current or future granted patents of others may
have an adverse effect on our ability to do business and achieve
profitability.
One
of our issued US patents is directed to a candidate antibody
product that will expire in 2034. Other previously filed antibody
patent applications will, if issued, have patent expiration dates
depending on country and filing date between 2034 and
2037. It is possible that the term of the antibody
patent and certain patents issuing from the antibody patent
applications may be extended for a portion of the time the
candidate product was under regulatory review. Patents covering
components of the sarcoma vaccine will expire in
2022. Patents covering the polyvalent ovarian vaccine
will expire between 2018 and 2025. We believe that our
product candidates are eligible for Orphan Drug designation from
FDA depending on the indication for which it is approved by
FDA. Each product that receives an Orphan Drug
designation would be eligible for up to 7 additional years of
patent protection.
The
degree of future protection for our proprietary rights is uncertain
because legal means afford only limited protection and may not
adequately protect our rights or permit us to gain or keep our
competitive advantage. For example:
●
others may be able to make compounds that are similar to our
vaccines and monoclonal antibody-based candidates and any future
product candidates we may seek to develop but that are not covered
by the claims of our patents;
●
if we encounter delays in our clinical trials, the period of time
during which we could market our vaccines and monoclonal
antibody-based candidates under patent protection would be
reduced;
●
we might not have been the first to conceive, make or disclose the
inventions covered by our patents or pending patent
applications;
●
we might not have been the first to file patent applications for
these inventions;
●
any patents that we obtain may be invalid or unenforceable or
otherwise may not provide us with any competitive advantages;
or
●
the patents of others may have a material adverse effect on our
business.
Due
to the patent laws of a country, or the decisions of a patent
examiner in a country, or our own filing strategies, we may not
obtain patent coverage for all the product candidates that may be
disclosed or methods involving these candidates that may be
disclosed in the parent patent application. We plan to pursue
divisional patent applications and/or continuation patent
applications in the United States and many other countries to
obtain claim coverage for inventions that were disclosed but not
claimed in the parent patent application, but may not succeed in
these efforts.
Composition
of matter patents on the active biological component are generally
considered to be the strongest form of intellectual property
protection for biopharmaceutical products, as such patents
generally provide protection without regard to any method of use.
We cannot be certain that the claims in our patent applications
covering composition-of-matter of our candidates will be considered
patentable by the U.S. Patent and Trademark Office, or USPTO,
courts in the United States or by the patent offices and courts in
foreign countries. Method of use patents protect the use of a
product for the method recited in the claims. This type of patent
does not prevent a competitor from making and marketing a product
that is identical to our product for an indication that is outside
the scope of the patented method. Moreover, even if competitors do
not actively promote their product for our targeted indications,
physicians may prescribe these products “off-label.”
Although off-label prescriptions may infringe or contribute to or
induce the infringement of method of use patents, the practice is
common and such infringement is difficult to prevent or prosecute.
Interference proceedings provoked by third parties or brought by
the USPTO may be necessary to determine the priority of inventions
with respect to our patents or patent applications or those of our
collaborators or licensors. An unfavorable outcome could require us
to cease using the related technology or to attempt to license
rights to it from the prevailing party. Our business could be
harmed if the prevailing party does not offer us a license on
commercially reasonable terms. Litigation or interference
proceedings may fail, resulting in harm to our business, and, even
if successful, may result in substantial costs and distract our
management and other employees.
There
have been numerous changes to the patent laws and proposed changes
to the rules of the USPTO, which may have a significant impact on
our ability to protect our technology and enforce our intellectual
property rights. For example, in September 2011, President Obama
signed the America Invents Act that codifies several significant
changes to the U.S. patent laws, including, among other things,
changing from a “first to invent” to a “first
inventor to file” system, limiting where a patent holder may
file a patent suit, replacing interference or “first to
invent” proceedings with derivation proceedings and creating
inter partes review and post-grant opposition proceedings to
challenge the validity of patents after they have been issued. The
effects of these changes are currently unclear as the USPTO only
recently has adopted regulations implementing the changes, the
courts have yet to address most of these provisions, and the
applicability of the act and new regulations on specific patents
and patent applications discussed herein have not been determined
and would need to be reviewed.
Periodic
maintenance fees on any issued patent are due to be paid to the
USPTO and foreign patent agencies in several stages over the
lifetime of the patent. The USPTO and various foreign governmental
patent agencies require compliance with many procedural,
documentary, fee payment and other similar provisions during the
patent application process. While an inadvertent lapse can in many
cases be cured by payment of a late fee or by other means in
accordance with the applicable rules, there are situations in which
noncompliance can result in abandonment or lapse of the patent or
patent application, resulting in partial or complete loss of patent
rights in the relevant jurisdiction. Noncompliance events that
could result in abandonment or lapse of a patent or patent
application include, but are not limited to, failure to respond to
official actions within prescribed time limits, non-payment of fees
and failure to properly legalize and submit formal documents. In
such an event, our competitors might be able to enter the market,
which would have a material adverse effect on our
business.
We
also rely on trade secrets to protect our technology, especially
where we do not believe patent protection is appropriate or
obtainable. However, trade secrets are difficult to protect.
Although we use reasonable efforts to protect our trade secrets,
our employees, consultants, contractors, licensees, licensors,
outside scientific collaborators and other advisors may
unintentionally or willfully disclose our information such that our
competitors may obtain it. Enforcing a claim that a third party
illegally obtained and is using any of our trade secrets is
expensive and time consuming, and the outcome is unpredictable.
Moreover, our competitors may independently develop equivalent
knowledge, methods and know-how, such as new therapies, including
therapies for the indications we are targeting. If others seek to
develop similar therapies, their research and development efforts
may inhibit our ability to conduct research in certain areas and to
expand our intellectual property portfolio, and also have a
material adverse effect on our business.
Moreover,
because some of the basic research relating to one or more of our
patent applications and/or patents were performed at various
universities and/or funded by grants, one or more universities,
employees of such universities and/or grantors could assert that
they have certain rights in such research and any resulting
products. Further, others may independently develop similar
products, may duplicate our products, or may design around our
patent rights. In addition, because of the assertion of rights by a
third-party or otherwise, we may be required to obtain licenses to
patents or other proprietary rights of others in or outside of the
United States. Any licenses required under any such patents or
proprietary rights may not be made available on terms acceptable to
us, if at all. If we do not obtain such licenses, we could
encounter delays in product market introductions during our
attempts to design around such patents or could find that the
development, manufacture or sale of products requiring such
licenses is foreclosed. In addition, we could incur substantial
costs in defending suits brought against us or about patents to
which we hold licenses or in suing to protect our own patents
against infringement.
We
require employees and the institutions that perform our preclinical
and clinical trials to enter confidentiality agreements with us.
Those agreements provide that all confidential information
developed or made known to a party to any such agreement during the
relationship with us be kept confidential and not be disclosed to
third-parties, except in specific circumstances. Any such agreement
may not provide meaningful protection for our trade secrets or
other confidential information in the event of unauthorized use or
disclosure of such information.
With
respect to our vaccine programs we have in-licensed rights from
third parties. If these license agreements terminate or expire, we
may lose the licensed rights to some or all our vaccine product
candidates. We may not be able to continue to develop them or, if
they are approved, market or commercialize them.
We
depend on license agreements with third-parties for certain
intellectual property rights relating to our product candidates,
including, but not limited to, the license of certain intellectual
property rights from MSK. In general, our license agreements
require us to make payments and satisfy performance obligations to
keep these agreements in effect and retain our rights under them.
These payment obligations can include upfront fees, maintenance
fees, milestones, royalties, patent prosecution expenses, and other
fees. These performance obligations typically include diligence
obligations. If we fail to pay, be diligent or otherwise perform as
required under our license agreements, we could lose the rights
under the patents and other intellectual property rights covered by
these agreements. If disputes arise under any of our license
agreements, including our license agreement with MSK, we could lose
our rights under these agreements. Any such dispute may not be
resolvable on favorable terms, or at all. Whether any disputes of
this kind are favorably resolved, our management’s time and
attention and our other resources could be consumed by the need to
attend to these disputes and our business could be harmed by the
emergence of such a dispute.
If
we lose our rights under these agreements, we might not be able to
develop any related product candidates further, or following
regulatory approval, if any, we might be prohibited from marketing
or commercializing these product candidates. In particular, patents
previously licensed to us might, after termination of an agreement,
be used to stop us from conducting these activities.
We are dependent on MSK for the establishment of our intellectual
property rights related to the vaccine program, and if MSK has not
established our intellectual property rights with sufficient scope
to protect our vaccine candidates, we may have limited or no
ability to assert intellectual property rights to our vaccine
candidates.
Under
our agreement with MSK, MSK was responsible for establishing the
intellectual property rights to the vaccine antigen conjugates,
mixtures of vaccine antigen conjugates that make up polyvalent
vaccine candidates and methods of use. As we were not responsible
for the establishment of our intellectual property rights to these
vaccine antigen conjugates, mixtures of vaccine antigen conjugates
and methods of use, we have less visibility into the strength of
our intellectual property rights to our vaccine candidates than if
we had been responsible for the establishment of these rights. If
MSK did not establish those rights so they are of sufficient scope
to protect the vaccine candidates, then we may not be able to
prevent others from using or commercializing some or all of our
vaccine candidates, and others may be able to assert intellectual
property rights in our vaccine candidates and prevent us from
further pursuing the development and commercialization of our
vaccine candidates.
We may not obtain exclusive rights to intellectual property created
because of our strategic collaborative agreements.
We
are party to collaborative research agreements, such as with
Rockefeller University and MSK, and expect to enter into agreements
with other parties in the future, each of which involve research
and development efforts. Under certain circumstances, we
may not have exclusive rights to jointly developed intellectual
property and would have to license the collaborative
partner’s interest in the jointly developed intellectual
property to obtain exclusive rights. We may not be able to
license our collaborative partner’s interest or license their
interest at reasonable terms. If we are unable to
license their interest we would not have exclusive rights to the
jointly developed intellectual property and, in some
collaborations, the collaborative partner may be free to license
their interest in the jointly developed intellectual property to a
competitor. In other collaborations, if we are unable to
license the collaborative partner’s interest we may not have
sufficient rights to practice the jointly developed intellectual
property. Such provisions to the jointly developed
intellectual property may limit our ability to gain commercial
benefit from some of or all the intellectual property we jointly
develop with our collaborative partners and may lead to costly or
time-consuming disputes with parties with whom we have
collaborative relationships over rights to certain innovations or
with other third parties that may result from the activities of the
collaborative arrangements.
We may incur substantial costs because of litigation or other
proceedings relating to patent and other intellectual property
rights and we may be unable to enforce or protect our rights to, or
use, our technology.
