Forward-Looking
Statements
Statements
and terms such as “expect”, “anticipate”, “estimate”, “plan”, “believe” and
words of similar import regarding our expectations as to the development and effectiveness of our technologies, the potential demand
for our products, and other aspects of our present and future business operations, constitute forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Although we believe that our expectations are based on reasonable assumptions
within the bounds of our knowledge of our industry, business and operations, we cannot guarantee that actual results will not differ
materially from our expectations. In evaluating such forward-looking statements, readers should specifically consider the various factors
contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on March 19,
2021, which factors include, without limitation, the inherent uncertainty in the drug development
process, our ability to raise additional capital to fund our planned future operations, our ability to obtain or maintain FDA and foreign
regulatory approvals for our drug candidates, potential impact of the outbreak, duration and severity of the COVID-19 pandemic on our
business, our ability to enroll patients in our clinical trials, risks relating to third parties conduct of our clinical trials, risks
relating to government, private health insurers and other third-party payers coverage or reimbursement, risks relating to commercial
potential of a drug candidate in development, changes in technologies for the treatment of cancer, impact of development of competitive
drug candidates by others, risks relating to intellectual property, volatility in the market price of our common stock, potential inability
to maintain compliance with The Nasdaq Marketplace Rules and the impact of adverse capital and credit market conditions. These
and other risks and uncertainties could cause actual results to differ materially from those indicated by forward-looking statements.
The
discussion of risks and uncertainties set forth in this prospectus supplement is not necessarily a complete or exhaustive list of all
risks facing the Company at any particular point in time. We operate in a highly competitive, highly regulated and rapidly changing environment
and our business is in a state of evolution. Therefore, it is likely that new risks will emerge, and that the nature and elements of
existing risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess
either the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors,
or new or altered factors, may cause results to differ materially from those contained in any forward-looking statement. Except as required
by law, we assume no obligation to revise or update any forward-looking statement that may be made from time to time by us or on our
behalf for any reason, even if new information becomes available in the future.
In
this prospectus supplement, the terms “Celsion Corporation,” the “Company,” “we,” “us,”
“our” and similar terms refer to Celsion Corporation, a Delaware corporation, and its wholly owned subsidiaries, CLSN Laboratories,
Inc., also a Delaware corporation, and Celsion GmbH, a limited liability company, unless the context otherwise requires. The Celsion
brand and product names, including but not limited to Celsion® and ThermoDox® contained in this prospectus
supplement are trademarks, registered trademarks or service marks of Celsion Corporation or its subsidiary in the United States and certain
other countries. This document may also contain references to trademarks and service marks of other companies that are the property of
their respective owners.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights certain information about us, this offering and selected information contained elsewhere in or incorporated by reference
into this prospectus supplement and the accompanying prospectus. This summary is not complete and does not contain all of the information
that you should consider before deciding whether to invest in the securities covered by this prospectus supplement. For a more complete
understanding of Celsion and this offering, we encourage you to read and consider carefully the more detailed information in this prospectus
supplement and the accompanying prospectus, including the information incorporated by reference in this prospectus supplement and the
accompanying prospectus and the information included in any free writing prospectus that we have authorized for use in connection with
this offering, including the information referred to under the heading “Risk Factors” in this prospectus supplement beginning
on page S-6.
Overview
We
are a fully integrated, clinical stage biotechnology company focused on advancing a portfolio of innovative treatments, including DNA-based
immunotherapies, next generation vaccines and directed chemotherapies through clinical trials and eventual commercialization. Our product
pipeline includes GEN-1, a DNA-based immunotherapy for the localized treatment of ovarian cancer, and ThermoDox®, a proprietary
heat-activated liposomal encapsulation of doxorubicin, currently under investigator-sponsored development for several cancer indications.
We have two feasibility stage platform technologies for the development of novel nucleic acid-based immunotherapies and next generation
vaccines and other anti-cancer DNA or RNA therapies. Both platform technologies are novel synthetic, non-viral vectors with demonstrated
capability in nucleic acid cellular transfection.
For
additional information related to our business, please refer to the reports incorporated by reference, as described under the caption
“Incorporation of Certain Information by Reference.”
Concurrent
Offering of Series B Convertible Redeemable Preferred Stock
Concurrently
with this offering of Series A Preferred Stock, and pursuant to a separate prospectus supplement, we are offering 50,000 shares of our
Series B Convertible Redeemable Preferred Stock, $0.01 par value per share, or Series B Preferred Stock (and the shares of common stock
issuable from time to time upon conversion of the Series B Preferred Stock). The Series B Preferred Stock is being offered at the same
public offering price as the Series A Preferred Stock and, other than voting rights and conversion price, on substantially similar terms.
Special
Meeting of the Stockholders
Promptly
after the closing of this offering, we intend to call a special meeting of our stockholders, or the Special Meeting, to seek stockholder
approval of an amendment to our Amended and Restated Certificate of Incorporation, or the Charter, to effect a reverse stock split, or
the Reverse Stock Split, with respect to our issued and outstanding common stock, par value $0.01 per share, including stock held as
treasury shares, at a ratio to be determined at the discretion of our Board of Directors, or the Reverse Stock Split Amendment. Our Board
of Directors approved the Reverse Stock Split and the related contemplated amendment to the Charter and intends to recommend that our
stockholders approve and adopt the same at the Special Meeting.
The
approval of the Reverse Stock Split Amendment requires the affirmative vote of a majority of the voting power of our outstanding shares
entitled to vote on the Reverse Stock Split Amendment, or the Proposal, at the Special Meeting. The common stock, the Series A Preferred
Stock and the Series B Preferred Stock will vote together on the Proposal.
Each
share of common stock is entitled to one vote. The shares of Series A Preferred Stock will be entitled to vote only with respect to the
Reverse Stock Split (and on no other matter, except as required by the Delaware General Corporation Law and with respect to certain other
limited matters set forth in the Certificate of Designation of Preferences, Rights and Limitations governing the Series A Preferred Stock
(the “Series A Certificate of Designation”) related thereto). The holders of the Series A Preferred Stock will be entitled
to a number of votes per share of Series A Preferred Stock equal to the number of shares of common stock which such share is convertible
into (disregarding any limitations on conversion thereof), which equals 329.67 votes per share of Series A Preferred Stock. The purchasers
of the shares of Series A Preferred Stock will agree not to transfer such shares until the Reverse Stock Split is effected, to attend
the Special Meeting and to vote such shares in favor of the Proposal.
The
shares of Series B Preferred Stock purchased in the Concurrent Offering will be entitled to vote only with respect to the Reverse Stock
Split (and on no other matter, except as required by the Delaware General Corporation Law and with respect to certain other limited matters
set forth in the Certificate of Designation related thereto) and will be entitled to 45,000 votes per share on the Proposal. The purchasers
of the shares of Series B Preferred Stock will agree not to transfer such shares until the Reverse Stock Split is effected, and to attend
the Special Meeting. In addition, for the purpose of determining whether a quorum exists at the Special Meeting, each share of Series
B Preferred Stock will count as the number of shares of common stock it is convertible into (disregarding any limitations on conversion)
and the holders of the Series B Preferred Stock will agree to vote their shares of Series B Preferred Stock in the same proportion as
the shares of common stock and Series A Preferred Stock are voted (excluding any shares of common stock that are not voted) with respect
to the Proposal, or on a “mirrored” basis to the manner in which the Company’s common stock and Series A Preferred
Stock are voted on the Proposal.
Corporate
Information
We
were founded in 1982 and are a Delaware corporation. Our principal executive offices are located at 997 Lenox Drive, Suite 100, Lawrenceville,
NJ 08648. Our telephone number is (609) 896-9100. Our website is www.celsion.com. The information contained on or that can be
accessed through our website is not incorporated by reference into this prospectus supplement, and you should not consider information
on our website to be part of this prospectus supplement or in deciding to purchase our Series A Preferred Stock.
THE
OFFERING
Series
A Preferred Stock, offered by us
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Up
to 50,000 of Series A Preferred Stock, $0.01 par value per share, convertible into 16,483,516 shares of common stock at $0.91 per
share upon conversion.
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Series
A Preferred Stock to be outstanding after this offering
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50,000
shares of Series A Preferred Stock.
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Common
Stock to be outstanding after this Offering
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86,557,736
shares of common stock, par value $0.01 per share1.
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Public
Offering Price
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$14,250,000
in the aggregate or $285.00 per share of Series A Preferred Stock (representing a 5% original issue discount to the Stated Value).
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Stated
Value
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$15,000,000
total or $300.00 per share.
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Use
of Proceeds
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We
currently intend to use the net proceeds from this offering for the redemption of the Series A Preferred Stock, as and if required,
and to the extent not so used, for general corporate purposes, including research and development activities, capital expenditures
and working capital. See “Use of Proceeds” on page S-9 of this prospectus supplement.
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NASDAQ
Capital Market symbol
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As
of January 10, 2022, our Series A Preferred Stock was not listed on any exchange. We do not intend to list our Series A Preferred
Stock on any exchange.
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Custodian
and Transfer Agent
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American
Stock Transfer & Trust Company serves as our transfer agent, registrar, dividend disbursement agent and stockholder servicing
agent. See “Custodian and Transfer Agent” in the accompanying prospectus.
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Risk
Factors
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Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-6 of this prospectus supplement.
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1
The number of shares of our common stock outstanding after this offering excludes:
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6,513,169
shares of our common stock subject to outstanding options having a weighted average exercise price of $2.58 per share;
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23,250
shares of our common stock subject to unvested outstanding stock grants having a weighted average grant day fair value of $0.95 per
share;
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102,009
shares of our common stock reserved for future issuance pursuant to our existing equity incentive plans;
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2,636,899
shares of our common stock issuable upon exercise of warrants outstanding having a weighted average exercise price of $1.40 per share;
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16,483,516
shares of our common stock issuable upon conversion of our Series A Preferred Stock at a conversion price of $0.91 per share;
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15,000,000
shares of our common stock issuable upon conversion of our Series B Preferred Stock at a conversion price of $1.00 per share; and
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334
shares of our common stock held as treasury stock.
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Ranking
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The
shares of Series A Preferred Stock are senior securities that constitute capital stock. The
Series A Preferred Stock ranks:
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senior
to shares of our common stock as to the distribution of assets upon dissolution, liquidation or the winding-up of our affairs, and
upon a Change of Control Transaction or Fundamental Transaction (as defined below in this prospectus supplement, see “Description
of Securities — Series A Preferred Stock — Other Definitions”);
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equal
in priority with all other series of preferred stock we have issued or may issue in the future, including the Series B Preferred
Stock being offered in the Concurrent Offering, as to the distributions of assets upon dissolution, liquidation or the winding-up
of our affairs and upon a Change of Control Transaction or Fundamental Transaction (as defined below in this prospectus supplement,
see “Description of Securities — Series A Preferred Stock — Other Definitions”); and
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subordinate
in right of payment to the holders of our existing and future indebtedness.
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Redemption
Rights
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The
proceeds from this offering will be placed in an escrow account until the date the Series
A Preferred Stock is no longer redeemable, and will, to the extent not used for purposes
of redeeming the Series A Preferred Stock, be distributed to us when the Series A Preferred
Stock is no longer redeemable. Each holder of Series A Preferred Stock shall have the right
to cause us to redeem all or part of their shares of the Series A Preferred Stock during
the Series A Redemption Period (as defined below in this prospectus supplement see “Description
of Securities — Series A Preferred Stock — Redemption”) in cash at a redemption
price equal to 105% of the Stated Value. See “Description of Securities — Series
A Preferred Stock — Redemption” in this prospectus supplement.
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Conversion
Rights
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The
shares of Series A Preferred Stock will become convertible at the option of the holder thereof
into shares of our common stock on the date on which the Reverse Stock Split of our common
stock is consummated and the amendment to our certificate of incorporation is filed and accepted
by the State of Delaware, or the Reverse Stock Split Date.
Subject
to the Series A Beneficial Ownership Limitation (as defined below in this prospectus supplement, see “Description of Securities
— Series A Preferred Stock — Series A Beneficial Ownership Limitation”), our Company may cause the conversion of all
or part of the outstanding shares of Series A Preferred Stock to common stock on the Reverse Stock Split Date if the Equity Conditions
(as defined below in this prospectus supplement, see “Description of Securities — Series A Preferred Stock — Other
Definitions - Equity Conditions”) are satisfied on that date, or if all of the Equity Conditions are not satisfied on the Reverse
Stock Split Date, on the first such date after the Reverse Stock Split Date, if and only if such date is within and no later than 15
Trading Days (as defined below in this prospectus supplement, see “Description of Securities — Series A Preferred Stock —
Other Definitions - Trading Days”) after the Reverse Stock Split Date, that all of the Equity Conditions are satisfied and as further
described in “Description of Securities — Series A Preferred Stock — Conversion - Mandatory Conversion” in this
prospectus supplement.
Additionally,
and subject to the Series A Beneficial Ownership Limitation (as defined below in this prospectus supplement, see “Description of
Securities — Series A Preferred Stock — Series A Beneficial Ownership Limitation”), at any time after 120 days following
the Series A Mandatory Conversion Date (as defined below in this prospectus supplement, see “Description of Securities —
Series A Preferred Stock — Conversion - Mandatory Conversion”), we may deliver a written notice to each holder of the Series
A Preferred Stock to cause each holder to convert all or part of such holder’s Series A Preferred Stock, provided that the Equity
Conditions are then satisfied. See “Description of Securities — Series A Preferred Stock — Conversion - Forced Conversion”
in this prospectus supplement.
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Voting
Rights
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Except
as otherwise provided in the Charter, or as otherwise required by law, each holder of Series A Preferred Stock shall have the right
to vote (on an as-if-converted-to-common-stock basis, disregarding for such purpose any conversion or other limitations) with the
holders of the common stock and the Series B Preferred Stock as a single class only with respect to the Proposal but shall have no
other voting rights, except as required by the Delaware General Corporation Law and for the limited voting rights set forth in the
Series A Certificate of Designation. See “Description of Securities — Series A Preferred Stock — Voting”
in this prospectus supplement.
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Concurrent
Offering
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Concurrently
with this offering of Series A Preferred Stock, and pursuant to a separate prospectus supplement, we are offering 50,000 shares of
our Series B Preferred Stock (and the shares of common stock issuable from time to time upon conversion of the Series B Preferred
Stock). The Series B Preferred Stock shall be issued and subject to the same terms as those applicable to Series A Preferred Stock
except for: (a) the conversion price for Series B Preferred Stock shall be $1.00 per share of common stock, (b) each share of Series
B Preferred Stock shall be entitled to 45,000 votes and (c) the shares of Series B Preferred Stock will be voted in a manner that
“mirrors” the proportions on which the shares of common stock and Series A Stock are voted on the Proposal.