If
we choose to go to court to stop another party from using the
inventions claimed in any patents we obtain, that individual or
company has the right to ask the court to rule that such patents
are invalid or should not be enforced. These lawsuits are expensive
and would consume time and resources and divert the attention of
managerial and scientific personnel even if we were successful in
stopping the infringement of such patents or sustaining their
validity and enforceability. In addition, there is a risk that the
court will decide that such patents are not valid and that we do
not have the right to enforce them. There is also the risk that,
even if the validity of such patents is upheld, the court will
refuse to stop the other party on the grounds that such other
party’s activities do not infringe such patents. In addition,
the United States Court of Appeals for the Federal Circuit and the
Supreme Court of the United States continue to address issues under
the United States patent laws, and the decisions of those and other
courts could adversely affect our ability to sustain the validity
of our issued or licensed patents and obtain new
patents.
Furthermore,
a third party may claim that we or our manufacturing or
commercialization partners or customers are using inventions
covered by the third party’s patent rights and may go to
court to stop us or our partners and/or customers from engaging in
our operations and activities, including making or selling our
vaccine and monoclonal antibody-based candidates and any future
product candidates we may seek to develop. These lawsuits are
costly and could affect our results of operations and divert the
attention of managerial and scientific personnel. There is a risk
that a court would decide that we or our commercialization partners
or customers are infringing the third party’s patents and
would order us or our partners or customers to stop the activities
covered by the patents. In that event, we or our commercialization
partners or customers may not have a viable way around the patent
and may need to halt commercialization or use of the relevant
product. In addition, there is a risk that a court will order us or
our partners or customers to pay the other party damages for having
violated the other party’s patents or obtain one or more
licenses from third parties, which may be impossible or require
substantial time and expense. We cannot predict whether any license
would be available at all or whether it would be available on
commercially reasonable terms. Furthermore, even in the absence of
litigation, we may need to obtain licenses from third parties to
advance our research or allow commercialization of our candidates,
and we have done so from time to time. We may fail to obtain any of
these licenses at a reasonable cost or on reasonable terms, if at
all. In such events, we would be unable to further develop and
commercialize one or more of our drug candidates, which could harm
our business significantly. In the future, we may agree to
indemnify our commercial partners and/or customers against certain
intellectual property infringement claims brought by third parties
which could increase our financial expense, increase our
involvement in litigation and/or otherwise materially adversely
affect our business.
Because
of the substantial amount of discovery required in connection with
intellectual property litigation, there is a risk that some of our
confidential information could be compromised by disclosure during
this type of litigation, which could adversely affect our
intellectual property rights and our business. In addition, there
could be public announcements of the results of hearings, motions
or other interim proceedings or developments. If securities
analysts or investors perceive these results to be negative, it
could have a substantial adverse effect on the price of our common
stock.
The
pharmaceutical and biotechnology industries have produced a
proliferation of patents, and it is not always clear to industry
participants, including us, which patents cover various types of
products or methods of use. The coverage of patents is subject to
interpretation by the courts, and the interpretation is not always
uniform. If we are sued for patent infringement, we would need to
demonstrate that our products or methods either do not infringe the
patent claims of the relevant patent or that the patent claims are
invalid or unenforceable, and we may not be able to do this.
Proving invalidity or unenforceability is difficult. For example,
in the United States, proving invalidity requires a showing of
clear and convincing evidence to overcome the presumption of
validity enjoyed by issued patents.
Because
some patent applications in the United States may be maintained in
secrecy until the patents are issued, because patent applications
in the United States and many foreign jurisdictions are typically
not published until eighteen months after filing, because searches
and examinations of patent applications by the USPTO and other
patent offices may not be comprehensive, and because publications
in the scientific literature often lag behind actual discoveries,
we cannot be certain that others have not filed patent applications
for technology covered by our patents or pending applications. Our
competitors may have filed, and may in the future file, patent
applications and may have obtained patents covering technology
similar to ours. Any such patents or patent application may have
priority over our patent applications, which could further require
us to obtain or license rights to issued patents covering such
technologies. If another party has obtained a U.S. patent or filed
a U.S. patent application on inventions similar to ours, we may
have to participate in a proceeding before the USPTO or in the
courts to determine which patent or application has priority. The
costs of these proceedings could be substantial, and it is possible
that our application or patent could be determined not to have
priority, which could adversely affect our intellectual property
rights and business.
We
have received confidential and proprietary information from
collaborators, prospective licensees and other third parties. In
addition, we employ individuals who were previously employed at
other biotechnology or pharmaceutical companies. We may be subject
to claims that we or our employees, consultants or independent
contractors have improperly used or disclosed confidential
information of these third parties or our employees’ former
employers. Litigation may be necessary to defend against these
claims. Even if we are successful in defending against these
claims, litigation could result in substantial cost and be a
distraction to our management and employees. If we are not
successful, our ability to continue our operations and our business
could be materially, adversely affected.
Some
of our competitors may be able to sustain the costs of complex
intellectual property litigation more effectively than we can
because they have substantially greater resources. In addition, any
uncertainties resulting from the initiation and continuation of any
litigation could have a material adverse effect on our ability to
raise the funds necessary to continue our operations, on our
ability to hire or retain employees, or otherwise on our
business.
Risks Related to our Common Stock
Our restated certificate of incorporation, our amended and restated
by-laws and Delaware law could deter a change of our management
which could discourage or delay offers to acquire us; certain
restrictions in our agreements with existing stockholders could
also discourage or delay offers to acquire us.
Certain
provisions of Delaware law and of our restated certificate of
incorporation, as amended, and amended and restated by-laws, could
discourage or make it more difficult to accomplish a proxy contest
or other change in our management or the acquisition of control by
a holder of a substantial amount of our voting stock. It is
possible that these provisions could make it more difficult to
accomplish, or could deter, transactions that stockholders may
otherwise consider to be in their best interests or in our best
interests. These provisions include:
●
establishing a classified board of directors requiring that members
of the board be elected in different years, which lengthens the
time needed to elect a new majority of the board;
●
authorizing the issuance of “blank check” preferred
stock that could be issued by our board of directors to increase
the number of outstanding shares or change the balance of voting
control and thwart a takeover attempt;
●
prohibiting cumulative voting in the election of directors, which
would otherwise allow for less than a majority of stockholders to
elect director candidates;
●
limiting the ability of stockholders to call special meetings of
the stockholders;
●
prohibiting stockholder action by written consent and requiring all
stockholder actions to be taken at a meeting of our stockholders;
and
●
establishing 90 to 120-day advance notice requirements for
nominations for election to the board of directors and for
proposing matters that can be acted upon by stockholders at
stockholder meetings.
The rights of our common stockholders are limited by and
subordinate to the rights of the holders of Series D Preferred
Stock, Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred
Stock, Series J Preferred Stock, Series K Preferred Stock and
Series L Preferred Stock; these rights may have a negative effect
on the value of shares of our common stock.
The holders of our Series D Preferred Stock,
Series E Preferred Stock, Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred
Stock, Series J Preferred Stock, Series K Preferred Stock and
Series L Preferred Stock have rights and preferences generally
superior to those of the holders of common stock. The existence of
these superior rights and preferences may have a negative effect on
the value of shares of our common stock. These rights are more
fully set forth in the Series D Preferred Stock certificate of
designations, Series E Preferred Stock certificate of designations,
Series F Preferred Stock certificate of designations, Series G
Preferred Stock certificate of designations, Series H Preferred
Stock certificate of designations, Series I Preferred Stock
certificate of designations, Series J Preferred Stock certificate
of designations,
Series K
Preferred Stock certificate of designations, and Series L Preferred
Stock certificate of designations, respectively, and include, but
are not limited to the right to receive a liquidation preference,
prior to any distribution of our assets to the holders of our
common stock, in an amount equal to $0.01 per share, or $441. for
the Series D Preferred Stock; $0.01 per share, or $333, for the
Series E Preferred Stock; $0.01 per share, or $0, for the Series F
Preferred Stock; $0.01 per share, or $0, for the Series G Preferred
Stock; $1,000.00 per share, or $0, for the Series H Preferred
Stock; $0.01 per share, or $10,485, for the Series I Preferred
Stock; $687.50 per share, or $531,252, for the Series J Preferred
Stock;
$0.01 per share, or
$650, for the Series K Preferred Stock; and $100.00 per share, or
$5,800,000, for the Series L Preferred
Stock.
We may fail to regain compliance for continued listing on the
Nasdaq Capital Market and a delisting of our stock could make it
more difficult for investors to sell their shares
Our
common stock was approved for listing on the Nasdaq Capital Market
in August 2016 where it continues to be listed. The listing rules
of Nasdaq require the Company to meet certain requirements. These
continued listing standards include specifically enumerated
criteria, such as:
●
a $1.00 minimum closing bid price;
●
stockholders’ equity of $2.5 million;
●
500,000 shares of publicly-held common stock with a market value of
at least $1 million;
●
300 round-lot stockholders; and
●
compliance with Nasdaq’s corporate governance requirements,
as well as additional or more stringent criteria that may be
applied in the exercise of Nasdaq’s discretionary
authority.
On
August 22, 2017, Nasdaq notified us that we also no longer
satisfied the minimum $2.5 million stockholders’ equity
requirement. While we have completed several offerings and
financing transactions totaling approximately $4.8 million in net
proceeds that have been completed subsequent to June 30, 2017, we
believe that additional equity capital may be required to maintain
our listing. On September 6, 2017, Nasdaq informed the Company that
it had failed to maintain a minimum bid price of $1.00 per share
for more than 30 consecutive business days. The Company can regain
compliance if, at any time during the 180-day period ending March
5, 2018, the closing bid price of the common stock is at least
$1.00 for a minimum of ten consecutive business days. On October 6,
2017, at a special meeting of stockholders, our Board of Directors
received approval, if the Board deems to be necessary to achieve a
higher stock price to continue to meet the continued listing
qualifications for the NASDAQ Stock Exchange, to amend our Amended
and Restated Certificate of Incorporation to effect a reverse stock
split of our issued and outstanding common stock by a ratio of not
less than one-for-two and not more than one-for-twenty at any time
prior to September 28, 2018, with the exact ratio to be set at a
whole number within this range as determined by the Board of
Directors, in its sole direction, to continue to meet the continued
listing qualifications for the NASDAQ Stock Exchange. No decision
has been made yet by our Board of Directors to implement a reverse
split. However, if we were to effect such a reverse stock split,
our stockholders may bring actions against us in connection with
that reverse stock split that could divert management resources,
cause us to incur significant expenses or cause our common stock to
be further diluted. Continued listing during this period is also
contingent on our continued compliance with all listing
requirements other than for the minimum bid price.
If
we fail to comply with Nasdaq’s continued listing standards,
we may be delisted and our common stock will trade, if at all, only
on the over-the-counter market, such as the OTC Bulletin Board or
OTCQX market, and then only if one or more registered broker-dealer
market makers comply with quotation requirements. In
addition, delisting of our common stock could depress our stock
price, substantially limit liquidity of our common stock and
materially adversely affect our ability to raise capital on terms
acceptable to us, or at all.
Finally,
delisting of our common stock would likely result in our common
stock becoming a “penny stock” under the Securities
Exchange Act. The principal result or effect of being
designated a “penny stock” is that securities
broker-dealers cannot recommend the shares but must trade it on an
unsolicited basis. Penny stock rules require a broker-dealer, prior
to a transaction in a penny stock not otherwise exempt from those
rules, to deliver a standardized risk disclosure document prepared
by the SEC, which specifies information about penny stocks and the
nature and significance of risks of the penny stock market. A
broker-dealer must also provide the customer with bid and offer
quotations for the penny stock, the compensation of the
broker-dealer and sales person in the transaction, and monthly
account statements indicating the market value of each penny stock
held in the customer’s account. In addition, the penny stock
rules require that, prior to a transaction in a penny stock not
otherwise exempt from those rules; the broker-dealer must make a
special written determination that the penny stock is a suitable
investment for the purchaser and receive the purchaser’s
written agreement to the transaction. These disclosure requirements
may have the effect of reducing the trading activity in the
secondary market for shares that become subject to those penny
stock rules. Under such circumstances, stockholders may find it
more difficult to sell, or to obtain accurate quotations, for our
common stock, and our common stock would become substantially less
attractive to certain purchasers such as financial institutions,
hedge funds and other similar investors.
Substantial future sales of our common stock by us or by our
existing stockholders could cause our stock price to
fall.
Additional
equity financings or other share issuances by us, including shares
issued in connection with strategic alliances and corporate
partnering transactions, could adversely affect the market price of
our common stock. Sales by existing stockholders of a large number
of shares of our common stock in the public market or the
perception that additional sales could occur could cause the market
price of our common stock to drop.
If we do not progress in our programs as anticipated, our stock
price could decrease.
For
planning purposes, we estimate the timing of a variety of clinical,
regulatory and other milestones, such as when a certain product
candidate will enter clinical development, when a clinical trial
will be completed or when an application for regulatory approval
will be filed. Our estimates are based on present facts and a
variety of assumptions. Many of the underlying assumptions are
outside of our control. If milestones are not achieved when we
estimated that they would be, investors could be disappointed, and
our stock price may decrease.
Our stock price may be volatile; you may not be able to resell your
shares at or above your purchase price.
Our
stock prices and the market prices for securities of biotechnology
companies in general have been highly volatile, with recent
significant price and volume fluctuations, and may continue to be
highly volatile in the future. For example, during 12 months ended
October 18, 2017, our common stock traded between $4.25 per share
and $0.43 per share. The following factors, in addition to other
risk factors described in this section, may have a significant
impact on the market price of our common stock, some of which are
beyond our control:
●
developments regarding, or the results of, our clinical
trials;
●
announcements of technological innovations or new commercial
products by our competitors or us;
●
our issuance of equity or debt securities, or disclosure or
announcements relating thereto;
●
developments concerning proprietary rights, including
patents;
●
developments concerning our collaborations;
●
publicity regarding actual or potential medical results relating to
products under development by our competitors or us;
●
regulatory developments in the United States and foreign
countries;
●
economic and other external factors or other disaster or crisis;
or
●
period-to-period fluctuations in our financial
results.
Our common stock may be affected by limited trading volume and
price fluctuations which could adversely impact the value of our
common stock.
While
there has been relatively active trading in our common stock over
the past twelve months, there can be no assurance that an active
trading market in our common stock will be maintained. Our common
stock has experienced, and is likely to experience in the future,
significant price and volume fluctuations which could adversely
affect the market price of our common stock without regard to our
operating performance. In addition, we believe that factors such as
quarterly fluctuations in our financial results and changes in the
overall economy or the condition of the financial markets could
cause the price of our common stock to fluctuate substantially.
These fluctuations may also cause short sellers to periodically
enter the market in the belief that we will have poor results in
the future. We cannot predict the actions of market participants
and, therefore, can offer no assurances that the market for our
common stock will be stable or appreciate over time.
The number of shares of issued and outstanding common stock as of
October 18, 2017, represents approximately 45% of our fully diluted
shares of common stock. Additional issuances of shares of common
stock upon conversion and/or exercise of preferred stock, options
to purchase common stock and warrants to purchase common stock will
cause substantial dilution to existing stockholders.
At October 18, 2017, we had 19,919,261 shares of common stock
issued and outstanding. Up to an additional 18,918,608 shares may
be issued upon conversion of our Series D Preferred Stock, Series E
Preferred Stock, Series I Preferred Stock, Series J Preferred
Stock, Series K Preferred Stock, and Series L Preferred Stock
(provided stockholder approval of the conversion is obtained);
1,268,056 shares issuable upon exercise of warrants at a weighted
average price of $6.37; 1,598,071 shares upon exercise of all
outstanding options to purchase our common stock at a weighted
average price of $4.89; and 2,516,359 shares issuable upon vesting
of restricted stock units granted, resulting in a total of up to
44,220,355 shares that may be issued and outstanding. The issuance
of any and all of the 24,301,094 shares issuable upon exercise or
conversion of our outstanding convertible securities will cause
substantial dilution to existing stockholders and may depress the
market price of our common stock.
You may experience future dilution in the event of future equity
offerings.
We
may in the future offer shares of our common stock or other
securities convertible into or exchangeable for our common
stock. Although no assurances can be given that we will
consummate a financing, in the event we do, or in the event we sell
shares of common stock or other securities convertible into shares
of our common stock in the future, additional and substantial
dilution will occur. In addition, investors purchasing
shares or other securities in the future could have rights superior
to our current stockholders. Further, in the event we must again
obtain the Consent, you may experience additional dilution if we
are required to issue additional shares of our capital stock and/or
securities convertible into or exercisable for shares of our
capital stock.
If our common stock is not listed on a national securities
exchange, compliance with applicable state securities laws may be
required for subsequent offers, transfers and sales of the shares
of common stock offered hereby.
The
securities offered hereby are being offered pursuant to one or more
exemptions from registration and qualification under applicable
state securities laws. Because our common stock is listed on The
Nasdaq Capital Market, we are not required to register or qualify
in any state the subsequent offer, transfer or sale of the common
stock. If our common stock is delisted from The Nasdaq Capital
Market and is not eligible to be listed on another national
securities exchange, subsequent transfers of the shares of our
common stock offered hereby by U.S. holders may not be exempt from
state securities laws. In such event, it will be the responsibility
of the holder of shares or warrants to register or qualify the
shares for any subsequent offer, transfer or sale in the United
States or to determine that any such offer, transfer or sale is
exempt under applicable state securities laws.
C
AUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS AND INDUSTRY DATA
This
prospectus contains forward-looking statements, which reflect the
views of our management with respect to future events and financial
performance. These forward-looking statements are subject to a
number of uncertainties and other factors that could cause actual
results to differ materially from such statements. Forward-looking
statements are identified by words such as
“anticipates,” “believes,”
“estimates,” “expects,”
“intends,” “plans,” “projects,”
“targets” and similar expressions. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which are based on the information available to
management at this time and which speak only as of this date. We
undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. For a discussion of some of the factors that may
cause actual results to differ materially from those suggested by
the forward-looking statements, please read carefully the
information under “Risk Factors.” Examples of our
forward-looking statements include:
●
Our ability to continue as a going
concern and our need for additional capital to fund our
operations;
●
Our history of losses and our expectation
of future losses;
●
The clinical development of our product
candidates and our expectations for the completion of associated
clinical trials;
●
Our expectations regarding the safety and
efficacy of our product candidates;
●
The expected costs of our clinical
trials;
●
Our expectations regarding the use of our
existing cash and the expected net proceeds of this
offering;
●
Our
expectations regarding our ability to obtain regulatory approval
for any of our product candidates and any requirements that may be
imposed in connection with any regulatory approval we
receive;
●
Our plans to commercialize any product
candidate that receives regulatory approval;
●
Expectations regarding the willingness of
doctors to use any approved product and the availability and amount
of any third-party reimbursement for such use;
●
Our expectations regarding the cost and
effect of ongoing regulatory oversight for any approved
product;
●
The effect of the loss of any of our
executive officers, directors and principal consultants on our
business;
●
Our expectations regarding the ability of
our clinical research organizations to properly oversee our
clinical trials;
●
Our expectations regarding the ability of
our contract manufacturers to manufacture sufficient amounts of
product candidates to satisfy our needs in accordance with cGMP,
including the availability of raw materials and intermediates used
to manufacture our product candidates;
●
Our ability to obtain and enforce patents
and other proprietary rights to our technology;
and
●
The
performance by third party collaborators of their obligations under
their agreements with us
●
Our need for additional capital to fund our
operations;
●
Our history of losses and our expectation of future
losses;
●
The clinical development of our product candidates and our
expectations for the completion of associated clinical
trials;
●
Our expectations regarding the safety and efficacy of our product
candidates;
●
The expected costs of our clinical trials;
●
Our expectations regarding the use of our existing cash and the
expected net proceeds of this offering;
●
Our expectations regarding our ability to obtain regulatory
approval for any of our product candidates and any requirements
that may be imposed in connection with any regulatory approval we
receive;
●
Our plans to commercialize any product candidate that receives
regulatory approval;
●
Expectations regarding the willingness of doctors to use any
approved product and the availability and amount of any third-party
reimbursement for such use;
●
Our expectations regarding the cost and effect of ongoing
regulatory oversight for any approved product;
●
The effect of the loss of any of our executive officers, directors
and principal consultants on our business;
●
Our expectations regarding the ability of our clinical research
organizations to properly oversee our clinical trials;
●
Our expectations regarding the ability of our contract
manufacturers to manufacture sufficient amounts of product
candidates to satisfy our needs in accordance with cGMP, including
the availability of raw materials and intermediates used to
manufacture our product candidates;
●
Our ability to obtain and enforce patents and other proprietary
rights to our technology; and
●
The performance by third party collaborators of their obligations
under their agreements with us
You
should read this prospectus and the documents that we have filed as
exhibits to the registration statement, of which this prospectus is
a part, completely and with the understanding that our actual
future results may be materially different from what we
expect. You should assume that the information appearing in
this prospectus is accurate as of the date on the front cover of
this prospectus only. Because the risk factors referred to above
could cause actual results or outcomes to differ materially from
those expressed in any forward-looking statements made by us or on
our behalf, you should not place undue reliance on any
forward-looking statements. These risks and uncertainties,
along with others, are described above under the heading
“Risk Factors” beginning on page 7 of this
prospectus. We qualify all of the information presented
in this prospectus, and particularly our forward-looking
statements, by these cautionary statements.
USE OF PROCEEDS
This
prospectus relates to shares of our common stock that may be
offered and sold from time to time by the Selling Stockholders. We
will not receive any of the proceeds resulting from the sale of
common stock by the Selling Stockholders.