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RISK
FACTORS
An
investment in our Series A Preferred Stock involves a high degree of risk. Before deciding whether to invest in our securities, you should
consider carefully the risks discussed below, together with the risks under the heading “Risk Factors” beginning on page
29 under Part I, Item IA of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 19,
2021, as well as any amendment or update to our risk factors reflected in our other filings with the SEC, which are incorporated by reference
into this prospectus supplement and the accompanying prospectus, as well as the other information in this prospectus supplement, the
accompanying prospectus, the information and documents incorporated by reference herein and therein and in any free writing prospectus
that we have authorized for use in connection with this offering. If any of the identified risks actually occur, they could materially
adversely affect our business, financial condition, operating results or prospects and the trading price of our securities. Additional
risks and uncertainties that we do not presently know or that we currently deem immaterial may also impair our business, financial condition,
operating results and prospects and the trading price of our securities.
The
holders of the Series A and/or Series B Preferred Stock may redeem their shares rather than convert their shares into shares of our common
stock which would utilize all funds raised from the offering and the Concurrent Offering.
The
shares of Series A Preferred Stock offered hereby and the shares of Series B Preferred Stock offered in the Concurrent Offering are subject
to redemption or, only if we obtain, and after stockholder approval of, the Reverse Stock Split Amendment, conversion into our common
stock at the holder’s election, subject to our right to compel conversion into our shares of common stock under certain circumstances.
The conversion price for each of the Series A and Series B Preferred Stock is above the current market price for our common stock and
the benefit to a holder of a conversion to common stock depends, among other factors, on the future trading prices of our common stock.
We are offering the Series A and the Series B Preferred Stock at a five percent original discount to the stated value of the series.
However, the redemption value for each of the Series A and Series Preferred Stock is 105% of the stated value. Accordingly, it is possible
that holders of our Series A and/or Series B Preferred Stock will elect to redeem their shares for cash, at a premium to their investment
price, in lieu of converting their shares into shares of our common stock. Such redemptions would reduce or eliminate the proceeds to
us from the offer and sale of the Series A and Series B Preferred Stock and require us to utilize some of our other cash. The proceeds
of this offering and the Concurrent Offering will be held in escrow until the end of the redemption period and only released to us upon
the expiration of the redemption period, subject to any earlier payments to holders upon redemption.
Moreover,
holders of the Series A Preferred Stock are not entitled to convert their shares into our common stock unless and until our stockholders
approve the Reverse Stock Split Amendment. Accordingly, it is possible that the shares of Series A Preferred Stock will not be convertible
into shares of our common stock.
Because
we will have broad discretion and flexibility in how the net proceeds from this offering are used, we may use the net proceeds in ways
in which you disagree.
To
the extent the net proceeds from this offering are not used to redeem the Series A Preferred Stock, we intend to use such net proceeds
for clinical development of our product candidates, working capital and other general corporate purposes. However, we may be required
to use all or a portion of such net proceeds to redeem the Series A Preferred Stock. See “Use of Proceeds” on page S-9. We
have not allocated specific amounts of the net proceeds from this offering for any of the foregoing purposes. Accordingly, our management
may have significant discretion and flexibility in applying the net proceeds of this offering. To the extent we do not use the proceeds
to redeem Series A Preferred Stock, you will be relying on the judgment of our management with regard to the use of these net proceeds,
and you will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used appropriately.
It is possible that such net proceeds will be invested in a way that does not yield a favorable, or any, return for us. The failure of
our management to use such funds effectively could have a material adverse effect on our business, financial condition, operating results
and cash flow.
This
offering is being conducted on a “reasonable best efforts” basis.
The
placement agent is offering the shares on a “reasonable best efforts” basis, and the placement agent is under no obligation
to purchase any shares for its own account. The placement agent is not required to sell any specific number or dollar amount of shares
of Series A Preferred Stock in this offering but will use its reasonable best efforts to sell the securities offered in this prospectus
supplement. As a “reasonable best efforts” offering, there can be no assurance that the offering contemplated hereby will
ultimately be consummated.
You
may experience future dilution as a result of future equity offerings and other issuances of our securities. In addition, this offering,
the Concurrent Offering and future equity offerings and other issuances of our preferred stock or other securities may adversely affect
our common stock price.
In
order to raise additional capital, we may in the future offer additional shares of our common stock, preferred stock or other securities
convertible into or exchangeable for our common stock or preferred stock at prices that may not be the same as the price per share in
this offering or the Series A Preferred Stock conversion price. We may not be able to sell shares or other securities in any other offering
at a price per share that is equal to or greater than the price per share paid by investors in this offering, and investors purchasing
shares or other securities in the future could have rights superior to existing stockholders. The Series A Preferred Stock is convertible
into shares of our common stock. You will incur dilution of any common stock into which you convert shares of Series A Preferred Stock
upon exercise of any outstanding stock options or warrants or upon the issuance of shares pursuant to future equity grants made under
our stock incentive programs. In addition, the sale of Series A Preferred Stock in this offering, the sale of Series B Preferred Stock
in the Concurrent Offering and any future sales of a substantial number of shares of our common stock in the public market, or the perception
that such sales may occur, could adversely affect the price of our common stock. We cannot predict the effect, if any, that market sales
of common stock, including any sales of shares obtained upon conversion of the Series A Preferred Stock or the Series B Preferred Stock
or the ability of holders of Series A Preferred Stock or Series B Preferred Stock to convert their shares into common stock will have
on the market price of our common stock.
Our
common stock is subject to substantial dilution and we are requesting our stockholders’ approval to approve a discretionary reverse
split of our common stock.
We
intend to call a Special Meeting to seek stockholder approval of the Reverse Stock Split Amendment. The shareholders will be asked to
approve the reverse stock split at exchange ratios of 7-to-1, 10-to-1, 12-to-1 or 15-to-1, the final ratio to be selected by our Board
of Directors at its discretion. Our Board of Directors has approved the Reverse Stock Split and the Reverse Stock Split Amendment and
intends to recommend that our stockholders approve and adopt the same at the Special Meeting.
Implementation
of the Reverse Split Amendment would not change the total number of shares of our common stock authorized for issuance and the number
of shares of our common stock available for issuance following the implementation of the Reverse Split Amendment would increase to the
extent the Reverse Stock Amendment reduces the number of outstanding shares of our common stock. Accordingly, the Reverse Stock Amendment
would provide us with additional authorized, unissued and otherwise unreserved shares of common stock available for future corporate
purposes, including future acquisitions, investment opportunities, the establishment of collaboration or other strategic agreements,
capital raising transactions involving equity or convertible debt securities, future at the market offerings of common stock, or issuance
under current or future employee equity plans. The issuance of equity securities in connection with such transactions may result in potentially
significant dilution of our current stockholders’ ownership interests in our Company.
There
is no established public market for the Series A Preferred Stock being offered by us in this offering.
There
is no established public trading market for the Series A Preferred Stock being offered in this offering, and we do not expect a market
to develop. In addition, we do not intend to apply to list either the Series A Preferred on any national securities exchange or other
nationally recognized trading system, including the Nasdaq Capital Market. Without an active market, the liquidity of the Series A Preferred
Stock will be limited.
We
have the right to require you to convert your Series A Preferred Stock into common stock in certain circumstances.
We
have the right to force the conversion, subject to the Series A Beneficial Ownership Limitation described herein (see “Description
of Securities — Series A Preferred Stock — Series A Beneficial Ownership Limitation”), of all or part of the outstanding
shares of Series A Preferred Stock to common stock in certain circumstances. This right is contingent upon the Reserve Stock Split Amendment
being approved by our shareholders and satisfaction of the other equity conditions. See “Description of Securities — Series
A Preferred Stock — Other Definitions - Equity Conditions” for a description of the Equity Conditions.
If
we compel conversion of the Series A Preferred Stock, your shares of Series A Preferred Stock may be converted into shares of our common
stock at a time that you may not desire such conversion, and you would not, after effecting such conversion, be able to have your shares
of Series A Preferred Stock redeemed.
We
may be unable to maintain compliance with The Nasdaq Marketplace Rules which could cause our common stock to be delisted from The Nasdaq
Capital Market. This could result in the lack of a market for our common stock, cause a decrease in the value of an investment in us,
and adversely affect our business, financial condition, and results of operations.
Our
common stock is currently listed on The Nasdaq Capital Market, or Nasdaq. To maintain the listing of our common stock on Nasdaq, we are
required to meet certain listing requirements, including, among others, a minimum closing bid price of $1.00 per share.
On
December 2, 2021, we received notice from Nasdaq that the closing bid price for our common stock had been below $1.00 per share for the
previous 30 consecutive business days, and that we are therefore not in compliance with the minimum bid price requirement for continued
inclusion on Nasdaq under Nasdaq Listing Rule 5550(a)(2). Nasdaq’s notice had no immediate effect on the listing or trading of
our common stock on Nasdaq. The notice indicated that we would have 180 calendar days, until May 31, 2022, to regain compliance with
this requirement. To regain compliance with the $1.00 minimum bid listing requirement, the closing bid price of our common stock must
be at least $1.00 per share for a minimum of ten consecutive business days during the 180-day compliance period. If in the future we
are unable to comply with one or more of the Nasdaq listing standards, we could receive a notice of non-compliance and, if we are not
able to regain compliance within the requisite time period, Nasdaq could take action to delist us. If our securities are delisted from
trading on Nasdaq, and we are not able to list our securities on another exchange or to have them quoted on Nasdaq, our common stock
could be quoted on the OTC Markets or on the Pink Open Market. As a result, we could face significant adverse consequences including:
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a
limited availability of market quotations for our securities;
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a
determination that our common stock is a “penny stock,” which would require brokers trading in our common stock to adhere
to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
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a
limited amount of news and analyst coverage; and
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a
decreased ability to issue additional securities (including pursuant to short-form registration statements on Form S-3 or obtain
additional financing in the future).
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USE
OF PROCEEDS
We
estimate that the net proceeds from the sale of the Series A Preferred Stock offered under this prospectus supplement, after deducting
the placement agent fees and the estimated offering expenses payable by us will be approximately $13.5 million. We estimate that net
proceeds from the Concurrent Offering, after deducting the placement agent fees and the estimate offering expenses payable by us will
also be approximately $13.5 million, for aggregate net proceeds from both Offerings of approximately $27.0 million.
The
proceeds from this offering and from the Concurrent Offering will be placed in an escrow account until the applicable series of Preferred
Stock is no longer redeemable and will, to the extent not used for purposes of redeeming shares of the applicable series of Preferred
Stock, be distributed to use when the applicable series of Preferred Stock is no longer redeemable.
We
currently intend to use the net proceeds from this offering for the redemption of the Series A Preferred Stock, as and if required, and
to the extent not used for the redemption of the Series A Preferred Stock, for general corporate purposes, including research and development
activities, capital expenditures and working capital. As of the date of this prospectus supplement, we cannot specify with certainty
all of the particular uses for the net proceeds to us from this offering, if not required for the redemption of Series A Preferred Stock.
As a result, our management will have broad discretion regarding the timing and application of any net proceeds from this offering not
used to redeem shares of Series A Preferred Stock.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our common stock and do not currently anticipate declaring or paying cash dividends
on our common stock or the Series A Preferred Stock in the foreseeable future. We currently intend to retain all of our future earnings,
if any, to finance operations. Any future determination relating to our dividend will be made at the discretion of our Board of Directors
and will depend on a number of factors, including future earnings, capital requirements, financial conditions, future prospects, contractual
restrictions and other factors that our board may deem relevant. If we pay dividends on our common stock in the future, the Series A
Preferred Stock will be entitled to dividends on an equal (on an as-if-converted-to common stock basis, disregarding for such purpose
any conversion limitations on the Series A Preferred Stock) to and in the same form as dividends actually paid on shares of the common
stock.
DILUTION
If
you purchase shares in this offering, your ownership interest will be diluted to the extent of the difference between the conversion
price of the Series A Preferred Stock and the then as adjusted net tangible book value per share of our common stock after giving effect
to the offering and the Concurrent Offering. Our net tangible book value as of September 30, 2021 was approximately $44.0 million, or
$0.51 per share of our common stock. Net tangible book value per share as of September 30, 2021 is equal to our total tangible assets
minus total liabilities, all divided by the number of shares of common stock outstanding as of September 30, 2021.
After
giving effect to the sale of our Series A Preferred Stock in this offering at the public offering price of $0.86 per share on an as-converted
basis, and after deducting estimated offering expenses payable by us, and the sale of 50,000 shares of our Series B Preferred Stock in
the Concurrent Offering, our as adjusted pro forma net tangible book value would have been approximately $71 million, or approximately
$0.60 per share of common stock on an as-converted basis, as of September 30, 2021. This represents an immediate increase in net tangible
book value of approximately $0.09 per share to existing stockholders and an immediate dilution of approximately $0.26 per share to investors
in this offering on an as-converted basis. The following table illustrates this calculation on a per share basis.
Public
offering price per share on as-converted basis
|
|
|
|
|
|
$
|
0.86
|
|
Net
tangible book value per common share as of September 30, 2021
|
|
$
|
0.51
|
|
|
|
|
|
Increase
in net tangible book value per share attributable to this offering and the Concurrent Offering
|
|
$
|
0.09
|
|
|
|
|
|
As
adjusted net tangible book value per share as of September 30, 2021 after giving effect to this offering and the Concurrent Offering
|
|
|
|
|
|
$
|
0.60
|
|
Dilution
per share to new investors
|
|
|
|
|
|
$
|
(0.26
|
)
|
The
number of shares of our common stock shown above to be outstanding immediately before and after this offering is based on 86,557,736
shares outstanding as of September 30, 2021, and excludes:
|
●
|
6,602,705
shares of our common stock subject to outstanding options having a weighted average exercise price of $2.58 per share;
|
|
|
|
|
●
|
10,750
shares of our common stock subject to unvested outstanding stock grants having a weighted average grant day fair value of $1.33 per
share;
|
|
|
|
|
●
|
102,009
shares of our common stock reserved for future issuance pursuant to our existing stock incentive plans;
|
|
|
|
|
●
|
2,636,899
shares of our common stock issuable upon exercise of warrants outstanding, having a weighted average exercise price of $1.40 per
share; and
|
|
|
|
|
●
|
16,483,516
shares of our common stock issuable upon conversion of our Series A Preferred Stock at a conversion price of $0.91 per share;
|
|
|
|
|
●
|
15,000,000
shares of our common stock issuable upon conversion of our Series B Preferred Stock at a conversion price of $1.00 per share; and
|
|
|
|
|
●
|
334
shares of our common stock held as treasury stock.
|
To
the extent that any outstanding options or warrants are exercised or preferred stock converted, new options are issued under our stock
incentive plans, or we otherwise issue additional shares of common stock in the future, at a price less than the public offering price,
there will be further dilution to new investors.