SELLING STOCKHOLDERS
We are
registering an aggregate of 6,965,569 shares of common
stock for resale by the Selling Stockholders listed in the
table below, consisting of (i) 6,500,000 shares issuable upon
conversion of outstanding shares of Series K Preferred Stock issued
in connection with the August 2017 Public Offering, (ii) 152,143
shares of common stock issued in connection with a private
placement with OPKO Health, Inc., (iii) 100,000 shares of common
stock issued to HS Contrarian Investments, LLC as compensation for
due diligence services and (iv) 213,426 shares of common stock
issued to Sichenzia Ross Ference Kesner LLP. All expenses incurred
with respect to the registration of the common stock will be paid
by us, but we will not be obligated to pay any underwriting fees,
discounts, commissions or other expenses incurred by the Selling
Stockholders in connection with the sale of such
shares.
The
Selling Stockholders may also resell all or a portion of their
securities in reliance upon Rule 144 under the Securities Act
provided that they meet the criteria and conform to the
requirements of that rule or by any other available
means.
The
Selling Stockholders named below may from time to time offer and
sell pursuant to this prospectus up to 6,965,569 Resale
Shares.
The
following table sets forth:
●
the name of the
Selling Stockholders;
●
the number and
percent of shares of our common stock that the Selling Stockholders
beneficially owned prior to the offering for resale of the shares
under this prospectus;
●
the number of
shares of our common stock that may be offered for resale for the
account of the Selling Stockholders under this prospectus;
and
●
the number and
percent of shares of our common stock to be beneficially owned by
the Selling Stockholders after the offering of the Resale Shares
(assuming all of the offered Resale Shares are sold by the Selling
Stockholders).
The
number of shares in the column “Number of Shares Being
Offered” represents all of the shares that each Selling
Stockholder may offer under this prospectus. We do not know how
long the Selling Stockholders will hold the shares before selling
them or how many shares they will sell, and we currently have no
agreements, arrangements or understandings with any of the Selling
Stockholders regarding the sale of any of the Resale
Shares.
This
table is prepared solely based on information supplied to us by the
Selling Stockholders, any Schedules 13D or 13G, and other public
documents filed with the SEC. The applicable percentages of
beneficial ownership are based on an aggregate of 19,919,261 shares
of our common stock issued and outstanding on October 18,
2017.
Except
as noted in the footnotes to the table below, to our knowledge,
none of the Selling Stockholders has held any position or office or
had any other material relationship with us or any of our
predecessors or affiliates within the past three years other than
as a result of the ownership of our securities. None of the Selling
Stockholders is a broker-dealer or affiliate of a broker-dealer.
See “Plan of Distribution” for additional information
about the Selling Stockholders and the manner in which the Selling
Stockholders may dispose of their shares. Beneficial ownership has
been determined in accordance with the rules of the SEC, and
generally means that a person has beneficial ownership of a
security if he, she or it possesses sole or shares voting or
investment power of that security, and includes options that are
currently exercisable or exercisable within 60 days. Our
registration of these securities does not necessarily mean that the
Selling Stockholders will sell any or all of the securities covered
by this prospectus.
Name
of Selling Stockholder
|
Shares Beneficially Owned Prior to Offering
Number
|
|
|
|
Number of Shares
Beneficially Owned
After Offering
|
|
Percent Beneficially Owned Before
and
After Offering (1)
|
|
HS Contrarian
Investments, LLC (2)
|
1,046,175
|
(3)
|
1,700,000
|
(4)
|
1,046,175
|
(5)
|
4.99
%
|
|
GRQ Consultants,
Inc. Roth 401K FBO Barry Honig Trustee (6)
|
1,046,175
|
(7)
|
1,200,000
|
(8)
|
1,046,175
|
(9)
|
4.99
%
|
|
GRQ Consultants,
Inc. Roth 401K FBO Renee Honig Trustee (10)
|
1,046,175
|
(11)
|
1,125,000
|
(8)
|
1,046,175
|
(12)
|
4.99
%
|
|
Grander Holdings,
Inc. 401K (13)
|
946,175
|
(14)
|
1,200,000
|
(8)
|
1,046,175
|
(15)
|
4.99
%
|
|
Grander Holdings,
Inc. (13)
|
100,000
|
(16)
|
100,000
|
(8)
|
-
|
(17)
|
*
|
|
Robert B.
Prag
|
481,899
|
(18)
|
185,000
|
(8)
|
269,899
|
(19)
|
*
|
|
David
Moss
|
79,448
|
(20)
|
62,500
|
(8)
|
16,948
|
|
*
|
|
Paradox Capital
Partners, LLC (21)
|
301,604
|
(22)
|
185,000
|
(8)
|
116,604
|
|
*
|
|
Melechdavid, Inc.
(23)
|
406,688
|
(24)
|
305,000
|
(8)
|
101,688
|
|
*
|
|
Melechdavid, Inc.
Retirement Plan (23)
|
75,000
|
(25)
|
75,000
|
(8)
|
0
|
|
*
|
|
Robert S. Colman
Trust UDT 3/13/85(26)
|
125,000
|
(27)
|
125,000
|
(8)
|
0
|
|
*
|
|
Sargeant Capital
Ventures, LLC (28)
|
169,174
|
(29)
|
110,000
|
(8)
|
59,174
|
|
*
|
|
Edward W. Easton
TTEE, The Easton Group (30)
|
160,300
|
(31)
|
110,000
|
(8)
|
50,300
|
|
*
|
|
Donald E.
Garlikov
|
75,000
|
(32)
|
75,000
|
(8)
|
0
|
|
*
|
|
Airy Properties
(33)
|
55,199
|
(34)
|
50,000
|
(8)
|
5,199
|
|
*
|
|
Ryan
O’Rourke
|
65,594
|
(35)
|
50,000
|
(8)
|
15,594
|
|
*
|
|
Corey Patrick
O’Rourke
|
52,897
|
(36)
|
42,500
|
(8)
|
10,397
|
|
*
|
|
Sichenzia Ross
Ference Kesner (37)
|
213,426
|
|
213,426
|
|
0
|
|
*
|
|
OPKO Health, Inc.
(38)
|
1,046,175
|
|
152,143
|
|
1,046,175
|
(40)
|
4.99
%
|
*Less
than 1%
(1)
Represents the
percentage of shares that are owned by the Selling Stockholders
before the offering and that will be held by the Selling
Stockholders after completion of this offering based on the
assumptions that (a) all shares registered for sale by the
registration statement of which this prospectus is part will be
sold and (b) that no other shares of our common stock beneficially
owned by the Selling Stockholders are acquired or are sold prior to
completion of this offering by the Selling
Stockholders.
(2)
John Stetson is the
Managing Member of HS Contrarian Investments, LLC. In such
capacity, he has voting and dispositive control over the securities
held by such entity.
(3)
Includes (i)
279,037 shares of common stock and (ii) 767,138 shares of common
stock underlying Series K Preferred Stock. Excludes (i) 767,138
shares underlying Series K Preferred Stock and (ii) 2,500,000
shares of common stock underlying Series L Preferred Stock. Series
K Preferred Stock and Series L Preferred Stock have a 4.99%
beneficial ownership limitation and conversion of the Series L
Preferred Stock is subject to stockholder approval.
(4)
Represents (i)
100,000 shares of common stock and (ii) 1,600,000 shares of common
stock underlying Series K Preferred Stock.
(5)
Includes (i)
279,037 shares of common stock and (ii) 767,138 shares of common
stock underlying Series L Preferred Stock. Excludes 1,732,862
shares of common stock underlying Series L Preferred Stock. The
Series L Preferred Stock contains a 4.99% beneficial ownership
limitation and conversion of the Series L Preferred Stock is
subject to stockholder approval.
(6)
Barry Honig is
trustee of GRQ Consultants, Inc. Roth 401K FBO Barry Honig. In such
capacity, he has voting and dispositive control over the securities
held by such entity.
(7)
Includes 1,046,175
shares of common stock underlying Series K Preferred Stock.
Excludes (i) 153,825 shares of common stock underlying Series K
Preferred Stock and (ii) 1,666,666 shares of common stock
underlying the Series L Preferred Stock. The Series K Preferred
Stock and the Series L Preferred Stock have a 4.99% beneficial
ownership limitation; further, conversion of the Series L Preferred
Stock is subject to stockholder approval.
(8)
Represents shares
of common stock underlying Series K Preferred Stock.
(9)
Includes 1,046,175
shares of common stock underlying Series L Preferred Stock.
Excludes 620,491 shares of common stock underlying Series L
Preferred Stock. The Series L Preferred Stock contains a 4.99%
beneficial ownership limitation and conversion of the Series L
Preferred Stock is subject to stockholder approval.
(10)
Renee Honig is
trustee of GRQ Consultants, Inc. Roth 401K FBO Renee Honig. In such
capacity, she has voting and dispositive control over the
securities held by such entity.
(11)
Includes 1,046,175
shares of common stock underlying Series K Preferred Stock.
Excludes (i) 78,825 shares of common stock underlying Series K
Preferred Stock and (ii) 1,333,334 shares of common stock
underlying Series L Preferred Stock. The Series K Preferred Stock
and the Series L Preferred Stock contain a 4.99% beneficial
ownership limitation and conversion of the Series L Preferred Stock
is subject to stockholder approval.
(12)
Includes 1,046,175
shares of common stock underlying Series L Preferred Stock.
Excludes 287,159 shares of common stock underlying Series L
Preferred Stock. The Series L Preferred Stock contains a 4.99%
beneficial ownership limitation and conversion of the Series L
Preferred Stock is subject to stockholder approval.
(13)
Michael Brauser is President of Grander Holdings, Inc. and Trustee
of Grander Holdings, Inc. 401K. In such capacities, he is deemed to
hold voting and dispositive power over the securities held by such
entities.
(14)
Includes (i)
402,820 shares underlying Series I Preferred Stock (ii) 454,545
shares underlying Series J Preferred Stock, (iii) and 88,810 shares
underlying Series K Preferred Stock. Excludes (i) 1,111,190 shares
underlying Series K Preferred Stock and (ii) 1,916,667 shares
underlying Series L Preferred Stock. Series I Preferred Stock,
Series J Preferred Stock, Series K Preferred Stock and Series L
Preferred Stock have a 4.99% beneficial ownership limitation and
conversion of the Series L Preferred Stock is subject to
stockholder approval.
(15)
Includes (i)
402,820 shares underlying Series I Preferred Stock (ii) 454,545
shares underlying Series J Preferred Stock, and (iii) 188,810
shares underlying Series L Preferred Stock. Excludes 1,727,857
shares underlying Series L Preferred Stock. The Series I Preferred
Stock, the Series J Preferred Stock and the Series L Preferred
Stock have a 4.99% beneficial ownership limitation
and conversion of the Series L
Preferred Stock is subject to stockholder approval.
Excludes 583,334
shares underlying Series L Preferred Stock. The Series L Preferred
Stock has a 4.99% beneficial ownership limitation and conversion of
the Series L Preferred Stock is subject to stockholder
approval.