CAPITALIZATION
The
following table sets forth our consolidated cash and cash equivalents, equity and total capitalization as of September 30, 2021:
|
●
|
on
an actual basis;
|
|
|
|
|
●
|
on
a pro forma basis to give effect to the sale of 50,000 shares of our Series B Preferred Stock in the Concurrent Offering and the
application of the estimated net proceeds as described under “Use of Proceeds.”
|
|
|
|
|
●
|
on
a pro forma basis as adjusted to give effect to the above adjustment and the sale of 50,000 shares of our Series A Preferred Stock
in this offering and the application of the estimated net proceeds as described under “Use of Proceeds.”
|
You
should read the data set forth in the table below in conjunction with the section of this prospectus supplement under the caption “Use
of Proceeds” as well as our “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
and our financial statements and notes and other financial information included or incorporated by reference in this prospectus supplement.
|
|
As
of September 30, 2021
|
|
(UNAUDITED)
|
|
Actual
|
|
|
Pro
Forma
|
|
|
Pro
Forma As Adjusted2
|
|
|
|
|
|
|
|
|
|
|
|
Cash
and investments3
|
|
$
|
60,551
|
|
|
$
|
74,301
|
|
|
$
|
88,051
|
|
Series
A Preferred Stock $0.01 par value: no shares authorized, issued or outstanding actual and pro forma; 50,000 shares authorized, issued
and outstanding pro forma as adjusted
|
|
|
—
|
|
|
|
—
|
|
|
|
14,250
|
|
Series
B Preferred Stock $0.01 par value: no shares authorized, issued or outstanding actual; 50,000 shares authorized, issued and outstanding
pro forma and pro forma as adjusted
|
|
|
—
|
|
|
|
14,250
|
|
|
|
14,250
|
|
Common
stock $0.01 par value: 112,500,000 shares authorized; 86,557,736 shares authorized, issued and outstanding pro forma and 86,557,736
shares authorized, issued and outstanding pro forma as adjusted
|
|
|
866
|
|
|
|
866
|
|
|
|
866
|
|
Additional
paid-in capital
|
|
|
387,107
|
|
|
|
387,107
|
|
|
|
387,107
|
|
Accumulated
deficit
|
|
|
(328,546
|
)
|
|
|
(328,546
|
)
|
|
|
(328,546
|
)
|
Treasury
Stock: 334 shares
|
|
|
(85
|
)
|
|
|
(85
|
)
|
|
|
(85
|
)
|
Total
stockholders’ equity
|
|
|
59,342
|
|
|
|
59,342
|
|
|
|
59,342
|
|
Total
capitalization
|
|
$
|
59,342
|
|
|
$
|
59,342
|
|
|
|
59,342
|
|
The
number of shares of our common stock shown above to be outstanding is based on 86,557,736 shares outstanding as of September 30, 2021,
and excludes:
|
●
|
6,602,705
shares of our common stock subject to outstanding options having a weighted average exercise price of $2.58 per share;
|
2 Gives effect to the payment of the placement
agent fee of $1 million but does not give effect to other expenses related to the Offerings and payable by us.
3
The proceeds from this offering and the Concurrent Offering will be held in an escrow account until the expiration of the Redemption
Period for the relevant Series, subject to their prior use for Redemptions. See “Use of Proceeds” in this prospectus supplement.
|
●
|
10,750
shares of our common stock subject to unvested outstanding stock grants having a weighted average grant day fair value of $1.33 per
share;
|
|
|
|
|
●
|
102,009
shares of our common stock reserved for future issuance pursuant to our existing stock incentive plans;
|
|
|
|
|
●
|
31,483,516
complete shares of our common stock issuable upon conversion of the Series A Preferred stock and Series B Preferred Stock, respectively;
|
|
|
|
|
●
|
2,636,899
shares of our common stock issuable upon exercise of warrants outstanding having a weighted average exercise price of $1.40 per share;
and
|
|
|
|
|
●
|
334
shares of our common stock held as treasury stock.
|
DESCRIPTION
OF SECURITIES
Series
A Preferred Stock
We
are offering up to 50,000 shares of our Series A Preferred Stock, $0.01 par value per share, in this offering, with a stated value of
$300.00 per share. The following are the principal terms of the Series A Preferred Stock:
Dividends
The
holders of Series A Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends
actually paid on shares of our common stock, when and if actually paid.
Quorum
For
purposes of determining the presence of a quorum at any meeting of the stockholders at which the shares of Series A Preferred Stock are
entitled to vote, each share of Series A Preferred Stock shall equal the number of shares of our common stock it is convertible into,
disregarding, for such purposes, any limitations on conversion thereof.
Voting
Rights
The
Series A Preferred Stock has no voting rights, except to the extent required under the Delaware General Corporation Law and as set forth
below:
●
|
each
share of Series A Preferred Stock will entitle the holder thereof (a) to vote exclusively with respect to (i) the Reverse Stock Split
and (ii) the amendment to our Charter, as amended, to effect the Reverse Stock Split, and (b) to a number of votes equal to the number
of Series A Conversion Shares issuable upon conversion thereof assuming the Series A Preferred Stock were then convertible into common
stock (whether or not such shares are then convertible and disregarding for such purposes any limitations on conversion). The shares
of Series A Preferred Stock shall, except as required by law, vote together with the common stock and the Series B Preferred Stock,
as a single class. The holders of the Series A Preferred Stock agreed to vote such shares in
favor of the Proposal.
|
|
|
●
|
otherwise,
as long as any shares of Series A Preferred Stock are outstanding, the holders of the shares of Series A Preferred Stock will be
entitled to approve, by a majority vote of the then-outstanding shares of Series A Preferred Stock if we seek to (a) alter or change
adversely the powers, preferences or rights given to the Series A Preferred Stock or alter or amend the Series A Certificate of Designation,
(b) amend our certificate of incorporation or other Charter documents in any manner that adversely affects any rights of the holders
of the Series A Preferred Stock, (c) increase the number of authorized shares of Series A Preferred Stock, or (d) enter into any
agreement with respect to any of the foregoing.
|
Liquidation
Upon
any liquidation, dissolution or winding-up of our Company, whether voluntary or involuntary, prior and in preference to the holders of
our common stock, the holders of the Series A Preferred Stock shall be entitled to receive out of the assets available for distribution
to stockholders an amount equal to 105% of the Stated Value of the Series A Preferred Stock and no more. The same preference and terms
with respect to distributions to the Series A Preferred Stock upon a liquidation, dissolution or winding-up of our Company shall apply
mutatis mutandis to any distributions to be made upon the consummation of a Fundamental Transaction (as defined below) or Change
of Control Transaction (as defined below).
Conversion
Subject
to the Series A Beneficial Ownership Limitation (as defined below), the Series A Preferred Stock is convertible into shares of common
stock, or Series A Conversion Shares. The conversion rate, subject to adjustment as set forth in the Series A Certificate of Designation,
is determined by dividing the stated value of the Series A Preferred Stock by $0.91, or the Series A Conversion Price. The Series A Conversion
Price is subject to adjustment as set forth in the Series A Certificate of Designation for stock dividends and stock splits or the occurrence
of a Fundamental Transaction (as defined in below). If any shares of Series A Preferred Stock are converted or reacquired by us, such
shares shall resume the status of authorized but unissued shares of our preferred stock and shall no longer be designated as Series A
Preferred Stock.
Optional
Conversion
Subject
to the Series A Beneficial Ownership Limitation, each share of Series A Preferred Stock will be convertible, at any time and from time
to time only after the Reverse Stock Split Date, at the option of the holder thereof, into that number of shares of common stock determined
by dividing the stated value of such share of Series A Preferred Stock by the Series A Conversion Price (as defined below). Stockholders
will effect conversions by delivering to our Company a conversion notice, or a Series A Notice of Conversion. Each Series A Notice of
Conversion will specify the number of shares of Series A Preferred Stock to be converted, the number of shares of Series A Preferred
Stock owned prior to the conversion at issue, the number of shares of Series A Preferred Stock owned subsequent to the conversion at
issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable stockholder delivers
such Series A Notice of Conversion to our Company, such date, the Series A Conversion Date. If no Series A Conversion Date is specified
in a Series A Notice of Conversion, the Series A Conversion Date shall be as of the close of business on the business day that such Series
A Notice of Conversion is delivered to us, or if such day is not a business day or if the Series A Notice of Conversion is delivered
after regular business hours, the next business day. No ink-original Series A Notice of Conversion shall be required, nor shall any medallion
guarantee (or other type of guarantee or notarization) of any Series A Notice of Conversion form be required. The calculations and entries
set forth in the Series A Notice of Conversion will control in the absence of manifest or mathematical error. From and after the Series
A Conversion Date, until presented for transfer or exchange, certificates that previously represented shares of Series A Preferred Stock
will represent, in lieu of the number of shares of Series A Preferred Stock previously represented by such certificate, the number of
shares of Series A Preferred Stock, if any, previously represented by such certificate that were not converted pursuant to the Series
A Notice of Conversion, plus the number of shares of Series A Conversion Shares into which the shares of Series A Preferred Stock previously
represented by such certificate were converted. To effect conversions of shares of Series A Preferred Stock, a stockholder will not be
required to surrender the certificate(s) representing the shares of Series A Preferred Stock to us unless all of the shares of Series
A Preferred Stock represented thereby are so converted, in which case such stockholder will deliver the certificate representing such
shares of Series A Preferred Stock promptly following the Series A Conversion Date at issue. Shares of Series A Preferred Stock converted
into common stock will be canceled and will not be reissued.
Conversion
Price. The conversion price for the Series A Preferred Stock will be $0.91, subject to adjustment as further described herein, or
Series A Conversion Price.
Mechanics
of Conversion
●
|
Delivery
of Series A Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days (as defined below) and
(ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) after each Series A Conversion Date,
or Share Delivery Date, we will deliver, or cause to be delivered, to the converting stockholder the number of Series A Conversion
Shares being acquired upon the conversion of the Series A Preferred Stock, which Series A Conversion Shares will be free of restrictive
legends and trading restrictions. We will use reasonable best efforts to deliver the Series A Conversion Shares required to be delivered
by us through the Depository Trust Company or another established clearing corporation performing similar functions. As used herein,
“Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on our Company’s
primary Trading Market with respect to the common stock as in effect on the date of delivery of the Notice of Conversion.
|
|
|
●
|
Failure
to Deliver Series A Conversion Shares. If, in the case of any Series A Notice of Conversion, such Series A Conversion Shares
are not delivered to or as directed by the applicable stockholder by the Share Delivery Date, the stockholder will be entitled to
elect by written notice to us at any time on or before its receipt of such Series A Conversion Shares, to rescind such conversion,
in which event we will promptly return to the stockholder any original Series A Preferred Stock certificate delivered to us and the
stockholder will promptly return to us the Series A Conversion Shares issued to such stockholder pursuant to the rescinded Series
A Notice of Conversion.
|
|
|
●
|
Obligation
Absolute; Partial Liquidated Damages. Subject to the Series A Beneficial Ownership Limitation, our Company’s obligation
to issue and deliver the Series A Conversion Shares upon conversion of Series A Preferred Stock are absolute and unconditional, irrespective
of any action or inaction by a stockholder to enforce the same, any waiver or consent with respect to any provision of the Series
A Certificate of Designation, the recovery of any judgment against any person or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by such stockholder or any other person of any obligation
to our Company or any violation or alleged violation of law by such stockholder or any other person, and irrespective of any other
circumstance, other than in connection with the Series A Beneficial Ownership Limitation, which might otherwise limit such obligation
of our Company to such stockholder in connection with the issuance of such Series A Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by our Company of any such action that our Company may have against such stockholder.
In the event a stockholder elects to convert any or all of the stated value of its Series A Preferred Stock, our Company may not
refuse conversion based on any claim that such stockholder or anyone associated or affiliated with such stockholder has been engaged
in any violation of law, agreement or for any other reason, other than pursuant to the Series A Beneficial Ownership Limitation,
unless an injunction from a court, on notice to stockholder, restraining and/or enjoining conversion of all or part of the Series
A Preferred Stock of such stockholder has been sought and obtained, and our Company posts a surety bond for the benefit of such stockholder
in the amount of 150% of the stated value of the Series A Preferred Stock which is subject to the injunction, which bond will remain
in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to
the stockholder to the extent it obtains judgment. In the absence of such injunction, subject to the Series A Beneficial Ownership
Limitation, our Company will issue Series A Conversion Shares and, if applicable, cash, upon a properly noticed conversion. If our
Company fails to deliver to a stockholder such Series A Conversion Shares by the Share Delivery Date applicable to such conversion,
other than in accordance with the Series A Beneficial Ownership Limitation, our Company will pay to such stockholder, in cash, as
liquidated damages and not as a penalty, for each $5,000 of stated value of Series A Preferred Stock being converted, $50 per Trading
Day (increasing to $100 per Trading Day on the third Trading Day after the Share Delivery Date and increasing to $200 per Trading
Day on the sixth Trading Day after the Share Delivery Date) for each Trading Day after the Share Delivery Date until such Series
A Conversion Shares are delivered or the stockholder rescinds such conversion. Nothing will limit a stockholder’s right to
pursue actual damages for our failure to deliver Series A Conversion Shares within the period specified herein and such stockholder
will have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree
of specific performance and/or injunctive relief.
|
●
|
Compensation
for Buy-In on Failure to Timely Deliver Series A Conversion Shares Upon Conversion. In addition to any other rights available
to the stockholder, if we fail for any reason, other than due to the Series A Beneficial Ownership Limitation, to deliver to a stockholder
the applicable Series A Conversion Shares by the Share Delivery Date, and if after such Share Delivery Date such stockholder is required
by its brokerage firm to purchase (in an open market transaction or otherwise), or the stockholder’s brokerage firm otherwise
purchases, shares of common stock to deliver in satisfaction of a sale by such stockholder of the Series A Conversion Shares which
such stockholder was entitled to receive upon the conversion relating to such Share Delivery Date, or Buy-In, then we will (A) pay
in cash to such stockholder (in addition to any other remedies available to or elected by such stockholder) the amount, if any, by
which (x) such stockholder’s total purchase price (including any brokerage commissions) for the common stock so purchased exceeds
(y) the product of (1) the aggregate number of shares of common stock that such stockholder was entitled to receive from the conversion
at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including
any brokerage commissions) and (B) at the option of such stockholder, either reissue (if surrendered) the shares of Series A Preferred
Stock equal to the number of shares of Series A Preferred Stock submitted for conversion (in which case, such conversion will be
deemed rescinded) or deliver to such stockholder the number of shares of common stock that would have been issued if we had timely
complied with our delivery requirements. For example, if a stockholder purchases shares of common stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series A Preferred Stock with respect to which
the actual sale price of the Series A Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation
was a total of $10,000 under clause (A) of the immediately preceding sentence, we will pay such stockholder $1,000. The stockholder
will provide us written notice indicating the amounts payable to such stockholder in respect of the Buy-In and, upon our request,
evidence of the amount of such loss. Nothing will limit a stockholder’s right to pursue any other remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect
to our failure to timely deliver the Series A Conversion Shares upon conversion of the shares of Series A Preferred Stock.
|
|
|
●
|
Reservation
of Shares Issuable Upon Conversion. From and after the Reverse Stock Split Date and until no shares of Series A Preferred Stock
remain outstanding, our Company will at all times reserve and keep available out of its authorized and unissued shares of common
stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock, free from preemptive rights or any other
actual contingent purchase rights of persons other than the stockholder (and the other holders of the Series A Preferred Stock),
not less than the aggregate number of shares of the commons stock as would (subject to the terms and conditions set forth in the
Purchase Agreement) be issuable upon the conversion of the then outstanding shares of Series A Preferred Stock. Our Company covenants
that all shares of common stock that will be so issuable will, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
|
|
|
●
|
Fractional
Shares. No fractional shares or scrip representing fractional shares will be issued upon the conversion of the Series A Preferred
Stock. As to any fraction of a share which the stockholder would otherwise be entitled to purchase upon such conversion, we will
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Series A Conversion Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but
consistent with the provisions of this subsection with respect to fractional Series A Conversion Shares, nothing will prevent any
stockholder from converting fractional shares of Series A Preferred Stock.
|
|
|
●
|
Transfer
Taxes and Expenses. The issuance of Series A Conversion Shares on conversion of the Series A Preferred Stock will be made without
charge to any stockholder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
Series A Conversion Shares, provided that we will not be required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such Series A Conversion Shares upon conversion in a name other than that of the stockholders
of such shares of Series A Preferred Stock and we will not be required to issue or deliver such Series A Conversion Shares unless
or until the person or persons requesting the issuance thereof have paid to us the amount of such tax or have established to our
satisfaction that such tax has been paid. We will pay all transfer agent fees required for same-day processing of any Series A Notice
of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions)
required for same-day electronic delivery of the Series A Conversion Shares.
|
Mandatory
Conversion
On
the Reverse Stock Split Date or, if all of the Equity Conditions (as defined below) are not satisfied on the Reverse Stock Split Date,
on the first such date, if and only if such date is within and no later than 15 Trading Days after the Reverse Stock Split Date, that
all of the Equity Conditions are satisfied unless waived in writing by each holder of the Series A Preferred Stock, or Series A Mandatory
Conversion Date, our Company may deliver written notice of the Series A Mandatory Conversion (as defined below) to all holders of shares
of Series A Preferred Stock on the Series A Mandatory Conversion Date and, on such Series A Mandatory Conversion Date, the Company will
convert all of each such stockholder’s shares of Series A Preferred Stock into Series A Conversion Shares at the then effective
Series A Conversion Price, or Series A Mandatory Conversion. If any of the Equity Conditions shall cease to be satisfied at any time
on or after the Mandatory Conversion Date through and including the actual delivery of all of the Series A Conversion Shares to the holders,
a holder may elect to nullify the Series A Mandatory Conversion by notice to us within three Trading Days, after the first day on which
any such Equity Condition has not been satisfied. Any Mandatory Conversion shall be subject to the Series A Beneficial Ownership Limitation.
Forced
Conversion
In
addition to the Series A Mandatory Conversion, and subject to the Series A Beneficial Ownership Limitation, at any time after 120 days
following the Series A Mandatory Conversion Date, we may deliver a written notice to all holders of shares of Series A Preferred Stock,
or Series A Forced Conversion Notice, and the date such notice is delivered to all such holders, the Series A Forced Conversion Notice
Date, to cause each holder of Series A Preferred Stock to convert all or part of such holder’s Series A Preferred Stock (as specified
in such Series A Forced Conversion Notice) in accordance with the Series A Certificate of Designation, or Series A Forced Conversion.
We may not deliver a Series A Forced Conversion Notice, and any Series A Forced Conversion Notice delivered by us shall not be effective,
unless all of the Equity Conditions have been met on the Series A Forced Conversion Notice Date through and including the later of the
Series A Forced Conversion Date and the Trading Day (as defined in the Series A Certificate of Designation) after the date that the Series
A Conversion Shares issuable pursuant to such conversion are actually delivered to the holders pursuant to the Series A Forced Conversion
Notice.
Redemption
After
(i) the earlier of (1) the approval by a majority in voting power of the then outstanding shares of capital stock of our Company entitled
to vote on the matter, of the Proposal and (2) the date that is 90 days following the original issue date and (ii) before the date that
is 120 original issue date, or Series A Redemption Period, each holder of Series A Preferred Stock shall have the right, by delivering
written notice thereof, or a Series A Redemption Notice, to cause our Company to redeem all or part of such stockholder’s shares
of Series A Preferred Stock at a price per share equal to 105% of such shares’ stated value. The Company will redeem the shares
of Series A Preferred Stock in accordance with the Series A Redemption Notice, no later than 5 days after the date on which the Series
A Redemption Notice is delivered to our Company. Any redeemed shares of Series A Preferred Stock will no longer be deemed to be outstanding.
Series
A Beneficial Ownership Limitation
The
Series A Preferred Stock cannot be converted to common stock if the holder and its affiliates would beneficially own more than 4.99%
or 9.99% at the election of the holder of the outstanding common stock, or Series A Beneficial Ownership Limitation. However, any holder
may increase or decrease the Series A Beneficial Ownership Limitation to any other percentage not in excess of 9.99% upon notice to us,
provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase
or decrease will apply only to the holder providing such notice. The Series A Beneficial Ownership Limitation may not be waived by our
Company or the stockholder subject thereto.
Other
Definitions
“Change
of Control Transaction” means the occurrence of any of (a) an acquisition by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder) of effective control (whether through legal or beneficial ownership of capital stock of our Company, by contract or otherwise)
of in excess of 50% of the voting securities of our Company (other than by means of the issuance, sale, conversion or exercise of Series
A Preferred Stock or Series B Preferred Stock), (b) our Company merges into or consolidates with any other person, or any person merges
into or consolidates with our company and, after giving effect to such transaction, the stockholders of our Company immediately prior
to such transaction own less than a majority of its aggregate voting power or the successor entity of such transaction, (c) our Company
(and all of its subsidiaries, taken as a whole) sells or transfers all or substantially all of its assets to another person and the stockholders
of our Company immediately prior to such transaction own less than a majority of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a one year period of more than one-half of the members of our Board of
Directors which is not approved by a majority of those individuals who are members of our Board of Directors on the original issue date
(or by those individuals who are serving as members of our Board of Directors on any date whose nomination to our Board of Directors
was approved by a majority of the members of our Board of Directors who are members on the original issue date), or (e) the execution
by our Company of an agreement to which our Company is a party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above.
“Equity
Conditions” means, during the period in question, (a) our Company shall have paid all liquidated damages and other amounts
owing to the applicable holder in respect of the Series A Preferred Stock, (b) (i) there is an effective registration statement pursuant
to which either (A) our Company may issue Series A Conversion Shares or (B) the holders are permitted to utilize the prospectus thereunder
to resell all of the shares of common stock issuable pursuant to the Transaction Documents (and our Company believes, in good faith,
that such effectiveness will continue uninterrupted for the foreseeable future) or (ii) all of the Series A Conversion Shares issuable
pursuant to the Transaction Documents (and shares issuable in lieu of cash payments of dividends) may be resold pursuant to Rule 144
under the Securities Act without volume or manner-of-sale restrictions or current public information requirements as determined by the
counsel to our Company as set forth in a written opinion letter to such effect, addressed and reasonably acceptable to the Transfer Agent
and the affected Holder or (iii) all of the Series A Conversion Shares may be issued to the Holder pursuant to Section 3(a)(9) of the
Securities Act and the rules and regulations promulgated thereunder, and immediately resold without restriction, (c) the common stock
is trading on a Trading Market and all of the shares of common stock issuable upon conversion of the Series A Preferred Stock are listed
or quoted for trading on such Trading Market (and our Company believes, in good faith, that trading of the common stock on a Trading
Market will continue uninterrupted for the foreseeable future), (d) there is a sufficient number of authorized, but unissued and otherwise
unreserved, shares of common stock for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (e) a majority
in voting power of the outstanding shares of our Company will have approved the Reverse Stock Split Amendment, (f) the issuance of the
shares in question to the applicable holder would not violate the Series A Beneficial Ownership Limitation, (g) the shares of common
stock have traded on the applicable Trading Market during a consecutive ten (10) day period at an average market price per share greater
than $2.00 and the average daily trading volume during such period is equal to or greater than $2,000,000, (h) there has been no public
announcement of a pending or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (i) the
applicable holder is not in possession of any information provided by our Company, any of its subsidiaries, or any of their officers,
directors, employees, agents or affiliates, that constitutes, or may constitute, material non-public information and (j) our Company
shall have duly honored all conversions scheduled to occur or occurring by virtue of one or more Series A Notices of Conversion of the
applicable holder on or prior to the dates so requested or required, if any.
“Fundamental
Transaction” means, if at any time while shares of Series A Preferred Stock are outstanding, (i) our Company, directly or indirectly,
in one or more related transactions effects any merger or consolidation of our Company with or into another person, (ii) our Company
(and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance
or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by our Company or another person) is completed pursuant to which holders of common
stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders
of at least 50% of the outstanding shares of common stock, (iv) our Company, directly or indirectly, in one or more related transactions
effects any reclassification, reorganization or recapitalization of its common stock or any compulsory share exchange pursuant to which
the common stock is effectively converted into or exchanged for other securities, cash or property, or (v) our Company, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another person whereby such other person acquires
more than 50% of the outstanding shares of common stock of our Company (not including any shares of common stock held by the other person
or other persons making or party to, or associated or affiliated with the other persons making or party to, such stock or share purchase
agreement or other business combination).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the common stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York
Stock Exchange (or any successors to any of the foregoing).
“Transaction
Documents” means the Series A Certificate of Designation, the Certificate of Designation of Preferences, Rights and Limitations
of the Series B Convertible Redeemable Preferred Stock of our Company, the Purchase Agreement, the Escrow Agreement, all exhibits and
schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated pursuant
to the Purchase Agreement, in each case as amended, modified or supplemented from time to time in accordance with its terms.
Securities
Purchase Agreement
The
Series A Preferred Stock described in this Prospectus Supplement will be issued subject to, and in accordance with, the terms of the
Securities Purchase Agreement, or the Purchase Agreement, entered into by and among our Company and each purchaser party thereto, on
January 10, 2022. In addition to customary covenants, representations and warranties, the Purchase Agreement contemplates indemnification
obligations of our Company in favor of each purchaser thereunder, and its directors, officers, shareholders, members, partners, employees
and agents, each person who controls each such purchaser, and the directors, officers, shareholders, agents, members, partners or employees
of such controlling persons, each, a Purchaser Party, for all losses, liabilities, obligations, claims, contingencies, damages, costs
and reasonable expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs
of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations,
warranties, covenants or agreements made by our Company in the Purchase Agreement or in the other Transaction Documents or (b) any action
instituted against the Purchaser Parties in any capacity, or any of them or their respective affiliates, by any stockholder of our Company
who is not an affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents.
Additionally,
under the Purchase Agreement the Company and the purchasers thereunder have agreed as follows:
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On
and after the Reverse Stock Split Date, our Company will maintain a reserve from its duly authorized shares of common stock for issuance
in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. If, at any date after
the Reverse Stock Split Date, the number of authorized but unissued (and otherwise unreserved) shares of common stock is less than
the Required Minimum on such date, then the Board of Directors will use commercially reasonable efforts to amend the certificate
of incorporation to increase the number of authorized but unissued shares of common stock to at least the Required Minimum at such
time, as soon as possible, and in any event not later than the 90th day after such date. “Required Minimum” means, as
of any date, the maximum aggregate number of shares of common stock then issued or potentially issuable in the future pursuant to
the Transaction Documents, including the conversion in full of all shares of Series A Preferred Stock, ignoring any conversion or
exercise limits set forth therein.
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From
the date of the Purchase Agreement until thirty (30) days thereafter, neither our Company nor any subsidiary will (i) issue, enter
into any agreement to issue or announce the issuance or proposed issuance of any shares of common stock or Common Stock Equivalents
or (ii) file any registration statement or amendment or supplement thereto, other than this prospectus supplement. “Common
Stock Equivalents” means any securities of our Company or its subsidiaries which would entitle the holder thereof to acquire
at any time common stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, common stock.
In addition, to the extent shares of Series A Preferred Stock are outstanding, from the original issue date until one hundred twenty
(120) days thereafter, neither our Company nor any of its subsidiaries shall issue any shares of preferred stock or other securities
having rights senior to or pari passu with the Series A Preferred Stock.
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From
the date of the Purchase Agreement until one (1) year following the Reverse Stock Split Date, our Company will not effect or enter
into an agreement to effect any issuance by of common stock or Common Stock Equivalents (or a combination of units thereof) involving
a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which our Company (i) issues or sells
any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional
shares of common stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or
varies with, the trading prices of or quotations for the shares of common stock at any time after the initial issuance of such debt
or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after
the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly
related to the business of our Company or the market for the common stock or (ii) enters into, or effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, whereby our Company may issue securities at a future determined
price. Any purchaser will be entitled to obtain injunctive relief against our Company to preclude any such issuance, which remedy
will be in addition to any right to collect damages.
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Until
the Reverse Stock Split Date, neither our Company nor any of its subsidiary will make any issuance whatsoever of common stock or
Common Stock Equivalents. In addition, to the extent shares of the Series A Preferred Stock are outstanding, from the date hereof
until one hundred twenty (120) days thereafter, neither our Company nor any Subsidiary shall issue any shares of preferred stock
or other securities having rights senior to or pari passu with the Series A Preferred Stock.
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From
the date of the Purchase Agreement up to and including the Reverse Stock Split Date, each purchaser, severally and not jointly with
the other purchasers, agrees to not convert any shares of Series A Preferred Stock and such purchaser will not transfer, offer, sell,
contract to sell, hypothecate, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement
or otherwise)) any shares of Series A Preferred Stock.
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Each
purchaser covenants to (i) vote, and will cause its affiliates to vote, all shares of Series A Preferred Stock owned by such purchaser
or its affiliates, as applicable, in favor of any resolution presented to the stockholders of our Company for the purpose of approving
the amendment of the certificate of incorporation to effect the Reverse Stock Split, (ii) attend (with respect to all shares of Series
A Preferred Stock held by such purchaser), including, for purposes of attendance, by delivering a proxy, any meeting of the stockholders
of our Company held for purposes of obtaining the indicated in (i) above, and (iii) promptly upon request by us, grant our Company
(or its designee) an irrevocable proxy, in form and substance reasonably satisfactory to such purchaser, to vote all shares of Series
A Preferred Stock in accordance with clause (i) above.
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The
Company will not offer or grant any consideration (including any modification of any Transaction Document) to any person to amend
or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered
to all of the parties to such Transaction Documents.
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Except
for the Reverse Stock Split, until the one year anniversary of the original issue date, our Company will not undertake a reverse
or forward stock split or reclassification of the common stock without the prior written consent of the purchasers holding a majority
in interest of the shares issued under the Purchase Agreement, provided that no consent shall be required in the event the Company
undertakes a reverse stock split for purposes of maintaining the listing of the common stock on the Trading Market.