(17)
Excludes 583,334
shares underlying Series L Preferred Stock. The Series L Preferred
Stock has a 4.99% beneficial ownership limitation and conversion of
the Series L Preferred Stock is subject to stockholder
approval.
(18)
Includes (i)
251,449 shares of common stock, (ii) 45,450 shares underlying
Series J Preferred Stock and (iii) 185,000 shares underlying Series
K Preferred Stock.
(19)
Represents (i)
251,449 shares of common stock and (ii) 45,450 shares underlying
Series J Preferred Stock.
(20)
Represents (i)
16,948 shares of common stock and (ii) 62,500 shares of common
stock underlying Series K Preferred Stock.
(21)
Harvey
Kesner is the Managing Member of Paradox Capital Partners,
LLC.
In such capacity,
he has voting and dispositive control over the securities held by
such entity.
(22)
Represents (i)
116,604 shares of common stock and (ii) 185,000 shares underlying
Series K Preferred Stock.
(23)
Mark Groussman is the President of Melechdavid, Inc. and the
Trustee of the Melechdavid Inc., Retirement Plan. In such
capacities, he has voting and dispositive control over the
securities held by such entities.
(24)
Represents (i)
101,688 shares of common stock and (ii) 305,000 shares of common
stock underlying Series K Preferred Stock.
(25)
Represents 75,000
shares of common stock underlying Series K Preferred
Stock.
(26)
Robert Coleman is
the Trustee of the Robert S. Colman Trust UDT 3/13/85. In such
capacity he has voting and dispositive control over the securities
held by such entity.
(27)
Represents 125,000
shares of common stock underlying Series K Preferred
Stock.
(28)
Daniel Nir is the
Managing Member of Sargeant Capital Ventures, LLC. In such
capacity, he has voting and dispositive control over the securities
held by such entity.
(29)
Represents (i)
59,174 shares of common stock and (ii) 110,000 shares of common
stock underlying Series K Preferred Stock.
(30)
Edward Easton is
trustee of Edward W. Easton TTEE, The Easton Group. In such
capacity, he has voting and dispositive control over the securities
held by such entity.
(31)
Represents (i)
50,300 shares of common stock and (ii) 110,000 shares of common
stock underlying Series K Preferred Stock.
(32)
Represents 75,000
shares of common stock underlying Series K Preferred
Stock.
(33)
John
O’Rourke, Jr. is Partner for Airy Properties. In such
capacity, he has voting and dispositive control over the securities
held by such entity.
(34)
Represents (i)
5,199 shares of common stock and (ii) 50,000 shares of common stock
underlying Series K Preferred Stock.
(35)
Represents (i)
15,594 shares of common stock and (ii) 50,000 shares of common
stock underlying Series K Preferred Stock.
(36)
Represents (i)
10,397 shares of common stock and (ii) 42,500 shares of common
stock underlying Series K Preferred Stock.
(37)
Harvey
Kesner is a Partner of Sichenzia Ross Ference Kesner
LLP.
In such capacity,
he has voting and dispositive control over the securities held by
such entity.
(38)
OPKO Health,
Inc.’s voting and dispositive control over the securities
held by such entity is by an investment committee.
(39)
Includes (i)
406,112 shares of common stock, (ii) 519,751 shares underlying
Series E Preferred Stock, and (iii) 120,312 shares underlying
Series I Preferred Stock. Excludes 202,508 shares of Series I
Preferred Stock. The Series E Preferred Stock and Series I
Preferred Stock have a 4.99% beneficial ownership
limitation.
(40)
Includes (i)
253,969 shares of common stock, (ii) 519,751 shares underlying
Series E Preferred Stock, and (iii) 272,455 shares underlying
Series I Preferred Stock. Excludes 50,365 shares of Series I
Preferred Stock. The Series E Preferred Stock and Series I
Preferred Stock have 4.99% beneficial ownership
limitation.
DESCRIPTION OF SECURITIES
Authorized Capital Stock
Our
authorized capital stock consists of 150 million shares of
common stock, $0.01 par value, and 15 million shares of
preferred stock, $0.01 par value. As of October 18, 2017, there
were (i) 19,919,261 shares of common stock outstanding, (ii) 44,104
shares of Series D Preferred Stock outstanding that are convertible
into 596,000 shares of common stock, (iii) 33,333 shares of Series
E Preferred Stock outstanding that are convertible into 519,751
shares of common stock, (iv) 1,048,460 shares of Series I Preferred
Stock outstanding that are convertible into 1,048,460 shares of
common stock, (v) 772.73 shares of Series J Preferred Stock
outstanding that are convertible into 772,730 shares of common
stock, (vi) 63,150 shares of Series K Preferred Stock outstanding
that are convertible into 6,315,000 shares of common stock, and
(vii) 58,000 shares of Series L Preferred Stock outstanding that
are convertible into 9,666,667 shares of common stock subject to
obtaining stockholder approval.
Common Stock
The
holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the
stockholders and do not have cumulative voting rights. Accordingly,
holders of a majority of the shares of common stock and preferred
stock entitled to vote in any election of directors may elect all
of the directors standing for election. Subject to preferences that
may be applicable to any outstanding shares of preferred stock, the
holders of common stock are entitled to receive ratably such
dividends as may be declared by the board of directors out of funds
legally available therefor. Upon the liquidation, dissolution or
winding up of the Company, holders of our common stock are entitled
to share ratably in all assets remaining after payment of
liabilities and the liquidation preferences of any outstanding
shares of preferred stock. Holders of common stock have no
preemptive rights and no right to convert their common stock into
any other securities. Our common stock has no redemption or sinking
fund provisions. All outstanding shares of common stock are fully
paid and non-assessable.
Preferred Stock
Pursuant
to our certificate of incorporation, our board of directors has the
authority, without further action by the stockholders, to issue up
to 15 million shares of preferred stock, in one or more
series. Our board shall determine the rights, preferences,
privileges and restrictions of the preferred stock, including
dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preferences, sinking fund terms and the
number of shares constituting any series or the designation of any
series. The issuance of preferred stock could adversely affect the
voting power, conversion or other rights of holders of common
stock. Preferred stock could be issued quickly with terms
calculated to delay or prevent a change in control of our company
or make removal of our management more difficult. Additionally, the
issuance of preferred stock may have the effect of decreasing the
market price of our common stock.
0% Series L Convertible Preferred Stock
On
October 16, 2017, we filed with the Secretary of State of the State
of Delaware a Certificate of Designation of Preferences, Rights and
Limitations of Series L Preferred Stock (the “Series L
Certificate of Designations”), and on October 18, 2017, we
filed a Certificate of Correction to the Series L Certificate of
Designations to include a sentence that was inadvertently omitted.
Pursuant to the Series L Certificate of Designations, the Company
designated
58,000
shares of its
blank check preferred stock as Series L Preferred Stock. Each share
of Series L Preferred Stock has a stated value of $100 per
share. In the event of a liquidation, dissolution or winding
up of the Company, each share of Series L Preferred Stock will be
entitled to a per share preferential payment equal to the stated
value. Each share of Series L Preferred Stock is convertible into
167 shares of common stock. The conversion ratio is subject to
adjustment in the event of stock splits, stock dividends,
combination of shares and similar recapitalization
transactions. The Company is prohibited from effecting the
conversion of the Series L Preferred Stock to the extent that, as a
result of such conversion, the holder beneficially owns more than
4.99%, in the aggregate, of the issued and outstanding shares of
the Company’s Common Stock calculated immediately after
giving effect to the issuance of shares of Common Stock upon the
conversion of the Series L Preferred Stock (the “L Beneficial
Ownership Limitation”). Each share of Series L Preferred
Stock entitles the holder to vote on all matters voted on by
holders of Common Stock substituting the consolidated closing bid
price on October 13, 2017 of $0.75, but not in excess of the L
Beneficial Ownership Limitation.
As of October 18,
2017, there were
58,000
shares
of Series L Preferred Stock outstanding convertible into
9,666,667 shares
of common
stock, subject to the Series L Conversion Restriction until
stockholder approval is obtained.
0% Series K Convertible Preferred Stock
On
August 14, 2017, we filed with the Secretary of State of the State
of Delaware a Certificate of Designation of Preferences, Rights and
Limitations of Series K Preferred Stock (the “Series K
Certificate of Designations”). Pursuant to the Series K
Certificate of Designations, the Company designated
65,000
shares of its blank check preferred
stock as Series K Preferred Stock. Each share of Series K Preferred
Stock has a stated value of $0.01 per share. In the event of a
liquidation, dissolution or winding up of the Company, each share
of Series K Preferred Stock will be entitled to a per share
preferential payment equal to the stated value. Each share of
Series K Preferred Stock is convertible into 100 shares of common
stock. The conversion ratio is subject to adjustment in the
event of stock splits, stock dividends, combination of shares and
similar recapitalization transactions. The Company is
prohibited from effecting the conversion of the Series K Preferred
Stock to the extent that, as a result of such conversion, the
holder beneficially owns more than 4.99%, in the aggregate, of the
issued and outstanding shares of the Company’s Common Stock
calculated immediately after giving effect to the issuance of
shares of Common Stock upon the conversion of the Series K
Preferred Stock (the “K Beneficial Ownership
Limitation”). Each share of Series K Preferred Stock
entitles the holder to vote on all matters voted on by holders of
Common Stock. With respect to any such vote, each share of Series K
Preferred Stock entitles the holder to cast such number of votes
equal to the number of shares of Common Stock such shares of Series
K Preferred Stock are convertible into at such time, but not in
excess of the K Beneficial Ownership Limitation.
As of
October 18, 2017, there were 63,150
shares of Series K Preferred Stock
outstanding convertible into 6,315,000
shares
of common stock.
0% Series J Convertible Preferred Stock
On
August 14, 2017, we filed with the Secretary of State of the State
of Delaware a Certificate of Designation of Preferences, Rights and
Limitations of Series J Preferred Stock (the “Series J
Certificate of Designations”). Pursuant to the Series J
Certificate of Designations, the Company designated
3,400
shares of its blank check preferred
stock as Series J Preferred Stock. Each share of Series J Preferred
Stock has a stated value of $550 per share. Each share of
Series J Preferred Stock is convertible into 1,000 shares of common
stock. The conversion ratio is subject to adjustment in the
event of stock splits, stock dividends, combination of shares and
similar recapitalization transactions. The Company is prohibited
from effecting the conversion of the Series J Preferred Stock to
the extent that, as a result of such conversion, the holder
beneficially owns more than 4.99%, in the aggregate, of the issued
and outstanding shares of the Company’s Common Stock
calculated immediately after giving effect to the issuance of
shares of Common Stock upon the conversion of the Series J
Preferred Stock (the “J Beneficial Ownership
Limitation”). In the event of a liquidation, dissolution
or winding up of the Company, each share of Series J Preferred
Stock will be entitled to a per share preferential payment equal to
125% of the stated value. Each share of Series J Preferred Stock
entitles the holder to vote on all matters voted on by holders of
Common Stock. With respect to any such vote, each share of Series J
Preferred Stock entitles the holder to cast such number of votes
equal to the number of shares of Common Stock such shares of Series
J Preferred Stock are convertible into at such time, but not in
excess of the J Beneficial Ownership Limitation.