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Placement
Agent Agreement
Under
the Placement Agent Agreement dated as of on January 10, 2022, by and between our Company and A.G.P./Alliance Global Partners, our Company
has agreed, among other terms, to continue to retain (i) a firm of independent PCAOB registered public accountants for a period of at
least three (3) years after the original issue date and (ii) a competent transfer agent with respect to the common stock for a period
of three (3) years after the original issue date. In addition, from January 10, 2022 until 90 days after the original issue date, neither
our Company nor any of its subsidiaries shall issue, enter into any agreement to issue or announce the issuance or proposed issuance
of any shares of preferred stock, common stock or Common Stock Equivalents (as defined above), except that such restriction shall not
apply with respect to an Exempt Issuance. “Exempt Issuance” means the issuance of (a) shares of common stock or options or
other awards to employees, officers, service providers or directors of our Company pursuant to any stock or option plan or arrangement
duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose for services rendered to our Company (or shares of common stock issued
upon exercise of any such options or awards), (b) securities upon the exercise or exchange of or conversion of any securities issued
under the Purchase Agreement and/or other securities exercisable or exchangeable for or convertible into shares of common stock issued
and outstanding on the date of the Purchase Agreement, provided that such securities have not been amended since the date of the Purchase
Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities
(other than in connection with stock splits or combinations), (c) securities in connection with the acquisition or license by our Company
of the securities, business, property, technology or other assets of another person or business entity or pursuant to any employee benefit
plan assumed by our Company in connection with any such acquisition, and (d) securities in connection with any merger, joint venture,
strategic alliance, commercial or other collaborative transaction; provided that, in the case of immediately preceding clauses (c) and
(d), the aggregate number of securities issued in connection with all such acquisitions and other transactions does not exceed 10% of
the number of shares outstanding on a fully diluted basis after giving effect to the consummation of the offering pursuant to the Purchase
Agreement.
Escrow
Agreement
On
the original issue date, our Company, Citibank N.A. and the Holder Representative (as defined therein), will enter into an escrow agreement,
pursuant to which, the proceeds otherwise payable to our Company under the Purchase Agreement upon the original issuance of the Series
A Preferred Stock and Series B Preferred Stock will be deposited in escrow to serve as source of payment in the event the purchasers
of shares of Series A Preferred Stock and Series B Preferred Stock exercise their redemption rights as previously described in this Prospectus
Supplement and in accordance with the Series A Certificate of Designation. Any funds not payable to the stockholders upon redemption
of shares, will be released to our Company upon termination of the Series A Redemption Period.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and do
not have cumulative voting rights. Subject to any preferential rights of any outstanding preferred stock, holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time to time by our board out of funds legally available
therefor. In the event of a dissolution, liquidation or winding-up of the Company, holders of common stock are entitled to share ratably
in all assets remaining after payment of liabilities and any preferential rights of any outstanding preferred stock.
Holders
of common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and
privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which may be designated and issued in the future.
PLAN
OF DISTRIBUTION
A.G.P.
has agreed to act as the placement agent in connection with this offering
and the Concurrent Offering. The placement agent is not purchasing or selling any of the shares of our Series A Preferred Stock offered
by this prospectus supplement but will use its reasonable best efforts to arrange for the sale of the securities offered by this prospectus
supplement. We have entered into a securities purchase agreement directly with institutional investors in connection with this offering
and the Concurrent Offering. Both Offerings are expected to close on or about January 13, 2022, subject to customary closing conditions,
without further notice to you.
Fees
and Expenses
We
have agreed to pay the placement agent a placement agent’s fee of approximately $1 million for both this offering and the Concurrent
Offering. The following table shows the per share and total cash placement agent’s fees we will pay to the placement agent in connection
with the sale of the shares of our Series A Preferred Stock offered pursuant to this prospectus supplement and the accompanying prospectus.
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Per
Share
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Total(1)
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Public
offering price
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$
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285.00
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$
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14,250,000
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Placement
agent’s fees(1)
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$
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10.00
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$
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500,000
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Proceeds
to us, before expenses
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$
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275.00
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$
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13,750,000
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(1)
The placement agent fees in this table represent one half of the total placement agent fees for both Offerings of $1 million.
In
addition, we have agreed to reimburse the placement agent’s expenses up to $110,000 upon closing the Offerings, representing a
pro rata amount of $55,000 for this offering. We estimate that the total expenses of the offering payable by us will be approximately
$750,000 including the placement agent’s fees.
Regulation
M
The
placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act of 1933, as amended (the
“Securities Act”), and any commissions received by it and any profit realized on the resale of the shares sold by it while
acting as principal might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the placement
agent would be required to comply with the requirements of the Securities Act and the Securities and Exchange Act of 1934, as amended
(the “Exchange Act”), including, without limitation, Rule 415(a)(4) under the Securities Act and Rule 10b-5 and Regulation
M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of shares by the placement agent acting
as principal. Under these rules and regulations, the placement agent:
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may
not engage in any stabilization activity in connection with our securities; and
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may
not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted
under the Exchange Act, until it has completed its participation in the distribution.
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Indemnification
We
have agreed to indemnify the placement agent and other specified persons against certain civil liabilities, including liabilities under
the Securities Act and the Exchange Act, and to contribute to payments that the placement agent may be required to make in respect of
such liabilities.
Lock-Up
Agreement
We
have agreed, subject to specified exceptions, that until 90 days after the closing date of this offering and the Concurrent Offering,
neither we nor our subsidiary will issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares
of our Series A Preferred Stock, common stock or any other securities that are convertible into, or exercisable or exchangeable for,
or otherwise entitle the holder thereof to receive Series A Preferred Stock or common stock, without the prior written consent of the
placement agent (except for certain Exempt Issuances, as defined herein). The placement agent may, in its sole discretion and at any
time or from time to time before the termination of the 90-day period release us from all or any portion of this lock-up restriction.
Other
Activities and Relationships
The
placement agent and certain of its affiliates are full service financial institutions engaged in various activities, which may include
securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment,
hedging, financing and brokerage activities. The placement agent and certain of its affiliates have, from time to time, performed, and
may in the future perform, various commercial and investment banking and financial advisory services for us and our affiliates, including
any past offerings and the Concurrent Offering, for which they received or will receive customary fees and expenses.
In
the ordinary course of their various business activities, the placement agent and certain of its affiliates may make or hold a broad
array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including
bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve
securities and/or instruments issued by us and our affiliates. If the placement agent or its respective affiliates have a lending relationship
with us, they routinely hedge their credit exposure to us consistent with their customary risk management policies. The placement agent
and its respective affiliates may hedge such exposure by entering into transactions which consist of either the purchase of credit default
swaps or the creation of short positions in our securities. Any such short positions could adversely affect future trading prices of
the shares offered hereby. The placement agent and certain of its respective affiliates may also communicate independent investment recommendations,
market color or trading ideas and/or publish or express independent research views in respect of such securities or instruments and may
at any time hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.
The
foregoing includes a brief summary of certain provisions of the placement agency agreement and securities purchase agreement that we
will enter into and does not purport to be a complete statement of their terms and conditions. A copy of the placement agency agreement
and the form of securities purchase agreement will be filed with the SEC and incorporated by reference into the registration statement
of which this prospectus supplement forms a part. See “Where You Can Find More Information” on page S-22.
NASDAQ
Capital Market Listing
Our
common stock is listed on The NASDAQ Capital Market under the symbol “CLSN.” As of January 10, 2022, our Series A Preferred
Stock was not listed on any exchange. We do not intend to list our Series A Preferred Stock on any exchange.
LEGAL
MATTERS
The
validity of the securities being offered hereby will be passed upon by Baker & McKenzie LLP, New York, NY. Certain legal matters
will be passed upon for the placement agent by Ballard Spahr LLP, Philadelphia, Pennsylvania.
EXPERTS
WithumSmith+Brown,
PC (“Withum”), an independent registered public accounting firm, has audited our consolidated financial statements included
in our Annual Report on Form 10-K for the year ended December 31, 2020 as set forth in their report, which is incorporated by reference
in this prospectus. Our financial statements are incorporated herein by reference in reliance on Withum’s report, given on their
authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus supplement constitutes a part of the registration statement on Form S-3 that we have filed with the SEC under the Securities
Act. As permitted by the SEC’s rules, this prospectus supplement and any accompanying prospectus, which forms a part of the registration
statement, do not contain all of the information that is included in the registration statement. You will find additional information
about us in the registration statement. Any statement made in this prospectus supplement or any accompanying prospectus concerning legal
documents are not necessarily complete and you should read the documents that are filed as exhibits to the registration statement or
otherwise filed with the SEC for a more complete understanding of the document or matter.
We
are subject to the reporting requirements of the Exchange Act, and file annual, quarterly and current reports, proxy statements and other
information with the SEC. You can read our SEC filings, including the registration statement, over the Internet at the SEC’s website
at http://www.sec.gov. We also maintain a website at www.celsion.com, at which you may access these materials free of charge
as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or
that can be accessed through, our website is not part of this prospectus.
You
may also request a copy of these filings, at no cost, by writing or telephoning us at: 997 Lenox Drive, Suite 100, Lawrenceville, NJ
08648, (609) 896-9100.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose
important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference
is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically update and supersede
that information. Any statement contained in a previously filed document incorporated by reference will be deemed to be modified or superseded
for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings we may make with the SEC under Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act between the date of this prospectus and the termination of the offering of the securities described in this
prospectus supplement.
This
prospectus supplement incorporates by reference the documents set forth below that have previously been filed with the SEC:
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our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 19, 2021;
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our
Quarterly Reports on Form 10-Q for the fiscal year ended December 31, 2021, filed with the SEC on May 14, 2021, August 12, 2021 and
November 15, 2021;
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our
Current Reports on Form 8-K filed with the SEC on January 21, 2021, January 25, 2021, January 29, 2021, February 3, 2021, February
11, 2021, April 2, 2021, June 4, 2021, June 7, 2021, June 10, 2021, June 21, 2021, December 3, 2021, December 10, 2021 and December
30, 2021; and
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the
description of our common stock and preferred stock contained in our registration statement on Form 8-A filed with the SEC on May
26, 2000, as amended by a Form 8-A/A dated February 7, 2008, and any amendments or reports filed for the purpose of updating such
description.
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All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this prospectus supplement and prior to the termination of this offering, but excluding any information furnished to, rather than filed
with, the SEC, will also be incorporated by reference into this prospectus supplement and deemed to be part of this prospectus supplement
from the date of the filing of such reports and documents.
Any
statement contained in this prospectus supplement or in a document incorporated or deemed to be incorporated by reference into this prospectus
supplement will be deemed to be modified or superseded for purposes hereof to the extent that a statement contained in this prospectus
supplement or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus supplement modifies
or supersedes the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute
a part of this prospectus supplement.
You
may request a free copy of any of the documents incorporated by reference in this prospectus supplement (other than exhibits, unless
they are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:
Celsion,
Inc.
997
Lenox Drive, Suite 100
Lawrenceville,
NJ 08648
(609)
896-9100
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus supplement.
PROSPECTUS
$100,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Rights
Units
We
may from time to time offer to sell any combination of the securities described in this prospectus, either individually or in units,
in one or more offerings. The aggregate initial offering price of all securities sold under this prospectus may not exceed $100,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we offer securities using this prospectus,
we will provide the specific terms of the securities and the offering in one or more supplements to this prospectus. We may also authorize
one or more free writing prospectuses to be provided to you in connection with these offerings. The prospectus supplement and any related
free writing prospectus may also add to, update or change the information contained in this prospectus, You should carefully read this
prospectus, the applicable prospectus supplement and any related free writing prospectus, as well as any documents incorporated by reference
herein or therein before you invest in any securities. This prospectus may not be used to consummate a sale of securities unless accompanied
by the applicable prospectus supplement.
We
may sell these securities directly to investors, through agents designated from time to time or to or through underwriters or dealers,
on a continuous or delayed basis. For additional information on the methods of sale, you should refer to the section titled “Plan
of Distribution” in this prospectus. If any underwriters are involved in the sale of any securities with respect to which this
prospectus is being delivered, the names of such underwriters and any applicable commissions or discounts will be set forth in a prospectus
supplement. The price to the public of such securities and the net proceeds that we expect to receive from such sale will also be set
forth in a prospectus supplement.
Our
common stock is listed on The NASDAQ Capital Market under the symbol “CLSN.” On March 17, 2021, the last reported closing
sale price of our common stock on The NASDAQ Capital Market was $2.29 per share. We do not expect our preferred stock, debt securities,
warrants, rights or units to be listed on any securities exchange or over-the-counter market unless otherwise described in the applicable
prospectus supplement.
Investing
in our common stock involves a high degree of risk. Before making an investment decision, please read “Risk Factors” on page
5 of this prospectus, in any accompanying prospectus supplement and in any related free writing prospectus, and under similar headings
in the documents incorporated by reference into this prospectus, any accompanying prospectus supplement and any related free writing
prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is March 30, 2021.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement on Form S-3 that we filed with the Securities and Exchange Commission, or the SEC, utilizing
a “shelf” registration process. Under this shelf registration process, we may, from time to time, offer shares of our common
stock, shares of our preferred stock, debt securities, warrants, rights or units comprised of two or more of the foregoing securities
in one or more offerings, for a total maximum offering price not to exceed $100,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell any securities under this prospectus,
we will provide a prospectus supplement that will contain more specific information about the terms of that specific offering, including
the specific amounts, prices and terms of the securities offered. Any prospectus supplement may include a discussion of risks or other
special considerations applicable to us or the offered securities. Any prospectus supplement may also add to, update or change information
contained in this prospectus. To the extent there is a conflict between the information contained in this prospectus, on the one hand,
and the information contained in any prospectus supplement, on the other hand, you should rely on the information in the prospectus supplement.
If any statement in one of these documents is inconsistent with a statement in another document having a later date-for example, a document
incorporated by reference in the accompanying prospectus-the statement in the document having the later date modifies or supersedes the
earlier statement.
You
should read this prospectus, any applicable prospectus supplement and any related free writing prospectus, any documents that we incorporate
by reference in this prospectus, and the additional information described below under “Where You Can Find More Information”
and “Information Incorporated By Reference” before making an investment decision. You should rely only on the information
contained or incorporated by reference in this prospectus, any applicable prospectus supplement and any related free writing prospectus.
We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. This prospectus is not an offer to sell these securities and it is not soliciting an offer to
buy these securities in any jurisdiction where the offer or sale is not permitted.
You
should not assume that the information in this prospectus, any applicable prospectus supplement and any related free writing prospectus
or any documents we incorporate by reference herein or therein is accurate as of any date other than the date on the front of those documents.
Our business, financial condition, results of operations and prospects may have changed since those dates.
Unless
the context indicates otherwise, as used in this prospectus, the terms “Celsion,” “the Company,” “we,”
“us” and “our” refer to Celsion Corporation, a Delaware corporation, and its wholly-owned subsidiary, CLSN Laboratories,
Inc., also a Delaware corporation. The Celsion brand and product names, including but not limited to Celsion® contained
in this prospectus are trademarks, registered trademarks or service marks of Celsion Corporation or its subsidiary in the United States
and certain other countries. This document may also contain references to trademarks and service marks of other companies that are the
property of their respective owners.
WHERE
YOU CAN FIND MORE INFORMATION
We
are subject to the information requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. In accordance with
the Exchange Act, we file annual, quarterly and current reports, proxy statements and other information with the SEC. Such reports, proxy
statements and other information filed by us are available to the public free of charge at www.sec.gov. We also maintain a website
at www.celsion.com, at which you may access these materials free of charge as soon as reasonably practicable after
they are electronically filed with, or furnished to, the SEC. The information available on or through our website is not part of this
prospectus or any applicable prospectus supplement or related free writing prospectus and should not be relied upon.