As of
October 18, 2017, there were 772.73
shares of Series J Preferred Stock
outstanding convertible into
772,730
shares
of common stock.
0% Series I Convertible Preferred Stock
On May
26, 2017, we filed with the Secretary of State of the State of
Delaware a Certificate of Designation of Preferences, Rights and
Limitations of Series I Preferred Stock (the “Series I
Certificate of Designations”). Pursuant to the Series I
Certificate of Designations, the Company designated
1,968,664
shares of its blank check
preferred stock as Series I Preferred Stock. Each share of Series I
Preferred Stock has a stated value of $0.01 per share. In the
event of a liquidation, dissolution or winding up of the Company,
each share of Series I Preferred Stock will be entitled to a per
share preferential payment equal to the stated value. Each share of
Series I Preferred Stock is convertible into one share of common
stock. The conversion ratio is subject to adjustment in the
event of stock splits, stock dividends, combination of shares and
similar recapitalization transactions. The Company is
prohibited from effecting the conversion of the Series I Preferred
Stock to the extent that, as a result of such conversion, the
holder beneficially owns more than 4.99%, in the aggregate, of the
issued and outstanding shares of the Company’s Common Stock
calculated immediately after giving effect to the issuance of
shares of Common Stock upon the conversion of the Series I
Preferred Stock (the “Series I Beneficial Ownership
Limitation”). Each share of Series I Preferred Stock
entitles the holder to vote on all matters voted on by holders of
Common Stock. With respect to any such vote, each share of Series I
Preferred Stock entitles the holder to cast such number of votes
equal to the number of shares of Common Stock such shares of Series
I Preferred Stock are convertible into at such time, but not in
excess of the Series I Beneficial Ownership
Limitation.
As of
October 18, 2017, there were
1,048,460
shares of Series I Preferred
Stock outstanding convertible into
1,048,460 shares
of common
stock.
0% Series H Convertible Preferred Stock
Pursuant
to a Series H Preferred Stock Certificate of Designations, on May
3, 2017, we designated 2,000 shares of our blank check preferred
stock as Series H Preferred Stock. The shares of Series H Preferred
Stock are convertible into shares of common stock based on a
conversion calculation equal to the stated value of the Series H
Preferred Stock, plus all accrued and unpaid dividends (the
“Base Amount”), if any, on such Series H Preferred
Stock, as of such date of determination, divided by the conversion
price. The stated value of each share of Series H Preferred Stock
is $1,000 and the initial conversion price is $1.75 per share, each
subject to adjustment for stock splits, stock dividends,
recapitalizations, combinations, subdivisions or other similar
events.
In the event of a liquidation, dissolution or
winding up of the Company, each share of Series H Preferred Stock
will be entitled to a per share preferential payment equal to the
Base Amount.
All shares of our
capital stock will be junior in rank to Series H Preferred Stock
with respect to the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding-up of the
Company other than Series D through G Preferred Stock.
The holders of Series H Preferred
Stock will be entitled to receive dividends if and when declared by
our board of directors. The Series H Preferred Stock shall
participate on an “as converted” basis, with all
dividends declared on our common stock. In addition, if
we grant, issue or sell any rights to purchase our securities pro
rata to all our record holders of our common stock, each holder
will be entitled to acquire such securities applicable to the
granted purchase rights as if the holder had held the number of
shares of common stock acquirable upon complete conversion of all
Series H Preferred Stock then held.
We
are prohibited from effecting a conversion of the Series H
Preferred Stock to the extent that, as a result of such conversion,
the holder would beneficially own more than 4.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon conversion of the
Series H Preferred Stock, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%. Each
holder is entitled to vote on all matters submitted to stockholders
of the Company, and shall have the number of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series H Preferred Stock, but not in excess of the
beneficial ownership limitations.
As of
October 18, 2017, there were no shares of Series H Preferred Stock
outstanding convertible into shares of common stock
.
0% Series G Convertible Preferred Stock
Pursuant to a Series G Preferred Stock Certificate
of Designations, on May 15, 2017 we designated 5,000,000 shares of
our blank check preferred stock as Series G Preferred Stock. The
shares of Series G Preferred Stock are convertible into shares of
common stock based on a conversion calculation equal to the stated
value of the of such Series G Preferred Stock, plus all accrued and
unpaid dividends, if any, on such Series G Preferred Stock, as of
such date of determination, divided by the conversion price. The
stated value of each share of Series G Preferred Stock is $1.75 and
the initial conversion price is $1.75 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events.
The holder of a majority of the Series G Preferred Stock shall have
the right to nominate a candidate for the Board, such right to
expire on December 31, 2017.
In the event of a liquidation, dissolution or
winding up of the Company, each share of Series G Preferred Stock
will be entitled to a per share preferential payment equal to the
par value.
All shares of our
capital stock will be junior in rank to Series G Preferred Stock
with respect to the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding-up of the
Company, except for the Company’s Series D Convertible
Preferred Stock, Series E Convertible Preferred Stock and Series F
Convertible Preferred Stock.
The holders of Series G Preferred Stock will
be entitled to receive dividends if and when declared by our board
of directors. The Series G Preferred Stock shall participate on an
“as converted” basis, with all dividends declared on
our common stock. In addition, if we grant, issue or
sell any rights to purchase our securities pro rata to all our
record holders of our common stock, each holder will be entitled to
acquire such securities applicable to the granted purchase rights
as if the holder had held the number of shares of common stock
acquirable upon complete conversion of all Series G Preferred Stock
then held.
We
are prohibited from effecting a conversion of the Series G
Preferred Stock to the extent that, as a result of such conversion,
the holder would beneficially own more than 4.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon conversion of the
Series G Preferred Stock, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%. Each
holder is entitled to vote on all matters submitted to stockholders
of the Company, and shall have the number of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series G Preferred Stock, but not in excess of the
beneficial ownership limitations.
As of
October 18, 2017, there were
no
shares of Series G Preferred Stock outstanding convertible into
shares of common stock.
0% Series F Convertible Preferred Stock
Pursuant
to a Series F Preferred Stock Certificate of Designations, on
August 16, 2016, we designated 1,559,252 shares of our blank check
preferred stock as Series F Preferred Stock. The shares of Series F
Preferred Stock are convertible into shares of common stock based
on a conversion calculation equal to the stated value of the of
such Series F Preferred Stock, plus all accrued and unpaid
dividends, if any, on such Series F Preferred Stock, as of such
date of determination, divided by the conversion price. The stated
value of each share of Series F Preferred Stock is $4.81 and the
initial conversion price is $4.81 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events.
In the event of a liquidation, dissolution or
winding up of the Company, each share of Series F Preferred Stock
will be entitled to a per share preferential payment equal to the
par value.
All shares our capital
stock will be junior in rank to Series F Preferred Stock with
respect to the preferences as to dividends, distributions and
payments upon the liquidation, dissolution and winding-up of the
Company, except for the Company’s Series D Preferred Stock
and Series E Preferred Stock.
The holders of Series F Preferred Stock will be
entitled to receive dividends if and when declared by our board of
directors. The Series F Preferred Stock shall participate on an
“as converted” basis, with all dividends declared on
our common stock. In addition, if we grant, issue or
sell any rights to purchase our securities pro rata to all our
record holders of our common stock, each holder will be entitled to
acquire such securities applicable to the granted purchase rights
as if the holder had held the number of shares of common stock
acquirable upon complete conversion of all Series F Preferred Stock
then held.
We
are prohibited from effecting a conversion of the Series F
Preferred Stock to the extent that, as a result of such conversion,
the holder would beneficially own more than 4.99% of the number of
shares of common stock outstanding immediately after giving effect
to the issuance of shares of common stock upon conversion of the
Series F Preferred Stock, which beneficial ownership limitation may
be increased by the holder up to, but not exceeding, 9.99%. Each
holder is entitled to vote on all matters submitted to stockholders
of the Company, and shall have the number of votes equal to the
number of shares of common stock issuable upon conversion of such
holder’s Series F Preferred Stock, but not in excess of the
beneficial ownership limitations.
As of October 18, 2017, there were no shares of
Series F Preferred Stock outstanding convertible into shares of
common stock
.
0% Series E Convertible Preferred Stock
On
March 30, 2015, we filed a Certificate of Designations,
Preferences and Rights of the 0% Series E Convertible Preferred
Stock with the Delaware Secretary of State, designating one hundred
thousand shares of preferred stock as 0% Series E Convertible
Preferred Stock.
The
Series E Preferred Shares are convertible into shares of common
stock based on a conversion calculation equal to the stated value
of the of such Series E Preferred Share, plus all accrued and
unpaid dividends, if any, on such Series E Preferred Share, as of
such date of determination, divided by the conversion price. The
stated value of each Series E Preferred Share is $75 and the
initial conversion price is $5.55 per share, each subject to
adjustment for stock splits, stock dividends, recapitalizations,
combinations, subdivisions or other similar events. In addition,
during the period proscribed by the Certificate of Designations,
subject to certain exceptions, in the event the Company issues or
sells, or is deemed to issue or sell, shares of common stock at a
per share price that is less than the conversion price then in
effect, the conversion price shall be reduced to such lower price.
On August 16, 2016, we revised the conversion price to $4.81 per
share as a result of entering into an underwriting agreement at
$4.81 per share on the date. As a result of listing on the Nasdaq
stock market on August 17, 2016, the provision for price adjustment
is no longer in effect. We are prohibited from effecting a
conversion of the Series E Preferred Shares to the extent that, as
a result of such conversion, the holder would beneficially own more
than 4.99% of the number of shares of common stock outstanding
immediately after giving effect to the issuance of shares of common
stock upon conversion of the Series E Preferred Shares, which
beneficial ownership limitation may be increased by the holder up
to, but not exceeding, 9.99%. Each holder is entitled to vote on
all matters submitted to stockholders of the Company, and shall
have the number of votes equal to the number of shares of common
stock issuable upon conversion of such holder’s Series E
Preferred Shares, but not in excess of the beneficial ownership
limitations. The Series E Preferred Shares bear no
interest.
As
of April 10, 2015, we entered into separate subscription
agreements with accredited investors relating to the issuance and
sale of $11,714,498 of units at a purchase price of
$5.55 per unit, with each unit consisting of one share
of common stock (or, at the election of any investor
who, as a result of receiving common stock would hold in excess of
4.99% of our issued and outstanding common stock, shares of our
newly designated Series E Preferred Shares) and a thirty month
warrant to purchase one half of one share of common stock at an
initial exercise price of $11.10 per share. In connection with the
above described offering we issued $2,500,000 of units consisting
of Preferred Shares on April 10, 2015.