This
prospectus is part of a registration statement that we filed with the SEC. This prospectus omits some information contained in the registration
statement in accordance with SEC rules and regulations. You should review the information and exhibits in the registration statement
for further information about us and the securities being offered hereby. Statements in this prospectus concerning any document we filed
as an exhibit to the registration statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified
by reference to the filings. You should review the complete document to evaluate these statements.
INFORMATION
INCORPORATED BY REFERENCE
SEC
rules allow us to “incorporate by reference” into this prospectus much of the information we file with the SEC, which means
that we can disclose important information to you by referring you to those publicly available documents. The information that we incorporate
by reference into this prospectus is considered to be part of this prospectus. These documents may include Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as proxy statements. You should read the information incorporated
by reference because it is an important part of this prospectus.
This
prospectus incorporates by reference the documents set forth below that have previously been filed with the SEC (SEC File No. 001-15911):
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our
Annual Report on Form
10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 19, 2021;
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our
Current Reports on Form 8-K filed with the SEC on January
21, 2021, January
25, 2021, January
29, 2021, February
3, 2021 and February
11, 2021; and
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the
description of our capital stock contained in our registration statement on Form
8-A filed with the SEC on May 26, 2000, as amended by a Form
8-A/A dated February 7, 2008, and any amendments or reports filed for the purpose of updating such description.
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Any
statement contained in any previously filed document incorporated by reference herein shall be deemed to be modified or superseded for
purposes of this prospectus to the extent that a statement contained in this prospectus or any prospectus supplement modifies or supersedes
such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part
of this prospectus.
We
also incorporate by reference any future filings, other than current reports furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits
filed on such form that are related to such items, made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
in each case, after the date of the initial registration statement and prior to effectiveness of the registration statement and from
the effective date of the registration statement until the termination of the offering of the securities hereunder. Information in such
future filings updates and supplements the information provided in this prospectus. Any statements in any such future filings will be
deemed to modify and supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be
incorporated herein by reference to the extent that statements in the later filed document modify or replace such earlier statements.
We
will provide without charge to each person, including any beneficial owners of our securities, to whom this prospectus is delivered,
upon his or her written or oral request, a copy of any or all documents referred to above which have been or may be incorporated by reference
into this prospectus but not delivered with this prospectus, excluding exhibits to those documents unless they are specifically incorporated
by reference into those documents. You may request a copy of these documents by writing or telephoning us at the following address.
Celsion
Corporation
997
Lenox Drive, Suite 100
Lawrenceville,
New Jersey 08648
(609)
896-9100
FORWARD-LOOKING
STATEMENTS
This
prospectus includes or incorporates “forward-looking statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 and releases issued by the SEC and within the meaning of Section 27A of the Securities Act of 1933, as amended (the
Securities Act), and Section 21E of the Exchange Act. All statements other than statements of historical fact are “forward-looking
statements” for purposes of this prospectus, including without limitation, any projections or earnings, revenue or other financial
items, any statements of the plans and objectives of management for future operations (including, but not limited to, pre-clinical development,
clinical trials, manufacturing and commercialization), uncertainties and assumptions regarding the impact of the COVID-19 pandemic on
our business, operations, clinical trials, supply chain, strategy, goals and anticipated timelines, any statements concerning proposed
drug candidates, potential therapeutic benefits, or other new products or services, any statements regarding future economic conditions
or performance, and any statements of assumptions underlying any of the foregoing. In some cases, forward-looking statements can be identified
by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,”
“estimates,” “potential” or “continue,” or the negative thereof or other comparable terminology.
Although we believe that our expectations are based on reasonable assumptions within the bounds of our knowledge of our industry, business,
and operations, we cannot guarantee that actual results will not differ materially from our expectations.
Our
future financial condition and results of operations, as well as any forward-looking statements, are subject to inherent risks and uncertainties,
including, but not limited to the various factors contained in the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 filed with the SEC on March 19, 2021, which factors include, without limitation, changes in the course of research
and development activities and in clinical trials; possible changes in cost and timing of development and testing; possible changes in
capital structure, financial condition, working capital needs and other financial items; changes in approaches to medical treatment;
clinical trial analysis and future plans relating thereto; our ability to realize the full extent of the anticipated benefits of our
acquisition of substantially all of the assets of EGEN, Inc., including achieving operational cost savings and synergies in light of
any delays we may encounter in the integration process and additional unforeseen expenses; introduction of new products by others; possible
licenses or acquisitions of other technologies, assets or businesses; possible actions by customers, suppliers, partners, competitors
and regulatory authorities; compliance with the listing standards of The NASDAQ Capital Market; and future economic conditions or performance.
These and other risks and uncertainties could cause actual results to differ materially from those indicated by forward-looking statements.
The
discussion of risks and uncertainties set forth in this prospectus is not necessarily a complete or exhaustive list of all risks facing
the Company at any particular point in time. We operate in a highly competitive, highly regulated and rapidly changing environment and
our business is in a state of evolution. Therefore, it is likely that new risks will emerge, and that the nature and elements of existing
risks will change, over time. It is not possible for management to predict all such risk factors or changes therein, or to assess either
the impact of all such risk factors on our business or the extent to which any individual risk factor, combination of factors, or new
or altered factors, may cause results to differ materially from those contained in any forward-looking statement. Except as required
by law, we assume no obligation to revise or update any forward-looking statement that may be made from time to time by us or on our
behalf for any reason, even if new information becomes available in the future.
PROSPECTUS
SUMMARY
The
following summary highlights information contained elsewhere or incorporated by reference in this prospectus. This summary does not contain
all of the information you should consider before investing in the securities. Before making an investment decision, you should read
the entire prospectus carefully, including the matters discussed under the heading “Risk Factors” in this prospectus.
Company
Overview
We
are a fully integrated, clinical stage biotechnology company focused on advancing a portfolio of innovative treatments including DNA-based
immunotherapies, next generation vaccines and directed chemotherapies through clinical trials and eventual commercialization.
We
were founded in 1982 and are a Delaware corporation. Our shares of common stock trade on The NASDAQ Capital Market under the symbol “CLSN.”
Our principal executive offices are located at 997 Lenox Drive, Suite 100, Lawrenceville, New Jersey 08648. Our telephone number is (609)
896-9100 and our website is www.celsion.com. The information available on or through our website is not part of or incorporated
by reference into, this prospectus and should not be relied upon.
RISK
FACTORS
Investing
in our securities involves a high degree of risk. You should carefully consider and evaluate all of the information contained in this
prospectus, any accompanying prospectus supplement and in the documents incorporated by reference in this prospectus and any accompanying
prospectus supplement before you decide to purchase our securities. In particular, you should carefully consider and evaluate the risks
and uncertainties described in “Part I - Item 1A. Risk Factors” of our most recent Annual Report on Form 10-K and in other
filings we make with the SEC, as well as the risks and uncertainties described under the heading “Risk Factors” contained
in the applicable prospectus supplement or in any other document and incorporated by reference into this prospectus. Any of the risks
and uncertainties set forth therein could materially and adversely affect our business, results of operations and financial condition,
which in turn could materially and adversely affect the trading price or value of our securities. As a result, you could lose all or
part of your investment.
USE
OF PROCEEDS
Unless
otherwise indicated in a prospectus supplement, we currently intend to use the net proceeds from the sale of the securities offered hereby
for general corporate purposes, which may include the further research and development, clinical trials, manufacture and commercialization
of our product candidates and of our technologies, working capital, repaying, redeeming or repurchasing debt, capital expenditures and
other general corporate purposes. We may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies
that are complementary to our own, as well as for capital expenditures. We have not specifically allocated the proceeds to those purposes
as of the date of this prospectus. The precise amount and timing of the application of proceeds from the sale of securities will depend
on our funding requirements and the availability and cost of other funds at the time of sale. Allocation of proceeds of a particular
series of securities, or the principal reason for the offering if no allocation has been made, will be described in the applicable prospectus
supplement or in any related free writing prospectus.
DIVIDEND
POLICY
We
have never declared or paid any cash dividends on our common stock and do not currently anticipate declaring or paying cash dividends
on our common stock in the foreseeable future. We currently intend to retain all of our future earnings, if any, to finance operations.
Any future determination relating to our dividend policy will be made at the discretion of our board of directors, or our board, and
will depend on a number of factors, including future earnings, capital requirements, financial conditions, future prospects, contractual
restrictions and other factors that our board may deem relevant.
GENERAL
DESCRIPTION OF SECURITIES
We
may offer shares of common or preferred stock, various series of debt securities, warrants or other rights to purchase common stock or
preferred stock, or units consisting of combinations of the foregoing, in each case from time to time under this prospectus, together
with any applicable prospectus supplement, at prices and on terms to be determined by market conditions at the time of offering. This
prospectus provides you with a general description of the securities we may offer. At the time we offer a type or series of securities,
we will provide a prospectus supplement describing the specific amounts, prices and other important terms of the securities, including,
to the extent applicable:
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designation
or classification;
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aggregate
principal amount or aggregate offering price;
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voting
or other rights;
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rates
and times of payment of interest, dividends or other payments;
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original
issue discount;
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maturity;
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ranking;
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restrictive
covenants;
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default
provisions;
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redemption,
conversion, exercise, exchange, settlement or sinking fund terms, including prices or rates, and any provisions for changes to or
adjustments in such prices or rates and in the securities or other property receivable upon conversion, exercise, exchange or settlement;
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any
securities exchange or market listing arrangements; and
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important
U.S. federal income tax considerations.
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The
following descriptions are not complete and may not contain all the information you should consider before investing in any securities
we may offer hereunder; they are summarized from, and qualified by reference to, our amended and restated certificate of incorporation,
bylaws and the other documents referred to in the descriptions, all of which are or will be publicly filed with the SEC, as applicable.
See “Where You Can Find More Information” for additional details.
DESCRIPTION
OF CAPITAL STOCK
General
Our
authorized capital stock consists of 112,500,000 shares of common stock, par value $0.01 per share, and 100,000 shares of preferred stock,
par value $0.01 per share. As of March 19, 2021, there were 75,011,774 shares of our common stock outstanding and no shares of preferred
stock outstanding.
The
following summary description of our capital stock is based on the applicable provisions of the Delaware General Corporation Law, as
amended, or the DGCL, the provisions of our certificate of incorporation, as amended, or our certificate of incorporation, and our bylaws,
as amended, or our bylaws. This information is qualified entirely by reference to the applicable provisions of the DGCL, our certificate
of incorporation and bylaws. For information on how to obtain copies of our certificate of incorporation and bylaws, which are exhibits
to the registration statement of which this prospectus is a part, see the section titled “Where You Can Find Additional Information”
in this prospectus.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and do
not have cumulative voting rights. Subject to any preferential rights of any outstanding preferred stock, holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time to time by our board out of funds legally available
therefor. In the event of a dissolution, liquidation or winding-up of the Company, holders of common stock are entitled to share ratably
in all assets remaining after payment of liabilities and any preferential rights of any outstanding preferred stock.
Holders
of common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions
applicable to the common stock. All outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and
privileges of the holders of common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any
series of preferred stock which may be designated and issued in the future.
Preferred
Stock
Pursuant
to our certificate of incorporation, our board has the authority, without further action by the stockholders (unless such stockholder
action is required by applicable law or NASDAQ rules), to designate and issue shares of preferred stock in one or more series, to establish
from time to time the number of shares to be included in each such series, to fix the designations, powers (including voting), privileges,
preferences and relative participating, optional or other rights, if any, of the shares of each such series, the qualifications, limitations
or restrictions thereof, and to increase or decrease the number of shares of any such series, but not below the number of shares of such
series then outstanding.
The
DGCL provides that the holders of preferred stock will have the right to vote separately as a class or, in some cases, as a series on
an amendment to our certificate of incorporation if the amendment would change the par value of the class or, unless our certificate
of incorporation provides otherwise, the number of authorized shares of the class or the powers, preferences or special rights of the
class or series so as to adversely affect the class or series, as the case may be. This right is in addition to any voting rights that
may be provided in the applicable certificate of designation.
Our
board may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or
other rights of the holders of our common stock or other securities. Preferred stock could be issued quickly with terms designed to delay
or prevent a change in control of our company or make removal of management more difficult. Additionally, the issuance of preferred stock
may have the effect of decreasing the market price of our common stock.
Anti-Takeover
Considerations and Special Provisions of Our Certificate of Incorporation, Our Bylaws and the DGCL
Certificate
of Incorporation and Bylaws
A
number of provisions of our certificate of incorporation and bylaws concern matters of corporate governance and the rights of our stockholders.
Provisions that grant our board the ability to issue shares of preferred stock and to set the voting rights, preferences and other terms
thereof may discourage takeover attempts that are not first approved by our board, including takeovers that may be considered by some
stockholders to be in their best interests, such as those attempts that might result in a premium over the market price for the shares
held by stockholders. Certain provisions could delay or impede the removal of incumbent directors even if such removal would be beneficial
to our stockholders, such as the classification of our board and the lack of cumulative voting. Since our board has the power to retain
and discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a
change in management.
These
provisions may have the effect of deterring hostile takeovers or delaying changes in our control or in our management. These provisions
are intended to enhance the likelihood of continued stability in the composition of our board and in the policies it implements and to
discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are designed
to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that
may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our
shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or rumored
takeover attempts.
These
provisions also could discourage or make more difficult a merger, tender offer or proxy contest, even if they could be favorable to the
interests of stockholders and could potentially depress the market price of our common stock. Our board believes that these provisions
are appropriate to protect our interests and the interests of our stockholders.
Classification
of Board; No Cumulative Voting. Our certificate of incorporation and bylaws provide for our board to be divided into three classes,
with staggered three-year terms. Only one class of directors is elected at each annual meeting of our stockholders, with the other classes
continuing for the remainder of their respective three-year terms. Because our stockholders do not have cumulative voting rights, our
stockholders representing a majority of the shares of common stock outstanding will be able to elect those directors due to be elected
at each annual meeting of our stockholders.
Meetings
of and Actions by Stockholders. Our bylaws provide that annual meetings of our stockholders may take place at the time and place
designated by our board. A special meeting of our stockholders may be called at any time by our board, the chairman of our board or our
president. Our bylaws provide that (i) our board can fix separate record dates for determining stockholders entitled to receive notice
of a stockholder meeting and for determining stockholders entitled to vote at the meeting; (ii) we may hold a stockholder meeting by
means of remote communications; (iii) any stockholder seeking to have the stockholders authorize or take corporate action by written
consent shall, by written notice to our secretary, request that our board fix a record date and our board shall adopt a resolution fixing
the record date in all events within ten calendar days after a request is received; and (iv) a written consent of stockholders shall
not be effective unless a written consent signed by a sufficient number of stockholders to take such action is received by us within
60 calendar days of the earliest dated written consent received.