We
have also granted each investor, prior to the expiration of 24
months following the final closing date of the offering, a right of
participation in our financings. In the event we conduct certain
private or public offerings of our securities, each investor has
agreed, if requested by the underwriter or placement agent so
engaged by us in connection with such offering, to refrain from
selling any of our securities for a period of up to 60
days.
On
April 14, 2015, as a condition to participation by OPKO and Frost
Gamma Investments Trust, or FGIT, in the offering, we entered into
an Escrow Deposit Agreement with Signature Bank N.A. and OPKO
pursuant to which the subscriptions of OPKO and FGIT, totaling,
$3.5 million, were deposited into and held at Signature Bank as
escrowed funds for a period of 10 weeks, to be released subject to
the approval of OPKO. On June 22, 2015, the term of the
escrow was extended to 16 weeks. As further
consideration for the amendment, on June 30, 2015, we entered into
a letter agreement with OPKO pursuant to which we granted OPKO the
right, but not the obligation, until June 30, 2016, to nominate and
appoint up to two additional members to our Board of Directors, or
to approve the person(s) nominated by us pursuant to the agreement
in consideration for the release of the escrowed funds. The
nominees will be subject to the satisfaction of standard corporate
governance practices and any applicable national securities
exchange requirements. Upon signing the agreement, the
escrowed funds were released to us.
As
of October 18, 2017, 33,333 shares of our Series E Preferred Stock
are outstanding and convertible into 519,751 shares of our common
stock.
0% Series D Convertible Preferred Stock
Pursuant
to the Series D Certificate of Designations, we designated
1,000,000 shares of our blank check preferred stock as Series D
preferred stock. Each share of Series D preferred stock has a
stated value of $0.01 per share. In the event of a liquidation,
dissolution or winding up of our company, each share of Series D
preferred stock will be entitled to a per share preferential
payment equal to the stated value. Each share of Series D preferred
stock is convertible into 14 shares of common stock. The
conversion ratio is subject to adjustment in the event of stock
splits, stock dividends, combination of shares and similar
recapitalization transactions. We are prohibited from effecting the
conversion of the Series D preferred stock to the extent that, as a
result of such conversion, the holder beneficially owns more than
4.99% (provided that certain investors elected to block their
beneficial ownership initially at 2.49%, in the aggregate, of the
issued and outstanding shares of our common stock calculated
immediately after giving effect to the issuance of shares of common
stock upon the conversion of the Series D preferred stock. Each
share of Series D preferred stock entitles the holder to vote on
all matters voted on by holders of common stock. With respect to
any such vote, each share of Series D preferred stock entitles the
holder to cast such number of votes equal to the number of shares
of common stock such shares of Series D preferred stock are
convertible into at such time, but not in excess of the beneficial
ownership limitation.
On
March 25, 2015, we entered into separate exchange agreements with
certain holders of our then outstanding Series A-1 Preferred Stock
and A-1 Warrants and holders of our Series B Preferred Stock and
Series B Warrants, all previously issued by us. Pursuant to the
exchange agreements, the holders exchanged such securities and
relinquished any and all other rights they may in connection
therewith, their respective governing agreements and certificates
of designation, including any related registration rights, in
exchange for an aggregate of 342,906 shares of our common stock,
and an aggregate of 238,156 shares of our newly designated Series D
Preferred Stock.
As
of October 18, 2017, 44,104 shares of our Series D Preferred Stock
are outstanding and convertible into 596,000 shares of our common
stock.
Each
Selling Stockholder of the securities and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell
any or all of their securities covered hereby on the principal
Trading Market or any other stock exchange, market or trading
facility on which the securities are traded or in private
transactions. These sales may be at fixed or negotiated prices. A
Selling Stockholder may use any one or more of the following
methods when selling securities:
●
ordinary brokerage
transactions and transactions in which the broker-dealer solicits
purchasers;
●
block trades in
which the broker-dealer will attempt to sell the securities as
agent but may position and resell a portion of the block as
principal to facilitate the transaction;
●
purchases by a
broker-dealer as principal and resale by the broker-dealer for its
account;
●
an exchange
distribution in accordance with the rules of the applicable
exchange;
●
privately
negotiated transactions;
●
settlement of short
sales;
●
in transactions
through broker-dealers that agree with the Selling Stockholders to
sell a specified number of such securities at a stipulated price
per security;
●
through the writing
or settlement of options or other hedging transactions, whether
through an options exchange or otherwise;
●
a combination of
any such methods of sale; or
●
any other method
permitted pursuant to applicable law.
The
Selling Stockholders may also sell securities under Rule 144 under
the Securities Act of 1933, as amended (the “Securities
Act”), if available, rather than under this
prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any
broker-dealer acts as agent for the purchaser of securities, from
the purchaser) in amounts to be negotiated, but, except as set
forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal
transaction a markup or markdown in compliance with FINRA
IM-2440.
In
connection with the sale of the securities or interests therein,
the Selling Stockholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn
engage in short sales of the securities in the course of hedging
the positions they assume. The Selling Stockholders may also sell
securities short and deliver these securities to close out their
short positions, or loan or pledge the securities to broker-dealers
that in turn may sell these securities. The Selling Stockholders
may also enter into option or other transactions with
broker-dealers or other financial institutions or create one or
more derivative securities which require the delivery to such
broker-dealer or other financial institution of securities offered
by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as
supplemented or amended to reflect such transaction).
The
Selling Stockholders and any broker-dealers or agents that are
involved in selling the securities may be deemed to be
“underwriters” within the meaning of the Securities Act
in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the
resale of the securities purchased by them may be deemed to be
underwriting commissions or discounts under the Securities Act.
Each Selling Stockholder has informed the Company that it does not
have any written or oral agreement or understanding, directly or
indirectly, with any person to distribute the
securities.
The
Company is required to pay certain fees and expenses incurred by
the Company incident to the registration of the securities. The
Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
We
agreed to keep this prospectus effective until the earlier of (i)
the date on which the securities may be resold by the Selling
Stockholders without registration and without regard to any volume
or manner-of-sale limitations by reason of Rule 144, without the
requirement for the Company to be in compliance with the current
public information under Rule 144 under the Securities Act or any
other rule of similar effect, or (ii) all of the securities have
been sold pursuant to this prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale
securities will be sold only through registered or licensed brokers
or dealers if required under applicable state securities laws. In
addition, in certain states, the resale securities covered hereby
may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale securities may not
simultaneously engage in market making activities with respect to
the common stock for the applicable restricted period, as defined
in Regulation M, prior to the commencement of the distribution. In
addition, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of
purchases and sales of the common stock by the Selling Stockholders
or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the
need to deliver a copy of this prospectus to each purchaser at or
prior to the time of the sale (including by compliance with Rule
172 under the Securities Act).
The
validity of the securities being offered by this prospectus been
passed upon for us by Sichenzia Ross Ference Kesner LLP, New York,
New York.
The
consolidated financial statements of MabVax Therapeutics Holdings,
Inc. as of December 31, 2016 and 2015, and for the years then ended
incorporated in this registration statement by reference have been
so incorporated by reference in reliance on the report of
CohnReznick LLP, an independent registered public accounting firm,
which included an explanatory paragraph about MabVax Therapeutics
Holdings, Inc.’s ability to continue as a going concern,
given on the authority of said firm as experts in auditing and
accounting.
I
NTERESTS OF NAMED EXPERTS
AND COUNSEL
Sichenzia Ross
Ference Kesner LLP and members of the firm beneficially own less
than 5% of our common stock of which 398,426 shares are being
registered for resale of this prospectus.
W
HERE 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 hereby. This
prospectus, which constitutes a part of the registration statement,
does not contain all of the information set forth in the
registration statement or the exhibits filed with the registration
statement. For further information about us and the securities
offered hereby, we refer you to the registration statement and the
exhibits filed with the registration statement. Statements
contained in this prospectus regarding the contents of any contract
or any other document that is filed as an exhibit to the
registration statement are not necessarily complete, and each such
statement is qualified in all respects by reference to the full
text of such contract or other document filed as an exhibit to the
registration statement. A copy of the registration statement and
the filed exhibits may be inspected without charge at the public
reference room maintained by the SEC, located at 100 F Street, NE,
Washington, DC 20549, and copies of all or any part of the
registration statement may be obtained from that office at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference room. The SEC also maintains
a website that contains reports, proxy and information statements
and other information regarding registrants that file
electronically with the SEC. The address of the website is
www.sec.gov.
We are
subject to the information and reporting requirements of the
Exchange Act and, in accordance with this law, are required to file
periodic reports, proxy statements and other information with the
SEC. These periodic reports, proxy statements and other information
are available for inspection and copying at the SEC’s public
reference facilities and the website of the SEC referenced above.
We make available free of charge, on or through the investor
relations section of our website, annual reports on Form 10-K,
quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section
13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after we electronically file such material with, or
furnish it to, the SEC. The information found on our website is not
part of this prospectus.
INFORMATION
I
NCORPORATED BY REFERENCE
We
are incorporating by reference into this prospectus certain
information that we file with the SEC, which means that we are
disclosing important information to you by referring you to those
documents. 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 (other than, in each case, documents or
information deemed to be furnished and not filed in accordance with
SEC Rules):
●
our Annual Report on Form 10-K for the fiscal year ended December
31, 2016, filed March 1, 2017;
●
our Quarterly Reports on Form 10-Q for the fiscal quarters ended
March 31, 2017 and June 30, 2017, filed May 22, 2017 and August 14,
2017, respectively;
●
our
Current
Reports on Form 8-K, filed on May 3, 2017, May 10, 2017, May
16, 2017, May 22, 2017, May 26, 2017, June 15, 2017, July 3, 2017,
August 8, 2017, August 14, 2017, August 22, 2017, August 29, 2017,
September 8, 2017, September 8, 2017, September 12, 2017, September
13, 2017, September 22, 2017, September 28, 2017, October 3,
2017, October 6, 2017, October 11, 2017, October 11, 2017 and
October 19, 2017; and
●
the description of our common stock contained in our Form 8-A filed
on August 16, 2016.
Any
information in any of the foregoing documents will automatically be
deemed to be modified or superseded to the extent that information
in this prospectus or in a later filed document that is
incorporated or deemed to be incorporated herein by reference
modifies or replaces such information.
We
also incorporate by reference all documents we file in the future
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this prospectus and until we file a
post-effective amendment that indicates the termination of the
offering of the securities made by this prospectus. These documents
include periodic reports, such as Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K
(except, in any such case, the portions furnished and not filed in
accordance with SEC Rules), as well as any proxy
statements.
You
may request, orally or in writing, a copy of these documents, which
will be provided to you at no cost by contacting:
MabVax
Therapeutics Holdings, Inc.