Advance
Notice Requirements for Stockholder Proposals and Director Nominations. Our bylaws provide that stockholders seeking to bring business
before an annual meeting of stockholders or to nominate candidates for election as directors at an annual meeting of stockholders must
provide timely notice in writing. To be timely, a stockholder’s notice must be delivered to, or mailed and received by, our secretary
at our principal executive offices not later than the close of business on the 90th calendar day, nor earlier than the close of business
on the 120th calendar day in advance of the date specified in our proxy statement released to stockholders in connection with the previous
year’s annual meeting of stockholders. If the date of the annual meeting is more than 30 calendar days before or after such anniversary
date, notice by the stockholder to be timely must be not earlier than the close of business on the 120th calendar day in advance of such
date of annual meeting and not later than the close of business on the later of the 90th calendar day in advance of such date of annual
meeting or the tenth calendar day following the date on which public announcement of the date of the meeting is made. In no event shall
the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period)
for the giving of an advance notice by any stockholder. Any stockholder that proposes director nominations or other business must be
a stockholder of record at the time the advance notice is delivered by such stockholder to us and entitled to vote at the meeting. Our
bylaws also specify requirements as to the form and content of a stockholder’s notice. These provisions may preclude stockholders
from bringing matters before an annual meeting of stockholders or from making nominations for the election of directors at an annual
meeting of stockholders. Unless otherwise required by law, any director nomination or other business shall not be made or transacted
if the stockholder (or a qualified representative of the stockholder) does not appear at the meeting to present the director nominee
or other proposed business.
Filling
of Board Vacancies. Our certificate of incorporation and bylaws provide that the authorized size of our board shall be determined
by our board by board resolution from time to time and that our board has the exclusive power to fill any vacancies and newly created
directorships resulting from any increase in the authorized number of directors and the stockholders do not have the power to fill such
vacancies. Vacancies in our board and newly created directorships resulting from any increase in the authorized number of directors on
our board may be filled by a majority of the directors remaining in office, even though that number may be less than a quorum of our
board, or by a sole remaining director. A director so elected to fill a vacancy shall serve for the remaining term of the predecessor
he or she replaced and until his or her successor is elected and has qualified, or until his or her earlier resignation, removal or death.
Amendment
of the Certificate of Incorporation. Our certificate of incorporation may be amended, altered, changed or repealed at a meeting of
our stockholders entitled to vote thereon by the affirmative vote of a majority of the outstanding stock entitled to vote thereon and
a majority of the outstanding stock of each class entitled to vote thereon as a class, in the manner prescribed by the DGCL.
Amendment
of the Bylaws. Our bylaws may be amended or repealed, or new bylaws may be adopted, by either our board or the affirmative vote of
at least 66-2/3 percent of the voting power of our outstanding shares.
Section
203 of the DGCL
We
are subject to Section 203 of the DGCL, which prohibits a Delaware corporation from engaging in any business combination with any interested
stockholder for a period of three years after the date that such stockholder became an interested stockholder, with the following exceptions:
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before
such date, the board of directors of the corporation approved either the business combination or the transaction that resulted in
the stockholder becoming an interested stockholder;
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upon
completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned
at least 85 percent of the voting stock of the corporation outstanding at the time the transaction began, excluding for purposes
of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares
owned (i) by persons who are directors and also officers and (ii) pursuant to employee stock plans in which employee participants
do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange
offer; and
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on
or after such date, the business combination is approved by the board of directors and authorized at an annual or special meeting
of the stockholders, and not by written consent, by the affirmative vote of at least 66-2/3 percent of the outstanding voting stock
that is not owned by the interested stockholder.
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In
general, Section 203 defines a business combination to include the following:
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any
merger or consolidation involving the corporation and the interested stockholder or with any other corporation, partnership, unincorporated
association or other entity if the merger or consolidation is caused by the interested stockholder;
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any
sale, lease, transfer, pledge or other disposition of ten percent or more of the assets of the corporation to or with the interested
stockholder;
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subject
to certain exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation
to the interested stockholder;
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any
transaction involving the corporation that has the effect of increasing the proportionate share of the stock or any class or series
of the corporation beneficially owned by the interested stockholder; and
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the
receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits by or
through the corporation.
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In
general, Section 203 of the DGCL defines an “interested stockholder” as an entity or person who, together with the entity’s
or person’s affiliates and associates, beneficially owns, or is an affiliate of the corporation and within three years prior to
the time of determination of interested stockholder status did own, 15 percent or more of the outstanding voting stock of the corporation.
A
Delaware corporation may “opt out” of these provisions with an express provision in its certificate of incorporation. We
have not opted out of these provisions, which may as a result, discourage or prevent mergers or other takeover or change of control attempts
of us.
Transfer
Agent and Registrar
The
transfer agent and registrar for our common stock is American Stock Transfer & Trust Company, LLC, or AST, located at 6201 15th Avenue,
Brooklyn, New York 11219. AST’s phone number is (800) 937-5449.
NASDAQ
Capital Market Listing
Our
common stock is listed on The NASDAQ Capital Market under the symbol “CLSN.”
DESCRIPTION
OF DEBT SECURITIES
We
may issue debt securities from time to time, in one or more series, as senior, subordinated or junior subordinated, convertible or non-convertible
and secured or unsecured debt. Any senior debt securities will rank equally with any unsubordinated debt. Subordinated debt securities
will rank equally with any other subordinated debt of the same ranking we may issue. Convertible debt securities will be convertible
into or exchangeable for our common stock or other securities at predetermined conversion rates, and conversion may be mandatory or at
the holder’s option.
Debt
securities will be issued under one or more indentures between us and a national banking association or other eligible party acting as
trustee. Following is a summary of certain general features of debt securities we may issue; we will describe the particular terms of
any debt securities that we may offer in more detail in the applicable prospectus supplement, which may differ from the terms we describe
below. You should read the prospectus supplements, any free writing prospectus we may authorize and the indentures, supplemental indentures
and forms of debt securities relating to any series of debt securities we may offer.
General.
Except as we may otherwise provide in a prospectus supplement, the relevant indenture will provide that debt securities may be issued
from time to time in one or more series. The indenture will not limit the amount of debt securities that may be issued thereunder and
will provide that the specific terms of any series of debt securities shall be set forth in, or determined pursuant to, an authorizing
resolution, an officers’ certificate or a supplemental indenture, if any, relating to such series.
We
will describe in each prospectus supplement the following terms relating to any series of debt securities:
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title or designation;
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whether
they will be secured or unsecured, and the terms of any security;
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whether
the debt securities will be subject to subordination, and any terms thereof;
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any
limit upon the aggregate principal amount;
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the
date or dates on which the debt securities may be issued and on which we will pay the principal;
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the
interest rate, which may be fixed or variable, or the method for determining the rate, the date interest will begin to accrue, the
date or dates interest will be payable and the record dates for interest payment dates or the method for determining them;
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the
manner in which the amounts of payment of principal of, premium or interest on the debt securities will be determined, if these amounts
may be determined by reference to an index based on a currency or currencies other than that in which the debt securities are denominated
or designated to be payable or by reference to a commodity, commodity index, stock exchange index or financial index;
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the
currency of denomination;
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if
payments of principal of, premium or interest will be made in one or more currencies or currency units other than that or those in
which the debt securities are denominated, the manner in which the exchange rate with respect to these payments will be determined;
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the
place or places where the principal of, premium, and interest will be payable, where debt securities of any series may be presented
for registration of transfer, exchange or conversion, and where notices and demands to or upon the Company in respect of the debt
securities may be made;
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the
form of consideration in which principal of, premium or interest will be paid;
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the
terms and conditions upon which we may redeem the debt securities;
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any
obligation we have to redeem or purchase the debt securities pursuant to any sinking fund, amortization or analogous provisions or
at the option of a holder;
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the
dates on which and the price or prices at which we will repurchase the debt securities at the option of holders and other detailed
terms and provisions of these obligations;
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the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and any integral multiple thereof;
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the
portion of principal amount payable upon declaration of acceleration of the maturity date, if other than the principal amount;
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whether
the debt securities are to be issued at any original issuance discount and the amount of discount with which they may be issued;
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whether
the debt securities will be issued in certificated or global form and, in such case, the depositary and the terms and conditions,
if any, upon which interests in such global security or securities may be exchanged in whole or in part for the individual securities
represented thereby;
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provisions,
if any, for defeasance in whole or in part and any addition or change to provisions related to satisfaction and discharge;
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the
form of the debt securities;
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the
terms and conditions upon which convertible debt securities will be convertible or exchangeable into securities or property of the
Company or another person, if at all, and any additions or changes, if any, to permit or facilitate the same;
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provisions,
if any, granting special rights to holders upon the occurrence of specified events;
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any
restriction or condition on transferability;
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any
addition or change in the provisions related to compensation and reimbursement of the trustee;
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any
addition to or change in the events of default described in this prospectus or in the indenture and any change in the acceleration
provisions so described;
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whether
the debt securities will restrict our ability to pay dividends, or will require us to maintain any asset ratios or reserves;
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whether
we will be restricted from incurring any additional indebtedness;
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any
addition to or change in the covenants described in this prospectus or in the indenture, including terms of any restrictive covenants;
and
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any
other terms which may modify or delete any provision of the indenture.
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We
may issue debt securities that provide for an amount less than their stated principal amount to be due and payable upon declaration of
acceleration of their maturity pursuant to the terms of the indenture. We will provide you with information on the U.S. federal income
tax considerations and other special considerations applicable to any debt securities in the applicable prospectus supplement.
Conversion
or Exchange Rights. We will set forth in the prospectus supplement the terms, if any, on which a series of debt securities may be
convertible into or exchangeable for our common stock or other securities. We will include provisions as to whether conversion or exchange
is mandatory, at the option of the holder or at our option. We may include provisions pursuant to which the number of shares of our common
stock or other securities that the holders of debt securities receive would be subject to adjustment.
Consolidation,
Merger or Sale; No Protection in Event of a Change of Control or Highly Leveraged Transaction. Except as we may otherwise provide
in a prospectus supplement, the indenture will provide that we may not merge or consolidate with or into another entity, or sell other
than for cash or lease all or substantially all our assets to another entity, or purchase all or substantially all the assets of another
entity unless we are the surviving entity or, if we are not the surviving entity, the successor, transferee or lessee entity expressly
assumes all of our obligations under the indenture or the debt securities, as appropriate.
Unless
we state otherwise in the applicable prospectus supplement, the debt securities will not contain any provisions that may afford holders
additional protection in the event we have a change of control or in the event of a highly leveraged transaction (whether or not such
transaction results in a change of control), which could adversely affect them.
Events
of Default Under the Indenture. Except as we may otherwise provide in a prospectus supplement, the following will be events of default
under the indenture with respect to any series of debt securities that we may issue:
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if
we fail to pay interest when due and our failure continues for 90 days and the time for payment has not been extended or deferred;
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if
we fail to pay the principal, or premium, if any, when due whether by maturity or called for redemption;
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if
we fail to pay a sinking fund installment, if any, when due and our failure continues for 30 days;
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if
we fail to observe or perform any other covenant relating to the debt securities, other than a covenant specifically relating to
and for the benefit of holders of another series of debt securities, and our failure continues for 90 days after we receive written
notice from the trustee or holders of not less than a majority in aggregate principal amount of the outstanding series; and
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if
specified events of bankruptcy, insolvency or reorganization occur as to the Company.
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No
event of default with respect to a particular series of debt securities (except as to certain events of bankruptcy, insolvency or reorganization)
will necessarily constitute an event of default with respect to any other series. The occurrence of an event of default may constitute
an event of default under any bank credit agreements we may have in existence from time to time. In addition, the occurrence of certain
events of default or an acceleration under the indenture may constitute an event of default under certain of our other indebtedness outstanding
from time to time.
Except
as we may otherwise provide in a prospectus supplement, if an event of default with respect to debt securities of any series at the time
outstanding occurs and is continuing, then the trustee or the holders of not less than a majority in principal amount of the outstanding
series may, by a notice in writing to us (and to the trustee if given by the holders), declare to be due and payable immediately the
principal (or, if the debt securities are discount securities, that portion of the principal amount as may be specified in the terms
of such securities) of and premium and accrued and unpaid interest, if any, on all such debt securities. Before a judgment or decree
for payment of the money due has been obtained with respect to any series, the holders of a majority in principal amount of that series
(or, at a meeting of holders at which a quorum is present, the holders of a majority in principal amount represented at such meeting)
may rescind and annul the acceleration if all events of default, other than the non-payment of accelerated principal, premium, if any,
and interest, if any, have been cured or waived as provided in the applicable indenture (including payments or deposits in respect of
principal, premium or interest that had become due other than as a result of such acceleration) and the Company has deposited with the
trustee or paying agent a sum sufficient to pay all amounts owed to the trustee under the indenture, all arrears of interest, if any,
and the principal and premium, if any, on the debt securities that have become due other than by such acceleration. We refer you to the
relevant prospectus supplement relating to any discount securities for the particular provisions relating to acceleration of a portion
of the principal amount thereof upon the occurrence of an event of default.
Subject
to the terms of the indenture, and except as we may otherwise provide in a prospectus supplement, if an event of default under the indenture
shall occur and be continuing, the trustee will be under no obligation to exercise any of its rights or powers under such indenture at
the request or direction of any of the holders of the applicable series, unless such holders have offered the trustee reasonable indemnity.
The holders of a majority in principal amount of any series will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee, with respect to that series,
provided that, subject to the terms of the indenture, the trustee need not take any action that it believes, upon the advice of counsel,
might involve it in personal liability or might be unduly prejudicial to holders not involved in the proceeding.
Except
as we may otherwise provide in a prospectus supplement, a holder of the debt securities of any series will only have the right to institute
a proceeding under the indenture or to appoint a receiver or trustee, or to seek other remedies if:
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the
holder previously has given written notice to the trustee of a continuing event of default
with respect to that series;
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the
holders of at least a majority in aggregate principal amount outstanding of that series have
made written request, and such holders have offered reasonable indemnity to the trustee to
institute the proceeding as trustee; and
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the
trustee does not institute the proceeding and does not receive from the holders of a majority
in aggregate principal amount outstanding of that series (or at a meeting of holders at which
a quorum is present, the holders of a majority in principal amount of such series represented
at such meeting) other conflicting directions within 60 days after the notice, request and
offer.
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Except
as we may otherwise provide in a prospectus supplement, these limitations will not apply to a suit instituted by a holder of debt securities
if we default in the payment of the principal, premium, if any, or interest on, them.