11535
Sorrento Valley Road, Suite 400
San
Diego, CA 92121
(858)
259-9405
6,965,569 Shares of Common Stock
PROSPECTUS
October
, 2017
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and
Distribution
.
We will
pay all expenses in connection with the registration and sale of
the common stock by the Selling Stockholders. The estimated
expenses of issuance and distribution are set forth
below.
|
SEC filing
fee
|
$
588.83
|
|
Legal
expenses
|
15,000.00
|
|
Accounting
expenses
|
3,000.00
|
|
Miscellaneous
|
-
|
|
Total
|
$
18,588.83
|
Item 15. Indemnification of Directors and Officers.
Subsection
(a) of Section 145 of the General Corporation Law of
Delaware, or the DGCL, empowers a corporation to 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, administrative or investigative (other
than an action by or in the right of the corporation) by reason of
the fact that he is or was a director, employee or agent of the
corporation or is or was serving at the request of the corporation
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
in connection with such action, suit or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful.
Subsection
(b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit
by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that such person acted in any of the
capacities set forth above, against expenses (including
attorneys’ fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the corporation and
except that no indemnification may be made with respect to any
claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all of 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.
Section 145
of the DGCL further provides that to the extent a director,
officer, employee or agent of a corporation has been successful on
the merits or otherwise in the defense of any action, suit or
proceeding referred to in subsections (a) and (b) or in
the defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys’ fees)
actually and reasonably incurred by him in connection therewith;
that indemnification or advancement of expenses provided for by
Section 145 shall not be deemed exclusive of any other rights
to which the indemnified party may be entitled; and empowers the
corporation to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any
liability asserted against him or incurred by him in any such
capacity or arising out of his status as such whether or not the
corporation would have the power to indemnify him against such
liabilities under Section 145.
Reference
is also made to Section 102(b)(7) of the DGCL, which enables a
corporation in its certificate of incorporation to eliminate or
limit the personal liability of a director for monetary damages for
violations of a director’s fiduciary duty, except for
liability (i) for any breach of the director’s duty of
loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL (providing for liability of directors
for unlawful payment of dividends or unlawful stock purchases or
redemptions) or (iv) for any transaction from which the
director derived an improper personal benefit. Our amended and
restated certificate of incorporation provides that we must
indemnify our directors to the fullest extent under applicable law.
Pursuant to Delaware law, this includes elimination of liability
for monetary damages for breach of the directors’ fiduciary
duty of care to MabVax Holdings and its stockholders. However, our
directors may be personally liable for liability:
●
for any breach of duty of loyalty to us or to our
stockholders;
●
for acts or omissions not in good faith or that involve intentional
misconduct or a knowing violation of law;
●
for unlawful payment of dividends or unlawful stock repurchases or
redemptions; or
●
for any transaction from which the director derived an improper
personal benefit.
In
addition, our amended and restated bylaws provide
that:
●
we are required to indemnify our directors and executive officers
to the fullest extent not prohibited by Delaware law or any other
applicable law, subject to limited exceptions;
●
we may indemnify our other officers, employees and other agents as
set forth in Delaware law or any other applicable law;
●
we are required to advance expenses to our directors and executive
officers as incurred in connection with legal proceedings against
them for which they may be indemnified; and
●
the rights conferred in the amended and restated bylaws are not
exclusive.
Item 16. Exhibits.
A list of exhibits filed with this registration statement is set
forth in the Exhibit Index, and such exhibits are incorporated into
this Item 16 by reference.
Item 17.
Undertakings.
(a) The undersigned registrant hereby undertakes:
|
|
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration
Statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
|
|
|
|
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing,
any increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth
in the “Calculation of Registration Fee” table in the
effective registration statement; and
|
|
|
(iii)
|
To
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
|
|
|
|
|
Provided,
however, that paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii) of
this section do not apply if the registration statement is on Form
S–3 (§239.13 of this chapter) or Form F–3
(§239.33 of this chapter) and the information required to be
included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement, or is contained in a form of
prospectus filed pursuant to Rule 424(b) (§230.424(b) of this
chapter) that is part of the registration statement.
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
|
|
|
|
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
|
|
|
|
|
|
|
(4)
|
That,
for the purpose of determining liability under the Securities Act
of 1933 to any purchaser:
|
|
|
(i)
|
If the
registrant is relying on Rule 430B (§230.430B of this
chapter):
|
|
|
(A)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3)
(§230.424(b)(3) of this chapter) shall be deemed to be part of
the registration statement as of the date the filed prospectus was
deemed part of and included in the registration statement;
and
|
|
|
|
|
|
|
(B)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or (b)(7) (§230.424(b)(2), (b)(5), or (b)(7) of this chapter)
as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii),
or (x) (§230.415(a)(1)(i), (vii), or (x) of this chapter) for
the purpose of providing the information required by section 10(a)
of the Securities Act of 1933 shall be deemed to be part of and
included in the registration statement as of the earlier of the
date such form of prospectus is first used after effectiveness or
the date of the first contract of sale of securities in the
offering described in the prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that
date an underwriter, such date shall be deemed to be a new
effective date of the registration statement relating to the
securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. Provided,
however, that no statement made in a registration statement or
prospectus that is part of the registration statement or made in a
document incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify
any statement that was made in the registration statement or
prospectus that was part of the registration statement or made in
any such document immediately prior to such effective date;
or
|
|
|
(ii)
|
If the
registrant is subject to Rule 430C (§230.430C of this
chapter), each prospectus filed pursuant to Rule 424(b) as part of
a registration statement relating to an offering, other than
registration statements relying on Rule 430B or other than
prospectuses filed in reliance on Rule 430A (§230.430A of this
chapter), shall be deemed to be part of and included in the
registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the
registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or
prospectus that is part of the registration statement will, as to a
purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or made in any such document immediately prior to such date of
first use.
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under
the Securities Act of 1933 to any purchaser in the initial
distribution of the securities:
|
The
undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used
to sell the securities to the purchaser, if the securities are
offered or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities
to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule 424
(§230.424 of this chapter);
|
|
|
|
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
|
|
|
|
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the
offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the
undersigned registrant; and
|
|
|
|
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the purchaser.
|
(b) The
undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant’s annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(c)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing Form S-3 and has duly caused
this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of San Diego,
on October 19, 2017.
|
|
MABVAX THERAPEUTICS HOLDINGS, INC.
|
|
|
|
|
|
|
By:
|
|
/s/ J. David
Hansen
|
|
|
|
J.
David Hansen
|
|
|
|
President and
Chief Executive Officer
(Principal
executive officer)
|
|
By:
|
|
/s/ Gregory P.
Hanson
|
|
|
|
Gregory P.
Hanson
|
|
|
|
Chief
Financial Officer
(Principal
financial and accounting officer)
|
We, the
undersigned officers and directors of MabVax Therapeutics Holdings,
Inc. hereby severally constitute and appoint J. David Hansen and
Gregory P. Hanson, our true and lawful attorney-in-fact and agents,
with full power of substitution and resubstitution for him and in
his name, place and stead, and in any and all capacities, to sign
for us and in our names in the capacities indicated below any and
all amendments (including post-effective amendments) to this
registration statement (or any other registration statement for the
same offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, as amended), and to file
the same, with all exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and every act and thing requisite
or necessary to be done in and about the premises, as full to all
intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent,
or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the
requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated.
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
/s/ J. David
Hansen
J.
David Hansen
|
|
Chairman of the
Board, President and
Chief
Executive Officer
(Principal
executive officer)
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Gregory P.
Hanson
Gregory P.
Hanson
|
|
Chief
Financial Officer
(Principal
financial and accounting officer)
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Kenneth M.
Cohen
Kenneth M.
Cohen
|
|
Director
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Philip O.
Livingston
Philip
O. Livingston, M.D.
|
|
Director
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Paul V.
Maier
Paul
V. Maier
|
|
Director
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Thomas C.
Varvaro
Thomas
Varvaro
|
|
Director
|
|
October 19,
2017
|
|
|
|
|
|
|
|
/s/ Jeffrey F.
Eisenberg
Jeffrey
Eisenberg
|
|
Director
|
|
October 19,
2017
|
EXHIBIT INDEX
|
Exhibit
No.
|
|
Description
|
|
Form
|
|
Filing
Date/Period
End
|
|
Exhibit
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agreement and Plan of Merger and Reorganization, dated May 12,
2014, between the Company, Tacoma Acquisition Corp., Inc. and
MabVax Therapeutics, Inc.
|
|
8-K
|
|
5/12/2014
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No.1, dated as of June 30, 2014, by and between the
Company and MabVax Therapeutics, Inc.
|
|
8-K
|
|
7/1/2014
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amendment No.2 to the Agreement and Plan of Merger, dated July 7,
2014, by and among the Company, Tacoma Acquisition Corp. and MabVax
Therapeutics, Inc.
|
|
8-K
|
|
7/9/2014
|
|
2.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Certificate of Incorporation
|
|
8-K
|
|
9/9/2014
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amended and Restated Bylaws
|
|
8-K
|
|
12/14/2007
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series D Convertible Preferred Stock
|
|
8-K
|
|
3/26/2015
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series E Convertible Preferred Stock
|
|
8-K
|
|
4/6/2015
|
|
4.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series F Convertible Preferred Stock
|
|
8-K
|
|
8/17/2016
|
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series G Convertible Preferred Stock
|
|
8-K
|
|
5/15/2017
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series H Convertible Preferred Stock
|
|
8-K
|
|
5/3/2017
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Amendment to Amended and Restated
Certificate of Incorporation
|
|
8-K
|
|
8/17/2016
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series I Convertible Preferred Stock
|
|
8-K
|
|
5/26/2017
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Form of Certificate of Designations, Preferences and Rights of
Series J Convertible Preferred Stock
|
|
8-K
|
|
8/14/2017
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3.1
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Form of Certificate of Designations, Preferences and Rights of
Series K Convertible Preferred Stock
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8-K
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8/14/2017
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3.1
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Form of Certificate of Designations, Preferences and Rights of
Series L Convertible Preferred Stock
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8-K
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10/19/2017
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3.1
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Form of Certificate
of Correction to the Designations, Preferences and Rights of Series
L Convertible Preferred Stock
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3.2
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5.1**
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Opinion of Sichenzia Ross Ference Kesner LLP, as to the legality of
the securities being registered
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Form of Exchange
Agreement
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8-K
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10/19/2017
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10.1
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Form of Registration
Rights Agreement
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8-K
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10/19/2017
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10.2
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Consent of Independent Registered Public Accounting
Firm
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23.2**
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Consent of Sichenzia Ross Ference Kesner LLP (included as part of
Exhibit 5.1)
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Power of Attorney
(included
on the signature page to this Registration
Statement)
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*
**
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Filed herewith
To be
filed by amendment
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Unless
otherwise indicated, the above referenced exhibits are all
incorporated by referenced herein from the original form on which
such exhibit was originally filed.