Modification
of Indenture; Waiver. Except as we may otherwise provide in a prospectus supplement, the trustee and the Company may, without the
consent of any holders, execute a supplemental indenture to change the applicable indenture with respect to specific matters, including,
among other things:
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to
surrender any right or power conferred upon the Company;
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to
provide, change or eliminate any restrictions on payment of principal of or premium, if any; provided that any such action may not
adversely affect the interests of the holders of debt securities of any series in any material respect;
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to
change or eliminate any of the provisions of the indenture; provided that any such change or elimination may become effective only
when there is no outstanding debt security created prior to the execution of such supplemental indenture that is entitled to the
benefit of such provision and as to which such supplemental indenture would apply;
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to
evidence the succession of another entity to the Company;
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to
evidence and provide for the acceptance of appointment by a successor trustee with respect to one or more series of debt securities
and to add or change provisions of the indenture to facilitate the administration of the trusts thereunder by more than one trustee;
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to
cure any ambiguity, mistake, manifest error, omission, defect or inconsistency in the indenture or to conform the text of any provision
in the indenture or in any supplemental indenture to any description thereof in the applicable section of a prospectus, prospectus
supplement or other offering document that was intended to be a verbatim recitation of a provision of the indenture or of any supplemental
indenture;
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to
add to or change or eliminate any provision of the indenture as may be necessary or desirable in accordance with any amendments to
the U.S. Trust Indenture Act of 1939;
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to
make any change in any series of debt securities that does not adversely affect in any material respect the interests of the holders
thereof; and
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to
supplement any of the provisions of the indenture to such extent as may be necessary to permit or facilitate the defeasance and discharge
of any series of debt securities; provided that any such action may not adversely affect the interests of holders of any debt securities.
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In
addition, and except as we may otherwise provide in a prospectus supplement, under the indenture the rights of holders of a series of
debt securities may be changed by us and the trustee with the written consent of the holders of at least a majority in aggregate principal
amount outstanding (or, at a meeting of holders of such series at which a quorum is present, the holders of a majority in principal amount
represented at such meeting) that is affected. The trustee and the Company may, however, make the following changes only with the consent
of each holder of any outstanding debt securities affected:
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extending
the fixed maturity;
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reducing
the principal amount, reducing the rate of or extending the time of payment of interest, or any premium payable upon redemption;
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reducing
the principal amount of discount securities payable upon acceleration of maturity;
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making
the principal of or premium or interest payable in currency other than that stated;
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impairing
the right to institute suit for the enforcement of any payment on or after the fixed maturity date;
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materially
adversely affecting the economic terms of any right to convert or exchange; and
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reducing
the percentage of debt securities, the holders of which are required to consent to any amendment or waiver; or modifying, without
the written consent of the trustee, the rights, duties or immunities of the trustee.
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Except
for certain specified provisions, and except as we may otherwise provide in a prospectus supplement, the holders of at least a majority
in principal amount of any series (or, at a meeting of holders of such series at which a quorum is present, the holders of a majority
in principal amount represented at such meeting) may, on behalf of the holders of all debt securities of that series, waive our compliance
with provisions of the indenture. The holders of a majority in principal amount of the outstanding debt securities of any series may,
on behalf of all such holders, waive any past default under the indenture with respect to that series and its consequences, other than
a default in the payment of the principal of, premium or any interest; provided, however, that the holders of a majority in principal
amount of the outstanding debt securities of any series may rescind an acceleration and its consequences, including any related payment
default that resulted from the acceleration.
Discharge.
Except as we may otherwise provide in a prospectus supplement, the indenture will provide that we can elect to be discharged from our
obligations with respect to one or more series of debt securities. In order to exercise our rights to be discharged, we must deposit
with the trustee money or government obligations sufficient to pay all the principal of, the premium, if any, and interest on, the debt
securities of the affected series on the dates payments are due.
Form,
Exchange and Transfer. Except as we may otherwise provide in a prospectus supplement, we will issue debt securities only in fully
registered form without coupons and, unless we otherwise specify in the applicable prospectus supplement, in denominations of $1,000
and any integral multiple thereof. Except as we may otherwise provide in a prospectus supplement, the indenture will provide that we
may issue debt securities in temporary or permanent global form and as book-entry securities that will be deposited with a depositary
named by us and identified in a prospectus supplement with respect to that series.
At
the option of the holder, subject to the terms of the indenture and the limitations applicable to global securities described in the
applicable prospectus supplement, the holder will be able to exchange the debt securities for other debt securities of the same series,
in any authorized denomination and of like tenor and aggregate principal amount.
Subject
to the terms of the indenture and the limitations applicable to global securities set forth in the applicable prospectus supplement,
holders may present the debt securities for exchange or for registration of transfer, duly endorsed or with the form of transfer endorsed
thereon duly executed if so required by us or the security registrar, at the office of the security registrar or at the office of any
transfer agent designated by us for this purpose. Unless otherwise provided in the debt securities or the indenture, we will make no
service charge for any registration of transfer or exchange, but we may require payment of any taxes or other governmental charges.
We
will name in the applicable prospectus supplement the security registrar, and any transfer agent in addition to the security registrar,
that we initially designate for any debt securities. We may at any time designate additional transfer agents or rescind the designation
of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain
a transfer agent in each place of payment for the debt securities of each series.
Except
as we may otherwise provide in a prospectus supplement, if we elect to redeem the debt securities of any series, we will not be required
to:
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issue,
register the transfer of, or exchange any debt securities of that series during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption of any debt securities that may be selected for redemption and ending at
the close of business on the day of the mailing; or
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register
the transfer of or exchange any debt securities so selected for redemption, in whole or in part, except the unredeemed portion of
any debt securities we are redeeming in part.
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Information
Concerning the Trustee. The trustee, other than during the occurrence and continuance of an event of default under the indenture,
will undertake to perform only those duties as are specifically set forth in the indenture. Upon an event of default, the trustee must
use the same degree of care as a prudent person would exercise or use in the conduct of his or her own affairs. Subject to this provision,
the trustee will be under no obligation to exercise any of the powers given it by the indenture at the request of any holder unless it
is offered reasonable security and indemnity against the costs, expenses and liabilities that it might incur.
Payment
and Paying Agents. Unless we otherwise indicate in the applicable prospectus supplement, we will make payment of interest on any
interest payment date to the person in whose name the debt securities, or one or more predecessor securities, are registered at the close
of business on the regular record date for the interest.
Unless
we otherwise indicate in the applicable prospectus supplement, we will pay principal of and any premium and interest at the office of
the trustee or, at the option of the Company, by check payable to the holder. Unless we otherwise indicate in a prospectus supplement,
we will designate the corporate trust office of the trustee our sole paying agent for payments. We will name in the applicable prospectus
supplement any other paying agents that we initially designate. We will maintain a paying agent in each place of payment.
All
money we pay to a paying agent or the trustee for the payment of principal or any premium or interest which remains unclaimed at the
end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the holder of the security
thereafter may look only to us for payment thereof.
Governing
Law. The indenture and the debt securities will be governed and construed in accordance with the laws of the State of New York.
DESCRIPTION
OF WARRANTS, OTHER RIGHTS AND UNITS
We
may from time to time issue warrants or other rights, or Rights, in one or more series, for the purchase of common stock or preferred
stock. We may issue Rights independently or together with such securities, and such Rights may be attached to or separate from them.
Rights will be evidenced by a Rights certificate issued under one or more Rights agreements between us and a Rights agent which will
act solely as our agent in connection with the Rights and will not have any obligation or relationship of agency or trust for or with
any holders or beneficial owners of Rights. We may issue securities in units, or Units, each consisting of two or more types of securities.
For example, we might issue Units consisting of a combination of common stock and warrants to purchase common stock. If we issue Units,
the prospectus supplement relating to the Units will contain the information described above with regard to each of the securities that
is a component of the Units. In addition, the prospectus supplement relating to the Units will describe the terms of any Units we issue.
The forms of any such certificates and agreements will be filed as exhibits to the registration statement of which this prospectus is
a part by amendment thereof or as exhibits to a Current Report on Form 8-K incorporated herein by reference, and the accompanying prospectus
supplement and such forms may add, update or change the terms and conditions of the Rights or Units described in this prospectus. You
should read the prospectus supplements, Rights agreements and Rights certificates that contain the terms of the Rights in their entirety.
The
particular terms of each issue of Rights or Units will be described in the applicable prospectus supplement, including, as applicable:
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the
title of the Rights or Units;
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any
initial offering price;
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the
title, aggregate principal amount or number and terms of the securities purchasable upon exercise of the Rights;
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the
principal amount or number of securities purchasable upon exercise of each Right and the price at which that principal amount or
number may be purchased upon exercise of each Right;
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the
currency or currency units in which any offering price and any exercise price are payable;
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the
title and terms of any related securities with which the Rights are issued and the number of the Rights issued with each security;
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any
date on and after which the Rights or Units and the related securities will be separately transferable;
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any
minimum or maximum number of Rights that may be exercised at any one time;
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the
date on which the right to exercise the Rights will commence and the date on which the right will expire;
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a
discussion of U.S. federal income tax, accounting or other considerations applicable to the Rights or Units;
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whether
the Rights represented by the Rights certificates, if applicable, will be issued in registered or bearer form and, if registered,
where they may be transferred and registered;
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any
anti-dilution provisions of the Rights or Units;
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any
redemption or call provisions applicable to the Rights;
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any
provisions for changes to or adjustments in the exercise price of any Rights; and
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any
additional terms of the Rights or Units, including terms, procedures and limitations relating to exchange and exercise of the Rights
or Units.
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Rights
certificates will be exchangeable for new Rights certificates of different denominations and, if in registered form, may be presented
for registration of transfer, and Rights may be exercised, at the corporate trust office of the Rights agent or any other office indicated
in the related prospectus supplement. Before the exercise of Rights, holders of Rights will not be entitled to payments of any dividends,
principal, premium or interest on securities purchasable upon exercise of the Rights, to vote, consent or receive any notice as a holder
of and in respect of any such securities or to enforce any covenants in any indenture, or to exercise any other rights whatsoever as
a holder of securities purchasable upon exercise of the Rights.
PLAN
OF DISTRIBUTION
We
may sell the securities, from time to time, to or through underwriters or dealers, through agents or remarketing firms, or directly to
one or more purchasers pursuant to:
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underwritten
public offerings;
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negotiated
transactions;
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block
trades;
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“At
the Market Offerings,” within the meaning of Rule 415(a)(4) of the Securities Act, into an existing trading market, at prevailing
market prices; or
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through
a combination of these methods.
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We
may distribute securities from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices; or
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at
negotiated prices.
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A
prospectus supplement or supplements will describe the terms of the offering of the securities, including:
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the
name or names of the underwriters, if any;
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if
the securities are to be offered through the selling efforts of brokers or dealers, the plan of distribution and the terms of any
agreement, arrangement, or understanding entered into with broker(s) or dealer(s) prior to the effective date of the registration
statement, and, if known, the identity of any broker(s) or dealer(s) who will participate in the offering and the amount to be offered
through each;
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the
purchase price of the securities and the proceeds we will receive from the sale;
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if
any of the securities being registered are to be offered otherwise than for cash, the general purposes of the distribution, the basis
upon which the securities are to be offered, the amount of compensation and other expenses of distribution, and by whom they are
to be borne;
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any
delayed delivery arrangements;
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any
over-allotment options under which underwriters may purchase additional securities from us;
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any
agency fees or underwriting discounts and other items constituting agents’ or underwriters’ compensation;
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any
public offering price;
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any
discounts, commissions or commissions allowed or reallowed or paid to dealers;
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the
identity and relationships of any finders, if applicable; and
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any
securities exchange or market on which the securities may be listed.
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Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by that prospectus supplement. The obligations
of the underwriters to purchase the securities will be subject to the conditions set forth in the applicable underwriting agreement.
We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without
a syndicate. Unless otherwise indicated in the prospectus supplement, subject to certain conditions, the underwriters will be obligated
to purchase all of the securities offered by the prospectus supplement, other than securities covered by any over-allotment option. Any
public offering price and any discounts or concessions allowed or reallowed or paid to dealers may change from time to time. We may use
underwriters with whom we have a material relationship. We will describe in the prospectus supplement, naming the underwriter, the nature
of any such relationship.
We
may use a remarketing firm to offer the securities in connection with a remarketing arrangement upon their purchase. Remarketing firms
will act as principals for their own account or as agents for us. These remarketing firms will offer or sell the securities pursuant
to the terms of the securities. A prospectus supplement will identify any remarketing firm and the terms of its agreement, if any, with
us and will describe the remarketing firm’s compensation. Remarketing firms may be deemed to be underwriters in connection the
securities they remarket.
If
we offer and sell securities through a dealer, we or an underwriter will sell the securities to the dealer, as principal. The dealer
may resell the securities to the public at varying prices to be determined by the dealer at the time of resale. Any such dealer may be
deemed to be an underwriter of the securities offered and sold. The name of the dealer and the terms of the transaction will be set forth
in the applicable prospectus supplement.
We
may sell securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale
of securities and we will describe any commissions we will pay the agent in the prospectus supplement. Unless the prospectus supplement
states otherwise, our agent will act on a best-efforts basis for the period of its appointment.
We
may sell securities directly to one or more purchasers without using underwriters or agents. Underwriters, dealers and agents that participate
in the distribution of the securities may be underwriters as defined in the Securities Act, and any discounts or commissions they receive
from us and any profit on their resale of the securities may be treated as underwriting discounts and commissions under the Securities
Act.
We
may authorize agents or underwriters to solicit offers by certain types of institutional investors to purchase securities from us at
the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the prospectus supplement.
We
may provide agents and underwriters with indemnification against civil liabilities, including liabilities under the Securities Act, or
contribution with respect to payments that the agents or underwriters may make with respect to these liabilities. Agents and underwriters
may engage in transactions with, or perform services for, us in the ordinary course of business.
We
may offer new issues of securities with no established trading market. Any underwriters may make a market in these securities, but will
not be obligated to do so and may discontinue any market making at any time without notice. We cannot guarantee the liquidity of the
trading markets for any securities.
Any
underwriter may engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids in accordance with Regulation
M under the Exchange Act. Over-allotment involves sales in excess of the offering size, which create a short position. Stabilizing transactions
permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum price. Syndicate-covering
or other short-covering transactions involve purchases of the securities, either through exercise of the over-allotment option or in
the open market after the distribution is completed, to cover short positions. Penalty bids permit the underwriters to reclaim a selling
concession from a dealer when the securities originally sold by the dealer are purchased in a stabilizing or covering transaction to
cover short positions. Those activities may cause the price of the securities to be higher than it would otherwise be. If commenced,
the underwriters may discontinue any of the activities at any time.
Any
underwriters that are qualified market makers on The NASDAQ Capital Market may engage in passive market making transactions in the common
stock on The NASDAQ Capital Market in accordance with Regulation M under the Exchange Act. Passive market makers must comply with applicable
volume and price limitations and must be identified as passive market makers. Passive market making may stabilize the market price of
the securities at a level above that which might otherwise prevail in the open market and, if commenced, may be discontinued at any time.
LEGAL
MATTERS
The
validity of the securities being offered by this prospectus will be passed upon for us by Baker & McKenzie LLP, New York, NY. Additional
legal matters may be passed upon for us or any underwriters, dealers or agents by counsel that we will name in the applicable prospectus
supplement.
EXPERTS
WithumSmith+Brown,
PC, or Withum, an independent registered public accounting firm, has audited our consolidated financial statements included in our Annual
Report on Form 10-K for the year ended December 31, 2020 as set forth in their report, which is incorporated by reference in this prospectus.
Our financial statements are incorporated herein by reference in reliance on Withum’s report, given on their authority as experts
in accounting and auditing.
50,000
Shares of Series A Convertible Redeemable Preferred Stock
PROSPECTUS
SUPPLEMENT
Sole
Placement Agent
A.G.P.
January
10, 2022
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